Thursday, February 05, 2009
Delay again plagues Roanoke hotel project
Disagreements have cropped up between the general contractor and the project owner.
The latest from The Ticker blog
Work shut down again last month and remains stalled on the Cambria Suites hotel under construction in Roanoke on Reserve Avenue, where building has halted before for long periods.
Previous delays occurred when Wisconsin-based developer Telemark Hotel Group changed architects, appealed for city incentives and suffered financing challenges. At one point, the project sat idle for nearly a year.
But there reportedly is a new wrinkle this time, according to investor and former bank executive Warner Dalhouse of Roanoke, as well as the project's general contractor and two subcontractors.
"I have been in touch with the developers, and they say there are significant disagreements with the builder," Dalhouse said Wednesday.
Two mechanic's liens filed in January by general contractor J.M. Turner & Co. against the Roanoke Hotel Group LLC, the project owner, total about $1.4 million. The lien could allow Turner to collect what it is owed through a claim on the property.
Dalhouse added, "It may have to do with money, but it's not because the developer has financial problems."
According to contractors who have worked the hotel job, money is, in fact, at the root of the upheaval.
Over a barrel?
"The only thing I know is that [the developer] thought the price ought to go down because the economy was so bad," said Jay Thompson, a co-owner of Weddle Plumbing & Heating in Roanoke.
Roger Jamison, co-owner of Jamison Electric, concurred.
Ryan Eller, a partner in Telemark Hotel Group, did not respond to numerous phone calls Wednesday.
Both Thompson and Jamison said their companies left the job site in the fall because they were not being paid.
Mike Farris, president of J.M. Turner, said his company has not been paid for months.
"We have temporarily stopped work for some payment issues, and we are hoping to get those issues resolved within a week or two," Farris said. "That's our hope."
As reported by Thompson and Jamison, Farris acknowledged Telemark is citing economic conditions and attempting to negotiate a lower price.
Both Farris and Dalhouse expressed optimism that the hotel will be completed, will open and become an asset to the city and to redevelopment under way along Reserve Avenue and South Jefferson Street.
"I'm certain that the hotel is going to get built," said Dalhouse, who said he has invested about $130,000 in the project.
"But as an investor, I am concerned about the costs of these long delays," he said.
Dalhouse is a member of the board of directors for HomeTown Bank, which he said has loaned the project about $3 million. A Texas bank has provided the bulk of Telemark's financing. Dalhouse also serves on the board of Carilion Clinic.
Upscale
Nearly three years ago, word first surfaced about plans to build the upscale, 127-suite hotel in the South Jefferson Redevelopment Area near Carilion's Riverside Center development.
At the time, local officials celebrated landing another contributor to the area's ambitious redevelopment plans. The hotel construction began in May 2007.
Meanwhile, construction projects launched by Carilion Clinic or the clinic and partner Virginia Tech have added or are building several new structures at the redevelopment site. The hotel's proximity to the clinic, a new medical school under construction and Carilion Roanoke Memorial Hospital could help fill its rooms.
Telemark acquired the 6.4-acre site for the hotel from Carilion in 2006 for $925,000, the amount Carilion paid the Roanoke Redevelopment and Housing Authority for the land and for raising the site above the Roanoke River flood plain.
Cambria Suites is a franchise brand of Choice Hotels International Group, a publicly traded company based in Maryland. Its many other brands include Comfort Inn, Comfort Suites, Econo Lodge and Rodeway Inn.
Heather Soule, a spokeswoman for Choice Hotels, said she knew nothing about a dispute between Telemark and J.M. Turner. But Soule said Choice Hotels is "still going fully ahead" with the Roanoke hotel and estimates it opening in December.
In September 2007, the Roanoke City Council agreed to grant Telemark $1 million in tax rebates to help offset costs associated with adapting the hotel's design to avoid river flooding. The rebates carried conditions, however, including a requirement that the hotel open by September 2009.
