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City Council OKs eatery incentives
City Council votes to give tax break to new restaurant coming to town

View a press release from the company.

Date published: 12/15/2010

BY EMILY BATTLE

A new restaurant and bar with a focus on arcade games and billiards received tax breaks from Fredericksburg's City Council last night.

Council members unanimously approved a five-year incentives package worth a maximum of $46,250 for Longstreet's American Eatery, which is working to open next month at 409 William St. Over that five-year period, the business is expected to pay $388,000 in city taxes.

The building is owned by Tommy Mitchell and is the former home of Las Palmas, and before that University Cafe.

Longstreet's has already painted the building's exterior and performed a lot of work on the interior, which will house a well-appointed billiards area, along with other games.

Owners Mike Beaton and David Hanlon have signed a five-year lease, and they readily acknowledge they have to open downtown, incentives or no.

That prompted Councilman George Solley to ask at last night's meeting whether the city's incentives program was intended to lure undecided businesses to town, or to reward businesses that have already decided to locate in one of Fredericksburg's incentives zones.

"It was my understanding that the incentive package was something that would entice people to come and open a business, and it appears that you have decided to come and open a business before you were assured of any incentives," Solley said.

When the council started its incentives program in 2007, city staff argued that the tax breaks it includes would be a make-or-break part of businesses' decisions to locate in Fredericksburg.

But lately, work on incentivized businesses has begun before the council has even voted on incentives agreements.

Economic Development Manager Richard Tremblay said last night that the Bavarian Chef, which is also getting tax breaks, started work on its restaurant on Lafayette Boulevard ahead of the council vote, with the understanding that the deal might not pass.

Solley said that's troublesome, because when existing businesses ask him why newcomers get tax breaks and they don't, his primary argument is that these new businesses would not have come to Fredericksburg without those incentives.

Hanlon and Beaton said they looked at several locations for their restaurant, including two in Stafford County and one in Eagle Village.

Beaton said the availability of incentives weighed heavily on their decision to locate downtown.

Hanlon and Beaton put out a press release yesterday saying Longstreet's would focus on "casual American fare" in a family-friendly atmosphere. They plan to offer live entertainment on the weekends.

Emily Battle: 540/374-5413
Email: ebattle@freelancestar.com