‘Loop Road’ update sparks discussion over redevelopment area at Stateline
February 8, 2019
An update on the U.S. 50/South Shore Community Revitalization project turned into a brief debate on the future of Douglas County's redevelopment area at Stateline.
County commissioner John Engels, whose campaign platform included opposition to the redevelopment, asked pointed questions of Lake Tahoe attorney Lew Feldman at commissioners Jan. 24 meeting.
The redevelopment agency was established by county commissioners in 2016 to pay for a portion of a year-round convention center at Stateline.
Under Nevada law, county commissioners determined that portions of Stateline were blighted.
“The cost of doing nothing has consequences. Our region has historically been kind of radioactive to outside capital.”
— Lew FeldmanLake Tahoe attorney
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Engels asked Feldman if Edgewood or Tahoe Beach Club were blighted.
Feldman replied that Edgewood wasn't, but that Beach Club is still under construction. That project replaced a mobile home park, which Feldman pointed out was considered blighted.
The questioning brought out some information on the finance plans for the $80 million project.
Feldman said there was no question the center would have to be built with bonds.
He said that the redevelopment area and therefore the county would be responsible for $20-$25 million, which is why the area was formed.
The other three-quarters of the cost would be paid for by bonds issued by the Tahoe Douglas Visitor's Authority. He said those bonds would be paid for by room taxes charged at Lake Tahoe.
Both Engels and Commissioner Dave Nelson oppose the redevelopment area.
Commissioners Wes Rice and Larry Walsh favor the area and using its proceeds to build the center.
"I have a different take than my colleague," Rice said. "I see this as an enrichment for the entire county. The money that will be generated will flow off the hill."
Walsh agreed with Rice.
"The economic upside is enormous," Walsh said.
Commission Chairman Barry Penzel said commissioners would have a discussion on the redevelopment area in the future.
Feldman pointed out that in the last 17 years, the number of jobs in the casino core has dropped from 10,000 to 3,000. Where the assessed valuation was $142 million, it is now down to $84 million.
"The cost of doing nothing has consequences," Feldman said. "Our region has historically been kind of radioactive to outside capital."
Feldman said the U.S. 50 revitalization project, commonly referred to as the “Loop Road” project, will be the greatest challenge for the Tahoe Transportation District.
District Director Carl Hasty said the new road will follow the alignment established in Nevada and extend into California.
The highway will require 107 units of replacement housing during its construction. Should it be completed through South Lake Tahoe, the route through the casino core would be dedicated to the county while the state takes over the new road.
"Seventy percent of traffic is just passing through that area," he said. "Once it's done you will be able to close down the local street and not impact traffic."
Nevada redevelopment agencies raise money from increased property taxes collected inside the area.
At Stateline, projects such as the improvements at Edgewood and Tahoe Beach Club will result in higher assessed valuation, the taxes on which will go to redevelopment.
The county continues to receive property tax from the area generated before it was established.
An indoor convention center has been a long-term goal at Lake Tahoe, and was originally planned for South Lake Tahoe.
The city underwent a significant renovation using redevelopment money, with a similar center planned for a site just across the state line from the Douglas casinos.
But in 2010, recession-wracked California disbanded its 400 redevelopment areas and moved all the money into state coffers.
Douglas County has had a redevelopment area since 1997, first in the north Valley and then at Stateline.
Redevelopment Area No. 1 stretched from Topsy Lane south along Jacks Valley Road to Genoa.
When it was founded, commissioners found that the sagebrush land located at Jacks Valley Road and Highway 395 was blighted. Redevelopment helped bring Target and Home Depot to the county. It later was key in the arrival of Walmart and Best Buy.
In 2011, when it appeared the Nevada Legislature was considering raiding redevelopment areas, the county spent $2.2 million to work on Genoa, the largest non-disaster related expenditure in the town's history.
Redevelopment Agency No. 1 was officially dissolved July 1, 2018, but there is still roughly $3 million sitting in the account.
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