Temescal business owners see effects of neighborhood change

Adnan Ahmed, a Pakistani immigrant in a blue plaid shirt, looks gloomily around the 41 St Discount Store, just south of 41st Street on Telegraph Avenue in Temescal. At 10 a.m. on a recent Wednesday morning, the aisles of the small grocery and liquor store are devoid of customers, and the only thing that seems to cheer Ahmed up is having somebody listen as he recounts his tale of woe.

Ahmed and three cousins bought the store last spring, after its longtime owner convinced them it did a decent business. But he and his cousins worried that the crowd of men that gathered in front of the store to smoke were scaring away potential customers. After shooing the group away, Ahmed saw his profits slip and realized: they were his customers.

As Temescal has transformed into one of Oakland’s hippest neighborhoods, many older businesses have discovered their longevity lay in exactly what Ahmed unwittingly dismissed—long-term loyal customers, many of whom may have even left the neighborhood but return for shopping or haircuts.

“We have lots of steady customers,” says Helen Song, who has worked at Glamour Beauty Supply on 40th Street for 11 years. The 30-year-old store draws patrons from all over the Bay Area and continues to cater to African Americans.

John Sholes, the owner of nearby Universal Beauty Supply and Salon on Telegraph Avenue, just south of 48th Street, estimates that 90 percent of his customers are from out of town.

But returning isn’t always easy. The section of Telegraph Avenue that runs between 40th Street and 51st Street, a once gritty strip of tiny international restaurants, African-American beauty salons, and small corner delis, has become a destination spot for foodies.

“There ain’t nothing but restaurants around here, and it’s a killer,” says Shelby Sloan, pointing out the limited parking near Universal Beauty Supply and Salon, where she has cut hair for 23 years.

“We tell our customers, if you want to get a parking space, you need to be here between 3:00 and 5:00,” after the lunch rush and before dinner, she says. Sloan is referring to the attraction of places like Pizzaiolo, with its Chez Panisse pedigree, and Aunt Mary’s Café, featured on Guy Fieri’s “Diners, Drive-Ins, and Dives,” that have earned the area the moniker “the new Gourmet Ghetto.”

Nevertheless, she says, over the store’s 35-year tenure, they have built up a loyal client base. But relying on customers who come from out of town also has its risks and may not be a long-term strategy.

“I don’t see us hanging here long-term, because the neighborhood has changed so drastically,” says Sloan. “You’ve got to make the money, and if the customers can’t find a parking space, it’s hard for our bottom line.”

Between 1990 and 2013, the African-American population of Temescal and the surrounding area fell almost by half, while the white and Latino population has steadily increased. The demographic shift has been accompanied by substantial changes in local businesses; UC Berkeley’s Center for Community Innovation reports that 49 percent of the neighborhood’s businesses turned over between 2007 and 2014.

The popular Peruvian restaurant Cholita Linda now sits where three separate businesses, among them a hair braiding shop and a combination seafood/soul food restaurant, used to be. In Temescal Alley, on 49th Street, tiny boutique jewelry stores, art galleries, and eateries have set up shop in what was a largely abandoned lot once used as horse stables. On Saturday mornings, families line up for $3 artisanal hand-filled donuts.

Nine blocks south, Lawrence Khao can remember when there was a line out the door of Lee’s Donuts and Croissants. On a weekday morning, there is still a steady trickle of customers, but Khao says not nearly as many as there were just a few years ago. At the cramped counter, they order almost as many non-donuts as they do donuts: scratch-offs, cigarettes, a can of Sprite.

Khao, who has worked in the 40th Street shop for 17 years, says that competition and the rising cost of running a business have made things more difficult for the 24-year-old store. “When I first came, no coffee shops around,” he says. “Now, everywhere.”

And, he says, the cost of labor and coffee have increased, a particular challenge for a business that, like the beauty shops, relies heavily on a longstanding loyal clientele. “We try to raise prices, but every time we do, we lose a few customers,” he says.

It is the rising cost of rent that is likely to close more of the older shops. In April, Genova Delicatessen, which had been a neighborhood staple for 90 years, closed its doors, shut out by the cost of renting.

Sloan, of Universal Beauty Supply, says that within the last two years, she has seen the same thing happen to nearby African-American-owned businesses.

“There were like four or five of us in the area, and they’re all gone,” she says. She’s grateful that Universal Beauty Supply has held on. “Lucky for us, our landlord hasn’t put a massive increase on our rent,” she says. But she adds that she knows the landlord must be aware of rising rental values and is worried about what will happen in a couple of years when the store’s current five-year lease ends.

Two blocks down Telegraph, tucked into a corner lot he shares with a small clothing boutique and the popular Rosamunde Sausage Grill, which also has locations in San Francisco’s Mission District and Williamsburg in Brooklyn, Jong Yun Lee is also concerned about his current lease ending.

After 19 years in Rockridge, he moved his business, Rockridge Shoe Repair, to Temescal only two years ago when his previous landlord decided to renovate. He chose the area specifically for the $1,600 a month lease for a spacious 1,000 square foot shop where he duplicates keys and repairs watches along with shoes. Already, his rent has increased to $1,800.

He knows that when the lease is up in May, he might not be able to afford a new one.

If he has to move again, he plans to move north along Telegraph towards the Berkeley border, where rents—for now—are still affordable, he says.

Down the street, at the 41 St Discount Store, Ahmed says business has dropped to half of what the store’s previous owner says he was making. Ahmed and his cousins are paying out of pocket to try to make rent and keep the store afloat.

The clientele he wants to woo—the young couples at the nearby bars, the cyclists zipping down Telegraph—move past his storefront, with its cigarette ads in the windows and iron bars to protect the door.

Five months into his business venture, Ahmed says, he is thinking about selling.