City eyes eminent domain: Five parcels hold out from redevelopment | TahoeDailyTribune.com
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City eyes eminent domain: Five parcels hold out from redevelopment

Susan Wood
Dan Thrift / Tahoe Daily Tribune / One vacant residence and seven businesses may be bought out by the city in eminent domain proceedings if negotiations continue to falter with the developer of the proposed convention center complex near Stateline.
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Working on a tight timeline, the South Tahoe Redevelopment Agency took an initial big step Tuesday toward using eminent domain on five parcels holding out from selling to a private developer that plans to build a $410 million convention center complex near Stateline.

The board, which also acts as the City Council, voted unanimously to put in place five resolutions to buy the property on Lake Tahoe Boulevard and Friday Avenue as a conduit for Lake Tahoe Development Co.’s Randy Lane of Stateline and John Serpa of Carson City. The developer has already closed on 29 other properties in the 12-acre area between Highway 50 and Cedar, Friday, and Stateline avenues.

The action may have prompted a legal fight for the property owner where Up Shirt Creek and Lakeside Landing are located on Lake Tahoe Boulevard. The other businesses include Union 76, Pub Tahoe, Taco Bell, Paradise Timeshare and Shoreline Ski and Snowboard, along with an absentee residential property owner from San Francisco.



John Maxhimer pledged a fight if the city follows through with eminent domain, which is characterized as the legal taking of private property by government to eliminate blight in a community. The controversial practice is being challenged in California on November’s election ballot.

“If you adopt this, it will mark the illegal taking of property,” Maxhimer’s Oakland attorney Claudia Gorham told the agency board. She added the city’s finding of blight in the area is considered “too old to warrant condemnation” and called the move “legally deficient” and a “gross use of discretion.”



Former City Councilman Bill Crawford, who’s seeking a seat on the council in November, reiterated the attorney’s claims. He accused the board of acting on behalf of the developer and not of the people.

“I don’t think there’s a public good,” he said.

On the contrary – agency legal consultant Stacey Sheston of Sacramento countered by noting the classification of blight is not on individual properties but on the area “as a whole.” Moreover, the city will come out of the project scheduling for groundbreaking May 2007 with a convention center and public access venues like a village green with a walking path and pond.

The developer, who will also build two condominium hotels, retail space and a pedestrian tunnel under Highway 50, plans on continuing to negotiate over the next week or two with the property owners.

“This is just the process. I’m optimistic given one (party) came out in opposition,” Lane said after the meeting. The property owners were notified of the meeting and the city’s intent.

Collectively, the property is estimated at $8.5 million, a sum the developer would reimburse the city for if further negotiations fail to materialize the transactions. The city would also plan on a set aside of up to $1.6 million for relocation costs for the property owners and businesses.

“This area needs to be cleaned up, and this is an incredible way to do it,” agency board member Ted Long said, calling it a “reduction of tremendous blight.”

Board Chairman Hal Cole, who characterized Tuesday’s move “the most serious action we’ll ever take,” has said eminent domain would only be used as a last resort.

The city had endured a hefty $12 million in associated legal fees after using eminent domain across Highway 50 for the $250 million Park Avenue Redevelopment Project, which produced two Marriott timeshare hotels and Heavenly Village.

In other business:

— The City Council voted to execute an agreement with Caltrans on installing a pedestrian-activated traffic signal at Heavenly Village where a Heavenly Mountain Resort employee was injured by a vehicle when she crossed the road. The estimated cost of the signal has increased to $274,000, with $24,000 of that coming out of the city’s general fund.

— The council also allocated $12,500 as the city’s portion for a design contest beginning Oct. 4 that will highlight concepts to enhance the recreational and cultural opportunities at El Dorado Beach and Campground. The proposal may cost the state an estimated $13.7 million to develop.

— In addition, the panel approved the South Lake Tahoe Tourism Improvement District. The district calls for hotels and motels to collect $2 per room, per night from their guests beginning Nov. 1. Vacation home renters will charge $3. The South Lake Tahoe Lodging Association-spawned measure would earmark an estimated $1.6 million to go into marketing efforts spearheaded by the Lake Tahoe Visitors Authority.

No written or oral protests were filed with the city, a drastic departure from the local government’s citywide business improvement district that recently disbanded when the board reached an impasse.

California’s Proposition 90 on the November ballot

The measure would change the state constitution to require government to pay property owners for substantial economic losses resulting from some new laws and rules. It also would limit government authority to take ownership of private property, including homes, buildings, land, vehicles and “intangible” property such as a business or patent.


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