Convention center project encounters further delays | TahoeDailyTribune.com

Convention center project encounters further delays

Elaine Goodman
Jim Grant / Tahoe Daily Tribune
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Despite another month without construction activity at the site of the $420 million convention center project at the state line, the developer remains emphatic that the project is on track.

“It’s all about finishing what we started, and we’re going to do that,” Randy Lane, managing partner of Lake Tahoe Development Co., said Tuesday. “I want everybody to keep the faith.”

The project, known as The Chateau at Heavenly Village, will include a 477-room hotel-condominium, 50,000 square feet of conference and event space, a spa, a 1.5-acre park and shops and restaurants. A pedestrian overpass across Highway 50 also is planned.

The project is a partnership between the city of South Lake Tahoe and Lake Tahoe Development Co. and is within the state line redevelopment area. Completion is scheduled for fall or winter 2009.

Lane’s comments follow a Feb. 23 event in San Francisco in which $20 million of the project’s hotel-condo units were purchased, according to a news from the project’s publicist. Prices for the units, including studios and one, two and three bedrooms, reportedly ranged from $500,000 to more than $3.4 million. A portion of the project’s units were up for sale at the three-hour event at the Fairmont Hotel.

Buyers will only be allowed to use their units for 30 days in the summer and 30 days in the winter. The rest of the time, the units will be rented out, generating transient-occupancy tax for the city.

Units sold for more than $1,300 per square foot, which the release said “established a Tahoe-area benchmark and exceeds prices in most mountain resort communities.”

The project broke ground in June. Excavation work has been completed, the foundation has been laid and the next step is the project’s “going vertical” phase.

But for much of this year, work at the project site has been stopped, and a layer of snow has accumulated in the deep hole in the ground at the corner of Stateline Avenue and Highway 50.

In an interview Jan. 30, Lane said work had been interrupted while a bidding process for subcontractors was completed.

Lane said at that time that construction crews would be “hard at work” by March 1.

“We thought that would be the case,” Lane said Tuesday.

Bid packets finally were sent out last week, he said, and bidders have three weeks to respond. Work could resume by about March 25, although Lane said that was not a definite date. He still considers the project to be ahead of schedule.

Although he acknowledges The Chateau is the subject of much public scrutiny, Lane said he’s not going to rush the project. With the economy in a slowdown, developers are working to find the best deal on construction and financing options.

“We’re just riding out the bumps in the road,” Lane said. “It’s not incumbent on us to rush things.”

No major changes are planned for the project, although some of the hotel-condo units might become hotel rooms instead, he said.

One piece that Lane says will stay in place is the convention center, which he sees as critical to boosting tourism during the South Shore’s “shoulder seasons” between summer and winter.

“It guarantees the economic/tourist livelihood of this community,” Lane said. “(Gaming) is not the same draw it used to be. The conference center is an integral part of the project – that is never going away. We’ve never wavered in that commitment.”

Mayor Mike Weber said Monday that he remained confident in the project.

“I’d be the most stunned person on the planet if the project doesn’t start up again in the spring,” he said.

Meanwhile, officials continue working to acquire the final piece of property in the project’s 12-acre area. Negotiations are continuing with the owners of Lakeside Landing souvenir shop, John and Margaret Maxhimer.

Of 29 parcels in the area, the Lakeside Landing property is one of five for which the redevelopment agency launched eminent-domain proceedings. Three of those cases are settled. In the fourth, a jury decided in December that $3.2 million should be paid for the property where Taco Bell, Paradise Timeshare Resale and Real Estate, and Shoreline Ski and Sport were located.

So far, the developer has borne most of the cost of the convention center project, aside from time spent on it by city and redevelopment agency staff, said South Tahoe Redevelopment Director Gene Palazzo. Costs such as legal fees that are paid by the redevelopment agency will be reimbursed by the developer.

Public funds won’t go into the project until it starts generating revenue, Palazzo said.

The Driftwood Cafe is one of the businesses ousted by The Chateau. The restaurant owners reached a deal with the developer, and the cafe has reopened across the street at Heavenly Village.

“If the project goes off as planned, it’s good for everyone,” Driftwood Cafe owner Bud Hillman said of the convention center project. “I wish them luck.”


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