The triangle project has been kept alive.
The South Lake Tahoe City Council approved a three-year extension on an agreement to negotiate with Charlie McDermid on a hotel and public improvement project at Pioneer Trail and U.S. Highway 50.
The existing agreement, which included other partners who now want to back out, will expire at the end of September.
The agreement gives McDermid and his new partners, known as Tahoe Hospitality LLC, exclusive rights to negotiate on the property with the redevelopment agency for the next three years. He hopes to construct a Hilton Garden Inn.
While McDermid is ready to go on the project, the South Tahoe Redevelopment Agency is reluctant to incur any more debt until it can refinance some of the bonds it has taken out for the Park Avenue Redevelopment project.
“The Redevelopment Agency is not at a point where we can’t issue debt, but we should think long and hard about it,” said City Manager David Childs.
The refinancing could take place as soon as two years from now, but three years will give the agency extra time, officials said.
McDermid said his project is not economically feasible unless the agency purchases the land up-front, which he would pay back. An agreement on how this would be done still needs to be made. This form of financing was used for Park Avenue Redevelopment, although city officials are hoping to encourage developer-financed projects in the future.
McDermid already has detailed plans for his hotel. He is ready to move on the project, but the Redevelopment Agency was busy with Park Avenue and consequently the triangle project fell by the wayside, said Janet McDougal, redevelopment legal analyst.
“If the city wants to take on the project more quickly, we can move more quickly,” McDermid said. “We are ready now.”
McDermid, however, will have to make some adjustments. The original hotel was slated to be 125 rooms, but the new project will be scaled down to about 100 because of escalating property costs.
Previous partners in the project, Mike and Lori McKeen and Don Smith and Karen Wittingham, have said they no longer want to be a part of the agreement.
This will give the Redevelopment Agency, which owns property where the Jackpot Inn and Sierra Lodge used to be, the opportunity to include it in McDermid’s project.
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