Column: More on the Marriott time-share project
City councilman Hal Cole made some excellent points as he chastised me for my recent editorial opposing a Marriott time-share project. The project, which the South Lake Tahoe Redevelopment Agency approved Tuesday, would add 409 units of time-share to the Park Avenue Project.
I had argued that more time-share in the redevelopment area beyond the already approved Grand Summit Resort Hotel quarter-share project would decrease the city’s lodging mix, decrease future transient occupancy tax and keep tourist dollars on the ski hill.
Such is not the case, said Cole.
The foremost problem with erecting hotel rooms is that banks are simply not extending money for such construction, except in prime locations like downtown San Francisco. If no money is readily available for new hotel construction, the risk and expense of building such facilities is simply not a gamble corporations are going to make; no matter how much communities like South Lake Tahoe may wish it otherwise.
But the key reason for Cole and other city council members backing the Marriott project is that it places the community at less risk than if the project were to be completed by American Ski Corporation.
“The biggest concern for me is making sure we can pay off the debt of redevelopment over the next 30 years without having to take money from the city’s general fund,” said Cole.
In that regard, Cole feels it a far safer position for the city to be working with a huge corporation like Marriott,
which has a proven track record over the long haul, than to put both key lodging projects into the hands of ASC. ASC has its hands full trying to get the Grand Summit built. Should it have both projects, the second project could drag out the construction time line as ASC resources get stretched.
Good point. We have had too many problems already with all our redevelopment eggs in one ASC basket.
The other key point Cole made was about the nature of Marriott’s time-shares themselves. Marriott has a mix of accommodations available and a global base from which to market them. Rather than just buying a specific time-share unit, a Marriott time-share owner buys into a pool, using points to stay in whichever Marriott has facilities.
People who buy into a quarter-share unit, like those proposed for the Grand Summit, are investing more than $100,000. And folks who can afford that kind of money probably aren’t as interested in reaping the $30 to $40 per night they could get if they put the unit into a rental pool for overnight accommodations.
Again, not so with Marriott. Its huge, global reservation system already gets about 2,000 calls a year looking for lodging at Lake Tahoe. With a Marriott presences here, the South Shore gains access to that global customer base
As Cole said, the folks who are calling Marriott’s 1-800 number aren’t those people just driving up for the weekend and looking for vacancy signs.
As far as TOT is concerned, the amount collected from time-share units will be less than that collected from a conventional hotel. According to a redevelopment financial consultant, that shortfall would be offset by property taxes, which he claims are a more stable resource than TOT that fluctuates with the season and the weather.
That may be. Let’s hope so. However, I am significantly more comfortable with the TOT that Marriott, with its global reach, can generate than I am with a much smaller corporation proposing the same project.
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