The honeymoon is over for Douglas Jemal and Buffalo.
It’s not that Jemal is giving up on the Queen City, where he still has significant holdings that he hopes to develop. But as he struggles financially and is strapped for cash, his optimism is fading.
“I’m not as bullish as I once was about Buffalo,” Jemal said. “I don’t feel as if Buffalo is heading in one solid forward-march direction. I don’t think we function as a community or a city. I don’t think we have municipality support.”
He says he has invested more than $150 million of his own personal equity into a host of projects and properties here – not including the value of loans and construction – and he’s still trying to pursue those projects. Construction has restarted at Elmwood-Bidwell in the Elmwood Village, and repairs and improvements to the Mohawk Ramp have been completed.
But he’s frustrated by the lack of progress on others, and has sold off some of his holdings across the region to raise cash. He also is reaching out to brokers to list other properties for sale.
Now Jemal says he’s even willing to walk away unless he sees a new attitude by local and state leaders to address the problems facing businesses and developers in downtown Buffalo.
He says state and local governments need to provide more financial assistance to help overcome higher borrowing expenses and rising costs. Without it, he said, projects won’t get done, small businesses can’t survive, and downtown Buffalo won’t recover.
“I don’t feel the same way I felt. That’s a reality,” he lamented. “I was there for the betterment of the city, and that community. I left a lot of money on the table, and a lot of precious time.”
He also doesn’t feel local and state officials have appreciated all he’s done for the region, including filling the once-vacant Seneca One tower in downtown Buffalo with tenants and tackling other projects that other local developers wouldn’t touch.
“I don’t feel as if I was dealt with properly. And I’m the type of person, I’m very sensitive, I’m very committed when I start something, but where’s the help? How do we get this over the hump? One private guy can’t do it all,” he said.
That’s a remarkable statement from a man who has not asked for much help in the form of tax incentives or benefits, aside from standard tax credits that any developer can obtain. He has even given up lucrative property tax breaks to create infrastructure funds for downtown, costing him over $1 million.
The major exception was his request a year ago for up to $30 million in state aid for the $140 million Statler Hotel redevelopment, because of its complexity, importance and cost. He ultimately received $10 million.
“The Statler needs to get done. The retail needs to get done around Niagara Square. The office needs to be open,” he said. “I don’t think there’s a cohesive plan.”
“They seem to be very very good at attacking (Buffalo Bills and Sabres owner Terry) Pegula and Douglas, and let’s not give these rich guys money. But without these rich guys committing to something, you’re going to have nothing. So now you’re on your way to having nothing, because maybe that’s what you want.”
Jemal leveled particular criticism at Gov. Kathy Hochul, a Western New York native, and Erie County Executive Mark Poloncarz, saying he has “put out the olive branch on multiple occasions.”
“I don’t think that Kathy has done a good job supporting Western New York and her hometown,” Jemal said. “I’m calling Albany, I’m calling the city, I’m calling Poloncarz.”
He added, “It’s mind-boggling. This is Kathy’s home. Where is she?”
Matt Janiszewski, upstate press secretary for the governor, reacted angrily, saying that “as the first governor from Buffalo in over a century, no one has been more committed to the rebirth and continued success of downtown Buffalo and the Western New York area than Gov. Hochul.”
He cited a litany of projects and initiatives that the state has supported under Hochul, including the $10 million grant toward the Statler renovation, another $2.5 million for basement parking in the Statler, and $31 million toward infrastructure work in Amherst around the Boulevard Mall, which Jemal owned until he agreed last week to sell it.
“Like many others, the governor believed in the promise of Doug Jemal’s vision supporting his efforts to bring back Seneca One and other long-stalled projects, but it’s now clear that he overextended himself,” Janiszewski said. “Rather than spreading the misguided views of a disgruntled developer, he should focus on fulfilling his commitments to this community, and Gov. Hochul will continue fighting for the people of Buffalo.”
Poloncarz spokesman Peter Anderson said the county executive, his economic development team and the Erie County Industrial Development Agency “have been actively engaged with Douglas Development regarding multiple projects” since at least December 2022, including last week.
In each case that a potential project was presented, Anderson said, “every viable economic development tool within the Erie County toolkit was presented for consideration to make the project happen, including some extremely creative and rarely used options.”
“Despite this engagement on our end, no formal application or action on any option has been taken by Douglas,” Anderson said. “Despite our ongoing willingness to meet with Douglas and work with them, they have not committed to any action.”
When Jemal went on a buying and development spree, many questioned his ability to do all the projects, and worried that he had taken on too much too quickly. He faces more than $4 million in mechanics liens filed against him and his companies for unpaid bills, first reported by Investigative Post, plus about $1 million in tax warrants, although that’s a fraction of what he has invested here.
Jemal dismissed those concerns, citing decades of experience in Washington, and saying he could handle it.
“Who tried to save Richardson and saved it? I did. Who saved Seneca One? I did. Who saved the Hyatt? I did,” he said. “I did a lot.”
Against a brick wall
But all of that changed with the Covid-19 pandemic, which cut the number of workers coming downtown each day by an average of 20,000 as hybrid work schedules took hold. Interest rates soared and construction costs shot up, making projects more expensive and harder to finance. As projects paused, Jemal still had to pay taxes, insurance, maintenance and other costs.
“Banks don’t want to take the development risk right now,” said Gunner Tronolone, a commercial real estate broker at Hunt Commercial. “There are plenty of developers out there. They all want to do it. But they just can’t get the funding right now.”
Meanwhile, the Trump administration has made the situation worse, through its aggressive job cuts and lease reductions in the Washington area – where Jemal’s real estate business is concentrated.
Those Washington holdings were a prime source of the cash he used to build and fund his Buffalo ventures. But when the Trump administration slashed the federal workforce, it was a blow to Jemal’s residential holdings and his commercial projects.
With cash tight, the developer and his sons had to rethink their Buffalo investments. He already withdrew from the Richardson Hotel and the Richardson Olmsted Complex, and pulled out of a Lackawanna project.
“I’m up against a brick wall,” Jemal said. “Everybody in real estate is in a cash crunch.”
Conditions have started to improve slightly. After a long pause, construction at the project at Elmwood Avenue and Bidwell Parkway has resumed, with workers constructing a higher-rise apartment building addition behind the historic storefronts along Elmwood. He expects completion in five to six months.
“Things are getting better. There’s no question about that,” he said. “There’s a light at the end of the tunnel.”
Talking to brokers
At the Mohawk Ramp, critical repairs and waterproofing have been completed and the ramp is open. Elevators have been cleaned up, lights have been installed, and the exterior is being repainted the same red as Seneca One, with a light blush swoosh on one side, the word “Park” in multiple places, and a series of classic cars driving down a meandering colorful road on the other side.
And he’s “getting real close to starting” on the Burns Building, part of the Simon Electric project, within two months.
Anything else, though, would come later, if at all. “I’m not going to do it all at one time,” he said.
Meanwhile, Jemal also said he has been talking to real estate brokers about listing his other properties for sale, including four properties on the 500 block of Main Street.
Jemal put the Butler Manson up for sale a year ago, with no takers, and twice tried unsuccessfully to auction the Mahoney State Office Building on Niagara Square. He sold several Niagara Street properties to neighbor Rich Products Corp., and is now selling the Boulevard Mall to Benderson Development Co.
“Absolutely, I’d go,” he said. “If someone has the ability to do something with them and pay for it, I’d be glad to sell it. These are valuable assets that need to happen for Buffalo to come back again.”
However, it’s not what he wants, considering how much he has spent in Buffalo and how much he still owns. And he wants his vision to come to fruition.
“But I need help. The numbers just don’t work. It’s not a rich community,” Jemal said. “It’s not charity. Economic development is a dividend.”
“The answer is not cutting. It’s developing,” he said. “What happens when a business is slow, in a retail business? They give incentives. They run a sale.”
Too much negativity
Jemal says it’s all about attitude, and Buffalo’s is steeped in doom and gloom.
“Negativity breeds negativity. All we look at is negativity when we drive around,” he said. “We need to be cured of this. We need to step up to the plate as a municipality.”
He criticized the community for not having a “business-friendly climate,” and said he’s frustrated by the politics.
“You have someone here who wants to help build the city,” Jemal said. “If I left there tomorrow, my life would not change one iota. Did I lose money? Yeah, I lost money. But did I try my best for that community, whom I like and care about? Absolutely. They deserve better.
“What downtown is going through, that’s a reality, and it’s something that one guy can’t fix. It’s not a Douglas Jemal issue. It’s a municipal issue. Even a pizza guy can’t make it,” Jemal said. “Do I think it’s fixable? Absolutely. Can we get through this? Absolutely. But I don’t feel we’re doing that.”
Yet he still feels a strong connection to Buffalo.
“I just have a limited amount of years to give you. I’m not 20 years old,” said Jemal, who turns 83 in November. “I’ll give you everything I’ve got, but let’s get going.”
Reach Jonathan D. Epstein at (716) 849-4478 or jepstein@buffnews.com.
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Jonathan D. Epstein
News Business Reporter
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