Council Considering Business Incentives

The Fredericksburg City Council will consider awarding incentive packages worth a combined $94,000 to two businesses looking to open up shop in the city. The City Council will discuss the items at its regularly scheduled meeting tonight at 7:30  p.m. in

Viewers can expect some discussion of the appropriateness of awarding these or other businesses incentive packages. Members of City Council such as at-large

City staff have recommended that council approve the two incentive packages, one for an auto maintenance facility on Plank Road owned by and another for a Caroline Street southern-style restaurant called Buttermilk and Olde Lace. 

The incentive package offered to AAA-Mid Atlantic would provide $15,500 in licensing and tax incentives over five years. AAA-Mid Atlantic plans to buy the old Fudruckers restaurant site on 2871 Plank Road in Central Park and turn it into an experimental business which combines aspects of a auto mechanic's shop with its traditional AAA services like travel planning according to a memo from City Manager Beverly Cameron.

In the process, AAA will move its regional operations from 1171 Central Park to the new "prototype business" site. The organization already has 13 years of history working within the city of Fredericksburg. AAA plans to invest $1.3 million in the project, including $800,000 in site improvements and $500,000 on equipment and other items. AAA says the move will create 12 new full-time jobs. 

Under the Central Park Tourism Zone incentives, the project is eligible for a five year, 40 percent waiver of business licensing taxes. Despite the $15,500 tax discount, city staff estimate the expanded AAA presence will generate $181,500 in tax revenue for the city. 

The City Council will also consider a seven-year, $78,700 incentive agreement for a planned Buttermilk and Olde Lace restaurant at 623 Caroline Street in the Chimneys Building, itself vacant for the last two years since Eileen's Bakery moved to its current location.

The restaurant will seat approximately 120, including 20-30 outdoor seats, and plans to employ 40 full and part-time workers. The total investment being made in the restaurant is approximately $300,000. The restaurant will serve lunch and dinner five days a week, Tuesday through Saturday as well as a Sunday brunch. According to documents filed with the incentive application Dishes will range in price from $4 to $34.

Cameron writes in a memo to City Council that the restaurant "will fill a prominent building and address the demand for southern dining in the regional and visitor markets."

Under the Downtown Tourism Zone incentives, the restaurant qualifies for between five and 10 years of full business license tax waivers and a 10 percent refund on meals and sales tax revenues up to $11,250 per year. 

City staff project the restaurant will generate $551,600 in new tax revenue for the city, despite the incentive package.