People have been buying cars on upper Broadway in Oakland since the days of the Packard and the Hudson. But in the next few years, the auto dealers that have historically anchored upper Broadway will begin to abandon the street. The loss of one type of shopping presents an opportunity to recruit another. On Tuesday, the Community and Economic Development Committee will receive a report from a retail consultant about turning the area into a major shopping destination. The report shows that a vibrant retail district is a very real possibility, with the biggest barrier being the political will to make it happen.
A Citywide Retail Strategy Given its position at the center of a large urban area, Oakland should theoretically be attracting shoppers from neighboring East Bay cities. The reality is quite the opposite. Oakland residents do three quarters of their shopping outside the city. The $1 billion annually in lost sales costs us $10 million per year in sales tax. Beyond that, the lack of shopping in Oakland inconveniences residents and harms the economic vitality of our neighborhoods. The retail shortage also means we’re missing out on 10,400 jobs that could provide opportunities for the city’s youth and other entry-level workers. After viewing a 2005 report detailing the costs of our retail shortage, Oakland’s City Council elected to create a comprehensive citywide plan to strengthen our retail base. In February 2007, they hired the Oakland-based Conley Consulting Group to craft their strategy. The firm will deliver its first report on Tuesday, focusing on bringing an influx of retail to join the housing that will likely come to upper Broadway when the car dealers are gone. Re-envisioning Auto Row Many of the leases for car dealerships along Broadway will expire over the next few years, potentially offering Oakland a unique opportunity to capitalize on open space in the center of the city. Small showrooms and limited lot space make auto row a difficult place to sell cars, and many of the dealers would prefer more modern set-ups, like freeway-facing auto malls. The City has already worked with two of the auto row dealerships to move to locations on the old Army base, but the fate of the rest of the businesses remains unclear. Lengthy exclusive negotiating agreements with the Wayans Brothers, who proposed an ambitious movie studio, hotel, and amusement park project, have tied up the land most desired by the remaining dealers. The Wayans Brothers deal is temporarily off the table, but they could well return to negotiations with City Hall, forcing the City Council to choose between the movie studio and the more mundane, but highly profitable, car dealers. The dealerships on auto row right now generate $3.9 million a year in sales tax, and provide 650 jobs. Anticipating an exodus of auto dealerships over the next few years, the Conley report calls the area “very possibly the last chance for Oakland to reestablish destination retail at its historic, cultural, and economic core.” Its proximity to 52,000 downtown office workers, whose annual purchasing power totals $283 million, makes upper Broadway an ideal location for retail development. With one large office project nearing completion and another about to break ground, that figure is only going to grow. 
Office workers don't buy cars on their lunch breaks (V Smoothe) But office workers are not even the largest source of potential customers. Over a million and a half people live within a 20 minute drive of upper Broadway. With an average household income of $82,000 per year, these residents have $1.7 billion annually to spend on “comparison goods” like clothing, jewelry, gifts, and home furnishings. Currently, Oakland hosts a reasonable amount of low priced retail, like beauty supply shops and sneaker stores, but leaves the upscale consumer under-served. New boutiques in Old Oakland and Rockridge have been springing up to fill some of the gap, but there is still room for much more. Mixed Use with Retail Focus After examining three different development strategies for the area, the Conley Group rejected individual big-box type stores (think Costco) as economically infeasible due to high land costs along Broadway. That left two options, either housing with a smattering of retail, or housing with a plan to make upper Broadway a retail destination for the East Bay. The latter option is the tricky option. Sandwiched between high-end shopping in San Francisco and low priced malls in the suburbs, Oakland is in a difficult position when it comes to attracting retail: difficult, but not impossible. Other cities facing similar constraints, like Santa Monica, have successfully revitalized shopping areas by targeting the specific desires of urban consumers. Pasadena, whose post-World War II economic decline mirrored Oakland’s, successfully transformed an area once known as “skid row” into an upscale shopping district in the 1990s. With significant mixed-use developments featuring large retail spaces, the Conley report estimates that the area radiating from Broadway and 27th Street can accommodate the 450,000 square feet of retail and 850 housing units needed to create a successful shopping district. If this is achieved, it will bring $167 million in sales and $1.7 million in sales tax annually. How to Get There The first step, according to the report, is to attract a key initial tenant that could anchor future stores. Target has repeatedly expressed interest in Oakland, and could fill the niche well. A movie theater is another option for this function. It won’t be enough to require developers to simply add ground floor retail to their housing projects. The city must make sure that developers build spaces that meet the needs of modern retailers. While Jack London Square’s housing market has boomed with lofts and condos over the past several years, retail in the area was an afterthought. As a result, retail options in Jack London Square remain sparse. City officials and developers working in upper Broadway should look to Old Oakland for inspiration. That district’s abundance of large spaces with high ceilings and big windows are ideal for modern retailers like H&M, Apple, or independent boutiques like Fiveten Studios and Verse. The report proposes a ban on ground floor residential units or residential lobbies on major streets, allowing for uninterrupted storefront space. The architects who designed upper Broadway’s buildings 75 years ago served the future well. With its attractive historic buildings, upper Broadway is particularly well suited to contemporary retail needs. The wide street and sidewalks would welcome improvements like large trees and a widened median. Several existing locations could accommodate large sidewalk cafes. 
Photo by V Smoothe
Achieving such a grand vision will not be easy. Because the area lacks enough redevelopment funds to assist acquiring enough parcels for one large-scale project, development will be piecemeal. Although this makes things more complicated, it is not without precedent. Walnut Creek faced similar constraints in their downtown, but through a carefully implemented specific plan, the city was able to approve only projects consistent with their goals, and over time developed a highly successful retail center. The report recommends that the City follow this model and develop a specific plan for the area, which would take between one and a half to two years to complete, and would cost roughly $1 million, as well as an Environmental Impact Report that would cover future developments. Financially, the biggest barrier to a new retail district is parking. Current conditions would render mixed use projects infeasible if they were required to provide adequate parking to serve retail in addition to residential needs. The report recommends that the city construct the necessary parking structures, which would cost roughly $50 million. The report also warns of the potential for NIMBYism to thwart the plans, noting that “despite widespread support for retail development, there is potential public controversy for any specific development project” and “the significant amount of non-retail use required for financial feasibility is likely to create controversy”. A glance at the development appeals on nearly every City Council and Planning Commission meeting agenda underscores this concern. Ultimately, the major barrier to this happening is primarily one of political desire. The report notes that City officials will have to aggressively recruit retailers and prioritize approval of developments in the area, similar to the approach Jerry Brown took to attracting new residential development downtown. The report also notes that the City will have to sustain these efforts long term, saying “political commitments will have to span multiple election cycles.” With the right commitments from the City, upper Broadway could host the beginnings of a new retail district as early as 2011. What: Conley Consulting Group Report on Upper Broadway, Community & Economic Development Committee When: Tuesday, September 25, 2007 4:00 PM Where: City Hall Hearing Room One |