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This blog includes news about City Hall, city schools and other 22401 news.

Pamela Gould reports on City Hall. You can reach her at 540-735-1972 or pgould@freelancestar.com. Robyn Sidersky reports on city schools. You can reach her at 540-374-5413 or rsidersky@freelancestar.com.

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Council Races: Who said what when, and who negotiated what when, on Kalahari

Kalahari has been a point of contention in the mayoral race since it started, but the candidates are starting to go after each other on two specific Kalahari-related matters:

1 – Tom Tomzak has claimed Debby Girvan didn’t start criticizing the Kalahari incentives package until after she announced her intentions to run for mayor.

2 – Girvan disputes a claim Tomzak made at the Micah candidates forum on April 10 that the city improved the terms of the Kalahari incentives deal through negotiation.

On No. 1:

Tomzak said at last week’s College Terrace Neighborhood Association forum that Girvan "kept quiet and never offered an opinion when the Kalahari deal was being hammered out," but has come out against it since starting her mayoral campaign.

This same complaint has come from Jud Honaker of the Silver Cos., who said a few weeks ago in a phone interview that Girvan "never came to any of us in this building and raised any concerns."

Girvan says she suggested twice to Honaker and Linda Worrell, also with Silver, that a portion of the 47.5 percent rebate "be invested in road improvements and other needed projects that could help both the city and Kalahari." She said she objected to the incentives terms at lunch with Worrell and Honaker in December.

Honaker said again today that none of that ever happened.

"It’s absolutely not true. At no time did she ever make that suggestion," he said of Girvan’s claim that she proposed to put part of the rebate money toward infrastructure projects. "She’s never said anything to me, one word, that she’s against it."

Girvan said this of her Kalahari position in a memo she brought with her to an interview at The Free Lance-Star last week:

"At no time did I ‘approve’ or ‘agree to’ the Kalahari project or incentives. I did agree to consider the concept of a waterpark resort (a by-right use) and the concept of an incentives package. When it was first proposed I was hopeful that this project might fit here in Fredericksburg and that the incentives package was truly negotiable. I was never satisfied with the amount of the incentive nor the requested length of the incentives."

Now, as I have told all parties involved, since so many of the early Kalahari discussions went on behind closed doors, there’s a whole lot of he-said, she-said here, and without the press, the public or some sort of recording device present, anybody can come out of a private meeting and tell their own version of what happened. But that’s where everybody stands on this.

On No. 2:

Let’s start with what Tomzak said at the forum:

"This discussion did not start with the numbers we ended up with. We started at a lower number. They started at a much higher number."

Girvan sent out a campaign e-mail today titled, "Let’s Be Honest About the Kalahari Deal, Mr. Tomzak." In it, she compares a memo that outlines the business terms of the proposed incentives as they stood on Jan. 2 (the day council members flew to Sandusky to see the Kalahari there) with those in the letter of intent that came out five days later, which forms the basis of the performance agreement that’s on the table today.

She points out that the percentage of the rebates–47.5 percent–was the same in both. She goes on to say that "The overall deal was worse after the mayor ‘negotiated’ this deal." That, she says, is because the number of jobs in the Jan. 2 memo was 900 full-time, versus the 800 full-time and part-time number that’s in the agreement today. She also says that the Jan. 2 version was a 10-year agreement, and became a 20-year agreement after Sandusky.

Tomzak said today that the proposed percentages were set as they remain today by the time council members went to Sandusky. He said Kalahari came in asking for more than 50 percent, but because the city as policy does not approve incentives packages where it gives out more than it receives in new revenue, the number was negotiated down to 47.5 percent well before the Sandusky trip.

The bottom line, he said is that Kalahari was looking for a guaranteed income stream of somewhere between $3 million to $5 million a year, because that income was crucial to it getting financing approvals for the $260 million project. The city, if it wanted Kalahari, had to find a way to provide that that was within its incentives guidelines.

As for the number of jobs, Tomzak said he doesn’t remember 900 full-time jobs ever being part of the agreement, although that number appears on the Jan. 2 memo.

As for the term of the agreement, Tomzak said it’s always been 20 years. The heading on the memo Girvan released says, "10-year agreement," but the terms include a provision that "The City will favorably consider a new 10-year agreement for a facility expansion and/or major capital improvements to the project during the duration of this agreement. Council cannot commit to the approval of a new agreement in advance."

The current performance agreement states that if Kalahari doesn’t build a second phase of at least $25 million within its first 10 years of operation, the incentives will end after 10 years. Also, the rules on economic incentives like this changed in the middle of the process. The General Assembly passed this bill, which allows localities to provide 20-year incentives deals in tourism zones.

Tomzak said these were not the topics negotiated in Sandusky. He said most of those talks, which were private, were about the price Kalahari would pay for water and utilities hookup fees.

Expect a little more discussion of this at tonight’s candidates’ debate at the University of Mary Washington.

Permalink: http://news.fredericksburg.com/citybeat/2008/04/21/council-races-who-said-what-when-and-who-negotiated-what-when-on-kalahari/

  • lgross

    I’m betting there is a whole lot more to this than meets the eye…

    let’s see who “adds” more info to the discussion…

    :-)

  • mydar

    Mr Honaker is a paid employee of a business that has a vested interest in and will gain a substantial financial benefit from the Kalahari deal.