Portsmouth Sen. Lucas to revive conference center plans

PORTSMOUTH

State Sen. Louise Lucas plans to come back to the City Council and ask members again for authorization to use up to $50 million in bonds to build a hotel and conference center at Victory Village.

During an interview with Joel Rubin on Sunday on his WVEC show "On The Record," Lucas, her attorney and a development consultant discussed why the City Council should approve the use of the bonds, the viability of the project and Mayor James Holley's comment that Portsmouth needs a "black" hotel.

"Six hundred people have told Sen. Lucas that they want to be part of Victory Conference Center," Lucas' attorney, William Nusbaum, said. "And there can be no better example of true community capitalism than what this project is."

The federal empowerment zone program was supposed to generate economic development in some of Norfolk's and Portsmouth's most-troubled neighborhoods.

Authorization of the bonds would allow the project's approximately 600 investors to secure financing at a lower interest rate, Lucas said.

"Every dollar will be paid back," Lucas said. "It is not an entitlement. It's an empowerment."

In July, the City Council voted 3-2 against authorizing the bonds for the hotel and conference center.

Council members who voted against the project said they had not been assured by the developers that they would not return to the city for financing and questioned the potential impact on the city-subsidized Renaissance Portsmouth Hotel and Waterfront Conference Center.

Two council members, Charles Whitehurst Sr. and Marlene Randall, did not participate in the votes.

Whitehurst, who received a $10,000 donation from Lucas during his recent City Council bid, has invested $2,500 in the conference center. Randall's husband, Vernon, has contributed $2,000.

During the show, Nusbaum described the idea of the city being on the hook for financing as a red herring.

He said the projects will pay back the bonds with the revenue they generate. If they don't, they will suffer the fate of other private businesses that are not successful.

"The city's not responsible for bailing out businesses that fail. And this one is no exception," Lucas said.

The $60 million project has been scaled back slightly from 250 rooms to 200. But developers still plan a 50,000-square-foot conference center and 16,000-square-foot ballroom.

Development consultant Michael Glenn said the Victory Village area is a great location for the hotel and conference center and will become a destination spot.

He said it is close to Interstate 264, a Tidewater Community College campus under construction and the planned 1,500-home New Port residential development.

"If you look at all the town centers throughout Hampton Roads, they're all very successful," Glenn said.

Project investors have generated $1.8 million to $2 million, Nusbaum said. The majority are black. Nusbaum said he expects another couple of million dollars to come in.

Developers plan to use a combination of the bonds and New Markets tax credits. Such federal income tax credits are available to investors and businesses in designated communities.

"Obviously, once we sharpen the pencils and fine-tune things, if the numbers don't work, then the bonds don't sell... we give the investors their money back and there's no project," Nusbaum said.

He disputed the argument that Whitehurst and Randall have any conflict of interest in voting for the project.

Nusbaum said that under state law, they would have a conflict if either had more than a 3 percent interest in the project or would earn more than $10,000 in revenue from the project per year.

Asked by Rubin about the perception of conflict, Lucas replied: "Members of City Council are elected to do the business of the city - to do what's in the best interest of the city.

"If perception is all it takes to make them not vote on the issue, how will they ever get anything done?"

Lucas said she had not returned Whitehurst's and Randall's investments because neither has asked and the two still support the project.

The Democratic senator from Portsmouth, who owns a successful chain of group homes for adults and youth, also addressed comments Holley made during the July council meeting that ignited what Rubin described as a firestorm.

Holley, who voted in favor of authorizing the bonds, described the Renaissance as a "white hotel" and said he thought it was time for the city to have a black one.

Lucas said Holley wasn't as "artful as we would have liked to have heard him make that statement."

"But certainly, people understood... what he intended was for this group of people who have been disenfranchised, who have not felt empowered, to have an opportunity to participate in economic development," Lucas said.

"But you said you don't want this to be a race issue," Rubin said.

"We're sitting here saying it is not about race, it is not about entitlement, it is certainly not about Louise Lucas," she said.

"It's about empowering these people who are supporters of being involved in some economic development in the city."

Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com