The iconic Silver Dragon restaurant in Oakland Chinatown closed in February after ushering in the area”s renaissance and then representing its success for nearly six decades.

Now the empty building at 835 Webster St. is a painful symbol of an economic and demographic evolution that is forcing Chinatown to redefine itself.

The family-owned restaurant will be converted into a clinic for Asian Health Services, which serves thousands of low-income Alameda County residents of Asian and South Pacific descent every year in a crowded clinic across the street.

Ironically, that clinic is in a converted restaurant called the Lantern, which opened to compete with the Silver Dragon. The Lantern failed, and the Silver Dragon closed Feb. 1.

The closing will leave a void in the community, second-generation owner Wesley Chee said.

“But on the other hand, time moves on,” he said. “It”s time. We”ve had a good run.

The busy district is still an economic powerhouse for the city.

But like the rest of Oakland, it has been suffering from a host of modern ills exacerbated by an aging infrastructure, a graying population and a slow bleeding of residents to suburban “ethnoburbs” with Asian malls and plentiful parking.

Settled in 1850s

Oakland”s Chinatown, which today spans 16 square blocks from Broadway to Fallon Street in one direction and 12th Street to Interstate 880 in the other, is one of the oldest in the country. But the community has expanded and contracted since the first settlement took shape in the 1850s.

By the time Wah Quon Chee opened the original Silver Dragon at 710 Webster St. in 1956, the district was recovering from the combination of restrictive anti-immigration laws that lasted nearly through World War II and the exodus of upwardly mobile Chinese-Americans to the suburbs in the 1950s and ”60s.

A new wave of immigrants in the 1970s breathed life into the shops and restaurants, and Chee decided to move the restaurant to 835 Webster St. He had to bankroll much of the $600,000 concrete edifice — built on a plot where a small wooden church once stood — because the banks did not share his faith in a three-story, 25,000-square-foot restaurant.

“The banks redlined Chinatown,” said Henry Chang, the architect and former Oakland City councilman who designed the restaurant.

Chee continued to be a fixture in the kitchen for decades, overseeing Cantonese dishes adapted for American palates. He died Feb. 8, 2001.

It was his son Wesley Chee who last year offered to sell the Silver Dragon building to Asian Health Services and discounted the price to help facilitate the purchase. The restaurant”s offshoot at Oakland International Airport, called the Silver Dragon Caf, will continue offering breakfast burritos and $8 plates of broccoli beef.

But the loss of a flagship restaurant in one of the busiest Chinatowns in the nation was bittersweet for even the most ardent supporters of Asian Health Services.

Silver Dragon”s banquet rooms could hold hundreds, the prices were low, the rooms clean and it had the only full bar of any Oakland Chinatown restaurant.

“The Silver Dragon is the last of the old original owners from when I grew up,” said John Minamoto, a member of the Buddhist Church of Oakland. The church held countless events on the third floor banquet room. Minamoto and his wife of Chinese descent held their daughters” “red egg and ginger” parties, a Chinese version of a baby shower, at the restaurant. “They grew up there,” he said.

Yet, Minamoto”s family also embodies the changes that are remaking Chinatown.

The 67-year-old moved to suburban Orinda like numerous others of his generation. His children are less likely to return to Chinatown for the wedding and baby shower banquets that represented such a vital part of the Silver Dragon”s business.

Aging population

The Silver Dragon closed because it didn”t have the right clientele to support a large Americanized Chinese restaurant any longer. The number of Oakland residents who identified as Chinese on the census has increased steadily every year since 1970 to 9 percent in 2010. But Chinatown residents are likely to be Chinese-speaking and have less and less disposable income as they age. The median age of the 2,788 people who live in the heart of Chinatown — roughly Broadway to Alice Street — is 62 years old.

They remained in Chinatown because of the built-in community and resources such as specialty stores selling medicinal ginseng — and Asian Health Services. Others have choices in Fremont, San Jose and other suburbs, and pan-Asian markets like Ranch 99.

Add to that Oakland”s image as a violent city, burdensome red tape for business and the Occupy melees, and people are going to think twice about Chinatown.

Coming here “has become a special occasion,” said Charles Hung, owner of the Shan Dong restaurant on 10th Street, a family restaurant cited as a model for the way Chinatown needs to adapt. The owners simplified Shan Dong”s menu to feature handmade specialties like hand-pulled noodles and dumplings about five years ago as a way to compete with other restaurants. The decision is paying off because the restaurant is considered a “destination spot,” Hung said. Nearly half of Shan Dong customers are from Alameda and Berkeley, he said.

“If we kept the same thing on the menu as 15 years ago,” he said, “we wouldn”t be doing well, either.”

Evolving Chinatowns

Chinatowns where people can live, work, shop and socialize are “increasingly rare,” said Peter Kwong, a professor at Hunter College in New York and a noted Chinese-American scholar. His parents retired to Oakland in the 1980s.

San Francisco, for one, relies on trinket shops and restaurants catering to tourists. Oakland doesn”t have that option, which lends it an authenticity that many others lack. But it also presents an economic dilemma that the arrival of Vietnamese, Taiwanese, Thai, Korean and Hmong immigrants in the 1980s and 1990s did not solve in the long term.

“It”s an uphill battle,” said John Loh, an investor whose portfolio includes the Pacific Renaissance Plaza in the heart of Chinatown.

“We need new blood,” he said, looking out the window of his office at the plaza”s courtyard. Nearly a dozen of the 69 storefronts are vacant. Like many of Chinatown”s business class, Loh has his hopes set on the development of a half-mile of land surrounding the Lake Merritt BART Station. But the Lake Merritt Station Area plan is years away.

More merchants say they would be willing to stay in Oakland if they could find a new model. But they are afraid to take a risk. They may not have a choice.

To stay relevant, the area has to change its model from a shopping hub to a cultural center for a pan-Asian population, Mayor Jean Quan said.

The transition, however, will be painful and there will be losers, said Carl Chan, Oakland Chinatown Chamber of Commerce and Asian Health Services board member.

Only few imagined the Silver Dragon would ever be one of them.

Oakland Chinatown

Learn more about the history of Oakland Chinatown from the Memory Map project at memorymap.oacc.cc Listen to the Silver Dragon”s architect Henry Chang talk about designing the restaurant on YouTube at http://bit.ly/zGrBSK