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Virginia Beach development authority approves revenue bond for Virginia Wesleyan University
Summary
The Virginia Beach Development Authority approved a resolution authorizing a tax‑exempt revenue bond—up to $10 million—for Virginia Wesleyan University and agreed financing terms including a Town Bank loan; the authority will collect an annual administrative fee and is not liable for repayment, bond counsel said.
The Virginia Beach Development Authority on April 8 approved a resolution authorizing the issuance of a revenue bond for Virginia Wesleyan University, not to exceed $10,000,000, and approved the financing terms, bond counsel said.
At a public hearing opened by the authority, Megan Gillley of Kaufman & Canoles, who identified herself as bond counsel to Virginia Wesleyan University, said the bonds are structured as tax‑exempt financing for a qualified 501(c)(3) borrower. Gillley said Town Bank has offered the financing and the structure before the board is set as a 10‑year financing amortized on a 20‑year schedule. She said federal tax‑law and statutory requirements require the public hearing and additional approvals, including a later resolution from city council, before the bonds can be issued tax‑exempt.
Gillley said the bond documents obligate the university—using its own revenues—to repay Town Bank and include an indemnification of the development authority for any costs; the authority, she said, bears no repayment responsibility. The loan agreement and resolution also provide for an annual administrative fee equal to one‑eighth of 1 percent of outstanding principal, she said.
The authority voted by roll call to approve the resolution and financing terms. Kayla Franklin moved to approve the request; Penny Morgan seconded. The roll call recorded votes in favor by Kayla Franklin, Allen Forsley, Penny Morgan, Lisa Murphy, Mike Standen, David Winger and Brenda Weitzel. The authority’s chair declared the measure approved and thanked Virginia Wesleyan for its presence in the city.
Why it matters: the authority’s action clears a required local step so the university can obtain lower‑cost, tax‑exempt financing for campus projects, subject to subsequent city council action and compliance with federal tax‑exempt bond rules.
What remains: Gillley said the final step is city council approval to complete the tax‑exempt issuance; the university may then proceed with draws under the financing and comply with reporting and federal tax‑law covenants.
