Record Scratch: Upstart Oakland Vinyl Manufacturer Going Out of Business

Eagerly-anticipated West Oakland record manufacturer Second Line Vinyl is at risk of losing all of its equipment to a creditor less than two years after announcing ambitious goals to build a venue and recording studio alongside the city’s first vinyl pressing plant since the 1930s, KQED has learned.

Second Line Vinyl founder and chief executive Zane Howard confirmed that he’s struggled to attract enough investment to bring the facility into action. “We’re having to wind down,” he said. “I would say the business is in jeopardy just as it was ready to begin pressing.”

Lyz Luke, Second Line’s community affairs director, used starker language in an email Saturday to industry contacts. “Our funding has run out and we are going to have to shut down,” she wrote.

The business’ main lender, Stockton pencil manufacturer California Cedar Products, has moved to recover the specialized pressing machinery used as collateral. Howard said an auction of the assets, publicly noticed in a local newspaper Monday, has been postponed until next week while he attempts to negotiate with the lender.

Howard valued the equipment at around $300,000, with an additional $100,000 in installation costs.

“We don’t know what will happen to the equipment,” he said, adding that he hopes to strike a new deal with California Cedar Products.

(KQED has contacted California Cedar Products for comment.)

In late 2017, Howard invited media, investors and music industry figures to the 40,000 square foot Mandela Parkway facility and said that, by the end of the next year, six newly built presses capable of producing a million units annually would be up and running.

The auction notice lists one combination press, extruder and cutter, and related equipment such as a steam boiler and water cooling tower. But the system isn’t operational. (One problem is difficulties working with Pacific Gas & Electric, which is in bankruptcy proceedings, to upgrade the gas line.) Meanwhile, Second Line has been brokering manufacturing deals with other plants.

According to Howard, there’s ample demand. Second Line’s brokering revenue for the past 12 months is approximately $500,000, and the company has fielded inquiries from major labels as well as local clients. Still, the business hasn’t raised enough capital, leaving Howard and his team without pay for several months now.

“There still needs to be a pressing operation in the Bay Area, and I think it’s going to happen one way or another,” Howard said.

Michael Thomas said Second Line’s brokerage operation is separate from the struggling manufacturing side, and that outstanding orders will be fulfilled. Thomas and Mark Calabro will effectively continue Second Line’s brokerage business with their own company, 16kHz.

“For all intents and purposes the orders taken by Second Line are now being managed by Mark and myself,” he said.

Also planned were facilities for recording, mixing, mastering and performance, plus an apprenticeship program connected to public schools. Second Line excited Bay Area artists and label operators eager to have a local partner in vinyl manufacturing, an expensive and complicated process often involving lengthy delays as demand for the format continues to grow.

Recording Industry Association of America statistics show steady year-over-year vinyl sales growth, which has led to long backlogs at pressing plants. Second Line, which planned to acquire newly-built instead of refurbished presses, promised to prioritize independent artists and short-run clients whose orders are often sidelined by major label projects at larger plants.

Second Line would’ve been Oakland’s first large-scale vinyl manufacturer since a Victor factory closed in 1937, and the only such plant in the Bay Area. Pirates Press in Emeryville, the best-known local vinyl business, works with a plant in the Czech Republic.