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Lindley Estes is a business writer for The Free Lance-Star and This blog is on Fredericksburg-area business. Send an e-mail to Lindley Estes.

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Celebrate Virginia bondholders to discuss options

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The investors who hold the bonds sold in 2006 to finance the development of Celebrate Virginia South in Fredericksburg will meet soon to discuss their options regarding a looming debt service payment. The Celebrate Virginia South Community Development Authority doesn’t have enough money to pay the roughly $758,688 owed Sept. 1 to the bondholders without dipping into a fund intended for infrastructure work at the complex adjacent to Central Park. Even after completely depleting the reserve fund and using the CDA special assessment payments made this year by Celebrate Virginia South’s existing businesses there would be about a $109,229 shortfall unless transportation funds are tapped, according to a disclosure filed Friday with the Municipal Securities Rulemaking Board. There is about $1.71 million in the Celebrate Virginia South CDA’s transportation fund, and the bondholders could elect to allow a portion of the Sept. 1 debt service payment to come from there, according to Joshua Forster, a senior vice president for CDA administrator MuniCap Inc. Money taken in from future land sales at Celebrate Virginia South could then be used to replenish the reserve and transportation funds, and also go toward the significant amount that the owners of the undeveloped land owe in back city taxes and CDA assessments. One possible source for some of that replenishment could be phase two of the Haven apartment complex in Celebrate Virginia South; Fredericksburg’s City Council will discuss that project’s request for a special use permit at its Aug. 23 meeting.

For much more background information on this situation, read an article I wrote in April.