South Tahoe redevelopment may cost other entities millions
Updated Jan. 16 5:40pm: The meeting with the city staff and STPUD board has been moved to Feb. 18.
By Kathryn Reed
To some it might like look like a shell game. Or maybe it’s robbing Peter to pay Paul. Or maybe it’s all on the up and up.
The problem with projected redevelopment areas is that nothing is guaranteed.
South Lake Tahoe believes it will generate $178 million in tax increment in the 45 years that the latest project area is slated to be on the books.
South Tahoe Public Utility District believes $54 million in property tax dollars are at risk if the plan is approved by the City Council.
The area in blue is the proposed redevelopment area in South Lake Tahoe.
El Dorado County, although it won’t put a dollar figure on potential lost revenue, knows it will be hit the hardest if the plan goes through.
Lake Tahoe Unified School District and Lake Tahoe Community College receive property tax money, too, but with how laws are written the state would have to backfill any dollars that are lost. Where the state comes up with that money when it is facing a $20 billion deficit is difficult to pinpoint.
Other agencies to be impacted are the local cemetery district, county Office of Education, county Water Agency, and county Abatement District.
If the redevelopment area is approved, then the property tax these entities receive is frozen instead of going up 2 percent each year. The city’s Redevelopment Agency gets that money.
But the city contends in the long run everyone will be better off. This is because if the value of properties goes up in the redevelopment area, property taxes are higher and therefore every entity shares in the growth.
The city is projecting 7 percent growth in the 3,100-acre redevelopment area that covers much of Emerald Bay Road and then goes down Highway 50 to Glenwood Way.
“Because you have more growth you have more property tax paid. Those agencies will get more over time,” said Gene Palazzo, city redevelopment director.
He compared it to putting money in a retirement account, that at first it doesn’t amount to much, but over time the pot grows.
South Tahoe PUD wants to see more concrete numbers. Palazzo and City Manager Dave Jinkens are scheduled to speak to the STPUD board on Jan. 20.
“We don’t want to be seen as obstructionists if the community feels this is good,” STPUD spokesman Dennis Cocking said of the redevelopment plan. “That ($54 million) is all essentially capital improvement dollars. By law it cannot be used for wages. If we lose property tax dollars, it has to be made-up elsewhere.”
The district has limited revenue sources — ratepayers, property taxes, borrowing money or issuing bonds, and state and federal grants.
The district could raise its connection fees, but with so little construction going on, that might not amount to much.
The 127-page draft EIR and all the documents related to the proposed redevelopment area are at www.ctcip.org.
The City Council is expected to take action on all the documents in early March. Meetings will be scheduled before then to gather public input, according to Palazzo. He has spoken to the Lake Tahoe Visitors Authority board and will be at the South Lake Tahoe Lodging Association meeting Thursday at 9:30am at Tahoe Bowl.
Meetings are also scheduled for Feb. 11 at 2 and 6pm at Lake Tahoe Airport.
One of the benefits to redevelopment would be to use some of the tax increment money on improving the dilapidated Lukins Brothers Water Company. Palazzo, though, said this is not designed to be the sole source to fix the ancient infrastructure of the company whose 953 customers are mostly off Highway 89.
Lukins also services businesses at the Y and doesn’t have adequate fire flow.
“We can’t get new commercial in there if don’t get (Lukins) upgraded,” Palazzo said.
Lukins has a franchise agreement with the city that the city hasn’t managed well considering it didn’t insist the company reinvest money in capital improvements.
Some city residents question having taxpayer dollars pay for upgrades to a private company. People are also questioning if the city is going to such lengths for a private business to cover itself legally so Lukins customers don’t sue the city for not protecting them through the franchise agreement.
It’s unknown if the city would be held responsible if a catastrophic fire occurred that Lukins water supply could not handle.
El Dorado County Board of Supervisors plans to hear from city staff at the Feb. 2 meeting.
“There’s a very strong view among counties in general that redevelopment is not helpful because of the way it works with redevelopment agencies reaching in and grabbing a percentage of property tax,” said Mike Applegarth, EDC senior administrative analyst. “I don’t think anybody has been able to assess the overall benefits or burdens of redevelopment.”
Applegarth said for the current fiscal year the county budgeted zero growth in property tax and said it is likely to go negative. This is because people are reappraising their property and it’s coming back lower than what they paid, and houses are selling for less than what the previous owner paid.
He isn’t sure if the board will take a position on the city’s proposal.
“Tax increment financing is an obscure way to make infrastructure improvements,” Applegarth said.
Deb Yates, chief financial officer with Lake Tahoe Unified School District, knows how the rules are now that the state will backfill any property tax dollars the district could lose in redevelopment. But those dollars come from the state’s education pool of money, which keeps dwindling.
“We don’t know in these times how the state is going to deal with the current budget. This would certainly add a little bit to the state issues as far as education goes,” Yates said.
Palazzo said the city’s goal is to create a financing tool.
But is it a hammer to clubber other entities in town?
The city will try to answer that question and others in the coming weeks.
do the plans include digging a big hole ??
Now is not the time, we already have one hole in the ground let’s fill that one first. This sounds like a gamble in a bad economy.
“The problem with projected redevelopment areas is that nothing is guaranteed…”
“Tax increment financing is an obscure way to make infrastructure improvements…â€
No kidding.
Hey I got it. Lets use eminant domain on a bunch of business’s-that pay taxes. Close them down. Spend a bunch more taxpayer money to dig a big hole. And leave it to rot. Then cry wolf-has not happened yet. City council when do you want to propose some sort of tax hike for public safety?
Dear STPUD-
I’ve been to every redevelopment meeting. The public is NOT in favor of this plan. Please help stop it.
The Citizens Alliance realizing the inherent problems with redevelopment and the Cities numerous past failures with RD areas #1 and #3, two years ago urged local residents and businesses to “Fight the Blight” a campaign waged to overturn the Cities “paid for” blight findings. The Alliance successfully applied pressure upon the City causing the City Council to pass a resolution not to use emminent domain in RD area #2. At the time the Alliance had a “Fight the Blight” website, public meetings, and an outreach campaign for public education, as well as publicizing and attending the Redevelopment meetings and questioning the RDA “pie in the sky” estimations, in light of their dramatic failure with the “TAHOLE”. STPUD was at the time focusing their attention upon labeling the Alliance candidates running for STPUD board seats as a “cabal” bent on talking over STPUD for their own benefit instead of dealing with the threat to STPUD revenues from redevelopments “tax increment financing” based upon the continuing rise of already sky high property values. Welcome aboard, STPUD.
The Alliance has always recognized the need for community and US50 corridor renewal, but believes it is best done for locals by locals, not controlled by Jenkins, Palazzo, and high paid, out of town consultants. We might have been able to provide sidewalks and street lights from Stateline to the “Y” with the money the City spent on consultants and outside attorney fees over the past decades.
The fact that redevelopment wants to spent $20 million or more on upgrading privately owned Lukins Brothers Water is incomprehensable in light of the state of our City roads. Redevelopment if enacted should focus on the maximum benefit to the maximum number of residents, not focus on the 953 Lukins Bros. customers for the benefit of the real estate developers speculators (remember Randy Lane and friends) who bought motels along the HWY 89 corridor.
Redevelopment area #2 has been and will continue to be another failed City Boondoggle, serving only a few, to the detriment of many. Please raise your voices now or suffer in silence for the next 45, yes, 45 years of depleted tax revenues for all other city functions(roads, police, fire, etc.)
We can crucify the City all we want for its past (& current) mistakes… but the bottom line is that we need to do something to improve our community and local economy. Let’s make sure we look at all of the factors involved, and take care with everyone’s tax dollars, but take action & move forward with something that has long term vision and will be POSITIVE. I think we’re all tired of ‘analysis paralysis’ and stagnation… (like with the “HOLE”) and we need to start somewhere!
So if this redevelopment plan follows suit with the last one we will see some of the last individual business’ disappear due to eminent domain and increased taxes. New start up business’ will find it hard to afford the new leases which will surely be raised on any new retail space. Personally with the exception of the shuttered monolith that was Miller Outpost and the business which is a car part/repair/ park your junk heap here;the Y area is not that bad looking. South lake Tahoe does not need to be another Vail or Aspen to be successful. We need unique and original shops owned by locals which would help establish it’s identity. Otherwise only retail chains will be able to afford the rent and this town will become another “anywhere in America” town.
A city blessed with robust, professional police and fire forces, with capable government leaders, an informed citizenry, and a relatively resilient economy can overcome catastrophe, but it doesn’t emerge stronger: Look at New York after 9/11. The richest big city in the country in more ways than one mustered every ounce of energy to clean up after 9/11 and to rebuild its economy and its downtown – but even so, competing special interests overcame citizens’ and officials’ best intentions. Ground zero remains a hole, and New York, for all its resources, finds itself diminished, physically and economically, four years on.
The current mayor Kathy Lovell can’t help but be a failer. A former failed sells owner, Mrs. Lovell ran for office pledging to spur economic growth in South Lake Tahoe. She doesn’t need our support now, but in her many years in office; she has made no perceptible progress in diversifying South Lake Tahoe economy. The mayor has shown no clear inclination to take charge and direct post- hole rescue and recovery efforts for her population.., Mr. Cole is almost a spitting imagine of the Mayor who got our city mixed up with lane and cronies and now they want the people who are surviving the worst city business climate to yet roll the dice on more borrowed money.
Sure, the feds must provide cash and resources for relief and recovery – but it’s up to South Lake Tahoe, not the feds, to dig deep within itself to rebuild its economic and social infrastructure before the tourists ever will flock back to pump cash into the city’s economy. It will take a miracle. South Lake Tahoe has experienced a steady brain drain and fiscal drain for decades, as affluent corporations and individuals have fled, leaving behind a bigger part of our population of people dependent on the government. Socioeconomically, South Lake Tahoe is one of America’s last helpless cities – just at the moment when it must do all it can to help itself survive.
It’s time for our council to start at the bottom work its way up, not the top work our way down with fixing our roads first ,then proceed with the fairy tales of a 178 million lottery ticket that could do more harm than good.
Like the big Apple competing special interests overcame citizens’ and officials’ seem to be the problem whenever we the people know there’s a more reasonable way to find a solution to its ailments.
For God’s sake get rid the Airport, it’s BEEN a hole in our budget that been sucking money before Timeshares came in destroyed the Good old days of our thriving community.
There’s no one to blame but ourselves for what’s happen to our once thriving small town by letting these failed city officials dictate what’s best for Our town, We need a new council, not retreads that keep singing the same old song.
I agree we need to start somewhere. Lets start with finishing what has already been started, i.e., the Hole.
Redevelopment will not be positive. On the contrary, it will prevent us from making positive decisions as to where tax dollars will be spent for the next 45 years.
Do we really have a voice? The majority of locals who live in the county aren’t allowed to vote for or against City Council members. I was enraged when I went to the poles with the intent to vote out every member who was stuck on building a retarded Convention Center at the ‘hole.’ I was informed that only those who live in the city, can vote for city officials. Therefore, half the town (the county dwellers) have no voice to choose the people who are making decisions for us, even though their lame decisions effect the entire community. Where is justice, what does it take to change a defective law such as that. All of South Lake Tahoe, City or County should be able to vote on their representatives, as their performance effects us all. This proposal is another classic example of incompetent leadership.
Macoche, timeshares didn’t destroy this town, VACATION RENTAL HOMES in our neighborhoods have destroyed this town! Even Mammoth does not have a problem with vacation rental homes. And guess what, Mammoth does not have a problem with bears in the trash because of tough laws dealing with trash bins! And you can bet the county portion of South Tahoe will never be allowed to vote for council members because those who have run this town for decades to further their own interests, as in money, know that the county will vote out the same ole same ole and put competent people in office who will work for the locals and the entire south shore, not just their own pocket book!
roxanne, it starts with a petition by county residents to become part of the city. Then, there has to be an economic impact study done to see the plus/minus of doing so, For example, would you still get snow removal, can the city afford tpo give you those services based on taking some of your property taxes from the county.
I agree with Steven, Vacation Home Rentals corrupt some neighborhoods and take away the community feel of the locals. Since passing their ordinance I have seen even more unruly, disruptive, obnoxious, inconsiderate behavior coming from these Vacation Homes and their guests. The Local here in Tahoe is a second class citizen in every respect of the word.
Stop Voting In Retreads! Definition of Insanity: expecting different results while doing the same thing over and over again.
Right! Keep banging your head against the wall and expect it to stop hurting is STPUD. Keep sending OUR tax money over the hill and expect the county to invest it where its needed here, is STPUD and waiting for STPUD to get SMART and invest in their local community on their own dime is like banging your head against the wall.
I’m all for improving the 50 and Y area since no one has done anything there. We need some help here. The place that needs redevelopment more is the Y than anywhere else. If private investment would help then why hasn’t it been done. The worst image of the city is at the Y. Some can live off family money the rest of us can’t.
The county didn’t care about us when they voted in the indian casino my sales dropped 40% immediately. And giving the state any more of our tax dollars is STPUD.
Heavenly shopping center looks a heck of a lot better than the Y. Lane did us all wrong and I hope his pocket book suffers for that, I hope he goes under. Maybe STPUD and the County could anty up to spend some of OUR tax dollars we give them and improve it since they think they should keep OUR MONEY.
Time to make the Y and 50 a place we can be proud of and using the money we’ve been sending to others is just SMART investing. Its OUR money.
Do it not go back to the Good OLD Days of the Good Old Boys Upton, Davis,and Cole.