GUARD’s growth prompted consideration of Sterling site

i Jan 12th 2017

By Denise Allabaugh, Wilkes-Barre Citizens’ Voice

WILKES-BARRE — Berkshire Hathaway GUARD Insurance officials confirmed Wednesday they have signed a “non-binding letter of intent” with the City of Wilkes-Barre to explore using the former Hotel Sterling site to expand operations.

The site is located across from the GUARD’s offices on West Market Street.

Since the insurance company was acquired by a unit of Berkshire Hathaway in October 2012, its staff has grown, said Chief Operating Officer Carl Witkowski.

“The company had 553 employees at the end of 2016 — with 448 of them working locally and 119 hired in 2016,” Witkowski said. “We have filled the four buildings that make up the GUARD Center complex and now also lease space at two additional Wilkes-Barre locations, creating inefficiencies.”

Kingston residents Judd and Susan Shoval founded GUARD Insurance. It has been located in downtown Wilkes-Barre since 1983.

GUARD operated as an independent carrier until Clal U.S. Holdings acquired it in 2007. It was subsequently sold to a unit of Berkshire Hathaway for $221 million in 2012.

“We are a growing company,” said GUARD Chief Financial Officer Eitan Ajchenbaum. “As part of our planning process, we are examining the options available to accommodate our staff both now and in the future, and we have been working with the city, the Chamber of Commerce, the Diamond City Partnership, the state and others to come up with possible solutions.”

It has not yet been determined if the former Hotel Sterling site would only include office space, or if there would also be parking and retail. That is part of an analysis underway, said Larry Newman, executive director of the Diamond City Partnership.

“We are at the very beginning of the process,” Newman said.

The non-binding letter of intent allows GUARD to evaluate possibly using the site as part of the company’s long-term planning strategy, Newman said. Officials from the Diamond City Partnership, the city, the Greater Wilkes-Barre Chamber of Commerce and the state have been working with GUARD officials for the last year to come up with solutions for the company’s space needs for its growing operation, he said.

“GUARD is one of the downtown’s most significant anchor tenants that brings hundreds of employees into our center city to work, shop and dine each weekday,” Newman said. “Downtown’s role as the location for the home office for Guard has been beneficial to our community. We are honored that this company that does business from coast to coast has called downtown Wilkes-Barre home since 1983.”

The city has applied for a

$1 million state gaming grant through the Commonwealth Financing Authority. The funding would be used to offset construction costs for GUARD to build at the former Hotel Sterling site, which the city owns, City Administrator Ted Wampole said at a city council work session Tuesday.

The Sterling site has been vacant since the former hotel, which closed in 1998, was razed in 2013.

Newman said developing the site is “of tremendous importance to the future of the downtown.”

“We’re very pleased that GUARD has elected to evaluate this site as part of their long-term facilities plan,” he said.

Wico van Genderen, president and CEO of the chamber, said GUARD is a “cornerstone of the downtown Wilkes-Barre business community, and we are fortunate to have them headquartered here.”

“They have grown exponentially in the past few years, and their continued growth represents an opportunity for our community,” van Genderen said. “We look forward to continuing this planning process with GUARD.”





The Hotel Sterling’s history:

1897: Construction starts on the Hotel Sterling at 47-65 W. Market St. It was designed by architect J.H.W. Hawkins and owned by Walter G. Sterling.

August 1898: The Hotel Sterling officially opens its doors. Formerly Wilkes-Barre’s largest and most luxurious hotel, its guests include movie stars and nationally known politicians.

1981: Susquehanna Development Corp. purchases the Hotel Sterling, which has been in decline since the 1972 flood, and converts it to apartments.

1983: Susquehanna Development Corp. stops paying property taxes.

1987: Ali Kazimi buys the Sterling parking lot for $190,000.

1992: The Hotel Sterling files for Chapter 11 bankruptcy protection.

1998: Wilkes-Barre officials condemn the Sterling and the electricity is shut off for non-payment of a $227,000 bill. Residents are evicted.

July 2002: A nonprofit community development firm called CityVest applies to Luzerne County for a Community Development Fund loan to preserve and redevelop the Sterling.

October 2002: Luzerne County Commissioners authorize the loan of $4 million in federal funds from the Community Development Fund pursuant to the CityVest application.

November 2002: CityVest buys the Sterling for $1 million at a delinquent tax sale and plans a $20 million renovation project to turn it into residential, retail and office space. More than $1.9 million in delinquent property taxes were owed.

July 2004: The City of Wilkes-Barre initiates eminent domain proceedings to acquire the Sterling parking lot. Litigation continues over ownership and use of the lot.

September 2006: Luzerne County Commissioners authorize the loan of another $2 million, bringing the total county investment to $6 million, of which $1 million was a forgivable loan.

From 2008 to 2010, The project is marketed to potential developers, but no deal is reached, and the Sterling continues to decay.

September 2011: The City of Wilkes-Barre condemns the Sterling, citing a compromised roof and floor, as well as damage to the ceilings, steel frame work and facade.

December 2012: The City of Wilkes-Barre decides to demolish the Sterling without financial or administrative assistance from Luzerne County.

2013: Wilkes-Barre City Council approves a demolition contract with Brdaric Excavating of Luzerne for $419,000 and the demolition of the Hotel Sterling begins.

June 2015: The city officially takes over ownership of the Hotel Sterling site. CityVest’s petition to dissolve is granted and approved by Senior Luzerne County Judge Joseph Augello.

January 2017: Berkshire Hathaway GUARD Insurance officials sign a “non-binding letter of intent” with the City of Wilkes-Barre to explore using the former Hotel Sterling site to expand operations.