Amplify Credit Union will soon open its new flagship branch at Esperanza Crossing, replacing its venerated Brockton location. We sat down with Senior Vice President/Chief Financial Officer John Orton to discuss the financial ramifications of opening a new flagship branch built from the ground up.
How will this relocation help Amplify?
John Orton: We have been at the current Brockton location for over twenty years and it has served us well, but that building needs a major and costly facelift to continue. It’s also hard to see from Burnet Road and, with no stop light, access is difficult. So, for both financial and member-service reasons, we decided that the Esperanza site, although smaller in size but with much greater street access, is far better suited to serve our current members and attract future members.
What are the long-term goals for this location?
John Orton: This is our main branch for the next generation, so the first goal is to continue to meet the needs of our 56,000-plus members. Secondly, the new site perfectly fits our desire for a more visible and accessible location to better attract new members for our future growth as it sits right on Burnet Road with great visibility and easy and protected access. Thirdly, the branch is located near the heart of the Domain which is well on its way to becoming Austin’s premiere destination second only to downtown, giving us a very strategic position to serve Austin for decades to come.
Does the relocation bring with it an anticipated growth in membership?
John Orton: Yes. We are surrounded to the east by hundreds of brand new apartments and to the west by thousands of existing apartment units and many small businesses in the Domain. They will all love having Amplify right in their backyard as will our neighbor, Top Golf. We are also excited that many of our heritage IBM members will have direct access to us right from the IBM buildings on Burnet Road.
What are some of the positive financial contributions Amplify can count on from the new branch?
John Orton: The cost of the new branch was almost exactly the same as what we sold the old branch for, so there was no incremental cost to our members. In fact, the sale of the old branch created a $3M+ gain for our member equity in 2014. By owning the new building, we lock in occupancy costs for decades to come, enabling better financial results for our members. Had we leased a large space like this, the annual costs for rent and triple net costs (taxes, insurance, etc.) would increase 5-10 percent every year. Because of its prime location, we will attract more members and grow more rapidly. This will result in better loan and dividend rates and services that we can provide our members, creating a virtuous circle that will financially benefit our members for decades to come.
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