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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
Kalahari’s allocation of $25 million represents more than one-fifth of the total amount of recovery zone facility bonds the state made available through the competitive process. The city had requested $30 million.
A letter to Cameron from Kaine Chief of Staff Wayne Turnage said the state received nearly $199 million worth of applications for the $112 million it had available.
Kalahari’s allocation represented the largest allocation to a single project that Kaine made. The next largest allocation was $17 million in bonds allocated to an industrial expansion project in Waynesboro.
Other projects that were allocated bonds included a convention center in Norfolk, the Main Street train station in Richmond and the SportsQuest Family Entertainment and Sports Campus in Chesterfield County.
City officials and Little all said it was good to see the state throw support behind the project, for which Fredericksburg approved a 20-year, $61 million package of tax-based incentives in 2008. Over that same 20-year time period, Fredericksburg expects the resort to directly generate $64 million in new city revenues, after the incentives are accounted for.
“It’s a project that benefits the city, but it’s also a project that benefits Virginia,” Vice Mayor Kerry Devine said.
“It’s nice to see the state and the locality and the business in partnership.”
Little said that the construction alone will be an economic stimulus, and he thinks that’s part of what made the project a good fit for the recovery zone financing.
He said it is expected to take 1.5 million work hours to build the resort, and between 85 and 90 percent of Kalahari’s construction budget is expected to go to Virginia contractors.
“Just to feed these contractors every day is going to be a huge business opportunity,” he said.
When Kalahari signed its incentives agreement with Fredericksburg, it was planning to open by the end of 2010. Shortly after that deal had been made, the housing market collapsed, the recession hit, credit markets dried up, and Kalahari’s schedule became a matter of when it could complete its financing package.
Nelson has continued the design phase of the project throughout the uncertainty, though. City building officials have received shipments of detailed plans, and a local firm was given the green light this past summer to start working on the site plan for the project.
“Everybody’s going 100 miles an hour on this,” Little said, adding that the team aims to be in a position to begin construction within 45 to 60 days of completing the financing package.
“If there’s anyone out there who still believes that this is just a flash in the pan idea, this should help them understand that this is a truly authentic project that is going to happen,” Little said.
Emily Battle: 540/374-5413