JEANNA DUERSCHERL The Roanoke Times

Jay Burkholder (from left), Stephanie Burkholder and Brad Allen stand in the warehouse of their flooring company Surfaces. Roanoke officials are trying to condemn their private land to complete the biomedical park.

Roanokers looking for something bold and prosperous to emerge from the taxpayer-subsidized business-park initiative on Jefferson Street are drawn to the impressive steel structure of Carilion Clinic's new physician services building.

Beside it is an expansive parking garage that foreshadows the place becoming a new, regional hub for same-day medical care in coming years.

But just down the street, a different side of the development story is unfolding.

It's a condemnation battle over two small lots amounting to about three acres of 26 acres earmarked as the business park's primary footprint.

The case represents the first time since the business-park project began in 2001 that authorities are known to have exerted legal force against an affected property owner. All the other business owners -- more than 15, in all -- gave up their land for the plan.

In 2001, the Roanoke City Council and the Roanoke Redevelopment and Housing Authority mapped a 110-acre area around South Jefferson Street and Reserve Avenue and adjacent properties for redevelopment -- either new structures or adaptive reuse of existing structures.

Officials said 74 percent of the designated area was blighted and deteriorated or improperly developed, or both. Officials envisioned a wave of private development revamping the area over a number of years.

Two of the mapped lots belong to B&B Holdings LLC. The housing authority says it has made a bona fide offer for the side-by-side lots with the intent to buy them and enter them into the redevelopment pipeline.

With the other lots it bought, all on a cooperative basis, the authority has relocated existing businesses with compensation, demolished and removed structures and sold the real estate at a loss to Carilion Clinic to redevelop.

Carilion is already putting up a large medical office building, has finished an office building and two parking garages and plans a medical school and research laboratory. The state will furnish $59 million for construction and startup costs.

But, the owners of B&B Holdings say they won't be forced from the land where they operate a successful flooring company called Surfaces with 11 full-time workers and about 24 contract installers. They rejected the housing authority's 2006 offer of nearly $1.03 million, about $175,000 below assessed value.

The land is not for sale, they say. The housing authority filed a condemnation suit last summer.

Joseph Waldo, the company's lawyer, said in an interview last week that the company's challenge to the condemnation should not be taken as a challenge to the creation of the business park. It's a revolt against what Waldo characterized as an improper effort to transfer the company's land and the opportunity to develop it to Carilion.

"The housing authority's primary goal to take private property from one private owner and turn it over to another private owner in the name of economic development is illegal," Waldo said in court papers filed Monday.

"That's not what the housing authority's doing," responded Mark Loftis, the housing authority's lawyer, in an interview last week.

"We are acquiring property in the redevelopment area for the purpose of eliminating blight and blighting influences and redeveloping the property in accordance with the plan that's been approved by the housing authority and city council."

Loftis said the condemnation attempt is valid even if the B&B parcels support a ongoing business as long as the majority of the rest of the land in the redevelopment area was deemed blighted, as occurred.

In addition, the housing authority can transfer acquired lands to a private party, in this case Carilion, with economic growth in mind, Loftis contends.

At this point, it's unclear if the disputants will settle or go to court, raising the chance of a delay in the full execution of park plans.

But the dispute will for now provide something else for park observers to watch in addition to the construction crews.