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Two members suing over business district formation are on BID board

Susan Wood

From the council chambers to perhaps the courtroom, one of the most recent controversial issues to come before the city may turn into a legal battle as early as next week.

Longtime South Lake Tahoe attorney Dale Sare is leading the charge against the city’s tourism-based business improvement district for businessmen Lou Pierini, John Cefalu and Dr. Patrick Martin, the latter two serving on the BID’s advisory board created in April.

Sare said Wednesday a legal complaint could be filed against the city Tuesday that takes aim at the formation and the process of the citywide BID. He added the South Lake Tahoe Lodging Association and Chamber of Commerce may also be named as well for its role in establishing the BID the City Council approved in February.

Lodging Association President Eric Eymann, who also serves on the BID board, wouldn’t comment on the matter, but he plans to bring up the issue at the organization’s board meeting slated for today.

The city and chamber paid for a Park City consultant to come up with a formula by which businesses would be taxed – from $30 to $3,000 annually. The assessment fees – set to generate in the neighborhood of $300,000 – were mailed this week with business license renewals.

South Shore attorney Dennis Crabb, who’s running for an El Dorado County supervisor seat vacated by Dave Solaro, helped draft the BID proposal for the organizations.

A legal challenge had been threatened months ago, as initially reported in Tahoe Daily Tribune in December.

“They just pushed this thing through,” Sare said, rifling through statutes on which to base the complaint. He plans to poke holes in points from the assessment’s geographic boundaries to the level by which a business would be affected.

The streets and highway code reads: “A finding that the businesses and the property within the business and improvement area will be benefited by the improvements and activities funded by the assessments proposed to be levied. In the case of an area formed to promote tourism, only businesses that benefit from tourist visits may be assessed.”

He also contends that while some businesses either can’t afford or aren’t impacted by tourism, the lodging establishment will benefit but not pay out of pocket for its contribution to the BID. The $1.50 per room, per night pass-through hotels and motels charge their guests will not go into coffers until Oct. 2006, when Measure Z expires. The ballot initiative added the $1.50 to the 10- and 12 percent transient occupancy tax.

Sare said he counted at least 30 people who have dropped by his office with money in support for him to pursue the suit. Early on, the BID prompted a merchant-led opposition campaign before the protest vote. Even after the level of protest was tallied and defeated, a segment of the population remained bitter about the upcoming fee.

Board members discussed the issue in the public comment section of its Wednesday morning, with City Attorney Catherine DiCamillo presiding. She’ll represent the city if a complaint is filed.

“I feel good about the structure and process and the effort put into it,” she said.

Although Cefalu was absent for the BID board meeting, Martin received a cool reception from the majority of the group. Some members questioned whether Martin and Cefalu would have a conflict of interest.

“I felt betrayed (at having learned about this),” BID Vice Chairman Paul Bruso said. “I mean I was against this (at first), but we’re here trying to develop the process.”

Martin explained that he had every intention of fulfilling his mission on the board, but he has always taken issue with the alleged inequity of the assessment formula the board approved a few months ago. Martin voted against it.

“It wasn’t an easy decision. I may be right. I may be wrong. What I’d like to see is the businesses not affected by tourism to not get taxed,” he said. “I do not intend to leave my position on the BID board.”

That may be a tough sell to others like board member Ed McCarthy, who called for Martin’s removal from the board. It will post the matter on the agenda for its next meeting July 27.

Another member, attorney Lori London, said she understands the basis of the lawsuit, but that it’s “for the courts to decide.”

“Sometimes you have to work in the system to change the system. It’s important we don’t take things personally,” London said.


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