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More details on the Kalahari bonds
Look for a story in Sunday’s Free Lance-Star about what we learn about the Kalahari project through the application Fredericksburg submitted for recovery zone bonds for the resort. You can download a copy of the 39-page application here.
A few other details about these bonds:
The "Recovery Zone Facility Bonds" made available under the stimulus act are only one category of tax-exempt bonds that municipalities were vying for under the provisions of the act. When the City Council voted Dec. 8 to designate Fredericksburg as a "Recovery Zone," all of the memos that went along with that vote said the city was making this designation to apply for "Recovery Zone Economic Development Bonds."
The economic development bonds are different from the facility bonds. They are for things like public infrastucture, construction of public facilities or expenditures related to other projects, like job training or educational programs, that promote economic activity in economically distressed areas.
Fredericksburg applied for $955,000 in economic development bonds, to be used in conjunction with other bonds made available through the federal government on a $6.3 million project related to the city’s sewer system. City Manager Beverly Cameron said Fredericksburg was allocated its full request for these bonds. You can read about the project here.
The recovery zone "facility bonds" are another category of tax-exempt financing made available under the stimulus act. They are intended for private projects within recovery zones. The federal government allocated $15 billion worth of this financing to states and localities nationwide.
However, according to Cameron, many of those allocations were so small that their recipients could not use them for anything, so in Virginia, the unused portion of the bonds went back into a pot that then-Gov. Tim Kaine decided to re-allocate using a competitive process.
Kaine made this process known through an executive order issued in November. That’s when city officials began working to get an application in for Kalahari.
"We said, ‘This is a perfect fit for Kalahari,’" Cameron said. "Let’s aggressively try to go get them."
The city applied for $30 million worth of the bonds, and Kalahari was allocated $25 million.