Fredericksburg City Beat

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 Robyn Sidersky reports on city schools. You can reach her at 540-374-5413 or

Visit our Facebook page.

RSS feed of this blog

EDA to beef up Expo subsidy

Economic Development Authority members learned at their meeting today that the opportunity fund the City Council created back in the summer of 2007 to help the Expo Center lure meetings that would bring in more tax revenues has become more of a direct operating subsidy to the Celebrate Virginia property.

That fund uses money paid by the property owners in the Celebrate Virginia South Community Development Authority to benefit the Expo Center. Expo and city officials have said since this debate began that the Expo Center, as a private enterprise, has trouble competing with publicly financed and owned convention centers around the state, because it can’t give away its space and then hope to make up the difference in sales and meals taxes–it doesn’t get those taxes.

Acting Economic Development Director Karen Hedelt told EDA members today that Expo has business booked through 2010, and that without city assistance, it may have to shut its doors to some of that business.

So the EDA will continue to act as the conduit for sending the $39,762 in the city’s "deal-closing fund" to Expo at a rate of about $15,000 a month. The EDA will also set aside $39,762 of its own money to continue that subsidy if the city money runs out.

This is meant as a way to buy time as the city and Expo wait to see if Kalahari Resorts can secure financing for its $250 million waterpark hotel project, which would adjoin Expo. Kalahari plans to buy or otherwise join with the Expo Center, and having hotel rooms attached to the convention center would make its business model a lot more viable. Just like governments can give away convention space and make up the loss on tax revenues, hotels can give away space and make up the loss with their room rates.

Hedelt said she expects to know whether Kalahari has obtained financing or not by late spring or early summer. That means that at $15,000 a month, the city and EDA could go through all of this money waiting to know whether Kalahari will be part of the Expo Center’s future or not.

Silver, city and Kalahari officials have all been saying Kalahari is still committed to the Fredericksburg project and that its properties in Ohio and Wisconsin have remained successful despite the economic downturn. The bigger question is whether, in today’s tight credit climate, the resort can secure financing for a project this big.

If the answer is no, Fredericksburg will have more to worry about than just propping up the Expo Center. Kalahari is now the anchor project in Celebrate Virginia, a development that is crucial to the future growth of city tax revenues.

As EDA member Joe Wilson said, "If Kalahari goes away, then we’re looking at a whole different ballgame."

We’ll have more on this in the Business section later this week. 


  • mydar

    Kalahari is planning to buy the Expo Center?

    From the Milwaukee Journal: “Nelson originally had planned to start construction in April, but said prospective lenders are waiting for a turnaround in the housing market before they’ll finance the project.

    “We need the economy to show some signs of being good,” Nelson said.”

  • EmilyBattle

    Actually, both of the stories you refer to were reported first in The Free Lance-Star. The Wisconsin papers picked up on the Kalahari schedule change after Bill Freehling wrote this story:
    Kalahari’s plans to partner with Expo were reported many times, including in this story: