Wednesday, October 24, 2007
Riverside Centre of Research and Technology's signs of progress
The hotel at Roanoke's Riverside Centre site may not be the hub of much bustle, but other projects there are.
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Photo by Josh Meltzer | The Roanoke Times
Construction crews work on the foundation of a parking garage that will be part of the complex at Riverside Centre for Research and Technology in Roanoke. Several structures are planned for the biomedical office park.
Carilion Clinic's construction is well under way at the Riverside Centre site. Mounds of red earth and heavy machinery are visible just beyond the fence, signs of progress on a new office building and parking garage, both of which are on-schedule, say officials involved with the project.
But on the other end of the park's footprint, weeds entwined in metal bars are sticking out of the earth at the spot of a planned Cambria Suites hotel. There has been no work on the hotel since at least June, and the developers are still trying to secure financing, even after the city granted them a large incentives package last month.
Construction of the 127-room hotel should begin on Reserve Avenue before the end of this year, according to Warner Dalhouse, a Roanoke-area banker and an investor in the hotel.
Dalhouse, one of 16 investors, said Telemark Hotel Group, the Wisconsin-based developer, is in the midst of completing financing for the enterprise. The group is searching out various lending sources, he said.
But it is unclear why Telemark still needs funding, or how much. Ryan Eller, a partner in the group, did not return several calls Tuesday for comment about the project.
Still, Telemark expects construction to begin on the hotel in the next 45 to 60 days, Dalhouse said.
And so far, the investors, who are mostly from the Roanoke area, have a large sum of money tied to the project. Dalhouse would not specify how much he has invested, but he said each investor has given the developers a similar dollar amount -- each of them put in a six-figure amount which could represent as little as $1.6 million total. The project has been estimated at $15 million.
Telemark announced its plans to build a Cambria Suites last year. At the time, the business partners said they expected the hotel to open by the summer of 2007.
They also requested financing help from the city because the hotel would be built in a flood-prone area. Last month, they received it.
On Sept. 17, the Roanoke City Council approved a $1 million incentives package for Telemark that is tied to the hotel's performance. The developers can receive half of the amount of real estate and occupancy tax revenue generated each year for six years if the hotel produces $275,000 or more. If the hotel doesn't generate this amount, Telemark receives no funding that year.
Eller, who is based in Dallas, said in August that whether his company received money from the city would determine if the hotel's progress continued.
Now at this future hotel lot, bundles of reinforcing bars marked "Cambria Suites Hotel" and stacks of white plastic pipe lie on the ground beside a row of locked storage trailers. Weeds encroach on the sidewalk, and the only signs of life Tuesday morning were birds roosting on a partly completed wall.
Roanoke building commissioner Jeff Shawver said there haven't been any building activity or inspections since May. Telemark's city-issued building permit will expire next month, Shawver said.
Meanwhile, site work is under way on the new clinic office building, scheduled to open in summer 2009.
When finished, the four-level structure will become a main hub for specialty physicians and outpatient services, said Curtis Mills, Carilion Clinic's senior vice president. It will also include a ground-level parking area and lobby, he said.
The cost is estimated at $70 million for the 211,000-square-foot structure at the corner of Jefferson Street and Reserve Avenue. Mills said, in preparing the site, workers uncovered the remnants of a railroad roundhouse, where trains were repaired.
Construction on the main part of the office structure is expected to begin in early 2008 with the erection of its steel framework, Mills said.
Next door, interior construction is also progressing on the park's four-story office building that houses Luna Innovations, and several other office groups, including the Carilion Foundation.
Virginia Tech is currently moving to a space on the building's first floor, where it will operate an obesity research lab. Some floors are still vacant or unfinished.
Mills said Carilion intends to refine those areas as tenants sign on, but right now, no outside tenants have expressed interest in leasing the space. In the meantime, Carilion plans to move some of its own offices into the vacant slots, he added.
Closer to completion is a 450,000-square-foot parking garage, which will have 1,500 spaces on seven levels, Mills said. The cost is about $27 million with an opening date set for October 2008.
Eric Earnhart, a Carilion spokesman, added that plans for a $58.5 million medical school and research building are also still on track, despite recent calls from Gov. Tim Kaine to rein in state spending. The move comes to offset a state budget shortfall and includes a proposed $10 million cut to Virginia Tech's budget.
Carilion, which has paired with Virginia Tech to establish the state's fourth medical school, is seeking money from the state capital to fund the building's one-time capital costs.
"We're committed to building the research institute on schedule," Earnhart said, adding that it is too early to know whether the shortfall will have an impact.
Development of the business park comes amid restructuring efforts aimed at remaking Carilion's chain of hospitals and doctors offices into a multi-speciality medical practice. Last month, the nonprofit completed a $105 million consolidation of the offerings of its two Roanoke hospitals. Carilion Roanoke Memorial Hospital, which is situated a couple of streets from the business park, was also expanded.
Because the park was established with more than $20 million in taxpayer money, land being developed by Carilion will be taxable property.
jenny.boone@roanoke.com 981-3235 christina.rogers@roanoke.com 981-3264
