Berkeley's Scrappiest Entrepreneurs Hope Co-op Model Will Keep Business Alive After They Retire
Dan Knapp and Mary Lou Van Deventer built Urban Ore by finding value in other people's trash. (Sam Harnett/KQED)
The vast assortment of reclaimed junk at Urban Ore in Berkeley draws all kinds of people, like Chicken John.
When I visited Urban Ore, Chicken John was picking up some rusty, squeaky ironing boards. John is from “the San Francisco Institute of Possibility.” He runs this “rotten boat-building contest” in the summer, where kids and adults create vessels out of trash. “Whoever builds the worst boat wins,” John said.
Urban Ore operates out of a cavernous 3-acre warehouse. It’s filled with all sorts of thrown-out stuff for sale: appliances, furniture, scrap metal, artwork, antiques, a giant papier-mache dragon head. The collection of old doors alone is impressive. The place has somewhere between 4,000 and 6,000.
End of an Era
The owners of Urban Ore estimate that the business keeps some 7,000 or 8,000 tons of trash per year out of landfills. It's difficult to verify how much Urban Ore actually diverts from the landfill, but even if it's only a fraction of what the owners claim, it would make the business a major cog in Berkeley’s thriving recycling ecosystem. And it could disappear. That’s because the owners of the 36-year-old business, Dan Knapp and Mary Lou Van Deventer, are ready to retire.
Urban Ore is one of the many businesses in the Bay Area run by baby boomers on the edge of retirement. New analysis of census data by the nonprofit Project Equity finds that in the Bay Area, boomers hold nearly half of all privately owned businesses with employees. As they retire, they're selling off their companies or just closing shop.
The Iron Law
Decades ago, Knapp quit his job as a sociology professor and started riding his bike to the dump, salvaging what he could. Over the years, he and Van Deventer built the business by sorting and selling garbage — squeezing juice from the trash, as they say around here.
Knapp devised a meticulous system for splitting it all into categories. By separating reusable items, from metal and chemicals, there is less cross-contamination. The trash can be resold, the scrap metal recycled and the chemicals disposed of safely. “I call it the iron law of recycling,” Knapp said. “The more categories the more money.”
In 2000, the couple bought Urban Ore’s spacious warehouse. Today it’s a real estate gold mine.
Knapp said, “We bought the place at $3 million and it's worth three times that now.”
“Both our lawyer and our banker have advised us to sell the property and take the money.” Van Deventer added, “but we said we spent our lives building the business.”
Transition of Power
The couple are now in their 70s, and they want the business to be around long after they’re gone. But Knapp's kids don’t want the Ore, and they said an outsider wouldn’t know how to run it.
“The nature of the business is in the activity of it,” Van Deventer said. “It's in the busyness.”
It’s in the 38 busy employees who know how the Ore works -- what makes the business tick. If only the couple could somehow transfer the company to them.
Alison Lingane is co-founder of Project Equity, a 3-year-old nonprofit that aims to help companies move to employee ownership.
“Most people aren't aware that employee ownership is an option," Lingane said. "That they have a potential buyer right there under their nose."
Lingane thinks employee ownership could be a great way to keep baby boomer businesses and the income they generate local. Project Equity crunched census numbers and found that over 60,000 businesses in the Bay Area are owned by aging boomers. The nonprofit is working with Urban Ore, which Lingane hopes can be a model for other entrepreneurs getting ready to retire.
“Are we going to sit back and let these businesses either quietly go away or be consolidated -- bought by out-of-area buyers, so wealth becomes concentrated? Or are we going to take this opportunity to keep at least a chunk of them locally owned and deepen their roots by transitioning them to employee ownership?” Lingane asked.
She said American business owners are unfamiliar with how to transfer power to their workers. With Lingane’s guidance, employees are preparing to use Urban Ore’s equity to take out a loan and buy the company. It would become a worker-owned co-op like Rainbow Grocery or Arizmendi Bakery. There would still be a similar management structure, but workers would share in both the profits and the decision-making.
Shoulders of Giants
Max Wechsler, Urban Ore’s assistant manager, is excited to keep the original owners’ vision going. “At night I read stuff that they’ve written,” Wechsler said. “They’re such valuable resources. So I am standing on the shoulders of giants here.”
Wechsler, like many of the Ore’s employees, is deeply connected to the mission of the company: working toward a world with zero waste. He grew up at a scrap yard and paid his way through college salvaging trash.
“My brother, my father and I would drive around in a pickup truck, just a few blocks ahead of the garbage truck, trash-picking,” Wechsler said.
Tucked in their office at Urban Ore, Knapp and Van Deventer said they want to transfer the business as soon as possible. I asked Van Deventer if she will be nostalgic handing over the company after all these years building it up.
“Oh yes, for sure," she replied, "but I’ll get over that in about three days." That made them both laugh heartily.
“What about all the stuff?” I asked. “Will you miss it?”
“When you've been in the business this long, and you've seen so much flow past your eyes every single day, you lose your lust to own and possess," Van Deventer said. "You can see a beautiful thing and appreciate its beauty and maximize its beauty, so that somebody will come in and find it as beautiful as you find and they'll take it home.”
I wondered aloud if you could say the same thing about their whole business. “That’s right,” she said, “That’s right.” The pair spent their lives building a successful company out of heaps of trash. In the process they’ve lost the lust to possess, and now, they're ready to pass it all on.