Convention center developers look to restructure debt
SOUTH LAKE TAHOE — The developers of the stalled convention center project at the state line say they need a “creative restructure” of debt but do not intend to declare bankruptcy, according to a letter to Mayor Jerry Birdwell.
Debt on the project from property acquisition and the first phase of construction had an initial term of two to three years, and “was never intended to be long-term,” states the letter from Randy Lane of Lake Tahoe Development Co.
Because new sources of capital to pay off the debt aren’t available, the developers are exploring debt restructuring options with lenders, the letter states.
The developers “continue to explore every avenue for new capital sources, some of which are emerging as a result of current market conditions,” the letter states. “While we have several we are evaluating, none are specific enough to report at this time.”
The letter was made public at last week’s City Council meeting.
City Manager David Jinkens said he held a teleconference with Lane on Friday, but that there was not enough information from that conference to provide an update on the project. Jinkens said he expects to have more information this week.
In their letter, the developers said they support the city’s efforts to get federal stimulus money for the project. There should be “no deterioration” of work completed at the site, they said.
A “p.s.” to the letter states: “Neither John Serpa or Randy Lane have nor intend to file bankruptcy.” The developer’s attorney, Lew Feldman, said last week that there are also no plans for Lake Tahoe Development Co. to file bankruptcy.
The project, known as The Chateau at Heavenly Village, includes a convention center, hotel-condominiums and retail. Under the original plans, the price tag was $420 million.
The project broke ground in June 2007. Excavation work was completed and the foundation was laid. But work stopped last winter and has not resumed.