Douglas Jemal buys Genesee Gateway complex

Jemal paid $2.55 million to purchase the five-building complex and a parking lot at the corner of Oak and Genesee streets, at the foot of the westbound Kensington Expressway as it terminates into the Oak Street Arterial.

The 60,000-square-foot complex is around the corner and up the block from Jemal’s Electric District projects, which consist of the Mohawk Ramp and the former Simon Electric properties at Ellicott and Huron streets.

It is also close to the landmark Electric Tower at Genesee, Huron and Washington streets, which Iskalo Development Corp. previously restored and renovated into a fully occupied office building.

Jemal is already undertaking a wholesale redevelopment of the parking ramp and the vacant Simon buildings, with hundreds of new apartments and additional levels of parking planned. The first phase of the project, the rehabilitation of the historic Burns building, has begun, with other phases to follow in the coming years.

The acquisition of the Genesee Gateway will add to that density and scale, as Jemal pursues his oft-stated goal of reviving downtown Buffalo with new residential space, ground-floor storefronts and restaurants that will bring more activity to the streets and draw more people to the city’s core. He could not be reached for comment Thursday evening.

For Wendt, the sale of the Gateway building – and the earlier sale of the Roycroft Inn in East Aurora to Jemal on April 2 – gets the nonprofit charity out of the real estate business, which has been a goal of the trustees for some time.

In both cases, Wendt became involved in an effort to save and restore historic properties, in order to preserve their legacy. But the involvement lasted longer than expected or desired, especially for Roycroft.

“We’re not in the business of owning real estate. We want to focus on Ms. Wendt’s funds going back out into the community,” said Claire Kresse White, one of the foundation’s trustees, and chief legal officer for Viridi Parente. “We feel very good and fortunate to be able to participate in the two projects, and hope that we’ve done well by Ms. Wendt’s legacy and intent, and also feel very good about transferring them to Doug Jemal’s ownership.”

Ironically, while while the Roycroft sale closed first, the discussions with Jemal actually began much earlier with the Gateway complex.

Wendt has been involved with Genesee Gateway for more than 17 years, in a bid to save the vacant and deteriorating buildings. Located at 111 Genesee, 62 E. Chippewa St. and 429 Ellicott St., the mixed-use row is comprised of five separate buildings, constructed between 1845 and 1915.

All were purchased in 2007 by Genesee Gateway, a partnership between the Wendt Foundation, which spearheaded the effort, bankrolled the purchase and renovation, and recruited local developers Doug Swift, Joseph Petrella and Bill Jones to help. The team then spent more than $12 million to renovate the vacant buildings, with street-level storefronts, offices and loft apartments.

“We’re at the point right now where we feel our job is done,” Swift said. “The goal was not so much a business success as it was a motivation for investment in that neighborhood. We felt it was an important block for the city. It was never our intention to be part of the project long-term.”

Besides the Passport Agency, other tenants now include the Wendt Foundation itself, as well as Jack’s Corner Cafe, the Salty Chefs and Eddie Brady’s.

“We did put a lot of money into the development of the Genesee Gateway, which was a great investment. It was a catalyst for great change downtown, and it preserved the facades of those great buildings,” White said. “It served its purpose well, but we don’t want to be in the business of owning or managing real estate.”

So when the opportunity came up with Jemal, Wendt seized it. Wendt already held the mortgage note on the property, giving it majority control, and White said the other partners were not willing to pay as much as Jemal to keep it. So Swift, Petrella and Jones agreed instead to deed the property to Wendt so the foundation could sell it to Jemal.

The sale won’t begin to cover that debt, or even the appraised value of $3.7 million, which White said no one was willing to pay. But that wasn’t the mission, she added.

“There was no way we were going to get that back,” she said. “We did it for the good of the community and what that development would do for the community.”