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Entrepreneurial spirit strikes seasoned executives Development firms formed by execs striking out on own

Rex Burgher had a top-flight job with Benderson Development.

As the retail developer's executive vice president, he relished working with the Benderson family and being part of their strategy sessions.

Then, after 23 years with Benderson Development, Burgher left in February. He has started his own company, concentrating on consulting and development projects in Western New York.

Some might look at his decision and wonder what he was thinking. Why give up a high-level position with the region's largest retail developer and one of the largest privately owned development companies in North America, which owns and manages more than 25 million square feet of retail space, for a brand-new venture?

But the timing seemed perfect to Burgher. For years, he had mused about running his own business. Now was the moment to try it, with his wife and two children working with him, at the newly formed Burgher Realty Group.

"I truly feel I'm at the top of my game right now," said Burgher, who is 53. "Ten years from now, I didn't want to look back and say, 'I should have taken a shot.' "

Even for those with the initiative to try, Buffalo might seem like a difficult development market to crack. It has dominant players, like Ciminelli Development and Uniland on the commercial side, and Benderson and Developers Diversified Realty on the retail side. Erie County's population has fallen an estimated 3 percent since 2000, and the region doesn't have the thriving construction market of some metro areas.

None of that has scared off some industry veterans from starting their own ventures. In fact, they say it is their intimate knowledge of the area, and the opportunities they see as untapped, that motivates them.

Michelle Mazzone, a former Ciminelli Development executive, began a real estate services firm in Cheektowaga with some former business partners.

At another new company, Gary R. Bichler and Christopher J. Hogan reunited to form R&P Oak Hill Development in 2006, and now have a staff of 18 people to handle their workload.

The businesses are different, but they are all relying on experience and contacts to try something new.

With his own venture, Burgher is focusing on business opportunities in the Buffalo area. He is quick to point out how plentiful those opportunities are.

"To me, there is tremendous opportunity," he said. "You just have to work hard and go out and find it."

Burgher left on good terms, but admits it was still difficult. He had built a career with Benderson, was at the center of countless deals and created close friendships, particularly with the Bendersons.

What excites him is not only the chance to run his own company in the Buffalo area, but to do so with his wife, Brooke, and his children, Brett and Caitlin.

Brett Burgher gave up a job with Cleveland-based Developers Diversified Realty, known as DDR. Caitlin Burgher is joining shortly, after she graduates from Niagara University. Brooke Burgher is serving as the new company's chief financial officer.

Brett Burgher had been with DDR for three years, working in leasing. "It's not the easiest thing to walk away from a job," Brett Burgher said. But he loved coming back home, with the chance to build a new company alongside his father.

How does Burgher Realty Group see a way into the local market?

"There are a lot of retail tenants out there that aren't in Buffalo yet," Brett Burgher said.

Identifying those retailers is one thing; persuading them to open stores here is another. Rex Burgher admits it might take extra work to win them over, but he believes it can be done. He recalled how, several years ago, Nate Benderson urged him to bring apparel retailer Stein Mart into the Buffalo market.

Rex Burgher approached Stein Mart representatives, who said no. But over the next 12 months, he kept sending them information about the area, articles about the business community here, anything to help bolster his case. Stein Mart ended up opening a store on Transit Road in Amherst, and then added a second store, in Orchard Park.

"No. 1, you can't accept 'no' for an answer," Rex Burgher said. "No. 2, you have to stay persistent."

Like some the other industry professionals-turned-entrepreneurs, Rex Burgher comes to his new venture with a track record and contacts. For that reason, he is confident about securing funding for projects.

"I have relationships with various lenders," he said. "When you have the property and you have the tenant, it generally leads to potential lending and financing for certain projects."

Experienced professionals who launch their own ventures are a different kind of entrepreneur. They have obvious advantages: connections with potential clients who know their work, and years of experience to guide their decisions.

But these types of entrepreneurs also face different risks from people starting fresh out of school, said Althea Luehrsen, executive director of the Center for Entrepreneurial Leadership at the University at Buffalo's School of Management. They often have families to support and mortgages to pay, raising the stakes of succeeding, she said.

Entrepreneurs with any amount of experience face a common challenge: handling responsibilities outside their expertise. "When they launch their own business, they've got an awful lot more on their plate," Luehrsen said.

That adjustment, she said, can be a little tougher for a veteran businessperson who is used to someone else taking care of travel arrangements, resolving work place conflicts, or everyday office duties.

The development veterans who are now running their own businesses say they draw on experiences with their past employers when they are confronted with seemingly daunting tasks.

Mazzone, who co-founded American Capital Real Estate Corp. in early 2006, recalls two such projects she was involved with when she worked for Ciminelli Development: the Lafayette Court building downtown and the former AppleTree Mall in Cheektowaga.

Lafayette Court was about 60 percent vacant before Ciminelli added a fitness center, upgraded its eatery and put in a new business conference center. Within a year and a half, she said, the building was practically full, showing her about how small but meaningful improvements can attract tenants.

At AppleTree, Mazzone worked with James Dentinger, a Ciminelli executive who has since joined McGuire Development, on converting a faded shopping mall into a unique, thriving indoor business park. She saw how a property could bounce back through a radical change in use or identity.

Mazzone's new company is working on finding tenants for the Main Place Tower, Main Place Mall and the Liberty Building, which combined consist of about 1 million square feet. Some of the office spaces have been sitting vacant for years, but Mazzone said she is excited by the challenge.

Forming the new company enabled Mazzone to reunite with Sam Iraci Jr. and James Comerford, whom she had worked with years earlier at Buffalo's economic development agency.

"I also thought, 'If I don't do it now, I never will,' " she said. Mazzone's brother, Thomas, is involved in the business, on the residential real estate side.

While tenant representation is part of her company's services, Mazzone has been surprised by how many landlords have sought her out to work for them. That stemmed from her past positive dealings with them.

The leaders of R&P Oak Hill Development, Bichler and Hogan, are making inroads based on past business relationships. They are also working with Melissa Garman Baumgart, who represents the interests of the majority investor, Richard Garman.

Bichler, Hogan and Baumgart worked together at Garman's ABCS Group when its companies included Buffalo Crushed Stone, ABC Paving and Gateway Trade Center.

Bichler spent about six years with ABCS before leaving in 1995 for a top position with LP Ciminelli and later for Christa Construction's Buffalo branch.

Hogan, an engineer who has 27 years' experience, left ABCS in 1998 after nine years. He worked for Paragon Construction Northeast, GPS Construction Services and LP Ciminelli.

Since starting R&P Oak Hill last May, the company has contracted about $40 million worth of construction value, Hogan said. The projects include work at Quaker Crossing in Orchard Park, a hospital conversion with Catholic Health System. It has been named construction manager for work at the site of Theodore Roosevelt's inauguration.

Even though the company is relatively new, Bichler and Hogan say their own industry track records have helped open doors. "Most of this has been relationships, people we have worked with in the past," Bichler said.

The familiarity also extends to their work force: Only about three of the people on staff haven't worked with Hogan or Bichler or both of them before.

"I think we're at a position to manage what we have in hand," Hogan said.

e-mail: mglynn@buffnews.com

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