The shooting was reported shortly after noon Thursday.
Before being evacuated, one witness at a salon near the restaurant said police broke down the restaurant's door and entered with guns drawn and dogs.
John Aquino, one of the representatives of the group that owns the restaurant, said the victim was a chef at the restaurant and said the gunman was a former dishwasher.
One person was shot and killed before the shooter took at least one hostage upstairs after the majority of the occupants left the restaurant.
The suspect, NBC has identified as Thomas Burnes, is described as a disgruntled employee, according to Tecklenburg added.
Employees working in the area near Virginia's restaurant said they were on lockdown as authorities swarmed the area.
Other witnesses described the assailant as looking like "an ordinary grandpa, but he had a insane look ... it was very insane".
He said there are "a couple of hostages" in the building with the suspect at present.
The witnesses reported that the armed man instructed diners to get on the ground and move to the back of the restaurant.
An employee who had been shot at a restaurant in Charleston has died, and a number of hostages have been rescued.
"He said, 'There's a new boss in town, '" Siegert told The Associated Press.
Police officers had sent a SWAT team, medics, hostage negotiators and a bomb squad all to the scene, and urged residents to avoid the area.
Police were focused around the Southern-style restaurant, a boutique owner near the restaurant said. Heavy police and SWAT presence has been claimed by several eyewitnesses.
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