Heavenly calls foul on South Lake Tahoe City Council vote to terminate parking ordinance

SOUTH LAKE TAHOE, Calif. - South Lake Tahoe City Councilmember Cristi Creegan called a vote during Tuesday's council meeting a "no-win situation," a comment echoed by Tom Fortune, VP and CEO of Heavenly Mountain Resort and the Tahoe Region for Vail.

The Council said the City of South Lake Tahoe had been trying to meet with Heavenly to get their support as they try to annex the resort into the city limits. City streets and services are used by the ski resort and its guests, and, being in El Dorado County and not South Lake Tahoe, funds raised through sales taxes go to the county. First responders have to come from the county portion of the South Shore. The City says annexing Heavenly into the City is important and makes sense for roads and services.

What was being used to get Heavenly to come to the table and support them in the annexation process was last year's updated parking agreement. Council voted during its June 4 meeting to terminate the agreement and to not allow parking along Ski Run Blvd or some neighborhood streets in the Heavenly area starting this season. The City will now have flashing beacons at the Ski Run/Pioneer intersection during snow conditions, and block off Ski Run Blvd. to parking with big barricades on each side of the roadway.

The 2023 parking agreement was working.

"Real results came out of the parking agreement last year," said Mayor Cody Bass. As pointed out by Heavenly's parking manager during the meeting, accidents in the area went down from 12 to 1 after restrictions were in place.

"We care deeply about our South Lake Tahoe community," said Fortune in a statement. "We have been meeting and providing information as requested regularly in good faith with the City on the matter of annexation. The City has not yet articulated the benefits of annexation, leaving us with many questions. Parking and annexation are unrelated and we are disappointed that the City is using parking to create leverage in the discussions around annexation. Canceling the parking agreement only raises costs for taxpayers and could impact the guest experience if not maintained as well as the resort team.”

"Today is a no-win situation," said Creegan. "We did a lot of great work last year on neighborhood parking. Feels defeating to be making this decision today."

The City said they've asked Heavenly for records of how much they pay in sales tax on food sold at the Cal Lodge and other outlets to El Dorado County, but says they haven't received anything. They also said they've asked for a letter of support in their quest for annexation but said that too hasn't been provided.

El Dorado County's 2023 sales tax report shows Heavenly Sports Main Lodge and Heavenly Valley Cal Base Lodge as two of the top 25 sales tax generators for the first quarter (January-March). No sales tax is levied on lift ticket sales due to a previous agreement made during redevelopment - it cannot be charged until the City repays the bond on Heavenly Village (about 15 more years). The City repaid the bond on the parking garage last December.

The City action can be canceled if Heavenly comes to the table to discuss annexation and provide the documents requested, Council said.

"We provide significant revenue to the City by way of this agreement/contract, paying for parking on Ski Run Blvd., along with paying taxes to and contributing to other key services including snow removal and road paving, among other things," said Fortune. "Vail Resorts also contributes more than $3.4M to Tahoe non-profits focused on critical community challenges like childcare, education, and ensuring the mountains are for everyone through access programs. On the topic of annexation, ski resort operations are highly complex, with a long history of land-use regulations and requirements with partners such as the U.S. Forest Service, TRPA, and El Dorado County. We will continue conversations with the City about what comes next, especially given our many years of positive and productive collaboration, and are hopeful they will do the same."

“Termination of the Parking Agreement is a result of the City Council's frustration with Vail not making a concerted effort to discuss potential annexation of the California Base Lodge and surrounding area into the City limits," said Bass. "The purpose of the annexation is for the City to receive sales tax revenue aligned with the amount of business Heavenly is doing on the mountain and for those funds to help offset the costs that the City incurs to protect City residents and infrastructure from impacts created by Heavenly patrons. After years of paying only $20,000 for the use of City streets for Heavenly employee and customer parking, last year the City requested that Vail pay an annual fee of over $150,000, which was calculated as the value associated with their use of the spaces. Vail only agreed to pay $54,000 annually. The City also requested that Vail pay $217,000 as their fair share of repaving Ski Run Blvd and they only agreed to pay half of that. What Vail pays is minuscule when compared to the City’s cost of road repairs and Police and Fire response to traffic incidents and parking violations caused by Heavenly patrons. We have been discussing annexation with Vail representatives for over a year in an attempt to rectify the unbalanced revenues and impacts that have occurred since 1965 when the City incorporated but they have not been able to provide a response to Council requests for information about the sales tax they generate or to the Council request to support annexation.”