City of South Lake Tahoe sells property to Halferty Development for $3.1 million

Portions of the land where Knight's Inn currently sits and the corner lot at Ski Run Boulevard and Highway 50 were sold today to the Halferty Development Corporation for $3,100,000.

During a special meeting of the City Council two agreements were approved. The first was a Commercial and Disposition and Development Agreement (CDDA) and the second was a Purchase and Sale Agreement by and between the City of South Lake Tahoe and Halferty.

The Pasadena based company is purchasing the developable portions around the motel, conference center and residence parcels on Lloyd Avenues and Highway 50 for $2,000,000. That area will be combined and developed jointly with the corner parcel at Ski Run Boulevard and Highway 50 that is currently in escrow for $1,100,000.

The project has been named the Bijou Park Creek Watershed Project and demolition is due to begin in July of 2017.

"It is pretty remarkable," SLT City Manager Nancy Kerry said. She also told the Council that with the addition of the planned Whole Foods 360 and new retail in the area will revitalize the Ski Run area. Without the 110 hotel room the Knight's Inn supplied, other lodging properties will benefit from those guests, Kerry said.

A portion of land around the current Knight's Inn will be reserved for public benefits, including environmental improvements.

On May 11, 2017, the SLT Planning Commission will consider the proposed project development, design review, Special Use Permit, the Initial Study/Mitigated Negative Declaration and permits.

The Bijou Park Creek project is divided into three (3) phases. The first phase is acquisition of the project site and redevelopment. The second phase consists of a Watershed study and the third phase being implementation of what is revealed though the Watershed study.

"We will make sure they are developed in such a way that brings both environmental and economic benefits to the City," added Kerry.

Planned improvements will increase ecosystem/watershed filtration processes, restore parcels located in an Stream Environment Zone (SEZ), reduce nutrients and sediment into Lake Tahoe, reduce localized flooding and initiate larger watershed restoration efforts. Improving the built environment, the visual corridor and the functionality of the Bijou Park Creek Watershed, will help the city and community better reflect the National Treasure in which we live, which is the City's new motto.

The City has applied for a grant from the California Tahoe Conservancy that will use over an acre in the area for SEZ improvements.

It is costing the City $1,060,000 to retain ownership of the non-developable portions in the area. Halferty Development Corporation will purchase the property in as-is condition. The City will not bear the cost of demolishing the Knights Inn
properties, hazardous material abatement or recycling requirements as had been
previously proposed.

City's purchase of the Knight's Inn +$5,935,000
Halferty's purchase of the Southwest Corner -$1,100,000
Halferty's purchase of the Knight's Inn -$2,000,000
Placer County's purchase of TAU's -$800,000
Sale of remaining on-site TAU's, and estimate -$550,000
Sale of Residential Unit of Use and bonus RUUs -$75,000
Value of banked on-site CFA -$350,000

Total - $1,060,000