Planners meet to address motel proposal
A change in policy that would allow motels to be bought to acquire commercial development rights could revitalize Lake Tahoe’s inventory of aging motels.
That’s the belief of the South Lake Tahoe Lodging Association, which presented the proposal at a meeting last week with the Tahoe Regional Planning Agency and South Lake Tahoe planners and redevelopment officials.
Under current TRPA codes, motel units are treated as a separate category of development from other commercial enterprises.
But owners of many of the South Shore’s older motels have struggled to stay afloat, according to Ed McCarthy, president of the lodging association.
“You start with the fact that all the motels up here have an average 40-percent annual occupancy rate, and some of the smaller motels can easily be 28 to 30 percent,” said McCarthy, who owns three Stateline motels. “The lodging owner is barely able to make his mortgage payment and meet operating expenses, so is unable to put any money into renovations. Some of the motels are economically obsolescent.”
The association believes that motel owners would have more options if the TRPA’s development code allowed them to convert the motel to a commercial use, or sell the commercial development rights.
“It could be as dramatic as tearing the motel down and building another structure, or a significant remodeling and converting to offices,” McCarthy said.
But such a policy could frustrate years of community planning and redevelopment if it is not fine-tuned, said TRPA and city planners who met with McCarthy last week.
“If you allow the conversion of motels outside redevelopment areas, it could encourage strip development,” said Jim Baetge, the TRPA’s executive director.
That concern could be addressed, however, if such conversions were prohibited outside redevelopment and community plan areas, said South Lake Tahoe Councilman Kevin Cole, who chairs the city’s redevelopment agency. In Cole’s view, allowing motels to be sold for their commercial floor area would not drive up the price of motel units enough to hinder the redevelopment process.
“Motel rooms sell for a lot more than commercial floor area would,” said Cole, who is also a real estate broker. “But outside the redevelopment area, we have a lot of motels that have outlived their useful life. We have a product that is no longer in demand.”
Terry Jamin, the city’s planning director, said one approach might be to require that motel units sold for commercial development rights be torn down if they are outside adopted community plan areas. If they were inside a planning area, the city would want to see external renovation at minimum, along with environmental improvements.
“We would not want to see additional strip development in areas where it’s not appropriate,” Jamin said.
Duane Wallace, executive director of the South Lake Tahoe Chamber of Commerce, said the proposal could present a way out for the owners of marginal motels.
“There are some motels that are hurting badly,” Wallace said. “They can’t remodel because they don’t have the money, and they don’t make enough money to attract a new buyer. They are in limbo.”
Gordon “Gabby” Barrett, a senior TRPA planner, said the agency agreed to study the proposal and put it on the so-called B list of projects to be undertaken within five years. A working group will tackle the issue later this year, when the agency’s current workload lightens.
As far as McCarthy is concerned, the policy could not be adopted soon enough.
“A key thing is that it would give properties that were virtually doomed a chance to be reborn.”
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