Saturday, March 01, 2008
Rooms to grow
The Cambria Suites hotel project near Carilion Clinic is back on track after a 10-month delay.
The latest from The Ticker blog
Photo by Sam Dean | The Roanoke Times
All is quiet on the site of a future Cambria Suites hotel Friday. The exact reasons for the construction delay are not clear.
Courtesy of Choice Hotels
The finished hotel should have 127 rooms, a two-story lobby, a curved pool and a coffee bar.
After nearly 10 months of sitting dormant, a hotel site that will border a significant medical business park in Roanoke may be back on track.
Last year, crews began to lay foundation at a 6-acre site where a 127-room Cambria Suites hotel is planned.
The property abuts one end of the Riverside Center for Research and Technology on Reserve Avenue, a Carilion Clinic-owned project that will feature the main clinic building, a four-level office complex, parking garage and medical school/research center.
Since May, no work has progressed at the hotel site that was planned to showcase a Cambria Suites -- a new Choice Hotels International brand -- with $100-a-night rooms, a two-story lobby, curved pool and coffee bar.
Telemark Hotel Group first announced plans to raise this hotel in 2006, with the expectation that it would open in 2007. Now all that remains of the project is a wire-framed foundation and a slab of concrete, standing among dirt mounds and tall weeds.
That could change.
According to a city official and an investor in the hotel, construction will resume this month, with an opening slated for 2009.
"The site of this hotel will no longer look as forlorn as it has for the last nine months," said Warner Dalhouse, a banker and one of 16 investors.
Brian Townsend, assistant city manager for community development, said he spoke with the developers two weeks ago.
"Every indication that we've gotten from them in conversations are the project is moving forward, that their financing is coming together," he said.
Roanoke also still is listed as one of Choice Hotels' future openings, according to Heather Soule, a spokeswoman for the Maryland-based company. She confirmed the estimated construction and opening dates. Still, the exact reasons for the delays in this $15 million project are unclear.
Ryan Eller, a Dallas-based partner in Telemark Group, did not return several calls this week for comment about the hotel's progress.
Dalhouse said construction hit a standstill because Telemark needed to obtain necessary financing to make the project go. It's unclear why Telemark needs more funding.
The city paid $3.2 million to ready the site for hotel development. Carilion Clinic sold the property in 2006 to a Telemark-related group for hotel and other commercial and retail development.
But Telemark has sought increased funding for the project for the past year.
After the city rejected the development group's request for $2 million last spring, Telemark went back to the drawing board to come up with new cost estimates.
In September, the city council agreed to grant Telemark $1 million in tax rebates. The agreement states that the developers can receive half of the amount of real estate and occupancy tax revenue generated in a year if the hotel produces $275,000 or more.
It also has to open within two years of the agreement, which would be September 2009.
Eller said last year that his company needed more money because the proposed hotel site sits in a flood-prone area. Its structure would have to be raised on a platform to make room for a parking garage underneath, work that would be costly.
HomeTown Bank in Roanoke is the lead bank for the project's financing, Dalhouse said. He added that the bank, for which Dalhouse serves as board chairman, is lending Telemark $3 million, its legal limit.
A Texas bank is providing the rest of the financing, but Dalhouse would not state the specific institution.
He also would not disclose how much money the developers have borrowed.
Dalhouse said some of the project's delays are a result of a national subprime mortgage crisis.
"Mortgage lenders are more reticent than they were before, especially for commercial projects," Dalhouse said.
Despite the fact that a Cambria Suites barely has broken ground, 16 local and regional investors have backed it financially. Last year Dalhouse said each of the investors contributed six-figure amounts, which could represent as little as $1.6 million total.
Dalhouse wouldn't disclose the names of all of the investors, but local businessman Bittle Porterfield confirmed several months ago that he is one of them.
"This project has all of the elements of a sound investment," Dalhouse said.
