A business that sits in the way of a growing medical complex has failed to convince a Roanoke judge that it languished under the threat of being condemned for the project.

William and Maeona Stegall claimed in a lawsuit that they suffered financially when the Roanoke Redevelopment and Housing Authority adopted plans to condemn their Williamson Road property in 2001 and then left them in limbo for seven years.

The Stegalls and a second property owner have refused to sell their land for the Carilion Clinic complex -- only to face the prospect of having it taken from them through eminent domain.

In November, the housing authority filed court papers to condemn the Stegalls' property to make room for the expanding Riverside Center, which includes Carilion offices, other health care businesses and a medical school and research center slated to open next year.

By then, the Stegalls had already taken the initiative, claiming in what's known as an inverse condemnation lawsuit that they had been harmed by the authority's actions.

But in a Sept. 21 opinion, Roanoke Circuit Court Judge William Broadhurst rejected claims that a "cloud of condemnation" hanging over the property since 2001 diminished its value.

Broadhurst noted that the Stegalls ran a tire business from the site in the 1200 block of Williamson Road, and then rented the property to a similar business, for much of the seven years in question.

"There is simply no evidence that the property has been rendered useless or that there has been even a partial diminution in value of the premises," Broadhurst wrote.

The judge also pointed to evidence presented by the authority that the property rented for amounts at or above market levels, and that its value had actually increased since 2001, when plans for the medical complex were launched.

Now that the inverse condemnation lawsuit has been dismissed, the authority can move forward with its efforts to take the property.

Virginia's condemnation laws, also known as eminent domain, allow a public entity such as the housing authority to take property designated as blighted for a legitimate public purpose.

If a condemnation petition is approved by a judge, a jury is then empaneled to determine a fair price for the property.

B&B Holdings LLC, which operates a flooring company in the medical park, is also facing condemnation. A decision in that case is expected to come before the Stegall case goes to trial.

"Both of them believe that they were not treated fairly by the housing authority," said Joseph Waldo, a Norfolk attorney who represents both property owners.

"Neither of them is politically connected, and they had to fight at every turn to protect their property."

During several days of testimony and arguments over the summer, Waldo questioned the relationship between Carilion and city officials -- arguing that they relied on unsubstantiated facts while developing what became the South Jefferson Redevelopment Area.

A key area of contention was the data used by the authority to determine the area was blighted, and thus appropriate for condemnation.

Since 2001, the authority has spent more than $20 million buying and developing property in the area to be used for the Riverside Center. With the exception of B&B and the Stegalls, all of the property owners agreed to sell.

The Stegall property lies on the northern edge of the complex, and there are no immediate plans for the site, according to Mark Loftis, an attorney for the housing authority.