Property owners throw wrench into redevelopment plan |

Property owners throw wrench into redevelopment plan

Susan Wood
An artist's rendering shows the convention center complex proposed for the Stateline area.

The city may resort to its eminent domain power as about 15 property owners who own five parcels on a proposed 12-acre, $410 million hotel and convention center redevelopment site in South Lake Tahoe are holding out.

So far, 29 property owners have signed over their property to allow for the redevelopment plan. The developer has paid them outright for their properties, which are either in escrow or have already sold, city officials say.

But the action of eminent domain, where a local government can legally take property if it is deemed blighted, is a negotiation tool of last resort for the city, which has already earmarked the property as legally fitting the description of blight.

A decision on whether the city will enter into a development agreement with the developer to build the hotel and convention center complex will come before the full council on Tuesday at 1 p.m. A decision is expected to be made at the meeting.

The 29 properties that were bought outright or are now in escrow were done so by the project’s developers, Lake Tahoe Development Co., a partnership headed by Falcon Capital’s Randy Lane of Stateline and DGD Development’s John Serpa of Carson City.

Motels in the project area bounded by Highway 50 to the east, Cedar, Stateline and Friday avenues to the west, north and south have all negotiated with Lane and partners.

But the property owners of where Taco Bell and Union 76 sit have not agreed on selling prices. The latter has 10 property owners on one parcel alone.

“My conversations with Conoco-Phillips (Union 76) is that they want to stay there. I’m afraid of what might happen with gas prices if they leave,” said the gas station’s business owner, Jim Hickey. He says he’s spent more than $100,000 on the site for best management practices – environmentally regulated landscaping guidelines.

The agreement states the city’s Redevelopment Agency “will prepare and submit an acquisition budget to the developer showing the estimated costs for acquisition. If agreed upon, the developer “shall provide the agency with cash or a letter of credit in sufficient amount to meet the acquisition budget.” The entire budget has been estimated at $8.5 million.

“This is the big thing (the developer is) asking. Nobody wants to use eminent domain (if unnecessary). But this is probably as good as it’s going to get. The developer is assuming all the risk,” said Mayor Hal Cole, the agency board chairman.

Groundbreaking on the 12-year-old concept that has changed developers’ hands four times is scheduled for May 2007.

The city has remained steadfast in that it has no plans to implement eminent domain procedures, which allows for the taking of property by government agencies if it’s considered to be to the betterment of the community.

Eliminating blight is the most common cited reason, one that was used with this city’s $250 million Park Avenue Redevelopment Project across Highway 50 from the proposed convention center complex. There, the city invested more than $12 million in legal fees.

The link to redevelopment

A pedestrian underpass or a bridge between the two redevelopment project areas has also been written into the agreement, but no estimate was given by the developer – the party responsible for the cost.

Still, Caltrans will forge ahead with its plans to install a pedestrian-activated traffic signal in that area of Highway 50 after a South Shore woman was injured crossing the street.

Other details of the convention center project include:

— Two condominium hotels collectively adding up to 176 rooms (386 rentals) and replacing 587 rooms in the area.

— A 93,000-square-foot, six-story convention center to be operated and maintained by a party selected by the flagship hotel and owned by the city. The center could accommodate up to 2,000 attendees for banquets and conferences and seat 4,400 people for concerts and other entertainment acts.

— A 495-space parking garage, the developer’s obligation, that would sit underneath the convention center.

— A village green with a pond, waterfall, walking path and patio area.

Support Local Journalism

Support Local Journalism

Readers around the Lake Tahoe Basin and beyond make the Tahoe Tribune's work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Your donation will help us continue to cover COVID-19 and our other vital local news.