WILKES-BARRE — Officials on Wednesday ended months of speculation with the announcement that Berkshire Hathaway Guard Insurance Co. will buy the Wilkes-Barre Center office building on Public Square for its new corporate headquarters.
The company will invest $10 million to create and retain more than 700 jobs in the downtown, officials said. The state also is contributing $1.8 million for the project. Nearly 300 of the jobs will be new.
State Sen. John Yudichak, who was among the group of elected and economic development officials who worked with Berkshire Hathaway, called the deal “the biggest economic victory for downtown Wilkes-Barre in decades.”
“Securing a national headquarters of a growing, community-minded company, like Guard, signifies Wilkes-Barre and all of northeastern Pennsylvanian is quickly becoming the best place to do business and create family sustaining jobs,” Yudichak said in a prepared statement.
The company, a subsidiary of billionaire investor Warren Buffett’s Berkshire Hathaway Inc., had been searching locally and in other states for a site to consolidate and expand its operations. It signed a letter of intent with Wilkes-Barre for the former Hotel Sterling site across the street from its West Market Street offices while looking at other locations, including the 10-story office building a few blocks away on Public Square.
The largely vacant office building has been advertising for tenants. The high-rise and connected buildings that include Dunkin Donuts, Rodano’s and Franklin’s Bar & Grill, Dollar Tree and Pronto Pizzeria were purchased last year by a Wilkes-Barre Square LP for $4 million.
Philip Balderston, founder and CEO of Odin Properties LLC, the Philadelphia-based real estate investment firm that owns Wilkes-Barre Square LP, acknowledged in April that he had been in discussions with Berkshire Hathaway Guard.
The insurance company was founded in 1982 by Judd and Susan Shoval and was sold to Israel-based Clal Insurance Enterprise Holdings in 2007 for $135 million.
National Indemnity Co., a subsidiary of Buffett’s Berkshire Hathaway, purchased Guard in 2013 for $221 million and the assumption of a $48 million bank-loan guarantee, according to Times Leader files.
Berkshire Hathaway Guard plans to renovate the office building and create 285 new jobs over the next three years. It will retain the 441 current positions in Wilkes-Barre.
“Under the leadership of Sy Foguel, CEO, and Carl Witkowski, COO, Berkshire Hathaway Guard has grown its business by over a billion dollars and doubled its workforce in the past five years,” Yudichak said.
“Our sales and staff have both doubled over the past five years, and we are projecting significant growth in the future,” said Foguel, CEO and president of GUARD.
“Staying in downtown Wilkes-Barre has always been a high priority for us, so we are pleased to have identified a solution to our infrastructure needs that allows us to keep our main operations in downtown Wilkes-Barre. We had many attractive offers and alternatives from developers outside Pennsylvania that did not involve the added expense of locating a large corporate headquarters in a downtown district. The hard work of Governor Tom Wolf, State Senator John Yudichak, State Representative Eddie Day Pashinski, Wilkes-Barre Mayor Tony George, and many other state and local business leaders helped find a way to make the City of Wilkes-Barre the most attractive alternative.”
State Rep. Eddie Day Pashinski, D-Wilkes-Barre, credited Gov. Tom Wolf and Wilkes-Barre Mayor Tony George for their efforts on the project.
“Keeping a national and growing enterprise, such as GUARD, in downtown Wilkes-Barre speaks volumes about the private sector’s faith in Wilkes-Barre city and Northeastern Pennsylvania,” Pashinski said.
The Governor’s Action Team in conjunction with the Department of Community and Economic Development identified $855,000 in tax credits and incentives. This year Wilkes-Barre applied for and received a $1 million Local Share Account grant funded by gambling revenues from the Mohegan Sun Pocono casino in Plains Township.
The city noted Berskshire Hathaway Guard’s financial growth required additional space and people. By the end of 2016 the company was expected to exceed more than a $1 billion in the nationwide sale of policies from its Wilkes-Barre offices, the city said.
“We are thrilled that Berkshire Hathaway Guard has chosen to continue to invest in the city of Wilkes-Barre and expand its national headquarters here,” George said.