The Roanoke Times

File March

ERIC BRADY The Roanoke Times

Anthony Smith (right) and his father, Robert Smith, survey the pool at the old YMCA facility on Church Avenue in Roanoke.

Anthony Smith paid $10 for a development opportunity that could earn him a hometown windfall worth far more than money.

The Roanoke City Council voted unanimously in April to sell Smith -- a relative newcomer to the city's development scene -- the 53-year-old YMCA building on Church Avenue for that amount, assuming he meets certain obligations such as securing financing by next spring.

The Roanoke native wants to invest at least $3.5 million to renovate the property into a mixed-use development with 30 to 40 luxury apartments, office space and a restaurant on the ground floor. He's named it the W.E. Muse Station.

The opportunity presents Smith, 34, with a chance to not only turn a profit and to create, but to become the latest member of an exclusive group of successful downtown developers. The city has been looking for a way to develop the prominently placed former Y site as it continues to push for improvements on the west side of downtown.

But the deal also carries risk: Inner-city redevelopment can be tricky and provides plenty of opportunity for failure.

Smith plans to renovate the existing Y building instead of tearing it down and starting anew.

Louis Salomonsky, a Richmond developer and one of Smith's mentors, said that inner-city buildings can be "tough puzzles" and difficult to bring to code.

Beyond that, as a black developer, Smith carries the burden of a city community that hopes to see him succeed and knock down walls -- both real and perceived -- that have blocked progress.

"I think there's more people looking for me to succeed than fail because somebody's got to put their foot in the door so the rest of y'all can get through," Smith told a William Fleming High School government class last month.

So just who is Anthony Smith? And what makes him think he can pull this off, particularly in a slumping housing economy?

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A couple of weeks after the council vote, Smith talked about the project at the site.

He fretted a bit: City officials had removed the classic "Young Men's Christian Association" sign from the front of the building and he worried that might hurt his chances of obtaining historic tax credits, which are a key to his financing.

Smith said he's also been working closely with the Virginia Housing Development Authority and Virginia Community Capital Inc. to obtain financing.

"For the most part, my week consists of pulling the pieces together," Smith said.

He has also been focused on networking: Smith said he has spent much of his life reaching out to those he views as possible mentors and advisers. Now, after the YMCA sale has made news, other developers and contractors have started contacting him.

Smith said he has always been comfortable speaking with people from a variety of racial and socioeconomic backgrounds. Much of that stems from his early life, growing up in Southwest Roanoke, on Grandin Road near its intersection with Electric Road. His father, Robert Smith, worked for the railroad and was a part-time real estate agent, and his great-uncle, Walter Muse -- the namesake for Smith's project -- was one of Roanoke's first black developers.

Smith spent his formative years at North Cross School, surrounded mostly by white peers. He described his experience at the school as an "educational utopia" where racial tension was almost entirely absent. That, he said, gave him not only a solid education but the ability to move easily within a variety of social circles (he said he now feels just as comfortable speaking to Roanoke's elite as he is to low-level contractors and high school students).

By high school, however, Smith said he was looking for more of "the black experience," so he transferred to William Fleming.

"He came in as a good student," said George Miller, who coached Smith on the football team. "A good athlete and somewhat complacent, I would say. He did things at his own pace, when he wanted to, how he wanted to."

Once, after noting that he was repeatedly late for class, Miller called Smith's mother, who gave him the OK to "make him comply."

Smith was late once more; Miller brought him out into the hallway to reach an understanding, and he informed Smith of his conversation with his mom.

"After that we never had that problem again," Miller said.

After high school Smith attended Virginia Union University, a historically black educational institution. "I knew I wanted to be one of two things: be a preacher, or be in real estate," he said. "I went to college and had too much fun to be a preacher."

He got a bachelor's degree in sociology.

Smith then went to work for an Ashland company acquiring real estate for cellphone towers. Before long he moved to a Chicago firm for much better pay. By age 25, he was working as a junior executive, helping to merge regional telecommunications territories.

But the technology economy plunged after 9/11, and Smith found himself out of a job. That's when he came back to Virginia.

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Smith replaced Enoch Pou as real estate director for the Richmond Redevelopment & Housing Authority. Smith landed there based on his experience acquiring property in the telecommunications business.

Smith then left the Richmond authority and went to work for Salomonsky, a higher profile real estate developer whom Smith said "had the greatest impact on my professional career of anybody living today."

Salomonsky made his reputation on a long string of multimillion-dollar developments, many of which were created from older, inner-city buildings that helped to transform Richmond's trendy Shockoe Bottom and Shockoe Slip districts. He also made headlines in late 2003 and early 2004 when he pleaded guilty to bribing a Richmond city councilwoman; he served 14 months in federal prison.

Smith said he left his job with Salomonsky several months before his former employer's legal troubles.

"Louis, whatever he got into he got into," Smith said. "But you can't deny his real estate track record."

Smith said his work with Salomonsky was "very high-pressure" but also gave him an opportunity to learn from one of the best: "All good opportunities don't come with a velvet glove and perfume," he said.

For his part, Salomonsky said he doesn't remember Smith all that clearly, but "there was no way he wouldn't have learned a lot."

Smith said he had no involvement with and draws no particular inspiration from Richmond's Railroad Y development, which was completed in 2001. But the similarities to his plans for the old Roanoke YMCA building are striking. Salomonsky invested about $3.4 million into the building, which now includes retail space, a restaurant and 30 living spaces the he describes as "small sardine-can apartments with a lot of sizzle."

And while it's tough to get financing for apartments -- particularly in this slow housing market -- "the sweet spot in Richmond has been the downtown inner-city apartments," Salomonsky said. "We are getting financing because the vacancy rates in downtown Richmond in the historical areas, Shockoe Bottom and Shockoe Slip, are close to zero."

That mirrors the situation in Roanoke, where demand remains for downtown apartments. That's the case even in the west end, where many buildings are still vacant and homes are assessed at less than $100,000.

Smith seems confident in his plans for the YMCA. He said the housing development authority financing is contingent not on him but on the project itself. And the $10 price tag gives him plenty of equity. He said he has lined up $2 million in tax credits.

And Smith has occasionally even contracted out his mentors for work. That's the case with Pou, who is working as a consultant to assemble historic tax credits for Smith's YMCA project.

"Because of my housing authority background and use of excellent consultants -- like Enoch Pou -- I've been able to structure incentives and entitlements to make this a recession-proof construction project," Smith said.

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In mid-May, Smith was invited by Catherine Keith, one of his teachers at William Fleming High School, to spend a Friday morning talking to her senior government class.

Smith takes pains to say he doesn't consider himself to be just a minority developer. At the same time, however, he's offered himself as a positive role model for young black men in Roanoke.

His message to the government class was offered to everyone: Keep your credit score high, your criminal record clean and be careful about having sex.

But he clearly tailored some bits to the young men: "Brothers, men -- turn around. ... You're going to be 25, 27, 28 years old and you're going to be out here stocking the shelves at Wal-Mart, and all the sisters went to college, and they don't want you. They've got a college degree, they've got good credit, they can buy a house, and they don't want you.

"You were laughing and joking and being silly, shuffling your feet, putting rims on a $2,000 car and putting on a pair of Air Jordans, when you should have been stacking your money, keeping yourself to yourself, managing your credit report, staying out of trouble and focusing on creating a family," Smith said. "That's manhood."

He also drilled the importance of mentors, even from the high school level: "Some of the people that you meet here, you'll carry them around with you the rest of your life. ... Coach Miller has been like a constant board in my back, keeping me standing up straight. Even as I went on, and he was hundreds or thousands of miles away from me, I carried his lessons with me wherever I went."

Finding the right mentors is one of Smith's key strategies. When he moved back to Roanoke three years ago and started work on the Larks Ridge Estates subdivision in the Mount Pleasant section of Roanoke County, he sought advice from Craig Balzer, a board member of the Blue Ridge Housing Development Corp. and a partner at the swanky Ballyhack Golf Club.

"One of the things I've enjoyed about Anthony is that he would call me on a number of occasions and ask if I could spend a couple of hours looking at things with him," Balzer said. "He was just looking for some expertise and advice from someone in the area. That's something I think that's of value."

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In mid-June, on the eve of the Democratic gubernatorial primary, Smith was sitting on a couch in Georgia Reeves' house on McDowell Avenue Northwest.

Smith has started to dabble in state politics, too. He was an early supporter of Democratic gubernatorial candidate Terry McAuliffe.

In February, a two-and-a-half-minute video posted at McAuliffe's YouTube page prominently featured Smith, wearing a pinstriped suit and an American flag tie, touting McAuliffe's business know-how. Smith also hosted a fundraising breakfast for McAuliffe at the Hotel Roanoke.

But on this evening, Smith's primary mission was to show respect to Reeves, an 83-year-old former schoolteacher who played a key role in Roanoke's "quiet" racial integration in the 1950s.

Smith said his father -- who was taught by Reeves at G.W. Carver High School -- made sure to expose him to an older generation of black leaders when he was growing up. His older aunts and uncles passed down oral remembrances from their parents, some of whom had been slaves.

"I feel like 34 is the perfect age to be involved," Smith said. "I'm young enough to relate to the younger crowd, the hip-hop crowd, but also old enough to be able to relate to people like Mrs. Reeves, who are going down in the history books. I'm really standing on their shoulders."

Reeves said she knew of Smith in high school through articles in the Roanoke Tribune, but only met him as an adult during the past year. She nodded when she heard him talk about the concept of community ownership, and again when he talked about finding qualified black subcontractors to work on the YMCA project.

Reeves described the challenges she and her husband faced when trying to finance the construction of their home in 1957. The check for the home loan, she said, was labeled at the top: "colored."

Since his purchase of the YMCA became public, Smith has received a steady stream of interest from subcontractors looking for work. Many of them have been unable to secure steady work in the recession. Others -- including a number of black electricians, plumbers and other tradesmen -- complained of being frozen out of other redevelopment projects.

"I'm not going to give you a job just because you're black," Smith said. "But when there's someone like Keaton Electrical, with the experience but not the contacts to get to the next level -- I think I can facilitate that."

But while the black community is largely behind him, Smith said it's also the source of some of his biggest detractors: "They said, 'They'll never let you do it.' I said, 'It's 2009! You still think like this?' "

Clearly, city council members don't think like that.

"We in the city haven't made it easy for him, but he continues to meet whatever criteria we put before him," Vice Mayor Sherman Lea said. "I like that, I think it says something again -- and we have to be cognizant of it -- he's a young black developer. We have not been as open in this city as we should have been. I want to do everything to help him succeed.

"If he keeps the proper attitude and stays humble, I think he can do well."