Chateau project given go-ahead for next phase
By Kathryn Reed
While concern remains about the adequate number of parking spots and the safety for pedestrians crossing Highway 50, the South Lake Tahoe Planning Commission on Thursday unanimously approved changes to the next phase of the Chateau project.
A special meeting was required April 30 to answer questions from a meeting earlier this month.
The approval will allow Tahoe Stateline Ventures (TSV) to proceed with the 32-unit condo project. This full ownership lodging facility will give owners the opportunity to put their units into a rental pool.
Also part of the next phase are amenities for the lodging property, like a pool; 19,477-square-feet of retail; upgrades to the streetscape; and public fire pits.
This next phase encompasses 3.4 acres and should break ground this summer.
The project requires 6,307 square feet of commercial floor area from South Lake Tahoe. The City Council already approved that allocation, but it must come back to that board for the commodity to be assigned to this project. That is likely to occur May 19.
TSV is a subsidiary of Owens Financial. This is the lending institution that acquired all of the parcels on the 11.4-acre site near the state line after the project went bankrupt under Randy Lane of Lake Tahoe Development Company.
“They are trying to sell it to a real developer,” Lew Feldman, attorney for the TSV, told the commissioners.
It is unusual for a bank to become a developer. The thinking was if the project that was first approved in 2007 made progress from being more than concrete and rebar that it would be more enticing to prospective developers.
TSV has permits with the city and TRPA, with the former having been revised a couple times.
TSV is working under the 2007 permit from the Tahoe Regional Planning Agency that lists Lake Tahoe Development Company and the now defunct South Lake Tahoe Redevelopment Agency as the permittees. While people keep saying the permit goes with the landowner, nowhere in the permit does it state that. The permit says, “[The permittee] also understands that if the property is sold, [permittee] remains liable for the permit conditions until or unless the new owner acknowledges the transfer of the permit and notifies TRPA in writing of such acceptance.”
TRPA has not received anything in writing from TSV, though TRPA and Feldman said something would be forthcoming.
In the interim, it is not known what kind of liability the city may still have if someone were to be injured at the site or other legal issues arose because City Attorney Tom Watson refused to return Lake Tahoe News’ phone calls.
The overpass for Highway 50 linking the Chateau to Heavenly Village that was in the 2007 plans was eliminated with a recent revision. Commissioners on Thursday discussed whether this next phase should trigger TSV having to put in upgrades to pedestrian crossings along the highway.
A traffic study has shown no pedestrian accidents since the improvements were made to Friday Avenue. Jan McCarthy, who owns the nearby Stardust Lodge, said her guests do not have difficulty crossing the highway.
It was decided that in Phase A, which includes the bulk of the lodging, that the property owner will have to pay his share for improvements.
While there are not enough parking spots for all of the potential users at the site – especially and maybe only if a convention center type entity were built – the commissioners spent the most amount of time on that issue. It’s an issue that was brought up when the project was first approved. At that time using casino lots was the answer.
The commissioners acquiesced; realizing at least with the next phase there should be ample on-site parking.
No one has a crystal ball to know if a convention center will ever be built. When the Redevelopment Agency was part of the project it was going to invest $55 million in what was to be a 40,000-square-foot community facility. That money is off the table since Gov. Jerry Brown dissolved redevelopment agencies.
In order to substantially change the project, the developer at that time would likely have to go through the environmental process again. That takes years and costs six figures. What the build out at the site will look like will in large part be determined by what the market dictates.
I’m all for this project to be finished, but it just irks me that Lew Feldman, and even Randy Laine to some degree, are still involved at this point. Them boys are snake oil salesmen! They’re getting everything they wanted and we’re getting nothing that they promised.
I agree completely, Bigs. Randy Lane’s daddy paved the way for him, and Feldman’s fingers are in every shady deal done in the last 20 years or so. Both of them ought to be ashamed of the damage they’ve done to others while they’ve skimmed the cream off the top. But they aren’t. Karma’s gotta kick in sooner or later.
The city approved a building permit without consolidation of 29 parcels down to 5, violating its own special use permit in 2007, a permit my family was dependent as extra security for our notes! That council cost us millions of dollars, the standards everyone else has to abide by they ignored for Lake Tahoe development!
Randy Lane walked away from paying our notes, tried to file bankruptcy, walked away from the public private partnership, allowing Owens to foreclose on us and the turns around and pays Lane hundreds of thousands of dollars as a ” consultant ” in developing the project! Unbelievable !!!
The same thing happened in 1989 at ski run and hy 50. The same attorney selling it to the city and they still believe him. What are they thinking?
I’m no expert on the past, so feel free to provide details. I’m still happy someone is going to develop that area.
Why did the property owners make a deal with Randy Lane without getting paid in full? Were they forced? How did it happen?
Rick,
Sorry that happened to you and your family. You hit the nail on the head.
The city should have never issued the building permit without parcel and lien consolidation.
I tell friends in the title and escrow business about this and they think I’m making it up.
One of the biggest screw-ups in real estate development on the west coast in history.
It was not the citys responsibility to make sure that the sellers were protected, they should never have agreed to carry a note and certainly in a junior position, they should have been in a senior position at all times or never have sold. Bad business decision to give that up. I heard that one man sold his property for 5 million, got paid 4 million up front and carried a second of 1 million and lsot that million in forclosure. The interesting thing is that in todays market after 2008,that property would only be worth about 2.5 million. They should sue their real estate attorney for malpractic, for allowing them to take a junior position. These sellers shound have at a minuim require a completion bond to secure their interest.
Slap shot, it’s a long story dating back to 1988 but I’ll summarize to the Lane period. The city sent me Randy Lane. He asked me to carry paper until his permanent financing was in place. I agreed. A couple months later he asked me to subordinate my notes, that he was still waiting on the financing to come thru. I agreed to subordinate 2 of my 3 notes. I felt secure enough in doing so because I knew the city would NEVER issue a building permit without consolidating the parcel map from 29 parcels into the 5 parcels of the project, and without the financing in place. And that would require me and the others to be paid off. I kept 1 note in my hip pocket just in case everything went south. To my shock and dismay the city council issued that permit anyway and they knew that each parcel had notes on them. My remaining note was a whole another story. Mr. Lane came to me when the project was well under way and asked me to subordinate my last note. He told me if I didn’t he would file bankruptcy, shut the project down and I’d never see another penny. I felt obligated to subordinate for everyone’s good. And yes, that was a Hugh mistake, as he secured a 12 million dollar loan from Owens and then walked away from it and filed bankruptcy 4 months later. I trusted Lane to do what he promised to do, I trusted the city to do what they were obligated to do and I trusted my decisions to be the right decisions for everyone involved.
I hope the Chateau project gets completed, but I feel there are too many loose ends to see this achieved.
Maybe a few retail shops rented out but with inadequate parking to draw in paying customers.
It’s on the market at a time when people are not investing into an unfinished developement with potentially a small if any profit margin for the owner of the property. OLS
Oh goody…is this the phase that includes plywood on the exterior?
Ask the council how much Randy Lane is being paid per month as a consultant and for how long.
Rick, I have the actual paperwork on the loans from Owens for a total of 22 million. He got the money to pay off two liens from the electrical contractors from Reno for about 3 Million. Owens gave approx. 10 million in cash and the rest was ownership in the project which he defaulted on and Owens filed default with 3 million in interest for a total of about 25 million. Under pressure from just about everyone on both sides of the fence the planning commission just gave in on everything Owens did not want to do to move the project forward. Depends on which side of the fence you sit on as to whether this was a correct move or not.
Wouldn’t it have worked out differently if the City had required a performance bond? Hal Cole is a contractor and had to know that contract was leaving the City and property owners in jeopardy. I don’t trust the central cast of characters (as far as I could throw them), to do better this time.
I think the most important thing we can do is to let this property sit for as many years as possible. This will allow many to needlessly lament the past and lob in the occasional “I told you so”. This would also make it easier to continue to be something others can stand and point to as a failure, using it as rationale to stall anything else from moving forward.
You know, SCT, if this had been a one-time misstep, we all might not have so much to say about it. But it’s been an ongoing thing here, with the same bad actors taking advantage of their political connections over and over again. Ski Run, the Crescent V takeover, the lakefront development across from Takela, the TaHole, now the loop road. . . always the same people scamming and getting richer by using loopholes unavailable to the rest of us.
Thanks for making my point.
Ski Run seems pretty nice to me. Crescent V seems pretty nice to me. The TaHole would be a lot nicer if we could get it finished. The arguments against the loop road are more of the same… We are against it because someone other than us might profit or benefit.
No, it isn’t about somebody ‘other than us’ profiting. It’s about a small group of people using Eminent Domain to STEAL property from people who rightfully own it against their will.
THAT is what it’s about, and it’s never about ‘the greater good’, it’s about business and profit accomplished by political connections.
Isee, im sorry but it was the lein holders that should have required the proformance bonds, cities are not required to protect private business, that is up to them to protect themselves, these are not dumb people, they know they should hire attorney to cover all basis in multi million dollar transaction.
Dog there was no eminent domain in the Tahole, and it will be impossible under new law to get it done for the loop road, as far as i know there has been no funding found for it either.
Relo,
Many of the properties were taken by or under the threat of eminent domain. Eminent domain was taken off the table for now after the hole in the ground disaster.
Businessmen/people who had their property confiscated have the right to have their local government act in a accepted/traditional/sane/logical manner.
Letting the project go forward without map priority is insane. It hasn’t happened since the 1950’s in Arkansas.
As to the completion bond who would have owned the project after completion???
sunriser, these properties were not taken under eminent domain, nor was it confiscated , if it had been they were they would have been paid in full. No one forced them to take back deeds of trust to finance this project and personnally i would felt to do so at the beginning would have been a red flag that financing was not secure enough to complete the project, because the land was the smallest part of the project.
Thanks Dog. Learning from the past is a good thing. Living in the past is not. There are too many people in this town that have one foot stuck in what Tahoe used to be and want to continually debate what happened a decade ago.
It is time to move forward.
The City of South Lake Tahoe DID use the eminent domain process to give title to Lake Tahoe Development Co/Randy Lane on several properties so he could borrow money. That is a fact!
The City of South Lake Tahoe was a partner with Lake Tahoe Development Co./Randy Lane for the Chateau Project. Because of that partnership, the city should have insisted on a performance bond. That performance bond was needed to protect the public interest in the project. The City of South Lake Tahoe failed to protect the community and the original property owners. That is a fact!
The City of South Lake Tahoe did NOT follow its own rules and regulations then, nor are they following its own rules and regulations today for the current project. That is a fact!
Randy Lane was the developer of the failed project then, and now he is a paid “consultant” for the current project. That is a fact!
Lew Feldman was Randy Lane’s attorney for the failed project then, and now he is the current attorney for Tahoe Stateline Venture. That is a fact!
Several original property owners lost millions of dollars. Many people lost jobs and businesses. The city lost a huge amount of property tax revenue. That property tax revenue would have benefited our entire community and all its citizens. That is a fact!
One of the reasons for those loses was because the City of South Lake Tahoe did not do enough to protect its citizens, the entire community and the original property owners. Like it or not. That is a fact!
SCTahoe, maybe you would have a different perspective on how to move forward if it was you and your family that were financially and emotionally devastated by the poor decision making of the City of South Lake Tahoe. I agree, the project should move forward, but only after the situation with the original property owners is resolved. That is a fact!!!
Rick, Lew Feldman was also the attorney for Richard Hodge who filed for BK on the failed project at ski run and by 50. Feldman sells snake oil, and the city keeps buying it. Of the 90 business displaced by redevelopment, starting in 1989, only one or two still remain. Lew Feldman, via the City of SLT’s eminent domain power, screwed those people.
Jeez. Any dispute with the original property owners will be handled by the courts. No one is disputing that many issues with the Chateau were handled poorly. However, today there is a new city manager a (mostly) new city council and a lot of good current projects that need to be moved forward.
While I am sure there is plenty of blame to go around why did the motel/property owners make the deals they did. Why did they accept the terms they did? At some point they have to accept responsibility. I have bought and sold several businesses and no one forces you to take the terms of the deal unless you agree. Did motel owners not have attorneys to advise them? Perhaps those attorneys are guilty of malpractice?This was a mess and its so sad but I am not willing to stop progress and needed changes. Lessons learned, move forward.
The city is 3 for 3 on failed projects. Two projects have moved forward the Chateau is starting to move forward. All 3 failed projects started with Feldman. History repeats itself, the city is still learning that. One can hope they will get it some day.
Nothing has been solved, the causes remain in place only the symptoms have been addressed.
The excessive arrogant government is the problem and the inability of the people to address that is what will keep South Lake Tahoe and America in decline.
Albert Einstein – “You cannot solve a problem from the same consciousness that created it. You must learn to see the world anew.”
The progressives are your problem and until you face that you will not solve your problems. Period.