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Lifeline offered to Expo Center
Discussion of Expo subsidy continues

Date published: 2/12/2009

BY EMILY BATTLE

Fredericksburg's Economic Development Authority has agreed to enhance the city's ability to subsidize convention business at the Fredericksburg Expo and Conference Center.

The EDA will match the $39,762 left in what has been called an "opportunity fund" to help the Expo Center compete with other convention centers that are owned by governments and hotels.

Those centers can offer lower rates to groups, because they make up for the cost of their rental space in meals and lodging taxes if they are governments, or in room rates if they are hotels.

Fredericksburg's Expo Center is privately owned, and since 2007 it has been making the case that it needs some form of city assistance to compete for the groups that would benefit the city the most from a tax perspective.

Fredericksburg's City Council first approved the opportunity fund for the Expo Center in summer 2007. The money in the fund comes from two years' worth of the annual payments of around $25,000 made by the property owners of Celebrate Virginia.

Those are payments they agreed to make to the city for various services in 2006. The Expo Center is one of the property owners making those payments.

The city has spent $10,988 from that fund since its creation. Those grants helped the Expo Center offer its facilities at discounted rates to various events, including the Harley-Davidson Owners Group rally in June 2008.

In fall 2007, city leaders began talking with Expo about the possibility of an additional $300,000 annual subsidy to the center from city coffers. That proposal was tabled after Kalahari Resorts announced it planned to build a $250 million, 700-room waterpark hotel that would connect in some way to the Expo Center.

Kalahari is expected to either buy or otherwise partner with the Expo Center as it exists now. Its hotel rooms are expected to make the center more competitive, since they will provide a mechanism to make up for revenue lost to discounted rental fees.

The Expo Center property is part of the tax-increment financing district underlying the incentive agreement that will give Kalahari a rebate of nearly half of the new tax revenues it generates for 20 years.


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