NORFOLK -- A Richmond-based developer said construction of a $40 million, 14-floor office tower, halted because of financial problems, could resume as early as October.
Work on the First American Financial Center was stopped June 7 after Marine Midland Bank of New York cut off funding. The building was supposed to be completed by the end of this year.
Deborah Stearns, regional vice president of financially troubled Rowe Development Co., said the firm is negotiating several alternatives to finish the project, including finding new lending sources.
If the company's efforts are successful, the building could be ready for occupancy by next June, she said.
Rowe, one of the state's largest commercial real estate developers, also is attempting to restructure loans on several other Virginia properties facing foreclosure.
Among them are the Peninsula Center office complex in Newport News and close to a dozen one-story buildings in the Innsbrook Corporate Center in western Henrico County.
The general contractor for the Norfolk building, Galloway Construction Corp. of Virginia Beach, has threatened to file a lawsuit that could force the building to be sold.
The building firm, which is owed about $2.8 million, according to court documents, already has voided its construction contract for the project.
Galloway has delayed taking Rowe to court because officials anticipate construction funding will be restored, officials said last week in the Virginian-Pilot and the Ledger Star newspapers.
"We haven't filed suit yet in the hopes that this will be resolved," said Galloway's attorney, Donald Clark. "But unless this is resolved immediately, we will file."
The building is about three-fourths finished, but only two leases have been signed.
First American Bank was to be the anchor tenant and contracted for about 50,000 square feet, or about 25 percent the building. But First American no longer needs the room and is seeking a replacement tenant to take its contracted space.
The bank is planning to withdraw from the area, and the building has been renamed One Bank Street due to the change.
In a related development, Five lawsuits filed by Sovran Bank against George M. Kaufman, GMK Hotels Inc. and Tampa Hotel Partners were dismissed Wednesday by the Norfolk Circuit Court.
Sovran was suing for repayment of a $6.83 million loan. Terms of the settlement were not disclosed.
"This action indicates that we've reached a mutually satisfactory agreement," said Albert B. Gornto Jr., chairman and chief executive of Sovran Financial Corp., the Norfolk-based parent of Sovran Bank.
An attorney for Kaufman and his companies, Anne B. Shumadine, described the settlement as "amicable."
The bank's suits involved unsecured loans of $1.83 million to Tampa Hotel Partners, $4.28 million to GMK Hotels -- Kaufman's Norfolk-based hotel company -- and $725,000 to Kaufman.