Erie Insurance Plans Expansion

Tom Hagen, chairman of Erie Insurance, remembers the exact spot his small desk sat when he went to work at the company in 1953.

Standing in that same building - now the Erie Insurance Heritage Center - Hagen said Friday that the small office building was crowded at the time with 100 employees.

Sixty-three years later, local employment has grown to 2,889 and problems with crowding persist.

The company announced a solution to that Friday morning - a plan invest $135 million in a 346,000-square-foot building that's expected to make room to add another 600 employees, and possibly make the company Erie County's largest employer. The proposed building is more than three times as large as Erie's Bayfront Convention Center and ranks as one of the single most expensive construction projects in Erie.

It's a project that's been in the works for a couple years.

But CEO Timothy G. NeCastro said Friday that he felt chills announcing the plans aloud and weighing the significance of the moment, which calls for building a seven-story building next door to the Heritage Center on East Sixth Street, facing the existing corporate headquarters.

"Our commitment to Erie has really never wavered," he said. "I am very excited and I know you are, too."

The problem of space has been on the minds of company officials for several years now. Addressing the issue, which began under the direction of former CEO Terry Cavanaugh, was especially important at a company that values collaboration, said NeCastro, who was named CEO earlier this year.

He recalled his own experience when he was assigned for a time to company offices at Knowledge Park. The setting was beautiful, he said, but he missed working with the larger group.

The new building, which is expected to eventually house 1,200 employees, won't put everyone under the same roof, but it will move the majority of the company's Erie employees within proximity of one another. NeCastro doesn't expect he will make the move, but will likely remain in what was once the office of co-founder H.O. Hirt.

Some company employees will likely be moving from the headquarters building across the street, where some employees work in spaces designed for other purposes.

Other occupants of the new building are expected to be new employees. NeCastro said he was reluctant to make a guess, but said the company could add as many as 600 new employees within the next few years.

Jeff Brinling, the company's senior vice president of corporate services, said the new building, which is expected to take about three years to build, will be a LEED-certified, environmentally friendly structure.

The structure, the largest on the company's downtown campus, will feature an open courtyard and will be connected by bridges to other company buildings and parking garages.

Friday's announcement follows the construction of the Technical Learning Center and a new parking garage, and renovations to the former Pennsylvania National Guard Armory and what's now known as the Erie Insurance Heritage Center.

Erie Mayor Joe Sinnott, who attended the announcement, called it clear and welcome evidence that Erie Insurance plans "to stay here and expand here."

It's also a project that should provide a substantial boost to the local tax base. In the unlikely event that the building's assessed value was equal to the construction cost, the building would generate $4.5 million in tax revenue a year.

While the actual tax bill will likely be lower, Friday's announcement drew loud and sustained applause.

Hagen, who has witnessed much of the company's growth into a Fortune 500 company, called it a special moment in the company's 91-year history.

"It makes me happy and proud," he said.

Jim Martin can be reached at 870-1668 or by email. Send email to [email protected]. Follow him on Twitter at twitter.com/ETNMartin.