For more than 40 years, the McClymonds, Hoover-Foster and Clawson neighborhoods in West Oakland haven’t had a full-service supermarket. That’s about to change. Community Foods Market, formerly known as People’s Community Market, broke ground on April 16, at 3105 San Pablo Ave. (at 32nd Street).
The project was spearheaded by Brahm Ahmadi, who co-founded People’s Grocery in 2002, a community food project that hoped to create a brick-and-mortar grocery store in the underserved community.
West Oakland is a food desert, with residents spending around 70% of their grocery dollars annually — an estimated $42 million — outside the neighborhood, according to Ahmadi. In 2003, People’s Grocery retrofitted an old mail truck into a mobile grocery store, offering residents affordable produce and a curbside grocery shopping experience. The organization also hosted classes on cooking and nutrition.
“Folks were appreciative but it was clear that it was far from adequate,” said Ahmadi. With a population of around 25,000, West Oakland has far more customers in need of access to healthy foods than a single converted mail truck could handle. “We needed to pursue more of an at-scale solution,” said Ahmadi “and what the neighborhood was asking for was a grocery store.”
As Nosh previously reported, momentum for a full-service store began in 2012, when Ahmadi began the research on just what it would take to get there.
The first hurdle was money. “We had to raise a minimum amount to get anywhere,” said Ahmadi.
As a grassroots organization, People’s Community Market had limited financial resources. Realtors and property owners were unwilling to enter discussions without proof it had the capital for a down payment. To secure seed money, Ahmadi spoke with venture capitalists and angel investors, but without success. People’s Community Market needed a new approach.
Like many nonprofits short on funds, the community was its greatest resource. People’s Community Market launched a DPO (direct public offering) model in November 2012, selling company stock directly to the public at a minimum investment amount of $1,000.
After launching the DPO, the organization raised $1.2 million by the end of 2013. Investments came from churches, nonprofits and individuals. Ahmadi describes most donors as “average Californians,” with the majority living in the East Bay.
“The average investment is about $3,200,” said Ahmadi, “and about half came in at the minimum.”
With enough money at hand to finally sit at the table with realtors and property owners, People’s Community Market began looking at locations in early 2014. They needed to secure a site near a residential area, serviced by bus lines and with easy pedestrian access. Solving this particular Rubik’s Cube actually wasn’t the hardest task. It was much more difficult to find a property owner willing to sell at a rate they could afford.
“The market was just starting to heat up, and, in West Oakland in particular, there are a lot of absentee property owners,” said Ahmadi. Speculators had purchased properties on the cheap in the ‘80s and ‘90s. “They bought mostly dilapidated, blighted buildings and they’ve just sat on them,” said Ahmadi, “waiting on market opportunity to make a huge return.”
“We just found time after time that they were just completely outrageous with what they wanted,” said Ahmadi. Some landlords requested as much as 200-300% above market value.
Barring outright purchase, People’s Community Market considered long-term lease options, but needed a minimum 20-year-lease to ensure a return on investment, and many property owners were unwilling to enter such a long-term arrangement.
Finally, Ahmadi approached East Bay Asian Local Development Corporation (EBALDC), a nonprofit community development organization, which provided consulting and would act as guarantor for the organization. “We entered discussion and/or negotiation with nine different property owners over the course of two years,” said Ahmadi, before People’s Community Market found the site on San Pablo Avenue.
As Nosh reported in 2015, People’s Community Market was able to secure the space because of a lucky break. An angel investor loaned funds to EBALDC to purchase the property so it could lease the space to People’s Community Market. The organization is on a 30-year-lease from EBALDC for the property, but will likely purchase in the next 20 years. It is also on a 30-year-lease with neighboring St. Matthew Missionary Baptist Church for use of its parking lot.
A third set of delays in the People’s Community Market saga came from the city of Oakland. Businesses in the food industry frequently encounter delays owing to licensing and permitting issues, but it seemed to take longer than necessary.
“We were promised by one of the head planners at the planning department that they would have it done by October 2016,” said Ahmadi. Zoning rights were completed in June 2017; the building permits took another five months to get.
Ahmadi attributes the bureaucratic delay to an undersized and overwhelmed city department unable to keep pace with the rapid changes currently afoot in Oakland. “Their process is not particularly small business-friendly,” he said.
When it comes to permitting, small organizations get overshadowed by high rise developers, according to Ahmadi. “We don’t have the resources to expedite the process or get their respect and attention in a way that they would,” he said. “They get way more attention than we do.”
With all systems now go for construction, the organization broke ground and changed names on the same day. The grocery store, initially called People’s Community Market, would now be Community Foods Market.
“Our focus has increasingly been around building community,” said Ahmadi. “And it wasn’t obvious from the name that we were a grocery store.” Residents had asked Ahmadi if it would be a flea market.
“Just opening a store in an underserved neighborhood doesn’t work,” said Ahmadi. The store aims to increase knowledge around healthier choices with cooking and nutrition classes, as well as providing financial incentives to try new foods. “People like a deal, a discount, a coupon, and can be incentivized to buy something new when you reduce the risk of trying,” he said.
Community Foods will carry on many of the same principles as People’s Community Market did back in its early days, though now in a 14,000-square-foot facility instead of a converted mail truck. And Community Foods is already performing neighborhood outreach to educate residents about the store.
To that end, Community Foods customers using SNAP (Supplemental Nutrition Assistance Program) can receive a 50% discount on qualifying fruits and vegetables owing to a partnership with Market Match, a statewide program administered by the Berkeley Ecology Center.
Community Foods will also partner with Fresh Life Foundation as a programmatic arm of the store, providing health services like diabetes screening, nutrition and dietary counseling, and asthmatic-related services for children and seniors. Ahmadi has also begun talks with Children’s Hospital Oakland and LifeLong Medical Care about making even more health services available in store.
There will also be a prepared foods section and a neighborhood café called The Front Porch, which will open one hour earlier and close one hour later than the grocery store. The Front Porch will function as both café and venue, with live music, guest speakers, movie showings and an array of events paired with dinner programs.
Ahmadi wants Community Foods to be a welcoming third place hangout for West Oakland.
“There’s a huge dearth of public spaces like that for this community,” he said. “People want a destination in the neighborhood.”
Since securing the property, Community Foods launched a second direct public offering from April through December 2016. From the two rounds of the DPO, it received a total of $1.7 million from 525 founding shareholders. It also received a combined additional $5.5 million construction loan from Northern California Community Loan Fund ($3 million), the Self Help Federal Credit Union ($2 million) and California Freshworks Fund ($500,000).
“What’s left to raise is working capital for daily operations for the store,” said Ahmadi. “That’s the next stock community campaign.”
The third direct public offering has not yet launched due to delays in receiving a permit renewal from the California Department of Business Oversight, but Ahmadi expects the renewal to go through any day and said the third round of DPO investment will be on the Community Foods Market website very soon. He anticipates there will likely be a few more delays in opening, but nothing so long as travails thus far endured. Especially now they’ve finally broken ground. Ahmadi is optimistic Community Foods will open before 2018 is over.
“Our target is mid-October of this year,” he said. “We’re going to work hard and do everything we can to make sure that happens.”
(Note: This story erroneously listed West Oakland’s population as 42,500. We also corrected the story to state that three neighborhoods in West Oakland —McClymonds, Hoover-Foster, Clawson — are the ones that did not have a full-service market for the past 40 years, rather than West Oakland at large.)