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A Closer Look: Is redevelopment a panacea or pitfall?

If ever there were a good time to pay attention to city government, this is it.

The South Lake Tahoe City Council is pondering a plan that could possibly involve 1,860 acres of land and create millions of dollars of debt. But if all went smoothly, the plan has the potential to pay for long-sought improvements at the “Y” and elsewhere in town – including storm drains, street repairs, refurbished homes and businesses, and affordable housing.

The proposal is to create a new redevelopment area in town, separate from the existing redevelopment area at the state line. The area being looked at is a lopsided-barbell shape, with the larger of the two ends at the “Y,” a skinny connecting segment running along Highway 50, and the smaller end of the barbell in the Bijou neighborhood. The Lake Tahoe Airport is included at the west end of the area.



In addition to deciding whether there should be a new redevelopment zone, the city council also will decide whether that zone should include all or just parts of the “barbell” area.

Already, skeptics are raising red flags about the proposal. Their concerns are wide-ranging. One worry centers on the wisdom of taking on more public debt, especially during an economic downturn.



A city-created redevelopment agency would borrow money to fund the improvements. The loan would be repaid, at least in part, by the increasing property-tax revenues expected to flow in as improvements are made and property values increase. Under redevelopment, the agency is allowed to keep most of the increase in property-tax revenue, the so-called “tax increment.”

In fact, a redevelopment agency is required to take on debt in order to collect the tax increment. A “statement of indebtedness” is prepared that shows the state that the tax-increment money is being spent appropriately, according to information on the city’s Web site (see http://www.cityofslt.us/redevelopment-housing/).

“Debts of the agency are not debts of the city,” the Web site document further states. That leaves unanswered one of many important questions about redevelopment: Who would be responsible, and what would the consequences be, if the redevelopment agency defaulted on a loan?

Another concern, which has been voiced by John Runnels of the Citizens Alliance for Responsible Government, is that the ulterior motive for redevelopment is to bring in a deep-pockets, out-of-town developer who would fill the “Y” area with chain stores and restaurants sporting a cookie-cutter, Alpine motif.

At least one city official contends there is no conspiracy afoot.

“This isn’t big brother,” Mayor Mike Weber said this week. “It’s not sinister.”

Weber said the proposed new redevelopment area has too many parcels under different ownership to attract a large-scale developer. The council already has promised not to seize residential property through eminent domain and may make the same commitment for business properties.

Weber said that, although he hasn’t made a final decision on the proposal yet, he sees its potential to help out individual business owners looking to improve their properties.

Those are just two of the questions surrounding the redevelopment proposal. Perhaps the most important question is: What other options might be available for funding the improvements the public wants – especially alternatives that would involve less indebtedness? And if the city does move forward with the new redevelopment area, can safeguards be included to prevent the corporate takeover of town that some fear?

If this fascinating discussion has put you in the mood to learn more, you’re in luck. On Friday, the city is hosting two public workshops about the redevelopment proposal. The first session starts at 2 p.m.; the second at 6 p.m. Both are in city council chambers at the Lake Tahoe Airport.

– Elaine Goodman is city editor of the Tahoe Daily Tribune. She can be reached at (530) 542-8006 or egoodman@tahoedailytribune.com.


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