Leases, Limbo, and Lost Revenue
The cost of opening a gathering space in Oakland
As Oakland’s April 15 special mayoral election approaches, we continue to explore the city's communal spaces that define its cultural and economic landscape. In this installment, we delve into the challenges faced by one local operator, highlighting how bureaucratic hurdles can impede the establishment of vital gathering places.
The City of Oakland likely lost out more than $150,000 in sales tax revenue from Tallboy because of the City’s backlog to approve their plans.
Tallboy owner Den Stephens estimates it took about seven months—and $11,3351—for his permits to clear. But by the time Tallboy turns one in a few weeks, he expects to have generated $275,000 in sales tax. While he worried about paying rent for months before he could even begin construction at the popular Temescal spot, he was equally frustrated that every delayed month was another he couldn’t rightfully—and willingly—contribute to the city’s coffers.
Stephens acknowledges the challenges of running a hospitality venue in Oakland, but he believes the real barriers are the city’s opaque, unstructured approval processes—ones that disproportionately hinder diverse ownership. It’s why he is codifying the processes in a long-form piece as a public good so there’s a record of the steps to opening an establishment for others to follow — and so he has a roadmap when he’s ready to launch another establishment in Oakland alongside Tallboy and North Light.
Stephens wonders if there’s a way to balance the city’s regulatory needs with economic reality. Could Oakland fast-track permitting for bars and restaurants—businesses already operating on razor-thin margins? Could it offset hefty upfront capital costs by allowing businesses to pay through their taxable revenue over the first year? If the city made it easier to open gathering spaces, wouldn’t more people be able to build community?
Tallboy isn’t just a bar; it’s built for connection. While “gathering” and “third spaces” are industry buzzwords, Stephens prefers a different term: “congregating.” His religious upbringing shaped his belief that bars aren’t just places to drink—they’re places to belong.
Stephens designed the space with large groups in mind—8, 15, sometimes 25 people2. And with the Bay Area’s nightlife clustered around Thursday through Saturday, unlike other metropolises, he needed a big enough space to prevent long waitlists.
He also wanted the pricing to be accessible and affordable, again, so more people could participate. Since his starting point was connecting people “to see and be seen” — not necessarily romantically, he noted, to my chagrin — he wanted guests to be able to converse, so he knew he needed a horseshoe-shaped bar. All of those constraints made him need a large footprint. “The bigger the space, the bigger the lease,” Stephens told me. “It’s a bigger swing and it’s higher stakes.”
Operators are already assuming major risk in opening bars, restaurants, cafes, and other establishments, so it’s painful (financially) that they’re not able to open as quickly as possible to generate revenue.
For Stephens, these regulations aren’t just red tape—they exist for a reason. “That stuff is there to ensure public safety on multiple fronts,” he explained, listing off occupancy limits, ADA compliance, and health department standards. “Checks and balances are what help keep the populace literally safe.”
For months, Stephens was stuck in limbo, burning cash while he waited on permits. “You’re just hoping it comes through, watching your burn rate the whole time,” he said. “This is my money flying out the door. And my permit? It’s literally sitting on someone’s desk—not because they’re lazy, not because they’re inept, but because there are a hundred other permits on that same stack.”
Stephens doesn’t blame city workers—he sees them drowning in paperwork, doing the best they can with half the staff they need and outdated computers. “They just need two or three times the workforce,” he pointed out. “And respectfully, their computers look like the Camrys3 that you see out on the road right now.”
With JOINERS, I’m definitely feeling the “where do I start with launching a business or organization in Oakland” right now, but I hadn’t seen under the hood of the labyrinthine process. I had not thought about the role of the steep activation energy for opening a space as an obstacle to Oakland’s social infrastructure landscape. And I certainly hadn’t thought about the potential of trading timelines and permitting fees for sales tax revenue.
It hadn’t crossed my mind because The Media™4 would have us all think that the Bay Area, and Oakland especially, is a post-apocalyptic hellscape with Immortan Joe bipping cars himself.
Stephens admits that he’s been “exceptionally lucky,” with North Light and Tallboy being located in Temescal. He acknowledges that his peers face different challenges in different parts of the city, “whether real, imagined or perception-based — seem to have been more affected by bipping.” Some of his friends have told him, “the perception of crime in our local neighborhood is absolutely damaging our business5, and I know that they're good operators. I know that they're operating good businesses with good product, good service, good people.”
After losing 21-ish windows on both sides of the Bay, I feel quite attuned to the bipping weather, and the forecast seems alright! The data and policy wonks are gonna jump on me, but I’ve understood crime as one of those things where the vibes and the data don’t always align6. Don’t take my word for it: I heard from Den, as well as several other cafe and restaurant operators in the last few weeks, that they feel like things are trending better. And the Chronicle recently reported that SF’s bipping is at a 22-year low.
This piece grew from a curiosity about what mayoral candidates will do for social infrastructure and gathering spaces in their administration7. When I asked Den whether city leaders understood bars’ role in civic life, he shrugged. “I don’t have relationships with them, so I don’t want to speculate.”
“They’re busy people, and all of us small business owners are busy people,” he said. “So it makes sense that it’d be hard to line up a bunch of mutually busy people.” Still, he’d welcome the opportunity to connect. “I would want to have [these] conversations with them, and that would have to start with me getting to know these people.”
“Andre Nickatina came in on Saturday night, and we all were acutely aware,” he said with a laugh. But if city leaders walked in? “Our staff don’t clock them like that.”
Upcoming Events
April 10, 7:30-11:30pm: Elastic Magazine Oakland Launch. Elastic is the new magazine of psychedelic art and literature. Their first issue is available now and they’re celebrating with a launch event in Oakland. Register (free) at Eventbrite for location.
Thursday, April 17. 7pm. Oakland Heritage Alliance Lecture: Oakland’s Legacy Businesses. Cities across the country are beginning to adopt legacy business programs to support long-established small businesses and boost neighborhood shopping. Why should Oakland adopt a legacy business program? What would the benefits be, and what businesses should be included? Tickets on Eventbrite
April 19, 2pm ET. Find common ground - Addressing Immigration. Braver Angels will bring together an equal number of Reds and Blues to do a deep dive into the topic of immigration. By the end, participants will jointly come up with shared points of agreement, values, concerns, and policies. Sign up free on Eventbrite.
April 25, 5-9pm: JOIN or DIE Screening. Join or Die is a film about why you should join a club—and why the fate of America depends on it. Follow the story of America's civic unraveling through the journey of Robert Putnam, whose legendary "Bowling Alone" research into American community decline may hold the answers to our democracy's present crisis. RSVP on Partiful.
May 4, 9:30-12pm: Make a Miniature Vignette. In this 2.5 hour workshop for adults, you’ll create a miniature scene that features a wall and floor, framed piece of art, console table, miniature books, and clock. You’ll get to customize your space with a choice of art print and mini-framing method, “tile” color and pattern, wall color, clock color, and more. Final dimensions approx. 7.75” tall x 6” wide x 3.7” deep. Hosted by JOINERS regular, Erica Meade.RSVP at Brushstrokes Studio.
$6,257 on Building Permit, $2,188 on Health Department, $2,886 on required Pre-Opening Insurance, $4K on plumbing single line drawing.
Your author has seen and/or participated in each of these group sizes.
The Toyota Camry is a notoriously reliable car, so you kinda only see very old Toyota Camrys. Computers are different.
Some of them are subscribers 😘.
Future issues will reveal some surprising stats and opinions from operators in other parts of the city.
Like the Vibecession.
New readers can find former Councilmember Loren Taylor’s and Representative Barbara Lee’s responses in previous issues.