When news broke the other day that Chase Bank would be taking over one of the most prominent and vacant commercial spots on Centre Street, groans of disappointment echoed through Jamaica Plain.
To be clear, this isn't about Chase Bank taking over the old Bukhara restaurant storefront at 701 Centre St. This is about any bank taking up residence on the main drag of Centre Street from the Monument to Hyde Square.
There are too many banks in that stretch. Chase Bank will be the fifth bank within 100 yards of that section of Centre Street. The fifth bank! There's Bank of America, Citizens Bank, Eastern Bank, and Rockland Trust. Those last three are New England-based, having started in New England, too. In Massachusetts and Boston, we tend to give chains that are based, or started, in the area a pass if they flood our commercial spots -- call it the Dunkin' Donuts effect.
After confirming that a Chase branch would be opening at that location, I was asked if I had any questions about the branch. I could've asked: Why does Jamaica Plain need another bank branch? But I already know the answer: Jamaica Plain doesn't need another bank branch.
Jamaica Plain has always valued independent businesses, which are getting squeezed out of locations as rents rise, and financial institutions like Chase obviously have the money to pay the high rent. Banks can kill foot traffic, and Centre Street is our main shopping district. As foot traffic wanes, the businesses on Centre Street suffer.
A bank taking up residence at 701 Centre St. really hurts because it is such a prominent commercial spot at the corner of Burroughs and Centre streets. That corner has a wide-angle look to it so people notice it. It's at a busy traffic light so cars are constantly stopping and drivers have the opportunity to check out the businesses around them. If they see a restaurant or interesting store they'll be more likely to park and check out that business. Or maybe on another day they'll decide to visit. But that's a lot less likely when it's a bank. You don't usually hear, "Did you go into that new bank branch? It's awesome!"
In this day and age it's more important than ever to have businesses that encourage foot traffic in commercial districts because people can easily order online. If you can get diners to visit The Real Deal, they are more likely to visit Boing! Those are two independent and well-liked local businesses. At the same time, many banking needs nowadays can be met online. People use Venmo, ApplePay, PayPal.
Why would a landlord rent to a bank? It's simple. Landlords tend to have fewer worries when leasing to a bank. Banks pay their rent. Due to decreased foot traffic, there may be fewer worries about customers causing a problem. And the financial capability to lease space is so much easier for banks than an independent business. Banks have the cash; they don't need to give themselves a line of credit.
It's also clear why more banks have opened up in Jamaica Plain, and specifically that section of Centre Street: Jamaica Plain's increased wealth. The median income has gone up a lot. Home and rental prices have skyrocketed. Banks know this and they want those deposits. That's the main reason there are so many banks on West Roxbury's Centre Street. Lots and lots of deposits.
But banks don't seem to be champing at the bit to open in Forest Hills (they may in the future as more luxury condos open in that area), Hyde Square, or Jackson Square. (You do have ATMs in those areas, some run by banks like Bank of America and Citizens Bank.)
So what happens when too many banks are taking up commercial spots in a small commercial district? Fewer people are going to walk around that area. Fewer people will go shopping on Centre Street. (Of course, we've got lots of restaurants; why restaurants are plentiful in today's economy is a whole other discussion.)
And when one landlord knows that another landlord was able to get a certain amount from renting to a bank, that first landlord is probably going to raise their rent. Does it matter that the higher rent was from a bank? Probably not. They just see the dollar amount. Are landlord costs going up? Higher property taxes? Yes. So much that they need to raise rents? Hard to tell. How many landlords are going to talk about their revenue streams, margins, desired revenue, and how much they charge for rent? Very few.
Slowed-down foot traffic means fewer sales for independent businesses, which will get squeezed out because it's highly unlikely that a landlord will take pity upon a tenant, even a longtime tenant, and reduce their rent. The business may move, or just shut down. And that's when a bank swoops in. They can afford the rent. Slowed-down foot traffic may not be a concern for them when they see the average income of the area.
What will adding a fifth bank to this stretch of Jamaica Plain do? Will it mean fewer independent businesses will be able to survive, yet alone thrive? Will bank-sponsored tumbleweeds eventually roll down Centre Street? We'll just have to wait and see.