U.S. Bank ceases branch operations at 97-year-old downtown Cedar Rapids building

CEDAR RAPIDS — Branch banking services in a downtown Cedar Rapids cornerstone building have ceased after 97 years of service.

U.S. Bank closed its main Cedar Rapids branch — located at the corner of Second Avenue and Third Street SE — on Sept. 14. Customers were notified by the bank in early June of the closing.

Primary reasons for the closure were customers’ changing banking methods, including rapid transition to digital and mobile banking platforms, and a desire for greater simplicity, said Caitlin Hurley, of Minneapolis, U.S. Bank vice president of public affairs and communication.

U.S. Bank is maintaining other services in the downtown building, Hurley said. Those services support Iowa business owners and commercial clients, and those seeking wealth management assistance through U.S. Bank. There are about 40 U.S. Bank employees remaining in the downtown building. “Fewer than five” branch employees were transferred to other U.S. Bank locations, Hurley said.

"We understand that the closure of any branch is a disruption for our customers and our employees,“ Hurley said. ”We worked to make the transition as smooth as possible for all involved, and all employees impacted by the branch closure have moved into other positions at U.S. Bank.“

U.S.Bank has four branches in the Cedar Rapids area and nine branches in the Cedar Rapids/Iowa City corridor. There are no plans at this time to open another branch in Cedar Rapids, she added.

The 12-story Merchants National Bank building was built in 1925-26. It was designed by the Weary & Alford architectural firm of Chicago. It was once the city's largest bank and Iowa’s third-largest bank.

Hurley said U.S. Bank sold the building at 226 Second Ave. SE and entered into a long-term lease agreement with the new owners.

Records at the Linn County Auditor's Office show the Merchants National Bank Building was sold for about $8.4 million on Nov. 5, 2021, to IOWA-MAP Holdings of Wayzata. Minn.

"I can understand the reasoning for the closure. After the flood, derecho and pandemic, I'm sure that the foot traffic in downtown C.R. has declined,“ said former bank employee Dan Sullivan, of Cedar Rapids. ”As a retired 50-year employee of that branch, I have a lot of fond memories of my time there, I'm sad to see it closed, and I hope that the beautiful ornate bank lobby will be preserved.“

Downtown jobs still rebounding from pandemic

While the U.S. Bank branch closure didn’t result in any job losses, some employees were transferred to work locations out of downtown Cedar Rapids. Even with the relocation of those jobs, the Cedar Rapids Metro Economic Alliance said it doesn't see an exodus of downtown jobs.

Nikki Wilcox, strategic development director for the Alliance, said one of the most accurate measures of downtown business activity is daily parking numbers. Those numbers have grown over the last two years, but Wilcox said the total still is down about 20 percent compared to pre-COVID parking numbers.

Before the pandemic, Cedar Rapids’ seven parking garages averaged 3,800 occupied spaces. As of July 2023, the garages averaged more than 3,100 occupied spaces.

"Several downtown businesses have actually grown, which theoretically offsets the job losses from the few companies that have moved,“ Wilcox said in an email to The Gazette. ”The lower parking numbers are more attributed to the remote and hybrid work schedules which has really diminished the number of people downtown during the workday.

"We estimated 13,000 (downtown) workers in the past, so one would assume if parking has decreased by 20 percent, we have around 10,400 people coming each day to work downtown.“

Wilcox said by including those working remotely for downtown business, it's estimated downtown jobs are still around 13,000. She cited recent job gains at TrueNorth, GreatAmerica, Cedar Rapids Bank & Trust, ImOn, and GoDaddy.

"The hybrid and remote working schedules have diminished the people downtown each day, not the job losses," Wilcox said.

One other tenant in the Merchants National Bank building, Shuttleworth & Ingersoll law firm, intends to move soon to the former location of the Cedar Rapids Gazette, 500 Third Ave. SE. That relocation will keep the firm and its jobs downtown.

Hurley, from U.S. Bank, couldn’t speak about other Merchants National Bank tenants because the company no longer owns the building.

Consultants look to build ‘consistent activity in downtown’

The city, the Alliance and other groups hired Progressive Urban Management Associates, downtown consultants from Denver, Colo., to assess Cedar Rapids' downtown and offer possible improvement suggestions.

"After three site visits and input from over 1,600 stakeholders and community members, they identified some key projects to help rejuvenate the downtown core,“ Wilcox said.

Ideas include repurposing underused spaces on Third Street SE and the Second Avenue Bridge into places where people can dine, gather and attend events. The consultants also pointed to a need to attract more independent retailers and add housing downtown.

Wilcox said the consultants believe Cedar Rapids' downtown "is above average when you compare our downtown to others across the country. It’s no secret that downtowns everywhere are hurting, but we have an above average lease renewal rate and we are slowly getting more downtown employees returning to work,“ she said.

Downtown restaurant owners report the majority of their profits are made during the dinner and late evening hours, Wilcox said.

"Twenty years ago, we had a vibrant dayside downtown and nothing happening at night. Now we have a vibrant nightside downtown and are struggling more during the workday,“ Wilcox said. ”We are hoping to implement some of the ideas in the downtown vision plan to ensure there is consistent activity in downtown day and night.“

Editor’s note: This story was updated to correct the number of U.S. Bank employees who were transferred to other branches and to correct the construction date and design firm for Merchant’s National Bank building.