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Bills making their way through General Assembly could boost Kalahari Resorts project
BY BILL FREEHLING
A bill that could help Kalahari Resorts obtain financing for its massive Fredericksburg water-park resort was approved by the Virginia Senate Finance Committee yesterday.
That sets the stage for a full Senate vote later this week on the bill, which Gov. Bob McDonnell has championed and which local economic development officials are closely tracking.
The bill, which appears likely to pass, would allow the state and locality to return at least 1 percent of the sales tax revenue created by tourism projects to the owner. The measure is intended to help tourism developers who have 80 percent of their financing lined up get the remaining part.
Wisconsin-based Kalahari wants to build a hotel, water park-focused entertainment complex and convention center on 49 acres it plans to purchase from the Silver Cos. at Celebrate Virginia South. The company announced its plans more than three years ago, but the ensuing global credit crunch has left it unable to find affordable financing for the project, which is estimated to cost $260 million.
Fredericksburg Economic Development Director Karen Hedelt said the bill could potentially push the project forward, which would create hundreds of local jobs and accelerate the development of Celebrate Virginia.
"It's been such a tough environment for any sort of project financing," Hedelt said. "This could well be the component that helps Kalahari make the case."
Officials with Kalahari and Silver met with McDonnell about the project last year. Del. Matthew James, D-Portsmouth, introduced the measure (HB 2285) in the House of Delegates, which passed it 72-26.
A similar bill (SB 1193) proposed by Sen. Tommy Norment, R-James City County, has already passed the Senate and is now in front of the full House. The two bodies would ultimately need to reconcile differences between the two bills.
The legislation would help developers of Virginia tourism projects who are struggling to put together the last 20 percent of their financing. The added revenue stream from the state and locality returning sales tax to the project could make a lender more comfortable.