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Kalahari faces June 30 deadline page 2
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

Date published: 1/17/2010

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In order to meet this schedule, Kalahari will need to raise about $80 million from outside investors. The company believes that equity, combined with $30 million of its own money and a $10 million grant from the Canadian government, would allow the resort to seek roughly $110 million in conventional bank financing and sell the bonds, which will be issued through Fredericksburg's Economic Development Authority.

The final project, as proposed to the state in the bond application, will include a 12-story, 832-room hotel with four restaurants, 100,000 square feet of new convention space added to the existing 92,000-square-foot Fredericksburg Expo and Conference Center, a 200,000-square-foot indoor water park and a 100,000-square-foot indoor theme park like the one Kalahari recently built at its Wisconsin property. Future phases call for an outdoor water park and additional hotel rooms.

Some of the estimated project costs given in the breakdown are: $16.3 million for the 49-acre site in Celebrate Virginia, now owned by the Silver Cos.; $132 million for construction of the hotel and convention center; $55 million to build the water park and slides; and $4 million to construct the indoor theme park. The $260 million construction budget also includes a $7.5 million contingency as well as other costs.

Construction of the resort is expected to create 1,230 jobs, and once it opens, Kalahari's performance agreement with the city requires it to maintain 800 full-time and part-time jobs.

Kalahari has already spent $4 million in development costs related to the project over the past two years.

The resort's existing properties in Wisconsin and Ohio have performed well in the recession. The bond application states that for the first seven months of 2009, Kalahari's revenues were up 5.3 percent, and its earnings were up 27.8 percent over the same period in 2008.

Staff writer Bill Freehling contributed to this report.

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


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