Special SLT City Council meeting Tuesday on purchase of Knight's Inn

What is officially known as the Bijou Park Creek Watershed Restoration Project, or unofficially the Knight's Inn Project, will be brought before the South Lake Tahoe City Council to be approved during a special meeting on Tuesday, March 14 at 4:00 p.m.

The three phase, 850-acre project will be both an environmental and economic development project, something the City has been working on for several years.

Environmentally, the project will remove 8,000 pounds of sediment from Lake Tahoe annually during Phase 1 of the project, more once the other phases are completed. There is 40,000 pounds of sediment that flows through Bijou Park Creek on its way to the lake each year.

Through the project area there will be a wetland constructed that will hold the sediment but also provide a backdrop to walking and biking trails and bridges over the creek. The City plans on having this as an educational area as well with signage along the paths that will explain the watershed project. Bike trails from the adjacent neighborhood will connect to the project area.

Future phases will begin uphill that will prevent the annual flooding in the neighborhoods currently behind the Knight's Inn off of Herbert Avenue.

Economically, the project will bring in new retail, restaurants and a Whole Foods 365, encourage pedestrian travel to the shops and further improve the visual and physical impact of the area on the tourist.

The planned project also fits in with the City's new vision statement, "We will reflect the national treasure in which we live."

There is also 11,000 sq feet of Commercial Floor Area that will be banked with the City for future consideration.

A signed acceptance offer by Knight's Inn owner Pradeep Patel and TMPM, LLC is in the City's hands and the Council will vote on that Tuesday. The property is being purchased by the City for $5,935,000.

To fund the purchase, the City will close escrow on the lot at the southwest corner of Ski Run Blvd. and Highway 50. Halferty Development Company, LLC was set to purchase the corner lot for $1,100,000 over a year ago when the City learned Patel might be interested in selling the adjacent motel property. Escrow was put on hold since Halferty was also interested in obtaining the other 850 acres. Now that the Bijou Creek project is more of a reality, Halferty will buy the corner lot and make an offer on the rest. The remaining property not used for water quality improvement projects is valued at $4,000,000.

The remaining $835,000 will come from the sale of Tourist Accommodation Units (TAUs) that come with the purchase of the motel. Placer County wants to buy 64 of the 110 for $800,000. That will leave $35,000 due the seller.

Jennifer Merchant, Placer County Deputy CEO-Tahoe, told South Tahoe Now that their buying the TAUs will help both the City in their goals of completion of the Bijou Creek project, and help Place County with their goals of economic stimulation at the lake. "Its a win-win for both of us," said Merchant.

Placer County is waiting for Tuesday's City Council vote and will then present their potential purchase of the TAUs to the Supervisors at their April 4 meeting.

Merchant said they don't know the exact project these units will be used on though there are many possibilities. She said per TRPA rules the TAUs will remain on the site until they are ready to be allocated. Placer County may need some of the commodities for the Tahoe City Lodge project as well as many others.

"We are actively seeking and banking TAUs for a number of projects," said Merchant. The County wanted to have 200-300 "in the bank" and they are well on the way. If the City's sale goes through, Placer will have 146 TAUs waiting for projects.

The California Tahoe Conservancy (CTC) is holding a meeting in Tahoe City on Thursday, and the Bijou Park Creek Watershed Restoration Project is on the agenda.

Up for discussion and vote is the consideration of the City's request for Conservancy review of Bijou Park Creek Ecosystem and Watershed Restoration Project. They had originally turned down the City's request for Proposition 1 funds to help with the project. The CTC Board can vote to give the City the money for phases 2 and 3 of the project, or vote to reopen Round 2 of the CTC Prop. 1 Grants program and the City could then reapply.

There is still $3.6 million in available funding to be granted in the Lake Tahoe Basin.

A timeline for the Knight's Inn and Bijou Park Creek:

March, 2017: Council consideration on purchasing the 850-acre site. Open Escrow with TMPM, LLC.
April, 2017: Council consideration of purchase agreement with Halferty, sell TAUs to Placer County, open bids for demolition of Knights Inn.
May, 2017: CEQA approved and adopted, close escrow on southwest corner, continued coordination with Placer County, CTC, TRPA.
June, 2017: CTC board considers grant funding request, close of escrow with TMPM, LLC, demolition may begin.
July, 2017: Demolition if not done in June, new permitting completion and complete sale of TAUs with Placer County.
August/September, 2017: Close of escrow for developmental portions of Knight's Inn parcels, construction of environmental improvements and developable portions coordinated, dependent on grant funding.

SLT City Manager Nancy Kerry said Halferty plans on putting a Whole Foods 365 where the motel lobby currently rests, and will have other retail and restaurants placed on the property around the creek, bridges and walkways.

"This is a perfect example of public/private partnership," said SLT City Councilmember Brooke Laine, who with Councilmember Tom Davis is part of the Council's real property negotiation team. "We need investment from our private partners," added Laine.

Phases 2 and 3 will be completed if the City is awarded the grant money from the CTC. The partnership between the two is needed to realize the full benefits of the whole Bijou Park Creek project and keeping Tahoe blue. TRPA and the League to Save Lake Tahoe are already on board with the plans.

Phase 2 will begin in 2017 and go through 2018, and then Phase 3 will, depending on grant applications, will being in 2018. Whole Foods 360 could be open as early as spring of 2019.

This project will be a big change for the Patel family who has lived in South Lake Tahoe since 1978. Pradip, who is a 1990 graduate from South Tahoe High purchase the property with his dad in May, 1994. "I'm a little nervous, a little excited," he told South Tahoe Now. "Nice to have change though."

25 of the motel's rooms flooded twice this winter, something Patel has never seen in the almost 23 years he's owned the motel.

He's also had to tell staff that the motel will be closed. One of his maintenance staff has been with them 20 years. The business tenants has also been told Patel said. The vape store already relocated, the restaurant will be closing and the beauty shop relocating he said.

"This is a once-in-a-lifetime opportunity," said Kerry.