Despite continued objections from El Dorado County, South Tahoe Public Utility District and City Councilman Bill Crawford, the South Lake Tahoe City Council approved the creation of a 1,300-acre redevelopment area centered at the "Y" on Tuesday.
The council voted 3 to 1 to approve Redevelopment Area No. 2, which stretches from Lake Tahoe Airport to Herbert Avenue.
Councilman Hal Cole recused himself from the discussion because he owns property within 500 feet of the new redevelopment area, which creates a conflict of interest under California Fair Political Practices Commission regulations.
The council also approved the inclusion of more than 100 acres between the Upper Truckee River and Al Tahoe Boulevard that they previously eyed for removal from the redevelopment area in an attempt to ease county and utility district concerns.
Local businesses need redevelopment as a financing tool to improve and remain competitive, said Councilman Bruce Grego. Councilman Jerry Birdwell and Mayor Kathay Lovell agreed.
Tuesday's approval will attract business to South Lake Tahoe and lead to reinvestment in "our tired little town," Lovell said.
"This is really, I believe, for the greater good," Lovell added.
Crawford provides lone council opposition
In their decision Tuesday, the council followed an April Planning Commission recommendation to remove five county-owned parcels and one parcel under city jurisdiction from the project area, but kept the section between the Upper Truckee River and Al Tahoe Boulevard. Planning commissioners said the segment was too in need of improvement to exclude.
In his opposition to the new redevelopment area, Crawford criticized the area's plan for being too vague and not detailing what type of projects will be completed.
"I will not support it and the reason is a very simple reason: the redevelopment area is a pig in a poke," Crawford said. "We don't know what the plan is, we don't know what is going to take place."
Crawford also disputed the South Tahoe Redevelopment Agency's contention that the area fits blight definitions required for redevelopment areas under California law.
"I don't think it's going to say, 'If you don't like it, it's blighted,'" Crawford said Tuesday.
County and STPUD maintain opposition
The sentiment was echoed by El Dorado County and the South Tahoe Public Utility District in letters of opposition to the redevelopment area, sent to the city this week.
Both agencies are concerned they could lose millions if the new redevelopment area is not as successful in driving property tax revenue as the city projects.
Along with several other agencies, a portion of county and utility district property tax revenue from within the redevelopment area will be diverted to the redevelopment agency for the next 45 years for improvements like street repairs, water quality projects, public space and workforce housing.
The area could raise up to $178 million for the redevelopment agency if the city's projections are accurate.
The county is likely to lose between $4.6 million and $16.9 million over the life of the redevelopment area depending the area's success, according to county staff estimates.
Proponents of the area contend the agencies will not see their funding reduced if property tax revenues grow at an average of six percent each year.
Both of this week's letters from the county and utility district bring up legal concerns in their closing sentences.
In a letter from South Tahoe Public Utility District Board President Dale Rise dated May 3, Rise wrote that the district needs to "preserve its legal position" by formally presenting objections to the area, even though discussion between district staff and city staff on the redevelopment area is expected to continue.
In a May 4 letter, the county's chief administrative officer Gayle Erbe-Hamlin wrote the county looks forward to meeting with city staff to resolve concerns so the city can move forward with a "legally adequate" redevelopment area plan.
Erbe-Hamlin asked for a delay in the approval of the redevelopment area in the letter.
Plan to receive final approval next month
But more time isn't likely to change agency opposition to the new redevelopment area, Lovell said.
Tuesday was a significant day in South Lake Tahoe' history and even a layman can see that the town is in need of some help, Lovell said.
"When you drive down Highway 50 it doesn't take a consultant to tell you there is a large area that is blighted," Lovell said.
References to specific projects involving Lukins Brothers Water Company were also removed from the redevelopment area plan as part of Tuesday's approval.
During a pair of March public workshops several people raised concerns about redevelopment money being used to improve the antiquated, privately held water system.
Tuesday's approval was a first reading of the ordinance creating the new redevelopment area. Final action on the ordinance is expected during the council's regular meeting May 18.
