Erie Insurance will loan  million for the Renaissance Center project
Erie Insurance will loan  million for the Renaissance Center project

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Christian Siembieda says he has already accounted for most of the $50 million needed to transform the Renaissance Center at 10th and State streets.

Siembieda, a California-based investor, plans to redevelop Erie’s tallest building into a 150-room luxury hotel as well as restaurant, office and community space.

The project’s so-called capital package — the sources of capital that support a real estate investment — includes both loans and investments from local and out-of-town sources, he said.

Erie Insurance steps up with financing

And it includes two loans totaling $11 million from Erie Insurance.

The first of these two loans, a $1 million mortgage from Erie Indemnity Corp. to 1001 State OZ Operator LLC, was recorded March 15 in Erie County Court.

More ▼: Owner of Erie’s tallest building plans $50 million facelift to include luxury hotel

Matthew Cummings, a spokesman for Erie Insurance, said the loan was a short-term mortgage to help finance what he called a preliminary development of the 198-foot building.

Once that loan is paid off, Erie Insurance plans to make a $10 million long-term loan to support this latest capital package, Cummings said.

Siembieda said funding for the project comes from various sources, including loans and shareholders who will become private owners of the 14-storey building.

More ▼: An investment group is buying the Renaissance Center in Erie with plans to improve the downtown landmark

Siembieda, whose past and present holdings include New York residential properties, power plants, grain silos, cell towers and a historic Main Street property in New Hampshire, is investing some of his own money through a Federal Opportunity Zone fund. Opportunity Zones provide special tax breaks to investors when they invest capital gains in federally designated low-income areas.

A plan to transform downtown Erie

Cummings said Erie Insurance, Erie County’s largest employer, is pleased to support the project.

“We see this plan to transform this downtown Erie landmark as an exciting project for Erie and one that complements the other work being done downtown,” Cummings said.

Both directly and indirectly, Erie Insurance has been a driving force behind much of this other development as a founding member of the Erie Downtown Development Corp., which has invested more than $100 million in the revitalization of downtown Erie.

Plans for what was long known as the G. Daniel Baldwin Building also embody EDDC leaders’ hopes that their projects, including the Flagship City Food Hall and dozens of new apartments, will entice others to invest their own money in Erie.

Drew Whiting, CEO of the EDDC, spoke in January of his hope that Erie can attract outside investors in addition to local companies and individuals who have purchased and renovated local real estate.

“I’d like to see where we have out-of-town developers,” he said.

While Siembieda fits that description, Cummings said the Renaissance Center project “also extends the revitalization effort to another part of State Street.”

EDDC projects are focused a few blocks north of the Renaissance Center.

Erie Insurance, Cummings said, “thanks to his vision of creating a top-tier hotel downtown, and also his commitment to professional learning, creating community spaces and his commitment to inclusive entrepreneurship really makes him attractive to us. “

Loans are an option

In addition to the millions of dollars that Erie Insurance has invested in Erie in the form of Opportunity Zone investments, the company has made at least one other loan to help a planned construction project cross the finish line.

Boston-based Beacon Communities, owner of the Richford Arms, an affordable senior housing apartment building at 515 State St., had plans for a $27 million upgrade and expansion of the building.

But it also faced a funding shortfall.

With the help of a $3.5 million low-interest loan from Erie Insurance and a $2.45 million loan from the City of Erie, Beacon was able to complete this renovation.

In a January interview with the Erie Times-News, Erie Insurance CEO Tim Necastro left open the possibility that the company would consider making other loans.

“Our company is selective about the use of loans,” he said. But “in the community development arena, they are definitely part of the capital.”

Contact Jim Martin at [email protected].

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