At the corner of West Grand Avenue and Market Street lies a vacant dirt lot, one of many scattered throughout West Oakland. This unassuming space is one of three priority locations for People’s Community Market (PCM), which could be the neighborhood’s first grocery store. But in the brutal Bay Area real estate market, making the project a reality is proving to be a difficult undertaking.
Brahm Ahmadi’s been working on it for five years. The community organizer who moved to Oakland more than a decade ago wanted to create an “authentic grocery store” that would provide healthy, affordable food options for locals. According to PCM, 25,000 West Oakland residents spend $58 million on groceries every year — but they must commute outside the neighborhood or rely on local liquor stores to make those purchases. And as study after study shows, a lack of access to healthy food leads to obesity, diabetes and other health problems in cities around the U.S.
Ahmadi recognized the need for a full-service grocery store while serving as the executive director of nonprofit People’s Grocery. For years, he helped set up temporary markets and programs that delivered produce to the underserved neighborhood. But the community needed a permanent solution for their food justice issue. In 2010, Ahmadi started the for-profit PCM and searched for ways to raise capital.
His goal received national news coverage and he pitched the idea to various investors, but investors balked at the low rate of return. (Grocery stores are a low-margin business.) After six months of coming up short, Ahmadi consulted with Cutting Edge Capital and decided to use Direct Public Offerings (DPOs) to raise the money. DPOs are a way to sell securities to unaccredited investors — individuals earning less than $200,000 per year. The campaign proved to be a huge success. Ahmadi raised $1.2 million for PCM and built a following of shareholders aligned with the mission of the grocery store. (Read the shareholder report here.)
Now PCM faces a new challenge.
The Bay Area real estate market is far more expensive today than it was only a few years ago. Landowners have high expectations for profits and will wait for deals more lucrative than what PCM can offer. Ahmadi also limited potential store locations to sites along West Grand Avenue, the neighborhood’s busiest corridor.
In July 2014, he brought on East Bay Asian Local Development Corporation (EBALDC) to assist in acquiring a site. Of the three sites Ahmadi is targeting, two are for lease and the other is for sale. Negotiations are underway for all three.
The challenge now may be as much political as it is financial. The issue of land access has become a focus point for PCM’s community advisory council (CAC), a body of people charged with engaging the West Oakland community in the creation of the grocery store. The council’s role shifted from helping to raise capital to “advocacy and activism,” says Hank Herrera, a CAC member who has known Ahmadi for 12 years and was an early shareholder.
“The real estate situation is very unfortunate right now,” he says. The value of land has skyrocketed in West Oakland, and landowners are taking advantage of that. Herrera says the CAC wants to “develop strategies to address this problem by bringing attention to the local policymakers.”
The challenge of land access surprised Monica White too. She’s also a CAC member and a resident of West Oakland for the last five years. The group has met with local politicians to discuss the challenges of acquiring a site and encourage them to work with the landowners so they come to a deal. So far, they’ve left without any commitments. Moving forward, the council will focus on gaining a better understanding of these complicated issues and look into how other groups have overcome them.
White clearly conveys her passion for the issue over the phone. She says everyone in West Oakland understands the need for a grocery store, be they a recent transplant or 30-year resident. Using that large community voice of over 25,000 residents to influence political leaders will be key to move PCM forward. White hopes Oakland’s decision-makers understand that this is pressing — and more than just a business transaction: “We really need our elected officials to move on this.”
The Equity Factor is made possible with the support of the Surdna Foundation.