Brawl on the mall

At the height of its short career, Danielson and Rolph’s company, D&R Development, held more than $10 million in Mall property. Onlookers credit two of their projects in particular––the Charlottesville Ice Park and the Regal Cinema building––for catalyzing the Mall’s evolution from a shell of empty buildings to an urban streetscape where people live, work and play.

Instead of enjoying the fruits of victory, however, D&R Development collapsed in a bitter legal brawl over money and control of the company. Now the fight between Danielson and Rolph has ended. The blood and sweat have been wiped up and the crowd has dispersed. As new owners with new agendas buy the remnants of D&R’s vision for “Charlottesville 2000,” bystanders wonder what it all means for the future of Downtown’s million-dollar development game.

 

It’s Friday afternoon, and the Mall teems with the sights, sounds and smells of prosperity. Swarms of bodies in summer clothes, the loose banter of after-work drinkers, the clink of silverware, the sounds of street musicians and the waft of prepared seafood.

There is a noticeable tatter in the fabric of the Mall’s historico-yuppie playground. For nearly 30 years, four buildings between 101 and 111 E. Main St., just west of Wachovia bank, have sat vacant. Home lately to a Boys and Girls Club, a real estate rental office and a troupe of rag-clad gutter punks, the four buildings present a shabby, boarded-up view to diners feasting on oysters and shrimp by candlelight at Blue Light Grill’s outdoor tables across the bricks.

Today, the buildings are an anomaly. Ten years ago, however, they fit right into the Mall’s fabric, which then could have been described as a sketchy urban dead zone. A few restaurants and bars clung to life amid numerous vacant buildings, and the Mall became desolate after 6pm.

“You could throw a rock down the Mall and not worry about hitting anybody,” says John Lawrence, who, at that time, pushed a coffee cart along the eight blocks with his wife, Lynelle. Their business would eventually become the Mudhouse.

Soon, however, the Wachovia buildings will catch up with the rest of the Mall’s commercial flavor. Last month developer Keith Woodard’s Woodard Properties put a contract on the four structures, which together are assessed at a total $1.74 million. He expects to close the deal by July. Although there are no final plans, Woodard says he envisions offices or apartments on the upper floors with restaurants and retail at ground level.

“There’s a strong demand for newly renovated historic places on the Mall,” he says. “We’re not particularly worried about being able to find tenants for the new buildings.”

The Wachovia buildings were formerly owned by D&R Development, which planned to demolish the structures and rebuild the site as part of “Charlottesville 2000,” their plan for revitalizing the Mall. D&R’s efforts with the Wachovia buildings were frustrated by the City’s Board of Architectural Review, which claimed the buildings were not merely old, they were historic. The four buildings went on the block when D&R collapsed in litigation.

Woodard’s confidence in his investment rests on the sheer number of bodies strolling past his new purchase every day—and evening. Many Downtown observers say they can trace the Mall’s current vitality directly to D&R’s vision. In other words, the company may be dead, partners Lee Danielson and Colin Rolph may now be adversaries, but the aftershocks of their business are still being felt.

“Lee Danielson started this whole thing,” says Chuck Lewis, the developer behind York Place and a former rival of Danielson. Lewis says D&R’s initiative spurred other developers to spend big money Downtown: “If it wasn’t for Lee, we’d still be where we were 10 years ago. He came to town and said what the Mall should be when it grows up.”

In 1992, Danielson moved his wife and four children from California to a farm in Keswick. “I came here to retire,” Danielson told C-VILLE recently. At the time of his move, he was 45.

The former linebacker arrived with a multi-million dollar trust fund and a background in building high-end condominiums in Los Angeles. With an athlete’s brash confidence, Danielson believed he could turn the dying Mall into an upscale entertainment district, along the lines of commercial districts in San Jose or Santa Cruz.

“Right away, I saw tremendous potential,” Danielson says. “But I didn’t have the financial wherewithal to do it on my own.”

Right from the start, Danielson announced his aims to the political establishment. David Toscano was the mayor when Danielson called him in the fall of 1993.

“I’ll never forget it,” says Toscano. “He called me out of the blue and asked if I wanted to have coffee.” Danielson told the mayor he wanted to build an ice skating rink Downtown. “I said, ‘You want to do what?’” Toscano recalls. “That sounded interesting.”

Danielson’s ambition appealed immediately to Toscano, a socially liberal attorney who believed Charlottesville needed a business-friendly climate to pay for the City’s growing social services budget. Entertainment, said Danielson, would bring people to the comatose Mall.

“He clearly had a vision from the very beginning that saw Downtown as an entertainment destination,” Toscano says. “Bring the entertainment, and the other economic activity would flow from it.”

With the Mayor on board, what Danielson needed next was a partner with deep pockets. “I was trying to impress other investors, but none of them would believe in it,” he says.

Given Danielson’s grand ambitions, which he called “Charlottesville 2000,” his first project Downtown was comically small. He partnered with SNL Financial owner Reid Nagle to rent a square of bricks near the Paramount Theater for $50,000. In 1995 the pair unveiled—ta da!—a newspaper stand. After a year of disappointing sales, Nagle donated the kiosk to City Hall.

Nagle wasn’t interested in Danielson’s larger schemes, so the developer mingled with Charlottesville’s elite, looking for a new partner. Although he was a paper millionaire, Danielson didn’t have enough liquid assets to secure big bank loans, and as a result he lost bids for some properties. He placed then dropped contracts on the vacant Rose building (which Lewis bought and turned into York Place) and the former Woolworth site (where Oliver Kuttner recently completed his Terraces project).

In his search for money, Danielson broadcast his “Charlottesville 2000” vision to anyone who would listen. In 1994 he echoed other developers and some City officials by calling for a Mall crossing at Second Street. Danielson was aiming to site a six-plex movie theater at 200-212 W. Main St. Although others advocated for the crossing, Danielson’s brash manner sufficiently irritated some people to the point where they formed a group called Townwatch. They rallied with picket signs to “Save the Mall” from Danielson, whom Townwatch identified as an archetypical bad-guy developer.

“We felt that a developer shouldn’t be dictating traffic planning,” says City Councilor Kevin Lynch, then a member of Townwatch. “There’s always a big question about how much City Council should give up to developers.” Ultimately, Council voted 4-1 in favor of the car crossing (the dissenting vote was from Rev. Alvin Edwards).

The Mudhouse’s Lawrence says many people worried Danielson wanted to “Californicate” the Mall with high-end chain retail shops like Banana Republic. In fact, that was exactly Danielson’s mission.

“It might have been all about his style and delivery,” says Lawrence. “In Virginia, we’ll start talking about the weather first, then you work your way around to what’s going on. Maybe Danielson just dispensed with some of the small talk.”

While Danielson’s big ideas made some people nervous, they emboldened other entrepreneurs who hoped renewed life on the Mall would perk up their businesses. Danielson’s pitch, for example, convinced the Lawrences to give up their cart in 1995 and open the Mudhouse on the Mall’s west end. “We took a risk, but we were confident things were changing Downtown,” Lawrence says.

Restaurant owner Tim Burgess was also staking his future on Danielson’s promises. He and his partner, Vincent Derquenne, contemplated relocating their restaurant, Metropolitain, from Downtown to Ivy. Danielson got wind of that and approached the partners.

“Danielson told us to hang on,” says Burgess, who with Derquenne now owns Bang, Bizou and Metro. “He said they had big stuff going on. And once he started closing on those buildings, things started happening pretty fast.”

While Lawrence and Burgess watched Danielson’s moves with guarded optimism, others thought Danielson’s cocky demeanor was setting the stage for misfortune.

“There’s a saying, ‘Don’t breathe your own exhaust,’” says Lynch. “You see guys getting big in the press, that’s always a sign their stock is about to slide.”

 

In 1995, a mutual friend told Danielson that his neighbor, Dorothy Batten Rolph, heiress to an estimated $800 million fortune generated by Landmark Communications––a media conglomerate with interests in newspapers, broadcasting, electronic publishing and cable programming, including the Weather Channel––might be interested in funding Charlottesville 2000. Dorothy was married to Colin Rolph, a native Canadian who, like Danielson, had come to Charlottesville by way of Southern California. Batten Rolph declined to comment for this article. Rolph bought into Danielson’s vision, and––as a lifelong hockey fan––was especially committed to the idea of an ice park.

With that, D&R Development was born. A big boost to the new company came in 1996, when Batten Rolph undersigned a $17.5 million loan to D&R from Wachovia bank. Danielson says that sum would have been impossible to obtain without Batten Rolph’s largesse.

“She was extremely instrumental in making the vision a reality,” Danielson says.

Rolph and Danielson seemed like an ideal match. Danielson played the role of the big-talking ideas man while Rolph’s reserved nature cast him as the silent partner with a fat billfold. According to a former D&R employee, they were close friends.

By the late ’90s Danielson and Rolph were certainly not the only people making big moves Downtown. Gabe Silverman, Charles Kabbash, Kuttner and Lewis all spent money on Mall or near-Mall properties believing that Downtown was changing. By all accounts, the competition was friendly, with developers sticking up for each other in the press. But the combination of Danielson’s personality (C-VILLE dubbed him “Central Virginia’s version of Donald Trump”) and Rolph’s checkbook made D&R Development the most powerful player.

“Having Lee and Colin come was great. It brought in more players, more people to push the envelope,” says Silverman. “They did something none of us would have done––the Ice Park and the movie theater. They could afford to take chances. They had more money, more chutzpah, you could say.”

In 1995, a smiling Toscano led a groundbreaking ceremony at a parking lot that, one year later, would become D&R’s flagship development, the $4 million Charlottesville Ice Park. Then, in summer 1996, D&R opened 200-212 W. Main with new tenants, Regal Cinema. (An ill-fated ice cream parlor and the steakhouse directly across from the movie theater were also among D&R projects during this period.)

The process leading to the cinema and ice park wasn’t smooth, however. D&R faced legal challenges from construction companies and the City. The BAR, which enforces aesthetic guidelines regarding Downtown architecture, spanked D&R when the company tried to put a stucco façade on the Regal Cinema building. The City also ordered D&R to replace several outdoor lights on the Ice Park. D&R complied, but not without public tirades from Danielson, who commanded the Planning Commission to “stay out of the way, period.” Danielson called for chief planner Satyendra Huja’s resignation and threatened never to build in Charlottesville again.

Danielson responded in 2000 to what he perceived as government roadblocks by forming a political action committee, Opportunity for All. During the City Council race that year, the pac sunk $20,000––a whopping sum in local politics––to support a business-friendly hybrid ticket of Republicans Jon Bright and Elizabeth Fortune, plus Democrat Meredith Richards. Opp for All also called 3,000 potential voters in what C-VILLE at the time branded a “push poll” to promote the controversial Meadowcreek Parkway.

There were other problems shrouding D&R, too. Faulconer Construction, which built the Ice Park, sued D&R in May 1996, charging that the developers had not paid a $326,000 bill. D&R settled the suit, but inside sources say the Ice Park’s construction was a fiasco that would haunt and ultimately doom the D&R partnership.

The company was structured like this: Rolph, Batten Rolph, Danielson and his wife, Barbara, acted as D&R’s four directors, with the women taking only a periphery interest and the men working together on day-to-day business. Danielson and Rolph each held 50 percent interest in D&R.

The pair set up limited liability companies (LLCs) for each property they purchased. For example, “Charlottesville 2000” held the Ice Park, while “Downtown Cinema Partners” held the Regal Cinema buildings. There were other LLCs for D&R’s three other holdings––the Exchange Center at 201-207 W. Main, which houses the Downtown Grille and the Southern Environmental Law Center; the four Wachovia buildings; and 200 E. Main, the former home of Boxer Learning. D&R also built a $4 million ice rink in Fredericksburg.

The strategy, says Danielson, was to keep each property a separate entity, “so one wouldn’t drag down the other.”

However, the Charlottesville Ice Park was “nowhere near” making money, according to sources close to the partnership, especially considering its expensive construction. Rolph was funneling D&R money into the Ice Park. Danielson objected to this, and, according to court documents, stated he wanted to shut the Ice Park down.

By 1997 the relationship had begun—perhaps inevitably—to deteriorate. According to a lawsuit filed by Rolph in Albemarle Circuit Court, Danielson asserted he was president of the company even after D&R hired Tim Slagle for that position in April 2000. Danielson fired some employees, Rolph rehired them. Danielson tried to change the locks on D&R’s offices to keep Rolph and Slagle out. Rolph’s suit says Danielson “refused to approve the application of funds to meet the financial obligations” of the company, “causing creditors’ invoices to remain unpaid.”

The conflict between Rolph and Danielson went much deeper than company leadership, however. D&R suffered significant debt. In 2001, the total appraised value of its properties was $10.8 million. But Danielson and Rolph each owed Wachovia $8.75 million dating from the bank’s $17.5 million loan to D&R in 1996. The company also owed First Union Bank (now merged with Wachovia) another $1.2 million on the Exchange Center building.

Furthermore, Rolph loaned Danielson “substantial sums” for personal expenses, according to court documents. In a deposition of Owen Strange, the attorney for Danielson’s father, Strange said, “As long as I’ve known [Lee], he’s been in debt. He’s a businessman.”

In a handwritten agreement dated 1996, Danielson promised to repay his debts from his share of his family’s inheritance, estimated at between $16 million and $19 million. But when Danielson began collecting the money in 2000, Rolph alleges, his partner refused to pay up.

In October 2001, with a quarterly interest payment coming due to Wachovia that D&R would be unable to pay, Rolph sued Danielson to dissolve the partnership and have its properties liquidated by a receiver. As a result of the lawsuit, Albemarle Circuit Court handed over all $10 million-plus of D&R’s holdings to developer Gaylon Beights. He was instructed to manage the properties and sell them for their “highest and best” value. Before the properties went to the open market, however, Rolph and Danielson each had a separate chance to buy them back. Danielson bought 200 E. Main and the Fredericksburg Ice Park, while Rolph purchased the Charlottesville Ice Park, the Regal Cinema building, the Exchange Center and the Wachovia buildings.

The court records are filled with Rolph’s account of Danielson’s transgressions, but they contain little of Danielson’s side of the collapse. A gag order forbids him from talking about the suit, but, naturally Danielson, who now lives in California, can’t stay silent.

“The great thing about real estate is that if one thing doesn’t work, you reconfigure it. But [Rolph] wasn’t willing to change anything about the operation,” Danielson says.

“The whole thing was mishandled from the beginning,” he says. “It never should have gone to court. In a business situation, you go through a business solution. Rolph was basically covering up his mistakes.”

Rolph would not speak on the record in response to Danielson’s comments.

 

 

In April of this year, Batten Rolph sued Rolph. In the court documents obtained from Albemarle Circuit Court, she alleges that in 1996, he began to withdraw money from their joint account to fund D&R’s projects without her knowledge. She says she didn’t learn about the “deception” until Rolph’s suit against Danielson. In June 2002, Batten Rolph says, she agreed to purchase D&R’s property from the receiver and to pay off the company’s debts to help end the Rolph-Danielson feud. Batten Rolph’s divorce suit appears to be the impetus behind the timing of the recent sales of the Wachovia buildings and the Charlottesville Ice Park.

Rolph referred queries about what he calls these “disputed” allegations to his attorney, Daniel G. Dannenbaum, who told C-VILLE “These are hust allegations in a court pleading. Nothing, obviously, has been proven.”

 

One person who claims not to know or care much about the Rolph and Danielson battle royale is Bruce Williamson. “All I know is what I read in the papers,” he says. “It’s not a matter that concerns us.”

His stance is curious, perhaps, because Williamson, along with three other partners––his wife, Roberta Bell Williamson, Robert Toby and Ellen Anderson––now owns the Charlottesville Ice Park. The four partners call themselves Acme Ice Company. They would not disclose the sale price, but the City assessed the Ice Park last year at $3.4 million.

Like Rolph, Williamson is a hockey fan, albeit a recent convert. “I learned to skate and play hockey two years ago,” he says. “I fell in love with playing goalie.”

Last year, Williamson says, at least one other party wanted to buy the Ice Park from Rolph and give the building a new use. But Rolph wanted to sell to someone who would retain the ice rink.

“We knew skating was in trouble,” says Williamson. “If we didn’t get the Ice Park, we would have built one.” He says there’s “zero” chance of the new owners dispensing with the ice.

The recent sale of some of what became Batten Rolph’s holdings––the Ice Park and the Wachovia buildings––signals the final demise of D&R. The properties that were once part of the ambitious Charlottesville 2000 vision are now in the hands of separate owners, each with his own vision. But now that the Mall has become the bona fide entertainment district Danielson believed it could be, the new owners are taking significantly less risk on the properties than did D&R.

“We’re not concerned with what happened in the past,” says Williamson. “The important thing is that those people had the vision to build this.”

Danielson left town in 2000 because, he says, his wife wanted to move back to California. “People thought I left town because I owe people money,” he says. Danielson says he doesn’t owe anybody anything, but that he lost “significant” money with the demise of D&R.

“Hello baby,” he says, “I’ve had to adjust my lifestyle dramatically.”

Danielson may be on the move again. His 8,000 square-foot home in L.A.’s Pacific Palisades neighborhood is up for sale for $7.9 million, reduced from an original price of $10 million.

Rolph is still in Keswick and refuses to discuss Danielson. “What we did Downtown was nothing new,” Rolph says. “It happened in Santa Monica in the mid ’80s. It was the right place and the right time for Charlottesville.

“Whenever I come Downtown on a Friday, and see all the people, I’m proud of what we accomplished. I’m proud for all the restaurants and businesses, for everybody.”

Posted In:     News

Previous Post

C-Ville 20

Next Post

What is it about this town? You can check out, but you can never leave.



Our comments system is designed to foster a lively debate of ideas, offer a forum for the exchange of ad hoc information, and solicit honest, respectful feedback about the work we do. We’re glad you’re participating. Here are a few simple rules to follow, which should be relatively straightforward.

1) Don’t call people names or accuse them of things you cannot support.
2) Don’t direct foul language, racial slurs, or offensive terms at other commenters or our staff.
3) Don’t use the discussion on our site for commercial (or shameless personal) promotion.

We reserve the right to remove posts and ban commenters who violate any of the rules listed above, or the spirit of the discussion. We’re trying to create a safe space for a wide range of people to express themselves, and we believe that goal can only be achieved through thoughtful, sensitive editorial control.

If you have questions or comments about our policies or about a specific post, please send an e-mail to editor@c-ville.com.

Leave a Reply

avatar
  Subscribe  
Notify of