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Market Street Partners LLC Could Receive $3 million in
Tax-Exempt Bonds for Renovation of Former Billy's Ritz Restuarant
into a 25-room High End Hotel, Roanoke, Virginia

By Jenny Kincaid Boone, The Roanoke Times, Va.McClatchy-Tribune Regional News

Jan. 20, 2010--A high-end hotel may check in at the former Billy's Ritz restaurant building in downtown Roanoke.

Detailed plans for a 25-room hotel, with an average rate of $179 a night in the first year, are outlined in bond application documents submitted to the city by the property owners.

Market Street Partners LLC, the owner of the prominent building on Market Street, learned last week that it would receive $3 million in tax-exempt bonds to help fund the renovation and opening of a restaurant, meeting and conference space and a hotel. The Recovery Zone Facility Bonds are available for private construction and renovation projects in certain localities through the federal stimulus program, the American Recovery and Reinvestment Act.

The owners of the former Billy's Ritz estimate that a boutique hotel for the property's second through fourth floors and a restaurant on its ground floor would generate sales of $2.8 million in its first year, according to application documents. A hotel is projected to open by February 2011 and have a staff of 23.

However, one of the project's partners said the hotel is not a done deal, despite details in its bond application indicating that this concept, named the Rowland Hotel, is moving forward.

"We have not made any decisions about what we're going to do upstairs," said Neal Keesee, a Roanoke lawyer and a partner in Market Street Partners. "We're looking at the building from a feasibility standpoint."

Local restaurateur Roger Neel also is a partner in the company.

Keesee said a hotel is one possibility for the upper floors of this property, located less than a block west of the Taubman Museum of Art. Other ideas include condominiums or offices.

An upscale hotel likely would compete directly with the nearby Hotel Roanoke, and "I would think that one would be very careful about that situation," said Granger Macfarlane, a local hotel owner and developer.

The Hotel Roanoke has more rooms, nearby parking and is a large draw for conferences and events, he said. The hotel also has considered expanding its room base. Its rates start at $119 for a Friday night.

On the other hand, some business leaders have expressed a need for more downtown lodging options in the past several years.

The Billy's Ritz property, which includes two adjoining buildings measuring 21,700 square feet, once housed the 60-room Ames Hotel, according to city records.

Demolition has begun inside the Market Street building's first floor to make way for a restaurant that would open in June, according to city documents. Keesee would not disclose details about the new restaurant.

But he emphasized that the named project, Billy's Restaurant/The Rowland Hotel, is viable. Application documents estimate the project costs at $4.5 million, including the owner's $1.7 purchase price.

"We are a shovel-ready project," Keesee said. "We're ready to finalize our options and move forward."

Billy's Restaurant/The Rowland Hotel is one of three private Roanoke projects that will receive bonds to be issued by June 15 through the city's Economic Development Authority.

The Roanoke City Council already approved $2.4 million in bonds for developer Ed Walker's renovation of the former Patrick Henry Hotel in downtown for apartments, office, retail and event space.

On Friday, the state approved a city request for an additional $18.3 million in bonds. Along with Market Street Partners, the Patrick Henry project could receive another $9.6 million in bonds. Additionally $5.8 million will go to the owners of a condominium project on South Jefferson Street called the Boxley Residences.

This high-end residential project would create luxury condominiums and commercial business space at 416 S. Jefferson St., inside the Boxley Building.

Fairlawn at Jefferson LLC purchased the 40,000-square-foot building in 2008, and the company expects to spend $11.3 million for its transformation, the application documents state. Renovations are expected to start this month.

The eight-story structure housed about 15 office tenants in 2008, said Cindy Fendley, a real estate agent with Poe & Cronk Real Estate Group who has handled leasing for the building. All businesses have left the structure, the application states.

Fairlawn's plans include creating upscale residential space on the 88-year-old building's top six or seven floors. Retail and commercial space would land on the bottom two floors.

Worth Boone, a partner in Fairlawn, did not return calls for comment about the project.

In application documents, the company states that the Boxley Residences would add "affluent permanent residents to the critical mass, and will push the redevelopment process from the center of downtown south along Jefferson Street."


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