Biltmore overhaul gets financing
March 23, 2015
The project to transform North Tahoe's California/Nevada state line by redeveloping the Tahoe Biltmore will move forward after the company overseeing it secured financing in a deal cemented with an undisclosed private equity firm on March 12.
Boulder Bay LLC had been struggling to garner the necessary dollars to fund construction of the development since it received approval nearly four years ago after a 12-hour Tahoe Regional Planning Agency Governing Board meeting that witnessed more than 80 members of the community offer opinions on the project.
In an exclusive interview with the Sierra Sun, Heather Bacon and Roger Wittenberg, Boulder Bay's respective president and CEO, shared the news and discussed their eagerness to begin work on the delayed project.
"We still have a lot of work to do," said Bacon. "But this is a positive step forward for this project and for this community."
The positive step took place as the real estate development company was up against an April deadline to either move forward or let the project permit expire.
Boulder Bay owed about a half-million dollars in taxes to Washoe County, and the property was scheduled to be auctioned in April unless the payments were met.
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Bacon said after her group secured financing, the payments were made to the county.
A representative from the Washoe County Treasurer's office confirmed the payments had been made and that Boulder Bay is up to date on its property tax obligations.
In April 2014, the development group also faced another deadline, but met its obligations then as well, implementing a water infiltration system aimed at improving water quality on the property.
In his interview with the Sun, Wittenberg said the largest reason for the delay is that banks are reluctant to lend large amounts of capital in the wake of the Great Recession.
"The banks are basically not in business right now," he said. "You have to make a relationship with a private equity group. It is fortunate for the country that (private groups) exist and they are moving the ball forward."
Wittenberg and Bacon said they were uncomfortable releasing the private equity firm's name, saying they would leave it to the investors' discretion as to whether they want publicity.
Financial terms of the deal were not disclosed.
Wittenberg and Bacon said they hope to have a shovel in the ground by May, but the TRPA essentially split the project's construction schedule into two major phases.
The first is almost strictly focused on the comprehensive water quality improvement project Boulder Bay began working on last year.
TRPA Public Information Officer Tom Lotshaw said the agency is in the final stages of inspecting the project, and whether or not Boulder Bay can move forward with construction six weeks from now is contingent on the development passing muster.
The TRPA has much at stake with Boulder Bay, as it is the first and most significant project to be approved after the agency staked out a new approach at Lake Tahoe — leveraging private investment to redevelop an aging built environment in the basin and introducing new technologies designed to soften the impact developed areas have on the lake itself and the surrounding ecology.
On the night Boulder Bay was approved — April 27, 2011 — the TRPA issued a press release with the following statement from Executive Director Joanne Marchetta: "With science showing us that we can reverse the decline of Lake Tahoe's clarity by encouraging environmental redevelopment of our town centers, the cost of doing nothing is just too high for the Lake. Redevelopment projects like Boulder Bay are an important part of the public-private effort to restore Lake Tahoe."
Lotshaw said the TRPA is pleased to hear of the project's progress, but noted that the bistate agency must finish inspecting the water quality improvements before signing off on Phase 2 — which includes all remaining aspects of construction.
"In terms of the infiltration basin, there were some changes that resulted along the way with utility conflicts, and we are in the process of inspecting to ensure the system is working as originally intended," Lotshaw said.
Nevertheless, Wittenberg and Bacon remain bullish on beginning construction in the coming season. Further, the Biltmore will not be closed during the initial phase of construction, Bacon said.
A proposed schedule shows the first phase will include site grading, demolition of some structures and the construction of the Sierra Park residential structure. The rest of the seven buildings will be built in ensuing phases.
Lotshaw said the construction schedule is tentative and a final permit has yet to be approved.
In order for the permit to be maintained, Boulder Bay must show "continuous diligent pursuit" of the project, he said.
Matthew Renda is a former reporter for the Sierra Sun and North Lake Tahoe Bonanza and currently is a Santa Cruz-based writer. He may be reached for comment at email@example.com.