A jackhammer's staccato pummeled the ground between two buildings on King Street on Thursday, marking the spot of PeopleMatter's expansion in downtown Charleston.

At the announcement, officials from the company and three levels of government celebrated the expansion, which will invest $18.8 million to renovate a dilapidated building and employ 265 people during the next five years.

PeopleMatter provides software that helps service industry businesses manage and integrate their hiring, training, scheduling and other management needs. Target industries are convenience stores, hospitality, retail and food service. The company also has locations in San Francisco and Atlanta.

Nate DaPore, president and CEO of PeopleMatter, said the company started looking for a place to expand at the beginning of the year.

DaPore said PeopleMatter considered building its new headquarters, leasing or refurbishing before deciding to move into 466 and 468 King St., the latter address currently occupied by Charleston Beer Works.

The company wanted its employees in one location, and downtown Charleston offers the environment for the software company's employees to be creative, DaPore said.

He said Charleston can become a knowledge industry hub –- dubbed "Silicon Harbor" by DaPore and Charleston Mayor Joe Riley –- and tech companies like PeopleMatter, Blackbaud and Benefitfocus have the opportunity to shape the industry in the Lowcountry.

During his speech, DaPore acknowledged PeopleMatter's growth from offices in the Charleston Digital Corridor to the Navy Yard at Noisette to King Street. He said the journey is a testament to his team's ability to build useful products for its customers.

Riley said the announcement is an example of a large number of parties working together. PeopleMatter used its knowledge to invent something that will transform the service industry and the way it hires employees, he said.

"We're so proud that it's here in Charleston," Riley said.

The company is an example of the effects of Charleston accepting a role as a nurturer of tech companies, he said, referring to the Charleston Digital Corridor, an incubator for the area's knowledge economy.

"We believe that Charleston will be a knowledge industry center of our country," Riley said.

Palmer Quimby, general manager of Chai's Lounge, located next to the future headquarters, said he had heard rumors about the announcement.

"It will be nice to have that dilapidated building looking nice and fresh," Quimby said.

Quimby said that Chai's hosts early happy hours for other nearby businesses, like The Post and Courier and the Charleston City Paper, and that PeopleMatter will bring in more potential customers next door.

The Noisette Co., a neighbor of PeopleMatter in the Navy Yard, said in a statement this afternoon, "While we are disappointed they will be leaving the Navy Yard in 2013, we are happy to hear they are staying within the region. Noisette shared an office space with PeopleMatter for over a year before they began expanding within our 7 Storehouse building. It is extremely gratifying to watch startup companies at the Navy Yard grow and succeed, and we look forward to helping make their transition as smooth as possible."

Developers will complete the project in two phases. During Phase I, builders will renovate 466 King St. and add a fourth floor to the building. That phase is expected to be finished by fall 2012. Phase 2 is expected to be finished by late 2013.
.