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City and waterpark negotiating
Public will get to comment on Kalahari incentives in January


Date published: 11/23/2007

BY EMILY BATTLE

The details of a package of tax incentives for the proposed Kalahari Resorts waterpark hotel in Celebrate Virginia will likely come out in early December.

At their Dec. 11 meeting, City Council members will publicly receive the details of the performance agreement that will dictate how those incentives are distributed.

That agreement will be subject to a public hearing on Jan. 8, before the council takes a vote on it.

For now, Economic Development Director Kevin Gullette said the exact numbers on the incentives package are still being negotiated.

"Everything is performance-based," he said "and the city is not upside-down," meaning it's not giving away more than it's getting.

Gullette said this deal will be similar in form to the incentives package the city set up with Wegman's grocery, which is also building in Celebrate Virginia.

That package calls for the city to waive $1.7 million of the grocer's business license taxes over a 10-year period. To start taking advantage of that waiver, Wegman's must generate at least $300,000 in tax revenue, so the city would get at least $130,000 in new money.

With Kalahari, Gullette said the city is looking at all of the local taxes it will pay--sales, occupancy, meals, admissions, real estate--as places to offer a rebate.

In Fredericksburg, Kalahari is estimating that it will contribute $122.7 million to the regional economy. It anticipates generating $5.9 million a year in new taxes to the city. Based on the most recent assessments, it would take a nearly 15-cent increase in the real estate tax to raise that amount.

In addition to the money, Gullette said the city is negotiating in other areas, such as looking for Kalahari to come up with a plan for conserving water on the 49-acre site, which is to include two water parks covering a combined 295,000 square feet. "Absent one, we would be less likely to approve a deal," he said.


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