Restoring TRUST in the Erie Economy
Officials, investors break ground on $65 million historic hotel transformation
Staring up at 1001 State St., Erie County's tallest building and the former home of the Erie Reader offices, the words "Together for Erie" came to fruition on Friday, May 29 as the city, county, and Commonwealth joined to celebrate the groundbreaking of The Trust Hotel – a $65 million project that will transform the 14-story building into a 195-room boutique hotel.
The building was originally the Erie Trust Company, which began construction in 1925 and has operated under different names and owners as time has passed. Most recently, it has been the Renaissance Centre, a chapter that began in 1998 as the building served as a space for businesses and professional tenants and ended in 2024 when it was sold for $2 million.
"100 years ago, you can imagine what they (the builders) were thinking about, how they were striving for the future to create something that was exciting, was confident, and would create value and help Erie grow into the future," said Christian Siembieda, the investor behind State OZ Operator LLC, owner of The Trust Hotel.
Against the backdrop of one of the building's murals painted by Edward Trumbull in 1926, Siembieda said that he plans to preserve the history of the building.
The landmark is listed on the U.S. National Register of Historic Places and is known for its Art Deco and Renaissance Revival architecture. As part of The Trust Hotel renovation, Trumbull's five remaining historic murals will be restored and preserved, along with arched windows, bronze elevator doors, and architectural detailing.
"We want to make sure that this building is here for another 100 years and provides a place that is an anchor for development – economic development – in Downtown Erie," Siembieda said.
Laying the foundation for success
Prior to the May 29 groundbreaking, Siembieda said the Erie community laid its own economic development bricks that led him down the path to finding The Trust Hotel.
An outside investor, he remarked that it was the work of the Erie Downtown Development Corporation (EDDC) and Erie Events, with investment from Erie Insurance that proved, "Erie could produce a 24-hour live, work, and play environment." The new hotel, which will include a ballroom, lounge, spa, and restaurant, looks to cater to that ecosystem.
Tim NeCastro, CEO of Erie Insurance, said that Erie Insurance provided upfront financing to keep things going and will have some other funding going into the project as well. NeCastro is also the EDDC board chairman and said that when the EDDC was founded, one of its major goals was to stimulate outside investment into the city, and he sees that coming to fruition in this partnership with Siembieda.
The $65 million capital budget includes private investment as well as state funding. The Trust Hotel is located in one of the 130 acres of downtown designated as a City Revitalization and Improvement Zone (CRIZ).
Businesses in the zone pay state and local taxes, and after the 2024 CRIZ designation, some of those taxes are being sent back to the CRIZ Authority to invest in local redevelopment. CRIZ generates up to $15 million a year for 30 years, and the funding can be used on new construction, infrastructure, business grants and loans, and property acquisition. For every $5 from CRIZ, there must be a $1 private match, and all investments must be reviewed by the CRIZ Authority, the PA Department of Community and Economic Development (DCED), the PA Department of Revenue (DOR), and the Office of the Budget (OB).
The DCED is also investing $5 million for electrical, plumbing, HVAC, and fire suppression work that needs to be done to rehabilitate the building. Of that, $4.5 million is Redevelopment Assistance Capital Program (RACP) money, and $500,000 is an annual historic preservation tax credit.
As the building prepares for its makeover, Siembieda said that part of his priority was not to displace tenants to the suburbs. He said it was important to keep the energy and momentum moving on State Street.
"We were very successful and paid a lot of attention to moving tenants from this building to other empty buildings on State Street," he said. "We were able to take empty buildings and reactivate them."
City of Erie Mayor Daria Devlin said that The Trust Hotel will create jobs, attract visitors, and support surrounding businesses to continue the surge of revitalization in the downtown corridor.
"Let me be clear: this project is about more than a building," she said. "It represents confidence in Erie's future."
It's an example of what can happen when the public and private sectors come together around a shared vision, she remarked. Other partners in The Trust Hotel investment include ERIEBANK, the Erie County Redevelopment Authority, the City of Erie, and Erie County.
"And while today is a celebration of this investment, it is also a reminder of the work ahead," she said, noting that growth and investment is vital in every corner of the city. "Projects like this matter, and so does the broader work of strengthening neighborhoods, expanding opportunity, and creating a city where every resident can share in Erie's success."
Few reservations about the future
Just this month, VisitErie reported that there's been an increase in visitors and spending to Erie as it continues a year-after-year increase in tourism.
Gov. Josh Shapiro said that visitors to the Great Lakes region contribute nearly $2 billion to the state's economy each year, making it extremely important to invest in infrastructure for visitors.
Recently, Shapiro was elected chair of the Great Lakes St. Lawrence Governors and Premiers, which is a binational organization that unites the governors of the eight states bordering the Great Lakes with the premiers of Ontario and Quebec.
"I want to show off Erie, I want to show off the Great Lakes, and I want to show off, of course, this great new hotel," Shapiro said. "Look, here's the bottom line: Erie is on the rise, and I got your backs, and I'm excited about the future. We're going to keep investing in the success of Erie."
In talking to the Erie Reader, Shapiro said that the commonwealth comes into places with a vision and provides the expertise to overcome challenges and the funding to move it forward. He pointed out that his administration has created a new permitting model that increases speed of permitting so that businesses can get on the fast track in a number of days rather than weeks, so that investors like Siembieda have less red tape to cut through.
"We look to show up in communities where they've got their act together, where the public sector and the private sector are working together, where labor and business are working together, and where they have a vision," Shapiro said. "And then we come in to try to complement that vision."
The comment about collaboration came following an Erie City Council announcement that it will revisit the Bayfront Market House project after a recent 4-2 vote rejecting a conditional use permit. The Shapiro admin had touted its $9.5 million in RACP funding for the project, which would create a 27,000-square-foot indoor market.
Shapiro said on Friday that he is in talks with the mayor and others, saying "I'm confident that there are local issues that are going to get resolved and that project is going to go forward. I'm a big supporter of that project."
He also touted the $37 million state dollars invested in the Bayfront Parkway project to connect downtown to the waterfront and its properties.
There is another bayfront hotel planned by Scott Enterprises at a price tag of $31.8 million next to the existing Hampton Inn & Suites Erie Bayfront, signaling a larger push for development near the waterfront as the Parkway progress continues.
By opening businesses at a fast enough rate to match the tourism demand, Shapiro said that it drives tax revenue in the community which can in turn be reinvested in shared priorities like schools, parks, cops, and firefighters.
Although tourism rates have increased, VisitErie did note that hotel occupancy was down 5 percent this year compared to last year in the first quarter. The agency attributed it to more visitors doing day trips and said the pattern may change come summer.
Siembieda told the Erie Reader that he thinks the current political tension between the United States and Canada could be affecting tourism as well. He's not worried about saturating the hotel market or not having enough tourists to fill the rooms, though.
"I think that will right-size at some point, but also, we're two years out from completing our hotel, and I think that what we offer is distinctly different from what exists in the market, so our market might not be directly comparable to the Erie market as a whole," he said.
The hotel is marketed as Erie's only four-star destination hotel and will remain independently owned rather than run by a chain. Shapiro said that the hotel not only will be a destination itself but puts Erie on the map as a destination once again.
"The Trust Hotel is going to be, I believe, a transformational project," Shapiro said. "Not just for its beauty and its splendor and wonderful rooms and meeting places that will go into this place, but I think by showing that we are willing to work together to revitalize the tallest building in Downtown Erie, we send a message to the rest of the community, the entire county, all of Northwestern Pennsylvania, that the city of Erie is open for business."
Chloe Forbes is a local journalist. Reach her at chloeforbes14@gmail.com
