Almost two years have passed since a lack of financing stopped construction on a project near Stateline that was expected to include retail space, hotel-condominiums and a convention center.
The future of The Chateau at Heavenly Village project was thrown deeper into doubt on Oct. 5 when its developer, Lake Tahoe Development Co., filed for Chapter 11 bankruptcy in federal court in Sacramento.
And it could be another month before the future of the stalled project - known to South Shore residents as "The Hole" - becomes any clearer.
By Dec. 2, the managing partner for the development company, Randy Lane, is required to submit a "preliminary status report" as part of Lake Tahoe Development Co.'s bankruptcy proceedings, according to court documents.
Reasons why Lane filed for bankruptcy and whether he anticipates any litigation from the filing - either from valuation of the company's assets or from potential violations of state and federal environmental laws - are among the long list of requirements for the status report.
The report also requires Lane to say whether he intends to reorganize the company or liquidate its assets, according to court documents.
Lake Tahoe Development Co. has $105 million in assets and more than $52 million in liabilities, according to the court documents.
The nine parcels included in the redevelopment area were scheduled to be sold to the highest bidder on the courthouse steps in Placerville on Friday, but the sale was canceled because of the bankruptcy proceedings, according to an employee at Stewart Default Services, the trustee of the property.
A call to Lane was not immediately returned on Tuesday.
The attorney representing the development company during the bankruptcy proceedings, Eugene Yamamoto, declined to comment regarding the bankruptcy process or the future of the site.
The bankruptcy process basically buys time for Lake Tahoe Development Co. to work with its creditors and make attempts to get the project near Stateline started again, said Eugene Palazzo, South Lake Tahoe's Redevelopment Director.
But getting the development back on track isn't a certainty, Palazzo added.
"(Randy Lane) can find an investor that's going to come in and help him build. He could sell the property to an investor. There's all kinds of scenarios," Palazzo said.
If the property is sold, the new owners could continue with the project as planned or move forward with a new project, Palazzo said.
Substantial changes to the project would put a host of city and Tahoe Regional Planning Agency approvals at risk and would basically require the buyers of the property to start on a new project, Palazzo said. Any development of the parcels would need to be in accordance with the area's community plan, Palazzo added.
"If they come in and say I don't want a convention center and say I don't want any money from the agency or the city, there's nothing we can do about that," Palazzo said. "The key is they need to comply with existing land use regulations."
The next step in Lake Tahoe Development Co. bankruptcy proceedings is a "341 meeting" in Sacramento on Nov. 6.
At the meeting, employees of the U.S. Trustee Program - a component of the U.S. Department of Justice - and Lake Tahoe Development Company's creditors can question Lane under oath concerning "the debtor's acts, conduct, property, and the administration of the case," according to the U.S. Courts Web site.
A preliminary status conference in the case is also for Dec. 9 in Sacramento.
At that meeting the court is expected to take several actions, including possibly setting a deadline for a plan for Lake Tahoe Development Co., according to court documents.
