Whither the 10K plan?

As the local economy cools, perhaps it's time to ask...

The lively protest in front of the new Gap store kitty-corner from City Hall — to date the most prominent visual symbol of downtown Oakland’s revitalization in action — brought out a motley assortment of activists: Gray Panthers, Just Cause Coalition members, anti-sweatshop activists, and environmentalists. Waving fists of crumpled paper money, the protesters gamely bounced through a choreographed routine to “Just Can’t Get Enough,” Depeche Mode’s new-wave hit turned Gap jingle. The gracefulness of the dance was somewhat hampered by the fact that its participants were wearing bulky cardboard boxes with white letters painted on each side of the cube. When they faced forwards, the letters spelled out “Save redwoods.” (The Fisher family, which owns Gap Inc., also owns 350 square miles of redwood forest in Mendocino County.) When everyone jumped ninety degrees and wiggled their right sides, the cubes read “Boycott Gap.” When they jumped back and wiggled their left, the cubes spelled out “No sweatshops.”

Behind the dancers, people held up signs with nearly dissertation-length slogans like: “Brown’s 10K plan robs from the poor and gives to the rich. When big corporations move in, only big investors win.” Another one, neatly bullet-pointed, demanded “small, local, socially responsible businesses,” “diversity in our community,” and “a thriving local economy.” Protest organizer Mary Bull was passing around a bullhorn, inviting people to speak their minds about all things Gap, and nobody seemed to mind when the Depeche Mode CD started skipping for the umpteenth time, or when a passing homeless man somehow got tangled up in the dance.

Too bad it was a Saturday. Save for a few anxious-looking Gap employees huddled behind the mannequins, and a small clump of passersby shanghaied on their way to the bus stop, the downtown area was empty.

The fact that City Center, and much of the rest of downtown Oakland, is vacant on the weekends — and evenings, and in fact quite a bit of the rest of the time — was the impetus behind Jerry Brown’s alternately revered and reviled “10K Project,” which aimed to move 10,000 new, mostly upscale residents into seven downtown neighborhoods and provide them with a bevy of new shops, clubs, and restaurants. It has become a selling point for the city’s redevelopment arm, a rallying cry for civic boosters, and the civic plan that anti-gentrification activists love to hate. There have been endless debates over who will benefit from the project and whether it will, along with rising rents and eviction rates, contribute to pushing low-income residents out of the city. But now that the dot-com boom has come and gone, perhaps it’s time to ask whether those shops, apartments, and 10,000 new people will ever materialize.

According to Patrick Lane, the city’s 10K project manager, so far 411 new units have been completed and another 919 are under construction. (Most of the former are located at The Landing, a relatively posh, 282-unit development at Jack London Square, where rents start at $1,490 a month. Opened in January, the project is now at about 75 percent occupancy.) Another 1,508 units are in various stages of the planning process, and 822 units are in the pre-application stage. According to Lane, developers proposing an additional 1,529 units are in the “just talking” phase of negotiations. With an average occupancy of 1.7 people per unit, that comes out to about 9,600 new downtown residents — if everything actually gets built.

As the Bay Area rental market cools, that’s becoming a big “if.” “Who knows what the market will be in a year?” says Lane. “Some of these projects won’t start for a year. If they don’t have planning approval, they haven’t even started on the drawings.” Even for projects that have already broken ground, construction can be extremely slow — the Essex apartment building, still in the works along the shores of Lake Merritt, was a muddy pit for so long that city staffers nicknamed it “Das Hole.” No doubt developers in the preliminary stages of negotiation will be closely watching the sales and rental performance of the first of these 10K projects before they break ground themselves.

To add it all up: with only 411 units complete, the 10K plan to date has brought only about 700 new residents in the downtown. It’s hardly a yuppie invasion. But then, nobody’s ever really put an end date on when the living space for those 10,000 people is supposed to be finished. Although many expected it to more or less coincide with Brown’s first term, the original report on the feasibility of the 10K plan, prepared by Berkeley-based firm Bay Area Economics (BAE) and presented in March 1999, refers to a five-year time frame. However, the report came with a significant caution that seems to have gone largely ignored. Comparing Oakland’s 10,000-resident goal with similar downtown development schemes in Cincinnati, Denver, Portland, and Seattle, BAE found that in each of these cities, growth was much slower than that envisioned by the 10K project. In other words, even its earliest stages, the city’s own experts predicted that getting thousands of people to move downtown right away would be an uphill battle. Were they right?

The 10K plan is still less than two years old (and has been overtaken by sour economic times) so it’s hard to tell whether or not it’s still on track. But perhaps a good indicator can be found in the recent tweaking of the most ambitious of the 10K-associated developments, a mixed development of about 2,000 housing units as well as retail space covering a two-block area bordered by Telegraph, San Pablo, 19th and 20th streets. Forest City Residential, a Cleveland-based developer, signed a negotiating agreement with the city in May 2000. But the planning process stalled after the agreement expired this January. (Perhaps not coincidentally, later that spring, Forest City first redesigned, then backed out of a deal to build a $130 million “cybervillage” on the site of a former Ford plant in Richmond.)

On June 26, the City Council agreed to let the city’s Community and Economic Development Agency (CEDA) reopen a 180-day exclusive negotiating period with the developer, but this time CEDA was armed with a new study they’d commissioned from Keyser Marston Associates to help them figure out what the Forest City project should look like. Surprisingly, the study suggested a move away from prioritizing housing, instead concluding that the project should bump up its retail space and change the focus from smaller, neighborhood-serving stores to something more regional, like a department store. Overall, says Daniel Vanderpriem, CEDA’s acting chief negotiator, the city wants to start bringing in stores that attract not just residents, but other stores. “We want to capture some of the leakage of taxable sales — people within Oakland going outside of Oakland to spend money,” he says.

Susan Smartt, Forest City’s vice president of development, declined to be interviewed for this story, instead issuing a statement through the company’s PR department that their plans remain unchanged. But in fact, CEDA documents prepared for City Manager Robert Bobb clearly state that the two agencies have been in discussion about changing the project’s housing-to-retail ratio, and that “Forest City’s current project development strategy differs significantly from the original proposal with an increased emphasis on retail in addition to housing … to establish Oakland as a premier regional retail destination.” Reading between the lines, there is an admission here that the downtown has not yet gathered a critical mass of residents, and that until enough of them arrive to support small, neighborhood stores, the real money is to be made from people outside of Oakland coming in to shop.

This is not new thinking, of course; for decades now Oakland officials have worked to attract a major department store downtown. It has long been Oakland’s great white whale. Does the renewed quest for a store signal the end of the 10K dream?

Not if you talk to the man who is synonymous with 10K. “We’ve got to get the housing first,” insists Mayor Jerry Brown, who continues to argue that otherwise retailers won’t set up shop. “We don’t have the consumer base, the tax base.” After recently losing a battle to pass a state bill that would streamline downtown construction by providing urban exceptions to the California Environmental Quality Act, Brown seems somewhat embattled when he talks about the 10K project. He’s tired of delays, NIMBY sentiment, and complaints about chain stores like the Gap. Sure, he’d like mom-and-pop shops, but he demands, “Where’s the locally owned store? Can we get Peet’s Coffee? No, they won’t come. It’s too much risk. It’s not for the faint-hearted.”

City officials have already angered housing advocates, who say they were promised that $4.6 million would be collected from the sale of four city plots to private developers and used to finance 80 to 120 affordable units. Although unexpected costs and the collapse of one such sale have reduced those set-asides to about $1 million, advocates like Elissa Dennis of East Bay Housing Organizations criticize the city for making such a precarious promise. “The city needs to have a policy where they are committed up front to building affordable housing in whatever large-scale development they take on,” she says. Meanwhile, pro-development mayor Brown feels that he and his sharpest anti-gentrification critics are getting tangled up in semantic battles over who is “progressive” and what “affordable housing” means. “Who wants unaffordable housing?” he asks dryly. But, he adds, developers won’t build here unless they can charge market rates. “It is a hard economic reality that construction costs are identical in Oakland and San Francisco, but the rents you can charge here are one-third lower, so why ever build here? That’s a problem.” The city is setting aside affordable units, he says, “But we should be honest and indicate that it’s more of a sidebar to the overall situation, and the fact that we build more housing will bring down rents because it will increase supply,” he says. “Not building housing doesn’t help.” Oakland currently has 13 percent of its rental housing classified as “affordable”; Berkeley has six percent and Albany less than one percent.

Has Brown taken away a lesson from the ups and downs of the 10K project’s first two years? Perhaps it’s that you can’t make all of the people happy all of the time. “You’ve got to distinguish between people who have dreams or fantasies that are not anchored in reality,” says Brown. “I guess I could say I would like a Nordstrom’s and a Hard Rock Café at 14th and Broadway, and 10,000 people here in the next year, and 5,000 new units, and that someone else would pay for it.” But as long as you’re doing that, he says, “Why don’t you square the circle or make water run backwards?”

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