Creditors to foreclose on SLT convention center; Lane out
By Kathryn Reed
Randy Lane and John Serpa are no longer involved in the would-be convention center project in South Lake Tahoe.
The two men who ran Lake Tahoe Development Company and sunk about $90 million of their money in the 11-acre site must walk away with only concrete and rebar to show for their efforts.
The creditors who own the 29 parcels are in control. They have agreed to foreclose, South Tahoe Lake officials said. This all transpired in bankruptcy court Dec. 21.
Creditors looking for someone to buy their rebar and concrete. Photo/Kathryn Reed
What happens next remains to be seen. Creditors and South Lake Tahoe officials have a meeting with Tahoe Regional Planning Agency representatives Jan. 4 to discuss what flexibility the bi-state regulatory agency will allow.
“The design is outdated,” South Lake Tahoe City Manager Tony O’Rourke told Lake Tahoe News. “We need to see what we need to do to amend the entitlements.”
TRPA officials were not available for comment.
Although O’Rourke does not anticipate any work occurring at the state line area site for at least two years, he says it is imperative to know how the footprint can be changed to accommodate the next developer.
“The biggest issue is we are in a market place that has collapsed and it will take some time to rebound. This is way too valuable (property) for it not to be developed,” O’Rourke said.
The July 2006 agreement with Zephyr Cove-based Lake Tahoe Development Company that the then-City Council of Hal Cole, Kathay Lovell, John Upton, Ted Long and Mike Weber approved called for two hotel-condo structures, retail, insufficient parking, and no easy access to Heavenly Village across the busy highway. (Additional parking was supposed to be at Harveys, but no agreement was ever secured. Caltrans never signed-off on a proposed over or underpass for Highway 50.)
With that operating agreement only good for fire starter or a doorstop, it’s possible the next contract won’t be so one-sided with the developer on the winning end.
Even though creditors – aka land owners – will have a large say in what happens, the city and TRPA will be part of the decision process because they dictate land use policy.
It was the council of Lovell, Long, Weber, Bill Crawford and Jerry Birdwell that gave the OK for LTDC to start construction without a final map in place – thus the reason multiple creditors own 29 parcels. Their vote also came with the assumption funding was in place, while in reality all LTDC had was a letter from a lending agency that turned out to be worth less than the paper it was written on.
Lane did not return phone calls.
Owens Mortgage Investment Fund is the largest creditor – owed about $28 million. The attorney for the creditor was unavailable for comment.
Most likely the creditors will get their respective properties appraised to know the value in today’s dollars. They vary in size and location, making them not of equal value.
O’Rourke speculates the group will bring in a recognized brokerage firm with experience domestically and internationally to move the project forward. In addition to anticipating a more traditional high-end hotel being part of the project, he believes a much smaller conference center will be erected.
“It will probably be more like a regional conference center like what Monterey has,” O’Rourke said. “Over the course of the near future with the creditors in control we will come up with a game plan that is market drive. We hope to attract a major investor whether it is Vail Resorts or someone else.”
Vail through its real estate arm RockResorts was going to be the initial hotel operator. That fell through long before the developer filed for bankruptcy in October 2009. The Colorado-company, which owns Heavenly Mountain Resort on the other side of the street, will not discuss future acquisitions.
Well it’s about doggone time!!
Maybe it’ll become something now.
Brilliant, someone finally realized after I don’t know how many years, that Lane could not finish this project. I think almost every citizen in town knew this for quite some time.
If only people facing foreclosure on their homes were allowed this much time to get it together.
Where is the Edgewood Properties group? They wanted seamless development as long as it was on their property (ie, move the TAUs from SLT to Stateline). Why doesn’t Edgewood develop this property in close proximity to the golf course but in SLT?
One thing that was never answered when the project was moving forward and its proponents were hailing it as part of a “New Tahoe” was how was the Operation, not the Development, but Operation of the Convention Center going to be financed. You’d hear rumblings of “We’ll figure that out later.”
But most convention centers, even those deemed successful by their respective communities, require a public subsidy to operate. With the City of So. Lake Tahoe’s refusal to even spend a nickel to promote itself as a tourist destination, if the CC had been built, it would probably be standing unused as they’re would be no operating budget.
Now watch-at some point, some developer is going to come along and build something there. But the Convention Center element, the whole justification of the project in the first place, will be thrown aside! (Note the City Mgrs. comments about a smaller conference center now being erected at the location!)
To Parker,
The development was based on the timeshare buisness model. Get investors to put up 4 time the money it takes to build the project, and once it’s built set up an ongoing monthly charge to support the maintanence. Then sell the daily operation to another company based on the monthly income for an additonal profit.
To tahoeadvocate:
That was how they were going to build the project! Randy Lane was Crystal Clear that he was going to build a Convention Center, and then have Nothing to Do with It!! He was going to hand it over to the City, LTVA, whatever!
I’d love to know of a Convention Center that’s of a significant size, like the one originally planned, that’s run by a private business?? Maybe Las Vegas’, but very few others, turn a profit! They require a subsidy to Operate, again not Build, but Operate!
Neither The City of SLT, or the LTVA, ever committed to stating that they had the money to operate the Randy Lane built, but then planned to abandon, Convention Center!!
Yay. What a jerk Lane is. Trying to make money hand over fist without thinking for two seconds what might happen to the TOWN or PEOPLE involved. If I were back at Lake Tahoe I would do a happy dance (probably not) where all those cool old hotels and businesses used to be, to celebrate its new future, which hopefully is now free from the involvement of Randy Lane and Lake Tahoe Development Company and Falcon Capital LLC.
(I copied & pasted my original response from the Trib article)
Forget Edgewood. They are already involved with the potential redevelopment of the Horizon casino area.
Let’s get some fresh blood into Tahoe…Let’s try some original thought…This doesn’t have to be one monolithic structure.
A convention center is fine, but let’s design it with a centerpiece of “outdoor adventures”. Sections of the Tahoe Convention Center could include things like an indoor mountain climbing center for winter use, unique restaurants like Medieval Times, & Dave’n’Busters. How about an Olympic style training center to include our Tahoe Winter Olympians? Maybe a retail store like a Cabela’s. Then we can target conventions such as American Hiking Society, National Campers & Hikers Association, and the International Mountain Biking Association.
Let’s give “Destination Tourists” a reason to come here by creating a user-friendly facility.
The failed, now abandoned convention center was a costly, poorly planned, poorly executed fiasco for which the elected officials involved should be held fully accountable.
The point about the lack of planning for the actual year to year operating costs is very relevant. During the 2009-2010 fiscal year, San Jose’s convention center required a massive $7.1 million public subsidy just to operate. To my knowledge it has never financially broken even since its opening 21 years ago. And it’s right in the center of bustling Silicon Valley.
There are investment bargain hunters out there right now and this site is just too valuable to pass up. Foreclosure will open up many possibilities to improve our town. Dealmein has lots of good ideas. We should capitalize on the outdoors interest in our area. Its important whatever is built has appropriate parking. Can’t the existing structures be used for a parking structure, with the balance built above it, without starting from scratch? If not, what a waste…..
Luxury hotel? I don’t think so. The affluent have abandoned south shore for lack of most everything they like; shopping in upscale stores, nice restaurants (not the hole in the walls most of our restaurants are), a nice surrounding neighborhood (diamonds in the middle of ghettos don’t usually appeal to the wealthy), our casinos are dated and lack the quality acts of days gone by. WE need a really novel idea. One so unique it would garner attention. It needs to be something people would go out of their way to see. Somethiung that would appeal to most people including families. Zoo, aquarium, science center, interactive museum, multi-level sports/stadium that could accomodate entertainment for popular groups/shows etc.
Boy, is Randy Lane going to have a fantastic tax write off. Lucky him and SLT.
Doesn’t the word assume have a second meaning as used in the above article. What did they (the council) say regarding the financing in the above article. I understand there is a bridge out there the council is interested in buying. The person selling the bridge promised the council it is a good deal and they couldn’t loose.
Maybe the new sucker, oh excuse me developer would like to take over the ice rink also.
Dealmein, do we really want a D&B, Cabellas, or any other large national chain there? While it has it’s advantages, maybe we could put them at the Y which would draw more traffic out there. They could use. Even better, replace KMart. IMO, I think we should promote local owned small businesses into whatever the hole transpires into.
I also sadly agree with Dryclean, I think Tahoe lost the affluent tourist to the North Shore. They have done a far better job of curb appeal. Perhaps an affordable with luxury suites just like the Marriott.
Then again, what do I know? ;-)
Having lived in SLT 36 years (since moved) I may be the only one to have made money on this project. At the time when I heard Randy Lane was going to “do it” I bet a friend $10 it would never happen. Thanks Randy
Is it possible to build a building so efficient it will be comfortably on the grid to supply excess power to it’s neighbors. All this without pollutants generated from creating a very desirable indoor situation. A TRPA coup.
I think our area is beautiful enough to stand on it’s own. The massive convention center was such a flop and so expensive in so many ways…..we should learn from this disaster. The foundation probably would not be safe to build on at this point and would have to be removed….I think the next venture will set the tone of the town. Think carefully….I’d rather not see sparkles anywhere. We should strive to blend in to the environment instead of blocking the view. Attitudes have changed and there are not a lot of mountain top lakes that offer what ours has….let’s not cave in to the “For now people”, let’s strive for a sense of permanence and pride in something well done. We have spent too much money doing it badly, let’s do it right. Pay attention, speak up, listen…..we are still paying for “The Hole”.
Lane not Gone and the Timber Cove and behind Raley’s Project wait in the time zone for more Screwing us scenarios.
Get ready South Shore, break out some Lube he’s ready to do it again!!!$$$$???.
The city council approved this project and 3 members of the current council have and will vote for these projects. So no change in sight, they have not learned a thing and still think they know best.
As one of the few homeowners who were forced to sell because of this fiasco, I say HA, HA, HA.
We owned our home for over 50 years and I wish them the worst!!