Friday, March 12, 2010
Cambria Suites developer gets 2-month extension
The Roanoke hotel must open by May 20 to be eligible for up to $1 million in grants.
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The latest deadline extension offers two more months to developers of the delay-plagued Cambria Suites hotel in Roanoke to open and thus qualify for up to $1 million in grants from Roanoke's Economic Development Authority.
In a letter to the city and the authority, the Roanoke Hotel Group cited snow-related construction delays at the Reserve Avenue site and asked city and authority officials to extend a completion deadline from March 20 to May 20.
May will mark the third anniversary of the start of construction of the 127-room hotel located within the redevelopment area along Reserve Avenue and South Jefferson Street. Developers envision renting rooms to guests visiting the nearby Carilion Roanoke Memorial Hospital, Carilion Clinic and a new medical school under construction.
Brian Townsend, assistant city manager, said Thursday that a grants-related performance agreement dated Sept. 20, 2007, includes a "force majeure" provision. It allows a deadline extension for delays caused by circumstances beyond "the reasonable control" of developers.
In this case, he said, the circumstance was the prolonged presence of snow cover that stalled grading and construction of parking lots, landscaping work and the like.
"The city has no objection to this claim," Townsend said.
Neither does the economic development authority.
Chuck Hunter, chairman, has administratively approved the extension. The approval does not require consent of the full authority, said Sam Darby, its attorney.
The performance agreement initially set a deadline for the same date in 2009 and required that the hotel be up and running by then. On Sept. 8, Roanoke City Council agreed then to extend the Roanoke Hotel Group's deadline to March 20 after financing issues and a contractual dispute slowed work. The force majeure provision does not require action by city council.
The developers' opportunity to apply for annual economic development grants is tied to the costs of altering the building's design because of its presence in a flood plain adjacent to the Roanoke River.
In addition to the deadline, other grant conditions hold that the developers invest at least $14.4 million in the project and generate sufficient tax revenues for the city through real estate and occupancy taxes.
Snags aplenty have plagued the construction of the hotel since work launched nearly three years ago. Delays have been attributed to the flood plain alterations, a change in architects, restructuring of project financing and conflict with a regional general contractor that ultimately walked off the job.
Wisconsin-based Telemark Hotel Developers has been involved with the Cambria Suites project from the beginning.
Telemark bought the 6.4-acre parcel for the hotel from Carilion in 2006 for $925,000, the amount Carilion paid the Roanoke Redevelopment and Housing Authority for the land and for raising the site above the flood plain.
Kjell Kaashagen, a Telemark principal, could not be reached for comment Thursday.
In late November, Kaashagen described the possibility of a second project on an adjacent parcel closer to Franklin Road --a high-rise condominium complex.
Cambria Suites is a franchise brand of Choice Hotels International, a publicly traded company based in Maryland.
