Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, January 16, 1993 TAG: 9301160254
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: DANIEL HOWES STAFF WRITER
DATELINE: LENGTH: Medium
HOTEL MAY NOT GET $10 MILLION
The quest for Hotel Roanoke money continued Friday, as project planners met again with bankers to nail down $10 million in loans.Several sources familiar with the negotiations said four regional banks - Crestar, Dominion, NationsBank and First Virginia - have tentatively agreed to lend a total of $6.5 million to the $42 million hotel and conference center project.
Crestar, Dominion and NationsBank would each commit $2 million to the project, several sources said, with First Virginia contributing $500,000 to the package. Roanoke-based Shenandoah Life Insurance Co. also likely will contribute to the package but is not expected to lend the final $3.5 million.
"Those numbers are ballpark" estimates, said a source close to the negotiations who asked not to be identified. "To the extent Shenandoah Life was thinking about $3.5 million - that's just unreasonable. That's never been discussed. That figure is much too large."
The eventual loan total likely will be "something over $6 million and something less than $9 million," the source said. "I think that's where it's going to come in.
"I know there's a lot of last-minute negotiations going on to try to get an increase here, an increase there and an increase another place," the source said. "I think it's just at a state where there's a lot of last-minute pressure being applied."
City and Virginia Tech officials either declined to comment Friday or did not return phone calls.
"Everybody's made an agreement that we're not going to talk about it," Virginia Tech spokesman Lawrence Hincker said Friday. "We're continuing to meet with [the bankers]. We met with them all morning. We're making progress."
Privately, the hotel planners say they are scrambling to put the deal together from existing commitments and new sources, perhaps including the taxpayer-financed Roanoke Redevelopment and Housing Authority.
Central Fidelity Bank and Signet Bank also had been considered likely members of the loan consortium but now appear to have pulled out of the deal. Central Fidelity instead contributed $50,000 to the recently concluded hotel fund-raising campaign, Renew Roanoke.
"We have opted to make a direct contribution rather than participate in the consortium," J. Carson Quarles, Central Fidelity's regional president, said in a recent interview. Dennis Traubert, Signet's regional executive officer in Roanoke, declined to comment.
Friday's talks between hotel planners and bankers capped a busy week: Monday, organizers for Renew Roanoke announced they had reached their $5 million goal - in just seven weeks. Tuesday, two city officials and the campaign's chairman, Carilion Health System President Thomas Robertson, asked Norfolk Southern Corp. officials for a contribution to the project.
Officials would not say how much was requested from the railroad, which donated the century-old hotel to Virginia Tech in 1989. Speculation that Norfolk Southern was asked to give $5 million to the hotel effort could not be confirmed.
Indeed, a $5 million railroad gift to the project would lift hotel planners close to their $42 million goal. But if the bank loan package falls short of the hoped-for $10 million and if Norfolk Southern's gift is less than $5 million, project planners would need to find funding elsewhere.
City Council already has committed $18 million in bonds and federal loans; Tech, through its foundation, has pledged $4 million; the management company chosen to run a reopened hotel and new conference center, Doubletree Hotels Corp., has put up $1 million; the Renew Roanoke campaign raised just over $5 million. Total: $28 million.