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City receives another $5 million in recovery zone bonds for Kalahari project Date published: 5/18/2010
BY BILL FREEHLING Virginia Gov. Bob McDonnell has allocated another $5 million in tax-exempt bonds to help Kalahari Resorts finance a water park in Fredericksburg's Celebrate Virginia. A formal letter will likely go out today from the governor's office to Fredericksburg officials, said McDonnell spokeswoman Stacey Johnson. Fredericksburg City Manager Beverly Cameron received preliminary word about the $5 million allocation late last week. Kalahari will be solely responsible for the interest and principal, but the tax-exempt bonds carry an interest rate that is about 3 percentage points lower than a taxable issue. The extra $5 million could save the resort about $150,000 a year in interest payments. "It's big for them," Cameron said. The Recovery Zone Facility bonds are part of the American Recovery and Reinvestment Act of 2009. The tax-exempt bonds are for private projects in areas under economic stress. Kalahari got another $25 million in RZF bonds this past January on one of Gov. Tim Kaine's last days in office. That allocation has shaped the Wisconsin-based company's financing plans for a water park, hotel and convention center. The project would cost about $260 million, but Kalahari wants to borrow more that that to cover early interest costs. Numerous other projects in Virginia also received access to the RZF bonds. The additional $5 million comes from projects that didn't end up using the financing. The city has requested yet another $5 million from McDonnell's office and expects to find out about that by August. The city has also asked McDonnell's office to extend the deadline for when Kalahari must issue the bonds from June 15 to Oct. 31. Federal guidelines state that the bonds must be issued by the end of 2010. Representatives for Kalahari and Celebrate Virginia developer the Silver Cos. met with McDonnell yesterday. To receive the tax-exempt status and the resulting lower interest rate, the RZF bonds must be issued through the city's Economic Development Authority, which has been deadlocked on the issue of what fee Kalahari should pay.
The naivety revealed and misinformation spread below is
embarrassing, and it makes our region look hick-ish.
Einstein: Where do you get off making the claim that
Kalahari has "no financial backers?" Upon what facts do
you base this wild claim? tpifos: Why is Einstein's question
"good?" It's based purely on an assumption and you too
have no evidence to justify the outlandish claim.
Irresponsible. Exits along one of the planet's busiest
interstates gets developed... Why is this so shocking to FLS
readers?
all of the incentives the City has already given to Kalahari - now Mr. Cameron wants to give them another $625,000 of our money - without even looking at their financial statement, which they refuse to provide. Isn't this the same type of funny financing that put the "too big to fail" institutions in trouble? I think the EDA was right in being cautious. Let Spotsy and Stafford pay up instead. The city has done more than its fair share. City Council shouldn't be too eager to believe the EDA is rediculous
Didn't realize the State of Virginia had extra money just lying around.....aren't they cutting budgets all over the state to include education, roads, etc. but we can afford to fund a waterpark??? I wonder what was promised behind the scenes to the Governor??
Why not? "The Kalahari Resort opened a $15 million family entertainment center in Wisconsin Dells in December." Milwaukee Biz Journal, May 2008. Mr Nelson stated that $30 million of his money would be part of the financing for Kalahari, yet the $240 - $260 (and growing) cost for construction never mentions that contribution. Nevertheless, Mr. Nelson called the EDA's position for not granting him a more favorable tax break on the bonds "Ridiculous."
keeps churning away... money for a project that even the locals don't want gets state money when other important needs go unanswered... everyone laughed at the Dems.. when they were in office... this guy's been in office barely 4 months and already he's proving to be a disaster... glad I didn't vote for him.
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