Conservation easement helps Hog Island Oyster bounce back from pandemic blows

Hog Island Oyster Company in West Marin inked a deal that will keep 250 acres of the surrounding ranch perpetually in agriculture and infuse cash that will help the business rebuild from the pandemic.

The operation entered into an agricultural conservation easement with Marin Agricultural Land Trust. The deal, which closed May 22, protects 240 acres of Leali Ranch near the community of Marshall on Tomales Bay, 8 acres of marine farming, or mariculture, support operations and a home nearest the oyster raising and processing facility.

To get the deal closed quickly, MALT covered the closing costs and funded the $1.1 million transaction price. That money came at a critical time for Hog Island Oyster, according to John Finger, co-founder and CEO.

“This gives us some essential breathing room, because we’re still not out of the hole from what happened last year,” he said. “It was touch and go from a company health standpoint in the early days of the pandemic.”

In the first half of 2019, the company acquired the 7-decade Marshall cultural landmark Tony’s Seafood. And a second restaurant was a week away from opening in Larkspur, with 30 workers hired and trained, when the mid-March 2020 health orders shut down restaurants in Marin County and throughout the state.

The company had 300 employees before the coronavirus pandemic, and that fell to 25 as workers were furloughed as business dried up. With the initial reopenings last summer, the workforce went back up to 180, but then came the closing of outdoor dining late last year following a spike in cases across the state.

Now, the company employs over 200 again. Many were furloughed workers, but filling open positions has been difficult, Finger said. Hog Island Larkspur restaurant in the Marin Country Mart shopping center just reopened for takeout and delivery at the beginning of April.

Hog Island Oyster had ideas about improving the equipment and expanding the number of products from the sea and land, but all that went on hold as the company went into survival mode with the pandemic, Finger said. Though the operation secured a federal Paycheck Protection Program loan of over $2 million, the timeline to shift from endure to innovate would have taken another year or two without an injection of capital, he said.

The influx of visitors to the oyster farm, lately thanks to a digital marketing push last summer and being featured on Netflix’s “Somebody Feed Phil” show last fall, is a blessing, but it makes production more challenging, Finger said. So now the extra funds can go toward building bigger processing barns, with more space for sorting the shellfish and more seawater holding tanks at different temperatures.

Other potential pursuits being explored are harvesting seaweed and specialty sea salt and planting row crops and a citrus orchard. These could be used to produce products such as Bloody Mary cocktail mix, pickles and lettuce for sale at local stores and markets. That’s in addition to the cattle raising that the Leali family has been doing on the ranch for nearly a century.

With the Leali Ranch deal, MALT now has secured protections for 54,459 acres in its 41-year history, but this is the nonprofit’s first mariculture project, according to Thane Kreiner, Ph.D., the organization’s new CEO.

“Mariculture is a sentinel for climate change, because changes in pH of the ocean through acidification and other composition affects the ability of juvenile oysters to form their shells,” Kreiner said. “So Terry and John and all of us have a vested interest in addressing the problems of climate change so that we have access to food that can provide a very reasonable and sustainable global source of nutrition.”

Marine biologists by training, Terry Sawyer and John Finger started the oyster farm in 1983. Hog Island Oyster Company participates in research projects on ocean acidification and climate change impacts on shellfish.

Kreiner said MALT has been impressed by the oyster farm’s circular approach to the food chain, with shells being ground to use in supplementing livestock feed on the ranch.

Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at jquackenbush@busjrnl.com or 707-521-4256.