San Francisco Chronicle Magazine

Life at the Pump

Cecille Isidro — Mon, 29 Jan 2007 02:03:00 -0500

When I first got interested in oil it was the far-away places that supply our oil that dazzled me: Venezuela, the Middle East, Africa, Alaska, even Texas seemed alluring and mysterious. I wanted to get on a drilling rig or glop through the muck in Azerbaijan. But when I started to write about the culture of oil, I realized I had to address the culture at our end of the pipe too, which meant hanging out in gas stations. What I found in the station was that American oil consumers are exotic creatures -- ruled by snacking impulses and so caught up in our relationship to our cars and routines that we can't reduce the amount of fuel we use when prices are high. People all along the oil supply chain -- from the local jobbers and truckers to the refineries, to oil producers overseas -- are doing backflips to support our need for more oil, but we're still unconsciously influencing everything from oil projects in incredibly impoverished countries like Chad to deadly conflicts in Nigeria. I could have named this book, "The Incredible Power of My Right Foot." We take gasoline for granted now, but we can't afford to keep ignoring it.

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Twin Peaks Petroleum sits at a welcoming angle to a busy San Francisco intersection. On this morning in the summer of 2003, a thick fog has crawled over the station, folding each of the eight drivers standing at the pumps in an envelope of cold mist. At the back of the lot sits a garage where a small convenience store glows. On the storefront is a poster of an ebullient snowman clutching a cola, while icicle letters drip the words Cold Pop over his head. Inside the convenience store, among the security cameras and parabolic mirrors, the Doritos, cigarettes and Snapples, jammed into a space no larger than a postal truck, a tall man with dark circles under his eyes appears to doze. His eyelids hang low, twitching; he mumbles; he moves with excruciating deliberation as he counts change.

I am leaning against a shelf holding several grades of motor oil, individually wrapped strawberry cheesecake muffins, and four flavors of corn nuts: picante, regular, nacho cheese and ranch. I am no more lively than B. J., the droopy manager. And I am recording the flavors of corn nuts in my notebook to stay awake. "Corn Gone Wrong" say the packages. I record that too. I’ve come to the gas station to watch Americans buy gasoline, as a way of understanding how we fit into the trillion-dollar world oil economy. But now that I’m here, I realize I’ve been here before, bought gas so many times myself I feel there’s nothing to see. The fumble, the stuporous swipe of the card, the far-off look: I know them well. Gas stations are everywhere, but when you’re in one, you’re nowhere in particular. Icicle letters are taking shape in my head: What Did You Expect?

I keep writing: Trojan spermicidally lubricated snugger fit, two Sominex and a folded paper cup, phone cards, batteries, air fresheners printed to look like ice cream sundaes, a greeting card with a picture of a pansy and the words "You’re too nice to be sick." The customers standing out at the pumps have a preoccupied, anxious look -- could they be distracted enough to buy a card that says "You’re too nice to be sick"?

Gas stations are collections of incidental items, impulses and routines that seem in themselves to be inconsequential but aggregate into a goliath economy when multiplied by the hungers of 194 million licensed American drivers. Corn nuts, for example, are part of $4.4 billion in salty snacks sold at gas station convenience stores yearly, nearly all impulse buys. The hopeful purchase $25 billion in lottery tickets. People with the sniffles spent $323 million on cold medicine at gas stations in 2001. And the faint smell of gasoline near the pumps? In California alone, the amount of gasoline vapor wafting out of stations, as we fill our cars, totals 15,811 gallons a day -- roughly the equivalent of two full tanker trucks. In the gas station, we’ve collaborated to create a culture of speed, convenience, low prices and 64-ounce cup holders, which allow us to express what the industry calls our "passion for fountain drinks."

And then there is the gasoline: 1,143 gallons per household per year, purchased in two-and-a-half-minute dashes. We make 16 billion stops at gas stations yearly, taking final delivery on 140 billion gallons of gasoline that has traveled around the world in tanker ships, pipelines and shiny silver trucks. And then we peel out, get on with our real lives, get back on the highway, or go find a restroom that’s open, for Pete’s sake.

With a wave of our powerful credit cards, American drivers buy one ninth of the world’s crude oil production per day. That makes us elephants in the global oil economy -- our needs are felt around the world, from the tiniest villages in Africa, the Amazon and the Arctic, to the highest towers in Vienna, Riyadh and New York. When we lick our lips, they open their taps. When we are in a funk, their governments fall. Here in front of the pump, surrounded by buntings in the joyful colors of children’s birthday party balloons, we have the opportunity to be our truest selves in the great, over-the-top drama/business that is the world oil supply chain.

But as you know, buying gas can be done by the living dead. Swipe card, insert nozzle, punch the button with the greasy sheen: Gasoline flows into the tank while money flows out of the bank account.

It’s not even clear what we’re buying -- gasoline’s fantastic uniformity means one is as good as another. Water doesn’t mix with gas, so beyond occasional traces of vapor, we don’t even have to worry about buying substandard gasoline. And all traces of where the fuel came from are completely erased by the time it gets to a gas pump. Texaco gasoline is no longer from Texas, and gas from Unocal is not from "Cal." Both companies have been purchased by Chevron, anyway.

As if acknowledging the futility of trying to stand out from the pack when 168,987 gas stations are selling essentially an identical chemical mix, stations have adopted a clannish ugliness. Whether they’re in Fairbanks, Alaska, or Pine Island, Fla., they all subscribe to the familiar topography of canopied islands, cheerful plate glass, struggling hedges and "Smile. You’re being watched by a surveillance camera" signs. Predictable they are, to the very last 9/10ths of a cent, which is permanently printed on every last gas price sign in the land.

The gas station’s blandness is misleading, though. Hidden in its windows, pumps and hedges are clues to the true nature of the American bargain with gasoline and the enigma of its role in the world.

On the counter in front of B.J. stands a line of purple plastic wizards, stomachs filled with green candy pebbles. Their shiny eyes stare at me expectantly. At the periphery of my vision, a van enters Twin Peaks’ yard and parks near the fence. In the time it takes the door to slam, B.J. grows a foot taller, loses his paunch and becomes a man of action. He snaps the countertop open, bounces into the yard and lands in front of the van driver in one tigerlike swoop. Words are exchanged. The driver sulkily returns to his van and B. J. returns to the store, shaking his head. People try to ditch their cars in the station and take the bus, he explains, taking his position behind the wizards. "The customer is always right," says B.J., "but bad people going round."

Like vapors, bad people always seem to be wafting through the gas station. Last week B. J. ran out to stop a truck that was barreling toward the station’s lighted canopy. The truck driver ignored him and crunched the canopy. Cars have driven willy nilly through the hedges as he watched. Nightly, people break through the chains on the four entrances. Once he found a gun in the hedge, stashed by a kid on the way to juvenile court. His response? Shave the hedges. Every morning he cleans up garbage, cans, and bottles filled with things we won’t discuss. Daily, and constantly, people try to steal: window squeegees, sodas, condoms, money and phone calls. Behind B.J.’s head are the counterfeit $20 bills the station has intercepted.

People use elaborate schemes to steal gas, he explains. Sometimes they’ll pay for $5 and shut the pump off when it reaches $4.75. Then they return to the clerk, telling him to turn the pump back on, knowing that the pumps don’t turn off after dispensing amounts less than a dollar. Then they fill their tank and drive off. In stations where people pump before they pay, they often just drive off. The average gas station loses more than $2,141 a year to gasoline theft. Some lose much more.

Think of a gas station as a maze engineered for belligerent rats. Hedges, which I’d interpreted as a pathetic attempt at dignity and baronial pretensions, actually eliminate escape routes for would-be robbers, limiting holdups. Many convenience stores buy "target hardening" kits, which include decals imprinted with rulers so that clerks can tell the police how tall the robbers were, two stickers that say "No 20s, no 50s," two "Thank You" decals, and one "Smile. You are being watched by our video security."

Even so, crime is always evolving. "After we did target hardening in stores in the 1980s, the crime moved to the pumps -- carjackings and abductions," says Dr. Rosemary Erickson, a sociologist who’s studied gas station crime for 30 years. "Now it’s public nuisance crimes in the parking lots. Gas stations are considered a magnet." Nearly 9 percent of U.S. robberies happen in gas stations and convenience stores, and the average gas station lost $1,749 to robbery in 2004.

Some of the crimes are not about money at all; they’re about free floating anger. When gas prices are high, more people get "pump rage" and try to drive off without paying for gas. The Indian and Pakistani immigrants who own and staff many stations bear the brunt. After 9/11, people who were angry at some vague combination of OPEC and Osama bin Laden attacked 100 clerks at 7-Eleven gas stations and convenience stores in a month. Five men were killed for looking "Middle Eastern." A photo of bin Laden in a 7-Eleven uniform circulated on the Internet. The National Association of Convenience Stores issued a list of tips to discourage customers from attacking employees -- including posting flags near the cash register.

In this harsh microclimate, B. J. maintains an impartial vigilance. When a woman enters and asks to use the phone, he activates the indifferent stupor, gesturing vaguely in the direction of a pay phone.

In a less charitable person, working in a gas station would have long ago brought on moral exhaustion and cynicism, but B.J. has created a worldview that embraces the station. "Everything is in the gas station," he says. "Good people and bad people are here. Not many honest people."

Spending mornings with B.J. gives me time to reconsider the extreme disinterest I’ve noticed in convenience store clerks over the years. B. J. is clearly operating the selective stupor on a very high level -- perhaps as a watchful hibernation, or a trancelike sensitivity to the station’s periphery. Anyway, he has perfected the art of being aware of the bad people going round without letting on that he’s awake.

However harsh the gas station microclimate is, it’s also a neighborhood for anyone who wants one. One industry focus group was surprised to find that customers had "deep feelings" for clerks. "Convenience store clerks are at the bottom of the retail ladder," says Jay Gordon of industry publication C-Store Decisions, "but that’s not how people perceive them. One woman described her local clerk as a "superhero, with six arms, always giving directions, napkins, and keeping things moving. Superhuman."

One morning B. J. talks about how he left his family’s farm in India in 1984. His family feared he’d be persecuted because he was Sikh, and the family’s oldest son, so he left the country. He went first to Singapore, then Malaysia, Australia, New Zealand, Canada and finally New Jersey, where he worked in a relative’s gas station. His English is haphazard. "New Jersey. My skin no like cold. Look ugly. My ears turn black." He grins at his ghoulishness. "I pack up me money and I come here." California. His family has joined him here. His daughter is a nurse, his son an X-ray technician, and his son-in-law an engineer who’s getting his MBA. Back in India, his younger brother runs the farm. B. J. has a theory about gas stations and life in general: "If I am good all is good. If I am bad all people look bad. I am nice and I have nice kids. If I am bad they will steal... ." He explains this to me a few times until it takes on the attributes of a philosophy.

The customers keep coming. They buy energy drinks and power bars and candy and Visine: Everyone spends time in front of the coolers, which are called "the vault." The name properly recognizes both their position in the store -- always opposite the door -- and their role in bringing in a high percentage of the store’s profits.

Snapple is advertising a drink involving bananas. The decal on the cooler says "Release Your Inner Chimp." Why is it that the coolly rational customers who shop ruthlessly for the cheapest gas turn into formless emotional mush -- susceptible to the likes of their "inner chimp" -- when they enter the convenience store?

"I make more money selling water than gas," says owner Michael Gharib. "And the gas gets shipped around the world and goes through a refinery and still my customers want it cheap." Wearing a pressed pink striped Ralph Lauren shirt, Gharib arrives at the station ready to spread his sense of order, compulsively arranging the mints as he talks about the 20 years he’s owned the place. When he started he made his money selling gas with a profit margin of 10 cents a gallon, but as gas margins have fallen, he uses the store’s 25 percent margin to boost the overall business. He moves on to dust the Daffy Duck Pez dispensers, straightens the STP carb cleaner and leaves the dusty Fritos in a cup alone on the bottom shelf. Onward to the Skittles! Gharib has the shoulders of a weight lifter, and big, liquid brown eyes. When he’s in the store it seems suddenly smaller, its 200 products a jumble until he personally straightens them. As I watch him, it dawns on me that the thing I’ve thought of as a gas station for the past 20 years is actually more of a Skittles emporium that sells gasoline.

The candy wizards, for example, contain about 50 cents profit. To make that 50 cents selling gasoline, the store would have to sell 10 gallons of gas. (And presumably the wizards are not combustible.) Nationally, sunglasses have a 100 percent markup, ice is 60 percent, candy is 43, and cigarettes are 19. Gasoline’s profitability has been falling over the past few years, reaching just 7 percent in 2004, the lowest in 20 years. It seems that the more ruthlessly we shop for the cheapest gasoline, the more vulnerable we are to the likes of Corn Gone Wrong: Impulse buys make up three-quarters of the $132 billion spent in convenience stores. The gigantic economy of oil marketing comes to one ironic point: Selling gasoline in America requires the assistance of candy wizards.

Running a station is a tough business: One in six gas stations has closed in the last 10 years. Gharib has a competitive edge, an attention to the details and balance sheets that has stood him well.

In the early 1980s Mobil owned the station. Gharib, a mechanic, leased it from the company. He had to sell Mobil brand gas but he got a guaranteed profit of 10 cents a gallon, and he ran the garage as a business. He never had to worry about gas prices, maintaining the pumps or whether the tanks under the station met the latest code. A phone call to Mobil took care of virtually everything. In return, Mobil, like other brands, depended on men like Gharib, who had relationships with their customers, and their cars, to draw in business and sell more gas. Gharib, who was born in Iran and is fluent in American culture, was probably a good draw -- he’s friendly, warm, and shrewd. Let me put it this way: His wife is one of his former customers. But the business of selling gas changed. Mobil stopped spending money to keep up the site and then sold it to another brand, which also didn’t put much money in. In the early 1990s the station had just two old pumps. "The brand didn’t see the money in this location," says Gharib, "but being here 10 years I knew the potential -- it’s convenient, and half the customers have been coming here for years and years. Firemen, police. Middle class."

Gharib swung a deal to buy the station, remodeled it and named it Twin Peaks to make it part of the neighborhood. (He and his wife designed the logo on their honeymoon in Fiji. "There was nothing to do but sit on the beach and scuba dive," he says. And think about gas stations.) He reopened it as an independent, selling unbranded gasoline at discount rates. As the market got tougher, he added the convenience store. Eventually he leased the garage to another mechanic.

Gharib has agreed to let me hang out in his station because he sees himself as part of a brotherhood of independent station owners. Independents own about 35 percent of the stations in the United States, but they are overshadowed by the major oil companies with their big flashy brands and advertising. When I called Gharib and introduced myself, he was amused by my request, but agreeable. "There’s not much to see," he cautioned, adding that he won’t talk with TV reporters anymore. "They’re really interested in us when prices are screamin’," he says, but when the interview appears on the news, they’ve lost all the nuances. "It’s totally different," he says. "It reflects badly -- not on me personally, but on the whole industry."

Independent stations see themselves as underdogs. They buy gasoline from wholesalers called jobbers, who buy wholesale gas on the spot market and truck it to them. The gasoline they sell is chemically identical to that of the branded stations -- it comes from the same refineries, travels through the same pipelines and sits around in the same tanks. But while the brands advertise that their gas contains special detergent formulas, the independents all use a generic formula and discount the wholesale gas by 2 to 3 cents per gallon. Without national advertising or a strong image, independents often try to keep their prices lower than the branded stations, which means they have to skillfully navigate both the wholesale market and the retail market. They’re wily and willing to take risks, and they need a reasonably large line of credit. "You can make a lot of money," says Gharib, "but sometimes you make negative. When the refineries sneeze we’re vulnerable."

Gharib invites me back into to his office, a tiny cinder-block room containing a metal desk and two metal chairs. He sorts his mail between the minarets of a plastic Taj Mahal on the desk. The space under the desk is filled by three and a half sacks of quick-setting concrete mix. Stacked on a shelf by his left ear is a pile of video decks and a TV for the surveillance cameras. There is a folding chair on the right side of the desk, but it has a gas nozzle on it.

He points to the end of the nozzle that connects with the hose. "Break-away valve," he says. "Separates at 20 pounds of pressure." If somebody drives off with the hose in the tank, Gharib can just replace the nozzle and break-away valve rather than having to replace the whole pump. Twice a month somebody drives off with the nozzle in his or her tank. "Friday. Hot. Nice weather. You’re talking on the cell phone and the kids are driving you nuts... ." He shrugs. Some drivers are embarrassed and try to pay immediately, but the majority insist it wasn’t their fault and some claim they don’t have insurance. In the gas station, something seems to tempt good people to act bad. Gharib pulls up a spreadsheet on his computer to show me how the price of gas is constructed. Today $1.61 and 9/10 is the price for regular. Of that, 37 cents a gallon are the state and federal fuel tax and superfund taxes. Sales tax costs another 13.3 cents, and when the price rises, the tax goes with it. Visa and MasterCard make 3.8 percent on every card purchase, which make up seven out of ten fill-ups. Then there’s the property. "Something as basic as this" -- he waves at the cement walls -- "is $1.5 million for the property and another half million for the station. You carry a mortgage on that and pay additional tank fees and maintenance." And then there’s wholesale price and overhead: That puts Gharib’s margin at 5 to 6 cents a gallon today, which isn’t a lot, but with his low prices he does high volume.

Gharib believes he needs to keep his prices approximately 10 cents lower than nearby brands to attract customers. When prices are stable, that’s easy -- there’s plenty of gasoline on the wholesale market, and he can easily stay under the brands and still be profitable. When prices are climbing, though, Gharib is in danger -- he needs to lower his profit margin quickly to stay competitive with the brands, which are cushioned against price rises by the refiners. He needs to be able to make a quick decision. Should he fill his tanks at today’s price, assuming tomorrow’s will be higher? Or should he wait until after midnight, hoping tomorrow will be lower?

When prices are falling, he’s in worse shape because he needs to be sure that he hasn’t filled his 8,000-gallon tank with expensive gas that he has to sell at a loss to be competitive with the brands. What’s worse, when prices climb steeply, it’s usually because the refineries don’t have much fuel, and then the wholesale gasoline price can be 10 cents more than the branded gas. That’s an inversion. "If you started your business in an inversion, it really scares the heck out of you," he says. "You can lose thousands of dollars in a day." Gharib never takes days off, he says, and if he’s with his family, his cell phone is always on. "I imagine my retirement floating out there like an oasis" -- he smiles -- "and I’m getting into real estate."

Small businesses aren’t for scaredy cats, but being an independent gas dealer is particularly rough because you’re working in a market dominated by some of the biggest corporations in the world. When the major brands sell gas through their dealers, they maximize profits by selling to some dealers at high prices and to others at lower prices. Sometimes a station near a freeway entrance will be 15 cents higher than the same brand on a busy corner with competing stations nearby. This is called zone pricing, and refiners determine prices for different stations based on the neighborhood, competition and traffic volume, among other things. (Though they don’t like to talk about zone pricing or their criteria, it seems clear that they create a computer analysis of every station in their chain and assess the competition, to create pricing models.) This system is controversial -- and it makes some dealers and consumer groups furious. An investigation by the Federal Trade Commission in 2000 described zone pricing as "an earmark of oligopolistic market behavior," but by 2004 the commission concluded that it was okay, because while it hurts some consumers, it helps others. If prices are too high at one station, you can always go elsewhere, it reasons.

The retail gasoline market is tremendously complicated. One thing that analysts and the Department of Energy agree on is that independent gas stations help keep gas prices lower by competing with the brands. However, zone pricing gives brands a competitive advantage because they can choose to reduce prices at some stations so that nearby independents cannot compete. Where brands drive out competitors, consumers probably will have to pay higher prices. Because the market is so complex, and constantly evolving, there’s a fear that regulations to limit the power of brands may end up backfiring and hurting consumers. For example, forcing stations to sell gas with a minimum markup, which is the law in 11 states, may end up punishing consumers because it prevents big discount chains from opening "hypermarts," which sell high volumes of gas at very low prices.

Gharib says he’s squeezed by both his customers and the refineries, but he can’t resent either one. "Everybody’s pissed at the oil companies," he says, "and the refineries are probably making a killing. But if they don’t make money we’ll be out another refinery. Then what will we do? Ride our bicycles?"

Gharib says that environmental regulations hit independents worse than the majors. California’s requirement that stations replace their underground tanks in the late 1990s put many independent gas stations out of business. He ticks off some of the other certifications and tests required by the federal, state, county, and city governments. "I used to have just two certificates," he says. "Now I have filled up three frames with these things. With the last two I just taped them to the wall."

Above Gharib’s desk is a bank of video decks and a small TV, which shows the station from different angles. "This is probably the best investment I ever made," Gharib says, craning his neck at the TV. "Twelve thousand dollars. I’ve got eight cameras and sound too. You have to have this."

In the industry, employee theft is called "merchandise shrink," and it apparently costs an average of $11,378 per store. That seems impossible here -- who would want to steal that many Dr Peppers? One manager before B. J. stole $70,000 over the course of a year and a half, Gharib says. Another employee came back and held up the store. "B. J. is really the only person I trust," says Gharib.

Sitting in the little cinder-block office, I’m not sure why anyone would agree to sell gasoline; between rude customers, ruthless competition and pilfering employees, you could be broke or dead in an instant. Gharib laughs. "I’ve always got an exit strategy." But then too, this business is so difficult it’s fun, and maybe that’s what makes it attractive. Whenever he thinks about leaving, he has another idea for making money.

Just last week he took a critical look around the store and decided the greeting cards had to go. He’s replacing them with an ATM, which will yield a profit of about a dollar a transaction -- similar to selling 20 gallons of gas, except that you don’t have to worry about an ATM catching fire, leaking into groundwater or evaporating.

Against Gentrification

Cecille Isidro — Sun, 21 Jan 2007 08:56:00 -0500

Marcel Diallo is at war. It’s a war he thinks he has about 18 months to win. As he walks the sidewalks of a neighborhood known as "the Bottoms" in West Oakland, he points out his enemies with a spoon, between dips into a pint of strawberry soy ice cream.

There are the punk rockers, who thought they’d found an industrial neighborhood where no one would mind their loud parties. There’s "the Indian cat and his partner from Palo Alto," who got a deal on one of the neighborhood’s many Victorians. There’s the "speculator" -- a white guy in a white pickup -- who regularly cruises the streets to see what’s for sale.

Diallo is racing against the gentrification clock to create an enclave of all things African American -- black homeowners, black-owned cafes, galleries, boutiques and mom-and-pop shops. He’s even got a name for this vision -- the Village Bottoms Cultural District.

"The Chinese got Chinatown, the Latinos got the Fruitvale and the Mission. We want our equivalent," said Diallo. "The only way that black people are going to be all right and not on the brink of revolution and wanting to burn this s -- down is if we have our own place that we feel like is ours," he said.

It’s not just for blacks, said Diallo. "Everybody needs a black cultural district. Just like everybody needs a Chinatown."

In the past few years Diallo has gone from an always-broke poet and musician to the majority owner of homes and lots along Pine Street -- the heart of the envisioned cultural district. He’s transformed the group of eclectic black artists he hangs out with into a collective that is slowly moving into the neighborhood. About 15 of these 30ish artsy African Americans have bought houses. They and Diallo recently opened the Black New World -- a performance venue -- and the Cornelia Bell Gallery. A Soul Food Co-op, Modupe’s Afro-soul and Vegetarian Restaurant and the Ghetto Flowers Boutique will soon follow. They’re buying homes and starting businesses by pooling their resources and stretching financially. They also help each other with construction, painting -- it’s an urban barn raising of sorts.

They’re working with -- not against -- a man who would seem to be their arch-enemy: developer Rick Holliday, whose Central Station Development will bring up to 1,500 new residences to the neighborhood. To Diallo, the new neighbors will bring shoppers and patrons for the envisioned cultural district.

They hope to create a place like Harlem in the 1920s and ‘30s, said Eesuu Orundide, a painter and sculptor who recently moved to the Bottoms.

Is this a utopian vision? Yes. What form will it ultimately take? Hard to say. To some, Diallo’s a visionary. To others, he’s a racist and all talk. But the collective has momentum. And its members are moving forward in their own self-help, grass-roots way, with little help from community organizations, city government or foundations. Their approach is low on precaution and high on a belief in the power of art to transform people and places.

"The edge that artist types have on the average Joe is that they’re more open to believing in magic," said Diallo. "Only an artist could look at a scrap yard and see a future cultural district."

The Glory Days

The formal name of the neighborhood around Pine Street is Prescott. But it’s known in the black community as the Bottoms. It’s surrounded by the West Oakland BART station to the south, the frontage road to Interstate 880 to the west, Mandela Parkway to the east and 16th Street to the north. It has a beachfront feel because it’s so close to the bay; a nonstop breeze washes over the old Victorians that dot the neighborhood. Drive through the Bottoms day or night, and you’ll see people sitting on their porches and congregating on the sidewalks. The main businesses seem to be corner liquor and convenience stores. About 30 percent of the housing in West Oakland is subsidized. The predominately black community has a median income of about $25,000.

It wasn’t always this way, said Marcus Johnson, a 40-year resident of the area. He remembers when nearby Seventh Street was hopping with social clubs and music venues such as Forty-Niners, where his aunt tended bar. You could get Texas barbecue or Louisiana catfish at black-owned businesses. His sister often babysat for the kids of Sly and the Family Stone when they played at Esther’s Orbit Room or the Continental Club. Oakland bands such as the Whispers and the Ballads played there too.

Johnson’s favorite time of the week was Saturday night at 11, when his grandmother would send him out on his bike to Seventh Street to track down his sister, who always missed her curfew. The streets were bustling with African Americans who worked in the nearby naval shipyards, rail yards and other manufacturing plants.

Diallo remembers, too. He rifles through a shoe box full of tattered photographs of his "party girl aunties" getting ready to go out for an evening on Seventh Street. In one, they have on go-go boots and hot pants.

The good times didn’t last. The jobs that had fueled the local black middle class dried up. The West Oakland BART station, built in 1971, ran right through Seventh Street. Several business owners had their properties seized by eminent domain. The rest soon left. Middle-class African Americans that could leave, did. More fled when the crack cocaine and violence later hit the neighborhood.

Since 2000, Oakland has lost between 18,000 to 34,800 African Americans. Whites now slightly outnumber blacks in the city for the first time, based on estimates from the U.S. Census. The exodus is fueled by rising crime and home prices.

"All I want is for the neighborhood to go back to how it was when I was growing up," said Diallo.

A Coalescing of Resources

In front of 924 Pine St. -- described by members of the collective as "the Office" -- there’s a small wooden sign attached to a rusty metal spear that says "Nganga Diallo’s House of Common Sense." Although Diallo has been called a poet, artist, community activist and the unofficial Mayor of West Oakland, he prefers "Nganga." It’s Congolese for "Magic Maker," he said.

The quickest way to get your mind around his vision for the Village Bottoms Cultural District is to walk one block up to the corner of 10th Street. Orundide and two other artists -- Githinji Wa Mbire and Keba Konte -- spent a few months painting a mural on the 10-foot high corrugated tin fence that surrounds a former scrap yard on the first lot Diallo bought. They imagined the colorful storefronts they hope will soon line Pine Street. All are bustling with black patrons in traditional African garb who shop for tomatoes, sip wine at the cafe and flip through magazines.

This vision began to form when Diallo returned to Richmond after finishing his bachelor’s degree. in philosophy at Cal Poly in 1995. "I started out majoring in business, but it was way too bland," said Diallo, who was the first in his family to go to college. (One brother is in prison. Another was "shot in the head" while pushing his newborn son down the street in a stroller.)

Diallo frequented the poetry readings that were just starting in coffee houses throughout Oakland. "This was pre-slam," he explained. People would get up and do rehearsed riffs. "Then Marcel would get up there and take it to the level of church," said Letitia Ntofon, his partner. "He’d testify."

Diallo and others decided they needed their own venue. In 1998, they opened the Black Dot Cafe on East 14th Street in the San Antonio neighborhood of Oakland. It barely fit a small stage, a few tables, a piano and some couches. "But we would regularly cram 60 people in there," remembers Kele Nitoto, a percussionist who lived in a loft in the back. They had weekly poetry nights, plays, jam sessions and cooking and drawing workshops for neighborhood kids. Every Sunday afternoon they’d hold "congregations." "It was basically dancing like crazy outside and we’d cook up waffles inside," said Nitoto.

Two years later, they were evicted, said Diallo. Their landlord would have sold them the building for $20,000 but they couldn’t pull the funds together. They lost their lease and had to move five times over the next five years, according to Diallo.

Diallo and his friends were fed up. "We decided we had to own something," said Diallo. "Anything."

Diallo, Ntofon and their friend Tiffany Golden went to an Alameda County auction of tax-defaulted properties in 2000. Diallo scraped together a few thousand dollars from his performances; Ntofon and Golden threw in some money, too. Together they had $7,800.

They bid on the only thing they afford -- an abandoned corner lot on Pine and 10th streets. Bidding started at $2,500. "I went head to head with a white guy" said Diallo. "Everyone in the place knew he probably had more money then me. But I ‘vibed’ him and stared him down." The other bidder backed out and Diallo and his friends got the property for $7,500. The whole place started cheering, said Diallo.

The lot was covered with junk that reached 8 feet high in some places. Rusted-out cars and tires were everywhere. The former owner, an old man named Jenkins, had long since abandoned it. Diallo brought his grandmother to see the lot. She leaned down and picked up an old address book. The first entry, she said, was an address and phone number for Laura Agnew, her mother. "It was meant to be that you own this," she said.

Then came a big break. His great-aunt sold him her North Richmond home that was about to be condemned by the city, asking just $1,000. Diallo and Nitoto tore the house down by hand. Diallo was unsure what to do with the lot for a few years until he went to Nigeria to visit Ntofon’s parents. He said his great-grandfather appeared to him there in a dream, telling him to sell the house and use the money to "save" the Bottoms in West Oakland. Diallo listed the lot for $80,000 on Craigslist and sold it for $85,000

Around the same time, Diallo read in the newspaper that Holliday had bought 30 acres adjacent to Pine Street. "I called him up and said ‘Yo Rick, this is Marcel. What are you doing in my neighborhood?’ " The call began a six-year dialogue between the two men. Diallo wants African Americans to have the first crack at buying the lofts. Holliday agreed to work with Diallo to identify African Americans who can be "founding buyers" and buy at a discount. They’re talking about co-developing some retail spaces along Pine Street.

Holliday said he advised Diallo to buy whatever he could in the surrounding neighborhood for the cultural district, and that prices were only going to go up. Diallo used his $80,000 to start buying and selling properties -- with the goal of accumulating land for the cultural district and helping his friends buy houses.

Diallo first started going down to the Alameda County office building and researching other vacant lots in the neighborhood. He’d identify the owners and track them down. He bought one lot for $3,000 and another for $5,000.

He knocked on doors all around the neighborhood and asked people to give him the right of first refusal to buy their house, if and when they decided to sell. He’d try to persuade them "not to be so greedy" and sell it to him for $25,000 or $50,000 less than market value to help "the cause." His charm and people’s fear of his quick tongue served him well.

Records show that Diallo owns three lots along Pine Street, the warehouse that he converted into the Black New World, and three other homes. He says that he collaborated with others to buy or gain control of up to 10 more. "Now we own the whole neighborhood," he says on the Black Dot Cafe Web site.

Until recently, Diallo believed he only had a limited window to buy as prices escalated, and that meant taking risks. He has used a lot of sub-prime and interest-only loans, and was able to refinance out of some of them. He has sold other properties that appreciated. Right now, home prices in the neighborhood have flattened out and Diallo has slowed down his real estate activity. Holliday said he cautioned Diallo not to over-extend himself.

Once the collective members saw that Diallo could buy, they thought that they could, too. Orundide teamed up with another family to buy a home together. "We see Asian folks doing it all the time," he said. "Why not us?" They bought a five-bedroom home on 11th Street for around $500,000. His 5-year-old twins have a playmate in the other couple’s 4-year-old son.

Nitoto and his fiancee Raheemah Muhammad bought a four-bedroom fixer-upper on 14th Street for $515,000. "We couldn’t afford it at first," said Muhammad. Diallo advised them to buy the house and the money would come, she said. They quickly found a young family to rent out the downstairs and a poet friend to rent a room in their upstairs flat. Muhammad got a raise at her biotech job and Nitoto took a job as a security guard at Pier 39. Nitoto spent three weeks cleaning it and Muhammad was still disgusted when she first walked in the door. Now it’s a sunny upper flat with hardwood floors. The front room has a piano they got for free and several shelves packed with the fantasy books they both enjoy.

"We’re still poor but we have the house," said Muhammad.

Living and Being Real

Experts disagree as to whether or not the families and Diallo are doing the right thing to stretch and buy properties.

"I see them as having more control and more choices," said anti-poverty activist Maurice Lim Miller, who got to know some collective members through his nonprofit, the Family Independence Initiative. "They didn’t have a lot to begin with so they don’t have a lot to lose."

It all depends on the financing, said George McCarthy, a program officer at the Ford Foundation who funds programs to broaden home ownership in the United States. With adjustable-rate mortgages, if interest rates go up, the loans can be a "ticking time bomb" for borrowers who suddenly face increased monthly payments they can’t afford, he said. The buyers in the Bottoms should be OK, said McCarthy, since their property values will likely go up when the Central Station Development comes in.

For now, the buyers are enjoying the neighborhood, holding backyard barbecues and going to events at the Black New World. Black nationalist poet Amiri Baraka recently drew 150 people there. Golden, a writer, read from her screenplay "First Born" another Saturday night.

Nitoto often sits in front of his house and holds impromptu drumming classes for neighborhood kids. The dealer who hangs out on the corner even joined in, said Nitoto. "You could see people driving by all slacked jawed, saying, ‘That’s the guy I get my stuff from,’ " Nitoto laughed. "He was drumming and all hippied out."

Orundide tells a similar story. When he painted in his temporary studio space at 10th and Wood -- two houses down from the home where Oakland Mayor Ron Dellums grew up -- he thought he’d be "an undercover artist." But kids kept coming in and he’d give them a small painting. "They’d come back and ask "Can I get one for my brother?’ " said Orundide. A few kids now bring their paintings to Orundide.

"These are my kids," said Muhammad of the neighborhood children. "I’m not going to leave them here to the drug dealers and pimps. They don’t need people to come in here and be all goody-goody to them and then leave at the end of the day. They need people to come here to live and be real."

"We have so many youngsters who don’t see themselves in a good light," said Nancy Nadel, who represents West Oakland on the City Council and is supportive of Diallo and his vision to create a black cultural district. "This can only be a positive thing."

Lisa Servon, a professor at the New School for Social Research in New York City, says it also makes economic sense for cities to promote "culturally authentic economic development."

"Cities are starting to look like suburbs," said Servon. "If they want to remain competitive, they need to lift up what’s already there and differentiate themselves." City governments can do a lot to support these cultural districts, said Servon. They can implement zoning restrictions that keep big-box retailers out and indigenous businesses in, and provide special financing and supports for first time entrepreneurs and home buyers.

The next year will be a busy time for Diallo and the collective. A few of the businesses are ready to go. Others still need financing and space. All will need significant foot traffic that isn’t there right now. In December, the collective started "First Fridays," where the first Friday of each month the Black New World, Nganga Diallo’s, and the Cornelia Bell Gallery will be open Friday evenings.

Diallo will need institutional investors and technical development expertise, according to Carol Galante, president and CEO of the nonprofit BRIDGE Housing, which is developing 100 affordable rental units in the Central Station development.

But even when Diallo starts to go mainstream, he’ll still rely on "juju" -- his word for magic. Visitors to the Yerba Buena Center for the Arts "Sampling Oakland" exhibit last fall may have seen the collective’s joint installation, called "A Shrine to the Anti-Gentrification Gods of West Oakland. May They Protect Us From the Invaders." The collective members gathered dishes, nails, records, broken glass -- anything they could find in the Bottoms’ streets and vacant lots -- and glued them to 6-foot-high wooden letters that spelled out "OAKLAND." Visitors could dial a number and hear a pre-recorded message from Diallo:

If you are residing in a gentrifying neighborhood and/or can be considered a gentrifying force, beware. The spirits of the anti-gentrification gods bottled up in the text of this shrine may be unleashed upon you. If I was you, I would leave an offering.
If you are a longtime resident in a gentrifying neighborhood, this shrine if for your protection. Leave an offering and be blessed.