All News & Blogs
Not much to know about incentivized projects yet
BY EMILY BATTLE
It's been more than a year now since City Council passed a flurry of economic-development incentives agreements to help lure several businesses to Fredericksburg.
Of the four largest incentives agreements the council approved, three of the target businesses have opened.
The largest project--Kalahari Resorts--is still trying to get financing, and may have to ask the city for an extension on the deadline stated in its agreement.
Since Wegmans grocery store opened in June, Capital Ale House opened last November and Kybecca's wine bar opened last October, the city has not paid out one cent of taxpayer-funded incentives.
For Wegmans and Capital Ale, that's because their incentive agreements do not call for money--in the form of tax rebates--to be paid out until next spring, when their business-license tax returns are due.
Kybecca's agreement did call for the business to start receiving its incentives payments this year. To be eligible for this year's worth of payments, owners were to file a report with the city manager by Jan. 21 of this year and another with the commissioner of the revenue on their sales- and meals-tax receipts by March 1.
Kybecca co-owner Rebecca Snyder said the business did not participate in this first year of its 10-year incentive agreement because the wine bar didn't open until last October--well before the Dec. 1 deadline stated in the incentive agreement, but later than Kybecca's owners had hoped.
That didn't give them enough time, Snyder said, to ramp up their business to hit the meals- and sales-tax threshold they must meet each year to receive their tax incentive from Fredericksburg.
For each of the first two years, that threshold is $35,000, pro-rated for the first year.
From a practical standpoint, this means Kybecca will now have nine years, instead of the original 10, to collect the incentives the city offered.
Those are a rebate of up to $60,000 on the new meals and sales taxes the wine bar generates, and a waiver of
Snyder said the wine bar is on track to hit the $35,000 tax threshold that would allow it to collect its incentives for the second year of the agreement.