By JASON BOOTH
Staff Reporter
BankAmerica Corp. has decided to continue operating its main Southern California cash vault in downtown, even though construction of the new sports arena directly across the street could pose a security threat.
Just months ago, BofA Chairman and CEO David Coulter told the Business Journal that continuing to operate the vault next to the arena project could pose risks.
But with arena construction slated to begin within a month, BofA officials said it’s business as usual at the vault, where $800 million to $1.5 billion is stored on any given day, according to industry sources’ estimates.
(BofA officials said the amount is “significantly lower,” but refused to release any figures.)
“We have not made any adjustment to our operations,” said BankAmerica spokeswoman Linda Mueller. “We discussed with the arena people on what will happen in the next few months in terms of construction and what they are doing to mitigate traffic. We left the meeting with the feeling that our operations can continue as usual.”
The statement contrasts sharply with views expressed by Coulter last May, when he said that increases in car and pedestrian traffic associated with the arena would cause a security problem.
“You have a tremendous structure there; it’s like the Federal Reserve Bank,” Coulter said at that time. “You’ve got to handle all sorts of security problems. You have to handle a lot of traffic flow in and out.”
Since early last year, BofA has been negotiating to sell the property to the arena developers, who would build a parking structure on the site. Arena officials last year worried that the vault could hold up completion of their overall project.
However, there are now indications that the arena team may be losing interest in buying the site.
While appraising the property’s fair market value is difficult, due to the extensive security system used at the vault, John Semcken, vice president of Majestic Realty Co. and manager of the sports arena project, said BofA’s asking price might exceed the $63 million earmarked by the city for land acquisitions associated with the arena.
“If we are unable to reach an agreement (with BofA) that’s OK, we don’t need to have it,” Semcken said.
Semcken said the arena development team is considering an alternative site for the parking structure on the corner of Ninth Street and Olympic Boulevard.
He also said the development team submitted to BofA a month ago a proposal to purchase the vault property, but BofA has not responded.
The vault located at 11th and Figueroa streets, directly across from the site of the sports arena takes up the majority of a city block. As BofA’s largest vault in Southern California, it is a key transit point for funds flowing between the bank’s numerous branches.
BofA officials said they are considering a range of options, including keeping the current facility, moving the money to the five remaining BofA vaults in Southern California, building a new vault or even leasing one or more facilities from other banks.
Part of the problem is that there are very few places available that are capable of safely storing so much money.
Brad Cox, senior managing director of real estate brokerage Cushman & Wakefield of California Inc., who advised Wells Fargo Bank on where to locate its bank vault, said he believes BofA would prefer to move its vault to an existing facility it would lease in the downtown area.
A downtown location also has the advantage of being close to the Federal Reserve Bank.
