Credit union puts downtown headquarters up for sale, plans exit from neighborhood - St. Louis Business Journal (2024)

One of the region's largest credit unions is marketing its downtown St. Louis headquarters for sale, with the eventual goal of exiting the neighborhood altogether.

Gateway Metro Federal Credit Union placed its building at 1001 Pine St. up for sale in the past several weeks with an asking price of $1.25 million, said CEO Jay Lewis. The two-story building, solely occupied by the credit union, houses its administrative offices and Gateway's branch in the city of St. Louis, one of six locations it operates throughout the region.

The 16,247-square-foot building on a 0.18-acre lot, which Lewis said was constructed on top of the foundations of row houses that had originally been built in the 1800s, was appraised at $1.09 million this year by the city assessor, records show. City records do not list when it was built, but it operated as a Catholic bookstore before the credit union bought it and moved there from another downtown building in the early 1990s, Lewis said.

The decision to list the building is part of a plan by the 53-employee credit union to exit downtown for a location elsewhere in the city or eastern St. Louis County and expand its appeal, particularly to younger people, Lewis said.

“We’re just looking to get out of downtown,” Lewis said. “The vibe downtown isn’t like it used to be.”

The credit union will be the latest company to announce a move out of downtown, even as government officials and boosters look for answers on big vacancies. New developments such as the proposed $1.2 billion Gateway South construction innovation district and new attractions at Union Station are planned, but the downtown market has struggled to recover office tenants and foot traffic after the Covid-19 pandemic.

The credit union could buy or lease another building for its central location, and will strongly consider other areas in the city, especially the Interstate 44 and Interstate 64 corridors around IKEA and the hospitals, Lewis said. It will also weigh moving to inner-ring suburbs on the western edge of the city, such as Clayton and Brentwood, he said.

“We may still stay in the city, but maybe move farther west where there’s maybe more visibility,” Lewis said.

The ultimate goal for the new central location would include branch space, a parking lot for a drive-thru ATM and office space for employees, Lewis said. The credit union has hired Chesterfield-based McKelvey Properties as the broker to sell the downtown building and find the credit union a new space.

Gateway’s administrative employees downtown work a hybrid schedule, so a range of 15 to 25 employees a day come into the office, Lewis said. The credit union had a total of 53 employees and $183.68 million in deposits and total income of $353,440 as of 2022, according to Business Journal research.

Not enough pedestrians

The decision to leave downtown centers on depressed foot traffic, at least in the credit union’s neighborhood at 10th and Pine streets, Lewis said. Although more bustling downtown areas like Ballpark Village — where Edwardsville-based credit union Scott Credit Union operates a branch next to Busch Stadium — still see a decent amount of foot traffic during the day, Lewis said 10th and Pine does not see the pedestrians it used to. And when it does, it’s not downtown residents or employees, but tourists who don't use the credit union, Lewis said.

The credit union was founded in 1935 by Southwestern Bell employees as the St. Louis Headquarters Telephone Credit Union and was anchored downtown by the massive number of Southwestern Bell and later AT&T employees who at that time worked out of multiple buildings, Lewis said. It still has significant membership from AT&T, but changed its name to Gateway in 1977 to better reflect its membership, which can consist of, among other qualifications, residents of seven counties in Missouri and Illinois. It had 11,381 members as of last year.

With the rise of remote work, many companies have fewer employees downtown and walking around during the credit union’s hours, including AT&T, Lewis said. The downtown branch operates from 9 a.m. to 5 p.m. Monday through Friday, and is not open on weekends.

“The ability for us to grow as a credit union has become rather challenging” without that foot traffic and with fewer downtown customers patronizing the branch overall, he said. That became a concern for the credit union’s ability to “thrive and survive” the next 50 years, even as the city loses population, he said.

“We’re trying to look for anything and everything to help build our credit union for tomorrow,” Lewis said.

The credit union’s research shows that the fastest declining population in the city is people 35 and younger, the age group Gateway hopes to target as the next generation of members, Lewis said. Gateway’s current average customer age is 51 years old, and it would like to see that number get younger, Lewis said.

“Strategic forethought and just trying to think ahead of where we want to be positioned, downtown St. Louis doesn't seem like that’s the place where we need to be,” Lewis said. “We’ve got to make sure that we’re prepared for tomorrow’s members, for us to survive tomorrow.”

Employee concerns over safety

A major factor weighing against remaining downtown long term were ongoing feelings around safety for Gateway’s employees and customers, Lewis said. Although there were no known severe incidents that affected anyone coming or going from the credit union, safety concerns are paramount since employees are there after hours, and employees increasingly feel like they are encountering more non-customers hanging around the credit union and approaching them as they arrive to work, Lewis said.

The feedback the credit union has received is that both employees and customers do not like those situations, Lewis said.

“I’m not saying it’s crime. It’s just they don’t feel safe in the environment,” Lewis said. “If you’ve lived in places that you’re not familiar with experiencing that on a daily basis, that’s kind of a shock to your system. That all of a sudden you’re maybe approached by a stranger, and you have no reason for them to approach you. I’m not saying it’s not safe, but I’m saying that their feelings are they’re not safe. That’s a hard thing to combat because it’s feelings, and you can’t say it’s not legitimate for some reason. For whatever purposes, they just don’t feel like it’s the best place for them to be.”

The credit union building has also experienced significant property damage at times due to its location. A car crashed through the building on New Year’s Eve a few years ago, he said. A few weeks ago, a person was kicking in the credit union’s ATM with his foot when employees arrived to work, he said.

Through April this year, St. Louis police reported that downtown crime was down significantly across all categories compared with the same period of 2023.

The credit union has also come to view parking as an obstacle for both customers and employees, who park in spaces in a nearby surface parking lot that the credit union has to pay for, he said.

Expansion elsewhere

Gateway is chartered to operate in Madison, Monroe and St. Clair counties in Illinois, and the city of St. Louis and St. Louis, Jefferson and St. Charles counties on the Missouri side, Lewis said. Besides the city branch, the credit union also has locations in Ballwin, Fairview Heights, Florissant, Cottleville, and a new standalone building that opened last month in south St. Louis County.

Despite the long-term plan to close the downtown branch, Gateway plans to keep the site open and operating for as long as possible, Lewis said. It’s possible that even if the building is sold, the credit union could work out a lease to continue to operate there until it opens a new location, he said.

That’s what Gateway did when it purchased and opened a new building at 9992 Lin Ferry Drive in south St. Louis County, which opened about a month ago inside a converted former restaurant building.

The credit union purchased the South County location in 2022 for $777,000, and remodeled the longtime restaurant site into a full-service credit union branch with offices and a drive-thru. The 2,300-square-foot building is more than twice the size of the temporary space it had been leasing at the Grasso Plaza shopping center in Affton, following the closure of a storefront branch on Lemay Ferry Road a few years ago.