City scrambling for solution on Kalahari bond fees

The Fredericksburg Economic Development Authority has indicated it does not wish to waive its standard fee on the roughly $240 million in taxable bonds Kalahari Resorts plans to issue to in part finance its Celebrate Virginia water park resort. Read this article for background.

As a result, City Hall has been scrambling today to come up with a possible compromise. The working solution, which is subject to change, involves the EDA receiving a portion of the occupancy taxes that the city collects from Kalahari over the resort’s first 10 years. A little over half of the amount paid to the EDA (ballpark $650,000 over 10 years) would have stayed with the city, while just under half (ballpark $590,000 over 10 years) would have been reimbursed to Kalahari as part of its performance agreement.

I’ll explain this in more detail for tomorrow’s FLS (doing so more than once may cause my brain to explode), but in the meantime here are some primary documents to look at:

Letter from Kalahari attorney to city asking for fee waiver

EDA chairwoman’s response to Kalahari attorney

Letter to EDA on behalf of Kalahari project

Permalink: http://news.fredericksburg.com/businessbrowser/2010/05/06/city-scrambling-for-solution-on-kalahari-bond-fees/