Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, February 6, 1991 TAG: 9102060672
SECTION: VIRGINIA PAGE: A/1 EDITION: EVENING
SOURCE: SANDRA BROWN KELLY and JOEL TURNER STAFF WRITERS
DATELINE: LENGTH: Long
Two Virginia companies, The Henry A. Long Co. of Chantilly and International Developers Inc. of Arlington, also met Virginia Tech's Tuesday deadline for proposals.
Other firms submitting proposals are Ackerman & Co., Atlanta; Classic Properties, New Orleans; Spruce Development Co., Bloomfield Hills, Mich.; and Winegardner & Hammons Inc., Cincinnati.
The companies' names were announced Wednesday morning during a news conference in the lobby of now-closed landmark hotel given to Virginia Tech in 1989 by Norfolk Southern Corp. Tech officials said they would not reveal any details of the proposals.
The project that Tech and Roanoke Valley leaders want for the eight-acre hotel property would include a 400-rooms-plus hotel with adjacent conference center. It is estimated that the project will cost about $35 million.
Roanoke city has agreed to commit $4 million in tax-free revenue bonds to help finance an $8 million conference center. Tech would provide the other $4 million.
Raymond Smoot, Tech's vice president for business affairs, announced Wednesday that an advisory group has been formed to review the proposals and help Virginia Tech make its selection.
Smoot said he expects the process to take several months, but a selection could be completed by summer. Once the project has the go-ahead, it is estimated that construction would take 27 months.
The advisory group is headed by Horace Fralin of Roanoke. Fralin is a partner in Fralin & Waldron Inc. development company and president of the Virginia Tech Foundation, a non-profit foundation that raises money for the university. The foundation has created a separate unit, the Virginia Tech Real Estate Foundation, as a holding company for the hotel property.
Others who will be reviewing the proposals are Joe Stephenson, president of Shenandoah Life Insurance Co. and also president of the Roanoke Chamber of Commerce; James Harvey, Roanoke councilman; John Rocovich, a partner in the law firm of Moss & Rocovich; David Caudill, president of Dominion Bankshares and chairman of the Roanoke City Trade and Convention Center Task Force; Tom Robertson, president of CArillon Health Systems; and George Cartledge Jr., president of Grand Piano and Furniture Co.
Copies of the proposals are to go to the advisory group in the next few days, but Fralin said he did not have a time frame for a first meeting.
Some members of Roanoke city government and Virginia Tech's staff will sit as ex-officio members of the review committee.
Vice Mayor Howard Musser and other city officials were pleased that seven developers submitted proposals at a time when financing for such projects is scarce.
The submissions are just proposals. Bidders did not have to submit a plan for financing the project.
"Given the difficult environment we are in, we are gratified that these developers have expressed confidence" in the project and the city, Musser said. "We didn't know what would happen."
But he said it may take some creativity and ingenuity to fashion a financing package that will assure that the project will go forward.
"It will take an extraordinary effort to put all of the pieces together," Musser said, adding it might have to involve others besides the developer, Virginia Tech and the city.
"It is going to require the help of all those who care about the hotel, Virginia Tech and the Roanoke Valley," he said. "Getting all of the money is not going to be easy."
Musser said the city might have to provide more incentives to help assure the project is feasible, but that won't be known until negotiations begin with the developer who is chosen. City officials said the renovation and reopening of the hotel is their top economic development project.
Musser suggested that banks and businesses in the valley might have to become involved in the financing plan. "Maybe we can get the banks to form a coalition to help with the financing," he said.
Earlier, Roanoke County discussed the possibility of chipping in an additional $4 million to build a larger conference center, but it has not agreed to do so.
Dominion's president Caudill said he believes the project has the support of the business community in the valley, but it needs full community support.
Caudill said the hotel project is a chance for the whole valley, which last year voted down a proposal to consolidate, to unite to support a project.
He said that when financing is sought, it will be crucial to have "real evidence that the valley is in full suppport of the project."
Brian Wishneff, chief of economic development for the city, said the financing capability of the developers will be evaluated by the advisory committee that will review the proposals.
The committee also will consider the developers' experience in similar projects, their credibility and reputation and their approaches in renovating the hotel, he said.
Wishneff said he was familiar with only two firms that submitted proposals - Faison Associates and Henry Long. The Long firm has a hotel and conference center in a business park in Northern Virginia, he said.
Norfolk Southern gave the hotel to the Virginia Tech Foundation in late 1989. The Virginia Tech Real Estate Foundation was established as a holding company for the property, which was valued at $14 million by the railroad.
The center's focus would be on corporate training, programs that could accommodate meetings of as many as 1,500 to 2,000 people.
The hotel dates to 1882. It had 385 rooms and employed 200 people at the time of its closing on Nov. 30, 1989.
The House of Delegates passed legislation last week that would create a six-member commission to own and operate the conference center. Three members of the commission would be appointed by City Council and three by Virginia Tech.
The commission would have the power to sell bonds, set fees and establish booking policies for the conference center.
The Senate will get the legislation in the next few days, said Minnis Ridenhour, executive vice president of Virginia Tech.
Roanoke city has agreed to make major street improvements in the vicinity of the hotel as part of the overall redevelopment plan. Nearly $10 million will be spent on the realignment of Second Street and Gainsboro Road, construction of a bridge across the Norfolk Southern Railway tracks at the Second Street crossing and and other improvements to provide better access to the hotel.
The city also is considering the construction of a $25 million convention and trade center near the hotel that could help make the project more attractive to a developer.
The convention center would be part of the overall complex that would include the hotel and conference center. But, the city has not made a commitment or established a projected schedule for building the convention center that has been recommended by consultants.
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by CNB