Home » Business, Marketing & Sales, Personal Finance, World » Two New York City Investors, John Catsimatidis and Philip Ruthen both express interest in Buffalo’s vacant One Seneca Tower
New York City Investor John Catsimatidis and Investor Philip Ruthen both express interest in Buffalo’s vacant One Seneca Tower in what will be a likely ‘tough deal’ for John Catsimatidis and Phillip Ruthen’s largest to date

John Catsimatidis, A New York City billionaire who built his fortune from real estate, grocery and convenience stores is the latest potential investor to explore the probable purchase of Buffalo’s tallest building, even as other unnamed parties have made formal offers to buy the vacant One Seneca Tower.

John Catsimatidis owns the Gristedes Foods in Manhattan, the Red Apple Group and the Warren, Pa.- based parent of the Kwik Fill chain – confirmed that he has “looked at the building” and has also engaged in discussions with another bidder, Phillip Ruthen of Connecticut, about a possible collaboration in the purchase of the building. However, both Catsimatidis, who toured the building on a recent visit to Buffalo, and Ruthen say they have not agreed to any deal to work together.

“We talked, but we are not partners,” Catsimatidis said by email. “We have interest, but it’s a tough deal.”

Phillip Ruthen is managing partner of Global Capital Partners, a Hong Kong-based real estate investment and development firm that has joined the fray of suitors for Buffalo’s One Seneca Tower. He and his team – which includes a couple of family wealth offices – have offered to pay about $50 million for both the 38-story tower and its attached parking ramp on Washington Street, and to spend over $100 million on a redevelopment. If the offer is accepted, it would be the largest venture he has tackled, and likely to occupy the bulk of his time for several years.

Meanwhile, no other details were made available about the newest purchase proposal for the 38-story tower or the potential buyer, except that the offer came this week from out of town. It has not yet been accepted, real estate sources said. However, those sources also revealed that the said offer is not from Catsimatidis nor Ruthen. The offered is also not from Harvey Kaylie, another New York City businessman, who canceled his own $27 million cash deal to purchase the 1.2-million-square-foot complex just two days before his due-diligence period expired, after struggling to line up enough partner financing to make the entire project work. However, the said offer came from a group of both Chinese and domestic investors represented by Hunt Real Estate Corporation’s Chief Executive Officer, Peter F. Hunt. That adds an entirely new individual or group to the mix of potential buyers, even as all the local developers continue to stay away from a project whose costs experts say could go as high as $200 million.

“Somebody has to have the deep-enough pockets and endurance to stick this out. It’s a multiyear project. It’s not going to happen overnight,” Hunt said. “You’ll need a developer with vision who can deal with all the naysayers. Are they standing in line? No, but someone will come along.”

One Seneca is currently owned by LNR Properties, the special loan servicer representing bondholders who held a $91 million mortgage on which the prior owner, Seneca One Realty, defaulted. Built in 1972 as the headquarters for Marine Midland Bank and long dominated by Marine and successor HSBC Bank USA, the tower is now 96 percent empty, after HSBC and Phillips Lytle LLC left the building almost simultaneously in late 2013, triggering the previous servicer to initiate foreclosure proceedings. LNR took possession of the tower last October, followed by the accompanying five-story parking ramp in March. LNR then put them both up for sale but insisted on a quick, two-week due-diligence period and a fast closing, which has puzzled many in the local real estate community who see such demands as unrealistic.

Kaylie, who had unsuccessfully bid on the tower at the October 2015 foreclosure auction, had planned a $100 million redevelopment of the building into a mixed-use complex with office space, apartments, a restaurant, an observation deck, a retail mall and possibly a boutique hotel. Ruthen said he would have offered about $37 million and “would have closed already” but his bid was contingent on financing, and his plans envisioned a total spend of over $150 million. Hunt would not provide details of his clients’ plans. But it’s the involvement of Catsimatidis in the process that adds a new level of financial capability, experience and even national visibility to the entire effort.

Born in Greece in 1948, Catsimatidis immigrated to the United States with his family and grew up in Manhattan. He studied electrical engineering at New York University but dropped out before graduation after working in a small Harlem supermarket and then buying out one of the owners. He opened his own store in 1971 and then bought a second one, which he named Red Apple.

By the time he was 24, he’s had 10 stores, and by the end of the summer in 1981, his businesses had included 27 stores in the Bronx and Manhattan, with over $40 million in annual sales. He bought 36 Gristedes Supermarkets and 11 affiliated stores in 1986 from 7-Eleven parent Southland Corp. for $50 million, adding additional Sloan’s Supermarkets and Food Emporium locations. He also purchased United Refining Co. of Warren, Pa., which operates refineries as well as the Kwik Fill, Country Fair and Keystone convenience and chains of gas stations, with 400 locations.

Today, his Red Apple Group has about $700 million to $800 million in real estate and aviation holdings in New York, Florida, and the U.S. Virgin Islands, with $3 billion in annual revenues and 8,000 employees. He also owns the Hellenic Times, a Greek-American newspaper in Manhattan, and hosts a talk radio show. And he’s ranked 182nd out of the 400 richest people in America by Forbes, with an estimated net worth of $3.4 billion.

Ruthen said that “a guy with his kind of net worth” could bring his own team to the table and make any other bidder a much stronger player. “He’s a smart, successful and really interesting guy, with tremendous insight, and it was a very interesting and informative meeting,” Ruthen said of his discussion with Catsimatidis. “If he decides to partner with someone on the deal, (that person is) going to be very lucky.”

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