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OAKLAND — Merchants Parking Garage will soon be no more as its demolition makes way for what will be the largest residential tower in Oakland.

Real estate developer Carmel Partners is replacing the garage at 1314 Franklin St. with a 40-story building atop a seven-floor podium that will include 634 residential units and about 17,000 square-feet of retail space, according to city records. There will be 600 off-street parking spaces.

Out of the 634 homes, approximately 27 to 54 of the units will be “permanently affordable,” according to information from the office of Oakland Councilmember Abel Guillen, who represents the district where the property is located. The affordability calculations are based on 540 units. The plans call for either 5 percent of the units to be priced for households earning 50 percent of the area median income or 10 percent made available to households that are at 80 percent of the area median income. Under Oakland’s 2017 guidelines, $68,200 is the area median income for a single-person household, while $97,400 is the area median income for a four-person household.

It is unclear how the other units will be priced. A spokeswoman for Carmel Partners declined to comment and refused to answer questions about the project via email.

According to Guillen, the developer will reserve 2,400 square feet of retail space at a reduced, below-market rate to a “community-serving business compatible with residences in the neighborhood.”

The project, which was approved in April, had met with some opposition earlier this year from community groups calling for more concrete community benefits. As part of the agreement, the development will include a 20 percent local-hire goal for construction, workin with local job centers. The developers will also provide technical assistance to the Black Arts Movement Business District, according to Guillen. The development agreement also calls for conducting a study to determine feasibility of a shuttle bus service along the 14th Street corridor.

The building, which joins other residential projects planned for Oakland, comes as the city embarks on Mayor Libby Schaaf’s plan to build 17,000 new housing units and preserve another 17,000 units for low-income renters over the next eight years. The tower, which could potentially house as many as 1,000 new residents, will help enliven an area that is largely desolate at night.

The two-story parking garage, which has been there for decades, was once the site of Contra Costa Academy, founded by Henry Durant, the 16th mayor of Oakland. The academy later became the College of California before it was relocated to Berkeley and became the University of California. A historic marker at the garage will be relocated to the new building when it is completed.