My Turn: Lessons learned from Ritz bankruptcy action
TAHOE/TRUCKEE andamp;#8212; The recent bankruptcy filing by East West Partners, the group that owned The Ritz-Carlton, Lake Tahoe, hotel property at Northstar-at-Tahoe, is not an indicator of the state of the tourist economy at Lake Tahoe, which has been relatively strong in 2011. However, it does demonstrate the folly of trying to build a destination resort in a place that is not really a destination. The hotel continues to operate in receivership after being taken back by the lender group that foreclosed recently.Now those who love to ski at Northstar may take issue with me. But letandamp;#8217;s face reality andamp;#8212; Northstar is not Jackson Hole or Vail. There is nothing to attract large numbers of people as repeat visitors on a year-round basis.First of all, the name Northstar-at-Tahoe is a misnomer andamp;#8212; the entire resort is outside the Lake Tahoe Basin, and your only view of Tahoe is from a couple of vantage points at the top of the mountain. The low elevation ensures some of the worst snow quality of any resort in the Truckee-Tahoe region, and the runs are challenging only to intermediate and novice skiers. So, the ski area itself is not going to attract repeat visitors for week-long vacations; most advanced level skiers will ski for a day and then head over to Squaw Valley or Alpine Meadows.In the summertime, mountain bikers can enjoy riding on the slopes and trails. But this demographic is notorious for being thrifty, and East West should not have been counting on the largesse from these folks to keep their financials in the black. Also, the vast majority of people riding mountain bikes in the Tahoe-Truckee area live here all year, so they are not going to be patronizing The Ritz-Carlton, Lake Tahoe, very frequently.Back in the 1980s, when Northstar had a quaint little village, the scale of the resort made sense. But a series of developers came to the Truckee/Martis Valley area with starry-eyed visions. They believed, to their own detriment, that a destination resort could be created in this location. A golf course was added, homes were built, and then the dot com and real estate booms encouraged an even more grandiose expansion for this locale. Several more golf course developments came on the drawing board for the region, which this columnist could not fathom since Truckee is, on average, one of the coldest places in the lower 48 states. Golf season is legitimately about 4 months a year andamp;#8212; anything more is considered a bonus.A combination of overly optimistic projections, a failure to understand the long-term weather patterns and unrealistic expectations of visitor numbers led to this debacle. Our local ski area in Incline Village at Diamond Peak turned in record numbers this year. While Diamond Peak does not make a big profit every season, the IVGID trustees are at least sensible enough to realize the limitations of the ski area and have not tried to turn it into something that it can never be.This now raises the question as to whether the recently approved Boulder Bay development in Crystal Bay will suffer the same fate. I have a great deal of admiration and respect for Roger Wittenberg, the developer behind this new project. It is my hope that Boulder Bay will not go the way of The Ritz-Carlton, Lake Tahoe, at Northstar. But it does raise the question andamp;#8212; does Crystal Bay truly have the features to make it a destination resort? Only time will tell.andamp;#8212; Don Kanare is an Incline Village resident and a Realtor at RE/MAX Premier Properties.
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