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Kalahari is just the latest of many incentive deals
Date published: 1/13/2008
Two months ago, when Kalahari Resorts first announced it was coming to Fredericksburg, Mayor Tom Tomzak stood on a stage in the Fredericksburg Expo and Convention Center and said, "I'd rather have 75 percent of something than 100 percent of nothing."
That line of reasoning is pretty common when governments enter into incentives deals to lure private businesses by waiving some of their taxes or fees, as the city has for Kalahari.
While the Kalahari incentives package that was announced this week appears to be the largest such package an area local government has offered from a strict dollar standpoint, it's certainly not the first.
Spotsylvania County has used similar deals to boost two different projects on State Route 3. Elsewhere in the state, different forms of local government incentives have been used.
Under the terms of the incentives deal the city released this week, Fredericksburg would return 47.5 percent of Kalahari's local tax payments to the resort on a quarterly basis for 20 years.
The resort has estimated that it will generate $5.9 million a year in new city taxes if it can stay 75 percent occupied and get an average room rate of $220 a night.
"Even at $3 million, they are still our single largest taxpayer in the city of Fredericksburg," Economic Development Director Kevin Gullette said.
And in a city with a $79 million budget, they'd be single-handedly boosting revenues by nearly 4 percent.
INCENTIVES used at MALL
In 2006, Spotsylvania County supervisors approved a $17.1 million incentives package to get the owner of Spotsylvania Towne Centre to make several improvements.
For 20 years from the time the renovated mall is 70 percent occupied, the county is to return to the mall's owner half of the new annual local sales tax revenue generated by the expansions to the mall.