Whole Foods announcement in South Lake Tahoe receives mixed reviews
November 10, 2016
Whole Foods Market announced last week that it signed a lease for a new location in South Lake Tahoe.
The store is slated to be built on the city-owned vacant property on the corner of Ski Run Boulevard and Highway 50, and the adjacent parcel of land that currently houses the Knights Inn.
The redevelopment of this area is four years in the making. City officials have been working with Halferty Development Company to get all the necessary pieces of the puzzle in place — but there is still one major roadblock to the project.
Though Knights Inn owner Pradip Patel entered into a $6-million purchase agreement with the city in February, the sale has still not gone through.
"The seller is still considering the deal and making sure he has all his questions answered. Hopefully, we can work out all the final details to everyone's satisfaction," said city manager Nancy Kerry.
"We continue to hope that Mr. Patel will agree to sell his property."
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Patel could not be reached for comment.
The project hit a snag back in August when the California Tahoe Conservancy expressed concerns over the expected environmental benefits of the redevelopment project.
The city was hoping to secure a $4.5-million grant for the restoration of a Stream Environment Zone, Lake Tahoe's natural water filter, on the property.
However, Patrick Wright, executive director of the Conservancy, said that the initial drawings of the development did not demonstrate the environmental benefits they were expecting.
"At first, the Bijou Park Creek project seemed very promising. It had the potential to restore the historic stream environment zone (SEZ) on the parcel, daylight Bijou Creek, and replace a large aging motel with a more compact and sustainable mixed use development that would take advantage of its natural surroundings," wrote Wright in a recent opinion piece published in the Tribune.
"But as details of the project began to emerge, a broad spectrum of agencies and organizations became alarmed that it was an uninspiring suburban-style development.
"Although the project would collect stormwater from the surrounding property, it was not the transformative project that we had all envisioned. The SEZ restoration promised in the city's grant application, for example, was scaled back significantly to make room for a sea of parking."
"We think the project is an exceptional example of blending environmental and economic benefits and meets the Prop 1 funding requirements," said Kerry.
"The City's proposal still needs to go in front of the [Conservancy] board. The executive director has indicated he doesn't want to recommend the project to the board for funding."
Without the Conservancy funding, Patel could potentially get out of the purchase agreement.
"He has a bit of an out clause. The out clause says that if the city doesn't get the [Conservancy] funding by June, then the buyer doesn't have to buy. It was written in such a way that it gives him an option to not exercise as well," explained Kerry.
If Patel gives the green light on the sale, the project could still move forward without funding from the Conservancy — there just would not be as many environmental improvements, according to Kerry.
Of the $6 million offered for the Knights Inn parcel, the developer, Halferty, would cover $4 million. The city planned to sell 64 Tourist Accommodation Units to Placer County at $800 a piece, and utilize funding from the sale of the adjacent property to Halferty to close the funding gap.
With the recent announcement that 365 by Whole Foods — a cheaper version of the original store — signed a lease on the South Shore, the project appears to be moving forward despite the seller's indecision.
"Whole Foods is clearly committed as they have now officially announced their signed lease. The developer is committed as he has been working with us for four years," said Kerry.
"I do know that Whole Foods is not going to wait indefinitely for a decision from the seller. We have a purchase agreement. At some point we've got to get a decision."
The news that Whole Foods is landing on the South Shore was met with mixed reviews from residents.
While many Facebook commenters expressed excitement over another local shopping option, others pointed out that the addition of a big-box store could pose a threat to smaller establishments in South Lake Tahoe like Grass Roots Natural Foods Market and Sprouts Café.
"Just another grocery store tailored to the fancy Bay Area visitors," read one comment.
"Awesome, a grocery store that's too expensive for 80% of Tahoe locals," read another.
Concerns over sustaining the new business were also voiced, with residents pointing to previous chains, like Staples and Pier One, that tried and failed in South Lake Tahoe.
The concept behind 365 by Whole Foods was announced last May, and the first three stores — in Silver Lake, California; Bellevue, Washington; and Lake Oswego, Oregon — opened in 2016.
"'365' in the name celebrates our belief that fresh, healthy foods can be readily available to more people in an affordable way every day," said Jeff Turnas, president of 365 by Whole Foods.
"It also tips our hat to our popular 365 Everyday Value brand, which our shoppers seek out for quality, transparency and great value — the same attributes to come with our smaller-store format."
In addition to announcing its lease in South Lake Tahoe, Whole Foods also signed leases in Redlands, California and Fairfax, Virginia.
There is no timeline for the store's construction since the project depends on the sale of the Knights Inn property.
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