Alan Kim | Roanoke Times

The former Red Lion Inn.

The Virginia Tech Foundation could be teaming with a former Hokie football star to bring a multimillion-dollar, mixed-use development to Blacksburg.

Bruce Smith Enterprise LLC will conduct a feasibility study on a proposed redevelopment of the former Red Lion Inn site at U.S. 460 and Prices Fork Road.

The proposal calls for approximately 225 apartments to sit above 45,000 square feet of retail space.

The development would also include a limited-service hotel of about 150 rooms and an additional 5,000 square feet of signature retail space on the 13-acre site, owned by the foundation since the 1960s.

Smith estimated the project would cost $35 million to $40 million. He said he's amazed at how the town has grown and that he hopes to be part of future growth.

"Blacksburg will always be a part of me," he said. "I'm impressed each and every time I have an opportunity to come back."

Smith was one of 10 developers who made project proposals last spring, said Ray Smoot, chief operating officer of the foundation. Smoot said Smith's proposal was chosen last week. Tech announced the decision Monday.

Smith, a star defensive lineman at Virginia Tech in the 1980s who went on to become the NFL's all-time sack leader during a 19-year NFL career with the Buffalo Bills and Washington Redskins, started the development firm in 2004. He also served on the university's governing board from 2002 to 2003 before stepping down because of time obligations to football.

Smoot said the proposal was chosen because of its feasibility and potential to make money -- not Smith's connections to the university.

"It's always nice to deal with people that you know, but in this case that was true with at least several of the people making proposals," he said.

Smith and his partners now have 90 days to conduct a feasibility study to gauge the market and decide on further details of the project before coming back to the foundation with an offer.

The Red Lion Inn was a Virginia Tech landmark for years, and Smith said it was one of the first places athletic department officials took him on his recruiting visit.

Owned by another former Hokie and NFL star, George Preas, it opened in 1973 on land leased from the foundation until closing in November 2004.

"It was full of life," Smith said. "I was taken aback to hear it had closed."

Smoot said this would be another land-lease agreement, with the foundation receiving a share of profits in addition to money from the lease.

Details of the lease would be negotiated after the feasibility study. Smoot said the foundation would receive 25 percent of the profits of the project beyond a 12 percent return. No foundation funds would go toward the project.

Smith's partners would include the Armada Hoffler Development Co., Drucker and Falk LLC, Barcelo Crestline Corp. and CMSS Architects.

Smoot said the track record of the groups involved was another factor in the decision.

Smith worked with Hoffler in his first commercial real estate endeavor in Boynton, Fla., in 1995. The two have also partnered on projects in Washington, D.C., including the Mandarin Oriental Hotel and the Swedish Embassy, near completion in Georgetown.

All of the groups involved in this proposal are also involved in the 17-block, $400 million Town Center in Virginia Beach. Located at the core of the city's emerging central business district, the center will provide a mix of multilevel upscale retail, restaurants, apartments and offices, as well as a performing arts center.

Smith said this development would be similar, though on a much smaller scale.

The foundation, established in 1948 to manage the school's endowment and other private assets, opened the Inn at Virginia Tech and Skelton Conference Center last July.

The $43.6 million deluxe hotel sits less than a mile from the Red Lion site. The foundation also owns the Hotel Roanoke.

Smoot said the Inn at Virginia Tech has the ability to bring in more people through conferences than it can accommodate with beds. The overflow crowds would benefit other hotels in town, including the proposed hotel.

"The feasibility study will either validate or question whether more hotel space is needed," Smoot said.

Smith said the project would take about 18 months to complete. Construction could begin after what Smith expects to be a short negotiation following the study.

Blacksburg developer Bill Ellenbogen, who along with a partner and help of the Virginia Tech Foundation is expanding University Mall, said he couldn't comment on the proposal, but questions how much more retail the town can sustain.

The question, he noted, will not necessarily be answered by developers.

"There is currently a lot of vacant retail space, and to assume that there is an unlimited demand may not be a correct assumption," Ellenbogen said. "In a free market like we have, the tenants ultimately make a decision about whether or not the market is viable."

Blacksburg Partnership executive director Diane Akers said she didn't know too much about the proposal either, but hoped the study would show there is a market.

"I don't know the details, but it's certainly good for Blacksburg" that they're looking, Akers said.

ARMADA HOFFLER DEVELOPMENT CO. Founded: 1979

Headquarters: Virginia Beach

Operations:Real estate development and construction company; has developed and constructed more than 19.5 million square feet of commercial real estate in more than 15 states with a market value in excess of $2.4 billion.

DRUCKER & FALK LLC Founded: 1938

Headquarters: Newport News

Operations:Multifamily (apartment) fee management, commercial fee management, commercial sales and leasing, senior housing, fee development.

BARCELO CRESTLINE CORP. Formed in a 2002 merger of Crestline Capital Corp. and Barcelo Corporation Empresarial

Headquarters: McLean

Operations:Crestline Hotels and Resorts Inc. is the hotel management subsidiary of Barcelo Crestline Corp. and currently manages and leases 39 hotels, resorts and conference and convention centers. Managed properties include Marriot, Hilton, Renaissance, Westin and Radisson brand hotels.

CMSS ARCHITECTS Founded: 1982

Headquarters:Virginia Beach

Operations:Architecture design, urban planning, interior design and landscape design