Former Employees Call Co-Op Plans Into Question at Starline Social Club

The popular Oakland venue Starline Social Club was presumed to be gone forever. In October 2020, the owners announced they were selling both the building and the business, citing pandemic-related financial struggles. But on April 29, in a surprising reversal greeted by hundreds of excited responses on social media, a press release and Instagram post stated that the Starline would return in September—and what’s more, it would be converted into a worker-owned co-op.

The announcement included a video montage on Instagram, featuring Starline staffers dancing and having fun. The implication, it seemed, was that the bartenders, event producers and sound techs who brought the space to life were looking forward to the new model.

But in interviews, several staff members, most of whom had been laid off since March 2020, said they first learned about the announcement through social media and articles in KQED, SFGate and Eater. The owners had not communicated with them beforehand, despite proclaiming in the press release, “We are nothing without our team” and “The Starline will be in the hands of workers making it fly.” Many of the workers felt confused, angered and betrayed, and said the owners were using their likenesses to appeal to Starline’s progressive customer base. The announcement also prompted questions about the bar’s financial situation, and the kinds of risks workers could be asked to assume by becoming worker-owners of a struggling business.

“I was definitely blindsided and taken aback by it, and felt like it was more so for the publicity for the bar versus actual concerns about the staff and our wellbeing,” said Tayler Sampson, who worked as bar manager at Starline until she was let go in March 2020 because of the COVID-19 shutdown, and was briefly rehired in May and June of that year for the bar’s short-lived takeout operation. “If they were genuine about their posts, it’d be not one but multiple conversations with staff before going public about anything.”

The Bay Area is home to several well-known worker-owned co-ops, including Cheeseboard Pizza, Arizmendi Bakery, Tamarack, a bar and restaurant, art space Rock Paper Scissors and 924 Gilman, the volunteer-run punk venue. Starline’s announcement was welcome news for fans of the historic ballroom, bar and restaurant. Since its opening in 2015, the Starline nurtured many of Oakland’s diverse creative scenes, hosting local bands, dance parties, touring acts, karaoke nights and bigger festivals and events like Noise Pop and Boiler Room. (Disclosure: I occasionally DJed at Starline between 2017 and January 2020.)

As Starline’s social media followers celebrated the announcement, Sampson and other employees said they felt embarrassed to be left in the dark when friends, family and former customers called and texted to congratulate them on the news.

“How can you have a co-op without having any communication?” Sampson asked, calling the lack of transparency a “red flag.”

“Seeing my face in a video promoting them reopening when I’ve had no contact with that place [since the pandemic started] felt like a slap in the face,” said Jasmin Porter, who worked in booking, operations and marketing, and who was laid off after four years in March 2020.

Financial Questions Left Unanswered

For other laid-off workers, the lack of clarity prompted questions about the financial risks they might be asked to take on if they were to become worker-owners. Last October, co-owner Adam Hatch (who owns the business with Drew Bennett, Sam White of Ramen Shop, Alex Maynard and several other partners) told KQED that during some years, Starline didn’t make a profit. The owners quietly put the building and business up for sale in August 2020, but it ultimately didn’t sell. Their decision to reopen, their press release says, is a result of receiving Small Business Administration loans and applying for a Shuttered Venue Operators Grant from the federal government. Data gathered by ProPublica shows that Starline Social Club received a total of $711,514 in Payroll Protection Program loans in 2020 and 2021.

Former staff said they are skeptical about what kinds of debts and financial responsibilities they may be asked to take on in a co-op structure. “The business model hasn’t changed, and COVID hasn’t totally gone away. What’s the difference going to be? Where’s that money going to come from so the workers, who are now going to be owners, can start things up again? How do we pay the light bill? How do we get the internet back on?” asked former assistant bar manager Jordan Martich, who was let go in March 2020 and briefly hired back when Starline reopened for takeout. Martich remembers hearing the owners float the co-op idea during that time, but said he had no idea a concrete plan was in the works until he read the public announcement.

Other former employees said the pro-worker tone of the announcement contrasted with the way they were treated at Starline well before the pandemic halted business. Jasmin Porter characterized her nearly four years of working at the venue as “mentally a really hard place to be.”

“Instead of being supportive management, it was a lot of finger-pointing and blaming people,” Porter said, adding that she didn’t want to single out a specific owner of the business, but clarified she was not referring to Maynard. Two other former workers described a similar dynamic.

Despite complaints about management, many of the former employees said they continued to work at Starline because the staff felt like a family, and they believed in the vision of an inclusive community space. As Porter, who relocated to Austin during the pandemic, said, “Starline was awesome. What it represented for Oakland—even if behind the scenes things weren’t as congruent—I hope that vision can come true.”

Some Former Staff Decide to Move On

Two weeks after the reopening announcement caused a stir, co-owner Drew Bennett addressed the controversy. “We are internally addressing the issues that have been raised and are working with our staff,” he told KQED on May 12, but declined to answer a series of detailed questions about what the co-op structure would look like or what the financial obligations for worker-owners would entail. He said the ownership has been exploring several financial models since December, including an Employee Stock Ownership Plan (ESOP).

By definition, an ESOP is different from a worker-owned cooperative. Unlike a co-op, an ESOP doesn’t require democratic leadership; instead, it puts company stock into a trust that holds it on behalf of the employees, who get paid out upon leaving or retiring.

Bennett admitted that the public announcement was premature. “It was definitely with great humility and misstep that we let that information become public long before it was due,” he added. Several hours after our conversation, he sent the laid-off staffers an email, which was forwarded to KQED, apologizing for the lack of transparent communication and inviting them to a town hall meeting with a moderator so the owners could answer questions and hear concerns. He did not set a date for the meeting.

For some of the workers, the mass email felt insufficient. “That should have been the first move,” Sampson said, adding that she’ll still most likely attend the town hall when it happens.

Other workers, though, have already moved on. “I’m not going to risk my future to bid on these guys who have proven to be untrustworthy and bad at communication,” said Martich. “Jumping into a situation where none of us would know how a co-op would work—I don’t think those guys have done any of the work in figuring that out.”

Update: This story originally listed Starline Social Club co-owner Alex Maynard as “of Sobre Mesa.” He was a consultant there, not a partner or employee. This story was also updated to include the amount Starline Social Club received in PPP loans.