Luther Burbank Savings appears to be taking a lemon and making lemonade.
The bank already owns the property, having acquired it in a 2008 foreclosure from the estate of the late real estate investor Raj Gulati. Earlier that year his estate stopped making payments on a $2.1 million loan on the property.
Traverso's, a downtown institution for decades, sold the site to Gulati in 2004 and last year moved to Fountaingrove. Since then the building has remained vacant.
John Biggs, the bank's president and CEO, said the new branch will provide customers a much larger office and more spacious parking than at the current location on Fourth Street near E Street. As well, Luther Burbank will enjoy the increased visibility of a prominent property at a key entrance to downtown.
"That site is really the first site you see entering the heart of the city," Biggs said.
The bank hopes to begin remodeling the building in the fourth quarter of the year and to open the new branch by the end of 2011.
The existing building will be expanded slightly to provide 6,000 square feet of space, double the size of the current branch.
Santa Rosa architect Don Tomasi, a senior principal of TLCD Architecture, has designed the remodeled building. The exterior features composite wood/resin panels that are almost brick red in color, topped with a band of anodized aluminum.
With $3.5 billion in assets, the bank will keep its corporate headquarters on Fourth Street and will continue there to lease most of its current office space, Biggs said.
He declined to estimate on the cost of the new branch project. But he said that since the bank owns the property and can amortize the improvements over 40 years, the new site "will be our least expensive branch in our system."