Convention center plans move ahead
August 31, 2004
The next stage of redevelopment in South Lake Tahoe could become the main stage for large groups and companies if Marriott and the city have a meeting of the minds.
The final draft of an exclusive negotiating agreement (ENA) between the South Tahoe Redevelopment Agency and Marriott Vacation Club to build a convention center complex near Stateline off Highway 50 is headed to the agency’s regular meeting slated for Tuesday at 9 a.m.
With some dissension from the audience, a special meeting on Monday night ended with optimism among council members – who serve as the agency panel – city staff, Marriott’s representatives and affected property owners. Harry Segal, who owns Sierra Shirts, has also been tapped as a negotiating party because he will handle the retail stores.
The estimated $200 million project involves a hotel with a convention center over a wedge of land between Highway 50 and Cedar and Stateline avenues to the east and the Stardust Lodge to the west.
“We’re hopeful this goes through,” Driftwood Lodge owner Rick Edwards said after the meeting.
He’s one of about three dozen property owners in the area polled by the city of their interest. Some business owners express an eagerness to get going on the project, which has seen a change of hands of negotiating parties, a stalemate with Marriott six months ago and nine extensions with Harrah’s.
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“We don’t want that to happen again,” Councilwoman Judy Brown said.
She was reassured by the Redevelopment Agency’s legal counsel, Sayre Weaver.
“This agreement only allows for one,” she said of the ENA.
If approved by both parties, Marriott will have nine months to lay out a plan to make the 12-year idea a little closer to reality. At the end of the 270-day period, the agency and hotelier may sign a development agreement. For now, the spirit of the document now under debate serves as a designation that gives Marriott the exclusive rights to the project.
Legally, the project can’t end up being a dramatic departure from the original proposal. Marriott has agreed thus far to work in the same footprint and build a hotel as originally intended.
Marriott is leaning toward a time-share hotel instead of a traditional one – thereby eliminating valuable revenue from the motel-room tax pool for the city because time share TOT is only paid if owners rent out their units. For that, city officials have said they’ll only agree on an intent to build if another source of revenue is established to replace the loss of funds.
If signed, the agency will deal with no other party. In the meantime, the Tahoe Regional Planning Agency’s three-year permit to build will expire in October.
When Harveys Casino Resort steered the convention center ship, it was anticipated the project would take seven years to build.
Marriott stepped in to take over the project more than a year ago – with South Shore attorney, Lew Feldman as the point man for the hotel giant.
A sticking point in February, Marriott may agree next Tuesday to release the agency from any legal liability if the project takes on lawsuits. The document has the clause written into it that protects the city.
It still may not be an easy road.
While agency officials stressed no public money can be used, Feldman warned it would be “disingenuous” to assume there would not be “some municipal debt.”
In the current ENA, Marriott would agree to pay for building the complex and deal with property acquisitions.
“They’re committed to trying to find a combination of products that will make this project economically feasible,” Feldman said.
The agency board voted unanimously Monday to proceed – with members Hal Cole and John Upton serving on the project subcommittee.
– Susan Wood can be reached at (530) 542-8009 or via e-mail at email@example.com