Glenda Barnhart and her partner Clay Wagers dreamed of opening a bicycle shop. In 2008, as the economic meltdown started to spread nationwide, she feared that she would lose her income as a consultant and noticed that a bike shop was for sale around the Valdez Triangle. She took one look at bike shop and walked out. The area also known as Upper Broadway — failing auto dealerships, vacant storefronts, desolation — reinforced the thought it would be a horrible idea to buy that shop.
Six months later, Barnhart noticed the bike shop was still for sale. But this time she saw signs that the area was springing back to life. The nearby Whole Foods on 27th and Harrison streets had become a vibrant attraction for area shoppers. Condos were popping up close by, new restaurants were opening, and a nascent art community was blooming. It was time, she concluded, to buy that shop — Bay Area Bikes. "If we do this now," Barnhart recalled thinking, "we will be getting on the ground floor of something big. It was my dream to retire and do what I love."
Barnhart may not have realized it at the time, but officials from the City of Oakland were already planning a major project for the Valdez Triangle that promised to accelerate the growth it was experiencing. It was going to be the largest retail development in city history, known as Broadway-Valdez. The proposal would have transformed 74 acres of Broadway between Grand and West MacArthur into a bustling retail core, featuring apartments, restaurants, and shops.
The Broadway-Valdez development was going to be Oakland's answer to Emeryville's Bay Street, Walnut Creek's Broadway Plaza, and San Francisco's Union Square. For decades, the City of Oakland has watched its residents drive or take mass transit to other cities to shop. Oakland, according to The New York Times, may be the fifth best place to visit, mainly as a result of its diverse cuisine and lively night scene, but it ranks as one of the worst "leakers" of retail dollars in the country.
A 2008 city commissioned report on the state of retail in Oakland found that the city loses about $1 billion a year to neighboring cities because of its lack of retail, translating into at least $10 million in lost tax revenues each year for Oakland. "If I am an Oakland resident and I want to shop, I have very few options to do that," noted Eric Angstadt, deputy director of Planning and Zoning. "So I look outside of Oakland."
Years in the planning, Broadway-Valdez was designed to help Oakland recapture a substantial portion of that leaked revenue and economic activity. The development proposal also enjoyed overwhelming support from Oakland political leaders; it was championed by many of the 2010 candidates for mayor; and last year, Jean Quan made it a keystone of her economic revitalization plan.
The project excited environmentalists, too, because it was to be a smart-growth, sustainable development built along a major transit corridor. It also was designed to complete a vision for Broadway as a "grand boulevard" that seamlessly connected North Oakland to Jack London Square, offering shoppers a variety of transportation options as they traveled from destination to destination without having to use their cars.
But the future of the Broadway-Valdez project is now cloudy at best. The reason is that it depended heavily on redevelopment funds to get off the ground, and as of February 1, redevelopment has been eliminated statewide because of a decision by former Oakland Mayor and current Governor Jerry Brown and the state legislature to use the funds instead to help balance California's budget.
Although the demise of redevelopment may not completely close the curtain on the Broadway-Valdez idea, it certainly will make it much more difficult to attract developers and small businesses to the area. In fact, the death of redevelopment has prompted city officials to begin a new strategy, moving away from a focus on large, national retail to a plan that would attempt to foster growth of small businesses in the Upper Broadway area in a more organic way — and thus keep dreams like Barnhart's alive. "The plan," Angstadt said, "is to build from the ground up."
The annual estimated spending power of the nearly 400,000 people who live in Oakland is $1.6 billion, according to city reports. But Oakland residents tend to spend a considerable amount of their incomes shopping outside the city's limits, often at large-scale retail centers in nearby communities. This retail leakage has worsened over the past several decades as the city failed to establish a major retail destination, while its neighbors built them rapidly. "It just didn't happen," Denise Conley, an economic analyst who worked on Oakland's highly referenced retail implementation study in 2008, said of retail development in Oakland. "It's getting worse."
Sure, the city has successful neighborhood shopping districts, like Rockridge and Piedmont Avenue, but those small commercial areas have struggled over the years to compete against larger destination retail centers around the Bay Area. Oakland's failure to diversify its sale tax base also is likely a reason why the city was hit harder during the Great Recession than its neighbors, losing 27.8 percent of taxable sales compared to San Francisco's 8.5 percent and San Jose's 10.7 percent, according to the San Francisco Business Times.
Perhaps no city capitalized more on the absence of major retail in Oakland than Emeryville, a tiny community that rapidly transformed itself into a major shopping hub. More than two decades ago, Emeryville city leaders embarked on a long-term program to use retail as an engine for growth, while also laying the foundation for a strong high-tech cluster that now sports such well-known companies as Novartis and Pixar.