Park Avenue project moving into place
As promised, the Park Avenue Disposition and Development Agreement was made public last week, although many of the key details are still undecided.
The South Lake Tahoe City Council will hold a DDA study session at its Tuesday meeting and vote on the agreement Jan. 19.
The city has left American Skiing Company, the main developers of the Park Avenue project, some wiggle room by not assigning a dollar amount to back the company’s promise to start construction this coming season.
In the Tahoe Basin, earth-moving construction can only be performed from May 1 to Oct. 15.
The agreement requires ASC to provide a Letter of Credit to the city. That then can be drawn upon if the property is purchased but construction does not proceed as scheduled. A Letter of Credit is a bank note that can be used in the same manner as cash.
Redevelopment Manager Jaye Von Klug reported the actual amount of that line of credit will be determined by the Jan. 5 council meeting.
The agreement states American Ski must pay the agency any interest owed on financing for the coming year if the city’s Redevelopment Agency grants the redevelopment property to ASC by June 15 and construction can’t proceed this coming season. If the redevelopment property is not sold to ASC by July 1, the developer has until 2000 to begin construction.
The city has also left ASC some wiggle room regarding the above provisions. In her summary of the agreement, Von Klug said this portion may still be revised to allow more flexibility.
ASC will pay the agency $2 million for the rights to develop the Grand Summit Hotel, expected to bring in close to $1 million in room tax annually, and the gondola from Park Avenue to Heavenly Ski Resort. These are the components of Phase I of the Park Avenue Project.
Phase II includes the redevelopment of Cecil’s Market, the intermodel transit center to be the hub of the Coordinated Transit System, and the new Lake Tahoe Inn.
ASC is still not sure if the inn will be a time share, hotel or quarter share. Von Klug said a financial downturn in the economy would effect plans to rebuild Cecil’s. The market’s demolition is part of Phase I while its rebirth is not to commence until Phase II.
“The separation of the project into phases has placed Cecil’s Market into jeopardy,” Von Klug reported. “If Phase II is stalled indefinitely, the provision requires that Cecil’s be compensated for its existing property.”
If the agreement moves through the council, bond sales could take place by late January. The actual bank note from the sale must be delivered to the city by Jan. 20 to meet the project’s time table.
The Bond Anticipatory Notes sale is expected to be approved by the city on Jan. 19. BANS are a type of higher-interest bond. Mark Northcross, a financial advisor for the city, said the project must be funded with bonds because nothing has been built so far.
Council members had discussed the possibility of a sales tax on gondola lift tickets in prior meetings. However, the agreement prohibits such a tax.
Park Avenue and Project 3, a project to begin in 2000 across the highway, will create viable transient units, make the area more pedestrian and public transit friendly, connect the casino area with skiing and improve the environment.
American Ski is the main proponent for Park Avenue, while Harveys Casino Resorts will take the lead with Project 3.
American Skiing Company is a publicly trade company with holdings in Colorado, Utah and Maine.
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