Photos by JUSTIN COOK The Roanoke Times

Some tenants at First & Main say there are missing pieces of the project. An adjacent parking lot (above) is done but fenced off. And on the spot where a movie theater was supposed to open, there is grass.

Eugenie Ranck, owner of The Chocolate Spike, helps a customer at her shop. Ranck says she was told the movie theater is in the works. When — or if — it comes, the site is just up the sidewalk from her confectionery, raising the possibility of moviegoers dropping in for a sweet something. "It's very encouraging," Ranck says. "I want this to succeed."

JUSTIN COOK The Roanoke Times

Bull & Bones co-owner Mark Shrader talks with customers at the First & Main restaurant in Blacksburg. A lawsuit filed by Bull & Bones principals charges Fairmount Properties, an Ohio real estate development company, with fraud, breach of contract and false advertising. They say Fairmount has failed to lease a reasonable portion of First & Main and wants a judge to cut its rent because the space is not worth the $21,289 a month the restaurant owes.

| Jeff Sturgeon

jeff.sturgeon@roanoke.com, 381-1661

BLACKSBURG -- At First & Main one morning, women toted bags out of upscale clothing shops. Inside a sweet-smelling shop, a chocolatier poured truffles.

Within the hour, restaurants were serving lunch to diners.

Blacksburg's first chic shopping center -- a more than $40 million business venture financed by Wells Fargo and Boston investment company New Boston Fund -- is coming up to speed. However, as First & Main completes its first year in business, there is uncertainty within the ranks of merchants about what the second year will hold.

Vacant storefronts, one for every four spaces occupied, dot the center, which celebrated its grand opening on Black Friday of 2008. Landlord-tenant money disputes have given way to a handful of lawsuits, one of which charges developer Fairmount Properties with overpromising and underdelivering at the complex on South Main Street.

A top concern is what tenants say are missing pieces of the project. On the spot where a movie theater was supposed to open, there is grass. An adjacent parking lot is done but fenced -- off limits to all.

On the center's opposite end, where a big-box retailer was supposed to go, there is a giant mound of dirt sprouting weeds and a pumpkin vine. But like the pumpkin that grew and now rots in the field, tenants say First & Main now must be finished in order to pick the opportunity it represents or else its future is uncertain.

In spite of the difficulties, several tenants said they still are pleased to be inaugural tenants of First & Main and are sticking around. They have faith in the project's potential, they said.

"They took a very dumpy part of town and made it a very beautiful part of town," said Bull & Bones restaurant co-owner Mark Shrader, referring to the aging motel that once sat on the South Main Street property.

"Was it what was originally sold to us? No, not at all. But you have two choices. You can either be mad about it and continue to fret about it or take care of your business."

Sales are Bull & Bones are running ahead of expectations, he said. People are coming from close and far, he said, including Princeton, W.Va., and the Roanoke Valley.

Sharon Gatewood, manager of Henebry's Jewelers, said area residents are coming in and buying. She loves the location, she said.

"We need some more tenants in here, that's for sure. But I think that will come," she said.

Eugenie Ranck, owner of The Chocolate Spike, said she was told a movie theater is in the works. When -- or if -- it comes, the site is just up the sidewalk from her confectionery, raising the possibility of moviegoers dropping in for a sweet something.

"It's very encouraging," Ranck said. "I want this to succeed."

Not everyone is confident. The language in court papers is harsh.

A lawsuit filed by Bull & Bones principals charges Fairmount Properties, an Ohio real estate development company, with fraud, breach of contract and false advertising.

Promises made early on, which included that the mall would have a TJ Maxx, Fresh Market, Beamer's restaurant, Walmart, cinema, condominiums, walking path, pond, bridge and fountain were "false," according to the suit, "and/or, upon information and belief, Fairmount did not intend to perform its promises at the time they were made."

Bull & Bones said Fairmount has failed to lease a reasonable portion of First & Main and wants a judge to cut its rent because the space is not worth the $21,289 a month that the restaurant owes. The suit asks for more than $500,000, including $350,000 in punitive damages. In reply, Fairmount denied all allegations of wrongdoing.

Bull & Bones is not the first retailer to sue. In May, both Blue Ridge Mountain Sports and Jos. A. Bank filed breach of contract lawsuits against developers for alleged nonreimbursement of store improvements. Only the cases involving Jos. A. Bank and Bull & Bones are pending.

Other store owners say they have also not been paid, but developers are temporarily reducing their rents to make up the discrepancy.

In concept, the mall was supposed to have two foot-traffic generators -- a movie theater and a general merchandise retailer in a medium or big-box store -- one on each end, with nice shops and restaurants between, according to Jeanne Stosser, an executive at a Blacksburg housing development company who was part of a group of five who got the ball rolling on the center by securing land.

Although some people supported the vision to bring new retail and new tax revenue to the community, Blacksburg balked at the idea of a big-box store occupying land at First & Main, and implemented a requirement for a special-use permit that gave the town complete control -- including the ability to say no.

When Fairmount challenged the permit requirement, the state Supreme Court sided with Blacksburg.

Stosser expressed angst. She said without the general merchandise retailer, she doubts the project can function as envisioned or succeed financially as envisioned. Bringing in a theater will be difficult because of the economic conditions, she added.

Three of the empty storefronts continue to promise coming amenities, including Beamer's, Classic Image Salon and Day Spa and El Rodeo. The signs have been posted for months, but only the Mexican restaurant appears to be progressing.

"You have a very bad and disappointing result," Stosser said. "I feel really bad because if it doesn't continue, it's going to be just terrible."

She added: "I would like to see some common sense come into play somewhere down the road and hopefully keep this project together ... [and] finish it in some fashion as it was designed."

Stosser said that if the financing climate improves, she would consider building multi-family housing with retail stores underneath on the former big-box site, which she owns.

"However, it's not the best use for the property," she said. Nor would new housing boost the shopping center's foot traffic the way a big-box store would, she said.

Randy Ruttenberg, a principal at Fairmount Properties, said Thursday the company has met its original commitment to give Blacksburg a pedestrian-friendly retail center with great stores and restaurants.

In spite of it opening during the recession, it has garnered positive feedback from tenants and the community, he said.

All but eight or nine of 34 spaces are leased. More than $40 million has been spent.

At one time, Wal-Mart was ready to build a 185,000-square-foot center, he confirmed, adding it could have been open by now. Such a store has been seen from the beginning as necessary for the project's long-term success, he confirmed.

"I don't believe the door should be closed on the big-box discussion," he said when asked if it was still possible.

As for the movie theater, he said an interested party or parties have been unable to finance it because of the credit crunch, but Fairmount continues talking to lenders about ways to make it happen.

Ruttenberg urged residents to support the center.

"We are hopeful that those from the community will recognize that in order for this project to remain viable, in both the short and long term, they will have to continue to support the stores within it," Ruttenberg said.