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Kalahari Resorts turns down financing package that included $30 million in tax-exempt bonds
Date published: 8/25/2010
In order to qualify for the RZF bonds, Kalahari would have to sell them by Oct. 15. The company was also required to update the governor's office on its progress by Sept. 1. Nelson said in a statement yesterday that the company is "preceding the deadline with this announcement to make certain that the governor's office has sufficient time to re-allocate the bonds to other projects."
Kalahari, which also has waterpark resorts in Ohio and Wisconsin that Nelson says are thriving despite the recession, announced its plans for Fredericksburg in November 2007. The park was originally expected to open by the end of 2009, but the financial crisis has prevented Kalahari from obtaining a loan for the project.
The announcement early this year that Kalahari had been granted access to the RZF bonds was hailed as a milestone for the project. It led to months of controversy about what fee Kalahari would pay Fredericksburg's Economic Development Authority for being the conduit for the bond issuance.
A compromise was eventually worked out between the city EDA and Kalahari, but now that entire debate appears to have been in vain.
The Silver Cos., which is developing Celebrate Virginia South, has said Kalahari is the key for the development of the campus, which itself is a critical tax revenue source for the city. Silver officials say the company has other users lined up that would commit to Celebrate Virginia South if Kalahari broke ground.
Under the incentives package that the city signed with Kalahari, the resort must be open for business by Dec. 31, 2013--a date that was moved back three years from the original one.
Bill Freehling: 540/374-5405
To read the letter Kalahari Resorts owner Todd Nelson sent Fredericksburg City Manager Beverly Cameron this week, go online to the Business Browser blog on fredericksburg.com.
Here is the statement Kalahari Resorts owner Todd Nelson sent The Free Lance-Star yesterday:
Today Kalahari Resorts advised the City of Fredericksburg, its Economic Development Authority and Governor McDonnell's office that we will not utilize the allocation of $30 million of Recovery Zone Facilities Bonds by the October 15 deadline to partially finance the development of a $260 million Kalahari Resort in Fredericksburg, Va.
Due to the current lending climate, Kalahari Resorts has been unable to secure the balance of the financing necessary to build the resort. We have invested significantly in the development of this project and will continue to pursue financing options. We are preceding the deadline with this announcement to make certain that the governor's office has sufficient time to
Kalahari Resorts' properties in Sandusky, Ohio, and Wisconsin Dells, Wis., have experienced significant 2010 year-over-year financial results amid difficult economic conditions. We remain committed to opening Kalahari Resort in Fredericksburg, Va., which would provide 1,230 jobs and contribute $174 million to the Fredericksburg regional economy.