Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, March 11, 1994 TAG: 9403110136
SECTION: VIRGINIA PAGE: B-1 EDITION: METRO
SOURCE: Associated Press
DATELINE: RICHMOND LENGTH: Medium
But supporters of Disney's America said the park would be an economic development coup for Virginia, which in recent years has lost other major projects to states offering greater incentives.
A panel of six legislators negotiating a compromise on a Disney incentives package heard from both supporters and opponents of the proposed American history theme park in Prince William County.
Public hearings by General Assembly conference committees are rare, but House Majority Leader Richard Cranwell, D-Roanoke County - a member of the panel - said he thought public input was important on legislation of such magnitude.
The hearing came a day after Gov. George Allen proposed a compromise in which Disney would pay the state if sales tax revenues from the development fall short of projections.
Specifically, Disney would guarantee the $3.8 million annual debt service on $49 million in bonds for building roads directly related to the project. If sales taxes from the project fall short of $3.8 million, Disney would pay the difference. The total road bond package is $131 million.
Tim Lindstrom, attorney for the Piedmont Environmental Council, argued that the debt service on the bonds could exceed the $3.8 million guarantee because of cost overruns or a higher-than-expected interest rate.
"If the estimate turns out to be more, who pays the difference? I suggest it would be the taxpayer," Lindstrom said.
He also suggested the sales tax projections are flawed because Disney's America would attract many visitors who otherwise would have spent their tourism dollars elsewhere in the state.
Michael Siegel, a public finance economist who studied the project for the Piedmont Environmental Council, agreed.
"When Disney takes a visitor who otherwise would have gone elsewhere, they're basically cannibalizing the other attractions in the state," he said.
Wilson Flohr, executive vice president and general manager of King's Dominion theme park in Hanover County, said he expected a 15 percent to 25 percent drop in attendance the first year Disney's America is open. Flohr, who was asked by Cranwell to attend the meeting, said it would take about four years to recover.
Lindstrom also said questions remain about the project's impact on local services like police protection and its impact on traffic throughout Northern Virginia.
He said Disney is "about a month behind" in providing information the county needs to get the project under way, and it would do no harm to take a closer look at the deal and vote on it again in September.
A re-enactment clause is included in the House of Delegates' version of the incentives package; neither the Senate version nor the Allen proposal has that provision.
Disney supporters, however, urged the legislators to work for a compromise before Saturday's adjournment.
"This is an unprecedented opportunity for the private sector, the General Assembly and the executive branch to forge a partnership," said Jean E. Clary, chairwoman of the Virginia Chamber of Commerce.
She said states must be willing to offer incentives if they are to compete for major projects. Approval of the Disney deal would send a message that "Virginia is open to business again, and a return to economic development leadership is under way."
Failure to reach agreement, on the other hand, would show that "Virginia lacks the vision and courage to compete in the '90s," she said.
Hugh Stallard, president of Bell Atlantic Virginia, said the Disney name alone would be a boon to Virginia tourism.
"This corporation is so well known it's an instant positive for the commonwealth of Virginia," he said. "Disney is the type of quality company we'd like to attract to the state."
Robert Singletary, chairman of the Welcome Disney Committee, criticized the legislature for not quickly seizing the opportunity to land the Disney project.
"If they took options on land in Maryland and then came over here and said, `Let's negotiate,' we would be looking at how we could give them $200 million" to lure the company to Virginia, he said.
The incentives originally proposed by Allen amounted to $163 million, including $142 million in highway bonds. Other items in the package include cooperative advertising, a state visitors' center, employee training and equipment relocation.
The Senate-passed deal featured $125 million in road bonds. The House proposal called for $82 million in road bonds, with Disney putting up another $44 million that would be reimbursed by the state if the park remained open.
Keywords:
GENERAL ASSEMBLY 1994
by CNB