The Roanoke Times | File September

The first few houses at the Sunset Cay development, off Hendricks Store Road in Moneta, sit unoccupied and for sale.

A developer at Smith Mountain Lake has drastically cut back plans for a mixed-use project -- nixing for now 1,500 off-water homes and a golf course planned in Moneta.

Given the state of today's economy and real estate market, "we are not biting off anything like that," said Jim Fields of Smith Mountain Lake Partners, the group developing Sunset Cay.

This week, Fields confirmed the company put on hold previously announced plans to purchase more than 400 acres in the Hendricks Store Road area for its Sunset Cay project. As the first nine homes at Sunset Cay sit unoccupied and for sale -- with prices starting at $495,000 -- Fields said his focus has shifted to commercial development.

Also this week, StellarOne, a regional bank, said loans at the lake area are hampering its financial performance.

A telephone call and e-mail to the Ed Barham, president and chief executive officer of StellarOne, were not returned Friday, but records filed in Bedford County Circuit Court show earlier this year the bank appointed the Roanoke law firm Whitlow & Youell as the substitute trustee of Smith Mountain Lake Partners' $13 million deed of trust.

"Sometimes the bank will get outside counsel related to potential foreclosure," attorney Mike Whitlow said.

But naming a substitute trustee may not always be significant, he said. A substitute trustee can be appointed if the names of bank officers on a loan are outdated, for example.

Whitlow declined to comment on Smith Mountain Lake Partners' financial situation or the specific reason his firm is now involved -- including whether foreclosure is looming.

Court records also showed the contractor R.M. Gantt Construction of Lynchburg placed mechanics liens on eight of the nine homes in Sunset Cay in February. In April, Smith Mountain Lake Partners satisfied the debt with a loan from Wachovia for $537,375.

The Bedford County Board of Supervisors approved a rezoning request for the project one year ago, but Smith Mountain Lake Partners never closed a deal to buy the more than 400 acres of farmland from Gene and Marie Batten Saunders.

Plans for the first phase of the community were unveiled in October 2006 --132 single-family homes bearing the mark of world-renowned interior designer Marie Abercrombie. Her name since has been dropped from Sunset Cay's Web site and the developer confirmed Abercrombie will not fashion the development.

In early 2007, Smith Mountain Lake Partners purchased the hotel, marina, campground and restaurant that formerly was Campers Paradise, on Virginia 122 just east of Hales Ford Bridge. Weeks later Smith Mountain Lake Partners announced plans to expand the development to farmland surrounding the first phase and proposed a mix of more than 1,500 single-family homes and multifamily dwellings along Hendricks Store Road.

The former restaurant at Campers Paradise was closed, the space was renovated and Harrison's Restaurant at Sunset Cay opened in its place. Mike Loflin of Smith Mountain Lake Partners said Wednesday that Harrison's has closed for the season and will reopen in the spring.

"We decided to close for the season and reopen in March to concentrate on The Shoppes," Loflin said.

The Shoppes at Sunset Cay is a commercial project under construction on Hendricks Store Road. Four restaurants, a national fitness franchise and an interior design center are planning to locate there.

While the former owners of Campers Paradise closed for two months every winter, this is the first closing for Harrison's, which is in its second year of operation.

This fall the restaurant closed even earlier than anticipated because of low traffic to the eatery.

"More people are staying home and belt-tightening," Loflin said.