OAKLAND — The historic Neldam's Danish Bakery recently got a new lease on life.
The bakery, which opened almost eight decades ago and is one of the city's oldest institutions, will remain open.
The company's land and buildings were sold to new owners who now lease building space back to the Neldam family to operate their business. They signed a contract for one year and Neldam's is set to celebrate its 80th anniversary in February.
"I have mixed feelings. It's sad to see the property go," said Cathy Caulkett, a Neldam's store manager for 28 years. "But it's a blessing that we still can be here and keep serving the customers we've had for years."
The deal gives Neldam's a clean slate, she added.
This summer Neldam's Holding Group LLC was put up for sale for $4.55 million to help the bakery owners pay off outstanding loans. The bakery, however, operates as a separate entity and was not up for sale.
The family had to sell the 4,500-square-foot building and a parking lot across the street to pay off a balloon loan payment of $500,000 due in August. They also had to pay the company's other outstanding $2 million loan.
Other factors, including a rising cost of supplies, a decline in customers, competition from bakeries inside supermarkets and a slow revitalization along Telegraph Avenue all contributed to Neldam's business problems.
The main baking plant will continue to operate at 3401 Telegraph Ave. and
"This is a great bakery and it needs to stay open," said John Simmons, 64, of Oakland, who has patronized the business since he was a kid. "I love their pecan pies and tasting them just takes me back to my childhood."
The bakery is one of Oakland's most-loved landmarks. The place was founded in 1929 by Askel "George" Neldam and wife Rosalia. George came from a baking family in Denmark.
A quality-conscious bakery, Neldam's makes its own scratch mix, jams and fillings. Some customer favorites are Neldam's German chocolate cake, macadamia-nut cookies and almond delights.
Typically, Neldam's makes money by catering for large companies, such as Kaiser Permanente and Clorox. It also turns a profit from customers who travel from as far away as 30 miles to buy cookies, cakes, pies and Danish pastries. A small amount of revenue is generated from walk-ins.
Rhoda Eichelberger of Emeryville has been a Neldam's customer since 1947. She said she is looking forward to buying pies, bread rolls and other baked goods from Neldam's during the holidays.
"I'm relieved to know they are not closing," she said. "I'm going to tell all my neighbors and friends the good news."
Reach Kamika Dunlap at email@example.com or 510-208-6448.