Behind-the-scenes flurry putting redevelopment back on track |

Behind-the-scenes flurry putting redevelopment back on track

by Sally J. Taylor

After years of plodding progress, city redevelopment appears on the verge of a flurry of activity, City Manager Kerry Miller told members of the South Lake Tahoe Lodging Association.

“This group has stuck with the vision of what we hope to accomplish with redevelopment. Many of you, of course, are directly impacted,” he said, prefacing his update on the various projects Thursday.


Considered the signature project of redevelopment, the Park Avenue Project will cover the area west of Embassy Suites to the Crescent V Center, on the south side of U.S. Highway 50.

Besides retail shops, entertainment and lodging, the project will realign Park Avenue itself and includes a gondola connecting the state line corridor to Heavenly Ski Resort.

According to Miller, private sector negotiations are “moving along very nicely,” and must be completed before the public sector components can move forward.

He expects an agreement soon to transfer development rights from owners of Lake Tahoe Inn to Trilogy Corporation.

American Skiing Company, owners of Heavenly, is close to a final agreement with the Castille Group to take development rights for the Park Place Component, Miller said.

That agreement is important to Embassy Suites Resort owner KOAR-Tahoe Partners, L.P. for the transfer of development rights so that Embassy can convert some of its units into time shares.

A potentially larger snag is the legal wranglings between KOAR and Matsui Bank, a repercussion of KOAR’s default on Embassy’s construction loan. Matsui is attempting to sell the loan and KOAR is threatening to file for Chapter 11 bankruptcy protection.

From KOAR’s standpoint, Chapter 11 filing “could be just enough window to get the details (of the time-share agreement) worked out,” Miller said.

“Chapter 11 doesn’t work out well on paper for when the city goes out and looks for bonding. It raises a red flag.”

Based on the opinions of the city’s financial counselors, Miller said it would not derail the project but could affect the city’s credit rating and ability to get financing at a reasonable rate.

A legal decision within the month will clarify the situation.

Assuming the private transactions conclude soon, the city could begin negotiations to acquire the remaining real estate by May 1.

On that timetable, the city would expect businesses to vacate the old buildings by April 1, 1999. Wholesale demolition and asbestos removal could take place in that month with construction beginning after May 1, 1999.

It’s an optimistic but “do-able” time frame, Miller said.

The long-delayed loop road behind the Crescent V Center and casinos is “very much on hold,” Miller said. Though still in the plans, “we’re looking at the coordinated transit system as being the project in lieu of the prospective loop road.”


While much of the Ski Run Redevelopment Project was completed last year, additional projects will move forward this year and some of last year’s projects will be adjusted.

Among the later is what Miller called the “intersection from hell.” Miscalculations on the median in the marina cul-de-sac left too little room for large vehicles to make the turnaround. Reconstruction and signal work is planned this summer.

Other adjustments to the intersection could include extending the cul-de-sac farther into the marina area to make it “more usable and user friendly,” Miller said, while maintaining the pedestrian-friendly atmosphere.

The next phase of drainage improvements in the Ski Run area will also begin this year. Drainage features are planned for the area along the fenceline of the Tahoe Meadows subdivision behind McDonald’s restaurant.

“Upon completion (of the new drainage), it will have significant impact to improve the water quality of the lake,” Miller said.

Construction of the various Ski Run public projects are expected to begin in July and be completed by Oct. 15.

On the private side, Fantasy Inn is moving forward with another addition to its site.

Embassy Vacation Resorts intends to begin phase-three construction this year. The time-share resort was designed to be constructed in five phases at yearly intervals.

To accommodate the resort, the city will retire motel rooms equivalent in number to about three average-size motels, Miller estimated.


Project Three encompasses the area west of Harveys Resort Hotel/Casino and north of Highway 50 and is slated to include a convention center.

The proponents of Project Three, including Harveys, are anxious to move it along, Miller said.

Draft environmental impact documents are now being circulated and the comment period will close April 6. After revisions, the final EIR/EIS could be presented for approval during the summer.

“Assuming Park Avenue construction in 1999, it’s not unreasonable for Project Three to begin the following year in 2000,” Miller said. “That’s fairly optimistic but it is feasible for Project Three to trail Park Avenue by one to three years.”

Though little actual construction, other than at Ski Run, will take place this summer, the paper load of preparations will be significant this year.

“There will be a flurry of the activity we’ve hoped for,” Miller said. “As we move forward to the future we’ll see redevelopment take shape and the economic impact we’re hoping for.”

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