Wilkes-Barre high-rise eyed for possible insurance company headquarters

i Apr 28th 2017

By Jennifer Learn-Andes, Wilkes-Barre Times Leader

WILKES-BARRE — In addition to the former Hotel Sterling lot, Berkshire Hathaway Guard Insurance is considering the largely vacant 10-story Wilkes-Barre Center on Public Square for its new corporate headquarters.

Philip Balderston, a managing partner of Wilkes-Barre Square L.P., which owns the Wilkes-Barre Center, confirmed Friday he is discussing possible plans with Berkshire Hathaway but said he can’t discuss details.

“Talks are ongoing,” he said from his office in Philadelphia. “The Guard is a great company, and we’re happy just to be speaking to them.”

Carl Witkowski, the chief operating officer and executive vice president at Berkshire Hathaway Guard, could not immediately be reached for comment Friday.

The insurance company also has been exploring the possible construction of a new headquarters on the vacant, city-owned former Hotel Sterling lot at the corner of River and Market streets. The state last month approved a $1 million gaming grant that would help fund Berkshire Hathaway Guard’s acquisition and renovation at the Sterling site.

City officials have not received any official confirmation that the company has ruled out the Sterling property, city Administrator Ted Wampole said Friday.

While city officials look forward to the sale and development of the landmark Sterling lot by the Market Street Bridge over the Susquehanna River, the main concern is ensuring Berkshire Hathaway Guard does not relocate to another area, Wampole noted.

“From the get-go, the goal is to keep them in downtown Wilkes-Barre,” said Wampole. “We want them to stay.”

Expansion of the business, which is located on River Street near the Sterling property, would add approximately 300 jobs to the more than 400 current ones, and other states also are pursuing the company, city officials have said.

When the possible Sterling plan was publicly discussed in January, city officials acknowledged Berkshire Hathaway was considering other Wilkes-Barre options.

“They signed a letter of intent for the Sterling, which was their preference, but they’re still doing their due diligence,” Wampole said.

Because the gaming grant is tied to the Sterling lot, the state would have to review and approve an amended application before that funding could be applied to a headquarters for Berkshire Hathaway Guard at a different city location, Wampole said.

While Berkshire Hathaway could avoid the cost of new construction at the Wilkes-Barre Center site, the Sterling property has Keystone Opportunity Zone tax exemption until 2024, officials have said. KOZ properties are exempt from real estate taxes and most state taxes.

A KOZ for the Wilkes-Barre Center expired in 2011. A representative of the prior owner, Wilkes-Barre Center Associates, said in 2011 the KOZ designation spurred about $8 million in renovations at the site, which also includes separate buildings that house Dunkin Donuts, Rodano’s and Franklin’s Bar & Grill. A Dollar Tree also is slated to open mid-year, Balderston said.

Primary tenant gone

While the Wilkes-Barre Center high-rise office building is marketed as 39 Public Square, county property records identify the address as 39 S. Main St. This building lost its primary tenant — Frontier Communications — when the company closed its downtown Wilkes-Barre location in 2012 and relocated 110 employees to its Back Mountain office, according to newspaper archives. Frontier, previously known as Commonwealth Telephone Enterprises Inc., had leased six floors inside the building for 11 years.

The building has retained state Department of Labor and Industry offices and Pronto Pizzeria on the first floor. Elliott Greenleaf & Dean occupies part of the 10th floor. An online listing for the property indicates six floors are available for lease.

Wilkes-Barre Square purchased the property for $4 million last June.

The National Indemnity Co., a subsidiary of Warren Buffett’s Berkshire Hathaway Inc., purchased Guard in 2013 from Israel-based Clal Insurance Enterprise Holdings for $221 million and the assumption of a $48 million bank-loan guarantee. Guard and its associated companies were founded in 1982 by Judd and Susan Shoval.

The city acquired the Sterling site after condemning and demolishing the long-vacant hotel that stood there in 2013.