Tahoe City Lodge takes major step forward

Published on January 10, 2018


Tahoe City Lodge rendering courtesy of Kila Tahoe LLC

Plans for North Lake Tahoe’s first new hotel in more than 50 years got a boost Tuesday, with the Placer County Board of Supervisors unanimously voting to approve the execution of a loan agreement with Kila Tahoe LLC to convey 60 tourist accommodation units for the Tahoe City Lodge.

The Tahoe City Lodge is widely considered a catalyst for more reinvestment and is expected to generate nearly $1.2 million a year in new tax revenue.

“I think it’s really important that we take this step,” said District 5 Supervisor Jennifer Montgomery. “Ever since I became a supervisor I’ve been asked what we can do about this property. We now have a solution to that, and Placer County has the chance to be a part of that solution. It’s a game changer not just for Tahoe City, but for the region.”

Tourist accommodation units, a commodity managed by the Tahoe Regional Planning Agency, are required to develop guest lodging in the Lake Tahoe Basin.

With a goal of encouraging environmental redevelopment in North Lake Tahoe, Placer County has been purchasing and banking TAUs to make them available to lodging developers. TAUs can be difficult to acquire, so this helps reduce a common hurdle for lodging projects.

The TAU transfer agreement between Placer County and Kila structures the transfer as a forgivable loan, with a 15-year repayment term at an interest rate of 1.59 percent. The $879,000 loan value includes the cost of the TAUs as well as reimbursement of county staff time spent processing the project’s permit application. It will be paid down by transient occupancy taxes generated by the project.

“I think everyone is well aware of the challenges of developing in North Lake Tahoe,” said Samir Tuma, managing partner of Kila Tahoe. “I really want to commend the county as leaders for coming up with a creative way to help.”

The Tahoe City Lodge project, approved by the Board of Supervisors in December 2016, will redevelop an existing commercial property at 255 North Lake Boulevard into a 118-unit lodge, with three buildings consisting of a mix of hotel units; one-, two- and three-bedroom condo hotel suites; hotel amenities; a restaurant and rooftop bar; and parking. Placer’s transfer of 60 TAUs, along with 58 TAUs secured separately by Kila, complete the total 118 TAUs needed for the project.

The Tahoe City Golf Course clubhouse would be relocated and rebuilt with a new second-floor conference space as part of the project, and a new parking area shared with the Tahoe City Lodge would also be developed. The golf club portion of the project is being negotiated separately between Kila Tahoe and the Tahoe City Public Utility District.

Redeveloping older commercial properties and improving lodging stock in North Lake Tahoe’s downtown cores are important goals of Placer’s Tahoe Basin Area Plan, which sets development policy for areas of the Lake Tahoe Basin under Placer County’s jurisdiction. Placer County last month successfully resolved a lawsuit against the plan that allows it to be implemented as approved by the county and the Tahoe Regional Planning Agency.

In 2016, Placer County created its North Lake Tahoe Incentive Program to help incentivize investment in new development projects in North Lake Tahoe, often considered to be prohibitively expensive. The program helps support those projects by reducing the costs of acquiring TAUs and building the necessary infrastructure to support redevelopment.

Developers must apply for the program and projects are evaluated for how well they help implement the Tahoe Basin Area Plan and build upon the community’s vision for development, the experience of the developer, and their economic and environmental benefits.