.An Oakland Icon May Close

The Merritt Bakery and Restaurant is on the verge of shutting its doors in part because of a city decision made nearly eight years ago.

In 2002, the Jerry Brown administration decided that a supermarket chain was more important to an Eastlake neighborhood than an independently owned Oakland icon — Merritt Bakery and Restaurant. So planning department officials allowed Albertson’s supermarket on East 18th Street to more than double in size without adding any new parking. The massive expansion, along with the closure of an Albertson’s on Lakeshore Avenue, resulted in thousands of new customers who had no place to park except in front of the next-door Merritt Bakery and Restaurant. And now, nearly eight years later, the Merritt is on the verge of collapse.

Charles Griffis, who runs the Merritt and whose wife, Patricia, owns it, said he’s lost more than a $1 million in annual business since the city allowed Albertson’s — now Lucky supermarket — to expand without adding new parking. He also said he’s been having trouble meeting payroll and may have to close unless city officials come to the rescue. He has asked the city for a $300,000 bailout, plus $50,000 a month to help his cash flow until business turns around. When asked in a recent interview at his restaurant whether he was in danger of going out of business, he responded: “Shit yes, I’m almost out.”

But there are questions as to whether the cash-strapped city can afford to save one of the few large, black-owned restaurants in Oakland. The city loaned the 58-year-old business $162,000 last year and has bailed it out repeatedly since it first opened in 1952. Moreover, is a 1950s-style coffee shop/diner whose glory days may be over worth saving — even if it is a local institution whose demise was hastened by a city decision?

A city-funded report on the Merritt completed last month reveals that it has problems beyond a lack of parking. San Francisco-based consultant Gabriel Cole noted in the report that the Merritt raised food prices during the recession in an effort to increase revenues. But the restaurant now charges more than its competitors for the same menu items, and it may have reached a point where it’s no longer affordable for its aging clientele. In addition, the report notes that even though the Merritt has downsized its staff from 86 employees in 2007 to 49 currently, its labor costs are “still more than 12 percent above the national average” for restaurants. Indeed, on a recent visit to the Merritt, there were far more employees than customers.

But the report also concludes that the Merritt’s parking problems need to be addressed before the business can make a turnaround. In fact, Griffis said he has told city officials that a bailout, by itself, will only prolong the misery. “We’ve told them — ‘Without parking, you’re wasting your money,'” he said.

Unfortunately, parking is not an easy solution. Part of the problem is that the city may not be able to force Lucky to build more parking or give up what it has. Eight years ago, the Brown administration could have driven a harder bargain and required the supermarket chain to construct additional parking spaces, possibly on the roof of the building. But city officials at the time were worried that the company would abandon Eastlake and leave the neighborhood without a full-service grocery store — much like other Oakland neighborhoods.

So despite protestations from Griffis at the time, the city only required the supermarket chain to conduct a parking mitigation study. And then city officials looked the other way when the company failed to complete the study until 2008. Moreover, there’s evidence that Lucky is still violating parking rules that the Dellums administration established after the study was done.

For example, a February 2009 letter from city Zoning Manager Scott Miller to the attorneys for Lucky’s parent company, Save Mart, a supermarket chain based in Modesto, noted that huge delivery trucks had been blocking the rear parking lot that serves both the Merritt and the supermarket. Miller’s letter, which also served as a notice of the conditions imposed following the completion of the study, stated that tractor trailer deliveries must be completed by 6 a.m. each day. In addition, small- and mid-sized truck deliveries must only be between the hours of 4 a.m. and 1 p.m.

But Griffis maintains that tractor trailers are still making deliveries late into the morning, after the Merritt opens for business, and are blocking his customers. In addition, smaller deliveries are happening into the afternoon, he said. Moreover, a February 2, 2010 report from Miller to top-level city officials backed up his contentions, concluding that “rear truck loading for Luckys was not in compliance” with city requirements.

Nonetheless, the city’s hands may be tied. The problem is that back in 2002, city planning officials granted approval for the supermarket expansion to the property owners, Barbara Hartson and John K. Kennedy, and not to Albertson’s/Lucky, as is typical under state law. As a result, the most the city may be able to do is place liens against the property owners, because it’s prohibited by law from fining Lucky itself, explained Eric Angstadt, who is Miller’s boss and is deputy director of Oakland’s Community and Economic Development Agency.

The city also could try to convince the property owners to alter Lucky’s lease. Currently, parking at the site is not set side for either Lucky or the Merritt. But in reality, Lucky’s customers end up dominating the two parking lots. The city also could attempt to alter the property owners’ permit for the site, but that likely would end up in court, because state law frowns on cities taking away or changing vested property rights.

Moreover, some city officials aren’t convinced that the Merritt’s parking issues are as bad as Griffis contends. In a February 2 report, Miller said that a city survey last year found that lunch-hour parking was available in the parking lot in front of the Merritt on a regular basis.

However, this reporter found no parking in the lot in front of the Merritt during lunch-hour this past Monday, and a vast majority of the motorists appeared to be supermarket patrons. In addition, this reporter found no parking in front of the Merritt just before the weekday dinner rush last week. And yet at the time, there were only a handful of customers inside the restaurant. Also, during about thirty minutes of observation, this reporter saw customer after customer go into Lucky, but not the Merritt.

Griffis realizes that his parking lot woes may be unsolvable, so he is asking the city to dedicate street parking on Second Avenue to the Merritt and to examine whether to close a one-block strip of the avenue adjacent to his business and turn it into parking for the restaurant. But although Griffis, whose wife bought the Merritt in 1998, has supporters within the Dellums administration, it’s unclear whether they will push to grant his bailout and build him more parking. Griffis has been corresponding with mayor’s office staffers Theotis Oliphant and Marisol Lopez, but Oliphant declined to comment for this article and Lopez did not return a phone call.

Griffis’ flashy lifestyle and history of financial problems also raise doubts as to whether he can garner the needed city support. He has had troubles with the state Franchise Tax Board, and he drives a gray Ferrari. Griffis said he bought the expensive sports car with proceeds from a prior business and that his tax problems were unrelated to the Merritt.

The business owner said he would be willing to sign a deal with the city to implement many of the recommendations made in the city-commissioned report on his business in exchange for the bailout and more parking. But will it be worth it to Oakland? Does it make sense to close off a street for a business that may not survive over the long term — even if it is run more efficiently? It’s a tough question, particularly for a city with so many financial problems of its own.

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