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Kalahari Resorts must start construction of its Fredericksburg water park by June 30 in order to take advantage of $25 million in tax-exempt financing from the state of Virginia
BY EMILY BATTLE
Kalahari Resorts will have to move quickly to take advantage of $25 million in tax-exempt financing its Fredericksburg water-park hotel could receive from the state.
The bonds, part of a federal stimulus program, must be issued by March 31, and construction has to begin no later than June 30, according to the application Fredericksburg officials filed with the state.
Kalahari President Todd Nelson said in a prepared statement released yesterday that the Recovery Zone Facility Bonds, which Fredericksburg officials learned late Friday had been allocated, will be an "integral part" of shoring up financing for the $250 million to $260 million project.
"This is a significant demonstration of the state's participation in helping develop this project and is a victory considering these tough times to secure financing," Nelson said in the statement.
The Recovery Zone Facility Bonds that Kalahari was awarded are intended for private projects in areas of economic distress.
On Dec. 8, Fredericksburg's City Council approved a resolution declaring Fredericksburg a recovery zone. The resolution cited Fredericksburg's 9.8 percent unemployment rate as of September and the 6.5 percent decline in sales tax revenue the city saw in the last fiscal year.
City officials first learned in November that Recovery Zone Facility Bonds would be made available through a competitive process. They spent nearly two months working with Kalahari and the Silver Cos. to put together an application that was due to the state Jan. 5--just 10 days before outgoing Gov. Tim Kaine's staff made its decision public.
Many details of the structure of the financing and the costs for the Kalahari project, along with an indication of what its timeline will look like if it is able to take advantage of the bonds, emerge in the application the city submitted to the state.
The application estimates a 21-month construction period, meaning the hotel, conference center and water park would be complete by March 2012.