Erie's historic Jarecki House has a new owner. What's next for the mansion?

The Georgian revival mansion at 558 W. Sixth St. has played a number of roles since it was built in 1911 as the home of manufacturing executive Robert Jarecki.

The 6,700 square-foot structure, which Jarecki had designed in the style of his fraternity house at Lehigh University, served in later years as home of Gannon University's chapter of the Delta Sigma Phi fraternity.

The property, which is listed on the National Register of Historic Places, has also seen service as a private residence, the home of the Lay Law Office, and, since 2015, as the home of Erie-based EmKey Energy LLC, founded by Norwegian entrepreneur Oivind Risberg.

EmKey subsidiary RH Energytrans owns and operates the 28.3-mile Risberg pipeline — built at a cost of $86 million — that carries natural gas from Elk Creek Township in western Erie County to North Kingsville, Ohio, in Ashtabula County, just west of the Pennsylvania line.

But many of the EmKey employees who originally moved into the building — there were more than 20 in 2015 — are now working remotely and have been since the early days of COVID-19.

"Since COVID, so much more of the work has been done remotely," said Dennis Holbrook a spokesman for EmKey and its pipeline subsidiary RH Energytrans. "I think the plan is we would relocate to smaller offices."

As of earlier this month, EmKey is now a tenant in the building.

Like so many other properties in the neighborhood, the building and the six-tenths of an acre on which it sits at the corner of West Sixth and Cherry streets have been sold to an entity controlled by Erie businessman, preservationist and developer Tom Hagen.

Hagen, who also serves as chairman of Erie Insurance, confirmed the purchase in a text message with the Erie Times-News.

Hagen said he has no immediate plans for the property, but might eventually transform the space into apartments as he's done elsewhere in the Millionaire's Row area of West Sixth Street and the surrounding neighborhood.

EmKey, which brought the property for $470,000, sold it for $800,000, according to records on file at the Erie County Courthouse.

Erie architect Jeff Kidder, who has worked closely with Hagen on the design and renovation of a growing list of former mansions and other buildings, said four or five preservation projects are underway at the moment. That's in addition to several restoration projects, including two historic buildings on State Street, that have already have been completed.

The only immediate plans for the property, he said, are some landscaping work, including the removal of several limbs and trees that were in bad shape or disfigured by power line trimming.

Eventually, he said, the building will be renovated for possible use as apartments or offices.

Kidder, who also helped EmKey remodel the after it purchased the building, said he enjoys working with Hagen, who has established a historic preservation trust that will eventually assume ownership of the historic properties that he has purchased.

"We are so deep into this (process)," Kidder said. "We want to preserve these buildings."

This building, which Kidder has described as one one of the largest in the neighborhoodd, was one of the homes Robert Jarecki, the assistant secretary of the Jarecki Manufacturing Co., which made iron fittings, oil well supplies and castings.

Kidder said Emkey will remain in the building for now until the company decides on its next move.

With so many other projects in various stages of construction, "We are in no hurry to get started." Kidder said.

Legal issues continue for EmKey

The sale of the West Sixth Street property comes as RH Energytrans, an EmKey affiliate, remains embroiled in a federal lawsuit over the construction of the Risberg Pipeline. The litigation started with a lawsuit filed in U.S. District Court in Erie in August 2020 and shows no signs of ending soon.

The plaintiff is the Wood Group USA, based in Houston, Texas. It built the pipeline under contract with RH Energytrans.

The Wood Group is claiming that RH Energytrans is in breach of contract and that it owes more than $35 million to the Wood Group for work on the pipeline. RH Energytrans is contending that the claim is groundless.

The Wood Group signed its contract with Energytrans in 2018. The original contract totaled $34.7 million, the Wood Group said in court records, but the Wood Group said the cost of the project grew to $58 million due to $22 million in change orders, typically meant to compensate contractors for unforeseen circumstances.

The Wood Group is claiming RH Energytrans has paid only $22.9 million out of the Wood Group's total project cost of $58 million, putting the total amount due at more than $35 million.

RH Energytrans is claiming it compensated the Wood Group for 95 of the 210 change orders requested, and that the other requests are unjustified.

The lawsuit has pulled in residents of western Erie County and residents of Ashtabula County, in Ohio, who granted property easements to RH Enegrytrans in exchange for payments. RH Energytrans needed the easement to build the pipeline across the residents' land.

In an attempt to secure repayment from RH Energytrans, the Wood Group has placed liens on the pipeline-related improvements on the easements. The liens do not put the property owners' own real estate at risk, but the liens have created confusion for the residents who granted easements. More than 100 landowners granted access to RH Energytrans in Erie and Ashtabula counties.

The liens remain in place as the lawsuit proceeds. In the latest action, lawyers for the Wood Group filed a motion on Aug. 10, seeking permission to add two defendants to the original lawsuit: Opatho Gas Trans, the parent company of RH Energytrans, and Oivind Risberg.

According to a court order filed Sept. 6, lawyers for RH Energytrans have until Oct. 6 to file a motion to dismiss the amended lawsuit that adds the two defendants. U.S. District Judge Susan Paradise Baxter is assigned the case.

Holbrook said reduced space needs are the primary reason for selling the property.

He also acknowledged that the ongoing litigation is expensive and shows no sign of coming to a conclusion.

"The lawsuit is still taking place and there is no question that it's an expensive proposition," Holbrook said. "It's a process that is cumbersome and will continue for the immediate future unless the parties have the opportunity to settle."

Annual property taxes on the property, which includes a separate carriage house, are $21,874.

Pipeline lawsui: Erie County landowners gave access for pipeline. Now they're getting hit with liens

No resolution: Hundreds of liens for millions of dollars remain as mediation fails in Erie County gas pipeline case

Contact Jim Martin at jmartin@timesnews.com.

Contact Ed Palattella at epalattella@timesnews.com. Follow him on X @ETNpalattella.

This article originally appeared on Erie Times-News: EmKey Energy, embroiled in pipeline case, sells home to Erie's Hagen