OAKLAND -- Sears has sold its downtown Oakland store and plans to vacate by the end of summer as the new owner transforms the six-story building into a retail and office center with a focus on technology firms.

Lane Partners, a Menlo Park real estate company, paid $25 million for the 85-year-old building, Oakland Planning Director Rachel Flynn said.

Flynn said that the new ownership group planned an extensive renovation that would include basement level parking, first floor restaurants and shops and technology offices on the upper floors.

"It's very exciting," Flynn said. "They've done work in Silicon Valley and they see an opening in Oakland because of the lower costs. They see Oakland as a place where new tech companies can grow."

Flynn said the firm also plans to restore much of the original facade that was poured over with concrete during a seismic retrofit and connect the ground-floor shops with the 19th Street BART Station below.

Additionally, the city is negotiating to sell to the firm Sears' former auto lot across 20th Street that would be developed into a residential building with ground floor retail.

Sears was the last of the large department stores that once dominated downtown Oakland. The company moved to the building at 1945 Broadway in 1996 after more than 60 years at its original Oakland home on Telegraph.

Employees indicated that the store would likely remain open for another couple of months, but said they were ordered not to discuss the sale. Several shoppers were surprised by the news.


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"This store means a lot me," a shopper named Jeff said just before a store security guard ordered him to stop talking. "I'd rather come here than go to a Target in some other city."

While Sears has been one of the few places in Oakland where residents could buy basic goods like socks and underwear, the store has long struggled and city leaders had been hoping for a sale. Much of the 400,000-square-foot structure sits empty, while a thriving night life scene has developed along surrounding blocks.

"I'm happy that we're going to be able to move forward with a new developer," Councilwoman Lynette Gibson McElhaney said. "It will be interesting to see what type of retail pencils out in that place."

Flynn said the city was hoping for retailers that would be "lively and attractive and urban in nature. She gave examples such as Urban Outfitters, American Apparel and REI.

Several major real estate firms, including Strada Investment Group, had bid on the building after a deal fell through last year to sell it to Oakland-based developer Alan Dones.

"I do think the project is timely," said Solomon Ets-Hokin, senior vice president at Colliers International. "I think it's viable and I do think something great is going to happen there."

Contact Matthew Artz at 510-208-6435.