With downtowns growing across the country—a huge demographic shift after years of migration to the suburbs—Gerber Collision & Glass wanted to take advantage of this trend in Seattle, a city with a booming central business district that added nearly 50,000 new residents in the last 10 years.
Building out a shop as close to the city center as possible is a nontraditional move with unique challenges compared to a small town or rural environment. The payoff, though, would be catering to an affluent audience in a fast-growing city that has shown no signs of slowing down, even during the Great Recession.
As a Seattle resident, Gerber’s Vince Claudio knew the hot neighborhoods, and which areas of the city would be the hardest nuts to crack. Zoning restrictions, land values, parking limitations and pollution requirements—especially in such an environmentally conscious city—would be his biggest potential roadblocks.
With his role as regional vice president at Gerber Collision & Glass, Claudio oversees the company’s 16 stores in Washington. Finding a suitable downtown site, while complying with myriad city requirements, would allow the national MSO to reach an underserved area in a city where it already had seven successful locations.
The project would require phone calls to city hall, fact-finding missions with a real estate broker, meetings with architects and, ultimately, unexpected hurdles that could have killed the store before it ever opened its doors or, worse, after countless man hours and dollars had already been spent.
“The analysis part was finding out where we could put a shop ... and then what kind of traffic and flow goes through that area, and then what is the proximity to neighborhoods where people live or where people work,” Claudio says, recounting the downtown project’s first steps. “We felt that since a lot of our insurance partners use radiuses when somebody calls to look for a shop location, being within a five-mile radius made it attractive to people, particularly those who didn’t want to deal with all of the traffic that we have in the area to get in and out. That was the strategy part.”
THE BACKSTORY
When considering where to build its next store, Jim Maliszewski, director of program management and centralized support at Gerber, says the company looks at the radius around existing repair centers and the customer bases they serve, as well as insurance partners within a given area.
In the case of Seattle, the company had advanced knowledge of the market with its seven pre-existing stores, as well as a former estimating and drop-off location in downtown that closed approximately eight years ago.
“We knew that getting near enough to the city where it would be convenient enough for people who commute in and be willing to leave their car was going to be a challenge, so we started by working with the broker to find what areas were zoned commercially for us,” Claudio says.
Once the company had a few locations in mind, it went back to its existing customer base to find out what kind of client support it would have in the various parts of the city under consideration.
After settling on a neighborhood that was close enough to reach downtown residents and those who commute from surrounding neighborhoods into the central business district, Claudio began to aggressively hunt the ideal individual site to develop. Finding a near-perfect site, he said, quickly became the project’s biggest challenge.
THE PROBLEM
With specific goals coming into focus, Claudio knew the company wanted to lease a space larger than 10,000 square feet—the company usually doesn’t own the buildings that house its stores. Some of its stores are as large as 18,000 square feet, so the challenge was building a big store in a largely landlocked downtown district.
Many urban areas including Seattle have zoning restrictions against businesses or uses deemed unattractive, and that’s just one of many concerns that could derail a new collision repair facility in a city environment.
Scarcity of land, resulting in prohibitively higher land values and a lack of space for parking, were other major challenges that played a large part in dictating where Gerber could even consider putting in a new store.
One of the city’s last downtown collision repair shops was displaced by Microsoft co-founder Paul Allen, whose investment company moved out of the location in favor of a large mixed-use development.
This being Seattle, a city that frequently appears on “Greenest Cities” lists, environmental concerns are paramount. Gerber had to submit a thorough list of chemicals that would be used on site, as well as plans for storing and containing the materials, including runoff from washing cars in the shop. Details also had to be reviewed for installation of the fire suppression system.
“They’re very strict and very specific about hazardous waste, materials, proper handling,” Claudio says. “The Department of Ecology here is very insistent and very involved in the permitting, and wants all the specs and information on the materials and the equipment that we use. So it’s a little bit of a wringer, more so than the shop we put in Kent (Washington) or other areas.”
THE SOLUTION
Claudio’s diligence paid off in a 16,000-square-foot building that satisfied nearly all of the company’s priorities, located in the city’s Interbay neighborhood, a 10-minute drive on city streets to the Space Needle. The company was pleased to find an existing building, rather than having to build new, which would have required a willing landlord interested in housing a collision repair facility.
The Interbay location wasn’t perfect, however, as the site has limited spaces for parking. But that wasn’t enough to scuttle the deal.
Overall buildout costs were approximately $700,000—25 percent higher than typical Gerber locations—due to the additional engineering work required by the multi-story building with tenants below the shop. Its monthly lease rate is a steep $17,285. “We have a pretty significant parking challenge there,” Claudio says. “We’re in an industrial area that, because there are a lot of buildings clustered [nearby], they don’t want to give up any of their spaces.”
Even so, the new location does offer the company many advantages, especially in terms of the demographics of nearby residents and those passing through to jobs in the central business district.
“For us this is a really great place to be as far as being surrounded by a lot of rooftops, good communities, and then, south of us, you just drive straight down 15th [Avenue] and it runs right to the Space Needle and the downtown corridor,” Claudio says. “So we’re pretty close.”
Opening the new store—which welcomed its first customers in October 2012—wasn’t without unexpected hiccups. Shortly after opening, tenants from the basement level of the building complained about water leaking from the shop facility above.
Gerber immediately suspended its operations to determine the source of the leak, which ended up being the small amount of water used to wash off cars before delivery. Protecting basement-level tenants required cleaning the car wash area to apply an epoxy coating that would fill the microscopic holes in the shop floor concrete.
THE TAKEAWAY
While Claudio wishes he would have anticipated the drainage problem in an effort to save time and money after the downtown location had opened, he says that the extra hurdles required in an urban environment were worth the effort.
“The ramp up took a little while, but we’re extremely pleased with the customer support that we have,” Claudio says. “We’re now looking for something in what is called SoDo, or south of downtown.”
SoDo is a gritty part of town that’s home to the CenturyLink Field and Safeco Field professional sports stadiums. Its more industrial character and zoning restrictions make it an ideal new focus, Claudio says, that’s compounded by an existing population of Gerber customers.
Two years on, the 16th Gerber Collision & Glass location in Washington State has an average monthly car count of 104 vehicles, which is higher than similarly sized stores within the corporate network. For 2013, its first full year of operations, the Seattle location produced $2.3 million in revenue. While the ramp-up was slower than expected, Claudio says the location is now “going gangbusters,” and he is already in negotiations for additional space.
For any other company considering adding an urban location, Claudio advises working closely with the city planning department to ensure that everything is done right the first time, rather than having to make any costly retrofits or dealing with neighborhood complaints.
“We worked with architects who work with the city planning department,” Claudio says. “In the long run, it’s better to do everything right than to have to go back and correct something because you didn’t have the right permission or the right information.
