Marriot gets nod for hotel plan | TahoeDailyTribune.com
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Marriot gets nod for hotel plan

Park Avenue Redevelopment has a new partner.

The South Lake Tahoe Redevelopment Agency voted 4-1 Tuesday to approve a time-share hotel project by Marriott Ownership Resort, Inc.

Construction of the $129 million, 409-unit hotel is scheduled to begin May 1 next year at the Lake Tahoe Inn site.



The project, formerly a 13-week, quarter-share hotel to be developed by American Skiing Company Resort Properties, will be a weekly time-share hotel as proposed by Marriott.

“Marriott is a strong financial brand that will be financing this project internally,” City Manager David Childs said.




The change frees ASC, which has a purchase agreement with the Lake Tahoe Inn, to transfer development rights to Marriott.

As a result of the redevelopment agency’s approval, the scheduled construction of the project will be accelerated by one year and should begin in unison with the ASC Grand Summit Resort Hotel, a $250 million quarter-share project.

Agency members said that adding a new developer with a different kind of project adds a diversity to the Park Avenue Project, a diversity that should be positive to the financial health of the project.

But by changing the project from a quarter-share hotel project to a weekly time-share, the redevelopment agency’s sources of revenue are changed.

The agency will be generating more income from Tax Increment on the property value than on Transient Occupancy Tax generated from the rental of rooms.

Don Fraser, financial consultant for the redevelopment agency, pointed out that the property tax is a stable source of income while taxes generated from room rentals are subject to fluctuations in tourism.

Several financial safeguards were added into the development agreement to protect the redevelopment agency if projected revenues fall short of expectations or if Marriott does not complete the project. Marriott, an $8.7 billion company, has 46 time-share projects internationally and has completed every project, according to Marriott representatives.

But agency member Bill Crawford, who cast the only dissenting vote, said he is not satisfied with the agreement.

“The document is weak on the city side as far as the risks the city is taking,” he said.

The cost of these safeguards will be passed on to those who buy the time-shares. The time-share owners will belong to a special district approved by city agencies and the developers. As part of their purchase agreement time-share owners will be required to pay a special tax. Some of these taxes will be required and others will be contingent on financial performance of the project.


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