WASHINGTON — The Internal Revenue Service has completed an audit of $67.6 million of bonds issued by Washington's Vancouver Downtown Redevelopment Authority in 2003 with no change to the bonds' tax-exempt status, the issuer disclosed this week.
In a letter dated Oct. 22, Robert Henn, the manager of field operations for the IRS' tax-exempt bond office, informed the VDRA that its audit was complete and it was issuing a no-change determination on the bonds. A copy of the letter was filed by the authority with the Municipal Securities Rulemaking Board's online EMMA system this week.
The revenue bonds were issued to finance a convention center and related projects. The proceeds were used to finance the design, construction, furnishing and equipping of a 29,000-square-foot conference center located downtown. They also were used to finance the construction of a hotel with 226 guest rooms and an underground parking garage with 160 parking spaces, according to bond documents.
The VDRA did not appear to have disclosed the opening of the IRS audit. However, it disclosed on Sept. 30 that it had to draw on its reserves to make deposits into reserve funds. It said the "severe recession" had adversely affected business and personal travel, including conference activity, and had caused a decline in revenues from the conference center.
The redevelopment authority added that it could not predict when, or to what extent, conference activity and related lodging and travel activity would pick up again, driving revenues back to their previously expected levels.
The agency said it probably would have to draw on $524,000 of reserves to make a $2.32 million debt-service payment on Jan. 1, 2011 because it only had $1.8 million of revenue available for the payment.
U.S. Bancorp Piper Jaffray Inc., underwrote the bonds. Orrick, Herrington & Sutcliffe LLP served as bond counsel, while Ball Janik LLP of Portland was the authority's special counsel.