Project 3 likely also to be put back
With the postponement of the Park Avenue Project construction, Project 3 also may be pushed back a year.
“It probably would result in a delay,” City Manager Kerry Miller said. “I don’t see any way we’d have the bonding capacity to do both at once.”
However, there is a chance the city could have funding in place and be able to complete phase one and two of the Park Avenue Project at the same time. Much depends on American Ski Corporation’s ability to seal a deal with the potential operator of the Lake Tahoe Inn.
That section of the project was slated for redevelopment in 2000. But, Miller said, if ASC completes its negotiations for a operator, “the entire project could be completed at the same time.”
Kevin Servatius, senior vice president and general manager of Harveys Resort Hotel/Casino, admitted the delay of Park Avenue was a new wrinkle, but said Harveys intends to proceed with its development permit received last November. Harveys is the main sponsor of Project 3.
Servatius said Harveys is aggressively pursuing a partner in the project. He said the resort has received direction from its parent company to move forward. Despite Harveys willingness to proceed, Miller said construction bonds sold for Park Avenue, now to be sold this coming summer, would have to be refinanced before public dollars could be raised for Project 3.
However, Mark Northcross, a financial advisor for the city, said the Project 3 area could be demolished and rebuilt with private funds. This would not force Harveys and other businesses vested in the project to wait until the city was able to pursue more bonding.
“Harveys is considering going ahead without Park Avenue,” said Northcross, principal for Project Finance Associates based in Mill Valley.
Northcross said a fixed-term percentage of room tax or property tax generated from the new properties could offset Harveys contribution to demolition of existing structures, a cost often borne by the local governments.
Faced with almost impossible construction deadlines, the South Lake Tahoe City Council postponed Park Avenue construction until May 2000. The project, which would include new hotels, a new Cecil’s Market, a movie theater and other amenities, is located on the Heavenly side of U.S. Highway 50 from Park Avenue to west of the state line Embassy Suites Hotel.
Project 3 is proposed for the lake side of U.S. Highway 50 in the state line area of South Lake Tahoe with a convention center and other amenities. Both projects will use public financing to remove the existing structures within each project area.
At a cost of $1 million, Harveys was able to push the project through the Tahoe Regional Planning Agency, a bi-state agency which regulates excavation in the Tahoe Basin.
Long-hailed as a way for South Shore to compete with other gaming area, the convention center could bring big business gatherings to South Shore and the revenue they generate.
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