Capital Ale House will get $100,000 in incentives from the city of Fredericksburg to build a bar and restaurant on Caroline Street.
The council approved the incentives package last night on a 5-2 vote, with council members Debby Girvan and Marvin Dixon opposed.
Girvan said she wanted the city to study the impact Ale House could have on similar existing downtown businesses.
"I would feel more comfortable if we knew what impact it was going to have downtown," Girvan said. "Until then, I think I'm going to have to not approve it tonight, but I want to make it clear that I think this is a good business and I welcome it to the city."
Dixon said he didn't think the city should incentivize the business "for a number of reasons I'm not going to go into."
City Economic Development Director Kevin Gullette said Ale House will provide "something that we are sorely lacking downtown"--a private business willing to put on large events that will draw lots of people to the historic central business district. Ale House puts on special events around St. Patrick's Day, Oktoberfest and other yearly celebrations at its other locations.
In response to Girvan's comments, Councilman George Solley said he had asked other bar owners downtown what they thought about Ale House's plans.
"The opinion of the people who run those establishments is pretty much uniformly that Capital Ale will help their businesses by drawing people downtown who would not necessarily come downtown," Solley said. "I don't think we need a formal economic study to realize that."
Vice Mayor Kerry Devine agreed.
"I think it goes directly with what we are trying to do, building up our evening clientele downtown," she said.
And Councilman Hashmel Turner, a Baptist minister, said he'd found reasons to approve incentives to a bar.
"The prices and the menu seem well within my range and I believe they will serve ginger ale," he said.
The incentives package includes a $25,000 grant from the Economic Development Authority upon completion of renovations to the building it plans to rent at 917 Caroline St. The EDA approved that grant last week.
Another $25,000 would come from the city in the form of a waiver of all of Ale House's business license taxes and 13.5 percent of its estimated local sales taxes in its first year of operation.
The city would waive Ale House's business license taxes for the next nine years of the bar's operation to make up the last $50,000 of the package.
To get the incentives, Ale House would be required to invest at least $1.5 million in the building it is renting from Joe Wilson, which was formerly the home of Chords bar and restaurant.
It would have to hire at least 35 full-time and 35 part-time employees, and generate no less than $100,000 in new local sales and meals taxes.
The agreement would require Ale House to have its certificate of occupancy by November of this year.
Over the course of the 10-year agreement, city officials estimate they'll bring in $1.7 million in new revenue over the same period they'd be giving away $100,000 in incentives.
Emily Battle: 540/374-5413
Email: ebattle@freelancestar.com