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Oakland: born again by the Bay.

One of the oldest and most historic cities in the West, Oakland, Calif., has mirrored the changes that occurred in many Eastern cities. With its populace migrating our of the core toward suburbs in Contra Costa and other adjoining counties, this conce thriving urban center declined throughout the 1960s and 1970s.

But the trend had been reversed in the past five years as the cost of housing in the California suburbs has skyrocketed, forcing moderate income families to move back within the city limits. This return to the city has upgraded many Oakland neighborhoods.

"Oakland does not have neighborhoods that could be called slums," says Keith Sovereign, owner of three PRO Markets within the city limits. "The city has become very homogeneous, somewhat of a melting pot for our entire society." Oakland was recently recognized as the most integrated city in the U.S.

Sovereign opened his first supper in 1968, added a second unit in 1970 and a third in 1978. "The chains have just about dominated all of California. Independents are few and far between. I had to find a niche where I could operate without going head to head with the chains. Safeway and the others have left the Oakland Flatlands wide open for independents."

Sovereign says the neighborhoods near two of his supers are improving. The opening of a BART (Bay Area Rapid Transit) station near his store on Eastmont Avenue about 12 years ago has been the catalyst for a gradual upgrading of that neighborhood. The renewal has become so dramatic that Sovereign plans to build a new supermarket on the parking lot of his present store. The new store, he claims, will be only the second new super to open within the Oakland city limits in the past 10 years.

"People can get to San Francisco faster than to other sections of Oakland," Sovereign says. This easy commute combined with the lower housing prices in Oakland has attracted many people who work in San Francisco to live in Oakland. With financial incentives and encouragement from the city government, many white collar workers have been renovating the older houses and apartment buildings.

Sovereign feels that the shopping facilities serving the area should undergo a similar improvement. Located in a former cable car barn that even the owner calls "dilapidated," the PRO Market currently in operation serves as a place to shop, but is patronized only because it is convenient, according to Sovereign.

"We plan to build a store that will convince people not to leave the neighborhood to do their food shopping," says Sovereign. Construction should begin in March 1985, and, hopefully, will be completed by November. The Eastmont Plaza will consist of an 18,000-square-foot PRO Market, a 10,000-foot Walgreen's and assorted small shops.

"If you have a nice-looking, well-maintained and merchandised store, you should be able to get everybody in the neighborhood to shop with you," says Sovereign. The independent says he will alter his business philosophy in the new store, switching to a lower price image to gain more volume and cover the expense of constructing a modern supermarket. "We will be featuring low prices on products that attract people across the entire demographic spectrum instead of pushing items that appeal to low income people."

The independent hopes that his new store will be as successful as the Acorn Supermarket, a 30,000-footer constructed with funding provided by the city of Oakland. Owned by Whitey Mathieson, a grocer who has served Oakland's inner city for decades, the Acorn Supermarket is central to a redevelopment project that the city undertook when residents of a poor neighborhood were displaced by the construction of a freeway.

"The government has made in impressive effort to build the city back," says Mike Hatfield, who operates three supers doing business as Emby Foods. "They are improving the city from a commercial, a housing, and an employment stand-point by embracing diverse programs ranging from incentives for renovating housing, to providing jobs and training for underprivileged teen-agers."

Hatfield decided to become an independent grocer at the age of 29. When Emby was offered for sale in 1981, he was eager to see what he could accomplish as the owner. Emby operates three stores in the Oakland Flatlands that average 16,000 square feet apiece, and has been in business for more than 25 years.

Hatfield felt that his ability to organize and professionalize store operations could make the firm even more successful. "Emby was a profitable company that could be made to operate even better than it was. My function as the new owner is to orchestrate the people, to make the organization operate as smoothly as possible," he says.

The young grocer's motives for acquiring the market were sociological as well as financial. Hatfield says, "People at an economic disadvantage still should have a clean, community-oriented store to shop in. Grocery stores in these neighborhoods can function as a sociological marketplace, where people can feel comfortable gathering and talking with friends and neighbors.

"If there are no places to congregate in these neighborhoods, people may engage in activities that do not add to the betterment of the community. That's why nice supermarkets are essential to the well-being of inner city areas."

There is one market that serves consumers in the Oakland Flatlands like no other store in the city, and possibly the country. The Housewives Market has been in business since 1908, using its current format for the last 50 years. The market has been so integral to the history of Oakland that the city stepped in and saved the building when it was threatened by the wrecker's ball in 1983.

Co-owner Art Weikert first became involved in the property in 1950. At that time, the market housed 50 different vendors, including a dozen who sold just produce. Housewives Market was a mecca for independent merchants, for small businessmen selling meat, chicken, fish, bacon, cheese and so on. Consumers who wanted to buy top-quality perishable products traveled to the market to do their weekly shopping, patronizing the Housewives Market instead of traveling to specialty shops. A cross between a farmer's market and a superstore, the complex was located in Oakland's warehouse district, close to the downtown.

Historically a working class neighborhood, the community around the market had slipped into a poor status. Yet the Housewives Market continued to survive by attracting a mix of poor people from nearby housing projects and apartments, and the more affluent who would drive in from the suburbs. Says Weikert, who holds the grocery concession and manages the other vendors. "We resemble old-time merchants because we sell absolutely the best quality, at extremely low prices."

Weikert offers the fish department as an example why the concept has been successful. "The fish," he says, "are sold almost as soon as they come out of the water and are fresher than in any supermarket. And the vendor has a greater selection than on Fisherman's Wharf in San Francisco." The service fish case is 80 feet long.

The Housewives Market currently consists of 30,000 square feet of selling space, and has 16 tenants. But in 1985 the market will expand to 60,000 square feet and Weikert hopes to attract 50 tenants when the remodeling is completed. All of this is a far cry from the condition that Housewives Market was in two years ago.

The financial troubles then were caused by the redevelopment of the neighborhood around the store. A sparkling new Hyatt Hotel opened two blocks from the market and the convention center is a mere three blocks away. Spurred by these commercial developments, luxury high-rise condominiums and apartment buildings were built near the market, edging into the once poor neighborhood that furrounded the store.

This construction boom was good for volume, but caused the property the market sits on to become too valuable to serve as the site of a food store. According to Weikert, the value of the property skyrocketed from $500,000 to $1.5 million in about seven years. The landlords wanted to sell to collect the appreciation from the property.

But the city stepped in. "The tenants and people in the community convinced the city fathers that the Housewives Market was a landmark," says Weikert. "Oakland would have lost some of its past if the market had been sold to somebody who wanted to build an apartment building. So we made a deal in which the city purchased the property and building, and will gradually sell it back to the tenants. Now we are in control of our own destiny."

Business at the Housewives Market is rebounding under city ownership. The people who have moved into the neighborhood are shopping at the store, and the improvement in the surrounding area has made consumers from other parts of the Bay area feel more comfortable about driving to the warehouse district. It seems that like the city itself, the Housewives Market still has its best years ahead.
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Title Annotation:economic development includes supermarkets
Author:Tanner, Ronald
Publication:Progressive Grocer
Date:Feb 1, 1985
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