City OKs return of Sunterra for Ski Run redevelopment |

City OKs return of Sunterra for Ski Run redevelopment

After wagging its finger at the project developer for delays, South Lake Tahoe redevelopment officials gave unanimous approval Tuesday to a $10 million expansion plan at Embassy Vacation Resort.

A new agreement is expected to return to the Redevelopment Agency by May. As part of the deal, parent company Sunterra must proceed to build its planned 40 time-share units in Phase 4 on a parcel behind its location across from Ski Run Marina by May 2007. The company is almost three years behind on new construction, and all the permits have expired. About 75 percent of its three phases have sold.

Agency members Hal Cole and Kathay Lovell took issue with the long delays for such a busy intersection of town. Cole questioned whether changing times have dictated a better use for the property. Lovell didn’t want history to repeat itself, considering the handful of extensions given to the developers of the convention center project planned near Stateline.

“We’ve been down this road before with non-performance of redevelopment property. I don’t want to go down that road again,” Lovell said. “That’s a valuable piece of property.”

The El Dorado County Assessor’s Office estimated the prime corner where Phase 5 will go at about $2.5 million.

As a measure of good faith, the company gave the city $25,000 for any costs incurred.

“Twenty-five thousand dollars is nothing,” Lovell said.

But she was told by staff that finding a new developer may turn out to be an even costlier venture that may delay redevelopment further.

If Sunterra doesn’t follow through with its plans, the city may legally pursue yanking the 2.3 acres it turned over to the developer. The old agreement was drafted in 1995, seven years before the Las Vegas-based company filed for bankruptcy protection.

Phase 5’s proposed 24 units and 13,000 square feet of retail would be located on the southwest corner of Highway 50. The added units in the two phases are expected to increase parking, a situation company counsel Todd Davis said Sunterra plans to address.

“We’ve learned you cannot underplan for parking,” he said.

The area has its parking challenges. In the summer, the next-door marina had to establish off-site parking to handle the demand.

Agency member Mike Weber, who is also the Tahoe Regional Planning Agency Governing Board member, suggested a pedestrian overpass over Highway 50 to improve access from its parking structure on Ski Run to its main building on the northeast side of the thoroughfare.

“The questions you raised we expected. We will do whatever it takes to show you the new Sunterra is the solution and the old Sunterra is the problem,” he said. “We have no cash-flow issues.”

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