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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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Senate approves bill to support Fredericksburg baseball complex

COMPLETE COVERAGE: View all related stories and images on the Fredericksburg baseball proposal

The Virginia Senate this month passed a bill that would allow the city of Fredericksburg to capture additional revenue from its planned minor league baseball complex.

State law allows certain localities, including Fredericksburg, to retain a portion of state sales tax revenues generated at public facilities such as minor league baseball stadiums to help pay off the bonds issued to build them.

That “clawback” allows the locality to get 3.5 percentage points of the state sales tax revenues collected at the publicly owned stadium.

The 5,000-seat minor league stadium that is planned at Celebrate Virginia South for the Hagerstown Suns, as well as the adjacent turf fields that will be used for Diamond Nation softball and baseball tournaments, will be primarily privately financed.

The city of Fredericksburg will be paying to develop the parking lot for the complex, but that cost is expected to be about $8 million compared with the private sector contribution of an estimated $29 million. Because of the unique structure of the Fredericksburg financing setup, the state’s Department of Taxation advised the city to seek supplemental legislation to ensure that it could receive the clawback under the statute.

The Senate last week unanimously passed a bill that would allow Fredericksburg to capture 3.5 percentage points of the state sales tax revenues collected at the complex.

But the Senate did make a change from the version of the bill, Senate Bill no. 579, submitted by Virginia Sen. Richard Stuart, R-Stafford.

The version of the bill that passed the Senate stipulates that the clawback revenue can be applied only to repay the bonds issued to build the “municipality-owned component of the sports complex.” In the case of Fredericksburg that would mean the money from the clawback could be applied only to the debt service on the publicly financed parking area.

In the original incentive agreement struck with the Suns and Diamond Nation, the city of Fredericksburg agreed to return the clawback revenue to the private investors to help pay for their portion of the complex. The incentive agreement also includes an array of other tax rebates and fee waivers.

Because of the way the bill now stands, the city now plans to apply the state sales tax clawback to its debt service on the parking lot, and then to pay an equivalent sum to the team in the form of an incentive grant, said City Manager Beverly Cameron.

The net effect will be the same as under the original incentive agreement.

The bill is now before the House Finance Committee.

The investors in the planned Fredericksburg minor league baseball complex plan to purchase the 38-acre parcel within the next couple of months, break ground this spring and have the facility ready for the start of the 2015 season.

The land on which the stadium will be built is where the U.S. National Slavery Museum was once planned. It borders Interstate 95′s southbound lanes and overlooks the Rappahannock River.

The Suns, a Class-A affiliate of the Washington Nationals, plan to relocate to Fredericksburg from Hagerstown, Md.