Motel and surrounding property could be demolished to make way for new project

The Knights Inn could be purchased by the City of South Lake Tahoe for $6 million should a grant be awarded them by the California Tahoe Conservancy. If that happens, the City would purchase, and then demolish, the motel located on Highway 50 near Ski Run Boulevard to make way for a new environmental and retail project.

There is grant money available through the CTC which the City will apply for. The funds come from the state's Proposition 1 Water Bond which was approved by voters in 2014 to authorize $7.545 billion in general obligation bonds for water projects.

During Tuesday's City Council meeting, the councilmembers voted unanimously to give Mayor Wendy David their support to execute a purchase agreement should the CTC grant come through.

TMPM, LCC owns the aging motel and its surrounding lots which include a house and events center on Lloyd Ave. Long-time local Pradip Patel is the Managing Partner of the company.

The move by the Council would give the City control over the use and design of the whole block from Ski Run Blvd to Herbert Ave, from Highway 50 to Lloyd Avenue.

Previously the City had entered into an agreement on the southwest corner of Ski Run Blvd with developer, The Halferty Group, who was going to purchase the lot from the City for $1.1 million. The City was in discussions with them on design standards, economic goals and regional threshold goals on the corner lot when they learned that Patel was considering the sale of his property. They told Halferty and escrow on the 'southwest corner' was put on hold since the developer had originally been interested in the whole property, including the Knights Inn, which wasn't for sale at the time.

The potential is now there for Halferty to purchase not only the southwest corner but also the Knights Inn and surrounding lots owned by TMPM, LLC.

The Knights Inn area, which is known as the Bijou Park Creek Project, will solve several water drainage problems in the area. The motel was built in what is now known as a sensitive Steam Zone Environment (SEZ), and City's plans will restore the SEZ as well as reduce the amount of sediment making its way into the lake by 8,000 pounds a year.

Restoration plans will include retention ponds that will collect the water currently running through pipes under the Knights Inn to the lake.

"I've never seen a project with so much physical change," Councilman Hal Cole said. Cole and Mayor Pro Tem Austin Sass are part of the Real-Property Committee of the Council. "This is going to be something we're all going to be proud of," Cole added.

"This will be extremely exciting for this town," said Sass.

The only condition for the grant is that the buildings are torn down. The rest will be up to the City and developer to come up with a plan that will be both economically and environmentally right for the community.

The Knights Inn comes with 110 Tourist Accommodation Units (TAUs) that the City would own. They could convert them to Commericial Floor Area (CFAs) if needed for the project area. The 'southwest corner' lot comes with 88 parking places in the garage already located on Ski Run Blvd.

The CTC Board is considering all requests for the bond money and will have an answer for the City at their March meeting. If granted, the motel could be demolished by winter. The developer could work through the permit process over winter and potentially start on the project in Spring, 2017.

"This could be the biggest project we've seen in many, many years," said Mayor David.

With the City being a partner in the project where design comes into play, there is potential for a wetlands look to the project instead of another retention pond. Walking, streams, retail and other commercial space, all working cohesively together to draw more people to that area of town at the same time the lake is being protected.

"We're creating this block to block," said Cole. He said they are no longer begging builders and businesses to come to South Lake Tahoe. "We are changing from a 'Will you come here' to a 'We want to come here' situation. There are few opportunities like this and they are courting us, we're not courting them."

During the public comment portion of the meeting, Tahoe Wellness Collective owner Cody Bass urged the council to require the project be a green/LED certified one that steps up the level of environmentalism in the community.

According to the Patels, businesses that will be affected, Mo's Place, Classic Cuts, and a vape store, have all been told of the pending proposal. Jack Young, owner of the Tahoe Vapory and Classic Cuts said he will be looking for a new location for both stores should the transaction go through.

The Patels have also told their employees that jobs will end in August should the City be able to purchase the property. They have no weekly or monthly rentals on site.

Mo's Place is owned by Pradip's brother Mo who also owns the Beverly Lodge and Tahoe Hacienda Motel.