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win-win development solutions

Robert Lee: Negotiating
win-win development solutions

Robert Lee, the new executive director of Rochester Downtown Development Corp., is spending a rare day at the organization’s Alliance Building headquarters.
One of his first acts in the job was to cut time spent in the office. The move in part reflects Lee’s long familiarity with RDDC.
But it also is an accommodation to his schedule. A precondition of Lee’s accepting the job was the ability to keep up a private real estate consulting practice he runs out of his Webster home.
Members say the change also shows how eager the organization was to entice Lee into the job.
The man he replaced, Larry Edwards, died in February after an eight-month battle with lymphoma.
Lee–and maybe only Lee, they say–could step in without skipping a beat.
A board member and an RDDC linchpin since 1975, Lee was the organization’s chairman at the time of Edwards’ death.
“I can think of no one better suited to take on the job,” says Jack Bowman, Xerox Corp.’s director of corporate real estate in Rochester.
An RDDC board member himself, Bowman calls Lee a master negotiator.
“He has the ability to find win-win solutions. Bob can get parties you thought would never even get in the same room together to work out solutions.”
Such negotiating skill is much-needed in the job.
RDDC is a sort of neighborhood association for heavy-hitters in downtown Rochester real estate.
Although its 135 members include small businesses and property owners, the organization’s tone is set by goliaths such as Eastman Kodak Co. and Bausch & Lomb Inc., developers like Farash Corp. and regional banks. All have big dollars invested in downtown property.
The group embodies the mixture of enlightened self-interest cum civic duty for which corporate Rochester often pats itself on the back.
When the big downtown real estate deals are cut, RDDC often can be found hovering in the background, tending the link between city and private-sector interests.
“What they do, they do well,” says Jeffrey Carlson, City Hall chief of staff, of RDDC.
Bowman says the group figured in the resolution of the city-county dispute over the downtown stadium, helped end a months-long impasse that had stalled construction of the Hyatt Regency Rochester, and engineered a downtown assessment district under which members pay for extra touches such as street cleaning.
These efforts might be viewed merely as moves to protect the millions of dollars in RDDC-member property values. But they also are part of a larger scheme, a quasi-utopian vision of Rochester’s downtown advancing from a reasonably healthy business center to become a living neighborhood with housing, shops, restaurants and a street life after 5 p.m.
Lee was key to bringing all three efforts to fruition, and a key shaper of RDDC’s wider agenda, board member Bruce Russell says.
A vice president and director of corporate real estate for Kodak, Russell has a healthy professional respect for Lee’s abilities.
“He’s very well-networked, but the real thing is that he is a very astute deal maker,” Russell says. “He comes to the table with such a broad-based real estate knowledge and specific knowledge of downtown that he can make things work.”
Lee sees himself as more of tinkerer. Or to use his favorite word, an “unbundler.”
The term, he explains, signifies a process whereby one simplifies by breaking a problem into component parts that then can be reassembled in a more efficient form.
Indeed, he credits a long, successful business career to his proficiency as an unbundler.
Lee, 55, recently retired as upstate director of corporate real estate and corporate security for Chase Manhattan Bank N.A.
It was a position he had risen to over 32 years in a tenure that began with Lee working for the old Lincoln Trust Co. of Rochester.
While he worked for a bank, Lee never was a banker as such.
“I am the only 32-year banker I know of who never made a loan,” he says.
A Rochester native, Lee started at the bank seven months after he graduated from Hobart and William Smith Colleges in 1963.
An economics major, Lee had married in his sophomore year and was the father of the first of two sons by the time he earned his bachelor’s degree. (His first marriage ended in divorce after 21 years. He wed his present wife, Marilyn, in 1984.)
Propelled by family responsibilities, Lee went to work for Rochester’s Sibley, Lindsay & Curr department store immediately after graduation.
Discouraged by a practice called “Chinese overtime” under which employees were paid a lower hourly rate as they worked longer hours, he quit the store before the Christmas season. By November, he had landed at the bank.
By 1975, Lee had parlayed a job appraising and disposing of properties for the estate and trust department into a position as director of corporate real estate.
When the bank became Lincoln First Bank in 1980, his duties broadened to cover oversight of corporate security and purchasing.
It was on being handed the new assignment, Lee says, that “it all fell into place.”
He was able to see how functions such as security and purchasing could be “unbundled” from other management areas and thus be more efficiently handled as central functions.
Within those areas, he also saw opportunities for further unbundling by dividing them into two categories: purely administrative duties such as facilities leasing and purchasing, and operational functions such as site management, food service and security.
Lee then arranged functions with two sets of managers, one operational and one administrative. Everything that did not go into one group went into the other.
“The same people are not necessarily good at both,” he explains. “An operations guy is usually terrible at administration and vice versa. But the beauty of the system for me was its simplicity. I was able to arrange things so I only had two people reporting to me.”
It must have worked.
When Chase acquired Lincoln First in 1984, it expanded Lee’s role and method to cover subsidiaries in Maryland, Ohio, Arizona and Upstate New York.
Lee describes RDDC as being organized along much the same lines. It is divided into several committees: Bowman heads a parking committee, M&T Bank regional president Brian Hickey heads a housing committee and Lee himself heads a group focused on High Falls development, for example.
As director, Lee says, he can easily scan committee heads’ reports and thus readily keep tabs on the activities of 42 separate board members.
The organization’s paid staff, meanwhile, is limited to two part-time and two full-time workers–the better to keep it from evolving into a bureaucracy, Lee believes.
The idea of keeping RDDC lean and focused on its goals rather than on organization building is a point on which Lee is adamant.
The group’s main failure has been not to develop the mid-market downtown housing central to its vision of creating a true Inner Loop neighborhood.
Lack of interest by no means is the main obstacle. Over the past four or five years, several developers have floated proposals to build such projects. But all have come a cropper of the same hitch.
Downtown property is priced and assessed at values that reflect the primary use to which such land could be put: office space and parking. Land costs thus price would-be residential developers out of the market.
As Lee states it: “The market’s there. What’s not is the economics for the developers.”

[Rochester Business Journal Profile, 5/26/95]

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