When Baking and Real Estate Collide

Tartine, a world-renowned bakery and San Francisco institution, opened in 2002, on an unassuming corner of Guerrero Street, at the edge of the Mission District. The dot-com bubble had recently burst, and the city was in a period of transition. The median rent for a two-bedroom apartment had fallen from three thousand dollars a month…

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Tartine, a world-renowned bakery and San Francisco institution, opened in 2002, on an unassuming corner of Guerrero Street, at the edge of the Mission District. The dot-com bubble had recently burst, and the city was in a period of transition. The median rent for a two-bedroom apartment had fallen from three thousand dollars a month to just under two thousand. Development had slowed, evictions and unemployment had spiked, and commercial vacancies had risen. In the Mission, a historically working-class and Latino neighborhood, artists’ spaces battled with real-estate developers. Tartine’s neighbors included a used-furniture store and a community center. The storefront, which had previously housed a cake shop, came with a panic button.

The bakery didn’t have prominent signage and didn’t need any: almost immediately, people began lining up out the door for citrus-perfumed morning buns, billowing banana-cream pies, and loaves of custardy millet-porridge bread. The bakery garnered praise from Martha Stewart and Alice Waters and made the cake for a “bohemian bourgeois”-themed birthday party attended by Nancy Pelosi and Hillary Clinton. Its married founders, Elisabeth Prueitt and Chad Robertson, started to become food-world celebrities: Prueitt was admired for her elegant pastries and, later, her artful use of nontraditional flours, and Robertson for his approach to bread-making, with wet dough long-fermented, then prepared by hand according to a strict schedule. Tartine’s loaves almost always sold out within the hour. In the pre-Yelp, pre-iPhone, pre-cronut era, waiting in line for baked goods was unusual in the Bay Area, and the queues outside Tartine became a local landmark and a symbol of a changing city. “Our favorite thing about this bread-rich city is the chewy-crusted, nutty-crumbed pain au levain from the Mission’s new Tartine,” Gourmet wrote. “Get in line,” the San Francisco Chronicle reported. “Everyone else is.”

Prueitt and Robertson radiated a particular kind of Gen X bohemianism—dedicated, ambitious, and breezy. Aspiring chefs and bakers travelled across the country to work with them. The bakery brought on a fleet of young and beautiful artists, musicians, and writers to work the front of the house, and for a certain set of locals the “Tartine girls” were a draw. The café, with its sturdy, dark wood bistro tables arranged knee-grazingly close, took on the qualities of a clubhouse, with bakers, baristas, and servers playing their own music on the stereo, hanging out after their shifts, and enjoying free glasses of “shift wine” from uncorked bottles. Samin Nosrat, then a fledgling chef, hosted ticketed dinners at Tartine; concerts and monthly art openings included works by employees, and one bread-themed show featured a bread chandelier that lightly toasted itself as it luminesced. “It was just the crux of the Mission for me,” Rachel Corry, a sandal-maker who worked at the bakery for nine years, told me. Another employee said, “It wasn’t a professional place to work, but that was what was so great about it. Our friends were our bosses. It was like a dream time, a pretend time.”

In 2005, Tartine began a small-scale expansion. Prueitt and Robertson opened a nearby restaurant, Bar Tartine, which was praised for its inventive, sophisticated take on Japanese, Scandinavian, and pan-European cuisine. They were nominated for James Beard Awards and published a celebrated cookbook. Prueitt gave birth to a daughter who has cerebral palsy, and co-founded the Conductive Learning Center of San Francisco, a specialized nonprofit school for children with motor disabilities; she continued to run Tartine’s pastry program, and in 2008 she and Robertson won the James Beard Award for outstanding pastry chef.

A decade on, “artisanal” breads and bakeries were popping up everywhere. San Francisco was rebounding, and the process was soon to accelerate. In 2012, Facebook went public, and the median rent for a two-bedroom shot back to nearly three thousand dollars a month. Activists started blocking the paths of double-decker shuttles run by Google, Facebook, and other companies, which picked up tech workers at public bus stops. Facebook bought WhatsApp and Oculus, Google bought Nest and DeepMind, Amazon bought Twitch, and the minting of new millionaires accelerated. By 2014, the median rent for a two-bedroom had passed thirty-seven hundred dollars. Some of Tartine’s staff members faced rent hikes or were threatened with eviction. “It really felt, like, Ugh, are we just working at the Disneyland for Google employees?” Katie Lally, who was at Tartine from 2007 to 2011, told me. She recalled a customer who’d ordered in tech-gadget lingo: “What’s your sexiest pastry? What’s the thing everybody wants?”

Tech was booming. Rents were skyrocketing. Tartine had thrived during an economic downturn. Now it was operating in one of the most expensive cities in the world. In Silicon Valley, startups were following a new business rule: grow or die. But how much was it possible for an artisanal bakery to grow?

In 2014, Prueitt and Robertson started work on a restaurant, café, and ice-cream bar called Tartine Manufactory. They leased an airy, six-thousand-square-foot space in the Heath Ceramics building, on the other side of the Mission. Robertson had begun collaborating with Washington State University’s Bread Lab, and there were plans to integrate a mill, allowing the on-site production of unusual flours. “This is kind of what happens: you find another place, you build a nicer kitchen, and keep people,” Robertson told the food magazine Lucky Peach.

The Oakland coffee company Blue Bottle, which had just raised forty-five million dollars in venture capital for its own expansion, needed a bakery partner to provide food in its coffee shops. (Today, there are more than a hundred.) Tartine soon announced a merger with the company. Anticipating a personal windfall, Prueitt and Robertson moved into a luxurious house in the Castro. A photo shoot published by the Web site Eater showed off their specialized cookware, heated outdoor furniture, and lemon trees. By the time the Eater piece went live, the Blue Bottle acquisition had fallen through; the couple put the Castro house up for sale and moved out. Still, Tartine Manufactory opened in the summer of 2016. According to its designers, its space, with light wood tables arrayed beneath Noguchi paper lanterns, represented “a new type of luxury,” and referenced “Alpine lodges, Danish cafes, Stickley furniture and Japanese teahouses.” Manufactory’s menu offered sea-urchin smorrebrod, beef-heart tartare, and buffalo-milk soft serve; the next year, it was nominated for a James Beard Award. Meanwhile, Tartine launched its own coffee brand, Coffee Manufactory, in partnership with Chris Jordan, a former Starbucks executive. Jordan became Tartine’s C.O.O. Tartine developed a series of partnerships with investors, among them a real-estate private-equity firm called CIM Group.

CIM was founded in 1994, by Richard Ressler, an investment banker, and Avi Shemesh and Shaul Kuba, two Israeli immigrants whose landscaping company Ressler had employed. The firm raises money from individual and institutional investors, such as pension funds, and manages about thirty billion dollars in assets, focussing on what it calls “thriving and transitional urban communities” and “opportunity zones.” It is one of the largest property owners in Los Angeles, and a prominent commercial landlord in Oakland. Like many large real-estate companies, CIM is also a lender, providing the kinds of loans necessary for big development projects.

CIM invested in Tartine’s café and bakery business. Coffee Manufactory planned to move into Jack London Square, a waterfront neighborhood in Oakland where CIM was pursuing redevelopment. For CIM, Coffee Manufactory was intended to be an anchor tenant—a business that could attract customers and other businesses, increasing the over-all value and cachet of the area. “It’s hard to grow these types of communities in the right way,” Jordan told the San Francisco Chronicle, in 2017. CIM, he continued, “gets it, essentially. They see consumers want an organic and local experience.”

In the mid-twentieth century, developers might have taken on shoeshines and newspaper stands as amenity-oriented tenants. Today, they are more likely to seek out gourmet coffee shops, bookstores, restaurants, and cafés. It isn’t unusual for developers to offer such tenants leases with reduced rent, or no rent at all. In some cases, the tenants pay real-estate companies a percentage of their revenue. For the real-estate firms, these arrangements can help open or revitalize a building; for business owners, they can offer a respite from worrying about fund-raising, being profitable, and paying rent; and for low-margin businesses, such deals may be one of the few viable routes to expansion. (In New York City, Tishman Speyer, the real-estate firm revamping Rockefeller Center, has offered custom leases to restaurants and smaller businesses including Van Leeuwen Ice Cream and the record store Rough Trade.)

Tartine was a particularly appealing anchor tenant. The food was great, and most of it could be made off-site, requiring a fairly modest square footage for retail sites. And Tartine had a history: the flagship location, with its artistic staff and communal ambiance, radiated the sort of authenticity that a real-estate developer could only dream of cultivating. Year on year, Tartine’s brand had become cooler, airier, and more transportable. Photographs of its pastries and its Guerrero Street bakery had appeared in Apple commercials and product demos; Sweetgreen, riffing on a recipe from one of Prueitt’s cookbooks, had offered a “Tartine bowl.” In 2018, an Eater article titled “Do You Even Bake, Bro?” credited Robertson with helping to inspire hobby baking among “the disruptors, engineers, and tech bros” of Silicon Valley. That year, the bakery opened the first of six licensed locations in Seoul, one of which is located in Kinfolk Dosan, a cultural space created by Kinfolk, the aspirational life-style magazine.

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