Financing Oakland's New Restaurants

City of Oakland’s Brian Kendall with Chef Paul Canales at Duende in Uptown.

Romney Steele and Steven Day (seated on right) of The Cook and Her Farmer in Old Oakland with Scott Lewis of OBDC Small Business Finance standing behind them.

 

BEHIND THE BOOM

The Finances Fueling Oakland’s New Wave of Restaurants

By Sarah Henry • Photos by Stacy Ventura

Cory and Silvia McCollow of Nido in Jack London Square.

Restaurant partners Richard Weinstein and Charlie Hallowell at Penrose on Grand Avenue.

Oakland is having a protracted It moment. First came word that the New York Times deemed the “gritty” city one of the 45 places to visit in 2012. Last year, the international press weighed in with the UK’s Independent dubbing this East Bay enclave the cooler cousin to that other, “glittery” city in the, ah, West Bay. You know the one. This year, the nonprofit organization Visit Oakland, civic booster bar none, rebranded this sunny hub-by-the-bay with the help of a local advertising agency. Its campaign slug, “Discover the side of Oakland you don’t know,” graces a billboard featuring both paper plates (for the food truck set) and linen napkins (for the fine dining crowd).

The vocabulary of the city is also changing. Crime, cocaine, Occupy Oakland, police, protesters, and pot are no longer the first—or only—things that come to mind when this city is the topic of conversation at the table. Culture and cuisine are right up there too. This recent seismic shift in the chatter around Oakland, which currently hosts at least three food-walking-tour companies (see story on page 26), is just one measure of how much has changed in a town that has tried repeatedly to succeed at urban renewal.

The “g” word—gentrification—is also on folks’ lips. Amid all the good news about revitalization, including emerging food businesses, innovative restaurants, and cool bars, comes a startling statistic: In the past 10 years, almost a quarter of the African Americans who used to call Oakland home no longer do. Whether they’ve been pushed out or lured away by lower housing costs, better jobs and schools, or safer streets, that’s a sobering decline for a diverse city that prides itself on its African American heritage.

Long-time residents scoff at the notion that Oakland is finally a world-class food town. It has been a great place to eat for decades, they say, citing iconic restaurants, such as Oliveto, BayWolf, and Doña Tomás; specialty markets, like Market Hall; and vibrant flavors, courtesy of immigrants from around the globe. Still, more and more adventurous eaters from near and far are “discovering” the rich variety of dining experiences that the city offers: hole-in-the-wall phō joints and mom-and-pop noodle shops in Chinatown, taco stands and pozole places in the Fruitvale, contemporary American restaurants in Uptown, Rockridge, and Piedmont Avenue. Others are flocking to cross-cultural culinary mash-ups featuring farmers’ market fare at spaces in Old Oakland, Temescal, and West Oakland.

Oakland attracts chefs who want to take risks. It is less pretentious (and less expensive) than San Francisco and less dogmatic (and less expensive) than Berkeley. There’s more room to maneuver and follow your bliss in Oakland: The city’s new crop of culinary creatives feel free to do their own thing. That’s evident in the intimate spaces that have popped up with women at the helm. (See our story “Any Females in the House?” in the Winter 2013 issue). It’s also true for the larger, investor-backed restaurants run by a quartet of men, each of whom have three places apiece.

Chef James Syhabout heads up Oakland’s only Michelin-starred restaurant, Commis, a molecular gastronomy-minded place on Piedmont Avenue. He also owns Hawker Fare in Uptown, serving his take on southeast Asian street eats, and recently opened Box and Bells in Rockridge, featuring meaty small plates. Daniel Patterson, who has the high-concept Coi and the bistro-ish Alta in San Francisco, is behind the contemporary American fare at Haven in Jack London Square and Plum and Plum Bar in Uptown. Restaurateur Chris Pastena presides over comfort stop Chop Bar, rustic Italian-American Lungomare, and pub-like Tribune Tavern. Rounding out this city’s version of the fab four: Charlie Hallowell runs Pizzaiolo and Boot & Shoe Service, plating Mediterranean-inspired dishes through a Cali-centric lens. His latest, Penrose, a grand space on Grand Avenue serving food with Moorish roots, opened in November 2013.

So much good grub at every price point in one town. Yet restaurants are a notoriously risky business. Many go belly up, profit margins are slim, and few make handsome chunks of change for their owners or investors. So what is fueling this restaurant renaissance in town, and who is helping finance this boom in the business of food in Oakland?

It’s time to put down our forks and follow the money. Meet the people with the means to bankroll these businesses in this thriving food frontier. As these three examples reveal, there’s no set recipe for success in the restaurant biz.

A Local Lender Assumes Risk on Small Startups

Sometimes, it just takes a leap of faith, a lot of hard work, and a lender willing to take a chance. Silvia and Cory McCollow were new to town, had no experience running a restaurant, and no formal culinary training when they relocated from San Antonio after Cory, a lieutenant in the U.S. Coast Guard, was transferred to Oakland in 2011.

No matter. The couple rented an apartment in Jack London Square and immediately began figuring out ways to make their dream restaurant a reality. Silvia, an art teacher by profession and an accomplished home cook, wanted to learn from the pros. So she found her way into the kitchens at Cosecha, B Restaurant (now Desco), and Chez Panisse. She and Cory also began a delivery service to local condos and a gym, where they provided home-cooked meals to get to know their neighbors and test out menu ideas.

“The Mexican food we wanted to do wasn’t down here, so we weren’t worried about that,” says Silvia, 37, who had no interest in opening a burrito joint. She wanted to serve what she calls good clean Mexican comfort food, the kind she grew up eating; her family hails from the coastal Mexican state of Nayarit.

The husband-and-wife team are thoughtful, careful risk takers. They worked on their business plan long before they hit the Bay Area. “I don’t think many people who want to open a restaurant understand what it actually costs to keep the doors unlocked,” says Cory, who keeps a close eye on the numbers and speaks in the measured manner of a military man. They used savings and pulled Silvia’s retirement funds (and paid a penalty for doing so), which gave them about $35,000, and launched a Kickstarter campaign that netted another $16K. But there was no fat cat investor to call on, no trust fund, no sugar daddy.

Well, Cory’s mom and dad were in a position to give a little. Here’s how that went down.

“We were sitting with my parents at Miss Pearl’s. They were visiting from Ohio,” says Cory, 30, setting the scene at the former Jack London Square restaurant. “We were giving them our pitch about how they could help us financially. And then we heard—pop, pop, pop—gunshots right near us. It was the day of the shooting at the movie theater, and there was just chaos,” explains Cory, referring to an incident in July 2012 in which five people were wounded at the Regal Cinemas. “My parents just looked at us and said: ‘Are you serious? Here in Oakland you want to do this? Right down the street from this?’ Even my parents weren’t willing to take a risk on us opening a restaurant in Oakland.”

But OBDC Small Business Finance (formerly Oakland Business Development Corporation) had no such qualms. The organization is designed to offer loans to startups that don’t qualify for funding from traditional lenders. OBDC has successfully serviced several hundred loans for small businesses since its inception in 1979, including a slew of high-profile Oakland restaurants such as Commis, Brown Sugar Kitchen, and Cosecha. More recently, newcomers to the culinary scene, including fish-taco-favorite Cholita Linda, former pop-up Kingston 11, which serves Jamaican fare, and California-coast-meets-Southern-comfort-cafe The Cook and Her Farmer, have also benefited from OBDC’s largesse. “OBDC broke the barrier to entry for us,” says Cory of the organization that helped the couple secure a $147,000 loan. “Our restaurant would not exist without OBDC’s lending and technical assistance.” The money helped fund building improvements, equipment purchases, and working capital for the restaurant across the street from their home.

The Many Facets of a New Restaurateur’s Success

Nido serves Mexican favorites, such as tacos, tostadas, and quesadillas, with a fresh twist. Pictured: The veggie taco with pepitas, avocado, and casera salsa

Nido Kitchen & Bar 444 Oak Street Jack London Square 510.444.6436 nidooakland.com

Nido was able to open its doors with the assistance of OBDC Small Business Finance. Good food and glowing reviews have followed.

Nido, which means nest in Spanish, opened on the scruffy industrial edge of Jack London Square in October 2012. The McCollows got early nods from national magazines Bon Appétit and Travel + Leisure for their fresh Mexican fare, such as chuleta de puerco, a grilled pork chop with spring onion and almond mole; pollo sobado, chipotle-rubbed chicken with sweet potato, cilantro oil, and cinnamon glaze; and their cemita, a sandwich featuring pulled chicken in an Oaxacan red mole with avocado. When Michael Bauer, the San Francisco Chronicle’s top food critic, wrote a rave review in May 2013, the pair learned about what’s known in the industry as “the Bauer bump.” Here’s what happened: “We close on Saturdays between lunch and dinner, from 3 until 5. So we run across the street and put our feet up for five minutes,” explains Cory. “The Saturday after the Chronicle review came out we came back and there was a line around the corner and we were like: ‘What is that?’ And then we went: ‘Okay, we’re going to do this.’ And it’s been like that on Fridays and Saturdays ever since.”

OBDC’s senior VP for lending, Scott Lewis, had a good feeling about the McCollows. “What stood out, I think because of Cory’s military background, is the discipline of implementation,” says Lewis, who has 35 years in the lending business, the past three-and-a-half at OBDC. “Working with him I didn’t have to worry that they would get off track. And given who they both are, on the creative and the business side, they made a good team.” Silvia and Cory are the kind of people OBDC is mandated to help: Low- to moderate-income small business owners. “I sit down with these people and I assess their business plans and financial projections; they’re the first two things that are critical in terms of strategic planning,” says Lewis. “Normally for a startup business we are looking for a 20{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} equity injection from the owners so they have some skin in the game.”

Restaurants can take time to develop a following: That’s why working capital is crucial. “I use the analogy of taking a trip and making sure you have enough gas in the gas tank to meet your destination,” explains Lewis. “We try to assess how much fuel these businesses need to get to their destination. You want to have a contingency reserve in case things don’t happen the way you predict. We spend a lot of time reviewing the numbers.” OBDC underwrites around $3 million in loans a year, according to Lewis. The average loan for a restaurant ranges from $75,000 to $125,000 and restaurants currently account for around 50–60{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} of the nonprofit organization’s portfolio. OBDC, which receives funding from financial institutions such as Bank of America, Citibank, Wells Fargo, and the U.S. Small Business Administration, has also underwritten Oakland food businesses such as Bakesale Betty, Beauty’s Bagel Shop, and BTTR Ventures (or Back to the Roots, also known as “the mushroom guys”).

There are common denominators among the kind of entrepreneurs who come through Lewis’ door or call him on his hotline. “A lot of the restaurateurs and food business people really have an appreciation for Oakland, a sense of its cultural diversity and community, and understand the value of being here,” he says.

Lewis is a straight up numbers guy; years in financial institutions will do that to you. And yet he’s more than a moneyman. He understands the ingredients necessary to make a restaurant a winner. “It has to be about the food: The food has to lead. When I eat a Cholita Linda fish taco it’s so good I have to remember to chew,” he says. “The place has to have something special the public wants, whether that’s smoked brisket at B-Side, Peruvian-style paella at Tambo, or fried chicken sandwiches at Bakesale Betty.”

But restaurants are not just about stellar food and strong financials. They can anchor a neighborhood and turn blight into bright. “We help entrepreneurs transform the community through jobs and business opportunity,” says Lewis, “and in the process they create economic balance and restore communities that need help. A lot of the creative energy that’s coming into Oakland in terms of economic development is flowing through the restaurant resurgence.”

The bottom line: It’s about reinvesting in people and places, even those that seem far from a sure thing. Take The Cook and Her Farmer, one of Lewis’ recently-funded projects, slated to open in May in Swan’s Market in Old Oakland. Chef Romney Steele and restaurant partner Steven Day are exactly the kinds of edible entrepreneurs OBDC likes to bet on. “Romney is the ultimate professional: determined, detail-oriented, with high expectations of herself and everyone she’s involved with. She comes from a restaurant family so she understands both the risks and opportunities of running this kind of business,” says Lewis of Steele, the author of My Nepenthe, a memoir of her clan’s landmark dining spot in Big Sur. “Steve provides balance on the business end, has personal fortitude, and is well connected to a clientele that reflects the diversity of Oakland. I’m excited about what they’re going to bring to this community.”

Lewis is a modest man, but it’s clear he’s proud of the restaurants he’s taken a gamble on. “There’s a certain patience I have, and a willingness to work with people, that comes with experience,” he offers during a moment of reflection. “Where someone else might say no, I’ll keep the dialogue open, even when it’s uncomfortable. We’ll work through it and talk about whatever the concerns are because we want our entrepreneurs to be successful and sustainable. It’s a great time and place to be doing this kind of work.”

The Right Matrix for Getting a Restaurant Up and Running

Duende found a home in the Art Deco gem known as the Floral Depot, across the street from The Fox Theater, another showy architectural jewel in Uptown.

Restaurant Duende & Bodega 468 19th Street Uptown 510.893.0174 duendeoakland.com

An elegant white gazpacho from the Duende kitchen

Paul Canales has the culinary pedigree to step out on his own: He developed a solid rep in his 15-year tenure helming the Cal-Italian classic Oliveto in Rockridge. But credentials in the kitchen are only part of the equation in getting a new restaurant off the ground. The bald and bespectacled Canales, 53, has the kind of edgy energy that seems fitting for a former teen tennis champ, punk-rock fan, and longtime skater. It’s also the kind of vibe that’s right at home in Uptown, dubbed the city’s Entertainment District.

They were down. So once Canales had his money peeps squared away, he started scouting for a location. He got lucky. Is there a more beautiful building in Oakland than the Floral Depot? Anchoring a corner with its Art Deco elegance, the building glimmers grandly at the intersection of 18th Street and Telegraph Avenue in Uptown. It’s impossible to miss the cobalt blue and black terra cotta tiles, sprays of silver, and corner tower. It’s a solid, showy, sexy structure with deep colors and bold geometric patterns.

The former flower warehouse, saved from demolition by preservationists like the Oakland Heritage Alliance, was added to the National Register of Historic Places in 1983. Today, the building is owned by former restaurateur turned commercial realtor slash landlord slash restaurant investor Richard Weinstein. It now houses the restaurant Flora, the bar Fauna, and the taqueria Xolo, all Dona Savitsky and Thomas Schnetz ventures. And the latest addition to the space: Canales’ Duende. The 4,000-square-foot space, most recently an architect’s office, features a restaurant/bar that seats close to 90, a mezzanine-level performance spot that boasts an eclectic array of music from flamenco to experimental, and a cozy spot that houses a combination café/wine shop by day and restaurant overflow by night.

Duende showcases Spanish tapas and pintxos (Basque small plates), along with paellas featuring traditional fixings, reinterpreted through a Northern California farm-to-table aesthetic. The ink-stained, seafood studded arroz negro (black rice) is a standout: Paella purists appreciate the bomba rice, rabbit, and bean version here. Duende has spirit, as its name suggests, oozing soul and creative expression up the wazoo: a striking mural here, a skull hanging there, a colorful collage somewhere else. It is, as they say in industry parlance, a destination dining spot. On a busy Saturday, or any day there’s a show at the nearby Fox Theater, it’s a standing-room only kind of scene.

But let’s get back to the business end of things. A great space is only a great space if you can afford it. “In downtown Oakland, your lease is everything. A percentage point or two can kill you and make the difference between struggling constantly and getting a chance to control your costs,” says Canales. “You should never sign anything for percentage rent, then you’re just working for your landlord,” says Canales, referring to agreements where landlords receive a cut of the profits versus a flat fee. “The relationship with your landlord and the deal you strike on your rent is first and foremost.”

Canales can’t say enough nice things about his landlord. “Richard Weinstein is a prince. He gave me an amazing deal in terms of time, amount, and terms. He also took care of the seismic upgrades, sprinklers, and roof, which are really a landlord’s job. That gave me the opportunity to work on a small budget to do what I’ve done here.” Canales declines to say exactly how much money went into the restaurant. He’ll concede it’s under $1.5 million, and city records state $1.2 million, a song considering the size of the place.

The Restaurant Whisperer

So Canales did well on the location and landlord front. He also benefited from a generous city program designed to stimulate business improvements in this area. That’s where the restaurant whisperer, also known as Brian Kendall, comes in. Kendall, who is charged with running both a façade improvement and tenant improvement program for the city, is the go-to-guy for food folk trying to get a foothold in downtown and Uptown. This jovial giant of a man can often be found touring prospective tenants around properties, dangling the carrot of city funds as he speaks. The city offers up to $75,000 in matching grants for exterior improvements and restorations. It also promises up to $99,000 or $10 a square foot for tenant improvements, designed to combat blight under redevelopment laws. For good measure, Kendall might throw in up to another $5K in assistance for architects and interior designers.

Not too shabby. Dozens of restaurants, cafes, and bars have benefited from the program, including Plum Bar, Tribune Tavern, and Bar Dogwood. Duende received $80,000 in tenant improvement monies and around another $20K for façade work. (Heads up: those funds are almost all spoken for.) When Kendall first started working for the city some 14 years ago, the downtown building vacancy rate was in the 25–30{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} range, he says. In the past 10 years, 250 businesses have opened, 800,000 square feet have been leased, 3,000 jobs have been created, 25 new businesses are under construction, and another 10 or so have recently signed leases. These days the vacancy rate in Uptown is a “very healthy” 5–6{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91}, Kendall says, and dropping fast. Of the 250 completed projects, half are bars and restaurants. “Typically, that’s the most vulnerable kind of business and almost none of them have gone under,” says Kendall, “and there are no issues of over saturation because almost everything is leased: My goal is to do myself out of a job.”

Kendall is a kind of concierge for the city, helping prospective and new tenants navigate the permit department and other typical hurdles to getting opened. From a landlord and business owner perspective he’s the best kind of bureaucrat: He makes shit happen and happen relatively fast with the minimum of fuss. “I tell people what spots make sense for them, where to find financing, how to handle inspection issues, where to go for design assistance. In about 20{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} of cases I’ve linked up the property owner and the renter,” he says. “The savviness of the people looking to open restaurants has gone way up in the past 10 years, and most of them have more money.”

Folks like Canales, for example. “Oakland, for now, is like the Wild West: You can be whoever the hell you want to be here and you live or die by it,” says the Redwood Heights resident, 21 years sober and counting, who graduated from Stanford University’s Sloan Business Program and worked in marketing and sales for Pacific Bell for 10 years before stepping behind the stoves for a living. “You can wipe out or you can kill. You have more aesthetic freedom. I wanted something that feels like it could only happen here and not something that you can pick up and move somewhere else.”

It’s not all roses and bon bons. Landlords and business owners would like to see more residents, more retail, and more office spaces filled with well-paid, hungry, and thirsty workers with wallets burning a hole in their pockets. And it appears they’re coming, priced out of San Francisco or simply enamored by what’s cooking in Oakland right now. In recent years the neighborhood has attracted interest from outside the area, with industry types who hail from Manhattan, Brooklyn, and L.A. relocating to the city.

Kendall predicts the cool factor will continue for some time. “Ten years ago it was all mom-and-pop restaurants, now there’s a mix of them and urban hipsters. With the influx of independents, the mom-and-pops have lifted their game a bit, like using better quality ingredients,” he says. It’s about more, though, than what’s coming out of the kitchen. “The tenant neighbors talk to each other more now,” says Kendall. “It was more insulated and isolated before because there were big gaps between businesses due to lots of vacancies, but now there’s a personality and a lot of shared values. There’s racial, economic, culinary, age, and business size diversity in the area. That’s all good.”

Can the good times continue to roll or are things starting to peak? “Downtowns are much more valued now than they have been in 40 or 50 years: It’s really been since the 1960s that this area has thrived,” notes Kendall. “People are interested in historic buildings with character, independent restaurants, and boutique retail.” And it shows. “Owners who have the right food and vibe are rocking it down here,” adds Kendall, who has spent time on the catering side of the food business. “If you miss the mark, you’ll have a hard time making money, as you would anywhere. It’s this Ouija board of having the right food, décor, and atmosphere. Flora gets it. Luka’s gets it. Duende gets it. And those places are packed.”

A Partnership that Pairs Well with Food

Chef Charlie Hallowell of Penrose holds a plate of local halibut crudo with blood oranges, snap peas, garlic sprouts, and Aleppo pepper.

Charred Wolfe Ranch boar loin with flowering bok choy, Fresno chile and Meyer lemon at Penrose

Penrose 3311 Grand Avenue Grand Lake 510.444.1649 penroseoakland.comBoot & Shoe Service 3308 Grand Avenue Grand Lake 510.763.2668 bootandshoeservice.comPizzaiolo 5008 Telegraph Avenue Temescal 510.652.4888 pizzaiolooakland.comComing soon: (check website for opening date)The Cook and Her Farmer Swan’s Market 907 Washington Street Old Oakland 510.285.6140 thecookandherfarmer.com

Charlie Hallowell, one wild, crazy, and completely unfiltered dude, says fuck the business plan and bean counting. The secret, according to this successful chef, is to just write the most eloquent vision statement you possibly can for the kind of eating environment and after-hours spot you want to create and hope that will attract the cash you need to see it become a concrete thing.

That kind of M.O. seems in keeping with Hallowell’s free spirited, free speaking ways. It’s also the luxury that may come from being a UC Berkeley English major, a longtime Chez Panisse chef, and the brains behind the hugely popular Pizzaiolo in Temescal, which opened in 2005.

What makes Hallowell charming is his transparency. He also readily admits he had a horrible contract with his first group of restaurant investors and still has a “ridiculous” arrangement with his landlord in Temescal, one of those percentage rent deals Canales cautions against: It offers no incentive for the 40-year-old restaurateur to open at lunch, since his landlord would profit most from such an arrangement. He’s philosophical about the situation. “I learned from Pizzaiolo, and it’s where I proved myself as a chef-owner-manager. That said, there are things about the set-up there that I would never accept now.”

Hallowell wised up when he started sniffing around for a second location. He also had the good fortune to meet Richard Weinstein, whose favorite restaurant just happens to be Pizzaiolo. The two began a culinary courtship that lasted several months before they decided to go for it and get into bed together, which is a cheeky and truncated way of saying that’s how Boot & Shoe Service was born. Hallowell had no money to front his new venture, despite Pizzaiolo’s success, so Weinstein bit the bullet and decided to go beyond his usual landlord-tenant relationship and pony up some serious moola to partner with Hallowell in this second restaurant. By both accounts, they lived happily ever after. So it was a no-brainer to stay hitched and launch a third restaurant, Penrose, across the street from Boot & Shoe last year. Hallowell says he opened Pizzaiolo on a shoestring, which is to say the build-out cost less than $500,000; Penrose, which seats 90 and features wood-fired mains and Moroccan-style flatbreads, cost around twice as much.

Weinstein, 64, who lives in Orinda and has a sleek office in Uptown near a check cashing place and a residential hotel, understands the food world from the inside. “In a previous life, in my mid-20s to mid-30s I was the owner-operator of a restaurant. I definitely know how hard it is and how expensive it can be and the startup time it takes to get going,” he says. “I consider myself an Oakland guy. My business has always been here, and all my restaurant businesses were here.” He’s referring to Café Valerian, a self-described hippie vegetarian joint he ran in the late 70s to mid 80s on Piedmont Avenue. That was followed by a tacqueria on Lakeshore Drive and a few other spots he deems not noteworthy. His foray into food goes back to his days taking a Spanish class at Merritt College, where he and a college buddy started a sandwich cart and wound up taking over the cafeteria.

But Weinstein wasn’t made for a lifetime of slinging cheap eats. He got out of the food business once his kids came along, switching to real estate and hustling to earn commissions like any eager agent. It didn’t take long before he realized he wanted to be in the business of owning buildings, so he could execute a vision, not just serve as the glue between buyer and seller. Now, after about 20 years, he’s amassed a sizeable portfolio of properties in less-than-prime (until now) locations in Oakland, somewhere between 40 and 50 buildings, many of them in the Uptown neighborhood, and many rented to food and bar folk, including the soon-to-open Township. He’s also now the sole investment partner in all three Hallowell restaurants, having bought out the original financial partners from Pizzaiolo some years ago.

He gets that it’s a tough industry in which to make a quid. “When I was in the restaurant business there were a couple of times when my rent was more than I made and I know what a strain that is,” says Weinstein, who himself benefitted from OBDC’s loans when he was a café owner years ago, to take this story full circle. “As a landlord-tenant, I think I have a much longer-term vision. I think some landlords are like, ‘Here’s two months free rent now sink or swim, and get out of the way if you sink.’ I’m a little softer about it. Our better restaurants and bars offer gathering places and give us a sense of community. I’m delighted to help play a role in making that a reality.”

Hallowell knows first hand that creating gorgeous restaurants that people flock to doesn’t necessarily translate into money in your own pocket. The first year he grossed around $2 million at Pizzaiolo, it’s around $3 million these days, but that’s before all the substantial overhead is deducted. For the longest time he says he was paying himself $48,000 a year, poverty wages by many measures. Hallowell’s not complaining, mind you, just keeping it real. “Most investors are capitalist assholes,” says Hallowell, in his frank-talking manner. “They just want to put their metaphorical cocks on the table and see whose is the biggest.” His business buddy is an exception, he says. “Richard doesn’t want to lose money, obviously, but he’s not a greedy fucker. He’s not trying to make more than is reasonable. He’s excited about being part of the food movement in Oakland. I’m not sure that was ever part of his plan. But all of a sudden he’s the real estate guy behind many of the best restaurants in Oakland.”

Hallowell has his sights set on other food ventures for Oakland. A bakery, a butchery, and a mini-market along the lines of San Francisco’s Bi-Rite, for starters. He’s never seriously thought about opening a spot in San Francisco, where residents have more money to spend and top restaurants do a thriving lunch and late-night business. In contrast, Oaklanders are more price conscious, tend to eat early dinners, and skip spending much at lunch, restaurateurs say.

He’d like the city to chip in some incentives for him to keep building his mini-empire; he runs three businesses in town and employs around 120 workers, after all. To date the City of Oakland hasn’t reached out in any way, no tax breaks, say, for creating new jobs, says Hallowell. But at this stage of the game, he is looking to give back to a city that has been good to him: Starting this month he’s co-hosting a series of Sunday Suppers designed to benefit local nonprofits such as Urban Tilth, The People’s Kitchen, and Restorative Justice for Oakland Youth.

That might just sum up what Oakland is all about right now, a place where you can take some risks, make hella big mistakes, and still come out strong on the other side, able to lend a hand to someone who could use a break. And, if Hallowell is any indication, there’s plenty of fun and good grub to be had along the way. •