Pawnshops find unlikely home in Naperville — Chicago Tribune June 21, 2010

June 21, 2010
By Gerry Smith, Tribune Reporter

Jade Osowski needed some quick cash.

So she took her seven designer-brand purses to a place that, until last year, did not exist in the city limits of Naperville: a pawnshop.

At Naperville Jewelry and Loan, co-owner Greg Holloway assessed the value of the leather bags and gave Osowski $170, which she used to attend a book-signing in Minnesota for “American Idol” runner-up David Archuleta.

Osowski, 17, might not fit the profile of a typical pawnshop customer. But neither does family-friendly Naperville — with an estimated median income of about $89,000 — seem the typical setting for a pawnshop.

Yet in the last year, three pawnshops have opened within a mile of each other along Ogden Avenue. Naperville Jewelry and Loan was the first.

The trio of new pawnshops in Naperville reflects an effort by pawnbrokers to open in more affluent towns where residents are hocking expensive goods to cope with the recession, experts say.

But in many cases, pawnbrokers have found their reputation has preceded them, reinforced by a long line of unsavory characters in movies and literature.

“They have this image, largely due to Hollywood, of trafficking in stolen goods — and it’s just not fair,” said John Caskey, an economics professor at Swarthmore College and author of “Fringe Banking: Check-Cashing Outlets, Pawnshops and the Poor.”

That image, fair or not, has made it difficult for pawnbrokers to open in some suburbs.

When Andrew Grayson, of Berwyn, tried to open a pawnshop in downtown La Grange in 2009, residents and business leaders objected, saying the shop would ruin the character of the village.

Village officials refused to issue Grayson a building permit and later amended a zoning ordinance to exclude pawnshops from La Grange’s central business district. In response, Grayson filed a lawsuit against the village, its board members and the landlord of the building he was to occupy, although it later was dismissed.

“People want to protect their property values, and here is something that has a bad image and they don’t want that thing around,” Caskey said.

Holloway said Naperville was one of just a few western suburbs that didn’t have a regulation against pawnshops. Even then, he found it difficult to find a willing landlord. He finally convinced one, but the landlord had one condition: he change the shop’s name so it did not include the word “pawn.”

Hollywood is now trying to capture pawnshops in a more accurate light with the History Channel’s “Pawn Stars,” which is based on the colorful negotiations that take place in a Las Vegas pawnshop. The show’s second season was the History Channel’s highest-rated series ever.

The number of pawnshops nationwide grew from fewer than 5,000 in 1986 to about 12,000 in 2007, Caskey said. The Illinois Department of Financial and Professional Regulation, which regulates the pawnshop industry and sets statewide interest rates at 20 percent, said there were 228 pawnshops in Illinois in 2009.

At Naperville Jewelry and Loan, about 80 percent of business operates like a retail consignment shop, with customers buying and selling used items. About 20 percent of business works like a pawnshop, with customers putting up their belongings as collateral for a loan. The average loan at the shop is $150 to $200 — about twice the national average.

Customers can pay back the loan plus interest anytime within one month. Then they are given a 30-day grace period, after which the pawnshop takes ownership of the item.

From the street on Ogden Avenue, there is little indication a pawnshop is operating. The ancient symbol of pawnshops — three hanging gold balls — is nowhere to be found. Only a small piece of paper taped to the door tells customers the pawnshop is upstairs.

Occasionally, a young man will enter the store looking to sell women’s jewelry or a pink digital camera, forcing Holloway to judge whether or not the items are stolen.

“At least once a day we turn someone away,” he said.

Customers are not buzzed in. There are no armed guards or bulletproof glass. There is only one security camera inside the well-lit showroom filled with jewelry, iPods, Louis Vuitton purses and guitars signed by Buddy Guy and the Rolling Stones.

“They’re not scary. They’re nice,” Jade’s mother, Pat Osowski, said of co-owners Holloway and Tom Brunzelle. “I wouldn’t bring my daughter here if there was a creepy feeling.”

Among some of the stranger items on sale at the shop were a Kentucky long rifle from the mid-19th century and an American $3 gold piece — one of about 20 known to exist, worth about $150,000. The coin is not kept in the store.

On a recent afternoon, Britten Durment, who described himself as “a broke musician,” visited Naperville Jewelry and Loan, where he recently had pawned a set of microphones for $60 so he could “party out at some colleges with some friends.” He returned because he needed to buy them back.

“Now I have to record some stuff so I need a couple extra microphones,” Durment said.

With the price of gold rising last year, Tom Vokac took his grandmother’s jewelry to Naperville Jewelry and Loan. Since then, Vokac has become a regular at the shop, buying a TV, a laptop, a piece of jewelry for his wife and some golf balls.

He also has sold, among other things, a human skull once used by a medical student. Like many items in the pawnshop, Holloway sold the skull on eBay — for $550.

The pawnshop, Vokac said, is nothing more than a place to shop for discounts.

“I’ve gone there for Christmas shopping,” Vokac said. “And I’m not embarrassed to say it.”