The details of a package of tax incentives for the proposed Kalahari Resorts waterpark hotel in Celebrate Virginia will likely come out in early December.
At their Dec. 11 meeting, City Council members will publicly receive the details of the performance agreement that will dictate how those incentives are distributed.
That agreement will be subject to a public hearing on Jan. 8, before the council takes a vote on it.
For now, Economic Development Director Kevin Gullette said the exact numbers on the incentives package are still being negotiated.
"Everything is performance-based," he said "and the city is not upside-down," meaning it's not giving away more than it's getting.
Gullette said this deal will be similar in form to the incentives package the city set up with Wegman's grocery, which is also building in Celebrate Virginia.
That package calls for the city to waive $1.7 million of the grocer's business license taxes over a 10-year period. To start taking advantage of that waiver, Wegman's must generate at least $300,000 in tax revenue, so the city would get at least $130,000 in new money.
With Kalahari, Gullette said the city is looking at all of the local taxes it will pay--sales, occupancy, meals, admissions, real estate--as places to offer a rebate.
In Fredericksburg, Kalahari is estimating that it will contribute $122.7 million to the regional economy. It anticipates generating $5.9 million a year in new taxes to the city. Based on the most recent assessments, it would take a nearly 15-cent increase in the real estate tax to raise that amount.
In addition to the money, Gullette said the city is negotiating in other areas, such as looking for Kalahari to come up with a plan for conserving water on the 49-acre site, which is to include two water parks covering a combined 295,000 square feet. "Absent one, we would be less likely to approve a deal," he said.
Tax incentives of various forms have been part of the process to lure similar waterpark projects to other areas. When Kalahari decided to build its second waterpark hotel in Sandusky, Ohio, in 2004, it had struck a deal with Erie County, Ohio, on what's called a tax-increment financing, or TIF agreement.
According to reports in the Toledo Business Journal, the Kalahari TIF deal called for $9.3 million of Kalahari's property taxes to be put into improvements of roads and utilities around the resort.
Great Wolf Resorts, which owns 10 waterpark hotels, including Williamsburg's Great Wolf Lodge, is building a 400-room resort in Concord, N.C., that should be complete in 2009.
To lure that project, Concord and Cabarrus County, in which the city lies, agreed to give Great Wolf a total of $4.1 million in tax incentives.
Concord approved a $1.5 million package that calls for the city to return $300,000 in taxes to Great Wolf each year for five years. Great Wolf is to spend that money on road improvements around the resort.
Cabarrus County added to that by approving a $2.6 million incentive grant.
Clay Andrews, business recruiter for the Cabarrus County Economic Development Corporation, said the county's incentive grant will be given over five years. It will literally be a rebate of 85 percent of the property taxes Great Wolf pays on what it adds to the value of the property it builds on.
Andrews said the county only uses incentives when it knows that a particular project is looking at sites in competing localities.
He said giving up some of the tax revenue as an incentive makes business sense because, "We felt like some piece of the pie was better than no piece of the pie."
Similarly, Fredericksburg Mayor Tom Tomzak said at last Friday's Kalahari announcement that "I'd rather have 75 percent of something than 100 percent of nothing."
Fredericksburg residents will get two chances to learn more about the Kalahari project coming here over the next two weeks.
Kalahari will hold public meetings to answer questions on Nov. 28 and Dec. 4. Both will take place at 7 p.m. at the Fredericksburg Expo and Convention Center.
Emily Battle: 540/374-5413