Opinion: Time to make a decision on North Tahoe Event Center
September 15, 2017
I would like to ask our citizens their opinion: Should the residents of the North Tahoe Public Utility District (NTPUD) keep the North Tahoe Event Center as a recreation asset managed by the district? Or should they allow it be leased for the next 70 years to a private company, Laulima Kings Beach LLC, who just bought a large portion of commercial properties in Kings Beach?
The goal of the community would be to have our event center open, operating well, and making a profit rather than incurring deficits averaging $90,000 per year.
The goal is to have sufficient funds to fix up all deferred maintenance, and more, to enhance the building. Laulima is proposing to lease the lakefront property, remodel the interior of the building and kitchen areas, and run the event center as part of their newly built hotel and commercial assets. Their goal is to bring the building to a 5-star venue.
While I do admire the spirit of their goal, I don't agree with the proposal to partner with a private company in this lease. After months of negotiations, it is still apparent this lease we are asked to accept is clearly written in favor of the tenant.
Laulima (Laulima Kings Beach LLC) is proposing to lease the lakefront property, remodel the interior of the building and kitchen areas, and run the event center as part of their newly built hotel and commercial assets. Their goal is to bring the building to a 5-star venue.
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A lease is like a sale when it is for 70 years. There is no down payment or deposit. There is no income during the time the building is being remodeled. Once it opens again, the lease starts at only $50,000 per year.
If any problems (like a downturn in the economy, loss of funding, delay in permitting, etc.) occurred, it would cost tens of thousands of dollars to correct default in a court. The people of the NTPUD could be responsible for correcting any problems incurred by the tenant if they default.
We will no longer be able to subsidize the local public uses to keep access affordable as we have done up until now. As a park asset, this subsidy is partially why we operating with a shortfall or loss averaging near $90,000 per year.
So, is the shortfall we pay really a loss? And would leasing the property in public private partnership be the right answer to those shortfalls?
Another way of looking at the shortfall in the event center is to consider it one of the costs of supporting our assets and programs. Consistent with our mission, we are spending money to support many NTPUD assets. The event center is only one of many.
TVRA and the boat ramp, we spend (or lose) more than $75,000 per year.
The Regional Park used to spend or lose over $300,000 per year now; with the Ropes Course it will be around $175,000 to $200,000 per year. The Boys and Girls Club spends or loses $116,000 per year.
Little League, school field maintenance and other community service cost us over $40,000 per year.
The event center is actually our most versatile asset and it can and does generate more income than other individual asset that we have. We under-utilize it. We know it. We could best manage it with a qualified management company (as a concessionaire like the Ropes Course in the Regional Park, he just paid us $65,000 in one month's revenue).
Utilized well, we could easily see the average annual loss of $90,000 paid for, and most likely the $45,000 that we need for depreciation and deferred maintenance too.
A concessionaire would pay the employees.
The NTPUD would get a payment based on a contract.
The NTPUD doesn't have property taxes.
For an additional $5-8 per month, the local NTPUD residents could also support a bond that would rebuild or remodel the whole building at the $5 million mark.
The event center could continue to be an asset belonging to the people of the district to decide how to operate and support it. We just need to ask the people directly: Do you want to keep the North Tahoe Event Center as a public asset?
There are many ideas that have not been explored enough by the current NTPUD board and staff. This board has attempted to reduce costs rather than to step into the special events and conferencing business by increasing advertising and hiring sales personnel, who will enhance the utilization of the event center.
The vote to determine whether to lease the building to a private company for 70 years or make our own choices on the future of the event center will be held Monday, Sept. 18 at 5:30 p.m. at the North Tahoe Event Center.
Letters to show the board your opinion should be sent to mpotts@NTPUD.org
Susan Daniels is a board member of the North Tahoe Public Utility District.
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