ASC meets Friday deadline
American Skiing Company, the main developer in the Park Avenue Redevelopment Project, met its first deadline Friday, just in time to stop the South Tahoe Redevelopment Agency from drawing on the company’s $5 million letter of credit.
“There are three documents that we are looking to have today – the extension to the letter of credit to July 10, the signed amendment to the (disposition and development agreement) and a signed construction contract for the Grand Summit Resort,” Agency Vice Chair Brooke Laine said Friday.
All three documents were delivered by Stan Hansen, ASC’s senior vice president, at an emergency meeting Friday, called by the Agency. Most of the documents were in place earlier in the week, but ASC had to wait until Friday to show the documents because the agreement with Perini Building Company didn’t come until Thursday, just one day before the deadline.
Laine said if any one of the three conditions were not met, the Agency could have drawn on the company’s existing letter of credit, which was set to expire on May 1. The letter of credit was put up by ASC last fall as a deposit to its commitment to build the Grand Summit Resort Hotel and a gondola in the city’s redevelopment project.
The new letter of credit, which has an expiration date of July 10, works under the same terms and conditions as the expired version, which states that proof of financing for the project must be disclosed to the city by its expiration date.
ASC couldn’t meet those terms by the old deadline because it didn’t have title for the land, which is scheduled to happen in late May. Under the new letter of credit, ASC must show proof of financing, bonds and the final public report issued by the California Department of Real Estate by June 30, or the Agency will draw on the new letter of credit before it expires on July 10.
With title of the land, Hansen said those terms will be easily met.
The letter of credit is refundable until Sept. 15, at the end of the building season. If the city were to draw the $5 million in July, the company could get it back if it starts building during the summer.
The Park Avenue Redevelopment Project calls for the demolition of 34 acres of land at the corner of U.S. Highway 50 and Park Avenue to make way for the development of ASC’s four-star hotel and a gondola leading up to Heavenly’s slopes. An ice rink, retail shops, restaurants and a six-screen cinema complex are also planned by another developer. Construction is scheduled to start in June.
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