Plan to Build a Hotel in Downtown Roanoke Put on Hold - FOX 21/27 WFXR Roanoke/WWCW Lynchburg News, Weather

Plan to Build a Hotel in Downtown Roanoke Put on Hold

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It's quiet on the bottom and top of the parking garage along Church Avenue where a new hotel is slated to be built.

And it's going to stay quiet for the foreseeable future, after plans to begin construction next month hit a snag.

Construction was supposed to start in September. Then the developer realized project costs were 45 percent over budget.

"We've seen budget busts before that might be five percent," said project manager Charles Reyner. "And we're prepared to roll with that if we have to. But this particular one was 45 percent and that's something we've never seen before."

The hotel's developer, Windsor-Aughtry, says it budgeted for the project last year, but since then construction costs have skyrocketed, as seen in the recent bids it received.

That, Reyner says, changes everything.

"We spend a lot of time studying and building a pro forma model for what we think the hotel can do and try to put realistic expectations in there. And that's really the report card our investors use when they decide, 'Do we want to invest in this project?'"

Reyner says they'll spend the next 60 days reworking their plans for the site and trying to get costs back near budget.

If they can do that, he says he believes construction can begin early next year.

If not, though, he says, "One of the things we don't want to fool ourselves into thinking is just because we have a lot of money invested in the due diligence process is that it has to go forward. We have to go back and rebuild that model now with everything that we're learning over the next 60 days and the present that to the investors."

The City of Roanoke has also invested a lot of time and energy into this project, and city leaders say they want to see it happen for economic development reasons. Assistant City Manager Brian Townsend tells us the city understands the developers have to do right by their investors, but they'll be keeping a close eye on the situation.

Reyner says his company doesn't like to back out of projects, and they're committed to doing all they can to make this one happen.

"I'm very optimistic it will still work out."

But only time will tell if the garage stays quiet for the long haul.