Lake Tahoe’s Boulder Bay development gets cash needed to move forward | RecordCourier.com

Lake Tahoe’s Boulder Bay development gets cash needed to move forward

by Matthew Renda
Special to the Sierra Sun

CRYSTAL BAY, Nev. — The project to transform North Lake Tahoe's 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 last week.

Boulder Bay LLC had been struggling to fund construction of the development ever 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 on March 12 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 $500,000 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 that witnessed such turbulence in the banking industry.

"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 did not feel comfortable 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 matthew.renda@gmail.com.

THE PROJECT, AND LAKE TAHOE’S FUTURE

The Boulder Bay project approved by the Tahoe Regional Planning Agency in April 2011 calls for building an eight-structure complex that will offer a mix of uses including gaming, residential units, and hotel and commercial components.

According to the permit approved by TRPA, the hotel will consist of 300 rooms. About 59 whole ownership condominiums as well as 14 affordable housing units are also slated for construction.

The commercial components will be divided between retail (about 12,000 square feet) and restaurants (about 8,800 square feet).

As Boulder Bay redevelops the Tahoe Biltmore, gaming will be downplayed, and health and wellness will be emphasized.

“Roger, as a visionary, was the person who came up with the original idea to have Boulder Bay focus on health, wellness, relaxation and rejuvenation,” Boulder Bay President Heather Bacon said of her father, company founder and CEO Roger Wittenberg. “He was one of the first people in Lake Tahoe and Northern Nevada to align what needs to happen with the goals of current consumers.”

Boulder Bay is slated to cut its casino floor space by a third, from 30,000 square feet to about 10,000 square feet.

This reduction is offset by the introduction of a nearly 20,000-square-foot health and wellness center, a 10,000-square-foot fitness center and other health and fitness-related amenities.

“If you look at the experiences people have when they come up to Lake Tahoe, back in the 1960s there was only gaming, which was a terrific time for a certain group of people,” Wittenberg said. “That is changing now because gaming is everywhere. So you have to create a different experience, one that is based on the outdoors and on the natural beauty of Lake Tahoe.”

A different demographic of visitors are frequenting Lake Tahoe, and they are seeking a different experience more in line with hiking, biking and the plenitude of other recreation opportunities in the surrounding area, Wittenberg said.

In 2000, the total win from the North Shore of Lake Tahoe was approximately $43 million, according to the Nevada Gaming Commission. By 2014, total win for the area had fallen to $25.6 million.

Experts trot out a bevy of reasons for the dramatic decrease in gaming in Lake Tahoe, from the aforementioned proliferation of casinos throughout the United States, to the still-sluggish economy as it rebounds from the Great Recession that began in 2008, to the rapid increase of Indian casinos in California, which once represented Lake Tahoe’s largest customer base.

“We can still attract people, nonetheless,” Wittenberg said. “We have to create an experience that is refreshing and unique enough that people don’t confuse it with anything else.”

In addition to the built environment, the Tahoe Biltmore will move 530 of its 540 parking spaces into underground facilities.

The property also will retain about 5.7 acres of open space, with nearly 2 acres of that to be dedicated to two public parks that will be maintained by Boulder Bay.

An additional acre will be used for the purposes of a hiking trail that leads to a scenic overlook above the property.