Is This Oakland Group CRE's Answer To Gentrification?

A newly formed community development corporation is looking to help stem the tide of displacement in East Oakland, five or so blocks at a time.

Across a 50-by-50-block area in East Oakland, Black Cultural Zone, a development entity started in the last year, looks to develop about 10 cultural and commercial hubs meant to create ownership and a secure place for the city's dwindling Black population, Black Cultural Zone CEO Carolyn Johnson said. 

Black Cultural Zone is an outgrowth of the longer-standing East Oakland Black Cultural Zone Collaborative, a partnership of over 20 nonprofits. Johnson said last year it decided it needed to form a new entity to carry out community and commercial development, to help move residents from "a consumer class to an owner class."

“We have to own the real estate to have real power," she said. "Otherwise, we’re at the whims of the marketplace."

The plan is underway after years of Black residents being priced out of Oakland and amid the nation's expanded response to decades of disenfranchisement for Black Americans, much of which was reanimated by the May death of Minneapolis man George Floyd. 

Since 2000, Oakland alone has seen its population fall from about 36% Black to under 24%, U.S. Census Bureau data shows. The Bay Area as a whole holds the widest gap in the nation in median incomes between White and Black households, the 2018 census found.

“You can continue to do business as usual, and there will be no Black folks and Black businesses," Johnson said in an interview. "People say that’s dramatic, but look at the dramatic decline. It is possible.”

A seasoned commercial real estate broker and developer, Johnson leads Black Cultural Zone after serving as East Bay Asian Local Development Corp.'s director of commercial real estate, and stints with the Northern California Community Loan Fund and Ritchie Commercial, a Bay Area brokerage. 

Johnson said the community development corporation will focus on developing neighborhood hubs in the swath of East Oakland designated as the Black Cultural Zone by the collaborative several years ago, stretching from as north as High Street down to near the border of San Leandro. It will look for commercial projects that help catalyze neighborhood activity in a five-block radius, using a mix of public and private funding that will include equity from existing residents supported by either their own capital or grants, she said.

Riaz Taplin, principal of Oakland developer Riaz Capital, told Bisnow East Oakland has a lot of opportunities for the kind of development Black Cultural Zone has in mind. Riaz Capital itself found success nearby, developing a 120K SF coworking facility after initially planning a residential development at the East Oakland site.

Taplin said he expects an increase in mission-driven capital to flow to projects like what Black Cultural Zone plans for the coming years. "As mission-oriented capital seeks an outlet, it will become easier for affordable housing and community development projects to secure financing at low cost to the developer," Taplin said.

Black Cultural Zone is already underway, with plans at one East Oakland site: a 54K SF city-owned lot just off 73rd Avenue and Foothill Boulevard leased to it by the city. Dubbed Liberation Park, the site served as a place to distribute meals and do COVID-19 testing over the summer and has since started hosting outdoor markets on Sundays, in addition to other programs.

Johnson said the ultimate goal is to gain long-term control of the site, either through acquisition or a very long lease, and develop a mixed-use, mixed-income property.

Oakland District 6 City Council Member Loren Taylor, who has worked with Black Cultural Zone in establishing its Akoma Outdoor Market on Sundays, said he can't guarantee the city will ultimately select the Black Cultural Zone as the developer of the surplus lands site. But he said he is very supportive of the group's efforts. 

“It’s extremely important to have an institution like the Black Cultural Zone squarely focused on preserving the Black culture, the Black experience and the Black legacy of Oakland," Taylor said. 

Taylor said his district of about 64,000 residents, which has the largest percentage of Black residents in Oakland, needs efforts like the Black Cultural Zone to help reverse decades of disinvestment while avoiding gentrification and displacement. District 6, in particular, lacks a single retail bank or major chain grocery store, he said.

Taylor said he is advocating for a “portfolio of solutions,” including Black Cultural Zone, that are meant to serve existing Oakland residents. 

That includes pressuring the city to provide zero-interest pre-development loans that are targeting historically blighted and underdeveloped parts of the city, with some overlap with the city’s opportunity zones. He said Black Cultural Zone is part of the reason why he has been pushing for this program, which would require borrowers to pay back the loan only once the development itself is completed.

Either way, Black Cultural Zone will be discerning in the projects it takes on, Johnson said. 

“We don’t just want place-keeping and development for development’s sake," she said. "It has to be supportive of the quality of life for existing residents and residents that have been displaced to be able to return home.”