S. Tahoe convention center project out of bankruptcy
By Kathryn Reed
The hole – as the 11-plus acre site on the state line in South Lake Tahoe is known – is out of bankruptcy.
After a 4½-hour hearing Wednesday in Sacramento, the judge dismissed the case.
“We are definitely in a better place because we don’t have to get approval from the bankruptcy court (about a project). We hope in the next month or two we would get together (with the property owners) and see where we go,” City Attorney Patrick Enright told Lake Tahoe News.
The convention center property is out of bankruptcy as of Feb. 29. Photo/LTN file
Randy Lane, the principal of Lake Tahoe Development Company of Zephyr Cove, was not available for comment Feb. 29.
It is his company that in October 2009 filed for bankruptcy. But it was the City Council two years before that allowed him to break ground without having a final parcel map filed or secured financing in place.
No final map means there are 29 parcels to deal with – most of which are covered with rebar and concrete.
Now four entities own the 29 parcels. Sixteen have been foreclosed on, four are in the process and the remaining nine are owned by Lake Tahoe Development Company, with Owens Financial having the first deed of trust on those nine. This means Owens could foreclose on the properties at any time.
It is now up to the four property owners to figure out what to do with the land. It’s possible one could buy out the others or all could sell to another entity.
While many have said the convention center, two boutique hotels, retail and open space planned for the property across from Heavenly Village on the Harveys side of Highway 50 should be scrapped, that is the project that was approved. Permits would allow for alterations, but not a change to the footprint. It was supposed to be the largest project in the city limits at more than $400 million.
TRPA said the permit expires in nine months. If the next developer has to start from scratch with permitting, it will cost time and dollars.
Kae, who was on city council, who was the city manager and attorney at the time this happened please?
“But it was the City Council two years before that allowed him to break ground without having a final parcel map filed or secured financing in place.”: As stated in the above news report. I just hope that this council does a more mindful job and don’t forget the performance bonds this time around. Has anyone ever added up the total cost of this snafu, start to finish so far?
One thing is for sure, Randy Lane shouldn’t be able to set foot within a mile of anyone developing this sight!
Finally, progress!
Well dryclean, one person on the Council who approved it, Hal Cole, is amazingly still on the Council! Another, Ted Long, is even more amazingly running a Grand Jury! Well not really running it as he spent all it’s budgeted money long before its term was done!
No wonder my friends from outside this town tease me about it’s govt!
True to this projects’ “betting on the come”, it would seem that he hopes to end up with it “by default”. . .
First curiosity: are the excavation & concrete contractors yet to be paid ?
My understanding is that there are 4 million in outstanding liens, which just about covers those early costs, which were never covered.
Original property owners who tried to help the city by caring paper all getting screwed by city. Council members like Hal Cole just don’t give a damn about them!
How bout a University there?
” We hope in the next month or two we would get together (with the property owners) and see where we go,” City Attorney Patrick Enright told Lake Tahoe News.
Enright is a piece of work…
Remember, it was the government involvement and crony relationships it develops that got this hole in the ground in the first place.
Government employees that think like this should end up in prison when the city collapses.
This saga will provide laughter for many for years to come…
Hey did ya see the news? Stockton is likely to go BK soon… yep, tip of the ice burg. Who’s next?
Hal Cole, Bruce Grego, Kathay Lovell were all on the City Council at the time of approval. David Jenkins and Christine Vuletich advised the City Council (very erroneously) that the City did not need to require a performance bond for a project of this magnitude. Cathy DiCamillo was the City Attorney at the time of approval. Jenkins and others at the City informed various entities they would guarantee title to the tune of over 1 million dollars in order to allow the project to go forward. Though Hal Cole is in the construction/ land development business and easily knew or should have known that NO PROJECT of this magnitude should ever go forward without a performance bond, he allowed the Council to approve the project because to require a bond would have been cost prohibitive and Lane and his company would not have been able to secure such a bond (for the very reason the project failed- a bond in the total value of the project can only be obtained if one can show the financial wherewithal to complete the project). In addition, no due diligence was done, such that the City (while threatening to condemn property to get small businesses to sell to Lane) had no idea the level of debt and the multiple lenders who loaned Lake Tahoe Development/Lane money even existed until the project failed. The City planned (just as at Heavenly Village) to take title to only the improvements that generate no income (sidewalks, landscaping… etc.) but that cost money (see Heavenly Village). Many innocent business owners have lost everything they worked for, their retirement and their homes as a consequence of this irresponsible government action. And now, the City (Hal / Grego) disclaim all responsibility by falsely stating on the public record that this was a “failed private development project that is all.” Dont buy it. They and Jenkins and Vuletich, as well as the financial advisors and outside counsel the City hired are entirely responsible. In addition, someone should ask, why on earth didn’t the City look at suing those outside experts for errors and omissions. (Enright) This never should have happened. And it could have been avoided. This team of Council w/ Enright at the healm will do little better, just see the snafu at the LakeView Commons, and the Ice Rink. So far Enright’s cost the city an estimated 800k, but the City Council continues to extend his contract, give him raises, and a $400/mo car allowance, while laying off workers throughout the rest of the City. Good Luck Tahoe.
Let us know when Vail buys the “hole” thing. They are they only ones with money and would probably love to have lodging there for their skiers. Close hwy 50, create a pedestrian corridor without traffic on hwy 50 and have Vail build some lodging and restaurants. A win all the way around.
WHAT? Lake Tahoe Development Company IS Randy Lane. Who are the other 4 “entities”? Why does it feel like insider deals are going to screw the citizens AGAIN?
At the time the go-ahead was given for Randy Lane to start construction the people affiliated with the city were, according to City Clerk Susan Alessi: Councilmembers Jerry Birdwell, Bill Crawford, Ted Long, Kathay Lovell and Mike Weber.
City staff at the time were:
Dave Jinkens, city manager
Cathy DiCamillo, city attorney
Christine Vuletich, finance director.
Kathryn Reed, LTN publisher
The Council Documents Tell All–That’s Tahoe South, now adays.
Thanks for you insight, and yes, why isn’t someone being held responsible?
to biggerpicture: Randy Lane has his tenticles throughout both sides of the Stateline. He isn’t going away.
Thanks Kae. Were those council members who gave the go ahead on the project the same council members who were involved in drafting the agreement? Thanks.
Hal Cole – nows the time for you to tell us what you are going to do with the Ta-hole. You have been involved with this from the get-go…so get going already!
The convention center debacle isn’t the first time the City’s failure to secure a performance bond has resulted in a fiasco and subsequent harm to the city’s residents and taxpayers.
And it should be pointed out, other members of prior city councils, besides the ones listed above who signed off on the final approval, are just as guilty and responsible for the convention center mess. The prior ones allowed – and encouraged – it to progress year by year, with equally poor oversight and ignorance. I could name them, but doing so would give me quite a headache so I won’t.
Whew… sad to see such incompetence! I agree with Steven – I hope Vail buys the hole and gets us ready for a future Olympics!
I also believe Vail is the only one that can make this happen.
Who in their right mind would want deal with this city and the crooks that still got connection to the council.
Corporation are evil but they are not that damn dumb.
WOW, you people need to do your home work. You want point fingers, go back to Marriott, they were contracted to build the center and backed out. It would be nice if Mr. Lane had the kind of power all of you have accussed him of having, he could have stopped the stock market from tanking the day before the financing was to go thru, maybe he could wave his magic wand and make everyone’s problems disappear. NEWS FLASH, Vail was involved in the HOLE, and they too backed out. I realize and respect that everyone has an opinion, but for heaven sakes people do your home work before you
jump on the ignorance band wagon. Hear is an idea why doesnt everyone start looking in the mirror and accepting responsibility for the decissions they made, no held a gun to anyone’s head that I have heard. If this had gone the other way all you would be suggesting a Statue be erected in his honor. Lastly the Olympic suggestion though I give you credit for thinking, this town cannot handle the traffic that a good 4th of July brings let alone the insanity of an Olympics, we just do not have the infrastructure to handle an Olympics. Maybe we can all just stop for a moment and remember that everyone was just trying to do what was best for Tahoe at the time and it just didnt work out.
Is that YOU, Ted?
Nope, no affiliation to City or project
Why should I look in the mirror? I didn’t support the project without the proper financing in place or without a completion bond!
Here’s some more information from the South Lake Tahoe city clerk’s office:
July 11, 2006 the OPA (owner participation agreement) was adopted. Res No. 2006-46, C-61-06 AYES: Hal Cole, John Upton, Kathay Lovell, Ted Long, Mike Weber.
May 1, 2007 – 1st amendment to OPA Res No. 2007-25, C-24-07 AYES: Jerry Birdwell, Ted Long, Kathay Lovell, Mike Weber; NOES: Bill Crawford.
Exhibit A of the 1st amendment states construction for foundation for phase I is on or before Aug. 1, 2007.
“Bill is correct that he and Jerry were not on the council in July 2006 when the original OPA was approved. However, Bill and Jerry were on the council when 1st amendment was approved, no final parcel map, financing when first phase construction began in 2007,” Susan Alessi, city clerk, wrote Lake Tahoe News.
Kathryn Reed, LTN publisher
Susan Alessi, MMC
Bill was right on then and now.
Tahobear, I knew you weren’t Ted. You just sort of sounded like him and I was trying to make a funny.
Ben Madox of Carson City, told me that it was the TRPA that forced the City to force John Serpa of Carson City to start the project in 2007 to stay on our redevelopment timeline.
acording to Ben, John Serpa wanted to wait as he projected the down turn in the economy
A funny thing happened on the way to this Hole in the ground !! THERES JOHNEEEE. NOT SO fUNNY
OK now, fill the hole Already!