WALNUT CREEK — Mechanics Bank has bought a big building near downtown here where the bank will move several administrative and wealth management operations — but the bank's headquarters will remain in Richmond.
The bank paid $12.5 million to obtain a majority ownership of the 75,000-square-foot building at 1111 Civic Drive in Walnut Creek, said Steve Buster, chief executive officer of Mechanics Bank. About 150 employees could eventually move to the building at the edge of the downtown district, Buster estimated.
The workers would relocate from other Walnut Creek locations, as well as sites in Richmond and Hercules.
Mechanics Bank will also spend about $2.5 million to renovate the building on Civic Drive, Buster said.
With $3 billion in assets, the bank needed more space for its expanding operations.
"We are straining at the seams," said Hatti Hamlin, a spokeswoman for the bank.
The firm emphasized its headquarters would remain in Richmond, where the bank has been based for decades.
"We are so entrenched in the Richmond community and we don't want to signal any change in our commitment to Richmond," Buster said.
The deal also represents a coup for Hall Equities Group, a development stalwart in the East Bay.
In late February, Hall Equities bought a foreclosed note on the building, which had previously been seized by a lender for $12 million.
The building is due to be sold to Mechanics Bank in early July, said Ken Cheitlin, an executive with Walnut Creek-based Hall Equities.
"We have been looking for at least two years for a new location for our administrative operations," Buster said. "We considered San Francisco, Oakland and Walnut Creek, among others."
Eventually, Walnut Creek attracted the bank's embraces.
"Walnut Creek is an economic epicenter for our deposit base and our loan activity," Buster said. "We love the building because it is a campuslike setting that speaks well of our employees and is a wonderful environment. It's close to BART, to the freeways, to the downtown and its amenities."
Yet this deal isn't the only expansion that the bank might generate at Civic Drive and Ygnacio Valley Road.
Mechanics Bank also has struck a deal for a long-term lease at an adjacent property, where the bank could move more employees into an existing 5,500-square-foot building.
That site could also become a retail store for the bank, Buster said.
What's more, the bank is contemplating a plan to construct a building on the vacant portions of the parcel, he said.
The first group of employees, about 60 workers, will move to the building on Civic Drive in the spring of 2011. They will relocate from downtown Walnut Creek.
More workers will move to the site over the next two years.
"The long-term plan is we want to be sure we can keep growing the bank's administrative and divisional resources," Buster said. We just think this location is a wonderful choice."
Contact George Avalos at 925-977-8477.