Building A Mystery
Douglas Jemal likes buying and renovating historic buildings. Sometimes he even fills them with tenants.
by Holly Bailey

Douglas Jemal likes buying and renovating historic buildings. Sometimes he even fills them with tenants. Douglas Jemal would probably rather be anywhere but here, sitting at the head of a long conference room table closed off from the world for something like 10 minutes, though to him it must seem like an eternity.

It's the kind of setting that Jemal, the developer of some of the District's most valuable commercial property of late, should be used to by now. After all, this is the sort of place where one envisions the big deals going down, the grand plans being laid out—the kind of place, in other words, where the essence of capitalism shines brightest.

In a few minutes, when he's released from his interminable obligation to sit still for an interview, Jemal will proudly give a tour of his hectic H Street NW office overlooking the MCI Center, where he is helping owner Abe Pollin attract tenants to the 4-year-old arena's vacant restaurant and shops. From this rarefied perch, you can also see the half-dozen or so properties that have precipitated Jemal's rise in the city's real estate game over the past few years, including a row of 19th-century storefronts that he's developing on the 700 block of 7th Street NW (across the street from the MCI Center) and the old Marlo Furniture building up the block on I Street NW.

Jemal shares his office with two parrots (Eagle and Dooley), a German shepherd puppy (Maggie), and a pair of giant fish tanks, both of which would look right at home in the National Aquarium. "Different, huh?" Jemal winks, though for a moment it's unclear if he's talking about his menagerie or himself.

You see, Jemal, 58, is an ordinary-looking guy—if, by chance, you are on your way to shoot bear, not negotiate real estate. Standing just over 6 feet tall, with a shaved head, Jemal today is wearing ratty bluejeans, boots, and a sweat shirt in a blinding shade of fluorescent orange—the kind that hunters wear in the woods to make sure they aren't accidentally shot. It's the same sweat shirt he once wore to a meeting with Mayor Anthony A. Williams. In fact, it's a little dressy for him, he slyly admits. Usually, Jemal just goes with a T-shirt and jeans, though he confesses to breaking out his token suit for occasions like weddings and funerals.

"No disrespect to the mayor, but I just feel more comfortable in clothes like this," Jemal says, walking through his office. "I don't think you are what you wear. You could be wearing a $1,000 suit and be a real piece of shit, or you could be the greatest guy in the world and be wearing jeans. Clothes shouldn't matter."

All around Jemal's office, every inch of wall is covered with something: pictures of the old cars he collects, landscapes that depict the solitude of the Old West, or antique relics from the buildings that he's redeveloped. An old wood banister that Jemal took from one of the storefronts on 7th Street is hanging on a wall opposite the conference room table. A faded gray-brown, it's not what you might call an exciting piece of decor, but Jemal likes to joke with guests that it's a piece of his playpen. In some ways, he's not kidding.

Over the past decade, Jemal's Douglas Development Corp. has amassed an impressive portfolio of properties in the District and its suburbs, and although Jemal proudly proclaims that "he doesn't count, because it's bad luck," he owns at least 70 buildings with an estimated value in the hundreds of millions of dollars. Jemal is not the biggest developer in D.C., but the property he owns—and where he owns it—certainly earns him a ranking among the most powerful.

This in spite of the fact that some of Jemal's most prominent buildings, in the midst of the biggest redevelopment craze that downtown has seen in years, sit empty—by his own choice.

The center of Jemal's empire lies in downtown D.C., in the blocks surrounding Chinatown and the MCI Center. At last count, Jemal owned at least 15 storefronts on 7th Street between E and I Streets NW, and on the surrounding blocks, he's developing even more properties, including another row of old storefronts on F Street, at 8th Street NW. Up the street from there is Jemal's most prized possession of late: the Woodward & Lothrop building, which sits atop Metro Center, occupying the block between 11th and 12th and F and G Streets NW.

Once home to one of Washington's grand old department stores, the 10-story Woodie's building, like a good number of Jemal's properties downtown, remains shuttered. It's been vacant since 1995, when Woodie's closed its doors. Using donated funds, the Washington Opera purchased the property for $18 million in 1996 in hopes of transforming the building into its new home, but the group gave up when preliminary studies showed that it would cost at least $200 million to renovate the facility into an opera house.

Jemal, who had attempted to buy the site the first time around, paid the opera $28.2 million for the property in 1999. Until recently, the Woodie's building was at the center of a tug of war between Jemal and downtown activists, who had hoped to see the property redeveloped into a mix of arts space, restaurants, retail outlets, and housing. But Jemal contended that the activists' plan would never work. "Believe me, I am for downtown housing, but it's not right for that building," he says.

With the backing of the mayor, Jemal instead pressed the city to rezone the building to permit a mix of office space and retail. When it appeared that the District's Zoning Commission wouldn't satisfy that request, the developer promptly sat on the project, telling people that he'd rather see the building empty than filled with "a shitty mix of tenants." In February, two years after negotiations began, the city blinked—but only after Jemal promised to build housing on another site. Now Jemal is in search of an anchor tenant for the landmark building—Macy's, he hopes, but three-way negotiations between Jemal, Macy's, and Deputy Mayor for Economic Development Eric Price have been continuing for several months without success.

"Doug is very much used to his way or no way," says Terry Lynch of the Downtown Cluster of Congregations, a group that advocates downtown housing. "He's not known as a man of patience, but once he gets a vision of what he wants for a building, he doesn't budge."

Case in point: the old People's Drug warehouse, located near the intersection of Florida and New York Avenues in Northeast. After purchasing the property in 1998, Jemal renamed it "Jemal's Washington Gateway" and made at least $70 million in renovations. Yet it still sits empty—just as it has for the past two decades.

Jemal initially wanted to build what he called a "town center" on the site, a property not unlike what you might see in the suburbs, with office space, parking, shops, and a movie theater. But when the neighborhood began attracting high-profile high-tech neighbors such as Qwest Communications and XM Satellite Radio, Jemal imagined that New York Avenue would become something like the Dulles corridor in Northern Virginia—home to America Online. He made sure his building would be tech-friendly, wiring the building for high-speed Internet access and leaving some of the space unfinished to allow tenants to build to their own specifications.

But so far, that gamble hasn't paid off. Next month, the D.C. Department of Employment Services—not exactly a high-tech tenant—will move into two floors of the renovated warehouse, occupying just under one-third of the space available in the building. (The District will pay about $33 per square foot in rent, the going rate for much downtown office space.) Jemal says he's had interest from companies such as Fannie Mae and Blue Cross/Blue Shield for the remaining space, but no deals have yet been closed.

As with the Woodie's building, Jemal says he's looking to land the right tenant. But critics say he's also looking to charge pricey rents that few tenants are willing to pay—a view Jemal emphatically denies.

Unlike some of his fellow developers, Jemal prefers to handle almost every aspect of a project on his own. If he wants to buy a building, he calls the owner himself. When it comes to negotiations, he's at the table, not his lawyer. After the purchase, he hires his own crew of people to renovate a property. And it's Jemal who decides whom he'll rent to and how much he'll charge.

If any factor doesn't work for him, Jemal is more than content to let a property sit empty until he decides otherwise—and eat the huge carrying costs of the vacant space. That's an approach that some of his real estate colleagues can't quite swallow. "Douglas is not a member of the club, so to speak, for that very reason," says a local official familiar with downtown's development community. "He looks bullheaded, and he acts bullheaded. He's a hard bargainer, and he's willing to take risks to get what he wants. The others, while they are risk-takers, are much more cautious and deliberate in what they do."

But Jemal couldn't care less what his competitors think. "I'm impatient because I want to see something happen, but I will wait if I have to," Jemal says. "It's better than screwing up a building with the wrong tenants. That's just desecrating a property."

For now, the waiting game is a luxury Jemal can afford.

Jemal says he didn't get into the business of buying and selling buildings out of ambition, or even the desire to make a lot of money, though that certainly is a perk that comes with riding the District's most recent real estate boom. Instead, Jemal became a developer more in the name of convenience, even if something about his vocation always seemed inevitable.

Born in Brooklyn in 1942 to an Egyptian father and a Syrian mother, Jemal dropped out of school when he was 15 and says he "never looked back." Instead, he went to work, first as a stock boy, then as a delivery driver, and then as a clerk at a retail store. By 1966, he was married, with a newborn daughter, and preparing to move down the coast to Washington—a destination he claims was chosen simply because his child was born on Feb. 22, George Washington's birthday.

When he arrived in the District later that year, Jemal opened his first store. He called it Bargaintown D.C., and it sold cheap electronics, housewares, clothing, and other goods. The store was located on 7th Street, right in the heart of what was once the city's prime shopping district, on the plot of land where the MCI Center sits today.

Nobody really knew it at the time, but downtown was then on its last legs. Seventh Street and Pennsylvania Avenue had been the city's main commercial streets since the turn of the century, home to a mix of stores that peddled everything from clothing and furniture to tobacco and meats. Perhaps most important, there were people everywhere—in the streets, in the shops, and living in flats above the stores.

According to historians, 7th Street hit its peak during World War II and began its slow descent in the late '50s, when people began to trickle out of the city and into the adjoining suburbs. By the time Jemal arrived on the scene, downtown was well into its long decline. The 1968 riots following the assassination of the Rev. Martin Luther King Jr. would further accelerate the area's deterioration.

Bargaintown D.C. closed its doors in 1971, when the District began to assemble blocks of downtown property for the first of many failed urban-renewal efforts. By then, Jemal had fallen in love with the city, and the seeds of his later development visions had been planted.

"When I watched downtown fall apart, it was terrible," Jemal says. "Back then, it was a happening, vibrant neighborhood that was full of life and shops and people. It was wonderful, it was magical, and then suddenly it was gone."

But it wasn't such sentiments that prompted Jemal to begin buying buildings and fixing them up. That trigger came more than a decade later, after Jemal had gotten into business with his father, Norman, and three brothers, Lawrence, Marvin, and Stephen. In 1976, the Jemal family co-founded the Wiz, an electronics chain known not only for its cheap prices but also for its ubiquitous slogan, "Nobody beats the Wiz."

The first Wiz store opened in Brooklyn in 1976, and by the mid-'80s, the chain had dramatically expanded, with more than 20 stores in and around New York City and its boroughs. That number would double in the following years, when the Wiz branched out to neighboring states, including Connecticut and Massachusetts. At its height, the Wiz employed more than 2,000 people and earned revenues nearing $600 million a year. Jemal, an executive vice president of the company, operated an 11-location subsidiary based in D.C.

In 1985, Jemal was notified by a landlord that the building where one of his stores was located was up for sale. An insurance company was looking to buy it, but Jemal, as leaseholder, had the right of first refusal. On a whim, Jemal bought the building, and thus began his career as a developer. "I don't think there was any agenda in the beginning, other than the fact I did something once and I liked it," he says. "Before that point, I thought I would be in retail forever."

For the next five years, Jemal continued to dabble in real estate while running the Wiz. Mostly, he bought the buildings that housed his stores, but in the early '90s, Jemal branched out, snapping up cheap properties dumped in the aftermath of the national savings and loan crisis and the real estate bust that followed. One of the first properties he purchased was a former Wonder Bread bakery located on Georgia Avenue near Howard University. Jemal reportedly paid $4.5 million for the building, which he transformed into an office and retail complex. In 1993, he sold the newly named Wonder Plaza to Howard University for just under $18 million.

That same year, Jemal bought another prominent property: the Park & Shop complex on Connecticut Avenue in Cleveland Park, just above the Metro station. He paid $6 million for the block-long strip mall, which had previously been slated for demolition to pave the way for an office building not unlike something you'd see in Bethesda. But the Cleveland Park Historical Society had discovered that the complex was one of the first strip malls built in the country, prompting the developer to back off the demolition plans. Jemal then purchased the vacant mall, recruited tenants including a Blockbuster and a Pizzerio Uno, and sold it in 1995 for $11 million, according to the Washington Post. "Park & Shop made my reputation in this town," Jemal says. "Before that, I was nothing. I had zero credibility."

But while Jemal was on a winning streak, making a name for himself by renovating noteworthy properties around the city, he didn't win them all. In 1993, Jemal and his brothers unsuccessfully bid on the Baltimore Orioles, offering $150 million in cash for the team—a bid they later withdrew when attorney Peter Angelos, backed by a roster of Baltimore luminaries including film director Barry Levinson, joined the hunt.

The following year, Jemal sold his stake in the Wiz (which three years later would file for bankruptcy protection) and turned his full attention to buying and renovating old properties in the District. What had started out as, more or less, an occupation of mere convenience was quickly evolving into a full-time job. But Jemal wasn't in the market for just any old property. He was looking to invest in buildings with a little bit of history, in neighborhoods that would be ripe for rehabilitation.

"I looked downtown," Jemal says.

Though Jemal doesn't claim to be a card-carrying preservationist, he certainly can talk and act like one. Don't get him started on the beauty and history of an old building unless you want to see a grown man cry—which is what Jemal seems on the brink of doing when he reminisces about the people who worked decades ago in the buildings he owns today.

A few months after he bought the Woodie's building, Jemal unearthed an old black-and-white photograph from the building's basement. In it, a group of men are gathered around the building's furnace, their faces stained with soot from the coal that they shoveled into the fire to heat the building.

"I look at that picture a lot," Jemal says. "It really struck me. It's real people that worked very hard at their jobs, and even though they aren't alive anymore, I don't think they should ever be forgotten, because they served a very important purpose."

Jemal, who initially comes off as a fairly brash guy, seems to feel a real dedication to the downtown that once was. In one corner of his conference room, next to the architectural renderings for some of his latest projects, Jemal has posted a blown-up photo of the old 7th Street. Dating back to at least the early '30s, the photo depicts a setting that Jemal seems to have taken it upon himself to revive, almost as if it were his own social responsibility.

"I thought that I loved the old downtown until I met Doug Jemal," Lynch says. "But he is in a separate class of his own, carrying on what I would call a love affair with downtown and its buildings."

In 1994, Jemal took his profits from the 1993 sale of Wonder Plaza and began scouting properties in the 7th and F Street area, where his old Bargaintown store had been. (He would do the same later, with the profits from the 1995 sale of the Park & Shop.) By the time plans were announced for a new sports arena, Jemal had inked deals worth nearly $6.5 million to purchase five adjoining storefronts between G and H Streets, across from what would become the MCI Center.

Down the street, Jemal also picked up the old First National Bank building at 509 7th St. NW. He says he bought the building, which is currently leased by the District ChopHouse restaurant, not because he thought the property was unique or particularly interesting, but because he remembered bouncing a check there three decades earlier. "That made me want the building pretty badly," Jemal says.

That's the kind of peculiar logic that seems to drive Jemal's investments in the District, even today. Colleagues say he's an emotional buyer, who will see a building that he likes one day and have its owner on the phone negotiating a deal the next. If the property fits certain criteria—it's cheap, there's history behind it, and he expects he can make a profit—Jemal is sold.

"He's definitely not plain vanilla," says Richard Bradley, executive director of the Downtown Business Improvement District, a business-interest group that works to promote downtown. "Most people don't do business like that, but Doug marches to his own d¥um. That sometimes elicits a lot of eye-rolling from some people, but when you judge him by performance, which is really what counts, it's hard not to respect him."

That track record, Bradley and others say, results from Jemal's habit of investing in risky projects, like the People's Drug warehouse and the Woodie's Building.

"You won't find anyone in this town who says bad things about Doug Jemal, unless they are talking about how eccentric he is," says Bill Regardie, editor in chief of the now-defunct business magazine Regardie's Power, who has known Jemal for more than a decade. "Increasingly rare is the developer who will take absolute risks to make things happen, but Doug Jemal is that kind of guy. He is an absolute visionary, and I would imagine that the only people against him are those against progress."

Indeed, preservationists, who might usually consider a developer like Jemal an enemy of their cause, seem to think the world of him; one, Jerry Maronek of the D.C. Preservation League, goes so far as to call Jemal "a savior" of 7th Street for his rehab of the old stores.
"Doug Jemal is a pioneer who's been willing to take the risks to preserve the city's historic value," says Maronek. "The greatest thing he's done is to preserve not just the historic façades of his buildings but the entire buildings. You can walk around downtown these days and see a lot of buildings that, at first blush, you think [are] historic [properties], when really they've gutted the actual building and kept only its face. But with Jemal, he's not trying to pull some Disneyland fantasy. With him, it's the real thing."

Yet the kind of tenants he is placing—or in some cases, not placing—inside those historic buildings earns Jemal a fair amount of criticism, even from those who say they are among his ardent fans.

Until the mid-'80s, there was little discernible difference between the area of the District known as Chinatown and its neighboring blocks of run-down office buildings and empty storefronts.

In fact, it was a neighborhood that had always looked far better on paper than in reality. Back then, Chinatown encompassed roughly 11 blocks of downtown, according to planners' maps, bordered on the north and south by Massachusetts Avenue and G Street NW, and on the east and west by 5th and 9th Streets NW.

With just a handful of Chinese restaurants and some Asian stores, Chinatown at the time was a pale echo of its counterparts in San Francisco and New York. And to make things worse, its population was declining, as residents began to move to the suburbs or to other parts of the city to escape the neighborhood's dilapidated buildings and high tax rates.

Chinatown was so disregarded as a destination in the city that its name wasn't even included on the Metro subway map. The neighborhood's Metro stop at the time was called simply Gallery Place.

In 1986, the city unveiled a work of public art that members of the city's Asian-American community hoped would transform Chinatown's fortunes. The Friendship Archway, an ornate Chinese gate constructed in hues of sapphire, crimson, green, and gold, stretches almost 60 feet in the air over H Street, at the corner of 7th Street.

The $1 million structure (the District and the government of China each contributed half the cost) was designed by local architect Alfred H. Liu. At the time, Liu hoped the arch would be a spark that would transform the little block of restaurants into the neighborhood planners had long envisioned it would be ("The Great Mall of China," 3/13/98).

Almost 15 years later, Chinatown's economic prospects have finally improved, but it's not the transformation Liu had hoped for. Today, when Liu looks west down H Street from beneath the arch he designed so long ago, he doesn't see the Asian-owned restaurants or businesses that he dreamed would come to the area. Rather, one of the first things that comes into sight is the Fuddruckers that just opened its doors in one of Jemal's refurbished buildings.

"It's very, very depressing," Liu says. "The city wants to promote itself, but why would people want to go to places like this?"

Fuddruckers, which opened in late March, is the fourth major tenant of Jemal's buildings, on which major renovations were largely completed almost two years ago. Pollin and the Washington Wizards have offices a few storefronts down, and last year, Legal Sea Foods and Ruby Tuesday moved in. The rest of the block sits empty.

Yet even that small roster of tenants has Jemal's detractors—and some boosters—buzzing that the developer is transforming Chinatown into something more like Chinaburb. "Is Ruby Tuesday's something I was dying to go to? No way," Lynch says. "But is that a place that suburbanites who go to the MCI Center will go to? Absolutely."

Others say the rents Jemal is looking to charge his prospective Chinatown tenants figure much more prominently into the picture. Liu and some of Jemal's competitors contend that the developer is seeking rents that only deep-pocketed national chains can afford—rents that are much higher than those of other properties in the neighborhood.

"You aren't going to see any small businesses renting from him," Liu says. "The price is too high, and that doesn't touch on all the other criteria he wants, like businesses with national connections."

Though Jemal is loath to discuss how much he is charging his tenants, the developer reportedly is asking between $45 and $60 per square foot for his Chinatown properties. Fuddruckers, Jemal confirms, paid about $55 per square foot for its space at the corner of 7th and H Streets NW.

That's much more than what others are paying for neighboring properties. Across the street, Starbucks reportedly pays $35 per square foot for its space in the almost fully occupied Gallery Court building, as do Adams National Bank and a nearby row of restaurants. The bank's building is owned by Riverdale International, fronted by former Chinatown restaurateur Yeni Wong.

With comparatively cheap prices up and down the block, it's obvious that tenants aren't lining up to move into Jemal's Chinatown storefronts. Though Jemal contends that he has talked to plenty of prospective tenants, he declines to get specific, saying only that no deals have been inked. Meanwhile, in the past few weeks, Jemal has posted even more prominent "For Rent" signs along his stretch of empty storefronts.

When asked if high rents have anything to do with why so many of his storefronts are empty, Jemal gets testy. He says he like to think of himself as a "leasing artist," someone trying to find the perfect fit for what he believes are downtown's needs. "I am not having trouble leasing," Jemal insists, with a trace of irritation. "I am looking to rent when it will elevate a property rather than sink it. Leasing just to lease is much riskier, because you just end up shitting on a property, and you never get past the smell."

It's not clear how city officials at Judiciary Square feel about Jemal's decision to leave so many properties empty, especially as the Williams administration pushes forward with efforts to make downtown a more exciting place to live and work. Numerous calls from the Washington City Paper to District officials, including Price and Planning Director Andrew Altman, both of whom have been negotiating with Jemal to redevelop the Woodie's building, went unreturned.

Not surprising, says another local developer: "Doug is very thin-skinned sometimes, and the last thing anybody wants to do right now is piss him off—not when he controls some very important property in the city."

There are times when Jemal seems to talk about his profession almost as if it's a hobby—albeit one that he worries about 24 hours a day.

Before he bought most of his properties downtown, Jemal used to have other avocations. When he was 13, for instance, he bought his first motorcycle, a 1949 Harley Davidson for which he paid $150. That motorcycle gave him his first real sense of freedom and of risk, he says, and riding it quickly became an obsession.

Up until a few years ago, Jemal rode a Harley to work almost every day. He was famous for it, even posing on the bike for newspaper shots or photos for the programs where he was an invited speaker. Such programs featured an unusual juxtaposition: a picture of Jemal in a leather jacket and jeans on his Harley, right next to sober-looking developers pictured in their regulation suits.

But around the time Jemal began to load up on properties downtown, things changed. He found that he couldn't concentrate on the road because his mind was swimming with details about what he needed to do for a building, whom he needed to call, which deals he needed to close. He thought it might be safer if he hung up his helmet and drove a pickup. And that's what he's done every day since.

"I really miss it," Jemal says of his motorcycle. And the way he says it, in a voice much quieter than his usual bombastic tones, makes you very much believe him.

Collecting buildings has replaced riding motorcycles. Not only can Jemal tell you the history of many of his buildings, but, following his acquisition of the Woodie's building, he has become an expert on the history of urban department stores. When the building reopens, Jemal wants to install a small museum dedicated to Woodward & Lothrop and its workers on the ground floor.

"It's important never to forget what those people did for D.C.," Jemal says.

Developing buildings also seems to fulfill Jemal's need for risk—he buys many properties in marginal areas on the way up, rather than in proven neighborhoods. Many observers say that's the kind of risk associated with the former People's Drug warehouse. On the one hand, it's a newly refurbished building that sits on the most heavily trafficked street in the District, where more than 100,000 vehicles pass by every day.

On the other hand, there's a reason that particular stretch of New York Avenue has been called "the Devil's Bowling Alley." It's long been a road to ruin for many commercial businesses and, in turn, many developers. Countless others before Jemal have had visions of taking one building and remaking it in hopes of transforming the four-mile stretch between the Baltimore-Washington Parkway and Florida Avenue into something more than just a commuter route. But after many attempts—developer Steve Choi's barely occupied International Business Mall ("Seoul Brother No. 1," 12/18/98) being one example—it hasn't quite happened.

"It's a disgrace that people coming into the nation's capital, or frankly, the capital of the world, have to drive down that road," Jemal says. "It's an eyesore, but I think the time is right for something to finally happen. I really believe that."

The last time Jemal had a sense that something big was going to happen was back when he first started buying storefronts in Chinatown. People said he was crazy then, too.