The "Rockledge Community Center Reference Guide" (of Valley Forward)
with
Responses of Mill Mountain Conservancy

The Rockledge Community Center Reference Guide
was prepared by Valley Forward, 2/26/08, including phrasing of the questions.
We present it here with responses from Mill Mountain Conservancy, April, 2008.

Topic Heads:

Q: What’s the Rockledge concept?

VF: A 3-part community center – a community room, a coffee shop and a destination restaurant. Outside, there will be wide porches, patios and bike racks.

MMC: It appears that Valley Forward is calling their development proposal a “community center” in order to meet the Roanoke city zoning ordinance for all city parks – Recreation and Open Space – which prohibits restaurants. 7,000 square feet of restaurant space does not justify using the 3,000 square feet intended to be a community center to define the concept for this proposed development.

Q: Why three parts?

VF: Two reasons: Primarily, to offer many new ways to enjoy and experience Mill Mountain and, secondly, to diversity Rockledge Center financially with three, instead of a single revenue source.

MMC: From the Roanoke city Code: The purpose of the city’s parks include enhancing the health, enjoyment and quality of life of citizens by preserving and protecting open spaces and the natural environment, the native flora and fauna therein, and historic structures and areas; providing for sustainable active and passive recreation facilities and areas for public use; and contributing to the attractiveness of the community with landscaped and ornamental areas, buffers, and open spaces.
Mill Mountain Park is a city park, and provides a multitude of ways to enjoy and experience it. The proposal for the Rockledge restaurant does not meet the city’s purpose for its parks.

Q: What’s the community room for?

VF: A 3,000 square foot space for use by non-profits and for events, such as weddings, receptions, fundraisers, parties and other functions. It’s much larger than the Discovery Center (usable space) and will have a restaurant and coffee shop as neighbors for refreshments or catering.

MMC: Public input has not been solicited that indicates there is a need for, or an interest in, building a community room (or restaurants) in any city park. If built, this space for revenue-generating events would compete with existing tax-generating city venues. Free availability to non-profits is not fiscally viable - there will have to be limits established on its availability to non-profits in order to assure its availability for revenue-generating events. These limits need to be declared now, rather than dangling a promise that can’t be met.

Q: How big is the footprint of the building?

VF: Approximately 5,000 square feet of interior space with wide porches all around. There will be three levels for a total of approximately 10,000 square feet of interior space.

MMC: The footprint of the proposed building is in the range of 10,000 SQ FT - this may or may not include decks and porches. VF must be required to produce a scaled model, photo montage workup, and environmental impact statement so that the public will better know the impact of the proposal.

Q: How does this break down by use?

VF: The main floor will house the restaurant (5,000 square feet) and the lower level will have the coffee shop (2,000 square feet) and the Community Room will be at the upper level (3,000 square feet).

Q: Is this the final plan?

VF: This is a functionally and aesthetically developed concept plan, but it is not yet a firm, “in concrete” plan with construction drawings and specifications. We have articulated firm goals for the project, however, including limitations on size, financial viability, environmental sustainability, respect for site and history and discreet design profile. Public input and ideas are still encouraged to make it even better.

MMC: We agree that there are limitations on its financial viability, environmental sustainability, and respect for site and history.

Q: Why does VF think this is the solution to attracting and retaining young adults?

VF: Rockledge Center was never meant to be a panacea to every community challenge, but it’s a great start and can have a dramatic, positive effect on our community.

MMC: We agree that it could have a dramatic effect, but not a positive one. In an ever-developing world, it is imperative that urban residents have rapid access to green space. Mill Mountain Park, without commercial development, is one of our unique features that can set us apart as a progressive city.

Q: How so?

VF: It will allow many more residents to enjoy Mill Mountain, create many incomparable experiences for visitors and those considering relocation or investment, and it will showcase that positive change – something that people clearly want – is happening in Roanoke. It will be one part of a larger vision for our community that includes connections to our revitalized downtown, thriving Riverside Center, and other community attractions.

MMC: We share in the desire for positive change. Commercializing our premiere greenspace is regressive thinking and a myopic idea of progress, not positive change. We share VF’s enthusiasm for our revitalizing downtown and the Riverside Center, and encourage VF to direct their enthusiasm for development to these urban areas, not to our region’s premiere greenspace. VF could make a significant contribution to downtown, local tourism, and Center in the Square by putting their fund-raising efforts towards developing the roof-top café on Center! That would be true progress, and provide an incredible view for diners!

Q: Do people want this?

VF: A recent independent poll commissioned by WDBJ News 7 conducted by Survey USA found that 66% favor Rockledge vs. 26% against. This follows an (independent) 80% for vs. 15% against poll for the original Rockledge proposal.

MMC: We have had countless - literally countless - experiences of asking people what they think of the proposal. It is not unusual to find people who say that it’s an OK idea... Until they hear the details of the amount of space on the mountain summit that would be required for the Rockledge restaurant, and the impact of adding two parking areas. We request that an independent poll be commissioned after the scaled model and photo mock-up have been on public display for at least one month. The independent poll that VF commissioned used flawed methodology, in the words of the research professional who provided the service to VF!

Q: What kinds of uses will there be at Rockledge Community Center?

VF: With a coffee shop, a community room, and a destination restaurant, the possibilities are limitless. New uses could include coffee with friends, the morning paper on the patio, lunch with mom, a school field trip (inside) lecture on the mountain’s natural habitat, fundraisers, business recruitment dinners, surfing the web on the deck, a hike with a lunch destination, community meetings, rehearsal dinners, family reunions, governmental summits, state of the city events, dinner with in-laws, ice cream with the kids, marriage proposals at dinner, zoo packages, girl scout retreats, and countless others.

MMC: Many of these events currently take place on Mill Mountain! People bring picnics, have weddings, school children have field trips using the fine resources available through the Discovery Center and the Parks and Rec staff, and find respite from the stress of life. Commercial enterprises are best suited to areas that are already commercialized, not to our premiere mountain park!

Q: But the old Rockledge Inn failed, didn’t it?

VF: Rockledge had some difficult times and did close for a variety of reasons. These include the Great Depression, competition from the railroad’s Hotel Roanoke and its considerable advantages (financial strength and dropping travelers at its doors), and due to obsolescence in a changing economy. It was not sustainable because it had to rely upon a steady, large income stream to keep going and yet was difficult to reach, expensive to maintain and often badly managed. These lessons have been applied to the design for the new Rockledge Community Center. it is now very easy to reach via the excellent road up the mountain (as well as trails). It also has a greatly augmented market with the growing Roanoke population. And, the building is designed to be energy efficient and environmentally sustainable.

MMC: We wonder why VF seems to be appealing to - perhaps even attempting to create - nostalgia for a business failure. In 2008, the world economy is changing again, with fuel costs escalating and the cost of living increasing significantly. Restaurants, which already have the highest failure rate of any commercial activity, will find it even more difficult to be profitable. Parkway traffic has been declining in recent years, and gasoline costs will be likely to further diminish Parkway travellers - and potential restaurant customers.

Q: How do we know that it won’t become obsolete 10 or 20 years from now?

VF: The building is designed to fit into the historical and regional vernacular, and thus will retain its attractiveness for the next hundred years. Al of the interior and exterior spaces are designed for versatility and longevity, and thus allow for new uses in the future. All systems and structure are designed for maximum efficiency and flexibility as well.

MMC: The building may not become obsolete, but the concept is obsolete! Roanoke can distinguish itself as a progressive city by protecting the small amount (5%) of undeveloped space that remains within the city limits.

Q: Will any public money be required?

VF: No.

MMC: Public money may not be required to build it, but public money would be lost without rental income paid to the city for using park land. Also, public safety costs need to be considered. What is the cost for one police or fire/rescue response on Mill Mountain? How many more calls would these departments anticipate if the Rockledge restaurant were to be built?

Q: Who is going to pay for it?

VF: Valley Forward will help the community raise $1 million in donated capital. With 1/3 of the project cost covered, the remainder will be borrowed from a group of banks and repaid with revenue from Rockledge.

MMC: At one of Valley Forward’s informational sessions, John Lugar announced that they intended to raise the money from within their membership, and that he and Robert Fralin would each be contributing $25,000. This would not be a community fund-raising venture, but the small membership of Valley Forward using personal resources to advance their agenda.

Q: Who will guarantee the loan?

VF: City or personal guarantees will not be required since so much (1/3 +) of the project’s cost is already paid at the beginning.

MMC: In spite of the capital that VF will raise from within its membership, the Rockledge would be a high risk endeavor due to its isolation. Has a feasibility study been done, as a lending institution would require? VF is expecting to secure a non-recourse bank loan, one that would not require guarantees from the principals of the borrower.

Q: How will it pay for itself?

VF: The restaurant and coffee shop will each have leases payable to the Mill Mountain Community Foundation. The Community Room will be rented for events by businesses, families, governments and others at market rates. Non-profits will have free usage.

MMC: The proposed venture will likely NOT pay for itself! Restaurants are the most risky endeavor in commercial real estate. VF’s business plan is deeply flawed. Their cash flow projection assumes 100% occupancy with 3% annual increases in revenues year over year for 20 years. These are extremely rosy and aggressive assumptions. Many restaurants will sign a 5 year lease with a flat rental payments (no annual increase). The VF proposal includes no provision for down time or vacancy between tenants. A realistic analysis should include a provision for 6 months or 1 year vacancy between tenants and a 5% vacancy factor to account for credit loss when tenants are in place.

Concerns include the optimistic expectation of 150 revenue-generating rentals of the community room (although they only budgeted clean-up for 102 events, which is a $12,000 hole in the projected budget). Also, the VF business plan does not indicate any cost to non-profits for cleaning - how do they plan to absorb this cost?

Expenses projected by VF are quite low and not reflective of this type of endeavor. They are only 20% of gross income, but a responsible business plan would project expenses closer to 45% or 50% of income.

For example, utility costs are seriously underestimated at $866 per month. Putting it in context may underscore the concern - $866/month for 10,000 square feet is comparable to $166/month for a 2,000 square foot personal residence. And - this proposed development would use a proportionately greater amount of utilities per square foot than a family residence. Utility costs will be substantial for cooking, baking, lighting, heating, cooling.... and a huge amount of water.

Q: How risky is it?

VF: The financial risk has been greatly reduced by employing a strong financial model ($1 million equity) and having 2 high-quality lessees, each with a record of success. A rentable Community Room at Roanoke’s ultimate iconic location will provide the third financial piece of the picture. Even a conservative analysis of comparable spaces indicates strong market viability with low-risk.

MMC: It is a huge financial risk, and the City of Roanoke should not take any financial risk with city park land.

Q: But what if it does fail?

VF: Though unlikely, one of the three revenue producers could fail to meet projections, or fail outright. But, due to having three revenue sources, Rockledge Center will still be able to meet its operating expenses and continue serving our citizens. If, somehow, Rockledge Center itself failed, due to the one million in equity and non-recourse (guaranteed) financing, the ultimate risk will be borne by the lending institutions, not the city or taxpayers.

MMC: If the Rockledge is built and fails, the city wold be in quite a quandary. A 10,000 square foot building would be occupying city park land, and generating no revenue for debt payment. There would not be viable options for converting it to a different commercial use. It is unjustifiable to take such a risk with Mill Mountain Park.

Q: Who will benefit financially from Rockledge’s success?

VF: The Mill Mountain Community Foundation, as owners of the Rockledge, will direct 100% of profits to the zoo and other mountaintop amenities. This Foundation will be a non-profit organization.

MMC: Given the weakness of the financial plan, neither the zoo nor other mountain top amenities should expect to receive any financial assistance from this project.

Q: How much will Rockledge and the zoo stand to benefit?

VF: Over 20 years, Rockledge is projected to generate over $2.5 million to be directed at the MMCF’s discretion. The financing is projected at 20 years, so after this time, cash flow grows dramatically - $6 million + over 30 years and $11 million + over 40.

MMC: VF’s profit projections are ludicrous because they incorporate aggressive increases in rents and net income year over year for a time frame that is well beyond reasonable. The consistent increases in income do not account for the true up and down cycles in real estate that are part of the reality of our economy.
A closer look reveals that their projections, which are extremely unlikely to be achievable due to absurdly excessive revenue projections, are not significant when broken down into annual profits. $2.5 million over 20 years is just $125,000 annually, and the projections beyond that assume that new financing will not be needed after 20 years for substantial renovations and systems upgrades.

Back to TOP

Q: Who will own Rockledge?

VF: The community through the Mill Mountain Community Foundation.

Q: So the MMCF will own the Rockledge and be the landlord?

VF: Yes. The MMCF will own Rockledge Community Center (the building) and secure leases from the coffee shop and restaurant. Further, it will charge for events, such as weddings, receptions, business events and other functions.

MMC: VF is proposing to develop land that belongs to all citizens, and then structure its management so that they would have no responsibility when it fails.

Q: Who will run it?

VF: The board of the MMCF, which will be represented by members of the community, including representatives from the Fishburn family, zoo, the Mill Mountain Advisory Committee, the Greenways, City Council and four At-large members. The Board will also rely upon the expertise of outside financial and marketing consultants.

MMC: Has a member of the Fishburn family agreed to serve on the MMCF?
The Fishburn family has clearly stated: “No more development on Mill Mountain.”

Q: So it’s a restaurant?

VF: No. It’s a 3-part community center with something for everyone. It will have enhanced (free) decks and outdoor spaces, a coffee shop, a community room for events, and a unique destination restaurant.

MMC: A restaurant by any other name is... a restaurant. Again, 70% of the square footage would be restaurant space.

Q: Why will we need another room since we have the Discovery Center?

VF: The Discovery Center is a great space, but small and lacking amenities. The community room can host events of up to 300 people (or simultaneous smaller events). The community room will benefit from having the restaurant and coffee shop as neighbors - for catering or larger events - and enjoy Rockledge’s outdoor decks and porches. And the Discovery Center and Zoo will also be enhanced by the Rockledge Community Center, augmenting their capabilities and attracting more visitors.

MMC: Again, we ask - where’s the need assessment? Incidentally, the zoo has a plan in place to build a 40' x 60' deck that will truly have a view. It will be available for rental for weddings and other events. It seems that a partnership with the zoo to develop a small restaurant within their existing space, with capacity to cater special events using the new deck, could benefit the zoo - and provide a real view of our city. Even better than contracting with an out-of-town restaurant chain, such as Bookbinders, work with a local independent restauranteur to develop the best of “green dining”. The Local Roots Café is an excellent example of such creativity, progressiveness, and quality food.

Back to TOP

Q: Many restaurants fail, so why will this be different?

VF: Many reasons. Successful, proven, well-capitalized restaurants in iconic locations rarely fail. Mill Mountain Coffee and the owner of the Bookbinder’s are such proven, well-capitalized operators with a history of success.

MMC: The Brugh Tavern, a few miles away at Explore Park, failed under several different quality management teams.

Q: Other reasons?

VF: Mill Mountain is a Roanoke icon and a must-see destination for any visitor, there is already considerable built-in traffic, and each part of the Community Center will support the others. Also, visitors will know that their patronage helps the zoo, it’s close to the Parkway’s many travelers, and it will be very well capitalized.

MMC: Parkway traffic diminishes considerably during the winter months, and is closed under adverse weather conditions. There has been an overall reduction in Parkway travel in recent years, and escalating fuel costs will further reduce Parkway traffic.

Q: Do we really need another restaurant?

VF: Rockledge Center is about the experience, about the place - not “a restaurant”. The food is secondary - but is a traditional feature of the kinds of gatherings people desire. Rockledge is about more ways to enjoy our community treasure.

MMC: Rockledge will primarily be a restaurant and a coffee shop.

Q: How much does (restaurant) location really matter?

VF: A restaruant in an incomparable location becomes unforgettable. The same Eiffel Tower restaurant in another location is hardly the same. Restaurants in skyscrapers (New York, Chicago, Miami, Atlanta, Dallas) at famous landmarks (the Grand Canyon, Niagra Falls, Central Park, Biltmore) overlooking beautiful scenery (San Francisco, Grove Park Asheville, Ciscayne Bay - Miami, Mabry Mill) become more than just “restaurants” . Make the restaurant itself first-rate, and the effects are beyond words.

MMC: Restaurant location is crucial, fundamental, all-important. Chain restaurants exhaustively research demographics and market information before buying or renting a space. Restaurants generally like to cluster together rather than be isolated. Note all the eating establishments in downtown Roanoke and at Valley View. Panera Bread placed itself beside an established mall. The isolation and daylight oriented activity of Mill Mountain would deter rather than promote restaurant success.

Q: What type of restaurant will it be?

VF: There will be a restaurant and a coffee shop. The coffee shop will have a casual, relaxed atmosphere, a variety of reasonably priced food. The restaurant will be nicer, but not exclusive, and a showcase for the Roanoke Valley. Pricing has NOT been set.

MMC: There are countless ways to showcase the Roanoke Valley - risking public park land is not one of them!

Q: What about alcohol in public parks?

VF: Currently, alcohol is permitted in public parks and places like Elmwood Park, Mill Mountain Zoo, Mill Mountain’s Discovery Center (in Mill Mountain Park), and at Explore Park (Brugh Tavern). Responsible, controlled