The Keagy Village retail complex in Roanoke County. Stephanie Klein-Davis | The Roanoke Times

This story by my colleague Laurence Hammack was published in today’s newspaper.

A bank that took possession of Keagy Village at a foreclosure auction has reached an agreement with the developers of the troubled shopping center.

As part of a settlement of a lawsuit against them, the developers of the Roanoke County complex agree they owe $5.8 million to TD Bank, according to documents filed this week in Roanoke’s federal court. Both sides are asking a judge to enter a consent judgment in that amount.

Since the lawsuit was filed, TD Bank sold Keagy Village to a North Carolina investor who hopes to find new tenants and breathe new life in the four-building center, which currently has just three tenants. In 2007, Carolina First Bank — which has since merged with TD Bank — agreed to finance a shopping center planned on a 15-acre site at Keagy Road and Virginia 419.

The bank loaned $10.87 million to Warehouses Inc., W.G. Indian Trail, Alan Kahn and Kahn Properties South, a division of Kahn Development.

By May 2011, the loan was three months delinquent and interest and late fees had pushed the amount due to $10.9 million, according to the lawsuit. The bank bought the property in 2012 at a foreclosure auction after placing the sole bid of $5.97 million.

It was not clear when — or if — the developers will be able to pay the $5.8 million they still owe under the loan. “Just because we have a judgment does not mean the money is forthcoming,” said Jason Hicks, a Charlottesville attorney who represents the bank.

Read the whole story here.

What started more than 40 years ago as a small natural food store in the basement of a southwest Roanoke County couple’s home has grown into a member-owned grocery store that soon will have two locations and supply its stores with products from its own farm.

Roanoke Natural Foods Co-op announced last week that it is opening a second store on the Roanoke farmers market, in the space where Thomas Market closed earlier this year to accommodate Center in the Square’s $27 million renovation. Plans for the co-op’s 25-acre urban farm, Heritage Point, were finalized earlier this year.

“We’re excited to be in the position to grow our cooperative,” general manager Bruce Phlegar said in a news release announcing the store.

The co-op’s board of directors had been looking for several years for a suitable space to open a second store. In August,Center in the Square president Jim Sears approached the board about opening in the renovated Thomas Market space. The owner of the market did not renew the store’s lease, Sears said.

“I think it strengthens the economy of the market area,” Sears said. “It strengthens Center in the Square. It provides a service I don’t think we could have found anywhere else.”

Click here to read more about the co-op’s growth and an update on Ivy Market, the Roanoke shopping center where Ukrops closed several years ago.

The first condo building at South Peak (at top) will be ready for residents by April 1. Photo by Amanda Codispoti

South Peak, the $200 million residential and commercial development atop a hill near Tanglewood Mall in Roanoke County, is gaining some steam.

Construction on a Hilton Garden Inn is expected to begin in February or March and the first building of five condos buildings is expected to be move-in ready by April 1st, according to Will Holmes, senior vice president of development and construction for developer Smith-Packett.

Smith-Packett has received approval from Hilton to build the Hilton Garden Inn, Holmes said. The five-story hotel will have 117 rooms, a restaurant and an indoor swimming pool.

At the very top of the hillside development the first condo building is well under way. The 100,000-square-foot building will house 32 condos that range in size from 800 to 2,600 square feet. When half of the condos in the first building are sold, Smith-Packett will start on the second building, Holmes said.

As of last month, Smith-Packet had accepted seven reservation deposits for condos, Holmes said. The condos range from $199,000 for a one bedroom to $569,900 for a three bedroom.

Smith-Packett also anticipates that it will soon begin paving streets and laying utilities on lots for 23 single-family homes that will sit on 12 acres of land behind Lowe’s. The homes will make up a gated community that Smith-Packett is calling The Estates at South Peak.

The second phase of the project will bring a restaurant and shops to South Peak. Holmes said Smith-Packett has received interest from several restaurants, but nothing is official. The retail piece will come later, after the hotel and condos are finished, Holmes said.

See a map of the development and read more about the project here.

Flat Rock Grille and Texas Steakhouse have been demolished to make room for a hotel. Photo by Amanda Codispoti

The Flat Rock Grille and Texas Steakhouse restaurants at Valley View were torn down this week as a developer gets ready to build a Hampton Inn & Suites.

Once the debris is cleared, workers will import dirt to level the site and put in underground utilities, according to Charlie Byers, general manager of Thomas Properties, the Tennessee-based developer building the hotel.

Byers expects that workers will begin laying the foundation next week.

Construction “will go fairly fast,” Byers said. The 126-room, five-story hotel will open within a year.

A building permit filed in Roanoke values the construction at $10.8 million.

The hotel will sit on about 2.5 acres of land where the restaurants were located. Flat Rock Grille closed in 2008 after the owners filed for bankruptcy. Texas Steakhouse closed October 2011.

The Ivy Market shopping center pictured next to the site of the development's second phase. Photo by Amanda Codispoti

Vacant buildings have been demolished and the debris cleared.

Since early this year, work has been ongoing at the site of the second phase of the Ivy Market development as the site’s owner, Valley Bank, is preparing the land to sell to a developer.

Next up is the building of a stone retaining wall near the northern end of the site, next to the Pure gas station on Franklin Road. The bank is spending $39,000 to build the wall, according to a building permit filed in Roanoke.

Valley Bank president and CEO Ellis Gutshall said that the bank is still talking with several developers, but a deal hasn’t been struck.

“We’re still very much in conversations with a number of people,” he said. “Nothing yet that we can actually report.”

The first phase of the site, built in 2006 and 2007, included the Walgreens at the corner of Wonju Street and the building that housed the Richmond-based grocery store Ukrops. The grocery store closed in 2009, and the property went into foreclosure. Valley Bank bought Ivy Market and the adjoining 5 acres.

The bank is looking for a developer that would bring retailers and finish the second phase of the project.

Late last year it appeared that Whole Foods was interested in the old Ukrops’ building, but Gutshall has since said that the organic grocery store decided against opening a store there.

In other Ivy Market news, city council voted this week to restructure the 15-year performance agreement for the development.

The following is from a story reporter Mason Adams wrote about Monday’s city council meeting.

As before, the agreement is still based on tax revenues, which means the city won’t lose a dime if Valley Bank can’t attract a tenant for the Ukrop’s space or a developer to build out the additional acreage to the north included in the project’s second phase. Instead, the city will return half of the tax revenue — including real estate, property, sales and meals taxes — back to the developer the following fiscal year in the form of a grant.

The agreement was also tweaked to allow for retailers that already operate in the city to move to the property, though there are provisions to ensure that any performance grant money is paid only on an increase in revenue from established stores.

Valley Bank President and CEO Ellis Gutshall said the changes to the agreement should help move along progress at the property.

The First & Main shopping center on South Main Street in Blacksburg. Roanoke Times file photo

Roanoke Times writer Jeff Sturgeon reports this morning that Wells Fargo has found a potential buyer for the troubled First & Main shopping center in Blacksburg.

A bank spokeswoman told Sturgeon they hope to close on the sale by the end of the month. She declined to identify the potential buyer.

The shopping center has struggled since its 2008 opening. The town of Blacksburg won a court battle to keep Walmart from building there, and a planned movie theater was never built.

Last year saw the closings of Books-A-Million, Rack Room Shoes, gifts and collectibles shop Steger Creek, Maggie Moo’s Ice Cream and Treatery, and Elderberry’s Smoothies & Wraps.

At least three new tenants, children’s clothing store Piccolini, Mexican restaurant El Rodeo, and the gym Anytime Fitness, opened at the shopping center last year.

Wells Fargo took control of the property in 2010 and hired The Rappaport Companies to manage it. A Wells Fargo spokeswoman said late last year that the bank would likely put the property on the market the beginning of this year.

Do you think a new owner will help the shopping center?

An old office building that’s been renovated into 15 apartments is 100 percent leased ahead of its June opening.

Residents will begin moving into the apartments at 401 Campbell Avenue this weekend, according to Faisal Khan, who owns the building with his father. The two spent $3 million on renovations.

The finished apartments include stainless steel appliances in the kitchens, black porcelain tiles in the bathrooms, stained concrete floors in the kitchens and living rooms, and hardwood floors in the bedrooms. The apartments come furnished with a wall-mounted flat screen television and a washer and dryer.

Parking is provided in a street-level parking garage off Rorer Avenue and a small surface lot off Campbell Avenue.

Rents range from $650 to $850 per month for the one-bedrooms and $930 per month for the two-bedroom.

Just one of the four first-floor commercial spaces has been leased. It is unclear what type of business has leased a space, but when I hear back on that I’ll update this blog post.

Michael Waldvogel, of Waldvogel Commercial Properties, which handled the leasing, said downtown living remains popular.

“The success of this project demonstrates the continuing demand for downtown housing in our region,” Waldvogel said in a news release.

The structure was built in 1946 as a Magic City Motor dealership. It was most recently the offices of Spanky Macher, an eccentric Roanoke business man who is serving a 30-month prison sentence for fraud and tax evasion.

Gene Whitesell, the development manager for site developer Smith-Packett, discusses the plans for the site off U.S. 220 in Roanoke County near Tanglewood Mall. The bare hillside had become a point of contention among some residents. Photo by Kyle Green | The Roanoke Times

As promised, here’s the link to the story updating the work that’s happening at the South Peak development in Southwest Roanoke County.

The structure you may have seen rising from the top of the denuded hill is the first of four, possibly five, condo buildings.

The condos range in size from 800 to 2,600 square feet and are expected to sell for between $195,000 and $610,000, according to Gene Whitesell, development manager for Smith-Packet, the site’s development company.

The development will also include office buildings, a parking garage, a hotel, a restaurant and hopefully, some retail.

Whitesell said the company is close to signing a deal with Hilton for a Hilton Garden Inn. He said they are also talking with a small chain restaurant, but wouldn’t say which one.

Read the story for more info, and check out a panoramic photo of the site here.

The Crystal Tower building at the corner of Second Street and Campbell Avenue. Photo by Stephanie Klein-Davis | The Roanoke Times

Last week I reported that the 17 tenants in the Crystal Tower Building would be asked to leave because of a sale pending on the downtown office building.

At that time, the Hummus House restaurant hadn’t received its notice to be out of the building by May 31 as several other tenants had.

The notice came this week, and owner Daniel Melki told me he plans to close the Lebanese restaurant May 18. He was on a month-to-month lease, he said.

Melki is disappointed that he has to close up so soon. The restaurant opened in February. But, he said the success of the restaurant has given him confidence to seek out another downtown location. He’s not settled on a new space just yet, but assured me he’d reopen, even if it meant putting his equipment and furnishings in storage.

Two hair salons, Mr. Bill’s and the Cutting Edge, are also leaving.

Bill Hollifield and his wife, Wanda, who is also a hair stylist, are moving down the street to 121 Campbell Avenue where they are renting booths from Dream Cutz, a new salon.  Wanda has already moved her station out of the Crystal Tower building. Bill plans to move his equipment this weekend, Wanda said.

“So far my customers are really glad that we didn’t move to where they couldn’t find me,” Wanda told me.

Mr. Bill’s has leased space at the Crystal Tower building since 1971.

The Cutting Edge has plans to move to The Colony, a group of shops and businesses at Colonial Avenue and 23rd Street in Roanoke near Towers Shopping Center. The Cutting Edge will close the downtown salon April 28. The new salon will open May 1.

Rendering courtesy of Proviz

Construction is humming away at the River House, an old cold storage building in Wasena that Ed Walker is redeveloping into a mix of apartments and commercial space.

The building is expected to open to residents sometime this summer. Already, nearly 40 of the 128 apartments have been leased, according to Michelle Rose, who is handling leasing.

Walker, at a news conference Tuesday morning, said the project is also looking for a tenant to operate a restaurant and bar in a 2,600 square-foot space attached to the building.

“We’re in conversations with several restaurants right now to figure out who we would most like to have in that space,” Walker told reporters. He said he’d also like to hear from individuals who might be interested in opening a restaurant.

A Chili’s will not do. Walker is looking for a restaurateur whose food and feel will complement the building, which is situated next to the Roanoke River and greenway.

“It’s not just a lease. It’s not just someone with a check, but somebody who would strengthen the area,” Walker said.

The kitchen and dining room will be built out for the operator, who would need to provide furnishings, dishware, flatware, etc. The restaurant will seat about 90 people inside, and up to 75 on a patio.

Walker said that he’s aiming for the restaurant to open in early October.

You can read more about the River House here.

What type of restaurant do you think would be a good fit for the project, and Wasena?