Port Of Oakland And Economic Development

Oakland 2020: Oakland Forgot Economic Development As Its Black Population Shrank, What Now?

Today is January 1, 2020. Or, as its already dubbed before its over, the start of “The Roaring 20s”. But what will 2020 bring for Oakland? Our city called Oakland forgot how to do economic development as its black population shrank, so what now for Oakland 2020?

The Oakland of 1980 was a thriving population that was majority African American (47 percent) with a nearly equal number of Caucasian Americans (38 percent), and a healthy mix of heavy industry and service industry companies. That Oakland had big plans for its future, one of them was the redevelopment of Downtown Oakland.

Oakland City Center
Oakland City Center Today

The plan was reflected in a giant sign for something called “Oakland City Center” and that surrounded 50 acres of land smack in the middle of Oakland’s central business district. As a teenager at Skyline High School then, I recalled the image of that wall as reflecting the idea that Oakland always had potential, but never reached it. The “Oakland City Center” wall was a signal that Oakland’s first economic development strategy was active – it just took some time to form.

Then, as Oakland headed toward the 1990s, it lost companies like the Vulcan Foundry in East Oakland, but a creative group of Oaklanders assisted by something called The Oakland Redevelopment Agency, managed to turn it into live-work quarters. Meanwhile, the unemployment rate, especially for blacks in Oakland, started to climb. In an effort to turn around its sagging economic fortunes, Oakland unsuccessfully (because it lacked interested private investors willing to ignore the institutional investor racism of the period) tried to build a high-tech industrial base in what I called in my 1986 U.C. Berkeley Planning Graduate School paper “Jumping on The High Tech Bandwagon Without An E-Ticket” (a nod to the old Disneyland ticketing system).

Oakland also tried to build its retail base by planning a 2 million square foot shopping center in Downtown Oakland, and complete with its own entry from the then planned I-980 Freeway in 1984. That effort was killed when Paul Cobb, now Publisher of The Oakland Post, but then the head of the Oakland Citizens Committee for Urban Renewal, gathered members of 40 different community groups to storm Oakland City Council and force a “no” vote.

(That work would later be revived twice: in 1993 and with a $293 million subsidy request that was killed by the Oakland City Council when it was working out of the Lakeside Park Garden Center after the 1989 Earthquake, and then again by Oakland Mayor Elihu Harris, who with then-Developer David Alexander, coined the term “Uptown Entertainment District” on February 16th of 1996, but that effort failed due to the developers unrealistic economic analysis. The reason I recall that date is I was at the meeting when the name was created during the conversation – I was there along with then Oakland economic development head Kofi Bonner and Denise Pinkson, two fellow classmates of mine at Berkeley, and Kofi’s now heading up FivePoints and Denise is a partner with TMG Partners, the developers of 2201 Valley Street, a new structure planned for the Uptown, as I write this.)

But one positive from that period was the creation of what just may be to this day the largest number of non-profit job training centers per capita of any city in America. By 1997, Oakland had an estimated 120 such programs, all which had financial ties to the Oakland Redevelopment Agency in the form of grants and loans.

Jerry-Brown
California Governor Jerry Brown

Most of those organizations were ran by black Oaklanders, (like Ethel Long Scott of the The Women’s Economic Agenda Project) and in retrospect did a very credible job of keeping money in the pockets of those most in need. Between that effort, and Oakland’s well-financed affordable housing industrial complex (yes, that’s the word for it), a person could comfortably live in Oakland on a low-to-middle income salary. But, by the late 1990s, something happened that was to change Oakland forever: then former California Governor Jerry Brown, eager to remake his “moonbean” image and reenter politics, ran for mayor of Oakland. In doing so, Jerry said he would break up what he perceived as a black political power system. In fact, he said so in a rambling talk he gave to Joan Walsh in Salon in 1999.

Salon’s Joan Walsh Wrote Of A Predominately Black Oakland Government That It Had A Racial Spoils System In Her Interview With Then Oakland Mayor Jerry Brown

It was a take that was as much disturbing as it was racist. Consider this exchange, as written by Walsh:

A few black leaders began to compare the liberal former California governor with New York’s Republican Mayor Rudy Giuliani. “I don’t think he cares much about diversity,” former Mayor Elihu Harris, who is black, told the San Francisco Chronicle after Brown’s State of the City address in April. It looked like an outbreak of ugly racial politics was going to paralyze Brown’s attempts at reform.

But two months later, the storm is over. Brown ousted the two officials — and at least three others — and lived to talk about it. But he doesn’t want to talk about it, insisting the controversy is ancient history now. We’re sitting in his small City Hall office, which is strangely anonymous five months into his tenure — no photos or plaques or even art on the walls — and Brown is uncharacteristically tight-lipped. “Nobody’s talking about that anymore. The Chronicle’s not covering it. The [Oakland] Tribune’s not writing about it.” Just because the media isn’t covering something, I remind him, doesn’t mean it’s irrelevant. “OK, maybe they’re talking about it in some of the black churches,” he admits. “But tell me who else is talking.”

When I repeat Harris’ comment about “diversity,” I touch a nerve, and suddenly Brown can’t help himself. He’s talking, all right, an angry, staccato stream-of-consciousness rant.

“Let’s talk about diversity. Every city department head but one is black — is that diversity? People can say anything they want.” He points to my cup of water on his desk. “They can say there’s two cups on the desk, but that’s demonstrably not true. Facts are facts.” I nod, and he moves on to the issue of crime, which he’s made his own. “Reducing crime is saving minority lives. Let’s look at the city’s murder victims last year. Almost all of them were black.

“Oakland government was not working,” Brown continues. “We had process paralysis. The insider group needed to be shaken up — the friends getting jobs for friends. People voted for change, and that’s what they’re getting.”

(Update: reading that for the first time causes me to look at how then-Mayor Brown treated me during my Super Bowl: Oakland effort with fresh eyes. Was all of the hell I was put through done because Brown thought someone white should head a Super Bowl Bid effort that I started from scratch? The fact is, neither Brown, or others, save for then-Oakland City Administrator Robert Bobb who put me in charge, cared to take the lead, always pointing to what Oakland didn’t have, instead of what advantages it did have, and could build on, like adding 12,000 seats to the Oakland Coliseum Stadium.

In the face of what Jerry himself admitted to me was a lack of support for what I was doing, my effort pushed Oakland to be one of three finalist cities for the right to host the 2005 Super Bowl. On top of that, he said it to me while we were in Atlanta for our Super Bowl Bid Pitch during the 2000 Fall NFL Owners Meeting my work brought him and the City of Oakland to.

And although we lost to Jacksonville, then Oakland City Council President Ignacio De La Fuente said it was the only positive news the Coliseum had the entire year of 2000. It also remains the only time in NFL History that Oakland filed a bid to host a Super Bowl Game. Not bad for a “racial spoils system” – such crap. It’s a raw nerve in me to this day, and seeing entries like that one by Salon’s Walsh doesn’t help.)

While Brown blasted the fact that Oakland had blacks running many of the City of Oakland’s departments (a take that would sink him politically in Atlanta), and while Joan Walsh called it a “racial spoils system” the underlying question was never asked by Walsh, or answered by Brown: “Do you intend to replace black Oakland workers with white Oakland workers?” Moreover, the other question that should have been asked was why? (I wonder what Joan calls the predominately white Oakland government of the 1970s or today? Or what she would say about employment advice books like the classic “The Secret Handshake” which is about how to rise in business by forming relationships?) Jerry Brown’s election and time as Mayor of Oakland is marked by race, both positively and negatively.

(Here, I have to sadly report the shockingly regular negative words white liberal publications like Salon and The Nation used to describe to African American-ran government in the Oakland of the 80s and 90s, in reference to Jerry Brown’s rise to become Oakland’s mayor. A “racial spoils system” is but one example in Salon, and The Nation’s Marc Cooper wrote it was “an ossified Democratic political machine that had once been a showcase for rising black political power.” These takes should give any black democrat or someone white, or Asian, or Latino who has the appropriate level of sensitivity to institutional racism pause. I’ll leave it there for now.)

Governor Brown Reduced The Rate Of Institutional Investor Racism That Plagued Oakland, As Much As He Started A Wave Of Market Rate Housing That Created The Foundation For Today’s Homeless Problem

What Jerry Brown did that was positive was to dramatically end the institutional investor racism that plagued Oakland for decades. For example, I remember a letter I received from Phil Tagami when I was Economic Advisor to Oakland Mayor Elihu Harris and he was developing the Oakland Rotunda. The letter wasn’t from him to me, but from the United Colors of Benetton and openly stating that Oakland’s demographics were not the “right fit” for its objectives. In other words, Oakland wasn’t white enough.

IMG_21391
Former Oakland Mayor Elihu Harris (Zennie62)

To put it in street terms, white developer money was jumping over Oakland from San Francisco, and going to Alameda, Emeryville, Berkeley, and suburban Walnut Creek. The standard population migration pattern in the San Francisco Bay Area at the time was that one would go from one county to the adjacent county: like from San Francisco County to Marin County. But my analysis for the San Francisco Human Rights Commission under the late later San Francisco Mayor Ed Lee, showed that in the case of Alameda County, the arrow of migration from San Francisco to Alameda was tiny, whereas the arrow of migration to Contra Costa County was gigantic; a factor of 20-to-1. Well, Jerry Brown’s becoming Oakland’s first white mayor in decades, coupled with his celebrity status, helped change that.

But Jerry (now former Governor Brown, again) wasn’t interested in developing Oakland’s retail base; he wanted Downtown Oakland to have market rate housing.

The reason I personally know this, is because what Jerry did effectively wrecked my effort to bring Forest City Development Company to Oakland, and to build what I and Kofi Bonner and Mayor Elihu Harris envisioned as the “Times Square of The West.” I cold-called, and then gave a presentation to Forest City representatives at the International Shopping Centers Spring Convention in 1997. Present for the event were Oakland District Seven Councilmember Larry Reid, Kofi Bonner, then Oakland City Administrator / City Manager Robert Bobb, Oakland District Two City Councilmember John Russo, and the afforementioned Phil Tagami. (In fact, Kofi, Phil, Russo, and I started a tradition of Oakland having a presentation booth at ICSC to market the city’s development opportunties to shopping center developers.)

After that meeting, I was on cloud nine. But that didn’t last long because, during a drive around Oakland with Forest City’s Greg Vilkin, I was informed that Brown, who had then just won the 1998 Oakland Mayoral Election, was talking with Forest City not about my Uptown project, but about building housing in the same Uptown District, using the same site. I was later told by Elihu Harris that Brown had promised to pay Forest City $70 million in upfront pre-development funding – an incentive to kick start his 10K Housing Program.

The only reason Oakland had more affordable housing built during Jerry Brown’s time as Mayor of Oakland was because California Redevelopment Law called for 20 percent of redevelopment tax increment revenue to be set aside for, and then used for, affordable housing development. In fact, that’s what created Oakland’s now dormant “affordable housing industrial complex.”

Mayor Jerry Brown’s 10K Housing “Elegant Density” Program effectively stopped not only Oakland’s quest for a retail base downtown, but it’s overall economic development effort. I had a personal stake in the 10K Housing Program as the one who formed the “developer forum” at my office on a Saturday. I called upon many of my developer and commercial broker friends I gained in Oakland real estate while working for Elihu Harris to come to the event. There, they were able to see what land parcels were marked for housing development, and learn about what Oakland Redevelopment Agency programs were available to assist them.

Jerry Brown As Mayor Of Oakland (youtube)
Jerry Brown As Mayor Of Oakland (youtube)

The objective was to build 10,000 units of new housing, all in or near Downtown Oakland, and most at market rate, with some above that. At the end of his time as Mayor of Oakland, about 7,800 units were built. Then, as Governor of California, Jerry got rid of California Redevelopment Law under the impression that it would save $1 billion and help get California out of its constant budget deficit problem. The California Finance Association asserted that California’s budget deficit problem could be solved without killing redevelopment law. But that didn’t stop Governor Brown as he pressed ahead and eventually the California Supreme Court laid the final death blow – both to redevelopment and to Oakland’s economic development program.

That Oakland’s black population shrank from 47 percent in 1980 to 23 percent in 2019 should come as no surprise: I predicted that outcome in a 1994 column in The Montclarion. I did so because many in Oakland, and in particular its politicians, had long called for a more completely developed downtown with what I wrote was a “well-monied white population”. But Jerry Brown didn’t call for a full downtown plan, he just focused on the market rate housing component in the 10K program.

If you’re wondering if then Mayor Brown had any idea his efforts would cause the gentrification problems of today, take a look at this doozy of a paragraph set quoting Brown on the subject in the same Marc Cooper interview in The Nation:

 

Now, as he strives to be re-elected to a new term on March 5, Brown has taken a decidedly more pragmatic view. “The flow of capital follows the rules of capitalism,” he says as he points toward a just completed, pastel-colored clump of upscale apartments. “It goes wherever it gets the highest return. In a city that has been neglected for twenty-five years, the only thing I can do as mayor is offer a certain level of confidence and reassure investors they are making a good decision. You just can’t turn every project into some sort of social experiment.”

Ask Brown about criticism that this attitude encourages gentrification and he visibly bristles. “I no longer know what they mean by gentrification,” he answers impatiently. “If gentrification means neighborhood improvement–well, what’s wrong with that? Please show me some neighborhood that doesn’t want to improve.”

 

That comment: “You just can’t turn every project into some sort of social experiment”, makes me wonder if Jerry’s real reason for eliminating California Redevelopment Law was that he didn’t like the 20 percent set aside of tax increment financing revenue for affordable housing? If that’s the case, Governor Brown’s past statements combined with the giant Oakland homeless problem of today, will lead to a wholesale reformation of his political image. The term “conservative democrat” is starting to fit much better than “progressive”. And less you say I’m wrong, well, here’s Jerry Brown, yet again, in Marc Cooper’s interview in The Nation:

 

“Here’s the problem: We are making real progress in Oakland. And the left simply has no rhetoric for progress,” Brown says as we reach our destination. “The left only has a rhetoric for victimization. They just can’t stand success. Some people are just more comfortable managing misery.”

And there’s this…

“School reform has a left component and a right component,” he says. “The left knows you need to spend a lot of money on public schools to make them work. The right knows you have to impose discipline and authority so that money gets spent most effectively.”

Thus, Jerry Brown’s Legacy: Oakland Has More Market Rate Housing, More Homeless, Fewer African Americans Than When He Was Elected Mayor of Oakland

Mayor Quan On Oakland Global – Insight Terminal Solutions Oakland Bulk & Oversized Terminal In 2013
Mayor Quan On Oakland Global – Insight Terminal Solutions Oakland Bulk & Oversized Terminal In 2013

Overall, two main developments contributed to Oakland’s black population decline and rise in its homeless population: then Mayor Jerry Brown’s 10K Program and later, the elimination of California Redevelopment Law (which was caused by the Jerry Brown, the former mayor, as Governor of California) and with it, the affordable housing money set-aside provision. That is, sadly, Jerry Brown’s legacy. But the equally sad fact is that other elected officials after Brown have done nothing to counter the impact of his actions.

So, from Brown to Oakland Mayor Ron Dellums, then Oakland Mayor Jean Quan and then to Oakland Mayor Libby Schaaf, Oakland has failed to add a job base of basic employment, or add truly affordable housing.

Consider this: Oakland had $300 million amassed for affordable housing between 2008 and 2011. From 2012 to 2019, as property values have grown at the highest rates in its post-war history, Oakland has had no redevelopment project area to be able to store that growth as tax increment revenue for affordable housing construction: the engine of Oakland’s economic development was killed, and then the very market forces it was set up to counter went to work, pushing blacks and Latinos (primarily) out of Oakland.

The Oakland Racial Spoils System, If You Believe It Exists, Did Not Go Away, It Just Changed From Black To White, Over Time And To 2020

Meanwhile, the “racial spoils system” that Joan Walsh claims to have existed in her article called “Jerry Brown shakes up Oakland’s black political establishment”, simply was changed to one that benefited whites more than blacks – if you believe Walsh’s take. Nonetheless, this view was powerfully communicated by the current Mayor of Oakland’s summer intern staff photo, where one was hard-pressed to find a black person – something not missed on social media. Moreover, the Mayor has taken heat for a not hiring more than a single black man during her first term – something that, in fairness to Libby, she’s worked to corrrect.

The fact and problem is, it’s not called a “racial spoils system” when whites are hired over blacks, its called “hiring the best and the brightest” – forgetting that under the black “racial spoils system” Joan Walsh claims Oakland had, Oakland was noted for some of the most innovative financial approaches in local government history (like the sale-leaseback). Something Salon’s Joan Walsh never knew because in her institutionally racist lens of the time, she’d never think that was possible.

measure-aa-loses-in-court-oaklan
Oakland Mayor Libby Schaaf

Now, today, Oakland’s economic development effort is all but dead. Zero effort is made to draw jobs for lower skilled Oaklanders, and because there’s no redevelopment law permitting the use of tax increment revenue to make it happen. The result is that only persons who want to build housing that needs a high rent to be profitable can afford to build in Oakland. It’s been that way for years now.

Indeed, the Mayor of Oakland relies on a private sector startup for the giving out of the same “microloans” the Oakland Redevelopment Agency once issued, and a younger generation of Oaklanders believes a public bank will solve all problems, and failing to look at the lessons of the Oakland Community Bank of The Bay, Oakland’s first attempt at a public bank that had to change its mission to just keep its doors open.

The point is, from 2009, and the murder of Oscar Grant on the part of BART Police, to Occupy Oakland, to the various marches and protests, to today, the overall quality of life in Oakland has not improved. Rents have continued to rise, and the homeless ranks have continued to grow.

Meanwhile, almost no efforts to build low skilled, high wage jobs have been made in Oakland. And tech? Whereas San Francisco is known for its many venture capitalists, Oaklanders seem infected with the idea that there’s no tech startups that need funding, and the game has to be to beg for blacks to get hired by white tech firms. They call it “tech-equity”. I call it a complete insult to blacks who have tech startups in Oakland and who seek venture funding.

And if it’s not that, then it’s the so-called Sierra Club-led environmental community borne of a racist past where its two founders were noted white supremacists, and that draws white supremacist support today, who fail to lift a hand to bring jobs to Oakland. In fact, they oppose the Insight Terminal Solutions Oakland Bulk and Oversized Terminal because Tom Steyer spent $60 million seeding non-profit firms to do so (and Insight Terminal Solutions is a Zennie62Media client). The managers of those firms don’t stop to consider that Steyer, a coal investor himself to this day, is really trying to devalue the coal fields and not tell anyone that America’s one of the top three producers of coal for use in the whole damn world.

Tom Steyer
Tom Steyer

So, Tom Steyer quietly sweeps in a buys the devalued-to-junk coal fields, adds automation, and makes a killing off the unsuspecting elected officials who gained his financial backing. One of those being Oakland Mayor Libby Schaaf, who managed to steer $500,000 to her Oakland Promise program. One has to ask why the Mayor hasn’t turned her effort toward Oakland’s homeless. She says she will, but when?

Meanwhile, No Coal In Oakland opposes the project Phil Tagami conceived of to replace the closed Oakland Army Base and its 4,000 jobs, and yet has not only just one black person involved, but has failed to push any kind of job replacement project of its own. Not once. They don’t care about bettering employment opportunities for anyone, but especially not for the homeless blacks in Oakland.

But what No Coal In Oakland does care about is spreading fake news about the Insight Terminal Solutions Oakland Bulk and Oversized Terminal, and attacking jobs it would generate as “union�� – which is a crazy thing to do, but they do it. No Coal In Oakland doesn’t seem to realize that the City of Oakland itself identified coal as a commondity for the OBOT, not Phil Tagami. They might as well be GOP conservatives, because they act like them in many ways.

Oakland Moms4housing 696x522
Oakland Moms4housing (Photo courtesy Post News Group)

And if it’s not that, then its the ugly precedent that will be set by Moms 4 Housing if it’s allowed to squat and take the property at 2928 Magnolia in West Oakland. So, I can see a future that consists of a well-gunned Oakland homeless community attacking Moms 4 Housing and taking the property they took from Wedgewood Properties. Tell me what’s to stop that from happening? We have a police department that responds only when someone is hurt or killed – so the damage would have been done by the time OPD can step in.

The anger that fuels Moms 4 Housing’s actions is 100 percent understood, but what I don’t like is the mothers being held in this place of daily suspense over their future. Wondering when the time they will be asked to leave that house has to be horrifying. It’s also not necessary. The overall cause of their situation is a market that creates more and more expensive housing; their actions, alone, will not change that state of affairs, but it will give more content opportunities for local media organizations.

Say that I’m wrong? Okay. I ask you to show me how it makes anything better? If Oakland’s economic history has shown us anything, it’s that we haven’t created a truly collaborative economy at all. Oakland’s society has degenerated into a free-for-all, where one can be killed just for having a laptop in a cafe. You’re telling me that action’s not going to happen to a housing squatter?

Wake up.

The only way to completely stop this craziness is for the City of Oakland to reinstall redevelopment and use it. In fact, there’s a plan to do that with Senate Bill 293 and using the Oakland A’s ballpark at Howard Terminal . That new redevelopment zone can generate more than $1.4 billion in tax increment financing revenue over a 40-year period, but the City of Oakland doesn’t seem to want anyone to know that. And then there’s Senate Bill 628, a law created in 2015 that allows for the creation of redevelopment tax increment financing zones, where the money can be used for affordable housing. When I say this, people look at the legislation and then say I’m wrong; they never bother to read the definitions section of the law. Geez.

Economic Development assures the creation of a city that’s for everyone. That’s what Oakland did when it used redevelopment, the question isn’t why isn’t it using it now, but what will it take to make it use redevelopment now?

In 2017, I wrote this over at Zennie62.com:

 

Our elected officials have been so enamored with tech that they have let biotech and whatever with a tech sound invade Oakland and the East Bay. This is not a new problem. I remember in 1997, I was in a meeting on the “jobs housing balance” and asked why the public officials were not going after jobs that Oakand and Alameda County dwellers could do, rather than focusing on biotech? A person qualified for that biotech job was then more than likely to live outside of Oakland and would have to drive to work, anyway. So much for jobs and housing balance.
Today, that mindless focus on tech has caused many Oaklanders to be pushed out of the city – many of them black. I think someone forgot to tell Mayor’s Brown, Dellums, Quan, and Schaaf that tech firms are not noted for employing black people. So, goodbye black Oakland, for all practical purposes.

That’s not city building. We need Oakland leaders who understand how to make government help people and small businesses. We need to change Oakland now, before it’s too late, and while the State of California has provided us the chance to do so.

 

That still applies, today.

Stay tuned.

Post script: This article is designed such that it’s always in a state of flux. Not only am I adding information on a regular basis, but I’ve asked Oaklanders who remember various events covered here, to recount their view, or to add other memories to the story. In all, it’s an experiment with a different approach to news reporting and column writing. So, as I say, stay tuned here, because there’s always going to be something new. And if you want to add something here, and were around during a time when something happened, just email me at [email protected].

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