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$25 million in tax-exempt financing will be made available through the federal stimulus act to Kalahari Resorts’ proposed waterpark hotel in Celebrate Virginia in Fredericksburg, governor's office announces.
Date published: 1/15/2010
Officials with the city and the Silver Cos. saw the news as a huge step that will put Kalahari in a better position to secure the financing it needs for the $260 million project.
“It’s a real solid building block,” City Manager Beverly Cameron said. “It positions them to get the remainder of their financing in place.”
City, Silver and Kalahari officials have worked for the past two months on pursuing these bonds. They expected to hear this week about their application, but as Kaine’s final hours in office ticked down, they began to wonder whether the decision would be passed to incoming Gov. Bob McDonnell.
Scott Little, Silver’s project manager for Celebrate Virginia, said there is still work to do to complete Kalahari’s financing package, but that the state’s allocation of these bonds through a highly competitive process is a vote of confidence that will help immensely as Kalahari continues to talk to banks and other potential investors.
A Kalahari spokeswoman said company President Todd Nelson was out of the country with family and could not be reached for comment.
The bonds are known as American Recovery and Reinvestment Act Recovery Zone Facility Bonds. The Recovery Act made many new types of financing available to states and municipalities for various projects, but these tax-exempt bonds are specifically for private projects in areas under economic stress.
Kalahari will be the entity responsible for the debt, but a public entity—in this case, Fredericksburg’s Economic Development Authority—will act as a conduit for the bonds, in much the same way the EDA allows other private entities, such as the University of Mary Washington Foundation or Mary Washington Hospital—to access low-cost financing for private projects.
“There is no real pledge of public funds involved,” Cameron said.