Check It Out:

What are your favorite local places for shopping, pampering or entertaining? Vote now in this year's Best Of Holiday Shopping readers' choice poll.

Roanoke council OKs sale of former health department building

A group of investors was unhappy with how the $10 sale was undertaken, calling it an "inside deal."

View Larger Map

David Ress | 981-3253

Tuesday, August 20, 2013

Roanoke will go ahead and sell its old health department building on Eighth Street Southwest to developer Ed Walker, who wants to renovate the 62-year-old landmark into apartments and commercial space.

The city council agreed Monday to sell the building to Walker for $10, who also will be on the hook to pay the city $140,000 if he doesn't finish the project in three years.

The vote was 6-0, as council members rejected criticism from a group of real estate investors about the second $10 sale of a city building in four months. Councilman David Trinkle was not at Monday's meeting.

"It's not about the building, it's about the way things are done," investor Roger Malouf told the council. Malouf, who is running for commissioner of the revenue, helped organize a group from Real Estate Investors of Virginia, a local association of property owners, that proposed buying the old YMCA building on Fifth Street for $50,000. The council voted in May to sell that building for $10 to developer Faisal Khan, who said he would invest $7 million to renovate that building. "It seems to me like a lot of these things are inside deals," said Dallas Powell, another member of the Real Estate Investors group.

Mayor David Bowers said that the performance bond Walker is under makes the sale a valuable deal.

"It's not just $10; you have to enter into a performance agreement . You have to put in millions of dollars," he said.

"This is not a question of $50,000 versus $10. It's about the long-term impact on the community," Vice Mayor Court Rosen said, adding that likely tax revenues in the future from either project would far exceed $50,000.

Malouf said his group was willing to accept a performance bond for the YMCA building and had the financial wherewithal and development experience needed to do the work.

He and his fellow investors said the city did not give adequate notice when the YMCA or health department buildings were for sale.

The city has seen little interest in the health department building, which has been vacant since 2007, Assistant City Manager Brian Townsend said. He said the city hoped the building would become a signature project to help anchor its revitalization efforts west of downtown Roanoke.

Officials asked developers for proposals for the building last year, but none were responsive. Some months later, though, Walker approached the city saying the completion of his River House project in the Wasena neighborhood freed him to tackle the project.

Walker has also renovated the Patrick Henry, the Cotton Mill Lofts, the Grand Piano & Furniture Co. building (now the Hancock) and the former Colonial American Bank building.

In other business, the city council:

Authorized Roanoke's participation in a new regional broadband authority to help bring faster, cheaper Internet service to the Roanoke Valley. The authority would have the job of developing broadband infrastructure, including forming partnerships with private firms or actually owning assets. Roanoke County, Salem and Botetourt County are set to vote on joining the authority later this month.

Formally amended last year's school board budget to recognize that spending ran ahead of its budget. The increase for the year ended June 30 was $6 million in the general fund, reflecting outstanding purchase commitments as of that date and bringing total spending to $155 million. Meeting new nutritional standards added $1 million to food service spending, bringing that total to just under $7.3 million.

Saturday, September 14, 2013