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Lazarus sale may bring 500 new jobs

| Wednesday, June 16, 2004

Filling the shuttered Lazarus-Macy's Department Store building Downtown with one or more new tenants could create as many as 500 jobs, says the New York company planning to buy the building.

"This is an opportunity to create synergy with a collection of specialty retailers giving Downtown a new destination," said Samuel Jemal, president of the J.J. Operating Corp., a privately held company that on Tuesday disclosed a tentative agreement to buy the four-story, 250,000-square-foot building on Fifth Avenue at Wood Street for an undisclosed price.

News of the deal comes on top of previous reports that Rugby Realty Co. Inc., a Teterboro, N.J.,-based company that already has been involved in a number of Downtown revitalization projects and owns the Gulf Tower office building Downtown, is a potential buyer for another failed city retail project, the city's Lord & Taylor department store due to close between now and the end of 2005.

Aaron Stauber, managing director of Rugby, declined to comment yesterday on his company's interest in the Lord & Taylor building.

However, he said he is familiar with the Jemal group from its work in New York and New Jersey, where in one instance Jemal is a landlord of a retail store operated by AE Stores, a Rugby affiliate company.

"I think it's going to be a tremendous success. They're a perfect operator for that space," Stauber said.

Stauber is more than familiar with the site. He and former Downtown real estate developer Richard Penzer acquired all of the buildings where Lazarus-Macy's now stands in the late 1980s and early 1990s before selling them to the Urban Redevelopment Authority, which razed the buildings to build the Lazarus.

J.J. Operating Corp. is a 40-year-old company owned by a family that includes Samuel's father, Jack Jemal, and Samuel's two other brothers, Joseph and David. It has owned and managed more than 70 properties totaling 6 million square feet of retail and office space in New York, Long Island, Westchester in New York and in New Jersey.

The company did not disclose the names of any prospective tenants for Lazarus-Macy's, but noted that to date it has purchased and renovated in excess of 2.5 million square feet of formerly vacant downtown department stores in major business districts in those markets.

"Our goal is to renovate the Lazarus-Macy's building and re-tenant it with one or more national chains as quickly as possible," Jemal said in a statement. "There is lots of interest by national chains in inner-city locations. They feel that once they are established, the customers will find them."

One of the company's successful projects was the $60 million revitalization of the five-story, 280,000-square-foot former Caldor-Alexander's building on Fordham Road in the Bronx, which had been vacant for two years when J.J. Operating purchased it in 2001.

By 2003, the building was full, with tenants including a Bally's Fitness center, P.C. Richard & Sons electronics retailer, Verizon Wireless phone store and a bank branch on the first level, an A.J. Wright discount clothing outlet on the second level, adult-education classrooms on the third level and public agency offices on the fourth and fifth levels.

Other successful turnaround projects include a former Macy's-Bamberger's in Newark, N.J., the former J.W. Mays in Woodmere, L.I., the former Macy's in Plainfield, N.J., and the former Hearn's on Third Avenue in the Bronx.

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