Grocery Co-Opted 

Snubbing a homegrown food co-op, the developers of West Oakland's Mandela Gateway welcome their new tenant: a 99-Cent store.

Two years ago, as developers of the Mandela Gateway low-income housing complex put the finishing touches on a two-block stretch of sparkling new storefronts along 7th Street, West Oakland locals envisioned a revitalization of their downtrodden business landscape. But most of that space has remained unoccupied, which is why Bridge Housing, the state's largest nonprofit housing developer, was thrilled to announce its new anchor tenant: a 99¢ Only store.

The Los Angeles-based chain is expected to sign a lease this month for the 11,500-square-foot space, Bridge Housing prez Carol Galante says. While Mandela Gateway sits on Oakland Housing Authority land, Bridge controls it under a thirty-year lease agreement signed with the city in 2003. "There are many, many people in the community who are very excited about having a 99¢ store," Galante says, citing a series of community meetings in 2003. The store will provide needed household goods, she says, and is a sound business investment.

The deal, however, was viewed as a major snub to Mandela Marketplace, a nonprofit local-business incubator that has long coveted the space for a worker-owned grocery co-op. After tireless negotiations with the developer, the would-be Mandela Foods Cooperative seemed to be a contender. It secured exclusive negotiating rights for the space in 2005 after Bridge failed to woo a Walgreens and other large drugstore chains, which deemed the low-income, high-crime area too risky (see "Take Two Buses and Call Me in the Morning," City of Warts, 1/5/05).

The co-op organizers were new to the grocery business, so Bridge handed them a weighty set of requirements to meet by last spring. They needed to raise $500,000 as a rent guarantee, and hire a retail consultant. Bridge would then contribute $250,000 toward tenant improvements, funds it now won't have to relinquish.

Galante says she called off the deal last summer after Mandela Foods repeatedly missed deadlines and failed to provide progress reports. Bridge instead offered the co-op a neighboring space about one-fifth the size. "By June, we said we couldn't wait any longer," she insists. "They have a really great idea but need to start at a more manageable level."

Housing Authority development director Phil Neville supports the decision. He wants the co-op to succeed, he says, but at this stage it's more important to have a functional business. "The co-op wasn't ready," he says. "If they had been ready, they'd have been there for two years."

The Mandela Foods crew counter that Bridge made unreasonable demands, and say they plan to ask Mayor Ron Dellums, a West Oakland native, to intervene on their behalf. "I believe we've really shown credibly [we can] put a business together," project founder Dana Harvey says.

Harvey insists her group was on its way to raising the money. It already had $300,000 in public funds, she says, including $100,000 from the project budget of Councilwoman Nancy Nadel, who represents West Oakland. "Bridge was not really open to this idea from the beginning," Nadel says.

The co-op's idea is to sell local organic produce in an affordable full-service grocery store. It plans to hire neighborhood residents and give them a stake in the business, and also provide funds for other local business startups. "That's why a 99-cent store can't compare," says co-op business manager Ali Ar Rasheed.

Nadel, like Galante, references the 2003 community meetings, but the councilwoman recalls them differently. She remembers residents wanting locally owned businesses and a decent grocery store. West Oakland has just one full-service grocery for nearly twenty thousand residents, Harvey says. And, according to 2000 census data, 61 percent of its households earned less than $30,000 in 1999.

There have been no community meetings to gauge local opinion since Mandela Gateway was built, so it's unclear where the neighborhood stands as a whole. "It's really upsetting that a publicly funded developer can make decisions like this that will impact our community for a long time without even asking what we want," says neighborhood activist Kenna Stormogipson.

On the streets near the development, the 99-center got mixed reviews. "A 99-cent store would work better. It would be economical, a place to buy deodorant, toothpaste, and diapers," says Jean Wilson, a local who likes the idea of a co-op, but doubts it could work here.

But Moe Rowland, who lives around the corner, was disappointed. The co-op, he says, would provide a much-needed boost. "West Oakland's run down," he says. "You want to help the community, you don't sell them crap."

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