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Kalahari incentives add up to $61 mil
City releases Kalahari incentives

  • BLOG: Read more on the incentives.

  • Date published: 1/9/2008

    BY EMILY BATTLE

    Fredericksburg would give back nearly half of the local taxes paid by Kalahari Resorts as part of a 20-year, $61 million incentives package that helped convince the Wisconsin-based company to build a water park hotel and convention center in the Celebrate Virginia tourism complex.

    Mayor Tom Tomzak said as the terms of that package were released that Kalahari will transform the city as a tourist destination.

    And on a night when the city manager called for a hiring freeze because of lagging sales tax revenues, Tomzak said this project is necessary for the city to meet the growing expenses of local government services and infrastructure.

    The agreement calls for the city to waive $3.35 million in up-front development fees for the project.

    The bulk of that is a waiver of the roughly $3.2 million in water and sewer availability fees Kalahari would have to pay to connect to the city's utility system.

    In addition to fee waivers, the deal calls for the city to return 47.5 percent of the local tax revenues that Kalahari generates to the resort on a quarterly basis for 20 years.

    In all, that means that of the $125 million Kalahari is projected to generate in local government revenue over 20 years, the city would get $64 million, and Kalahari would get $61 million in the form of tax breaks and fee waivers.

    The agreement also includes the following:

    Kalahari will include Fredericksburg in its marketing, and it will set aside up to 500 square feet in its lobby for the city to market other area attractions.

    Kalahari will "work with" the city to provide transportation between the resort and the downtown, but that doesn't require the resort to make any financial commitment to such a transportation system.

    Kalahari will develop a water conservation program.

    The Fredericksburg Kalahari will be the only Kalahari resort in Virginia.


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    For more on last night's discussion of the Kalahari incentives, and for a link to the document, click on the City Beat blog at Fredericks burg.com/blogs.