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Kalahari details are work in progress
Kalahari hearing, vote pushed back as city eyes tax increment financing

Date published: 3/7/2008

BY EMILY BATTLE

A public hearing on the $61 million incentives package for a proposed Kalahari Resort in Celebrate Virginia won't happen until April 8.

The hearing had been planned for Tuesday, but City Manager Phillip Rodenberg said the agreement that will govern those incentives isn't ready yet.

Neither is a consultant's report the city commissioned to assess Kalahari's feasibility, its economic impact and its worthiness of public incentives.

Work on the "performance agreement" that will govern the incentives the city used to lure the $225 million project has taken longer than anticipated, because the city and Kalahari have sought a legal framework for distributing the incentive money.

According to City Attorney Kathleen Dooley, they will be using what's known as "tax increment financing," or TIF, to distribute the incentives, which amount to 47.5 percent of all of Kalahari's local taxes, on top of more than $3 million in up-front fee waivers.

This would require the city to designate the Kalahari site as a special "TIF" district. All of the new tax revenue generated by the development would go into a specific fund that the city would maintain.

The city would use that fund to pay out Kalahari's incentives.

TIFs have been discussed locally as ways to finance public infrastructure to benefit desired private development.

The JumpStart plan suggests using them to build parking garages to support downtown development.

In Spotsylvania County, developers of the proposed Summit Crossings project have proposed creating a TIF district to pay for road and utility projects.

When Kalahari decided to build a resort in Erie County, Ohio, the county created a TIF district to finance $12.5 million worth of road and utility improvements around the development. One-half of Kalahari's tax revenues were to pay down that debt over a period of 20 years.

But in this case, Fredericksburg and Kalahari are proposing to use a TIF district to pay for an economic development grant that will go back to Kalahari.


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CHANGES The news: The city has delayed a public hearing and votes on the agreement that will govern Kalahari's incentives.

The reason: That agreement isn't ready yet, and since the city has decided to use tax increment financing to distribute the incentives, it will have to hold two public hearings: one on the incentives agreement, the other on creating a TIF district.

The upshot: The Kalahari hearings will be April 8 at 7:30 p.m. at City Hall. The council could take the first of two required votes on the incentives April 22, with the second vote May 13.