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<br />June 12. 2007
<br />
<br />"RESOLUTION APPROVING THE EXERCISE BY THE ECONOMIC
<br />DEVELOPMENT AUTHORITY OF THE CITY OF PORTSMOUTH, VIRGINIA OF
<br />POWERS CONFERRED BY THE INDUSTRIAL DEVELOPMENT AND REVENUE
<br />BOND ACT, IN CONJUNCTION WITH THE ISSUANCE FOR OLD TOWNE
<br />HOSPITALITY, L.L.C., A VIRGINIA LIMITED LIABILITY COMPANY, OF NOT TO
<br />EXCEED $12,000,000 OF THE AUTHORITY'S NEW EMPOWERMENT ZONE
<br />FACILITY REVENUE BONDS TO FINANCE A PORTION OF (1) THE COST OF A
<br />120 ROOM HOLIDAY INN AND SUITES HOTEL, (2) A DEBT SERVICE RESERVE
<br />FUND, (3) CAPITALIZED INTEREST, AND (4) THE COSTS OF ISSUING SUCH
<br />BONDS AND DESIGNATING THEM AS NEW EMPOWERMENT ZONE FACILITY
<br />BONDS FOR PURPOSES OF SECTION 1394(f)(2)(A) OF THE INTERNAL
<br />REVENUE CODE OF 1986, AS AMENDED.
<br />
<br />WHEREAS, the Industrial Development and Revenue Bond Act, Chapter 49,
<br />Title 15.2 of the Code of Virginia, as amended (the "Act"), authorizes the creation of
<br />the Economic Development Authority of the City of Portsmouth, Virginia (the
<br />"Authority"); and this Council has created the Authority; and
<br />
<br />WHEREAS, the Act empowers the Authority to assist Old Towne Hospitality,
<br />L. L. C., a Virginia limited liability company (the "Applicant"), by the issuance of not to
<br />exceed $12,000,000 of its new empowerment zone facility revenue bonds (the
<br />"Bonds") to finance a portion of (1) the costs of a 120-room Holiday Inn and Suites
<br />Hotel, to be located on an approximately four acre parcel of land at the southwest
<br />corner of Port Centre Parkway and Crawford Connector South, in the City of
<br />Portsmouth, Virginia (the "Project"), (2) a debt service reserve fund, (3) capitalized
<br />interest, and (4) the costs of issuing such Bonds; and
<br />
<br />WHEREAS, the Applicant, which will own the Project, has its present principal
<br />place of business at 825 Greenbrier Circle, Suite F, Chesapeake, VA 23320; and
<br />
<br />WHEREAS, Section 147(f) of the Internal Revenue Code of 1986, as amended
<br />(the "Code"), requires approval by this Council of the issuance of any private activity
<br />bonds by the Authority after the Authority has held a public hearing to consider the
<br />issuance of such bonds as one of the acts required in order for the interest on such
<br />bonds to qualify for exemption from the imposition of federal income tax; and
<br />
<br />WHEREAS, the Project is located in the ten square mile area of the City of
<br />Portsmouth, Virginia ("Portsmouth") and the City of Norfolk, Virginia ("Norfolk") which
<br />has been designated an empowerment zone under Section 1391 (g) of the Code;
<br />
<br />WHEREAS, Section 1394(f)(1) of the Code provides that "new empowerment
<br />zone facility bonds" are exempt from the state volume cap restrictions of Section 146
<br />of the Code if bonds are designated under Section 1394(f)(2)(A) of the Code for such
<br />purpose by the local government or governments which nominated the area to which
<br />the bonds relate for designation as an empowerment zone under Section 1391 (g) of
<br />the Code (a "new empowerment zone");
<br />
<br />WHEREAS, Norfolk and Portsmouth jointly nominated the above-described
<br />area for designation as a new empowerment zone;
<br />
<br />WHEREAS, the aggregate face amount of bonds which may be designated
<br />under Section 1394(f)(2)(A) of the Code with respect to a new empowerment zone
<br />may not exceed $130,000,000 if such zone is in an urban area and the zone has a
<br />population of less than 100,000, and such limit will not be exceeded by the issuance
<br />of the proposed Bonds;
<br />
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