One Seneca Tower, the long-vacant hulk, could use a knight in shining armor. It appears it may have found that individual in a Washington, D.C.-based developer who has shown more than a passing interest – insisting “This deal’s going down, my friend. It’s not a rumor.”
That would be very good news for Buffalo, which needs to do something positive with the empty behemoth in its midst.
Not to be cynical. Just the opposite. If Douglas Jemal, founder and president of Douglas Development Corp., can pull off his vision, he will have earned a standing ovation.
Jemal appears to be the buyer the tower needs. His plan is to redevelop it into one-third residential, one-third office and one-third hotel, with “lots of retail” on the ground-floor level. He may then remake the courtyard area with small building kiosks and other features that would reduce the “very strong wind shear” (annoying for pedestrians and bicyclists) and reclad the facade with more glass or other, less imposing features.
He may do all that and more. The deal comes with the five-story parking ramp across Washington Street and is expected to close in mid-October.
The 38-story edifice along Main Street and at Canalside was once a bustling tower. It was in late 2013 when its two largest tenants – HSBC Bank USA and law firm Phillips Lytle LLP – both left at the same time for nearby renovated and new office space. That blow added to the one dealt earlier with the closing of the Canadian consulate. More tenant departures set the building adrift at 95 percent vacant, leading to a loan default by the prior owner, Seneca One Realty.
Miami Beach-based loan servicer LNR foreclosed on the building and took possession of the tower in October 2015 at an auction, followed by the parking ramp in March. LNR put both properties up for sale.
It has been tough finding a buyer with the resources to purchase the tower and follow through. Developers estimate it will cost more than $100 million to bring the building back to life.
Interested parties have come and gone, including billionaire John Catsimatidis. But no one ever signed an agreement, leading some critics to urge demolition. It was an idea worth putting on the table, along with the others, but one met with resistance by Howard Zemsky, a Buffalo developer and CEO of Empire State Development Corp. He wants to see the building redeveloped, not demolished, but without state money – unless jobs are created.
Ditto for Buffalo Mayor Byron W. Brown, who opposes demolition except as a last resort, adding that the private sector must find a solution. But he wouldn’t close the door to public incentives.
Jemal said he “absolutely” would pursue public incentives for the project, such as tax breaks, because of the high costs of redevelopment. He also has his own resources, insists there are no contingencies remaining and no financing required other than his own equity.
Douglas Development Corp. controls more than 9 million square feet of leasable space and more than 8 million square feet of developable land, with over 180 properties in Virginia, Maryland, Pennsylvania and Washington, D.C. They are impressive credentials.
But there is troubling history: Jemal’s brush with the law, convicted in 2007 of defrauding his longtime business partner and Wall Street lender Morgan Stanley. Jemal used $430,000 in escrow funds designated for rehabbing one building to purchase another instead. But it says something that a federal judge merely fined him and sentenced him to probation, citing his abundant “good works for the community.”
Jemal says he wants to show that spirit here, comparing One Seneca’s importance in Buffalo to Mount Rushmore, the Empire State Building and the Eiffel Tower. It is the gateway for so much downtown promise. And that is why it is so important to get it right.