May 21, 2007 - PORTSMOUTH -- The developer of an extended-stay hotel chain has sued the City Council, saying members acted unreasonably last month when they denied the company permission to build one of their franchises in an up-and-coming neighborhood.

New River Holdings II, the local franchisee of ValuePlace Hotels, had requested permission last year to build a 121-room hotel at 4015 Victory Blvd., across the street from Victory Crossing Shopping Center and near the site of the planned Victory Village business park.

In April, the City Council denied the company a use permit on a 3-3 vote. Councilman Ray Smith, who had rejected the plan in a preliminary vote, was absent from the meeting.

Several council members at the time said they worried the hotel wouldn't be the same quality as the nearby Victory Village, which will include offices, a full-service hotel and a new Tidewater Community College campus. At least one council member cited the company's low room rates as proof. The hotel's weekly rates averaged about $45 a day.

Both the city's Economic Development department and the builders of Victory Village had opposed the hotel. The city's Planning Commission recommended that the council deny it.

In the lawsuit filed in Portsmouth Circuit Court earlier this month, the company argues that it had the support of close commercial neighbors, such as the Lowe's store across the street. The company also had upgraded its design plans, agreeing to build an all-brick hotel and adding shutters and balconies to each room to satisfy the Planning Commission's objections.

Attorneys for the company wrote that the council members who denied the proposal never explained why they voted against the hotel or offered evidence of how the hotel could damage the area.

City Attorney Tim Oksman refused to comment saying he had not seen the lawsuit.

The property is zoned for light industrial use, and hotel officials said lesser uses, such as a car wash or coin-operated laundromat, could be built on the site without the council's permission.

The lawsuit asks a judge to overturn the council's decision and allow ValuePlace to build a hotel there.

-- Reach Meghan Hoyer at 446-2293 or [email protected]

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