S. Tahoe trying to not default on parking garage
By Kathryn Reed
South Lake Tahoe is about to extend how long it will take to pay off the parking garage debt at Heavenly Village as it attempts to refinance the bonds so the overall payment is less.
It’s not a straightforward transaction because the state Department of Finance is involved because the garage is in part an asset of the now-defunct city Redevelopment Agency. The garage had been owned by the city and RDA, while the land is the city’s. The revenue goes to the bondholders. With the state dissolving RDAs, the successor agency is the partner with the city in owning the garage.
The original bond was for $9 million. There are 14 years left to pay off the debt, which today is $7.3 million. That’s just the principal.
The parking garage at Heavenly Village is saddled with debt. Photo/LTN file
“It will likely have a longer life. Part of what we will try to do is not extend it any longer than is necessary even though the rates are low,” Bob Gamble told Lake Tahoe News. He estimates seven to 10 years will be added to the life of the bond.
Gamble works for PFM Group in San Francisco, the entity handling the refinancing of the bond. He was at last week’s City Council meeting to get that group’s approval to go forward. Councilwoman Brooke Laine was the lone vote against the plan. She preferred an option that would have the bond paid off sooner.
“We are trying to avoid defaulting or a general fund subsidy,” Gamble told the council as to why refinancing is necessary.
In 2007, the 2001 special tax bonds were refinanced. That five-year subsidy has run its course and is creating a greater urgency to finance the main bonds.
While the interest rates will be lower, to what extent remains to be seen. The overriding need to do this is to keep from defaulting on the loan.
The garage has been in technical default since Day 1 because there was never enough income to pay the debt.
The bond payment is about $550,000 a year. While the garage is taking in approximately $650,000 a year, it costs about $200,000 to manage and operate it. This means there is a gap of $100,000.
The community facility district, better known as PADMA, is mostly responsible for that shortfall. Park Avenue Development Maintenance Association is the organization formed in 2002 to maintain Heavenly Village. The two Marriott properties pay 55 percent collectively, Heavenly Mountain Resort 20 percent, South Lake Tahoe 20 percent, Trans Sierra Investments 2.5 percent, and Cecil’s 2.5 percent for the upkeep for the entire center.
However, according to the city staff report from May 7, projections are that without refinancing the bonds revenues would be short $200,000 to pay the debt.
One day all the debt will be paid. But no one knows who will own the garage because of the dissolution of the Redevelopment Agency.
“Statewide there are a lot of those assets in that situation,” Gamble said.
What????? I thought all the people from the bay area wanted to pay for parking. I wonder how big of a disaster the the new paid parking will be????
I was thinking about going to the keys marina this weekend and looking at all the boats and having a drink at the Fresh Catch.
Didn’t even waste the gas to see if they had some punk asking where I was going.
Went to Portal Falls instead.
its very easy all you have to do is wait for the millions of dollars we will make with the new parking rip off will we ever learn
The parking garage is the city’s flagship paid parking project. It was a financial disappointment from the very beginning because there was never a local “buy-in”. Little wonder at $1.25 for 20 minutes or $25.00 for the day. Last week I was walking in the area of the parking garage and noticed a sign advertising the all day rate of $5.00. I went inside and counted about eight cars. A nine million dollar asset with eight cars inside at $5.00 each. You do the math. Our shoulder seasons are the reason that the garage and now the paid parking kiosks have and will fail. If you have no customers it doesn’t matter how low the rate is. We are stuck with the parking garage, but can still continue to request that our city council STOP the paid to park kiosks at our beaches and lake access locations.
As the stewards of a national treasure (Lake Tahoe), we have a tacid obligation and unique opportunity to share “our” lake with the community and our many visitors from around the world.
I wonder if THEY have enough water in case of an emergency…..
If I would have known about the $5 parking per day deal I would have paid to park there and explored the area. Another fail!!!
All the city employees that want paid parking will go out on early retirement before the disastrous effects of their actions are felt.
Default on the bonds and turn this fiasco over to the lender or bondholders. Let them have it, run it, and incur the losses that now require significant taxpayer subsidies. Put the $200k a year to a better use, fixing residential streets instead. Blame the unsophisticated city leaders who approved this turkey, naively believing the consultant at the time who told them that the city parking garage would “at least break even, even if Highway 50 was closed”. Get the city out of the parking business. NO on parking meters and kiosks which will only get vandalized and need repair, make people unnecessarily frustrated and angry, and limit beach access.
Can someone explain why it costs $200,000 every year to “manage” what is essentially a big block of concrete? Where does one find a disclosed budget for something like this, including salaries for whatever? Really sad commentary on the brains in charge. We have acres and acres of free parking a couple blocks away, so lets spend $9 million on a multi-level garage and charge through the nose for it. Brilliant. Actually, I have to agree to stick it to the bondholders. Sometimes one should be accountable for thinking a few minutes about their investment.
Customer friendly parking what drives cash registers,Somehow for many years they want all these world class admittees but dreams are dreams,and to install more paid parking only makes people stay closer to the valley casinos and recreation in their own cities and forget the meal ticket for the ride up,back.
The days of ripping off locals and tourist are being closely monitored compared to the days of easy disposable cash.
It kinda like when you use see so many families out fishing on the lake with their small boats,trpa comes puts ban on the motors and now all you see is less boats bigger loss of profits for the whole town, all these changes done nothing to promote business with the middle income people who use to thrive here and it added up because people made the wrong decisions thinking if its here they will come regardless of the price.
Proven it doesn’t work that way.
Why complain when the good old boys, Davis and Cole are still calling the shots.
Think Nutting and Sweeney. Sameo Sameo
I guess this is another example of how Government will always lose money and mess up anything they touch.
I do not know who owns all the concessions and shops in Heavenly village.
the Parking Garage had to be there to support all the shops. The city should have mandated the parking, but it ends there. It takes in 650,000$ dollars a year. and the City managed to do it so that you lose money every year? And ownership is in question?
There has to be some Back Room deal going on there. Who is getting the money?
Any real estate development of that size would never be losing money on parking, or the costs would be spread across all the businesses that are supported by the Parking.
Something stinks.
why not remove the boomgates, then default, and presto it’s free parking until someone can resurrect the dead redevelopment agency. Save $600k a year too.
Wow quite a few folks talking default. Amazing. I wonder what their credit score is?
This article is incomplete. The presentation done by the company tring to place the bonds were showing a positive cash flow after the refinance. This loan is called a two step which means that the payment is lower for a few years and then increases a lot in order to pay it off by the end of the term. But the increase will be paid because another loan will mature thereby leaving funds available to repay this bond.