Redevelopment Agency Considers Marriott’s Proposal
Marriott Vacation International and the South Lake Tahoe Redevelopment Agency meet today to look for common ground.
Marriott will be making a financial presentation to find out if the redevelopment project at the Lake Tahoe Inn site, originally designated as a 13-week quarter-share hotel, will be as profitable to the redevelopment agency in its proposed form as a one-week time share hotel.
“I think that the Marriott has worked very hard to meet the agency’s requirements,” said Lew Feldman, attorney for Marriott.
Agency members say the financial projections must be at least equal to the original plan. Both projects would generate revenues from Tax Increment and Transient Occupancy Tax.
City Manager David Childs says a key component necessary to obtain redevelopment agency approval is that the project provide a financial guarantee in case Marriott does not finish the project.
The project, as proposed by Marriott, is to be built in multiple phases, but the redevelopment agency wants a guarantee the bonds will be paid by the completion of the first phase, not the last.
The other requirement is that the project be financially feasible.
“I’m for it as long as the monies pencil out and the city is protected,” said agency member Judy Brown.
If the redevelopment agency likes what it hears, it could modify its original agreement with American Skiing Company Resort Properties, which has the development rights on the Lake Tahoe Inn site. Those rights apply to a quarter-share hotel.
If this happens, ASC could strike a deal with the Marriott to turn over development rights.
Agency Member Tom Davis pointed out that the Marriott is an $8.7 billion company, which gives him high confidence, but doesn’t eliminate caution.
“My responsibility as mayor and councilmember is to ask the ‘what if’ questions,” he said
The proposed time-share project would generate more revenue in property taxes, but the quarter share hotel would generate more in TOT.
Feldman points out that while TOT is a volatile tax dependent on the strength of tourism for any given year, tax increment remains constant and increases at a rate of 2 percent each year. But on the downside, when the redevelopment agency sunsets in 2028, the tax increment, although higher than on a quarter-share will decrease in respect to itself.
The $189 million Marriott project was initially proposed as a five-phase project, but is now being proposed as a three-phase project. The first phase would begin in May 2001 and would be finished by December 2003, Feldman said. It includes all amenities and about140 rooms . The third phase would be finished by spring 2007.
The original agreement called for a 325-unit quarter-share hotel. The time-share would be 240 units. If the redevelopment agency approves the plan, it will consider amending the agreement with ASC on Oct. 10.
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