By Mary Thompson - The Tahoe Daily Tribune
March 31, 2000
Pending litigation against the South Tahoe Redevelopment Agency could put a plug on the long-awaited Park Avenue
Redevelopment Project.
Wallace Theater Corporation, after being denied lease space in Park Avenue's new development, has filed for an
injunction calling for a stop on all activity in the project area. This comes in addition to its cross complaint
to the legal action filed by the city of South Lake Tahoe on eminent domain.
The papers were filed Monday in El Dorado Superior Court by legal counsel representing Wallace Theaters.
C. Nicole Murphy, Wallace's attorney, said it isn't the goal of the theater company to impede the project.
"We just want the Agency to comply with its obligations under the law," she said.
Under California Community Redevelopment Law, reasonable preference must be given to tenants that will be displaced
from the project area.
Wallace Theaters, which has operated one screen on Park Avenue for the last nine years, is considered an existing
tenant. It also operates an eight-screen complex inside the Horizon Casino Resort.
"I do believe the word 'preference' means a priority ahead of others," Murphy said. "The final straw
was the election of another theater operator."
Trans-Sierra Investments, the project's commercial space developer, awarded the proposed six-screen theater operation
in February to Resort Theaters of America.
Attorney Lewis Feldman, representing the private proponents of the Park Avenue Project, said RTA's business proposal
was far superior to Wallace's proposal, which didn't include an amount the company was willing to pay for rent.
He said the developers were also interested in introducing competition to the community.
After the rejection letter came, Wallace Theaters arranged for a public hearing in front of the Redevelopment Agency
to contest the decision.
After hearing arguments last Tuesday from both sides, the Agency upheld the developer's decision to award the theater
operation to RTA.
Catherine DiCamillo, the city of South Lake Tahoe's attorney, said she believes the Agency acted legally and that
the Park Avenue Project will remain unaffected.
"We don't believe there is any merit to the complaints - it will be defended," she said. "There's
a high legal standard to obtain a restraining order and I don't believe they can meet that threshold."
The Park Avenue Project calls for the demolition of numerous buildings on 12 parcels along U.S. Highway 50 and
Park Avenue to clear space for new development: a gondola leading to Heavenly's slopes, a quarter-share hotel,
retail shops and restaurants, an ice rink and cinema. Demolition is planned for April and construction could last
as long as two years.
Also named in the cross-complaint are several companies and individuals involved in the project including the American
Skiing Company, Heavenly Ski Resort Properties LLC, Trans-Sierra Investments, Heavenly Valley LP, Gary Casteel,
John and Camilla Jovicich, Resort Theaters of America, the Tahoe Crescent Partners and Terry Hackett. The South
Tahoe Redevelopment Agency and City Councilmembers Hal Cole, Brooke Laine, Tom Davis, Judy Brown and Bill Crawford
have also been named in their official capacity as well as individuals.
Crawford, the only Agency member to abstain from the vote in the Wallace hearing, said he wanted to take more time
to evaluate the selection procedure.
"I put a motion on the floor to re-evaluate it but it didn't get a second," he said. "I was interested
in making sure that the Agency's responsibilities were met."
Lewis Feldman, attorney representing the developers, called the legal action "frivolous." He said Trans-Sierra
has given preference to three of the 10 businesses that have wanted to relocate, three were not interested and
two others are still pending.
"I can't imagine that (Wallace Theaters) will meet the required legal burden - it seems like a major loser
to me," Feldman said. "The public and private sectors are willing to spend more than $100 million in
environmental and economical improvements and it's unimaginable to me that the courts would tip in favor of a month-to-month
tenant in a blighted and woeful theater."
A settlement is also out of the question, according to Feldman.
"It wouldn't be the right thing to do," he said. "It would be sending the message that if you bully
people around you get what you want."
That leaves the courts to make the final decision but a hearing date has not yet been determined. Legal papers
have not yet been served to the parties that the charges have been filed against.
(c) Copyright Tahoe Daily Tribune. All rights reserved. To see more of the Tribune, or to subscribe to the newspaper,
go to http://www.tahoe.com/tribune/