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."
Santa Rosa Mayor Susan Gorin expressed satisfaction at the news of the new branch.
"It would be a great location for a business that activates pedestrian activity," Gorin said in an e-mail.
Danielle O'Leary, the city's economic development manager, said the branch will open near the proposed 10-story mixed-use Museum on the Square project, also designed by Tomasi. And nearby, the city is planning a major renovation of its downtown transit mall.
"It's great to see that whole area being invigorated both with occupancy and with infrastructure upgrades," O'Leary said.
Biggs acknowledged the new branch property "was always intended to be a high rise of some sort," but "in this economy it just doesn't pencil out."
The bank now has six branches in California and plans to open a seventh next month in Beverly Hills. In the past five years, it has more than doubled the size of its assets.
Vic Trione, the bank's chairman, said in a news release that the bank anticipates "solid and continued growth" and the new branch location "allows us to accommodate the anticipated growth, while underscoring our commitment to the community that has fostered our success."
[END_CREDIT_0]You can reach Staff Writer Robert Digitale at 521-5285 or firstname.lastname@example.org.