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Residents Fear Bank Boom Is Leaving D.C. None the Richer
Branches are popping up with greater frequency in residential neighborhoods. On Connecticut Avenue several blocks north of the three banks at Dupont Circle, the former home of a restaurant, video store and magazine shop is another Commerce branch.
"Love Your Bank at Last," reads the sign near the entrance, where a concierge greets customers and a player piano tinkles in the background.
In Adams Morgan, Wachovia is taking over space once occupied by shops that sold electronics and antiques. The neighborhood's crossroads already offers five banks. "We're becoming a neighborhood of bars and banks," said Brian Weaver, an advisory neighborhood commissioner.
Douglas Jemal, the developer who bought the building where Wachovia will open, said he had hoped to rent to a high-end clothing store, but the company told him that Adams Morgan does not generate enough daytime shoppers. "I looked long and hard. I'm not pro-bank," Jemal said. "The economics worked."
Although a preponderance of the new branches have opened in Northwest, banks are also adding offices east of the Anacostia River. A SunTrust branch has opened, and a Wachovia is on the way in Congress Heights, where residents have had to travel more than a mile to find a bank.
"We want more businesses, we want more stable businesses, and banks certainly do represent that," said Yavocka Young, executive director of Main Streets Anacostia, which lobbies for economic development.
Banks choose densely populated neighborhoods where they can lure customers. New branches generate fees, market CDs and loans, and build up the bank's name. "In New York, you have these huge branches that are a block long, and you walk by and won't see more than three customers," said Kevin Fitzimmons, a banking analyst. "But it's advertising. Your customer may come in once every five years. It gives them comfort to know it's there."
Chevy Chase has opened eight branches in the District since 2001, the most of any bank. Alexander Boyle, Chevy Chase's vice chairman, said the expansion reflects the District's "growth and expansion" and a need to keep up with the demands of customers commuting from the suburbs.
Banks have also opened more branches in Maryland and Virginia, increasing by 21 percent in Fairfax County and 9 percent in Montgomery County.
The rise in branches has prompted some cities to devise controls. A Chicago alderman became so alarmed by the proliferation that she drafted a law requiring that banks obtain permits to open within 600 feet of one another.
"We had them in every block," said the alderman, Vi Daley. "They were destroying my streets."
Tregoning, whose office oversees development in the District, said the city could rewrite zoning laws "so we don't have banks on every corner." Or, she said, the government could provide tax relief to property owners so they could lease space at below-market rents.
John Asadorian, a commercial real estate broker, said many retailers gravitate to the suburbs because that's where they find masses of shoppers. "There are a lot of banks, but it's not at the expense of retail," he said.
In Columbia Heights, the center of a development boom, residents lobbied for more banks. Until recently, their only branch was a Riggs, now PNC, on 14th Street NW. Now they have Citibank and Wachovia, a BB&T is opening, and a developer is negotiating to bring a Bank of America, all within several blocks.
"We needed banks. It's a welcome improvement," resident William Jordan said. "I just don't know if we need five of them."