Financial consultants say city project in good shape
The South Lake Tahoe City Council heard financial consultants tell of the city’s financial well -being Tuesday night.
Mark Northcross, of Project Finance Associates, and Don Fraser, vice president of Katz Hollis, told the council the city is in good shape regarding money borrowing for the planned Park Avenue Project. Both men are from consulting firms hired by the city to confirm its financing numbers are accurate.
The advisers spoke to the council regarding the status of money borrowed for the Ski Run Project as well as the city’s overall financial health.
Northcross said Ski Run is generating revenues so far beyond what conservative revenue projections dictated that, even if the final phases never reach fruition, the improvements already in place will pay the rest of the outstanding debt.
“I feel even better now than I did before,” said council newcomer Brooke Laine, who commended the advisers for a complete report. Laine said she supports redevelopment, but tries to leave herself open to a financially conservative point of view.
Bill Crawford, the other council newcomer asked several questions of the advisers. He said he saw the words “assume” and “projection” more times in the financing report than acceptable. Northcross and Fraser appeared to answer Crawford’s questions to the council member’s satisfaction.
Northcross said because Park Avenue is on such an accelerated schedule, refinancing of money borrowed for Ski Run will have to be done at the same time as money borrowing for Park Avenue.
Because the city has not yet built anything at Park Avenue, Northcross said the city will have to sell BANS rather than bonds. BANS are financed over a shorter period of time and have higher interest rates, according to Northcross.
The Park Avenue Project’s first phase, scheduled to begin next spring, will demolish buildings in the state line area of South Lake Tahoe to make way for a gondola to Heavenly Ski Resort and the Grand Summit luxury hotel. This project deals only with the Heavenly side of U.S. Highway 50, from the state line to Park Avenue.
Both the gondola and the Grand Summit will be built by American Skiing Company, Heavenly’s parent company.
Additional phases are scheduled to follow in the future as more of the current infrastructure is torn down, paving the way for a multi-screen movie theater, a public ice rink, a transportation center, more tourist accommodations, and retail shopping.
The city, along with Harveys Resort Hotel/Casino, plans to redevelop the opposite side of the highway beginning in 2000. Those improvements will include hotels, retail and other amenities as seen in the Park Avenue Project, but will also include a convention center.
The convention center project is currently referred to as Project 3.
City staff, along with redevelopment consultants, plan to have a financing plan for the council to look over at a Jan. 5, 1999 workshop. A council vote on the financing should be forthcoming a short time after the January workshop.
“You’re in good shape,” Northcross told the council. “In April there was some doubt, but it looks like you’re in good shape.”
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