Potential investor backs out of convention center project
By Kathryn Reed
The investor developer Randy Lane lined up to take over the stalled South Lake Tahoe convention center project backed out of the deal this week.
“The Investor is no longer pursuing an investment in the Debtor or otherwise pursuing a plan in the Case,” reads Michael Rosenfeld’s May 12 letter to the bankruptcy court in Sacramento.
The would-be convention center took another hit this week. Photo/Kathryn Reed
That is the letter in its entirety.
Lane, the principle with Lake Tahoe Development Company, filed for bankruptcy last fall on the $400-plus million endeavor to create two high-end hotels, a convention center and retail space on the northeast corner of Highway 50 and Stateline Avenue.
He brought in Rosenfeld earlier this year to create a plan to resurrect that project that has not had a laborer on the 11-acre site in a couple years. Although some in the city saw Rosenfeld as a savior, others considered him nothing more than a salesman with glossy photos to show for his credentials.
Lane was not available for comment, nor was Mayor Kathay Lovell.
The court had given the Zephyr Cove developer exclusive rights to come up with a plan. The deadline was June 2. That exclusivity goes by the wayside with Rosenfeld’s withdrawal.
South Lake Tahoe City Attorney Patrick Enright said now any creditor may come up with a plan.
“(Rosenfeld) did submit a term sheet on May 1. It was an outline of what the deal would be without substance. It was a bullet point,” Enright said.
The city learned about Rosenfeld’s decision to end his involvement with The Chateau project at the close of business Wednesday. As of Thursday evening the city had not connected with Lane.
“I’m not sure if we were surprised. We knew it was a possibility,” Enright told Lake Tahoe News of Rosenfeld’s decision. “I want to talk to the creditors. I think they have been in contact with other people who may have an interest in the project or something similar.”
It’s possible the judge could say liquidate the property. The problem is rebar and concrete cover the 29 parcels. A final map was not filed with the city before permits were issued to allow construction to begin. This muddies the waters in being able to return property to the original owners. Plus, structures that were there have long been bulldozed.
The city is not one of the creditors. The money South Lake Tahoe has spent relates to consultants and planning costs. Until a little more than a year ago Lane picked up those costs. A dollar amount for what the city has spent on the convention center project could not be tracked down Thursday night.
South Lake Tahoe continues to receive its share of property tax on the land from El Dorado County because of the Teeter law even though Lane isn’t paying his tax bill. With the assessed value more than what it was before construction started, the city is making more on the property now in property taxes compared to when businesses were open near Stateline.
What are you gonna do now Kathay, Hal, Greggo, and Birdwell? Its time to be realistic about your options down there. Lets create another development agency!
DUH
Who wants to be next? Come one, come all.
The Citizens Alliance for Responsible Government has opposed and continues to oppose the further extension of redevelopment in South Lake Tahoe based upon its past and continuing failures. We instead propose and support measures that address helping existing businesses to renew and rebuild on a smaller scale, such as “Enterprise Zones”, democratically formed BID’s, and tax breaks for local businesses. The efforts of City Manager David Jenkins and Redevelopment Director Eugene Paluzzo have lead no where except to pose our community on the brink of bankruptcy, failing to benefit even the limited special interests they represent. It is time now for them to resign immediately and at least save the community the expense of their wasted salaries and the cost of coming legal actions from STPUD and El Dorado County.
It is ridulous to continue with another impending failure, Redevelopment Area #2 and if the City Council members who have and continue to support the fallacious house of cards that RDA 2 is, they should be removed from office at the next possible opportunity or sooner.
Right ON, Mr. Runnels. I guess the reason you never get elected is that you buck the old boy system with your practical views. Please keep posting, here AND on your business property. Some of us appreciate it!
John, why don’t you run for council in November. We need someone dedicated to the cause like yourself. Complaining doesn’t do any good. We need action, not words.
It is now time for RDA #3? The city can bring it in on a “Wing and a Prayer.” Build the technology park as proposed 13 years ago. If you haven’t read John Runnels letter above you should.
While your at it lets give TRPAZI more power to control our behavior and lives, while they build their totalitarian empire with our pathetic acquiesence but
but nevertheless virtuousness. TRPAZI is half our problem.
Another thought for the RDA. Loan the city some of your millions to throw a lights out and lock the door party.
And WHY do they keep giving Randy Lane extensions, anyway? Let the man go bankrupt. He’s abused his connections to the powers in this town and it needs to stop.
Bob,
Unfortunately I live in the County. We definitely need new representation on the Council. I might suggest drafting Peggy Cocores. She is a City resident, involved, informed, and has a commodity lacking in many councilmembers, “common sense”
Here’s an idea, lets fill in “The Hole”, pave a landing pad and move that Heli Tahoe (helicopter noise making business) from the airport to the tourist corridor! Give peace and quiet back to the neighborhoods surrounding the airport.
This is going to be a tuff situation for any investor to want to invest in. We’re in a recession, and our unemployment is high. This hole needs a lot of work, which means a lot of MONEY! Plus, for any investor to wonder why no one has picked up on this project, and it has been sitting here looking like this for 2 years makes any one question. Is this a “money pit”?
From the last paragraph of this article:
“With the assessed value more than what it was before construction started, the city is making more on the property now in property taxes compared to when businesses were open near Stateline.”
That is hard to believe, is the City stating this to make us less angry?
If the City continues to collect its share of property taxes from The Hole’s parcels, which it claims are higher than before the businesses and buildings were bulldozed, and Lane isn’t paying his tax bills, then who is caught in the middle shorthanded? The County?
If so, it is then no wonder the County is so hesitant to support the City’s newest redevelopment fantasy at the other end of town. Burned once, shame on you; burned twice, shame on me.
Was the statement that the City is collecting more property tax revenues from the individual parcels than before from the same City employees that based the tax increment finance figures upon a 7% growth rate in property tax evaluation? What about sales tax revenues from the no longer operating businesses? Or the monies spent by the business and property owners that were displaced by eminent domain and moved to greener pastures? Redevelopment officials and their consultants shape or project the figures to show whatever they want shown, not reality?
Did anyone really ever think That they don’t want do business with Lane period.Wants the cake and eat it to.
I really laughed out loud when the Tribune showed the city council members putting the first shovels of dirt to start this Hole Inc.”Many moons ago”!Was as Funny as Mayor Davis coming back with soiled pants after the gondola first trip to the top when the wind was blowing 60 plus miles an hour on opening and closing day.
The Tribune even blocked out my comment in the paper forum section.
I stated that this would come back bite them in the a$$ ! Kae was it you or Susan that did that?lol ,you are forgiven.
The thing might got built if the city had not dragged their feet FOR SO LONG with that issue of the overhead walk way.I went to that meeting,they wanted over the highway, cal trans, under the highway!Does it matter now?Can’t believe all the screw ups in that damn hole.Still today ,the trpa never addressed the lack parking spaces this would come up short on,they wanted to have agreements with the the casinos to use their lots. “Right another brilliant idea”.
I’ve seen over the years all these timeshares projects (Ridge Tahoe, the two Embassy,Wallies Hot Springs, etc).They were public relation build ups to bring so much business to town ,money be bulging from all the near by business.This is not the honest case here.
People have yet to even brig forth a good replacement project that could be built there.It seems so senseless to bring all the new projects forward before the older issues are solved.
If we would have left our town like John’s place ,we all might be still making money.I will never agree that this town is 2/3 blight.
John don’t remember if you recall a old Chevy Corvair YOU SOLD A BUDDY OF MY FROM Mammoth, it’s still running like a clock in New Zealand,People there thinks that’s one cool car.
H
Glad to hear Simon is still enjoying the Corvair. It must be a rarity in NZ. Did they have their baby? Tell him Hi!
Could this be a blessing in disguise? A silver lining to the dark cloud that has hovered over this project from the word go?
As our economy and environment continue to erode, taking out businesses, jobs, school enrollment, etc., it becomes more evident every day that we must reinvent oursleves and our community. The concept of a sustainable economy based on the principles of geotourism has begun to infiltrate the thinking and speach of many of the marketing entities that have ignored it in the past. For more on geotourism see:
http://travel.nationalgeographic.com/travel/sustainable/about_geotourism.html
How might this “new” thinking be used to turn ‘the hole’ into a whole new way of attracting a whole new breed of visitors while protecting our whole (physical, economic and social) environmet?
There is a growing group of people in the region who see the potential of building a combination visitors center / living labratory that would study and demonstrate cutting edge practices in areas like: green building, wetland protection and resoration, forest health, transportation, community gardens / local food production, composting, recycling and so on.
I hope this forum will attract comments and ideas, especially from those creditors who now have a potent voice in what happens to ‘the hole’.
Let’s not let this opportunity to do something signifcant and future oriented slip through our fingers. We don’t have to keep repeating the unsustainable practices of the past. We can learn from our history of short-term profits at the cost of long-term sustainability. As Future Shock author Alvin Toffler famously said:
“Instead of anticipating the problems and opportunities of the future, we lurch from crisis to crisis.” It’s time to stop lurching and start a steady, determined march into a sustainable future.
Tom is right on, the timeshare biz doesn’t work well here. big big developments are dead until the economy gets fat again (which will be quite a long time) Small development zones like Mr. Runnells stated is key. But in order to do so, TRPA has to relax the coverage and CFA rules. Build small sustainable projects and they will come, and we wil have a TOWN. The foundations at the hole should be removed and the site filled in for an amphitheater type city park/fun zone until smaller development opportunities present themselves at the site.
Why bother,SLT. and Pee-ville are machine run. Check out the length of service by the Machine Screws in City Hal.
Thanks for the support Froggy. Now if we could only get some more people to weigh in on this with some positive ideas on how to move forward. We need to keep this discussion on the front burner.
Why bother Alex? For the same reason it’s important to vote. Because doing nothing and simply hoping the next developer (or politician) will realize the vision of a sustainable economy and enivironment is simply not an option. If we just give up then we’ll get just what we deserve….more failure.
Although John makes some valid points I don’t think we can overlook the “vintage car graveyard” that graces the busiest intersection in our city. If the grassroots business improvement movement truly is the path to prosperity why don’t we see a Runnels makeover to a) eliminate the eyesore, b) create a business that actually contributes to the financial welfare of the community?
Granted, Runnels Automotive is mirrored be equally blighted (yes I said the “B” word) properties that also desperately need to be redeveloped (oh no!–the “R” word!). Nonetheless, talk is cheap so I’d like to see John put his $$$$ where his mouth is and actually DO something to promote prosperity in this town rather than just talk about it.
Ultimately, this town continues to flounder in mediocrity because people are afraid of change. Mediocrity sucks. Change is good. Prosperity rocks. Time to evolve.
And just like they say in business, “you’re either growing or you’re dying”. Growth for SLT is not about increasing population per se, but evolving to meet the demands of our current society and regaining vitality.
People are so afraid of becoming Vail or Aspen. How many of you have been to Vail or Aspen? Geographically SLT could never be either. Nonetheless, having more educated, cultured, money making and money spending residents in SLT would hardly be a detriment to our social and economic strata.
Why are people who want money so scared of people who have money? Wake up!–we can learn from them!
It’s easy to criticize the city for all its failures (and yes, there are many); however we need to revitalize SLT and if nobody is going to pull up their bootstraps and take the plunge then get out of the way–at least the city is trying.
The only well planned and constructed project in the city is a trash transfer building on 3rd street is there a lesson here?