THE FREE LANCE-STAR

BY EMILY BATTLE

Date published: 4/9/2008

The speakers who came to Fredericksburg City Hall last night for the second public hearing on incentives for a proposed Kalahari Resort were overwhelmingly in favor of the project.

The 23 supporters praised Kalahari for its potential to create jobs, and for the wide impact that its $230 million project will have in the local economy. They said it could strengthen Fredericksburg's position on the tourism map at a time when history-based tourism is declining.

The three opponents questioned the project's viability and asked where Kalahari's employees would live. One asked whether Kalahari employees would have all their benefits completely paid for.

During it all, the tensions of the mayoral race between Councilwoman Debby Girvan and Mayor Tom Tomzak were evident.

Kalahari President Todd Nelson spent the first hour of the meeting talking about his business and answering questions-some from council members--some from speakers at the Jan. 15 public hearing--about his project.

"I'm hoping to clear up any misconceptions that there are here tonight. I'll talk very openly about our company," he said before introducing his wife and two sons, along with several Kalahari employees.

He spent about 10 minutes in a direct exchange with Girvan, the only council member who vocally opposes the Kalahari incentives package.

She's said repeatedly that she thinks the city "settled for" the Kalahari deal, and is giving away too much.

Nelson doesn't agree with that analysis.

"I will never go to another community with a subsidy like this ever again in my life," he said, adding that he'd likely seek an up-front grant of as much as $10 million from the governments where he locates in the future.

Nelson said the 47.5 percent rebate Kalahari will get on its local taxes over 20 years, which will amount to around $3 million a year, is crucial to securing financing for the $230 million project.

He said it's misleading to call the incentives package a $61 million payment by the city to Kalahari.

"You've got to get off this $61 million thing. It's not $61 million, it's nothing, it's zero. The city pays nothing. I generate 100 percent of it before you pay me one dollar," Nelson said to Girvan. "The city doesn't have any skin in the game until I produce. I am taking 100 percent of the risk, the city is taking zero percent of the risk."

Other council members echoed Nelson's sentiments. Councilman Hashmel Turner even asked him to look straight into the cameras at City Hall and repeat that the city would pay Nelson nothing until he begins generating new revenue.

Girvan also asked repeatedly why Nelson wouldn't put specific employee benefits in writing and attach them to the 20-year performance agreement.

The Kalahari public hearing will continue at the council's April 22 meeting. At that meeting, council members are scheduled to take the first of two votes on the performance agreement and TIF ordinance. The second vote could come on May 13.

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