OAKLAND -- Sears is in talks with a new buyer for its downtown department store after pulling out of a deal to sell the massive building to an Oakland developer.

Alan Dones, who had been in contract for months to purchase the four-story structure at 1955 Broadway, said a Sears official informed him Wednesday that the retailer had decided to negotiate with a different buyer.

Dones and other officials monitoring the negotiations said they could not disclose the name of the interested buyer.

A building sale could spell the end for Sears in Oakland but also opens the opportunity to fill the underutilized building with a collection of shops, restaurants and entertainment spaces.

Sears would not discuss the potential sale of its Oakland store. "Sears values its presence in Oakland," spokesman Howard Reifs wrote in a prepared statement. "We remain committed to serving our members and customers in the greater Oakland community."

Sears is the last of the large department stores that once lined Broadway, but the struggling retailer occupies less than 20 percent of the building that commands more than half a square block.

The building's dead space is seen as a drag on the surrounding neighborhood, which has become the epicenter of Oakland's thriving night life scene anchored by the Fox Theater. The building's basement, which opens directly to the 19th Street Bart station, has long been closed to the public. The top floors also have been empty for years.


Advertisement

"The revitalization of Sears would absolutely be a catalyst project, as important as the Fox Theater, if not more important," said Colliers International Senior Vice President Solomon Ets-Hokin. "It's an excellent opportunity for a sophisticated developer to revitalize an iconic urban space. My understanding is there has certainly been a lot of demand to take that project on."

The city had been working with Dones on a retail, hotel and housing project that would have subdivided the Sears building into numerous smaller retail shops and also included new buildings on city-owned lots across from Sears on Telegraph Avenue and 20th Street.

Deputy mayor Sandré Swanson said the city hoped that a new building owner would share the city's vision. "We are trying to make sure that whatever development takes place responds to the obvious needs of the citizens of Oakland," he said.

Sears began selling off its most valuable assets about two years ago. The Oakland building, which was for decades home to Capwell's department store, is anticipated to sell for between $25 million and $30 million, officials said.

Dones, who heads the Oakland-based Strategic Urban Development Alliance, said Thursday that he ran out of time to put the deal in place and that he had been looking for alternative sources of capital. He hopes to work with the eventual buyer in redeveloping the building and surrounding parcels.

"It's been a challenge, but I still believe in the project," he said. "And I still believe we can play a valuable role with whoever it is that they go with."

Contact Matthew Artz at 510-208-6435.