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Kalahari is just the latest of many incentive deals Date published: 1/13/2008
BY EMILY BATTLE
Two months ago, when Kalahari Resorts first announced it was coming to Fredericksburg, Mayor Tom Tomzak stood on a stage in the Fredericksburg Expo and Convention Center and said, "I'd rather have 75 percent of something than 100 percent of nothing." That line of reasoning is pretty common when governments enter into incentives deals to lure private businesses by waiving some of their taxes or fees, as the city has for Kalahari. While the Kalahari incentives package that was announced this week appears to be the largest such package an area local government has offered from a strict dollar standpoint, it's certainly not the first. Spotsylvania County has used similar deals to boost two different projects on State Route 3. Elsewhere in the state, different forms of local government incentives have been used. 20-YEAR AGREEMENT Under the terms of the incentives deal the city released this week, Fredericksburg would return 47.5 percent of Kalahari's local tax payments to the resort on a quarterly basis for 20 years. The resort has estimated that it will generate $5.9 million a year in new city taxes if it can stay 75 percent occupied and get an average room rate of $220 a night. If Kalahari hits that $5.9 million mark for the year, the city would get $3.1 million and Kalahari would get $2.8 million. "Even at $3 million, they are still our single largest taxpayer in the city of Fredericksburg," Economic Development Director Kevin Gullette said. And in a city with a $79 million budget, they'd be single-handedly boosting revenues by nearly 4 percent. INCENTIVES used at MALL In 2006, Spotsylvania County supervisors approved a $17.1 million incentives package to get the owner of Spotsylvania Towne Centre to make several improvements. For 20 years from the time the renovated mall is 70 percent occupied, the county is to return to the mall's owner half of the new annual local sales tax revenue generated by the expansions to the mall.
Read more stories about Fredericksburg Date published: 1/13/2008
I am all for generating revenue,and I don't live in the "city". But the traffic (shortcut) now from Rt. 3 over to Bragg Rd. by way of River Road is just awful! (the poor folks on River Rd.)And then there is Bragg Rd., (shortcut) over to the back of Central Park. I do not care what day or time you choose, Bragg Rd. is packed with Central Park traffic. Such an attraction will increase flow even MORE. cha-ching... cha- ching...road changes/widening? There go the REST of the homes!
I'm not oart of any legion, but If they (Gander, Kalahari etc) feel this is a good location and a sound business move they should do it without the city having to offer them any corporate welfare to come here. Maybe the rest of America should join in and stand up to this version of extortion. When the businesses can't get communities to offer these enticements they'll have to do business without the kickbacks.
Where is the Legion of Pessimists who have been
obediently evangelizing that incentives are unnecessary,
risky and unusual? Here is your first reading assignment.
If we're going to be outraged, let's be outraged it took until
the city was broke to figure out we can use bait to lure a
revenue generating catch. The city should join the rest of
America in making incentives commonplace. Excellent and
informative newspaper report.
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