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Park Project timeline crunched

Surprises are holding up the court hearing for Wallace Theaters’ motion to stay in the Park Avenue Redevelopment Project.

Without filing in advance, Wallace Theaters’ attorney asked El Dorado County Superior Court Judge Suzanne Kingsbury, who has been presiding over other redevelopment cases in South Lake Tahoe, to disqualify herself from sitting on the bench in the Wallace Theaters case.

“I’m asking that you disqualify yourself from the case on the basis of information concerning your personal friendship with City Attorney Catherine DiCamillo,” said attorney C. Nicole Murphy, for Wallace Theaters.



Murphy said she didn’t file the request earlier because she just learned of the relations from a local source about a week ago.

Kingsbury said she would have disclosed the fact that DiCamillo, who was not present in the courtroom Wednesday, worked on her election campaign about four years ago, but was not about to remove herself from the bench for that reason.



“If I were to disqualify myself from every case where someone has worked on my campaign, I wouldn’t be very busy,” she said. “I am not prepared to voluntarily recuse myself.”

Murphy requested that another judge make the ruling in the case of Kingsbury’s impartiality before any other items in the hearings proceeded.

Wallace Theaters, which operates a one-screen cinema on Park Avenue, has filed for a motion to stay in a cross-complaint to the city of South Lake Tahoe’s legal action in the eminent domain process. Wallace Theaters also owns a theater complex inside the Horizon Casino Resort.

The city has used the power of eminent domain to acquire 13 properties along U.S. Highway 50 and Park Avenue for a $350-million redevelopment project to be built by private developers, namely American Skiing Company, which owns Heavenly Ski Resort, and Trans-Sierra Investments, a Nevada company. The city is planning to turn the property over to the developers by the end of May so that construction can begin on a four-star hotel and a gondola that will lead up to Heavenly’s slopes.

A retail complex, restaurants, an ice rink, a parking garage and a six-screen cinema complex are also planned to be built in the redevelopment block within the next year.

The dispute between Wallace Theaters and the city’s Redevelopment Agency started in February when Trans-Sierra Investments awarded the theater contract in the new development to Resort Theaters of America.

Lewis Feldman, attorney for the developers, said the Los Angeles-based theater company was selected on its superior business proposal, and because of Wallace Theaters’ past performance in South Lake Tahoe.

In a public hearing in March, the Redevelopment Agency upheld the developer’s decision to award the bid to Resort Theaters, even though Murphy said it had an obligation to Wallace as an existing tenant that will be displaced by the project.

Murphy said the Agency is not living up to its obligations under redevelopment law which calls for a preference to existing tenants.

The Agency, with the exception of member Bill Crawford, ruled that the developer has exhibited those preferences in its selection of businesses to go into the retail complex and shouldn’t have to lower its standards and accept an inferior business proposal from Wallace Theaters.

Wallace Theaters wants a judge, but not Judge Kingsbury, to make the final ruling in the matter. Feldman questioned Wallace Theaters’ motive in the request for Kingsbury’s disqualification.

“This smacks of some gamesmanship in terms of timing,” Feldman said. “Timing being our absolute enemy.”

Murphy filed the paperwork seeking the disqualification late Wednesday. A date for the ruling has not been set. After the disqualification matter is decided, the hearing will be rescheduled.

Judith Von Klug, the city’s redevelopment manager, said the city is preparing for a ruling in their favor.

“The order of possession on the land is May 25. If we go beyond that date there will be extra construction costs to the city,” she said. “We’ve always felt confident that the ruling will be in our favor.”

The city has until July 1 to turn the property over to the developers before it faces default penalties, Von Klug said.

The theater building on Park Avenue is only one of two buildings left standing in the demolition process of the Park Avenue Project. The other building is the Rodeway Inn, on Highway 50. It is scheduled to fall next week.

Wallace does not own the land under the theater building, but has a monthly lease agreement with the Van Sickle Trust, which owns the property, and about five others within the redevelopment block.

Jennifer Higgins, an attorney for Van Sickle, said the Van Sickle Trust does not have any disagreement with the city’s taking of the land.


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