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The Negotiator

John W. Bates III has been in the middle of the city's biggest projects of the year. You just can't see them yet.


John W. Bates III moves in such a continuum.

For years, the Richmond real-estate attorney has helped shape the way the city has developed. In the past year, Bates' activity has hit a stride. He hasn't cut ribbons or broken ground. But in 2002, one way or another, Bates has been involved with some of the most expensive, high-profile development projects the city has ever tackled.

So far, these projects are somewhat invisible: a $55 million deal to build a new downtown hotel in the former Miller & Rhoads; a developer's commitment of at least $12 million to upgrade the bankrupt Richmond Marriott; an effort to raise $105 million to build the Virginia Performing Arts Center; an authority to sell $85 million to $90 million in bonds to fund Broad St. improvements; and an $80 million plan to turn Brown's Island into a retail, residential and entertainment destination.

"He's touched each of these projects," Jim Dunn, president and CEO of the Greater Richmond Chamber of Commerce and a member of Style Weekly's Richmonder of the Year selection committee, says of Bates. "He really has brokered deals."

"To me, that's really powerful," says committee member Robert S. Ukrop, president and CEO of Ukrop's Super Markets. Despite the tough economic times and political hurdles, Ukrop adds, "things have happened, and he's been in the middle of it."

Bates is not an elected official. He is not a developer or an investor. But Dunn, Ukrop and others familiar with what's been happening downtown and at the riverfront point to Bates as a player. On the record or behind the scenes, he has helped secure and foster support for the projects. Colleagues say he is driven to put things together. He is a problem-solver. A dealmaker. A facilitator.

John W. Bates III — his old friends call him Johnny — is Style Weekly's Richmonder of the Year for 2002.

ates, 61, is a graying redhead. A partner in McGuire Woods, he has a seventh-floor corner office in One James Center overlooking the Federal Reserve, Ethyl Corp. and Dominion Resources. It is a classic Richmond view. Bates comes across as traditional, not stuffy. He wears a blue suit with a white pocket square. (A close friend teases: "He sure would be better off if he spent more money on his clothes than he does. He's not the most dapper guy in the world.")

But it is difficult to imagine someone better suited than Bates for his role in Richmond real estate. It is in his genes. A framed map hangs in a hallway just outside his office. It is downtown Richmond, as drawn in 1836 by Bates' great-great grandfather, Micajah Bates, a city engineer.

In 1908, John W. Bates Sr. — Bates' grandfather — teamed with another local businessman, Robert Harrison, to form Harrison & Bates. Now known as Grubb & Ellis/Harrison & Bates, the firm manages and leases some 4 million square feet of commercial space. In the mid-'40s, Bates' father, John W. Bates Jr., went to work for the firm (he helped develop the James Center). Bates' younger brother, Mac, works in the firm today, more than 150 years after that old map was drawn.

John Bates III did not go to work for his father. And although his career is in real-estate law, he says, his family considers him the black sheep for not joining the business. He is joking — Bates probably has never been the black sheep of anything.

"He was always the guy who got the best grades," says his brother, Mac. "He was the Eagle Scout, that kind of stuff."

Cliff Cutchins, a fellow partner at McGuireWoods, has known Bates for nearly 30 years. "I've never seen him raise his voice," Cutchins says. "Some people are very up and down. John is very steady."

ates grew up in a home at the south end of the Huguenot Bridge — at the time, part of Chesterfield County, now part of Richmond. He attended Bon Air Elementary, then St. Christopher's, then left Richmond to attend Virginia Tech.

There, Bates joined the college's corps of cadets. He aspired to join the Army and learn to fly helicopters. So in late June 1962, the summer before his senior year, he went to Fort Bragg in North Carolina. But there was a problem. For the first time since he was 9, he suffered an asthma attack. He was pulled out of training. Undeterred, he called the commandant at Tech, as well as a family friend who happened to be a major general in the Army, to wrangle a waiver. In a matter of days, he was back with his unit. It didn't last. Another attack of asthma hit him. That was it.

Back at Tech, Bates finished his senior year. Undecided about his future, he took a chance on law school at the University of Virginia. He had no intention of being a lawyer, he says. But things clicked. He got fired up. And after graduation, he returned to Richmond and joined the small McGuire law firm, which was about to merge with the Battle firm. He's been there for 36 years. "I've never known any other environment," Bates says. "I have no wish to."

His marriage has lasted even longer, 38 years. Bates met his wife, Beverly Estes Bates, when he was home from college. The two dated for two years and married a year after his graduation from college.

"He was attractive," Beverly Bates says. "He's also very bright. He's not someone I can manipulate, which is a challenge." The other challenge, she says, laughing, is that he is an early riser. "He likes to have deep philosophical discussions early in the morning," she says. "I do not."

She and John have two daughters: Elizabeth, 35, a lawyer in Arlington, and Kathryn, 32, a pediatrician with Pediatric Associates in Richmond. Beverly is retired from her career as a learning-disability specialist with St. Catherine's and serves on the board of trustees at her alma mater, Mary Baldwin College.

Recently, there has been a new member of the family: Amazing Grace, a black Lab puppy that Bates is training as a hunting dog. Bates loves duck hunting.

"I enjoy being outside, and I enjoy earning a duck, not buying a duck," he says. "Which means that you have to build a blind, and you have to train the dog, and you have to slog through the mud … you have to do all that stuff. It's a great reward."

And in the end, there is a singular measure of success. In a duck blind, he says, there is a self-imposed pressure. "That is, are you going to get the duck or not?"

The same could be said of negotiating. In his professional life, friends and colleagues say, Bates is driven to get the duck.

ne almost got away in 2002.

As an attorney representing the city of Hampton, Bates had come to know Baltimore-based Cordish Co. through several years of deal-development there. Cordish wanted to try duplicating the success of its Baltimore Power Plant project — a huge retail and entertainment draw — in Hampton. Bates thought about Brown's Island in Richmond.

"I said, 'Hey guys, you really ought to take a look at this,'" Bates says. They did. Cordish started sniffing around, came up with a plan for the riverfront property and started negotiating with City Manager Calvin Jamison and other city officials.

In the summer, City Attorney John Rupp asked Bates whether he could help, Bates says. But because he served as counsel to the Richmond Redevelopment and Housing Authority, which potentially would be a part of the transaction, he had to decline. Still, he stayed in touch, volunteering ideas. "It was tough," Bates says. "Cordish is a tough negotiator."

In July, Jamison put the deal in the hands of City Council. Some council members said they needed more time: It was too big a project to rush, and $5.9 million in taxpayer dollars were at stake. In late July, the vote approached.

Bates, set for a vacation to Kiawah with his wife, asked Mayor Rudy McCollum whether he was free to go — or whether he should stick around to help. McCollum said, "No problem, we've got the votes," Bates recalls. But the mayor didn't. One council member was away on vacation, and the remaining members deadlocked. Cordish threatened to pull out.

When Bates returned to Richmond the following week, he says, there was a message from Jamison: "We need to talk."

They did. And in the next few weeks, Bates helped put heads together — Jamison, McCollum, Jim Ukrop and Brent Halsey of Richmond Riverfront Development. Also involved was Beverley W. Armstrong, the vice chairman of CCA Industries Inc., chairman of Richmond Renaissance's economic-development committee and a longtime friend.

"Johnny wanted to get it done," Armstrong says. The group tried to figure out how to restructure the deal. In doing so, Armstrong says Bates "wouldn't take no for an answer." "He just wanted it so badly," Armstrong adds. "He wanted to find a way to make it work."

One of Bates' solutions was to work with Dominion Resources, which owned the land. Dominion agreed to lease, rather than sell, the land to Cordish (and Richmond developer Daniel Corp.) at a more favorable rate.

In early September, Jamison announced a new proposal to City Council. Cordish and Daniel would develop Riverfront Village on Brown's Island for $80 million, with $4.6 million in taxpayer incentives and $12 million in tax abatements.

Council agreed to the plan.

Bates says credit should be shared with Jamison. As for Dominion, he says, its cooperation showed they were good corporate citizens. "It really made the transaction happen."

Bates was integral in helping resurrect the deal, Armstrong says. Because of his relationship with Cordish, Armstrong says, "he could develop a rapport with them that helped get it out of the ditch." And his knowledge was key. Where the city lacks experience in such deals, Armstrong says Bates has done it his whole life.

In addition to the Cordish development, Bates has played roles in other projects that have come to a head in 2002.

With construction underway on the new convention center in early 1999, Richmond Renaissance realized it needed to step up revitalization around the center. The city would need to clean itself up, build more hotel rooms and offer a thriving downtown.

"But we didn't have any tenants, or any investment, or anything," Bates says. Renaissance, a public-private group organized to connect the city with business leaders and make downtown more viable, hired a consultant. The city had a general master plan. Bates worked with the city and the business community to come up with the specifics.

That led to the city's selection of Chicago developer Gary A. Beller as the area's "master developer." In September 2001, Beller announced his plans to redevelop downtown. Bates, who had helped choose him, negotiated deals to acquire such property as the Miller & Rhoads building — where Beller would build a new hotel.

In 2002, Bates says: "We figured out what we wanted to do. We got a developer. And we got the property."

His team at McGuireWoods also helped figure out a way the city could pay for its part of the improvements: a Broad Street Community Development Authority. The authority, which is separate from the city, is scheduled to issue bonds to raise some $80 million to $90 million starting in January 2003. The money will pay for parking decks, for tearing down 6th Street Marketplace and to fund utility improvements and streetscapes.

While the developers were working, many of Richmond's arts organizations had banned together to build the Virginia Performing Arts Center. The planned performing-arts magnet was to be centrally located in the former Thalhimers building. And it needed $105 million.

In 2001, Bates recruited Jim Ukrop and hired Brad Armstrong to lead the foundation charged with raising that money. This year, the rest of the team was put in place, and negotiations were completed with the Landmark Theater, Theatre IV and the Carpenter Center. The foundation kicked off its campaign in November. Beverley Armstrong says Bates has helped get it off the ground. "He has been a tireless worker toward getting the foundation established," he says.

Through the years, Jamison agrees, Bates has proven to be one of Richmond's "most conscientious city fathers."

s an attorney, Bates spends about 75 percent of his time working with cities across Virginia. He says Richmond, like other cities in the state, is in trouble.

"Cities are in bad shape," Bates says. "They are in an increasingly untenable position where their revenue sources continue to decline, and the burdens of services continue to increase."

The state and federal governments aren't helping, he says, by setting limits on the cities' abilities to raise taxes and by limiting annexation that could grow the tax base. On top of that, there are demographics to deal with. "The way that life is lived in the United States seems to favor suburbs," he says.

Richmond has been fighting such challenges for 20 years, he estimates. Recently the city has seen residential growth — a key to raising revenue. That trend needs to be fostered, he says. "Because we can do all we want with renovations, and buildings, and projects of all sorts, and spend tens of millions of dollars, but if we don't have people living here, it's still going to be: drive in, do what you want to do and drive home."

So the city must make investments, he says. It must capitalize on what makes it unique. Which brings us to the 6th Street Marketplace.

In 1982, the bridge over Broad Street, symbolically connecting races and meant to energize retail activity downtown, was crowned as the city's saving grace. It became a reality, in part, because of the work of the newly established Richmond Renaissance.

As counsel to Richmond Renaissance, Bates was the attorney who helped forge the deal for the marketplace. Today, the project has failed financially, and is doomed to come down with the new projects on Broad. But Bates is not swayed by criticisms of the marketplace and its end.

"I agree that financially it was not successful," Bates says. "But it was not built to make money." He contends that it succeeded in several ways. For example, he says, "It generated enough peripheral development so that what we're doing today on Broad Street is possible." It also cemented Richmond Renaissance, he says, and gave the group credibility.

Such an attitude — seeing the upside — seems to be ingrained in Bates. Cynicism bothers him like nothing else.

"He gets terribly upset with people who say negative things about the city and don't ever look for the good," says his wife, Beverly.

Cities and their political leaders must make the best bets they can on development, Bates says. Like all cities, Richmond must discover and invest in its uniqueness.

"There are a whole lot of people that find fault with a bold decision to make an investment like that," he says. "I would like, very much, for those people to not say how stupid it is, but to say what the alternative is. … What would you have us invest in? What would you do? Or are you just going to bad-mouth us until we all leave town?"

Bates, at least, isn't going anywhere. "I do feel my roots in the city of Richmond very strongly," he says. "And that's influenced me. I really do bleed the city."

He can picture what's coming for Richmond: A new downtown. A riverfront revitalized. A performing-arts Mecca. Some Richmonders say they will believe it when they see it. Bates believes it, period.

Does he see the future of Richmond? He smiles and replies, "I think about it all the time."