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Kalahari president talks about search for money to build in Fredericksburg
Date published: 7/17/2009
Kalahari Resorts President Todd Nelson said in an interview yesterday that he hopes to have the money to build the more than $250 million resort planned for Fredericksburg's Celebrate Virginia complex by the end of this year.
"We're as committed as we've ever been. We're moving forward, we're spending money like crazy," Nelson said.
But the economic crisis has frozen most of the traditional routes of getting financing for a project like this, so he is literally looking all over the world for equity investments to help him get a loan for the project, whose original schedule has been pushed back because of the recession.
"Conventional financing, the way we used to do our deals, really just doesn't exist anymore," Nelson said. He said banks are looking for 50 percent equity to give a 50 percent loan. On a $250 million project, that's a lot of money to round up.
Nelson said he's talking to banks in Canada, equity investors overseas and the state of Virginia. He hopes to possibly tap into some of the money the state has received from the federal stimulus bill that is to be dedicated to entertainment jobs.
"You want to talk about true stimulus, this is stimulus," Nelson said. "It will take 2 million labor hours just to build this thing."
The resort's first phase is expected to provide at least 800 jobs once it opens.
Nelson said that from the day he gets a firm indication that he has the money to build the project, "we'll be open in 20 months."
That's why he's told a local engineer to get going on the site-plan work. Nelson said that work could be expedited to take as little as three months if he gets his money soon.
Nelson said his resorts in Wisconsin and Sandusky, Ohio, are performing well, despite the recession. He sees his hotels as an affordable alternative to more expensive family vacations, like trips to Disney World in Florida.
For a family of four, "Disney tickets cost more than a room night at my hotel," Nelson said.
"We get lumped into the hotel business, and a lot of hotels are struggling," he said. "But we've really not felt the recession. We've come out of this thing unscathed."