Financial consultant says redevelopment on track |

Financial consultant says redevelopment on track

Michael Schneider

South Lake Tahoe’s financial consultant told the city council if the Ski Run Project meets its revenue projections future redevelopment is in good shape.

Mark Northcross presented the news to the council at last Tuesday’s Redevelopment Agency meeting. The Redevelopment Agency is comprised of the city council.

According to Northcross, unforeseen circumstances such as the closure of U.S. Highway 50 can hurt the city’s redevelopment revenues.

“This year has been good,” Northcross said. “But the city has a commitment to the Embassy Vacation Resort Project (at Ski Run and U.S. Highway 50). If the money’s not there, the commitments still are.”

Despite rumblings to the contrary, Northcross said that if the stateline Embassy Suites Hotel loses a court battle with the bank that financed its construction and goes bankrupt, it will not likely significantly impact the future feasibility of redevelopment projects.

However, a declaration of bankruptcy from KOAR-Tahoe Partners, L.P. could push back the timetable of projects soon scheduled to start, such as the Park Avenue Project.

Northcross said the city would need greater assistance from the private Park Avenue partners to proceed on schedule should the hotel owners declare bankruptcy.

He said the city would still reap room tax money from the hotel, but, if the hotel is worth less than its appraised value as the owner’s claim, it will impact property taxes collected from the hotel.

According to Northcross, this would only have about a 3 percent impact on the city’s total revenue.

“That is within manageable levels,” Northcross said. “It’s not the end of the world.”

When asked if it was wise for the city to undertake future redevelopment projects knowing it must have good tourism years like this one to support its debt, Northcross said it comes with the territory in California redevelopment.

“You’ve got to take risks to get it done,” he said. “It’s the only way redevelopment’s done in California.”

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