Adopt a resolution in the form attached as Exhibit A authorizing the issuance by the Economic Development Authority of the County of Spotsylvania, Virginia (the “EDA”) of bonds in an aggregate amount of up to $22,000,000 (the “EDA Bonds”) for the benefit of BFW Palmers Creek, LLC.

Purpose of Proposed Financing - The EDA is empowered by the Industrial Development and Revenue Bond Act, Chapter 49, Title 15.2, Code of Virginia of 1950, as amended (the “Act”), to issue its revenue bonds for the purpose of financing facilities used primarily for single or multi-family residences in order to promote safe and affordable housing in the Commonwealth of Virginia and to benefit thereby the safety, health, welfare and prosperity of the inhabitants of the Commonwealth of Virginia.  BFW Palmers Creek, LLC, a Virginia limited liability company (the “Applicant”) plans to acquire, construct and equip an approximately 200-unit multifamily residential housing facility (the “Project”) to be located at 8934 Jefferson Davis Highway, Fredericksburg (Spotsylvania County), Virginia (the “County”) and has requested the EDA to issue the EDA Bonds to assist in financing the Project.  The EDA will act as a conduit issuer on this transaction.  The financial institution that purchases the EDA Bonds will undertake its own credit underwriting effort and evaluation of the Applicant’s business plan.

                        EDA Action - The EDA held a public hearing and adopted a resolution on October 25, 2018 granting preliminary approval to issue the EDA Bonds in the maximum principal amount of $22,000,000 to assist in financing costs of the Project.  Notice of the hearing was published as prescribed by the Code and the Act.  No members of the public appeared at the public hearing to speak about the financing other than representatives of the Applicant.  Documentation regarding the public hearing and a certified copy of the resolution adopted by the EDA are included in Exhibit B.

                        Legal Requirements - Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”) requires that an issue of tax-exempt private activity bonds be approved by the elected legislative body of the governmental unit (i) issuing the bonds and (ii) having jurisdiction over the area in which the bond-financed facility is located.  Section 15.2-4906 of the Act sets forth the Virginia procedure for such approval.  Bonds issued by the EDA, which has no elected legislative body, must be approved by the next higher governmental unit (i) with an elected legislative body and (ii) from which the EDA’s authority is derived.  The County created the EDA, the Project is located within the County, and the County Board of Supervisors constitutes the highest elected legislative body of the County; and, therefore, County approval of the EDA Bonds is required under the Code and the Act.

No financial impact on the County.  The EDA Bonds will be payable solely from revenue generated by the Applicant.  The County and the EDA have no responsibility for payment of the EDA Bonds, and the County has no responsibility for debt issued by the EDA.  The EDA Bonds have no impact on the County’s debt capacity or credit ratings.  The EDA Bonds shall provide that neither the Commonwealth of Virginia nor the County nor the EDA shall be obligated to pay the EDA Bonds or the interest thereon or other costs incident thereto except from the revenues and monies pledged thereto and that neither the faith and credit nor the taxing power of the Commonwealth of Virginia nor the County or the EDA is pledged to the payment of the principal of the EDA Bonds or the interest thereon or other costs incident thereto.

Section 15.2-4906 of the Act requires that the Board of Supervisors take action within 60 days after the public hearing held on October 25, 2018 by the EDA.  Failure to obtain County authorization for the EDA Bonds within the 60-day time limit could result in increased financing costs and delays in financing the Project.  If the EDA Bonds are not issued, the Applicant will have to pay higher interest rates to finance the Project or identify alternative funding methods which would result in a delay in financing the Project.