Doing business under a microscope
In the business world, time is money.
That has been shown to be the case on the South Shore, where the people who do business in a tourism-driven economy regulated by the Tahoe Regional Planning Agency must be as frugal about making improvements as visitors are about mapping out vacations.
Hal Altman of Endeavor General Contractor Inc. has seen the effects firsthand when people are astounded by how long it takes to complete a job or what’s entailed with receiving a building permit.
“The problem is not the TRPA regulations. People just don’t know what to do,” said Altman, who advocates educational programs like basic workshops. “Their lack of education is what leads to the negativity about the agency.”
If some contractors don’t plan accordingly, they find it hard to make ends meet while waiting for permits to get approved. The longtime South Shore contractor said many people who want him to work on their projects come to his office unprepared and ignorant as it relates to what to do.
At least there’s been progress in that regard. Through the years, the local jurisdictions such as South Lake Tahoe and surrounding counties have taken some of the heavy workload off TRPA desks.
Larry Lohman, El Dorado County building official, said he was transferred up from Placerville a decade ago to handle the work.
“Now one single review saves an applicant from having to go through a two-step process,” Lohman said.
Phone calls from city building officials were not returned.
Still, if a home or business wants to expand its footprint, it needs to receive a site assessment from TRPA to ensure too much land isn’t covered by the job. Excess coverage rules mandates that no more than 30 percent of the lot be developed.
To abide by such a rule, Altman has a job of a garage extension that covers the driveway, thus requiring no new coverage.
Residents and contractors have learned to be creative and conscientious in respect to dealing with TRPA.
“Lake Tahoe is about 20 years ahead of the curve,” South Shore contractor Steve Yonker said. “We can’t always run on the promise of growth. At some point, things get built out, and we need to have an understanding there’s a limit to not having build-out. But do we need to get into noise and scenic restrictions? I think there’s a lot of room in the agency for efficiency.”
Charlie McDermid, who runs the Holiday Inn Express near Stateline, said getting permits through takes tenacity but the community “is a whole lot better off.”
Being 26 years in business, McDermid has learned to roll with the requirements when he makes changes at his hotel.
“This regulation or that stomps on (people’s) toes,” he said. “The TRPA gets a disproportion of invective. Those who benefit from them don’t stand up and say, “Thank God for the TRPA.'”
McDermid said the agency may face a perception problem, adding that many people may misunderstand that the agency is not run like a business.
But the business community has been at odds with the agency at times.
Kathy Farrell, executive director of the Tahoe Douglas Chamber of Commerce, thinks the enforcement of some of TRPA’s rules hurts business because it stifles growth and turns companies away because they don’t want to jump through the necessary hoops.
Farrell claims the agency has lost sight of its mission, which is to protect the lake — meaning preserving its clarity.
“There’s way too much discretion. My position has always been that it seems to me the ultimate task is phenomenally so huge, they focus on the minutiae like how high a flag should fly,” she said. She also wants board members to be elected to their positions.
Both chambers have seen the pinch.
“When the restrictions are added up, you have to ask yourself: Was the environment served?” South Lake Tahoe Chamber of Commerce Executive Director Duane Wallace said.
Wallace said he’s heard of many business owners and individuals having to take out loans while waiting for approvals to their permit applications on projects.
“When it costs more to do plans and takes a longer time, the interest paid on the loan creates higher expenses. Then the project is scaled down so much it reduces profit,” he said.
One of Wallace’s chamber members, former TRPA consultant Gary Midkiff, has filled a niche by making a living out of getting applicants through the process.
With all the criticism the TRPA gets about its development restrictions, the real estate industry has been able to make a positive spin on its effect on property values — until recently.
Since there’s a limit to building in the basin, the existing homes rise more readily in value. While would-be first-time homeowners lament about getting priced out of the market, those who already own celebrate the value of their investments.
“Historically, in the last 14 years, the rest of California has seen many fluctuations in the median housing values — except us, where we’re slightly increasing,” said Jerry Reed, South Tahoe Association of Realtors president. “We’ve simply run out of lots to build on. It’s basic supply and demand that’s always helped the real estate market here.”
Case in point, the median price for a single family home in South Lake Tahoe rose $21,000 in August to $299,000 in comparison to the same period in 2002.
The TRPA had made major points with Realtors in this market, until the regulatory agency started reviewing vacation home rentals.
It had pledged to enforce rules already on the books to limit vacation homes in its planning area statement, having homeowners seeking building permits to sign off on an agreement not to use their residences as vacation home rentals.
The policy was scaled down to a warning letter.
The suggestion created a firestorm of dissent, with many agents fearing the practice would encourage a flood of many second homeowners to sell their houses.
“It will most definitely have an effect on business and the economy of Tahoe,” said Dan Shideler, owner of Tahoe Rental Connection, a company that manages vacation homes. “We oppose this as a devastating property rights breach on the part of the agency.”