RALEIGH — The Berkeley Cafe is going on hiatus at the end of this week, closing for remodeling. When it reopens next year, the venerable downtown eatery will be under new ownership: Rose Schwetz, owner of Sadlack’s Heroes on Hillsborough Street, which is closing by the end of the year.

“I’m looking forward to a new challenge...,” Schwetz said. “I’m anxious to do something different in a different location, get it all changed and nice. I like the pressure and the tension of getting it all together.”

The contract was signed Friday, and Schwetz will take over the space on Oct. 1. The arrangement represents a quasi-union of two venerable local blue-collar institutions.

Sadlack’s has been on Hillsborough across from the N.C. State Bell Tower since 1973, the Berkeley on Martin Street on the south side of Nash Square since 1980. Both have served as key live venues in the local music scene, most notably for Whiskeytown and other mid-1990s roots-rock acts.

And in recent months, both have been under the gun.

The Berkeley has struggled with the lingering effects of the economic downturn, and its landlord forced it to close its adjoining 200-capacity music room this past summer to make way for a tobacco store. Sadlack’s is one of several businesses that will have to close by Dec. 31 to make way for construction of a 125-room hotel and retail complex, a project that will also force the relocation of another local-music institution, Schoolkids Records.

Schwetz spent months trying to find another spot on Hillsborough Street for Sadlack’s, but nothing worked. Moving downtown to take over the Berkeley seemed like the next-best option.

“I’d like to have another Sadlack’s somewhere,” she said. “Maybe someday. But right now, my only way to stay alive is to get the Berkeley up and running.”

Schwetz plans to gut the Berkeley’s interior and reconfigure the space, enlarging the kitchen and sprucing up the back patio. She’ll continue to book live bands there, possibly on the patio. Capacity would be about 100.

Both Schwetz and outgoing Berkeley owner John Blomquist confirm that the restaurant will remain the Berkeley Cafe, and Blomquist plans to stay on for a period during the transition.

“I’ve been doing this for 33 years, and I’m wore out, ready to try something else,” Blomquist said. “It just worked out really well. I’ve been waiting around for Rose for three months, when other people wanted to buy me out, because I wanted Sadlack’s to have the place. The only reason I’m letting it go is I just don’t have the money to revitalize it. I’m excited, even though I know I’ll miss it.”

In the meantime, the Berkeley is open for lunch through Friday. Saturday night, Blomquist will call it quits with what he’s calling an “alcohol reduction sale.” Reconstruction should start around the middle of October. If all goes according to plan, the new Berkeley will open in mid-January.

Monday afternoon, at least one of the Berkeley’s loyal customers was still jokingly expressing skepticism.

“I’m still waiting to see if it actually happens,” said Lee Limer, who is enough of an everyday regular to have his own bar stool. “We’ll see.”

Another longtime regular, Jimmy Thiem, has been eating at the Berkeley several times a week for almost 30 years – and has also been a frequent Sadlack’s patron.

“Rose seemed to keep Sadlack’s faithful to its original conception, and I expect she’ll do the same with the Berkeley,” Thiem said. “But I kind of want her to just renovate half of the Berkeley, and keep the other half the same.”

Menconi: 919-829-4759 or blogs.newsobserver.com/beat