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Motel owner caught in middle of fray

by Sally J. Taylor

M.K. Desai, owner of Cedarwood Lodge on Lake Tahoe Boulevard, is one of several small-motel owners snared between the decline in the South Lake Tahoe lodging industry and environmental regulations that hamper the conversion of motels into almost anything else.

He’s also caught in the middle of a zoning nightmare.

On one side of the 26-unit motel, teen-agers blare loud music at all hours while grabbing a fast-food snack. On the other side, vents from a bakery discharge smoke a few feet from upstairs windows. Car exhaust from a garage and parking lot filter into downstairs windows as well.

In the winter, snowplows rumble day and night to keep surrounding parking lots open.

“Business has gone,” Desai said. “It’s half the (business) I used to make.”

Fourteen years ago, when he purchased the motel between Al Tahoe and Sierra boulevards, occupancy averaged around 70 to 75 percent, he said. Now it’s in the low 30s.

Back then, Taco Bell closed earlier in the evening, he said. Where Bayers Bagel Bakery now stands, there was a shoe store with regular daytime hours and no ovens. Businesses behind the bakery also had regular hours and little exhaust.

“This used to be a booming place,” Desai said, recalling the repeat guests who appreciated the well-maintained property away from the hustle and bustle of Stateline.

“Tourists come to relax, to enjoy their time.”

With the noise and fumes, his regular customers now go elsewhere.

It’s getting harder to keep up with maintenance, something he used to do himself. That stopped a year ago when he was injured while working as an electrical contractor, his previous trade. Low income from the motel prevents hiring someone else for the work.

Despite the decline in maintenance, Desai continues to take pride in his property, most evident by the white petunias planted beneath the motel sign and landscaping at the office entrance.

Nevertheless, he would like to sell.

In almost any other town in the country, a one-acre property on a main thoroughfare would fetch a handsome sum. In the Tahoe Basin, it’s not that simple, even though potential buyers stand in line.

Three years ago, Desai and Taco Bell officials began talking. The fast food restaurant next door to the motel would like room to expand its indoor dining area, its parking lot, add a drive through, and improve its entrance. By purchasing the motel, they feel they can do all that and still preserve some rooms for a bed and breakfast inn that caters to skiers.

Talks stalled over Tahoe Regional Planning Agency policies. Concerned about idling cars, the agency did not want a drive-through. That dampened the buyer’s enthusiasm, Desai said.

An even bigger road block, however, is the distinction made by the TRPA between motels, considered tourism-commercial property use, and the general commercial use of all the business around the Cedarwood Lodge. The way the regulation now stands, the two uses are not interchangeable in most instances.

Taco Bell officials are becoming disillusioned.

No offers have come forward to buy the property as a motel.

The Cedarwood Lodge is also outside redevelopment boundaries and community plans that could provide buyout incentives.

The lodging industry as a whole, plagued by low occupancy rates, has seen improvements following the closing of motels in redevelopment and community plan area. Improving the ability of owners of struggling motels in other areas to sell out, could also help those that remain.

“From the ‘Y’ to here, see how many properties look good (and are profitable),” Desai said. There are too many “garbage buildings.” This is the old Tahoe. The new Tahoe is at Stateline, he said.

“The lodging power is at Stateline.”

Although frustrations are mounting for Desai and other small-motel owners, talks are under way to the open the snare that has locked them into decline.

TRPA, business and city officials all agree that some motels need to be converted to other uses. They recognize that the old motels that should be retired have valuable resources that can be applied to better uses.

Demolition of the Cedarwood Lodge, including the Desai residence, could free 29 valuable sewer units for use elsewhere. Twenty-six motel rooms could be banked for new properties in more suitable for areas or retired completely to improve occupancy rates in the remaining properties. Building and asphalt coverage, now locked into an underutilized property, could be applied to another business.

Each of those motel assets could be worth something to lodging owners now caught in limbo with unprofitable motels and no selling power.

But first environmental issues need to be worked out to ensure a motel problem does not evolve into a new problem in another 10 years.

“This place can be made into a good place,” Desai said of his property.

“If they can turn this into a commercial zone, Taco Bell benefits, the city benefits, everybody benefits.”

Tomorrow: Community officials begin to find solutions to the blight of aging motels.

Tahoe Daily Tribune E-mail: tribune@tahoe.com

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