GEICO Insurance Expands Amherst, New York Office

You wouldn’t think that the Buffalo, New York region—with its reputation for cold and snowy winters—would be an ideal climate for geckos, but in 2009 New York Governor David A. Paterson announced that GEICO insurance will expand its operations in Amherst, New York. GEICO, well-known for its advertisements featuring a small, green talking lizard, as well as the “fifteen minutes could save you fifteen percent or more on car insurance” tagline is a privately owned subsidiary of Berkshire Hathaway and the third largest automobile insurance carrier in the United States.
 
GEICO began its relationship with Western New York back in 2003 when it chose to increase its operations and build a new facility in New York State.  The company commenced a two phase project to construct a $ 36.3 million, 250,000 square foot building for sales, service and claims handling. The project resulted in the creation of more than 1,500 jobs, 25 percent more than originally estimated.  With a capacity for 2,500 workers, the building was a natural place to expand when GEICO wanted to grow that division and back up its center located in Fredericksburg, Virginia. This latest expansion is expected to add another 300 jobs in Western New York, as well as projected growth in the insurance division.
 
GEICO is a major local development success story, illustrative of the economic sense it makes to locate large back office operations in the Western New York region. Buffalo and Western New York have always had a rich tradition of working for and supporting the insurance industry, at reasonable costs and wage rates, no less. That, along with the area’s legendary good work ethic, meant both dollars and sense to GEICO.  Undoubtedly it will to more insurance companies in the future.
 
John Zinno, Vice President of GEICO Insurance Agency, started up GEICO operations locally when the company opened its Buffalo office in Amherst in 2004.  He said that he could always count on hiring from a pool of very valuable people.
 
“We’ll be able to expand our business by tapping into the talented workforce in Western New York,” Zinno said.  “GEICO is committed to providing more of our customers with the valuable insurance products they need like homeowners, renters and boat coverage.  We are excited that Western New York will help us achieve this goal.”
 
This project was a model of inter-governmental and regional cooperation from the start, with ESD spearheading the project.  The company worked with both the Town of Tonawanda and Town of Amherst to obtain Regional Significant Project (RSP) certification in order to qualify for state aid benefits under the Empire Zone program. As a result, GEICO will obtain nearly $1.5 million in Empire Zone tax credits over the next five years from ESD. In addition, as components of the incentive package, GEICO will receive state sales tax exemptions on equipment purchases through action taken by the Amherst IDA, low cost electrical power from the New York Power Authority and workforce training from the Erie and Niagara County Workforces.
 
“ESD’s Western New York office provides a variety of assistance to help business of all sizes; whether you’re a GEICO or an entrepreneur looking to start a small business,” said ESD Western New York Regional Director Christina Orsi “We work closely with all our partners to help business build new facilities, relocate, expand or enter the international market.  We’re proud, but not surprised, GEICO decided to expand here, along with the likes of other internationally known employers like Yahoo!, Roswell Park Cancer Institute, M&T Bank, Rich Products and Moog. ” 
 
GEICO (Government Employees Insurance Company) is the third-largest private passenger auto insurer in the United States. GEICO provides auto insurance coverage for 9 million policyholders and insures more than 16 million vehicles.  As a member of the Berkshire Hathaway group of companies, GEICO is rated A++ for financial strength by A.M. Best Company and ranks at the top of several national customer satisfaction surveys.

A New Day, a New Building, a New Future in WNY for New Era Cap
 
Baseball: It has long been a part of our national culture, once described by philosopher Morris Raphael Cohen as “America’s national religion” and each warm summer day, when the players take to the field, they are sporting New Era Cap Company  hats. 
 
New Era, the exclusive manufacturer and marketer of the official on-field cap worn by every Major League Baseball team and their minor league affiliates, is headquartered right here in Buffalo, New York.  The company also maintains agreements with other licensed entities including NHL, NBA and over 200 colleges and universities in the United States. 
 
The company’s roots in Western New York date back 90 years ago when 34-year-old Ehrhardt Koch persuaded his aunt to take out a second mortgage on her home to raise money for a fledgling headwear company. With $5,000, 14 employees and a promise to his aunt that her children would always have a job, Ehrhardt founded the New Era Cap Company on Genesee Street in Buffalo.  Today, the company is a global homerun, not just in the Greater Buffalo Niagara Region, but in the 40 countries where its hats are sold. 

However, things looked grim last year when New Era Cap thought it might have to close its doors in Western New York.  A downturn in the market had the longtime family-held company on the economic ropes, and the Buffalo community agonized it might lose the business.
 
Fortunately, after months of hard work, compromise and the new “can-do” attitude that has become the trademark of New York, Governor David A. Paterson announced that New Era Cap had been saved—it will maintain its manufacturing facility in Derby, New York.  As a result, some 459 existing jobs were saved, with the possibility of another 75 jobs being added if the economy recovers. 
 
Originally, the company had three manufacturing plants: one each in Jackson, Alabama; Demopolis, Alabama; and Derby, New York, with all but one slated to be closed.  Our Derby plant won out based on productivity, efficiency, worker seniority and overall lower costs.  In the end, the concerns of the union (CWA) and the incentives offered by the New York economic development team resulted in the Derby plant’s selection. The deal will result in over $3 million in capital investment (M&E) to the Derby plant, insuring its competitive and long-term future.
 
The deal went down like this: led by efforts at ESD, an incentive package was devised for New Era.  ESD’s Western New York Regional Director Christina Orsi explains that a coordinated effort went into preparing an incentive package and it was provided within 48 hours of the company’s request.  The company was eligible for income tax credits through the Empire Zone program, and will likely receive aid and assistance from other New York agencies, including energy efficiency financing from the New York State Energy Research and Development Authority (NYSERDA) and aid in the selection and training of its employees from the New York State Department of Labor.  Additionally, the Erie County Industrial Development Agency (ECIDA), working together with the Town of Evans and the Lake Shore Central School District, offered property tax relief via a payment-in-lieu-of taxes (PILOT) agreement and various sales tax abatements.  National Grid has also provided generous assistance for investment in electrical infrastructure and equipment through its own grant programs.
 
In addition to its Derby manufacturing location, New Era Cap also occupies the former Federal Reserve Bank in Buffalo—an exciting reuse of that facility as the leading headwear manufacturer’s headquarters.   Now producing more than 35 million caps per year and outfitting today’s biggest stars, the unwavering determination, relentless persistence and overwhelming passion of its workers remain a global homerun, as well as a manufacturing staple in Western New York.  Fittingly, the “Originator of the True Fitted,” New Era remains in Buffalo, where the company originally started.  Keeping the world’s premier headwear brand in the region is another ESD success story.

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