EDA, City Council and Three Card Monte

What’s Wrong With This Picture?

In 2008, Kalahari Resorts announced its intention to build one of their “Authentic African Themed Resorts” at Celebrate Virginia. The resort would include an 832 room hotel, four restaurants, a 100,000 sq ft convention center, a 200,000 sq ft. indoor waterpark, a full service spa, a 100,000 sq ft indoor theme park, and 10,000 sq ft of retail shopping. Fredericksburg City Council voted to return to Todd Nelson, owner of Kalahari Resorts, 47.5% of their annual local taxes, in order to snag this project. The buzz phrases used to incite uncontrolled salivation for Fredericksburg residents and their elected officials, then and now are “economic boom” and “major tourist destination.”

Although touted as “shovel ready, two years later, not one single spade of dirt has yet to be turned.

However, two years later, we find Mr. Nelson, back in front of the Economic Development Authority and Council with his hands out, asking for more concessions.

I have this nagging feeling of Déjà vu.

Mr. Nelson just announced (Que Shock!) that he would also like to do a taxable municipal bond issuance through the EDA for $200 million. Yet Mr. Nelson and his financial team have declined to reveal the specifics of the municipal structure regarding the bonds. Unashamedly (although it should come as no surprise), Mr. Nelson has the temerity to demand the EDA waive or reduce its fee for both the tax-exempt and taxable issues, calling the $25 million dollars the city would receive for the taxable portion of the bonds and ostensibly use for economic development; “ridiculous and unnecessary.” Let me repeat that; $25M dollars to the City of Fredericksburg is “ridiculous and unnecessary” per Mr. Nelson. All of this despite the fact that Mr. Nelson has access to $25 million in Recovery Zone Facility Bonds from the American Recovery and Reinvestment Act and the probability of another $10 million.

To top it all off, Mr. Nelson isn’t even sure he can sell all of the taxable bonds. However, it is his “hope” that this will happen by the end of 2010. Hell, I “hope” I win the lottery this year, but I don’t plan my financial future around it! Couple that with an evaluation of costs to decide whether or not the project is doable. Doable? A 47.5% rebate on local taxes and two years later and Mr. Nelson still hasn’t decided the project is doable? “DANGER WILL ROBINSON…DANGER!”

My only surprise is that Mr. Nelson didn’t use the sorry state of the “economy” for putting his hand out. Then again, how can he, when he himself touts his parks as “recession resistant.”

Fredericksburg has been in this position before. We saw it with the Silver Companies and Central Park; and with the now infamous Slavery Museum. City Council gave up concession after concession to these two entities. What did we end up with? The asphalt abomination that is Central (Hell) Park and former Gov. Wilder’s dead-on-arrival, Slavery Museum.

While there will be jobs associated with Kalahari, the vast majority will be in the service industry and of little "career" value. The city of Fredericksburg and the surrounding counties are rich with history; ranging from George Washington to the Civil War. The region can become a major tourist destination with more regional cooperation and savvy marketing. We do not need to give up the farm to another Three Card Monte artist, yet again. City Council and the EDA should blink two or three times in order to clear the vision of fleeting dollar signs from their eyes, remove their rose colored glasses and send Mr. Nelson and Kalahari packing.