Businesses vie for Park Avenue placement
Though nothing more than thin air and a set of plans at this point, commercial space in the Park Avenue Redevelopment Project is already being divvied out.
Thirty-nine businesses will be displaced in April to make way for demolition and new construction on the block encompassed by Park Avenue and U.S. Highway 50. Construction of the new development, which includes a quarter-share lodging resort, restaurants, shops, a movie theater, an ice rink and a parking garage, is scheduled to begin in May.
Completion of the project isn’t expected until summer of 2002, but the selection process for businesses to occupy 70,000 square-feet of commercial space began early this year.
As of last week, 28 businesses had been invited into the area by commercial developer Gary Casteel, of Trans-Sierra Investments, Inc., according to Lew Feldman, attorney for the developers.
Three of those 28 businesses – Bandanas Gourmet Pizza, The Powder House ski shop and The T-Shirt Connection – are from the redevelopment area. Moving into the new development is an exciting proposition for business owners who fear relocation will force them farther from the casino corridor.
“I’m still 100 percent behind redevelopment and looking forward to participating in the new development when it happens,” said Kurt Carlsen, co-owner of Bandanas Pizza. “We’re back by the ice rink for $3.50 a square foot, which is still negotiable, and the space is comparable in size to what we have now. We are flattered that they have considered us.”
In addition, Feldman said more than 20 local businesses that operate outside of the redevelopment area have been offered space.
“We have met with predominately local folks who are interested in space but we haven’t entered into any formal agreements with respect to these tenancies,” Feldman said. “What we have right now is an understanding.”
Feldman expects to firm up those understandings within the next 30 to 60 days. In the meantime, he said proposals for the remaining spaces are still under review.
On opening day, he anticipates 75 percent of the businesses in the project to be locally owned.
“The prejudice is to try to have as much local participation in the project as possible,” he said. “The point of departure is the intention of the project itself which is to diversify the retail experience from what previously existed.”
According to Feldman, T-shirt shops are not part of the retail mix but owners who are willing to modify their businesses and expand their retail inventory will be considered.
The Powder House and the T-Shirt Connection expanded their business plans to include a larger clothing selection to make their shops more appealing to the developers.
Scott Vane, an owner of a smaller T-shirt shop on Park Avenue, submitted a proposal to the developers but was rejected.
Vane said he received a letter from Feldman on Feb. 4 explaining that his 20-year-old business, the Tee Shirt Shop, Etc., does “not fall within the retail mix that has been selected for the Park Avenue Project.”
“I don’t know what I’m going to do – I’m a retailer, it’s what I do,” he said. “I was hoping I would get back in there but I’m getting stonewalled.”
Vane told the South Tahoe Redevelopment Agency board last Tuesday that he tried to contact Feldman three times this month but received no return calls.
After hearing Vane’s complaints, Agency Chairman Hal Cole asked staff to organize a workshop for a future meeting date on the legal issues surrounding the allocation of space in the new development.
“There’s two levels – what’s right on the moral level and what’s right on the legal level,” Cole said. “We want the developer to go beyond (a letter of rejection) and show him the maps of what spaces are left and give him the opportunity to come up with a business plan.”
Judith Von Klug, the city’s redevelopment manager, said that under redevelopment law the developer must show a reasonable preference toward existing tenants.
“The agency has an obligation to make sure this is happening,” she said. “And the fact that three have already been invited is an indication that they are showing preference.”
The developer also placed advertisements in the newspaper and sent notices to area businesses inviting them to apply for space in the new development.
Business owners who believe they were treated unfairly in the decision process could call for a hearing before the Redevelopment Agency.
“We’re anticipating one or two appeals on the final decisions,” Von Klug said.
Businesses that are being accepted into the new development must show financial viability, a proven track record with management and a business plan demonstrating that they fit into the new development’s retail mix, she said.
“We want tourist-oriented retail, with a lot of variety,” Von Klug said. “There hasn’t been enough variety in the past, we didn’t spend $40 million to take the same businesses and put them in nicer buildings.”
A date for the Redevelopment Agency workshop on the issuance of commercial space has not yet been determined.
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