Editorial: Resolving the redevelopment debate
While the Marriott-anchored Heavenly Village seems to be roaring to life with a seeming solvent set of businesses, and a growing amount of foot traffic at the retail shops, the debate about whether South Tahoe wants to proceed with a similar project across the street rages on, as residents mull whether the project will, in the end, benefit South Lake Tahoe.
With the Heavenly Village project, the benefits to local tax rolls are starting to show, although at a slower rate than was promised before construction went over budget and deadline. The city, and by association its taxpayers, is paying back more than $112 million in debt, and is projected to be turning a “positive cash flow,” driven by the increase in property tax, by the year 2013. As part of the project, the city received a new fire station – it also now owns a dog of a parking garage (potentially bleeding hundreds of thousands of dollars a year) and an empty visitor center building.
Another cost: When the Heavenly Village phase went over deadline and over budget, the city became the lender, and now, as part of its debt service, the redevelopment agency must pay back the nearly $7 million loan, at a cost of $500,000 a year.
For the next phase, the redevelopment agency and the developers working on the project have proposed a no-lose proposition, they say: The developer fronts construction of the project, while the city uses only the increased tax revenue from the completed project to pay back developers. The developers get a condo complex, and the city gets income from the more than 47,000 square feet of valuable retail space, improving tax revenue on sales and property in one shot. Oh, and the city also gets a 50,000-square-foot convention center.
And that’s one of the rubs.
First, it has not been determined that a convention center would even be useful to drive South Lake Tahoe tourism. Convention centers have continued to spring up across the country, while convention business has been unpredictable. A small convention center, in a relatively remote location (we have no commercial service at our local airport), might be hard to keep booked. Although the center has been part of the proposal for years, now would be the time to drop it, if it is determined to be unnecessary.
And although the city would not be paying for its construction, or even the land underneath, owning a potentially empty convention center could be a losing proposition – like a visitor center, or a parking garage. Why would we want to do that?
We have to ask if the end justifies the means, and whether the deal we are inking provides the best possible future for residents first, and visitors second. The debate is still not resolved.
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