Pak Avenue Project faces more delays
It may be 1999 before construction begins at Park Avenue, putting the massive redevelopment effort two years behind its original schedule.
“As the days continue to creep by without resolution to the Lake Tahoe Inn portion of the project, the actual construction on the project may be pushed back a year,” said Kerry Miller, South Lake Tahoe city manager. “What we’d be looking at in ’98 is appraisal activity and land acquisition, with demolition activity in early ’99 and a May 1, 1999 construction start. That’s what it’s shaping up to look like.”
Approved in November 1996, the project was supposed to break ground this year and finish during the 1998 building season. In early 1997, that schedule was pushed back one year, with officials pushing for a 1998 start.
The primary cause for the most recent delay is the continuing negotiation for private financing of the Lake Tahoe Inn. Due to the nature of today’s financial market, securing a developer for the hotel has been more difficult than it has for the other Park Avenue elements.
“The project is so big and complex that it is requiring more time than any of us would like to see,” said Lew Feldman, project attorney. “It’s just the nature of a very complicated but positive project.”
The Inn, at the corner of U.S. Highway 50 and Park Avenue, is planned to be rebuilt into a deluxe, 500-room hotel. Also part of the roughly $200 million redevelopment project will be a 200-unit time-share complex, a gondola from Heavenly Ski Resort to the casino core, a revamped commercial center and an eight-plex movie theater.
“It’s something where you have multiple levels of co-dependent finance,” Feldman said. “We have come a very long way in bringing that to completion, but it’s taking longer than we had originally anticipated.”
As far as just how much longer it will take, Feldman could not say. However, he did indicate that things were moving in the right direction.
“The velocity of the project has accelerated dramatically and it’s all been very positive,” he said.
Judith Von Klug, redevelopment manager, said she feels it could begin next year, if it is possible to work through the winter.
“We have not technically written off 1998, but it’s becoming an inevitability that it will be 1999 before construction begins,” she said. “We cannot make a May 1 (1998) start date, but we have not ruled out whether it’s feasible to do a start date later in the season.”
The public financing process for Park Avenue won’t start until the project is ready to go, so a delayed start date will not affect the city’s bond debt, Miller said.
“It’s typical Tahoe – everything takes a little bit longer than people would expect,” he said. “We have no debt service obligation resulting from a delay in project start.”
Meanwhile, city officials are in the midst of the environmental review and approval process for Project 3, slated to be built across the street from Park Avenue.
That project, which calls for a large meeting facility, retail space, hotel and condominium complex, has not yet been approved and therefore does not have an official start date.
Feldman said he sees three potential scenarios for dealing with Project 3 in light of a one-year delay on Park Avenue:
— Start construction on Project 3 at the same time as Park Avenue.
— Begin implementation of Project 3 one year after Park Avenue’s groundbreaking.
— Start Project 3 after Park Avenue is completed.
“My sense is that the middle option is the most probable at this time,” Feldman said.
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