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Vice Mayor: Let EDA and Kalahari negotiate
Vice Mayor Kerry Devine was administering SOL tests to her students at Walker-Grant Middle School during Friday’s on-air feud among Mayor Tom Tomzak, Councilman Matt Kelly and EDA member Rick Pullen. But as she heard over the weekend about what was said, she composed the following, which was submitted this afternoon as a letter to the editor intended for tomorrow’s paper. Don’t forget that tomorrow is the EDA’s scheduled meeting to discuss fees on the tax-exempt portion of Kalahari’s bond issue.
Devine said in an interview today that she feels the extension of the deadline for issuing the tax-exempt bonds from June 15 to Oct. 15 should give everyone some breathing room, and that any threats that a decision must made now or else is just “a scare tactic” by Kalahari.
Devine also brought up the standing policy among regional local governments against poaching economic development opportunities from one another. She mentioned that the city got some criticism a few years ago when it discussed a possible incentives package with a Spotsylvania firm (That move never happened, read about the situation here.) Devine said Spotsylvania County’s public willingness to bring the bond issue to its own EDA could be considered a breach of the non-poaching policy.
“I think Spotsy should never have said, ‘Sure, we’ll take it,’” Devine said today.
Here is Devine’s letter:
May 23, 2010
Kalahari Fees to the EDA
Let me begin by saying I am a Kalahari supporter and plan to remain one.
The current dispute between Kalahari and Fredericksburg’s EDA has pitted EDA members against each other and EDA members against City Council. At question are the fees the EDA charges for issuing bonds, both tax-exempt and taxable. In the past those fees have been used for various economic development projects throughout the city for the benefit of all residents. Some of those projects include the brick wall at Hurkamp Park for the farmer’s market, business incentives along the Princess Anne corridor and several new downtown businesses, partnering with UMW and the Eagle Village project, and recently awarding grants through the Arts Commission for public art works downtown. Were the fees charged that generated money for those projects “ridiculous” or exorbitant? Kalahari has often talked about its involvement in community programs – this is certainly a step in that direction.
As the EDA meets today, I am hopeful of several outcomes. Kalahari has indicated its acceptance of fees on the $30 million tax-exempt portion. That should be finalized and off the table.
The EDA and Kalahari should then negotiate the fees on the balance of the $240 million taxable bonds. The one exception the EDA has made on its fees was for the hospital, a project of great magnitude and benefit to the city. As Kalahari stands to be another project of great magnitude and benefit to the city, the EDA should be given the opportunity to further meet and negotiate with Kalahari. While city staff worked diligently to come up with a compromise, I do not fault the EDA for doing its job and needing additional time to negotiate and look out for the interests of the city.
The initial negotiations with Kalahari took many months and caused many gray hairs (I have to blame them on something) and hours of hand-wringing. Having been at the table I can tell you that getting to the agreement was arduous, with tempers on the rise at many times. Both sides had to give and accept; that is why it’s called negotiations.
If the discussions with the EDA take some time, so be it. The deadline on the tax-free bonds has just been extended 4 months. The best action council can take is none at this point. Having appointed responsible, thoughtful members of our community to that board, let them work. There is a cost of doing business, Kalahari should recognize that and come to the table willing to talk. The EDA should, knowing that its fees are pumped back into the local community, be willing to look at the big picture and consider a reduction in fees.
Council should not vote to send the deal to Spotsylvania. Our economic development departments have a tacit agreement not to poach on our neighbors – treat this no differently. The Governor should not override local authority and remove the city from the equation.