Is Jack London Square is Doomed?

Jack London Square, a historic mixed-use campus on the Oakland waterfront, recently rezoned to capture attention from new development and investors. But its doom was spelled out ten years ago when Oakland granted CIM, a private equity firm, a long term lease.

Jack London Square is a relatively new name, born in and of the 1950s redevelopment push. But it’s always been undeniably economically important for the Bay Area, and especially to Oakland. 

Jack London Square doesn’t have an actual square in the traditional sense, nor is it a precise square shape. It spans the blocks from the 880 to the water, and from MLK to Webster. 

It’s a name that the Port of Oakland chose in the 1950s for aesthetics. But it was a place where the famous writer would often begin the adventures that later became his most popular stories. 

The reason author Jack London visited is that the Port of Oakland was once filled with industry. These canneries, coffee importers, and lumber warehouses were vital job sites. During strange economic times dating back to the 1850s, even if you didn’t have a job you could find camaraderie and a solid drink at Heinold’s First and Last Chance Saloon. Or you could always become an oyster pirate! 

But industry changes, and jobs (even piracy) are a thing of which Oakland is deprived. From the time of redevelopment in the 1950s to 2025, the area had two allowed types businesses: those that served tourists, and those that fit under the Maritime Industry tarp. 

The area, therefore, languished under the economic conditions of the 21st century. Old reliable practices led to dead ends, and in 2016 the Port of Oakland made a deal with CIM, a private equity firm. 

More recently, the Port was lobbied into changing zoning regulations in a bid to attract new tenants like nail salons, grocers, and other services that don’t fit under tourism or maritime. Even oyster pirates can benefit from a soothing manicure, can’t they? 

But the zoning may not fulfill the imaginations of even the most lukewarm optimists because there’s a deeper, more fundamental pickle Oakland landed in. In 2016, they signed a deal with the devil.  

Private equity is a floaty, nefarious term that is poorly understood even by people who otherwise have sound business logic. That’s because it doesn’t follow standard logic. 

Through shady but totally legal practices, private equity plays a risky game, lying to everyone involved and allowing financial managers to collect their money and run when the jig is up. 

Private equity typically begins their brutal gutting in the guise of a biopsy. They’ll target a modestly successful business with room for improvement, pitching themselves as angels who can come in, trim things into a leaner position, and make the business more successful. But they often purchase using a Leveraged Buyout.

During the LBO process, private equity is allowed to take out loans in the business’s name and then turn around and use those funds to purchase the business. Private equity has no fiduciary responsibility to pay the loan back, so this new debt immediately turns a business vulnerable with debt. 

They’ll often add insult to injury by selling the land or building out from under the business’s feet and converting them into a lease agreement. 

After that, private equity demands the highest profit. They don’t have stake in the business succeeding; they only need to prove they can make money. This is how the living gutting begins. Employees are particularly vulnerable to mass layoffs, reduced resources, and general fuckery. Meanwhile the top brass often gives themselves massive bonuses before dipping.

If this subject drives you mad and you’d like to suffer more, check out the book Bad Company from your local library or listen to the podcast Stuff You Should Know, episode Private Equity: Your Ears Will Bleed.

The thing that makes this author uneasy about CIM is they claim the letters don’t stand for anything. According to their origin story, the company was founded in the 90s by two childhood friends who served in the IDF as paratroopers together and then started a landscaping company. They went to the door of a prominent businessman who wasn’t interested in their landscaping services, and instead the three came up with the idea for CIM.  

CIM is often in the news because of their alleged mishandling of properties and businesses. These controversies include:

-Knowing about a cracking concrete facade at 432 Park in Midtown and not doing anything

-Mismanaging a property called Southern Towers, igniting a movement among the African immigrants who rented and suffered from flooding and other issues

-Foreclosing on boutique office space in New York

-Frequently partnering with Jared Kushner, pursuing government contracts

-Getting into hot water with the feds in 2023 under the Biden Administration

And more!

One example is the slow-moving disaster in Santa Monica. The Third Street Promenade problem continues unfolding before our very eyes, revealing how dastardly investors and developers can be when they don’t have deep roots in a community and could frankly care less if a project in their vast portfolio doesn’t do well. 

Because CIM treated the Third Street Promenade as an ahistorical property, an investment instead of a place filled with nuances, it’s been a struggle for Santa Monica to retain control of the narrative and regain momentum in the post-pandemic slump. Now CIM is so well-known they’ve been called slumlords.

The worry is that this poses a parallel to what’s happening in Oakland. Could the same mismanagement, sneaky landlord tactics, and general fuckery happen here, especially with the pressures Oakland are under to kick back into gear?

The Port of Oakland is a place based organization that will continue having a responsibility to the Bay Area to turn things around. But in the meantime, a big chain called Dave and Busters is moving in, potentially threatening the one tenant that seems to be doing well. Plank is a locally owned entertainment center with a beer garden, games, and bowling. This author can confirm it’s a fun local place, so why invite competition? 

It’s unclear what will happen next in the game, but the players have their set fundamental characters. When private equity is involved, everyone’s sure to lose.