Vice Mayor: Let EDA and Kalahari negotiate

Holy cow.

The Vice-Mayor thought the “arduous” negotiations with Kalahari were somehow normal? This explains a lot. Clearly, Fredericksburg just doesn’t get it.

The negotiations with Kalahari were needlessly arduous and uncommonly protracted because city officials never quite understood what they were doing. A repeat of these same exercises in naivety now could kill this project — why isn’t that obvious?

The very idea that Kalahari and the project’s developers should sit around and fiddle with EDA fees because a deadline has been extended is patently absurd.

The project is behind schedule now, time is money and, quite obviously, those who are focused and intent upon making the project a reality don’t have free time to help the EDA look bad.

The EDA is not a place for “responsible, thoughtful members” who fail to realize that time is always a make or break factor in of itself. The EDA needs responsible, thoughtful members with some drive, and those who know how to act when an opportunity is knocking.

So, if the EDA thinks it needs more time, “so be it?” That kind of lackadaisical approach to economic development is why negotiations with those who are willing to invest in Fredericksburg are “arduous.”

It’s also a little embarrassing the way some elected officials think Spotsylvania is the only other Virginia jurisdiction willing to step in to ensure this project happens. It’s possible, but it would certainly be a shock if Stafford and other localities were not also calling upon Kalahari to let them issue bonds.

More sophisticated leaders elsewhere in Virginia understand the tremendous residual economic impacts of the project. Neighboring localities will reap financial benefits if Kalahari is built anywhere in the region, and they obviously don’t want Fredericksburg to blow it.

If the Vice-Mayor were really a Kalahari supporter, she would demand an immediate vote to authorize all the bordering localities to step in and issue the bonds.

If Kalahari doesn’t lose patience with our fair city, and if they succeed in achieving the financing to build and open here, the city will reap millions of dollars in new revenue that can build a lot more brick walls like the one at the Hurkamp Park farmer’s market, or provide exponentially more in incentives to small businesses downtown or far more significant commissions to local artists.

Sad to say this letter from our otherwise respectable Vice-Mayor reads like it was written by Rick Pullen, or another EDA member who thinks the EDA primarily exists to generate money for itself instead of for the city. I hope the rest of our city council understands the folly of the EDA, what is really at stake and why time is not a negotiation luxury.

Mr. Kelly, are you saying the Vice-Mayor shot this letter off without informing you or possibly your other colleagues?

Even though I recall reading about the Vice-Mayor’s disdain for Councilwoman Girvan when she did the same thing, and as much as I disagree with her now (profoundly), all council members should be able to speak up and out whenever they want (and at their own risk). It gives us a better measure of them.

So why not let the Silver EDA member follow the Vice-Mayor’s example and simply disclose he works for the Kalahari developer? Or shouldn’t we have people actually involved in economic development professionally making EDA decisions?

How is this situation different than when the Vice-Mayor votes on the budget for schools while she is also a teacher paid with those very same taxpayer funds? Is there no conflict? If not, why the double-standard?

Do abstentions apply only for those who work for Silver or other big scary developers? If a simple disclosure is all that is required of the Vice-Mayor, why is the Silver EDA guy denied what she is allowed?

The EDA needs more people who have actually been involved in economic development. Working on a city council campaign or sitting around a coffee shop talking about how wonderful it would be if shops downtown stayed open later does not qualify one to be on the EDA.

Maybe the city council should consider appointing more economic development professionals or individuals actually involved in economic development to our local economic development authority. Crazy idea?

Maybe a reasonable safeguard against allowing for any one interest alone (like Silver) from “controlling” the EDA would be to then limit the number of employees or representatives from any one business or interest who can be appointed.

Mr. Kelly at least looks and acts like he supports real economic development in the city. And please, let’s get real, it’s not “poaching” when the city EDA (even unknowingly) constructs a massive flashing neon sign that yells, “Please! Save us from ourselves!”

This is a most unfortunate letter.

First, Spotsy isn’t going to “poach” anything from the City. Regardless of how the deal is financed, the resort will still be in the City. That does not change.

Second, If the financing was private, would the VM have a case to make? The issue that’s problematic here is the deadlock on the City’s EDA. If the City Council and the resort come to Spotsy and need help with financing, and Spotsy gives it, it’s not poaching. It’s regionalism. It’s one neighbor helping another, and that’s the spirit we’re approaching it with.

Matt, you and the City Council and the Mayor should be commended for your desire to bring jobs to the City. Folks who are out of work need them now, not “in time”.

Ellis–It needs to be remembered that the EDA has not handled taxable bonds before. As such there is no such thing in this case as a normal fee.

Mr. Cameron consulted the Council about a possible compromise offer after Dana Herlong, EDA Chairman, sent a letter to Kalahari representatives (so much for claims the EDA was being blocked from direct negotiations with Kalahari) saying the EDA was not prepared to waive fees. As I was advised by Mr. Cameron ALL Council members, after individual conversations, gave him the go ahead to float a compromise. I should say that formal approval of that action would require a Council vote. THE EDA received the compromise and where briefed on it prior to their last meeting. It was not sprung on them nor were any statements made that they should take it our else.

Have yet to understand the term political pressure in this case. The EDA is an independent body that can set fees as they see fit. I hope you are not implying that I have no right to voice my opinion on an issue or consider such action as political pressure.

If you are referring to the actions taken by the Silver Cos. regarding going to another EDA that was done by them after it became clear there was no clear majority view on the EDA on what action to take. It looked like a 3-3 deadlock. With a 6/15 deadline looming they cannot be faulted with lining up other options.

11% on the taxable bonds are not junk bonds. Don’t take my word for it that came from the EDA’s bond counsel at their last meeting. That is neither the highest or lowest he had seen under the current economic conditions. For those who say if the fees were an issue maybe Kalahari shouldn’t move forward–I would agree. However, Todd Nelson wants to move the project forward even under the worst economy we’ve seen in decades.

I will again state that the normal bond sold through the EDA is non-taxable giving the borrower a lower rate. Even with the added EDA fee the borrower still saves money as opposed to going to the normal bond market. In this case, with the purchase of taxable bonds, there is no savings, other than some time, to the barrower so the fee is nothing more than an added cost.

Council seems determined to move forward on some significant projects for which they have no revenue other than through significant real estate and personal property tax increases. The Kalahari project meets our long term tourism goals, and will generate revenue to cover those costs. Agonizing over EDA fees didn’t seem the way to go.

Matt, thanks for the information on how Cameron became involved. We disagree about that intervention. I do agree that Kalahari will be a big boost in our local economy and more so if they use local contractors and local employees. I could not see the owner of such a large project hasseling over 1/8 of 1% fee when the owner was paying 11% on the bonds. Glad to see everyone come to an agreement and hope they start construction sooner using the stimulus funded bonds prior to the junk bonds being sold. 11% is junk status but that is ok as there are institutions in line to buy them.