Time-share conversion gets OK from city
After providing an enabling ordinance late last year, the City Council gave final approval to the transfer of time-share rights to the state line Embassy Suites Hotel Tuesday.
The council approved a transfer of the rights to develop 188 time-share units from the future Park Plaza Resort, another part of the Park Avenue Project.
The Park Plaza developers reportedly now want to develop hotel units rather than time shares.
Embassy Suites opened in the early 1990s, a hotel financed with a $53 million five-year construction loan from a Japanese bank.
When the loan became due last July, the developers were unable to repay it.
In order to pay $35 million of the bank note, the hotel developers proposed to convert about half the units to time shares and sell them, over five years, to a time-share company operated by the hotel’s developers.
Standing in the way was a five-year moratorium passed by the council prohibiting new time shares. The amendment to this ordinance, which allowed for the transfer of existing time-share rights within a redevelopment zone, was passed in December paving the way for Tuesday night’s public hearing.
Council member Tom Davis said there was no public comment on the proposal which had been passed by the city’s planning commission last month.
The proposal calls for Signature Resorts, Inc. to purchase the check-in and back-of-house areas as well as 18 units on the ninth floor on May 1. The last transfer, 29 units on the fourth floor, is scheduled to be complete Aug. 1, 2002.
However the hotel developers, KOAR-Tahoe Partners, L.P., must still go to court to attempt to get a temporary restraining order continued as a preliminary injunction against Mitsui Trust & Banking Ltd., the bank which provided its construction loan.
The bank had tried to sell the outstanding debt to a third party last December until KOAR sued.
El Dorado Superior Court Judge Suzanne Kingsbury issued the restraining order in December but has been disqualified by Mitsui from hearing the arguments for and against a preliminary injunction.
Judge Patrick Riley, the county’s Placerville-based judge, will hear arguments Friday regarding the injunction.
Riley can either continue the order as a preliminary injunction and set a trial date or dissolve the TRO and allow Mitsui to pursue a third party to buy the loan.
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