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October 10, 2017
<br />
<br />Next Steps Following Council Action:
<br />
<br /> City Manager will sign the loan agreement. Once the agreement is fully executed
<br />
<br />by both parties, the City Manager will submit a written request to VDOT for the funds.
<br />
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<br />1. Ross Cirrincione, 5017 Lake Circle, had several question with regards to Item 17-446.
<br />
<br />Motion by Mr. Clark, and seconded by Mr. Moody, to adopt the following resolution,
<br />and was adopted by the following vote:
<br />
<br />“RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A LOAN
<br />AGREEMENT WITH THE COMMONWEALTH OF VIRGINIA FOR A LOAN OF THREE
<br />MILLION FOUR HUNDRED THOUSAND DOLLARS ($3,400,000) TO COVER THE
<br />LOSS OF PERSONAL PROPERTY TAX REVENUE RESULTING FROM THE TERMS
<br />OF THAT CERTAIN AMENDED AND RESTATED DEED OF FACILITIES LEASE
<br />AGREEMENT ENTERED INTO AS OF SEPTEMBER 21, 2016 BY THE VIRGINIA
<br />PORT AUTHORITY AND VIRGINIA INTERNATIONAL GATEWAY, INC.
<br />
<br />WHEREAS,
<br /> the Virginia Port Authority (VPA) and Virginia International Gateway,
<br />Inc. (VIG) entered into an Amended and Restated Deed of Facilities Lease Agreement
<br />dated as of September 21, 2016 for the operation of the Virginia International Gateway
<br />Terminal (the “Lease Amendment”); and
<br />
<br />WHEREAS,
<br /> under the Lease Amendment the ownership of certain personal
<br />property has been and will be transferred from VIG to VPA, resulting in a substantial loss
<br />of personal property tax revenue to the City; and
<br />
<br />WHEREAS,
<br /> while it is anticipated that additional expansion at VIG will ultimately
<br />result in the City’s annual tax revenues from the Virginia International Gateway Terminal
<br />equaling or exceeding revenues prior to the Lease Amendment, the City will face reduced
<br />revenues for multiple years while the expanded facilities are being constructed; and
<br />
<br />WHEREAS,
<br /> in recognition of this shortfall the Virginia General Assembly included
<br />a provision in the 2017 Virginia Appropriation Act authorizing a loan from the
<br />Commonwealth to the City; and
<br />
<br />WHEREAS,
<br /> the principal amount of the loan will be $1,700,000 of FY 2017 funds
<br />and $1,700,000 of FY 2018 funds, for a total of $3,400,000; and
<br />
<br />WHEREAS,
<br /> the loan will be interest free; and
<br />
<br />WHEREAS,
<br /> the City’s obligation to repay the loan principal will not commence until
<br />FY 2022; and
<br />
<br />WHEREAS,
<br /> if the City’s personal property tax revenue has not increased by
<br />$1,700,000 from the FY 2017 level, the City’s repayment obligation will be $200,000 per
<br />year from FY 2022 through FY 2030 or until the loan is repaid; and
<br />
<br />WHEREAS,
<br /> if the City’s personal property tax revenue has increased by
<br />$1,700,000 from the Fiscal Year 2017 level, the City’s repayment obligation will be the
<br />greater of $200,000 or the amount of revenue in excess of the $1,700,000 increase, paid
<br />per year from Fiscal Year 2022 through Fiscal Year 2030 or until the loan is repaid; and
<br />
<br />WHEREAS,
<br /> in either case the City will be obligated to repay any remaining
<br />balance of the loan in Fiscal Year 2031; and
<br />WHEREAS,
<br /> the interest free loan will help the City to bridge the temporary loss of
<br />tax revenue resulting from VPA’s Amended Lease; and
<br />
<br />WHEREAS,
<br /> it is anticipated that the Commonwealth will provide an additional
<br />$1,700,000 interest free loan in Fiscal Year 2020;
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