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Package urged for wine shop
Council to consider incentives for Kybecca wine bar

Date published: 3/22/2008


Fredericksburg Economic Development Director Kevin Gullette has recommended that the City Council award a local business an incentives package that is similar to the one recently given to Richmond-based Capital Ale House.

Council members could vote April 8 on a 10-year, $80,000 incentives package for the owners of Kybecca, who are expanding their William Street wine shop and installing a wine and tapas bar in the space next door.

April 8 is the same night the council will hold a public hearing on the incentives deal for Kalahari Resorts.

The structure of the package is similar to the $75,000 incentives deal the city awarded to Capital Ale House in February.

Both businesses have received a $25,000 grant from the Fredericksburg Economic Development Authority in addition to their city incentives deals.

The proposed Kybecca incentives call for the city to waive its business license taxes for 10 years, estimated at $20,000.

In addition, the city would return to Kybecca 8 percent of its local sales and meals taxes over 10 years, a grant that is capped at $60,000.

Kybecca must open its new addition for business by December, must generate at least $45,000 in new annual sales and meals taxes and must invest at least $2 million in the William Street property over 10 years to get the deal.

The agreement also states that Kybecca will have to "maintain space for public and private art to be displayed in the facility for the duration of the grant."

Based on Kybecca's projected annual sales, the deal is expected to net the city between $50,000 and $60,000 in new revenue each year of the incentives grant.

Gullette wrote in a memo that council members received ahead of their Tuesday meeting that the wine and tapas bar Kybecca proposes to install in the former office space next to its William Street location "will provide a destination unlike anything in the region."

He said it fits the JumpStart plan's recommendation that street-level office space downtown be converted to something more tourist-friendly.

The memo also states that without the city incentives, Kybecca will not open the wine bar and will sublet the space it is preparing for that use as office space.

However, the business is already working to prepare the space for use as a bar, and the owners have said the outdoor patio might open next month.

Gullette's memo states that although that work has started, Kybecca "is still securing financing for the new venture and the City's incentive package is part of the package."

Kybecca's wine bar is expected to generate four new part-time jobs, compared with the 35 part-time and 35 full-time jobs Capital Ale House will likely generate.

Its annual sales are estimated to be $960,000, compared with $2.8 million at Capital Ale House.

Emily Battle: 540/374-5413
Email: ebattle@freelancestar.com