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Kalahari Resorts is looking at alternative financing methods, still committed to Fredericksburg park Date published: 12/30/2008
BY BILL FREEHLING
Housing prices must stop falling before Kalahari Resorts can get a financing package in place and start work on its planned Fredericksburg water park resort and hotel. The Wisconsin-based Kalahari is proceeding with plans for a 700-room hotel and 200,000-square-foot indoor water park on 49 acres of Celebrate Virginia South, company President Todd Nelson said yesterday. The financing problems will push back the start of construction, however, and could delay the planned 2010 opening, he said. The estimated price tag for the project is $250 million, although Nelson said recent declines in oil and other commodities could lower that figure. Kalahari plans to put up $20 million itself and has been working to raise the other $230 million. Nelson said he's "feeling real confident" about the financing coming through, and he's seeing banks loosen up a bit with lending. But his lenders have told him that housing prices must stabilize before he can get the loan. He hopes that will happen by April, and that he can start construction by the end of the upcoming summer. "We have never been more committed to a project," Nelson said. The company's initial plan was to raise about $80 million by selling 150 condo units at the Fredericksburg park, and borrowing the remaining $150 million from Wisconsin community banks. That's the model it used to build the two parks in Wisconsin and Ohio. But the economic downturn has forced Nelson to come up with a Plan B. Kalahari no longer intends to sell condo units, as that market has weakened significantly. The company is working with a couple of large financial institutions--which Nelson declined to name--to raise that equity portion of the funds. Nelson said he plans to still work with the Wisconsin banks to finance the remaining part, but that a larger financial institution will take the lead. The ongoing credit crunch has pushed back the project's timetable. In October, Nelson said he hoped to break ground by April 2009. He said the delays are allowing the company more time to design a better product.
Date published: 12/30/2008
From an industry trade journal: "The first five months of 2008 were not particularly kind to indoor waterpark hotels in general, with steep declines in all three typical measurements: occupancy, average daily rate (ADR) and revenue per available room (RevPAR)."
Kalahari families can offset the $1000 room-rent by taking advantage of the great liquidation-sale bargains in the next few years at nearby Central Park. Store-employees can enjoy the indoor surfing while they apply for unemployment benefits.
city plan is to raise real estate taxes to get 60 million MK Greenlaw was quoted in the paper as saying. Sorry I voted for her.
Everyone, except those on city council (minus Debby Girvan). Too many eggs in one basket.
The City Council would be fools to build the Courthouse now, with or without Kalahari. They are stupid to approve of a $60
million dollar Courthouse, without having the money. It will take 10 years, until 2018, for the houses to stop falling in price. A house selling for $400k today, will sell for $100k in 2018. Then in 2020, they can build Kalahari and the Courthouse.
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