Tuesday, January 27, 2009

Costco At Oakland Army Base? Probably Not

Live in Oakland long enough and you start to notice a few things are awry in terms of getting access to the kinds of services a typical middle class Bay Area family expects to find.

Let's say you want to go to Costco to buy some food for the next week. Well, your choices are to drive to San Leandro, Walnut Creek or up to Richmond. Strangely, there's no Costco in Oakland, even though it would seem the retailer has a big base of customers right here. Costco even has a store in San Francisco, indicating they're not afraid of urban settings.

For years, the only Wal Mart around was down in San Leandro, alongside the Costco. Now one has opened near the airport, but that still takes you pretty far from the heart of the city.

Suppose instead you want to go to a hardware store to buy some tools. There's Home Depot nearby, which is sort of in Oakland, but really it's pretty much in Emeryville. Recently, another Home Depot opened up alongside the 880 freeway, so that's an improvement. But there's no Lowe's to be found, and the Orchard Supply is in Berkeley.

Everyone knows that Emeryville has managed to snatch away from Oakland virtually all the valuable retail opportunities that have arisen in recent memory. They got the Ikea and the Emery Bay shopping mall -- all this in spite of having zero mass transit accessibility.

The situation with the former Oakland Army Base gives you a glimpse of why this has happened.

In most cities throughout California, a major issue is City Councils putting too much emphasis on retail, because it gives them a way to bloat the government through sales-tax receipts. Because of Proposition 13, property taxes are far less lucrative, so residential development is often less favored.

Not so in Oakland. We spurned the a new downtown stadium for the Oakland A's for a set of foreclosure-ready instaslums. And our fearless leaders are about to do the same thing with the Army Base.

First, the city decided to waste more than a year of planning time fooling around with an idiotic proposal from the Wayans brothers to build a film studio on the property. So far as I can tell, no consideration was given to the fact that the average Oakland resident would receive no benefits whatsoever from such a proposal. The government likely wouldn't have reaped any tax dollars from it either.

Now, according to various sources, the choice is down to two proposals.

The first would focus on the sort of retail that Oakland is sorely lacking. Recent articles have suggested that Costco might be interested in the location, so that would be at least one anchor tenant for the property. The proposal also includes a hotel and conference center, which makes sense given the property's access to the freeway.

Sadly, the second proposal sounds a lot more likely, given Oakland's terrible track record for city planning. That proposal would focus on office space and "industrial" uses which go along with the port of Oakland.

I have no idea why some people are obsessed with retaining industrial land use in Oakland. My only guess is that it's the result of some sort of collusion between the unions and some sort of socialist desire to keep as many blue-collar jobs around as possible.

Office space also seems a bizarre way to use the land. Shouldn't we at least try to cluster office space around mass transit? If so, wouldn't it make sense to put that near the West Oakland Bart station, a neighborhood of burned-out graffiti-covered buildings?

To me it's a no-brainer. Bring in a set of retail businesses which will bring the kind of upper-middle-income shoppers Oakland needs to eliminate its image as a city of poverty. And, it will provide residents one more reasonable destination within the city, so we can stop driving to Walnut Creek to shop.

We'll keep an eye on this as it develops. I am not optimistic.


  1. Oakland has a 1.395% gross receipts tax. Even if you lose money you still have to pay. San Leandro and Emeryville, let alone Walnut Creek, have no such tax. Making 1.395% more on every transaction matters in the competitive world of retail.

  2. Of all the available spaces to put retail in Oakland, I have a hard time seeing why anyone would think it's a good idea to put it on an inaccessible spit of land immediately adjacent to the sewage treatment plant.

  3. Fair enough, but let's put our cards on the table. Oakland's planning department has a history of making decisions with the sole purpose of keeping the city full of poor people and making life inconvenient for the middle class and above.

    If this site is bad, how about at least acknowledging the problem and trading it for reasonable retail land along the Broadway corridor?

    Also, have you looked at the site of the Richmond Costco? It's not much better. All you need is decent freeway access and a big parking lot.

  4. Actually, what I said was somewhat inaccurate. The city government does promote policies which promote gentrification -- regressive parcel taxes, for example.

    But they don't have gentrification as a goal. It's just that the people in government are too stupid to understand that that is the inevitable outcome of such policies.

    Thankfully, Oakland's leaders are so stupid that the unintended consequences of their policies outweigh the intended ones and produce gentrification.

  5. I would say that NOT choosing the retail option for the Army Base is a better way to promote gentrification, Boss. If we use the out of the way land to relocate metal recyclers that are currently magnets for crime and blight in West Oakland, those neighborhoods will gentrify much faster. Costco can go out by Hegenberger, where we're trying to attract big box retail. But the metal recyclers can't really fit anywhere else, and they're keeping property values low.

  6. Why not just get rid of the metal recyclers completely?

  7. Because they're an extremely lucrative industry for the City and the Port. Scrap metal is the Port of Oakland's primary export.

  8. I still don't see any reason why metal recycling needs to happen in a certain location. The metal comes in and it goes out to the port. That doesn't mean the intermediate storage site has to be right next to the port. It could be elsewhere.

    Incidentally, Hegenberger is essentially where the existing San Leandro Costco already is located. The problem is you have this large set of potential shoppers along the 24 corridor with zero available shopping nearby in Oakland.

    If the Army Base site is so horrible for retail, I wonder why Costco is interested at all. They have a pretty good track record.

  9. Well, there's two reasons. First, if the recyclers were to move outside the City (and there's nowhere else within the City that can accommodate them), we'd be facing a significant loss in revenue. Second, we are under obligation from the California Air Resources Board as well as a number of relatively recently enacted State laws to take measures to reduce Port-related pollution, and moving the producers of the Port's primary export farther away will create increased truck traffic, possibly resulting in expensive punitive action from the State.

  10. Just move to San Leandro like I did. You never have to leave town. Wal-Mart, Costco, home depot, Bay Fair Mall, the outlet stores, I got my Ace Hardware hole-in-the-wall in walking distance (Dutton & Bancroft), got soul food, Mexican food and Chinese all in walking distance. Transbay bus & bart. All we have to do is keep East Oakland at bay and work to keep the idiotic ghetto builders (Transit Oriented Development morons) at bay.

    I would like a bit more "boutique-y" stuff, but heck, it's a 10 minute drive to Oakland, Alameda and 15 minutes to Berkeley for the non-mass market stuff.

  11. Did I mention our housing & property taxes are cheaper too?

  12. Oh, and the weather's better.