Opportunities and Challenges Persist in East Bay’s Retail ‘Golden Triangle’

East Bay, Oakland, Berkeley, Emeryville, Urban Land Institute, ULI, Transwestern, Jay-Phares, Madison Marquette, East Bay real estate, retail

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By Rob Goszkowski

The retail sector of the East Bay’s Golden Triangle is ready to join the development boom.

[contextly_sidebar id=”0fe8996a8e213918ee170636a743d363″]The area is working to shed its reputation for having underdeveloped retail as new projects roll in, according to a panel representing Berkeley, Emeryville and Oakland, hosted at the Kaiser Center by the Urban Land Institute recently.

“The time is now for our city, so long as money stays cheap the way it is,” said John Jay, executive vice president & COO of Jay-Phares Corporation, a panelist with decades of developing experience in the city. “Growth will continue because of inexorable demand for new housing. With people comes a demand for goods and services. Oakland has incredible strengths: transit, great weather and Berkeley, which is just another neighborhood of Oakland,” he added, with laughter from the audience.

Berkeley is not staying on the sidelines. “Berkeley is known as a city where things couldn’t get done, but it’s exciting to see that change,” said Pamela White, vice president of development at Madison Marquette. “It’s fascinating to see what’s happened in the East Bay over last ten years,”

Michael Caplan, economic development manager for the City of Berkeley, agreed. “Berkley as a whole is very hot,” he said. “There are almost 1,500 units in the pipeline, just for downtown. It’s happening quickly.”

The discussion was moderated by Ed Del Beccaro, managing director of Transwestern and a member of the Executive Committee at East Bay Economic Development Alliance. He began with several facts about the area that seem counterintuitive. For example, over the last three years, the area’s population and household density has decreased, from 2.7 people per unit to 2.1.

Much of the middle class has headed east, Del Beccaro noted, while higher-end vacancies have gone down. But most importantly for the real estate discussion, taxable sales have increased in that time. “Car sales and grocery stores are hot,” Del Beccaro said, while furniture and clothing are not.

Keira Williams, a business development representative for the City of Oakland, attended the meeting and stood up from the audience at one point to deliver an update about how the city has grown, attaching some numbers to Del Beccaro’s comments.

“The city brought in $41.7 million in 2013, up from $40 million of retail tax revenue in 2012,” she said. “We added 100,000 square feet of new eating and drinking places and over 1 million square feet of retail came to Oakland in the last year.” And downtown in particular has seen dramatic growth, with 70 new bars and stores, some of which are currently under construction.

She noted a particularly vexing challenge as well. “Sixty to 65 percent of Oaklanders spend their spending dollars outside of Oakland,” she said. “We would like to capture more here.”

What people want now is difficult to pinpoint, and Oakland is already playing catch-up, given its outdated shopping centers. In some cases, it is so far behind that the city is still building complexes in a style that is considered overly suburban and passé: single-unit spaces built around vast parking lots. Retailers who have not adapted well to the changing marketplace were a source of frustration for some of the speakers and described as lemmings in more than one instance.

“Sometimes I want to crawl under my desk and hide when I’m working with retail,” she said. “They’re hot and cold, stressing about the internet, and few new concepts that have grown out of recession. It’s one of the most challenging points in my career.” But she and her colleagues have a sense of what the market is demanding now.

“A theme I’m seeing is entertainment. Nobody wants a mall … but people want entertainment, such as movie theaters.”

Jay agreed with her. “One has to look at medieval history, the juggler, the minstrel. We have to create the magic of the marketplace,” he explained. “It requires diversity, color, excitement and must be unique. That’s the challenge of design and the contemporary architect is responding by creating vertically integrated mixed use. Residential integrated with commercial.”

While much of society abandoned the cities in post-World War II America with cheap gas and suburban sprawl, the population is returning to the urban core, creating an immense opportunity for the East Bay’s Golden Triangle. “We as builders, planners, marketing people, have to respond,” he said.

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