What Should We Do With All These #@$@& Empty WaMu Branches?
WaMu went on an insane building spree in Chicago a few years ago, and when combined with Chase, already a huge player in the Chicago market, it became obvious that there are just too many damn bank branches. Chase recently announced that it would close almost 300 WaMu locations nationwide — 57 of them in the Chicago-area alone. The bank branches replaced local businesses during the boom, but will they come back during the bust?
Chicago-blog Hyde Park Progress takes a look at a building on Chicago's South Side that was recently renovated and turned into a WaMu, which, of course, is now closing.
Now we have a landlord at 1364 E. 53rd who had a bank tenant paying $32/square foot and now has nothing; had he kept the paying tenants cut loose in 2005, he would be in a better position. Instead, he signed with a financial institution that has gone down as the biggest bankruptcy in US history, which has caused the credit markets to freeze up, and a recession to accelerate, all of which make it highly unlikely that he will find a new tenant for the space vacated by the bank that drove the businesses out to begin with.
So, what do we do with all these WaMus? Suggestions?
Shuttered Bank Branch on 53rd a Window on Credit Crisis [Hyde Park Progress]
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Comments:
Floorplans might be decent for tutoring programs (like Sylvan) given their generally open floor-plans. Heaven knows Chicago education system needs the help.
They could also be retrofitted/subdivided back to smaller storefronts, which could then be leased to small businesses that couldn't fill something the size of the bank branch.
Sell the land to a developer, who can turn it into condos. Wait, that's what got us into this mess in the first place...
@TheRedSeven: Better yet, turn them into schools. They could use the old vault as the detention room!
/responding to self
57 in-n-outs would be awesome. That gets my vote. Maybe they'd close some in WA and we'd finally get in-n-out up here too
Oh man, I have the best idea. Stay with me here.
How about we find people that want somewhere to live and we offer the WaMu buildings to them? Now these people might not be in the best financial shape, so what we do is tell the people writing their loans that they make much more than they do.
Dude, I can't believe no one's thought of this before!
I find the tone of the quoted piece disgusting. There sure is a whole lot of conjecture in that paragraph. Also, I feel as if the blame put on WaMu for "making the financial system collapse (if this writer even had the scope to be able to make such a statement) is being transferred to the landlord.
Tiny bowling ally/homeless shelter. Everyone deserves to have a little fun.
VOTE: package stores
Schools have been moving into abandoned big box stores, so how about a financial school in former banks? Or soup kitchens...
Do you mean ACTUAL Victory Gardens or, you know, the Tony-Award winning Victory Gardens Theater in Chicago, which recently took over the historic Biograph Movie Theater.
I guess franchised-theatre is the next step, no?
I suggest that towns take empty storefronts and turn them into to municipal sponsored "indoor garage sales".
The city pays the utilities, installs the cash registers, pays the salaries.
City residents can bring items for sale. The city collects a (20%?) of the sale to cover their costs.
A). Most cities limit garage sales to once or twice a year, limiting resident's ability to raise cash by selling excess posessions.
B). People drop off items and they are available for sale, even when the seller isn't.
C). Works for people not able to use craigslist or similar (non-internet users, not home to meet buyers, etc.).
D). Generates sales tax revenue for city
E). Creates jobs for shop employees
F). Fills a vacant storefront, reduces blight
G). Attracts shoppers to the area, potential boost to other business, (resturaunts, gas stations, etc.)
H). Set-up can be designed to be quickly re-locatable when space is rented and simply moves to new location in the area., (Think of half-price bookstores that typically take short-term leases in vacant spaces).
This could also be done by mall operators with vacant storefronts. Think about the extra traffic it will bring to the mall!
Good thing the property can be marketed with a built-in bomb shelter! Bank vaults are good for something (uh, if they have ventilation at least).
While I can't speak for this landlord, I do have considerable experience dealing with commerical landlords in general.
During the last boom cycle, many landlords shunned small businesses for the "security" that national tenants were thought to provide. There are countless business districts that lost their character and allure because all the unique, independent stores were replaced by the cookie cutter national tenents. Certainly, these landlords were well within their rights, even though sometimes their choice of tenants was to the detriment of the community.
However, for those that made these decisions and are now without tenants... they deserve it.
I think credit unions and local banks will take over some of them. A lot of people have been closing their BOA, Citi accounts and going to the small local bank.
<<< wonders if there is a lease agreement and if cha-mu is having to buy itself out of it as would most small businesses.
I say just let people smash these places up as a sort of tension release. The government will pay for it.
I came here to say pretty much what bryanoak has said.
@BuddyHinton: Any time I head down to Cali to visit friends/family I make sure I eat there once a day if possible. Gotta get my fill while I can.
@WBrink: I agree with you, that is what I took from the quote as well. The landlord was given an opportunity to increase his income by a bank willing to pay, how the hell was he supposed to know the bank would fail 3 years later. If he had known that he probably would not have made the deal. But I guess he was being greedy, how dare he want to make money on his property?
@bryanoak: So if a "national" employer cam to you and offered you a job with a 20% raise and more "security", you would decline. A commercial property owners job is to lease space, he does not give a damn about who leases, he wants to get the most out of his space he can. If these unique independent stores where supported by those like yourself, this would not be an issue. That is why everyone buys groceries from a super market and not the corner shop anymore.
He lives on Radford; over by the In-N-Out Burger.
Isn't this just a symptom of a greater problem? It seems like I've noticed the following trend even since the nineties - businesses with large retail footprints will go out of business, the property will remain vacant, and in the same area new retail space will be built and then rented out.
I suspect this commercial real-estate weirdness is (was) an artifact of the credit market, the commercial equivalent of the blighted housing developments that are scattered all over my area half-completed with concrete driveways to nowhere.
I've been thinking lately, though, that we have a twin problem; people stuck with too-high house payments thanks to ARMs, job loss, or whatever, who cannot get out from under them because no one is buying. Also, we have a lot of vacant housing as market demand has tanked. Maybe some kind of community initiative could be started where local businesses and investors fund an organization which buys houses from people who can't afford to have them, then finances their purchase of a smaller place. It could be made financially reasonable by the fact that the "housing credit union" would be essentially getting a big house in exchange for a small house.
Thoughts? The problem of blighted real estate is not going away 'til we figure out something to do with it, and it's something I've been thinking about lately.
@SkokieGuy: I'll add one to that, I think the city should offer a tax credit/break to allow an individual to do this rather than have it operated by the city themselves. Basically an incentive to start a consignment shop up.
QDoba's. Though homeless shelters would seem more fitting.
The one near us was totally eviscerated. It was in a strip mall, and the sign on the facade was covered up with a custom-fitting cloth cover, the ATMs were ripped out, and all identifying marks of what it once was are gone. This all happened within a few days of it closing. It was creepy.
@Collie: When I clicked on the link, all I could think about was "random blogger or twitter guy?" It was random blogger WHO HAS OPINIONS AND DOGGONE IT, HE'S GONNA SHARE THEM WITH THE WORLD!
PS - Is there any way to get italics so I don't have to look like a yelling 5-year-old to put emphasis on words or phrases?
It's pretty obvious what these empty stores are going to be..
May ~ July --> swimsuit liquidation store
September ~ October --> Halloween costume store
November ~ December --> xmas tree store
January ~ March --> snowboard and ski liquidation store
Well, that's what happens to empty stores here in the Los Angeles area anyways.
@pb5000: But this is Chicago. To get that incentive who do they have to bribe? How much will it cost? And they won't take any junk because it won't be profitable enough to cover the corruption costs.
I think a consignment shop like SkokieGuy suggested will contribute to blight itself, you aren't going to attract a great clientel with junk.
Oh, c'mon...this one's obvious -- sell these bank locations to the drug stores! With the way things are going it'll mean another CVS and Walgreens on every corner opposite each other, not just every 2 corners like it is now.
@SkokieGuy: Another benefit: purchases would have a direct, local benefit. Good economic stimulus without buying disposable crap. So there would be an environmental benefit as well - less waste all around.
I'd go to a consignment store if they were easier to get to on mass transit, and unused bank branches may have pretty sweet locations, transit-wise.
@Mike Richichi: I think all of them got that treatment. At least the one near the Dominicks on Western, the one on Ashland near North, the one on Southport, and the one on Lincoln by Belmont. All gutted to the floor with white covers on the sign.
The one at Ashland and North is kinda funny, because it's directly under a Chase billboard talking about how many ATM locations it has.
@Collie: Except when they don't: Bed, Bath & Beyond, Circuit City, WaMu, etc. Going local gives broader diversity, authenticity and keeps the local money flowing locally, and, as it turns out, isn't any more risky than going for the next corporate behemoth trying to muscle out local entrepreneurs.
Yeah WAMU is still paying rent. They have to. The landlord has lost nothing yet.
@SkokieGuy: There's already organizations like this - Salvation Army and Goodwill. Just sounds like a city sponsored Thrift Store. They can be pretty picky about what they take if they know they can't make money on it.
You know what the landlord's biggest problem is? The landlord himself charging THIRTY TWO DOLLARS PER SQUARE FOOT. Flock me sideways. 9_9
How many small businesses and startups would be willing to pay $24? And for the hard of thinking, $24 times 12 months of rent is more money than $32 times zero. Landlords have to start being realistic about rents if they want any tenants.
@Oranges w/ Cheese: Actually no.
Goodwill and the Salvation Army accept donations. That's great if you need a tax write off, (perhaps to reduce taxes on the multi-million dollar bonus?)
On the other hand, if you're not a bank CEO, then maybe you need to sell stuff to raise money, and if so then you need a consignment store.
Consignment stores can also have standards on what they accept. I don't envision people bringing in old tupperware to sell for a quarter.
I do envision people who are in foreclosure bringing in flat screen TV's and antiques, artwork, leather couches and dining room sets and things that they will lose when they lose their home. Instead of it being set at the curb, or costing them fees to rent storage space, they can convert assets to cash.
Today's economy and high unemployment rate has created a desperate need for people to turn "stuff" into cash, as well as buyers who need "stuff" but must buy very economically.
It also generates tax revenue for the city, fills vacant storefronts and attracts shoppers.
@Trai_Dep: I guarantee there are thousands more independent retail outlets than national chains that have gone belly up and left a landlord with bag of nothing. It is just the media does not cover that as a story. Business is a game of chance, sometimes you pick a winner (Apple, Wal-Mart) and sometimes you don't (Citi, B of A). I am sure you take every opportunity to shop at said small independents right? This is the same theory behind buy American, but no one wants to pay 20 bucks for a tee shirt, until that changes you are peeing in the wind. I personally shop where I get the best buy, and 90% percent of the time it is online.
@Collie: There's no use arguing with these people. They don't understand that companies become big- for the most part- because they are successful or were successful at one time. Big business will always be evil to these people. They also think that everybody should subsidize their life, like the example where people would actually condemn a landlord for taking the bigger (and mostly more reliable) paycheck because they'd rather see one more tiny stationary shop or pet store that will fail within 6 months.
Why do WE have to decide what to do with all this commercial empty real estate?? Chicago will come back and businesses (perhaps other smaller banks) will snap these up. Not a problem... in the long term.
I love it when people get "greedy" then they end up shooting themselves in the foot. Probably the tenants their were "mom and pops" or other such small business who could not afford such a high rent amount but nonetheless made their payments on time.
You get what you get.
Sounds like a ready made infrastructure for a competing bank. One that actually checks your income when you apply for a three quarer million dollar loan. One that answers their own phones. One that pays its executive team a small salary and the rest in common stock,payable after they have left the company for 3 years,and absolutely no severance if they lose money.Also, a board of directors that have no cozy relationship with the management.
We need a name for this Never-NeverLand bank .
How about SnarkyBanc ?
@downwithmonstercable: there are no in n outs in chicago(or the subs where I live) so yeah bring them on.
When I was a kid and the Ben Franklin store closed I prayed for a roller rink to move into the space. I am still keeping that dream alive.
Perhaps Duane Reade can expand into Chicago.