It could take three to five years for a Washington, D.C., developer to remake Buffalo’s tallest skyscraper from an empty office building into a tower full of apartments, hotel rooms and retail shops.
But Douglas Jemal said he is so committed to remaking One Seneca Tower that he plans to move to Buffalo for at least six months and work full time on the project.
“It’s a project that needs a commitment. It’s not something you’re going to flip a card and say I’m doing this,” said Jemal, founder and CEO of Douglas Development Corp. “I paid my admission ticket. I’m in.”
Douglas Development, the second-biggest commercial real estate developer in the Washington metro area, agreed to purchase the vacant 38-floor tower from LNR Partners, the special servicer that owns the building on behalf of mortgage bondholders. Jemal did not say how much he would pay, but insists there are no contingencies to stop the deal, and expects to close by mid-October.
Tentative plans call for an equal blend of apartments or condos, office space, and a hotel, with significant retail on the first floor. Jemal also spoke of redesigning the concrete plaza area to make it more pedestrian-friendly and accessible as a conduit from Main Street to Canalside, and may seek to reclad the cement-panel building with more glass or other materials.
But such a project – estimated to cost between $100 million and $200 million, not counting the purchase price – won’t happen overnight, said Jemal, as well as an array of local architects, attorneys and developers. Rather, they say, redevelopment is likely to take place in stages, starting with feasibility studies to narrow down the mix of space, before shifting to engineering and architectural design work. Jemal would likely also have to line up some tenants and nail down financing before obtaining municipal approvals.
“He’s got to find tenants,” said Anthony Kissling, a New York City developer and property owner with significant holdings in Buffalo and Tonawanda. “Nobody is going to renovate the building without a tenant in hand. Without a tenant, there’s no way this is going to happen.”
All of those preconstruction pieces could take one to two years before any shovel hits the ground. There’s also significant structural work to be done, such as on the 28 elevators and mechanical systems, and likely asbestos cleanup, before the real work can begin. Then the construction itself would likely take 18 to 36 months, depending on the degree of work.
“These things definitely take time,” said Corey Auerbach, a land-use attorney at Barclay Damon. “The city is going through such an incredible revitalization that in my view, the most important thing is appropriate redevelopment and having this done right, not having it right now.”
In all, it could be three to five years before the 1.2 million-square-foot One Seneca would be completely revived, experts agree. “These things are not quick. You start the project in pieces and parts,” Jemal said.
The timetable also depends on how much structural design and exterior changes Jemal plans, especially if he wants to incorporate more pedestrian access and engage the public. “The process can go as quickly as the developer can prepare the development plans,” said Auerbach. “There’s certainly top-down support for the redevelopment and evidence that the city is going to work as a development partner toward bringing this structure back online in a meaningful way. I’m sure the city is going to want to participate in the design process.”
The financing piece is likely to be intricate, with multiple layers and different sources or types of funding for each component – residential, office, hotel and retail. Experts say it’s likely to include a mix of investor equity, bank and Wall Street debt, tax credits, and incentives.
State officials have already indicated the building may be eligible for historic tax credits because of its iconic significance to Buffalo, although redoing the exterior might limit that benefit. And experts say Jemal could also use federal New Markets Tax Credits, which equal about 20 percent of a project cost and are designed for projects in blighted communities. He’s also said he plans to seek other tax breaks from the city or other government agencies.
“It’s going to take time to put together various pieces, but it would seem to me there is a path forward,” said Phillips Lytle LLP attorney Doug Dimitroff. He said the building appears to fit with the Erie County Industrial Development Agency’s adaptive reuse policy.
Finally, municipal approvals could be quick – even within 30 days – if most of the changes are inside. Or it could take three months if site plan approval, environmental reviews and public input are involved, said attorney Marc Romanowski of Hopkins Sorgi & Romanowski.
“That process should not be very difficult to manage. This is an existing development that until relatively recently was fully occupied,” said Adam Walters, an attorney at Phillips Lytle. “The good news is we definitely have an experienced developer stepping up to take this on. But it’s a lot of square footage at the end of the day, and it’s going to take a fair amount of time.”
Jemal insisted that he’s not intimidated by the task or cost. “If you don’t have confidence in it yourself, how do you expect someone else to have confidence in what you’re building?” he said.
He’s currently doing a $450 million, 850,000-square-foot project with Brookfield Property Partners in Washington. And he compared One Seneca to his $125 million award-winning redevelopment of the Hecht Company Building, a sprawling former department store warehouse in northeast Washington. That new mixed-use complex entails close to 1 million square feet, and was completed eight months ago, after more than three years of work and five years of ownership.
But it was a complicated job. The building’s floors are more than 100,000 square feet in size, and it’s on the National Register of Historic Places for both the exterior and interior, adding to the project’s complexity.
“Seneca One is a lot easier. The building’s built. It’s got a great floorplate. It needs some lipstick,” he said.
“I’m going to do my best to do a great job,” he said. “I have no magic wand. It’s a lot of work.”