Sen. Lucas to request financing for convention center again

PORTSMOUTH

State Sen. Louise Lucas plans to again ask the city for access to millions in low-cost financing for a hotel and conference center at Victory Village.

She would use the money to help pay for the same project that was investigated by the State Corporation Commission earlier this year.

The case has since been resolved, but the agency made the allegation that Victory Conference Center LLC was not authorized by the state to sell shares. Lucas is the controlling shareholder of that company, according to a document she provided to investors.

As a result, the commission required that Lucas offer to return money to approximately 600 investors who gave more than $1.9 million to the project. Some have since requested and received their investments back, and the company is not currently registered with the state commission to sell more investments.

Lucas is now scheduled to go before the city's economic development authority Tuesday. She'd like for the authority to reconfirm a vote from earlier this year that would allow her to seek additional approval for tax-exempt bonds:

$32 million from the federal government and up to $6 million from the state.

Lucas plans to get the bonds guaranteed by a commercial lender. Neither the hotel nor the conference center would be a viable project without the bonds, according to Lucas' request.

The Portsmouth Democrat would also need approval from the Portsmouth City Council, which narrowly voted against the issue in July. Two council members who then had ties to the project abstained from the vote.

If the council signs off on Lucas' request this time, then the Norfolk City Council would also have to approve it.

The bonds are part of more than $130 million in tax breaks that the U.S. Department of Housing and Urban Development designated to Portsmouth and Norfolk nearly 10 years ago to promote economic development and job creation. In the past, several businesses in both Norfolk and Portsmouth have received the tax breaks - including Ocean Marine Yacht Center, and more recently, another Holiday Inn hotel project.

Lucas plans to build the project on about eight acres in Victory Village business park. The site is off Interstate 264, near where a Tidewater Community College campus is under construction.

Lucas has scaled back the project slightly since the last economic development authority vote.

The $40 million hotel, for example, is now 200 rooms instead of up to 250 rooms, according to documents that Lucas and her attorney submitted to the authority.

Lucas wants the authority's approval for up to $23.6 million in federal bonds for the hotel. In addition, she is seeking $3 million in tax-exempt bonds from the Virginia Department of Community and Housing Development.

She also would like to use up to $8.3 million in federal bonds for the conference center and $3 million in bonds from the Virginia Department of Community and Housing Development.

Norfolk and Portsmouth city councils do not have to approve the $6 million in tax-exempt bonds that she wants to request from the state.

According to a disclosure document Lucas provided to investors in October, Lucas will be the sole owner of the hotel. She already owns and runs several successful businesses, including local group homes and a transportation company.

She is the principal shareholder in the $20 million conference center portion of the venture, based on documentation she provided to investors this fall.

The hotel and conference center would have about 33 full-time employees and generate more than $927,000 in local taxes per year, according to the paperwork.

Portsmouth's director of economic development, Steven Lynch, referred questions last week about the project to Lucas' attorney, William Nusbaum.

Nusbaum did not respond to a message left at his office Friday afternoon.

Lucas did not respond to a message left at her Portsmouth office.

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