11.28.2014  |   | Subscribe  | Contact us

All News & Blogs

E-mail Alerts

Mayor says EDA irresponsible
Fredericksburg mayor criticizes EDA for handling of Kalahari project

View More Images from this story
Visit the Photo Place
Date published: 5/22/2010


A series of meetings this coming week in Fredericksburg and Spotsylvania County may shape the financing path that Kalahari Resorts takes on its local project.

An on-air radio exchange yesterday between Fredericksburg Mayor Tom Tomzak and Economic Development Authority member Rick Pullen illustrates how contentious that financing has become.

The Virginia governor's office has allocated $30 million in tax-exempt bonds to Kalahari for its water park, hotel and conference center in Fredericksburg's Celebrate Virginia. The Wisconsin-based company must sell the bonds, on which the firm will pay both the interest and principal, by Oct. 15.

Kalahari plans to issue the $30 million in bonds as well as another about $240 million in taxable bonds through an Economic Development Authority to give the bonds municipal status and create tax savings for investors.

Now the question is which EDA will be the issuer.

Kalahari intended to issue the bonds through the Fredericksburg EDA, but a dispute over fees has possibly brought Spotsylvania into the game.

The seven-member Fredericksburg EDA has been split over what constitutes a proper fee on both sets of bonds, with Chris Hornung unable to vote because of his job with Celebrate Virginia developer the Silver Cos.

Pullen has been the public voice of efforts to resist waiving or dramatically lowering the standard one-eighth of 1 percent fee that the EDA charges borrowers on the loan balance.

The exchange between Pullen and Tomzak followed a spirited debate between Pullen and Fredericksburg City Council member Matt Kelly over how the EDA has handled the talks with Kalahari.

At the end of Kelly's show on WFVA AM 1230, Tomzak called in to criticize EDA members who have voted against city compromise efforts. Dana Herlong, Amy LaMarca and Pullen haven't signed off on city recommendations.

"It's very irresponsible for some people on the EDA to play politics with this," Tomzak said. "Your guest [Pullen] is trying to micromanage Kalahari. Why does he think that his role on the EDA is to micromanage and to possibly hassle one of the greatest things that will ever happen in Fredericksburg?"

1  2  Next Page