N.C. Lawmakers Seek Extension of Bond Spending Period

November 23, 2020

Re: Virginia Small Business Finance Authority's Taxable Qualified Energy Conservation Bonds (Direct Pay) (VSBFA Green Community Program — Gateway Project, Raleigh, North Carolina, Series 2017 issues on December 29, 2017, under Section 54A of the Internal Revenue Code of 1986 (CUSIP No. 928104 MD7)

Dear Secretary Mnuchin:

We write to request that your office order a 24-month extension of the “3-year expenditure period” for the above-mentioned Qualified Energy Conservation Bond (QECB) for the City Gateway project located in Raleigh, North Carolina. Due to the coronavirus, many tenants have delayed their decisions to occupy space, which has resulted in equity partners not providing funding until tenants agree to return. The City Gateway project reflects our shared vision to enhance North Carolina's economy under the impact of the coronavirus. This will be the nation's first energy-positive high-rise building, and it has bipartisan support from all levels of government in North Carolina. The bond monies have already been deposited and much work has been completed on the project, but the monies would revert if an extension is not granted to allow the markets to regain stabilization.

Section 54A(d)(2) of the Internal Revenue Code of 1986 (CUSIP No. 928104 MD 7) states that “Upon submission of a request prior to the expiration of the expenditure period (determined without regard to any extension under this clause), the Secretary may extend such period if the issuer establishes that the failure to expend the proceeds within the original expenditure period is due to reasonable cause and the expenditures for qualified purposes will continue with due diligence.” Based on the authority given to the Secretary by Section 54A(d)(2), you may grant such a request by whatever process you deem appropriate assuming the facts support an extension. The private letter ruling process can take upwards of 6 months and will not meet the QECB three-year expenditure period timeline, which expires in December 2020.

Therefore, in light of the economic toll brought on by the coronavirus, we respectfully request that by the legal authority granted to you by Congress, you extend the expenditure period by twenty-four months to allow the markets to stabilize and tenants to return. During the extension period, the owners will continue to work diligently to make this transformative and visionary project a reality. Thank you very much for your service to our great country.

Sincerely,

GEORGE HOLDING
Member of Congress

DAVID E. PRICE
Member of Congress