Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, February 13, 1992 TAG: 9202130303
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: DANIEL HOWES BUSINESS WRITER
DATELINE: LENGTH: Medium
HOTEL DEVELOPER APPEARS OUT/ TECH OFFICIALS INSIST PROJECT ON TRACK
The New Orleans developer chosen last year to resurrect Hotel Roanoke apparently will be dumped, imperiling hopes that the refurbished hotel and conference center complex could be opened by early 1995.Officials at Virginia Tech, the hotel's owner, refused Wednesday to comment on the status of Classic Properties of New Orleans, hired last May amid great fanfare to develop a plan for the hotel.
"All I'm going to say is we're in a crucial stage in the development of the project and I'm not going to have anything else to say at this time," said Raymond Smoot, Tech's vice president for business affairs.
Asked specifically if Classic was still working on the project, Smoot said, "I'm not going to have anything else to say at this time. You should not read into that that the project is in jeopardy; you should read into that there are several crucial issues we're dealing with."
Still, several sources confirmed Wednesday they had been told Classic was no longer working on the project. "That's been a pretty strong understanding around here for a week or more," said Lawrence Dickenson, business development manager of Branch & Associates Inc., a Roanoke contractor bidding for a portion of the hotel project.
"We heard Classic was never really able to come up with any cash," he continued. "Apparently that money never materialized." Last spring, Classic and Tech officials said the firm was prepared to contribute $2 million of its own money to the project - twice the amount offered by any of the other six would-be developers.
David Waltemath, president of Classic Properties, was unavailable for a telephone interview, his secretary said, and would not be free until Monday.
"I told you - he's gone," said another source who asked not to be identified.
Indeed, negotiations appear to have broken down when it became clear Classic would not be able to deliver the $2 million in equity it promised last year. Other sticking points included disagreements over the number of rooms in the new hotel and the size of the adjoining conference center.
Ann Rudegeair, Classic's vice president and the project's financial analyst, said earlier this week she had not worked on the project for three weeks. Yet Tech and city officials - who refused any comment on Classic's status Wednesday - say they all have been working steadily on the project this winter.
Classic continually battled with the competing intentions of having at least 350 rooms in the refurbished $30 million hotel and containing the cost of the $8 million conference center next door.
"I've never understood why 350 rooms was a magic number," Rudegeair said from her home in New Orleans. "In order to make it work, you need to have a certain-sized conference center and you can't do that within a given dollar amount," because a hotel with that many rooms requires a larger conference center.
Rudegeair skirted further questions, referring them to Waltemath.
For months, Classic, Tech and city officials said negotiations toward a "general development agreement" - necessary before any bulldozers start moving - were on track. They promised that designs and critical cost estimates would be unveiled in early January, giving the public its first real look at the "new" Hotel Roanoke.
Instead, January melted into February, leaving Dickenson and Jay Turner, chairman of Salem-based J.M. Turner & Co. Inc., to wonder about the fate of their bids. "I thought we were going to hear something earlier," Turner said.
Smoot insisted Wednesday that the project remains on track, more than two years after Norfolk Southern Corp. handed Tech the keys to the landmark hotel. It is now likely that Tech and its high-powered advisory group are searching for Classic's replacement, opting to remain officially silent until they can turn a perceived negative into a positive.
"If you were on that committee, you would not want to see [news of Classic's firing] out in the media," Dickenson said. Several committee members, including chairman Horace Fralin, were not available Wednesday, their offices said.
Even though Tech officials have made it clear in recent months that the stakes in the hotel deal are higher for the city and its tax base than the university itself, news that the redevelopment deal appears to be stalled could impair widespread civic support.
Walking away from the project - which Tech officials insist they have no intention of doing - also would dash President James McComas' plans to widen the university's public service mission and cement its presence in downtown Roanoke.
NOTE: SEE MICROFILM FOR GRAPHIC ILLUSTRATED HISTORY OF CLASSIC'S HISTORY