Agenda packet — South Lake Tahoe City Council, March 14, 2023 (part 5 of 5)

819
Proposal
Date
2/23/2023
No.
3284
Name / Address
City of South Lake Tahoe
Phil Harwood
Ship To
Po Box 39
Henderson, Co. 80640
P.O. No. Rep
RL
VIN # Body Model #
3004
Body S/N #
Total
Phone: 303-288-8989
Fax: 303-288-8787
www.hardlineequipment.com
Proposal Valid For 30 Days From Proposal Date
Item Qty U/M Description Rate Amount
Spare wheel large winter tires -
385/65 R 22.5
Snow chains Alligator Plus
for tires 365/80 R20
Driver's seat with 3-point harness,
with air suspension by compressor.
-Backrest tilt adjustment
-Lumbar support mechanically
-Longitudinal horizontal suspension lockable
-Longitudinal adjustment 160 mm
-Height adjustment 60 mm stepless (air assisted
-Automatic weight adjustment (50-130kg)
-Air suspension travel 100 mm
-Low frequency suspension
-Adjustable damper
-Covering material fabric
-adjustable in height and inclination
-Armrests A 80 mm x 380 mm.

Passenger seat without suspension
- 2nd rotating beacon LED on cabin roof
- Additional 2 working lights LED on cabin roof
- Rear working light LED
- Exterior mirrors, heated and electric adjustable
24V
- Curbstone mirror left
- NATO socket incl. retainer
- Start assistance cable NATO, 5 m
- Battery charger

Page 2 ends

820
Proposal
Date
2/23/2023
No.
3284
Name / Address
City of South Lake Tahoe
Phil Harwood
Ship To
Po Box 39
Henderson, Co. 80640
P.O. No. Rep
RL
VIN # Body Model #
3004
Body S/N #
Total
Phone: 303-288-8989
Fax: 303-288-8787
www.hardlineequipment.com
Proposal Valid For 30 Days From Proposal Date
Item Qty U/M Description Rate Amount
- Murphy Cummins control unit
- Rearview camera complete
with heated camera lens, cable and monitor
- Chute AK600-2 mounted on high support,
with direct ejection
by turnable impeller housing left and right.
- Snow Blower with standard cutters without side
wings.
- Overload safety device for impeller
instead of standard execution with shear bolts
- Overload safety device for cutter drums
instead of standard execution with shear bolts
- Steel cutting edge 2440
- Curbstone deflector kit
- Hydraulic upper link for front tilting of blower
head
- Lateral inclination hydraulic Rolba
- Snow cutter blade right
necessary for full-width cutting at pass opening
- Snow cutter blade left
necessary for full-width cutting at pass opening
- Auger monitoring with signal lamp

Page 3 ends

821
Proposal
Date
2/23/2023
No.
3284
Name / Address
City of South Lake Tahoe
Phil Harwood
Ship To
Po Box 39
Henderson, Co. 80640
P.O. No. Rep
RL
VIN # Body Model #
3004
Body S/N #
Total
Phone: 303-288-8989
Fax: 303-288-8787
www.hardlineequipment.com
Proposal Valid For 30 Days From Proposal Date
Item Qty U/M Description Rate Amount
Snow & Ice External preheating 0 ea 2,750.00 0.00
Snow & Ice 1 ea Automatic central lubrication R3000 13,500.00 13,500.00 Snow & Ice Headlight, Turn Signal, Positions light on blower head - ADD $4,500.00
1 ea 0.00 0.00
Pricing subject to change with any fluctuation in
exchange rates - Pricing figured at 1.00 CHF / 1.07
USD on 2/23/23
Freight and Han... Freight and Handling Switzerland direct to South Lake Tahoe (ESTIMATED)
30,000.00 30,000.00
Sales Tax 0.00% 0.00

Page 4 ends

Thank you for your business. Sales Tax Notice: Hardline Equipment LLC will be collecting all Sales Taxes due unless Buyer provides exemption documentation acceptable to your jurisdiction. This includes, but not limited to, all affiliated Nexus interstate Sales Taxes for your specific state and jurisdiction. This is subject to change. If Sales Tax is not presented on this document Hardline Equipment reserves the right to collect and remit sales taxes to comply with your state and jurisdiction regulations. By receiving this document, you agree to the collection of Sales Taxes.
$551,821.00
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Dimensions
Overall length 7 392 mm
Width 2 500 mm
Height (incl. rotating beacon) 3 200 mm
Wheelbase 2 900 mm
Track 1 780 mm
Outside turning radius, over wheels 5.96 m
Weight
GVW approx. 11 500 kg
Engine
Engine Cummins QSX15
Euromot Stage IV, Tier 4(f) incl. particle filter
581 HP (433 kW)
2644 Nm @ 1400 min-1
Fuel tank, net volume 620 l
Electrical system 24 V
Battery 180 Ah
Drive system
Infinitely variable hydrostatic drive for the
vehicle, automatically controlled by an electronic load-sensing system. 2-speed vehicle drive. Mechanical blower drive, 2-speed
gearbox.

Hydraulic system
Hydrostatic drive: see above. Hydraulic system for controlling movement of the blower head. Also see steering and brakes below.

Driving speed
Working speed 0.3 to 40 km/h
Travel speed 50 km/h
Axles and steering
4-wheel drive: permanent front axle drive,
rear axle as required. Differential lock on
both axles. Selective hydrostatic steering:
4-wheel, front-wheel, rear-wheel or crabsteering.

Brakes
Hydraulic dual circuit braking system with
wet disc brakes front and rear.

Continuous braking through hydrostatic
drive. Parking brake on front axle.

Chassis
Welded rectangular steel tubing frame. Leaf
spring suspension front and rear.
4 wheels with wide winter tyres 385/65
R 22.5.

Specifications
ROLBA 3000
Self-propelled Snow Blower
Powerful blower head
The optimal proportions between the cutter and impeller housing give all ROLBA snow blowers an enormous snow clearing capacity.
2500 1688 2905
3202
2981
331
841
Castor wheels
For high-speed snow removal operations, especially at airports, castors and plastic scraper blades are often used to protect surfaces.

2.2017 (3004)
Cab and engine
compartment
Comfortable, hydraulically suspended, soundproofed cab. Corrosion protection.

Two lockable doors with sliding windows.

Safety glass throughout. Electrically heated
windscreen, side and rear windows and skylight.

Large heated rear view mirrors. Heater with
multi-speed fan. Sun visors. Two-arm parallel windscreen wipers with wash system.

Fully adjustable suspension seat for operator
comfort. Adjustable steering wheel.

Clearly and ergonomically arranged controls
and instrumentation.

Temperature and fluid level gauges with audible alarms. Detachable, rotating beacon on cab roof. Tool kit.

Engine cover can be hydraulically raised or
lowered.

Colour: orange (RAL 2011) or yellow (RAL
1004). Base colour: silver/grey.

ZAUGG-Rolba snow
blower system
2-stage Rolba auger/impeller system controlled and operated by joystick.

Blower head:

Clearing capacity up to 5300 t/h
Clearing width from 2500 to 3200 mm
Clearing height in one pass 1500 mm
Casting distance, infinitely variable (dep. on
chute) up to 50 m
Height adjustment:

Vertical movement –50 to +450 mm
Down pressure and front tilt –160 mm
Side tilt 9° each side
Front tilt 5°
Chute rotation left 45°/right 80°
Impeller with replaceable blades. Overloadprotection: shear bolt protected auger and impeller.

Replaceable cutting blades in 2 sections.

Replaceable scraper blade in 3 sections.

Mechanically adjustable skid shoes.

Auger cover.

Combination
The chute support offers a choice of direct tangential casting over long distances on either side or spot casting through the loading chute.

Options
• Various ejection chutes: chute combination for direct discharge, chute extension • For blower head: automatic overload
safety device instead of shear bolts
• Castor wheels for blower head (single or
twin system)
• Side tilt lock
• Front tilt lock
• Side plates for a 3.2 m clearing width (only
for blower head 2.5 m)
• Plastic scraper blades
• External electrical 110/220 V fluids
preheating
• Stationary fluids preheating system by
diesel fuel
• Snow chains; spare wheel
• Automatic central lubrication system
• Variable cab elevation +700 mm
• Fixed cab elevation +300 mm
• Hydraulic weight compensation for blower
head
• Blower head width 2.6 m
• Blower head width 2.8 m
• Special anti-corrosive protection
• Battery charger 110/220 V
• Stationary cabin heater system by diesel fuel
• Miscellaneous working lights on the
machine and on the blower head
• Rear view camera with 7”-monitor
• Cabin air conditioning
• Miscellaneous options on request
842
Jill M. Forsyth
Senior Vice President
Global Leasing
14636 N. Scottsdale Road, Suite #250
Scottsdale, AZ 85254
T 480.624.0369 F 415.796.1301
[email protected]
“Bank of America” is the marketing name used by certain Global Banking and Global Markets businesses of Bank of America Corporation. Lending, leasing, equipment finance and other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Banc of America Public Capital Corp, a wholly-owned subsidiary of Bank of America, National Association, is not a municipal advisor and is not subject to the fiduciary duty established in Section 15B(c)(1) of the Securities Exchange Act of 1934, as amended, with respect to any municipal financial product or issuance of municipal securities. The information provided in this document is not intended to be and should not be construed as “advice” with the meaning Section 15B of the Securities Exchange Act of 1934 and the municipal advisor rules of the SEC.© 2019 Bank of America Corporation. All rights reserved.

SUMMARY OF TERMS AND CONDITIONS
Date: February 23, 2023
Lessee: City of South Lake Tahoe (“Lessee”)
Lessor: Banc of America Public Capital Corp (“BAPCC”)
Structure: Lease Purchase with appropriation: Non-Bank Qualified Amount: Not to exceed: $3MM
Security: A security interest in the equipment being financed Interest Rate: 5 -years: 4.099%
This rate includes a 45- day rate lock
If the transaction does not fund within 45 days, the rate is subject to change based on market conditions.

Payments: Pricing was based on payments semi-annual in arrears Prepayment: Pre-payable in full after half of the term on any regularly scheduled payment date without penalty.

Governmental
Entity Lease: The Base Rent installments are calculated on the assumptions, and Lessee will represent, that Lessee is a City or political subdivision of a City within the meaning of Section 103(c) of the Internal Revenue Code (the “Code”), and that this transaction will constitute an obligation of Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the Code. Lessee shall provide Lessor with such evidence as Lessor may request to substantiate and maintain such tax status. Lessee shall comply with the filing requirements of Section 149(e) of the Code.
843
End of Term: At the expiration of the Lease Term, Lessee will own the equipment.

Opinion of Counsel: Lessee’s counsel shall deliver a validity opinion to Lessor at closing in form and substance satisfactory to Lessor. The opinion of counsel will cover that counsel has reviewed the documents and examined, approved and attached the text of the enabling resolution of Lessee’s governing body authorizing Lessee to enter into the Lease.

Documentation: BAPCC has Non-Bank Qualified Standard documents that can be forwarded for review. An escrow account option is also available if desired.

Credit: Subject to acceptable documentation and credit review. This process can be done timely upon an award.

Market
Disruption: Notwithstanding anything contained herein to the contrary, in the event any material change shall occur in the financial markets after the date of this Proposal Letter, including but not limited to any governmental action or other event which materially adversely affects the extension of credit by banks, leasing companies or other lending institutions, the Lessor may modify the indicative pricing.

USA Patriot Act
Compliance: Lessee acknowledges that pursuant to the requirements of the USA Patriot Act, as amended from time to time (including as amended by the USA Freedom Act of 2015) (the "Patriot Act"), Lessor is required to obtain, verify and record information that identifies Lessee, which information includes the name and address of Lessee and other information that will allow Lessor to identify Lessee in accordance with the Patriot Act.

Performance Bond: A performance bond will be required if the proceeds are paid to a vendor or manufacturer prior to the delivery and acceptance of the asset. BAPCC will be listed as co-obligee on the performance bond.

Proposal
Expiration: This proposal will expire on March 30, 2023 844
Resolution 2023-XXX March 14, 2023 Page 1 of 2
Resolution 2023-XXX
Adopted by the City of South Lake Tahoe
City Council
March 14, 2023
Authorizing 1) purchase of one (1) Trackless Snow Blower for Parks Maintenance for $167,680.54, from Shafer Equipment Company, Inc. of Sparks, NV through Houston Galveston Area Council (HGAC) Cooperative Agreement, 2) ordering of four (4) John Deer Graders for $2,168,360.76, from Pape Machinery, of Sparks, NV, through Sourcewell Cooperative Agreement; 3) ordering of two (2) Zaugg Rolba 3000 Snow Blowers for a total of $1,200,212 from Hardline Equipment of Henderson, CO, based on Emergency Purchase Sole-source Justification for Specialized Equipment, per City SLTCC § 3.45.070, and approving Fiscal Year 2022-2023 budget amendments

BACKGROUND
A. Snow Operations is one of the Core Services of the City of South Lake Tahoe.

B. The City currently have an aging equipment that is subject to continuous breakdown and repair. The equipment breakdown and repairs impede City’s goal to meet the expected 12-hour snow clearance goals.

C. To improve the level of services for snow operations to residents and visitors of South Lake, Tahoe, additional equipment is needed. The equipment will be used by the Streets and Parks Maintenance staff to improve snow operations.

D. Funding for the purchase of the equipment will be secured through existing unallocated Snow Removal equipment 208 Fund Balance, in the amount of $300,000; Unencumbered Fund 208 budget in the amount of $103,500; Unencumbered Fund 210 Budget in the amount of $189,577; and Measure “S” Funds in the amount of $243,177.30. The balance of the funding in the amount of $2,700,000 will be financed.

E. The financing of $2,700,000 and final budget amendments will be considered by the City County at a future date.

F. This additional equipment is essential for the streets and parks maintenance divisions to improve the level of services for the residents and visitors.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, BE IT RESOLVED, that the City Council of the City of South Lake Tahoe:

1. Does hereby authorize the purchase of one (1) Trackless Snow Blower for Parks Maintenance for $167,680.54, including sales tax and freight, from Shafer Equipment Company, Inc. of Sparks, NV through Houston Galveston Area Council (HGAC) Cooperative Agreement.

2. Does hereby authorize ordering four (4) John Deer Graders at $542,090.19 each for a total of $2,168,360.76, including sales tax and freight, from Pape Machinery, of Sparks, NV, through Sourcewell Cooperative Agreement.
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Resolution 2023-XXX March 14, 2023 Page 2 of 2

3. Does hereby authorize the ordering two (2) Zaugg Rolba 3000 Snow Blowers at $600,106 each for a total of $1,200,212, including sales tax and freight, from Hardline Equipment of Henderson, CO, based on Emergency Purchase sole-source justification for specialized equipment.

4. Does hereby authorize the following budget amendments to Fiscal year 2022-2023 budget:

Adopted by the City of South Lake Tahoe City Council on March 14, 2023 by the following vote:

Yes:

No:

Absent:

REVENUE EXPENSE
Fund/Account Description (Increase)/Decrease Increase/(Decrease) Measure S and Vehicle Replacement Fund 210
210-03010-36374 Reduce transfer in from Measure S 189,577 210-03010-46130 Reduce expenditures in Vehicles (189,577) 102-01511-50004 Reduce transfer out to Vehicle Replacement (189,577) Measure S and Snow Removal Equipment Fund 208
208-03610-36374 Increase transfer in from Measure S (189,577) 208-03610-36374 Increase transfer in from Measure S (additional) (243,177) 208-03610-46110 Increase expenditures in Machinery and Equipment 189,577 208-03610-46110 Increase expenditures in Machinery and Equipment (additional) 243,177 208-03610-46110 Increase expenditures from avail. Fund balance 300,000 102-01511-50058 Increase transfer out to Snow Removal Equipment 189,577 846
Snow Operations Update
and Proposed
Enhancements
March 14, 2023
847
Mission
Statement
The mission of the City of South Lake Tahoe
Public Works Department is to operate and
maintain the transportation network while
ensuring that the network functions as safely
and efficiently as possible. During wind, snow,
and ice events, the Public Works Department
conducts sanding operations, snow removal
operations, deicing, and selected road closures
to mitigate hazardous traveling conditions and
allow safer passage for vehicles, pedestrians,
and bicyclists, to the extent possible.
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Snow Operations Zones
Eight Zones
• Gardner Mountain
• Tahoe Keys
• Tahoe Island
• Tahoe Sierra
• Al Tahoe
• Bijou
• Heavenly
• Stateline
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Current
Challenges
With Snow
Operations
Goal of plowing all roads, trails, bike paths and
sidewalks in one12-hour shift if often not achieved
Limited Resources and Equipment
Inability to hire seasonable workers to fill the
required staffing
Aging equipment that require continuous
maintenance due to breakdowns
Staff training
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Improving Performance
• Increase staff with additional seasonal workers and assigning two (2) operators per zone during the evening shift and one (1) operator during the day shift. To increase the number of seasonable applicants, staff recommends hiring at MT V, Step 5, hourly rate for seasonal workers. • The city crew will continue snow removal with two 12-hour shifts until all roads are substantially plowed. • The City will strive to have all paved walkways, city-maintained sidewalks, and bicycle trails cleared within 12-hours post-storm. This work will be coordinated with the Street Division to avoid spillbacks. In addition, when necessary due to snow storage, snow will be hauled away and dumped at appropriate locations. • The City will utilize more brine treatment to pre-treat local streets or post-treat after ice build-up to allow faster ice-clearing operations. This would require a dump truck (already in inventory) with a horizontal spray bar and brine tank to treat roadways at an accelerated rate. (Staff has purchased the spray bar and brine tank with the current equipment budget).
• Expand the outside contracting work for non-street operations to free up staffing for the proposed operational plan.
• Install Global Positioning Satellite (GPS) units on all snow operations equipment to collect management data to optimize plowing patterns and aid with training and response needs (GPS was approved with last year's budget, and installation is under-way).
• Utilize a rover operator to address issues as they arise during the storm or post-storm events if successful in hiring the intended seasonal workers.
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Equipment Needs
• 16 graders to allow 2 operators
per zone. Four new graders are
needed.
• 8 blowers, one per zone, to
reduces break-down. Two new
snow blowers are needed.
• One smaller blower for the trails
and bike paths.
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Cost and Financing Breakdown
Four John Deer Graders at
$542,090 each or
$2,168,361.76
(Order Now)
Two Zaugg Snow Blowers at
$600,106 each or
$1,200,212.00
(Order Now)
One Trackless Snow Blower
for Parks Maintenance for
$167,680.54
(Purchase Now)
The total cost for the
proposed equipment is
$3,536,254.30
The purchase of this equipment can be financed as follows:
• Unallocated Snow Removal Equipment 208 Fund Balance: $300,000 • Unencumbered Fund 208 budget: $103,500
• Unencumbered fund 210 budget: $189,577
• Measure S Funds: $243,177.30
• Financed (to be finalized on 3/24/23): $2,700,000.00
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Other Costs and Considerations
The GPS for the Snow Equipment was approved for 2022-23 budget and is currently being installed. GPS annual cost will be about $6,800 per year.

The Brine equipment and tank is $27,948 and was purchased with existing Streets Division budget.

Additional Seasonal staffing budget will be requested during annual budget approval. It is estimated an additional $102,350 will be required for additional seasonal workers and higher hourly rates.

Additional outside contracting will add approximately $102,000 to the existing contract annually. This budget will be requested during annual budget approval.

Public Works will be requesting one (1) additional Mechanic to address staff shortage and number of equipment that requires maintenance during annual budget request. This staffing size brings the number of fleet Division to 2017 level. 50% of the cost of equipment and snow operations staffing for Streets snow Operations will be reimbursed by the State. 854
Questions
855
City of South Lake Tahoe
Agenda Item Executive Summary
Joe Irvin, City Manager
Meeting Date: March 14, 2023
Agenda Item #: 28
Agenda Item: Supplemental Residential Inclusionary Analysis Executive Summary: Consistent with City Council direction provided at the January 24, 2023 meeting, a supplemental analysis was completed to further inform discussion about a potential inclusionary housing percentage and in-lieu fee. The supplemental analysis is being presented to City Council for further discussion.

Requested Action / Suggested Motions: Receive presentation and provide direction to staff regarding the establishment of an inclusionary housing percentage and in-lieu fee.

Responsible Staff Member: Zachary Thomas, Housing Manager Responsible Staff Member: Zach Thomas, Housing Manager (530) 542-7400 Reviewed and Approved By:

Hilary Roverud, Director of Development Services
Susan Blankenship, City Clerk
Olga Tikhomirova, Director of Finance
Heather Stroud, City Attorney
Attachments:
01-Staff Report - Supplemental.docx
02-Staff Report - Original Study.docx
03- Supplemental Nexus Analysis.pdf
04-Local Housing Funding Feasibility Study.pdf
856
Council Agenda Report- March 14, 2023 Page 1 of 3
City of South Lake Tahoe
Report to City Council
Meeting Date: March 14, 2023
Title: Supplemental Residential Inclusionary Analysis
Location: City-wide
Responsible Staff Member: Zach Thomas, Housing Manager
Background: At its January 24, 2023 meeting, the City Council was presented the Analysis of Local Funding Sources for Housing Initiates report (Report) that analyzed eight different local discretionary funding sources that could provide revenue to fund the City’s housing initiatives. Upon receiving the presentation, the Council provided direction to staff to conduct further stakeholder outreach on the potential implementation of a Transient Occupancy Tax (TOT) and a Real Estate Vacancy Tax. The Council also requested that additional nexus and feasibility analysis be completed to further inform discussion about a potential inclusionary housing percentage and in-lieu fee.

The original January 24th staff report is included as an attachment for background and additional information regarding the original Report.

Issue and Discussion: Consistent with direction from Council, a supplemental nexus and feasibility analysis was completed. This supplemental analysis provides information in addition to the Report presented to Council in January.

With the understanding that the prior Report provided a nexus analysis for typical (~$800,000) single-family homes and a nexus and feasibility analysis of high-end ($3.125 million) singlefamily home, this supplemental analysis provides a nexus and feasibility analysis for townhome ($500,000 per unit) style projects as well as a feasibility analysis for the typical single-family home prototype. Together, these two documents provide nexus and feasibility analysis for townhome style projects, typical single-family projects and high-end single-family projects.

The supplemental analysis taken together with the prior Report is intended to inform City Council discussion regarding the potential for establishing an appropriate inclusionary percentage and in-lieu fee.

The supplemental analysis concluded that the minimum inclusionary housing percentage that the Council might consider for townhome style development is 3.5 percent with an in-lieu fee amount of approximately $8,000 per market rate unit. Similarly, the Council might consider a minimum inclusionary housing percentage of 9 percent with an in-lieu fee amount of $15,000 applied to new typical single-family development. The prior Report also concluded that the minimum inclusionary hosing percentage that the Council might consider for high-end singlefamily projects is 12% with an in-lieu fee amount of $29,000 per market rate unit. These rates 857
Council Agenda Report- March 14, 2023 Page 2 of 3
would align with the estimated workforce housing demand induced by these types of new development and the equivalent in-lieu fee to fill the estimated local funding gap for development of affordable housing. Feasibility analysis indicates that these rates would likely be feasible and demonstrates potential for variable rates based on types of market rate projects.

Percentages discussed above are below the 15 percent inclusionary in-lieu fee that the City may enact under state law without review by the state Department of Housing and Community Development and requiring the City to demonstrate that the rate does not unduly hinder the financial feasibility of new development.

If the Council desired to adopt in-lieu fees that cover the full cost of delivering each required low-income unit, rather than just the likely local contribution required for matching grants, this could justify an in-lieu fee of up to $59,300 per market rate unit. However, based on the feasibility analysis, the only development type that could absorb this fee amount is high-end single-family development.

Staff recommends the City Council receive the presentation of the supplemental analysis and initiate discussion of the findings. This should be done for the purpose of providing further direction to staff as to the City Council’s desired direction for establishing an inclusionary housing percentage and in-lieu fee. Specifically, the Council should provide direction to staff within the boundaries of these four parameters:
1) Should the City enact an inclusionary housing ordinance to include an in-lieu fee? 2) If so, what percent of new residential units should be required to be affordable and what type of development should it apply to? Should a different percentage apply to different development types?
3) What income level(s) should the required affordable units be restricted to? 4) Should the inclusionary housing in-lieu fee be based on the cost of providing necessary local contribution for matching grant funds or the full cost of constructing the required low-income housing?
Financial Implications: Under a noncompetitive funding process, the City received $150,000 in REAP grant funds to cover costs of the Analysis of Local Funding Source(s) for Housing Initiatives. The funds have already been awarded and Resolution 2021-056 authorized acceptance of REAP grant funds from the Sacramento Area Council of Governments (SACOG). Depending on the final consultant contract cost, additional staff time (up to $7,500) directly related to the proposed grant activities may be charged to the grant.

If the City adopts an inclusionary housing ordinance and in-lieu fee revenue for affordable housing projects and programs would be generated. The amount of revenue would vary widely based on the types of projects subject to the ordinance, the inclusionary percentage and the in-lieu fee rate.

Environmental Considerations: The recommendation in this report is not a project under CEQA, because it does not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment, as contemplated by Title 14, California Code of Regulations, Sections 15378(b)(2) and 15378(b)(4) and is, therefore, not subject to CEQA pursuant to CEQA Guidelines Section 15060(c)(3). 858
Council Agenda Report- March 14, 2023 Page 3 of 3
Policy Implications: The recommended action is consistent with the City Strategic Plan Action Item 1.3.5.

The recommended action is also consistent with the following adopted policies and programs:

City General Plan Housing Element
Presenting the Housing Initiatives Local Funding Source study for discussion by the City Council is consistent with pursuing the following Housing Element policies:

Policy 1-1 The City shall adopt programs, ordinances, incentives, land use plans and other regulatory mechanisms that provide opportunities for the private sector to address the housing needs of citizens of all economic levels.

Policy 2-5 The City recognizes that it will become difficult to attract employees if they cannot afford to purchase or rent housing in South Lake Tahoe. The City shall encourage and support programs and activities that create a robust local economy that provides residents with good paying employment and the means to purchase or rent housing in the City. 859
Council Agenda Report- January 24, 2023 Page 1 of 3
City of South Lake Tahoe
Report to City Council
Meeting Date: January 24, 2023
Title: Housing Initiatives Local Funding Source Study
Location: City-wide
Responsible Staff Member: Zach Thomas, Housing Manager
Background: Consistent with the City Council’s adopted 2021-2026 Strategic Plan (Plan), a robust set of housing programs are underway to address the spectrum of housing needs within the City of South Lake Tahoe (City). In order to fund this broad-spectrum approach, the Plan identified the need to explore the feasibility of a local discretionary funding source as an action item. This opportunity is intended to enhance the existing housing programs being implemented by the City while evaluating the revenue generation potential of a new city-wide funding source.

This funding study and assessment of options is intended to provide elected officials, staff and community members, initial data and guidance for housing policy development and program implementation. This effort has resulted in a thorough analysis of funding options that could be generated from a broad range of sources to address housing needs. In addition, the study considers local, regional, and state administrative and legislative processes that may be required for implementation as well as alignment with best practices and efforts underway in other jurisdictions.

The study was funded by a non-competitive grant. On August 3, 2021 the City Council adopted Resolution 2021-56 authorizing acceptance of the Regional Early Action Planning (REAP) Grant.

The grant scope of work included hiring a consultant to conduct an analysis of a local discretionary funding source.

At its May 3, 2022 meeting, the City Council authorized the City Manager to enter into a Professional Services Agreement (PSA) with BAE Urban Economics to conduct the study. BAE Urban Economics was recommended to the City Council after a Request for Proposals (RFP) process was conducted during the spring. In addition to scoring highest on the selection criteria outlined in the RFP, BAE staff are familiar with the Tahoe Region through their experience on affordable and workforce housing issues in Truckee and the North Tahoe region.

Issue and Discussion: The City currently operates robust and diverse housing programs, the highlights of which include: New construction of Sugar Pine Village, Lease to Locals Rental Incentive Program, HomeKey Properties Rehabilitation Program, Riverside Parcel Donation, First-Time Homebuyer Program Initiation, MFD and SRO Inspection Program, Housing Issues Reporting Hotline, Housing Element update and maintenance and general ongoing efforts to revised relevant ordinances and work with partner agencies to streamline development. 860
Council Agenda Report- January 24, 2023 Page 2 of 3
Currently, a significant amount of program efforts are funded by program income from repayment of past housing loans and non-competitive grants which are then used to secure high-value competitive grants. For example, to ensure the development of the Sugar Pine Village affordable housing project, the City has committed approximately $2.4 million which has been used to leverage and secure approximately $65 million in grants and outside funding sources. The project is now under development. However, without additional local funds, it can become increasingly difficult to continue to leverage the high-value outside funding sources needed to develop new housing.

In other instances, non-competitive grants are used to fund specific programs such as the Lease to Locals Rental Incentive Program and the HomeKey Properties Rehabilitation Program. While using non-competitive grant sources to fund highly beneficial local programs is an efficient use of outside funding, non-competitive grants are not consistently available, are limited to program specified uses, and cannot be considered a guaranteed source of local revenue.

A local funding source would support local control of funding while enhancing additional opportunities to leverage greater amounts of money from outside grants and funding programs. In addition, a local funding source would encourage more innovation to build diverse housing projects and programs to benefit the community. As such, the study was designed to explore a wide range of funding sources, analyze the estimated revenue potential of each source and assess the stakeholder impact.

Housing staff worked closely with the consultant to generate a report that reflects the unique nature and circumstances of the City of South Lake Tahoe. Local revenue generation is a sensitive topic and earnest attempts were made to analyze the impacts to all stakeholders.

While thorough, the study is not intended to be exhaustive in nature but rather be consistent with the strategic plan and provide a menu of options for a local discretionary funding source for the City Council to explore. The potential revenue sources analyzed include:
 Transient Occupancy Tax (TOT)
 Real Estate Transfer Tax
 Sales and Use Tax
 Real Estate Vacancy Tax
 Payroll Expense Tax
 Employee Headcount Tax
 Affordable Housing In-lieu Fee (Inclusionary housing)  Business Linkage Fee
The report is organized in an easy to read format intended to facilitate discussion at a policy level. While the report discusses the likely process for implementing each of the revenue generating methods, it by no means is intended to provide a complete road map for the typically complex nature of implementation. Should the Council wish to further explore the implementation process of source(s), further analyses, planning, stakeholder outreach and consultation would likely need to occur.

The study makes every attempt to be data driven both by using all applicable available data as well as performing financial feasibility testing to assess the extent to which new development can support the establishment of new housing in-lieu or business linkage fees. Financial market conditions can change, and no study can perfectly predict the precise outcome of the 861
Council Agenda Report- January 24, 2023 Page 3 of 3
funding source being explored. However, deliberate effort was made to account for the unique market forces impacting the City of South Lake Tahoe and the surrounding region and therefore provide a reliable study on which to base sound policy discussion.

Staff recommends the City Council receive the funding study presentation and initiate discussion of the findings presented in the study. This should be done for the purpose of providing further direction to staff as to the City Council’s desired direction for establishing a local funding source for housing initiatives.

Financial Implications: Under a noncompetitive funding process, the City received $150,000 in REAP grant funds. The funds have already been awarded and Resolution 2021- 056 authorized acceptance of REAP grant funds from the Sacramento Area Council of Governments (SACOG). Depending on the final consultant contract cost, additional staff time (up to $7,500) directly related to the proposed grant activities may be charged to the grant Environmental Considerations: The recommendation in this report is not a project under CEQA, because it does not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment, as contemplated by Title 14, California Code of Regulations, Sections 15378(b)(2) and 15378(b)(4) and is, therefore, not subject to CEQA pursuant to CEQA Guidelines Section 15060(c)(3).

Policy Implications: The recommended action is consistent with the City Strategic Plan Action Item 1.3.5.

The recommended action is also consistent with the following adopted policies and programs:

City General Plan Housing Element
Presenting the Housing Initiatives Local Funding Source study for discussion by the City Council is consistent with pursuing the following Housing Element policies:

Berkeley, CA 94710 Davis, CA 95616 Los Angeles, CA 90013 Washington, DC 20002 New York, NY 10001 510.547.9380 530.750.2195 213.471.2666 202.588.8945 212.683.4486 www.bae1.com
Final Memorandum

To: Hilary Roverud, Development Services Director, City of South Lake Tahoe Zachary Thomas, Housing Manager, City of South Lake Tahoe Jessica Wackenhut, Associate Housing Planner, City of South Lake Tahoe From: Aaron Nousaine, MCRP, Principal, BAE Urban Economics Date: March 2, 2023
Re: Supplemental Residential Nexus Analysis
The following memorandum reports key findings from a supplemental nexus analysis that identifies the minimum inclusionary housing percentage that would offset the impacts imposed by new townhome projects. This information is provided in addition to the nexus analysis and financial feasibility testing that was previously conducted as part of the Analysis of Local Funding Source(s) for Housing Initiatives report in January. This analysis is intended to help inform deliberations regarding an appropriate inclusionary housing percentage and inlieu fee and should not be interpreted as legal direction recognizing that state law does not require establishment of an essential nexus. This memorandum provides a nexus analysis for townhome projects only, recognizing that the prior report provided nexus information for single-family development. The prior analysis, however, only included financial feasibility testing for high-end single-family projects; therefore, this memorandum provides additional feasibility analysis for townhomes projects and more typical single-family housing units.

Informational Townhome Nexus Analysis
An Informational Nexus for Townhomes
To provide a representative analysis illustrating the impact of new townhome development on demand for local workforce housing in South Lake Tahoe, BAE reviewed the available information on recently constructed and proposed new townhome developments in South Lake Tahoe and analyzed recent property tax assessment and real estate transactions data to identify the average value or price per square foot associated with recently built townhomes.

Based on this analysis, BAE estimates that newly built duplex and related townhome units in South Lake Tahoe are typically around 1,200 square feet in size and may expect valuations of around $420 per square foot, which equals a market sale price of around $500,000 per unit.

At this price point, the purchasing household would need an income of at least $125,000 per year, assuming a conventional loan with a 20 percent downpayment, as shown in Table 1. 863
2 Table 1: Household Income Required to Purchase a New Townhome in Lake Tahoe, 2022
Notes:
(a) Represents the estimated value of a newly constructed townhome in South Lake Tahoe as of 2022. (b) Monthly ownership costs are based on the following assumptions:

Sources: ListSource; Local Mortgage Brokers; California Department of Insurance, Homeowners Premium Survey; BAE, 2023.

Table 2 reports the estimated induced employment generated by occupancy of new townhomes in South Lake Tahoe. The estimates were generated using the Impacts for Planning (IMPLAN) economic impact model. Due to the limited impacts per household, the analysis calculates impacts assuming a total of 100 households, then coverts the estimates to reflect the total impact per occupied housing unit. BAE estimates that occupancy of newly built townhomes may generate demand for approximately eight new jobs for every 100 occupied housing units, which reflects a jobs multiplier of 0.08 jobs per occupied housing unit.

To the extent that these units are occupied less than full-time, the impacts would be reduced.

Table 2: Estimated Economic Impacts Per 100 New Townhomes Note:
(a) Based on estimated household spending associated with 100 households earning approximately $125,000 per year.

Sources: Impacts for Planning (IMPLAN) Economic Impact Model; BAE, 2023.

Table 3 further breaks down the induced jobs estimate reported in Table 2 by income level and converts jobs to workforce households based on the average number of workers per Estimated Sale Price, New Units (a) $500,000
Monthly Housing Cost, New units (b) $3,142
Annual Housing Cots $37,706
Household Income Required (c) $125,685
Impact Type Employment Labor Income Value Added Output
Direct 0.0 $0 $0 $0
Indirect 0.0 $0 $0 $0
Induced 7.7 $363,997 $656,892 $1,089,986
Total 7.7 $363,997 $656,892 $1,089,986
Per Job 1.0 $47,089 $84,979 $141,006
Per Unit 0.08 $3,640 $6,569 $10,900
864
3 household within each income category. Based on this data, occupancy of newly constructed townhomes likely generates demand for approximately one new workforce housing unit for every 20 or so new townhomes, which would translate to an inclusionary percentage of approximately 4.5 percent, or 3.5 percent excluding demand from higher-income households who can presumably secure adequate and affordable housing on the open market.

Table 3: Induced Employment and Workforce Housing Demand by Income Level Notes:
(a) Based on estimated household spending associated with 100 households earning approximately $125,000 per year. (b) Based on the distribution of induced jobs industry sector, as reported by IMPLAN, combined with the distribution of workers by industry and household income, as reported in the Public Use Microdata Sample (PUMS) for the greater South Lake Tahoe area.
(c) Based on the distribution of workers by industry sector and household income level, as reported in the PUMS.

Sources: IMPLAN; U.S. Census Bureau, Public Use Microdata Sample (PUMS); BAE, 2023.

Table 4: Estimated Funding Gap and Equivalent In-Lieu Fee Amount (a) Notes:
(a) Based on estimated household spending associated with households earning approximately $125,000 per year. (b) Represents the estimated new workforce housing demand by income level generated by household spending associated with a newly constructed townhome unit, excluding higher income (>180% of AMI) households. (c) Reflects the estimated total cost and net financing gap associated with providing housing at each income level. Housing targeted for occupancy at 80 percent of AMI or below is assumed to be new construction funded using state and federal tax credits. Housing occupied by households in the moderate-income (81-120 percent of AMI) and multifamily achievable (121- 125 percent of AMI) income categories is assumed to be newly constructed market rate multifamily rental housing. Housing occupied by households in the single-family achievable (126-180 percent of AMI) income category is assumed to be existing single-family resale inventory.

Sources: IMPLAN; U.S. Census Bureau, Public Use Microdata Sample (PUMS); BAE, 2022.

Ave. Workers Est. Worker Per
Household Income Level Jobs (b) Per Household (c) Households New unit Extremely Low (30% AMI) 0.3 1.1 0.3 0.003
Very Low (50% AMI) 0.5 1.3 0.4 0.004
Low (80% AMI) 1.2 1.5 0.8 0.008
Moderate (120% AMI) 1.8 1.7 1.0 0.010
MF Achievable (125% AMI) 0.1 1.8 0.1 0.001
SF Achievable (180% AMI) 1.3 1.8 0.7 0.007
Higher Income (>180% AMI) 2.4 1.9 1.3 0.013
Total, All Income Levels 7.7 1.7 4.6 0.046
Per New Unit 0.08 0.02 0.046
New Workforce Equiv. In-Lieu
Housing Demand Per Estimated Cost Per Workforce Unit (c) Fee Per Market Household Income Level New M arket Rate Unit (b) Total Cost Net Gap Rate Unit (d) Extremely Low (30% AMI) 0.003 $825,227 $551,912 $1,733
Very Low (50% AMI) 0.004 $825,227 $489,556 $2,024
Low (80% AMI) 0.008 $825,227 $395,346 $3,277
Moderate (120% AMI) 0.010 $450,000 $58,805 $605
MF Achievable (125% AMI) 0.001 $450,000 $41,693 $31
SF Achievable (180% AMI) 0.007 $642,500 $20,200 $147
Total, All Income Levels (e) 0.034 $7,817
865
4 Revenue Generation Potential
Based on the nexus analysis above, BAE recommends that the minimum inclusionary housing percentage that the City might consider for townhome development is 3.5 percent. Note that state law permits establishment of an inclusionary housing percentage of up to 15 percent without HCD review. Based on the calculations presented in Table 4 on the prior page, the City should consider setting in-lieu fee amounts of not less than $7,800 per townhome unit, which is the minimum that the City should consider to ensure that new developments offset their estimated impacts. If the City were to set an inclusionary requirement at 15 percent, a fee of up to roughly $59,000 may also be justifiable (i.e., 15 percent of $395,000, which is equal to the net financing gap for multifamily rental units affordable to low-income households).

Financial Feasibility Testing
The following section summarizes key assumptions and findings from financial feasibility testing for new residential townhome and median priced single-family development.

Prototype Specification
The first step in conducting a financial feasibility test is to define the type of development being modelled. The following summarizes the rough characteristics of each prototype.

Townhome Prototype
The townhome prototype analyzed for this research is primarily based on units constructed in 2020 on Pioneer Trail. That project consisted of four duplex buildings with eight total units constructed on approximately 0.6 of an acre. The units are approximately 1,200 square feet each, on average, and include a one-car garage. Research on current assessed values and sale prices for similarly sized units in South Lake Tahoe indicate a market sale price of roughly $420 per square foot, which would translate to an assumed sale price of $500,000 per unit.

Single-Family Prototype
The single-family prototype analyzed here is reflective of a median priced newly constructed single-family home. The nexus analysis for this prototype was included as part of the prior research report. The prototype is assumed to be 2,000 square feet, with three full bedrooms, and is built on 0.15 of an acre. Due to the larger size, the single-family prototype is assumed to have a lower value per square foot at roughly $400, for an assumed sale price of roughly $800,000.

Development Cost Assumptions
BAE estimated development costs for each prototype based upon information collected from a variety of sources including research conducted by BAE for other similar projects and key stakeholder interviews, as well as published secondary sources like RS Means. The development costs reported in Exhibit B3, which form the basis for the proformas, represent the middle- to high-end range of comparable costs, meaning that the cost estimates are likely 866
5 to be conservative and, if anything, overstate the likely costs of development. Key components of the total estimated development cost include:

Site Preparation Costs
Site preparation costs include costs associated with grading, utility connections, paving and surface parking, and landscaping, among other items. Based on feedback from local developers and real estate professionals active in the greater Lake Tahoe region, this analysis assumes a site preparation cost of eight dollars per site square foot. It should be noted that this analysis assumes the sites to be vacant and relatively flat. This analysis also assumes that all necessary infrastructure is in place to service the prototypes.

Land Use Commodity Acquisition
Projects proposed for development within the Lake Tahoe Basin must acquire necessary land use commodities issued and managed by the Tahoe Regional Planning Agency (TRPA). These include development rights (i.e., residential units of use or RUUs, etc.), site coverage, etc. The proformas assume that new development will have to acquire necessary development rights and coverage at full market value, without use of multipliers, or reuse of existing rights.

However, in many cases, one-off residential developments are able to take advantage of existing development rights and coverage that are tied to the property and must wait for one of the necessary annual residential development allocations. The townhome project is assumed to have four development rights, plus coverage, available on the site, with the builder acquiring four additional RUUs. Pricing for development rights is based on an appraisal conducted by the City of South Lake Tahoe in April 2020.

Planning, Building and other Permit Fees.

Assumed costs associated with building permit, inspection, and impact fees were provided by City staff. Information on water and sewer connection fees was provided by the South Tahoe Public Utility District (STPUD). Fees charged by TRPA were excluded from the analysis at the request of City staff due to extreme variability.

Soft Development Costs
Soft costs include architecture, engineering, some permit and plan check fees, pre-entitlement costs such as preparation of necessary studies and Environmental Impact Reports, legal costs, permanent financing costs, and miscellaneous developer overhead costs, among others. For all five prototypes, soft costs are estimated at 15 percent of hard costs for the single-family prototype and 20 percent of hard costs for the townhome prototype.

Hard Construction Costs
Hard costs primarily include labor and materials costs and are based both on RS Means and on BAE’s experience with comparable recent projects constructed within the Tahoe region. 867
6 Developer Profit
Measured as a percentage of total development costs, developers typically seek a gross profit of 20 percent of gross sales for townhome and single-family developments.

Financing Costs
In terms of construction financing costs for real estate projects, this analysis assumes a 65 percent loan-to-cost ratio, and a 7.0 percent annual interest rate over a 12-month period.

Land Acquisition and land residuals
The proformas presented in this analysis do not include a land cost. Instead, the tables are structured with an assumed developer return and solve for the “land residual” as the bottomline measure of feasibility after accounting for all other costs and developer profit. Based on a review of recent land sales and current listings for residentially zoned land, BAE assumes a target land residual value of at least one million dollars per acre for both prototypes as an indicator of likely financial feasibility.

Feasibility Results
Overall, the financial feasibility testing exercise found that both the more typical single-family project and the townhome project were financial feasible under current market conditions.

The projects likely have some capacity to absorb an additional in-lieu fee burden at the lower levels indicated to be justifiable based on the nexus analysis (i.e., roughly $8,000 per townhome unit and $15,000 per average single-family unit). Under current market conditions, it is unlikely that either project could absorb the higher-end in-lieu fee amount of $59,000 per market rate unit (i.e., 15 percent of $395,000, which is equal to the net financing gap for multifamily rental units affordable to low-income households). However, economic theory indicates that imposition of additional fees and costs should, over time, result in an adjustment in land prices such that future projects could absorb construction costs as well as imposition of additional fees, though such adjustments can take many years to be realized. 868
7 Table 5: Single-Family Proforma Financial Model
Note:
(a) The value associated with acquiring one residential development right and required coverage is assumed to be included in the price of the land. Under this scenario, the builder/property owner is assumed to receive a development allocation directly from TRPA.

Source: BAE, 2023.

Development Program Assumptions Cost and Income Assumptions Development Cost Analysis Residual Land Value Analysis Lot Size (acres/sf) 0.15 6,534 Construction Fees and Exactions Revenues Site Preparation Costs (per site sf) $8 Land Use Commodities Cost (a) $0 Residential Sales Revenue $810,000 Residential Unit Type Res. sf Residential Hard Costs (per sf) $195 Linkage Fees $0 Less Transaction Costs ($8,100) AVG SFR 2,000 Soft Costs (% of Hard Costs) 15%
Residential Gross Area (sf) 2,000 Development Costs Total Project Value $801,900 Value (per sf) $405 Site Prep Costs $52,272 Less Total Project Costs $598,965 Sales Transaction Costs as % of Sale Price 1.0% Residential Hard Costs $390,000 Less Builder Fee $40,500 Financing Costs Permit and Impact Fees $72,047
Financing Interest on Construction Loan $14,531 Soft Costs $66,341 Residual Land Value $162,435 Loan to Cost Ratio 65% Points on Construction Loan $3,774 Subtotal Construction Costs $580,659 Residual Land Value/Acre $1,082,902 Initial Construction Loan Fee (points) 1.0% Subtotal Financing Costs $18,305 Interest Rate 7.00% Financing $18,305
Period of Initial Loan (Months) 12
Draw dow n Factor 55% Total Project Costs $598,965
Total Hard + Soft Costs $580,659
Total Loan Amount $377,429
Builder Fee 5%
869
8 Table 6: Townhome Proforma Financial Model
Note:
(a) The value associated with acquiring the first four residential development rights and required coverage is assumed to be included in the price of the land. Under this scenario, the builder/property owner is assumed to pursue four development allocations from TRPA and acquires the remaining four residential units of use (RUUs) on the open market.

Source: BAE, 2023.

Development Program Cost and Income Assumptions Development Cost Analysis Feasibility Analysis Construction Development Costs Revenue
Site Size (Acres / Sq. Ft.) 0.60 26,136 Site Work Per Site Sq. Ft. $8 Site Work $209,088 Gross Sales Revenue $4,032,000 Net Density (Dw elling Units/Acre) 13 Hard Cost Per Gross Bldg. Sq. Ft. $195 Residential Hard Cost $1,872,000 Less Marketing Costs ($80,640) Gross Building Size (Sq. Ft.) 10,680 Garage Parking Costs ($ sq. ft.) $125 Garage Costs $16,875 Less Total Project Costs ($3,224,921) Building Height (Stories) 1 Inclusionary In-Lieu Fee, Per Unit $0 Land Commodities/Entitlements $90,000 (a) Site Utilization Factor 40.9% Soft Costs (% of Hard Costs) 20.0% Impact & Permitting Fees $114,805 Residual Land Value $726,439 Floor Area Ratio (Floor Area/Site Size) 0.41 Developer Profit (% of Hard and Soft Costs) 15.0% Linkage Fee $0 Project Value per Unit $90,805 Soft Costs $416,218 Residual Land Value/Acre $1,210,731 Construction Type Type 5 - Wood Operations Per Sq. Ft. / Per Unit Subtotal Dev. Costs $2,718,986 Market Rate Residential Sale Price $420 $504,000 Cost Per Unit $339,873 Tow nhome Detail 8 1,200 Affordable Housing Sale Price NA NA Marketing Costs (% of Sale Price) 2.0% Developer Profit $407,848 Garage Space (Sq. Ft. Per Unit) 135
Financing Financing
Gross Residential Square Feet 10,680 Loan-to-Cost Ratio 65.0% Interest on Construction Loan $80,414 Loan Fee (Points) 1.0% Points on Construction Loan $17,673 Interest Rate 7.0% Subtotal Financing Costs $98,087
Loan Period (Months) 12
Draw dow n Factor 65.0% Total Project Costs, $3,224,921 Total Loan Amount $1,767,341 Cost Per Unit $403,115
Cost Per Gross Sq. Ft. $302
870

bae urban economic
Analysis of Local Funding Source(s) for Housing Initiatives Prepared for the City of South Lake Tahoe
January 13, 2023
871
bae urban economics
San Francisco Sacramento Los Angeles Washington DC New York City 2560 9th St., Suite 211 803 2nd St., Suite A 448 South Hill St., Suite 701 1140 3rd St. NE, 2nd Floor 234 5th Ave.

Berkeley, CA 94710 Davis, CA 95616 Los Angeles, CA 90013 Washington, DC 20002 New York, NY 10001 510.547.9380 530.750.2195 213.471.2666 202.588.8945 212.683.4486 www.bae1.com
January 13, 2023
Hilary Roverud, Development Services Director
Zachary Thomas, Housing Manager
Jessica Wackenhut, Associate Housing Planner
City of South Lake Tahoe
1052 Tata Lane
South Lake Tahoe, CA 96150
Dear Director Roverud:

We are pleased to provide the attached Analysis of Local Funding Source(s) for Housing Initiatives, prepared on behalf of the City of South Lake Tahoe. It has been a pleasure working with you and your staff on this important initiative.

We look forward continue working with the City of South Lake Tahoe to further understand the extent to which the funding sources analyzed here may assist the community in meeting its urgent community and housing needs.

If you have any questions or concerns, please do not hesitate to contact me by email at [email protected] or by phone at (530) 574-9285.

Sincerely,
Aaron Nousaine
Principal
BAE Urban Economics
13170 Stockholm Way
Truckee, CA 96161
872
Table of Contents
EXECUTIVE SUMMARY ................................................................................................................ i INTRODUCTION .......................................................................................................................... 1 Projected Revenue Requirements ..............................................................................................1 SPECIAL TAX REVENUE SOURCES ............................................................................................. 3 Transient Occupancy Tax (TOT)...................................................................................................3 Real Estate Transfer Tax..............................................................................................................6 Sales and Use Tax..................................................................................................................... 12 Real Estate Vacancy Tax........................................................................................................... 14 Alternative Business Taxes....................................................................................................... 22 DEVELOPMENT DEPENDENT REVENUE SOURCES ................................................................. 28 Inclusionary Housing In-Lieu Fee ............................................................................................. 28 Commercial Linkage Fee .......................................................................................................... 34 APPENDIX A: RESIDENTIAL NEXUS ANALYSIS ........................................................................ 39 APPENDIX B: PROFORMA FINANCIAL FEASIBILITY TESTING .................................................. 45 873
List of Tables
Table 1: Projected Annual Programmatic Funding Needs ............................................................ 2 Table 2: Residential Sales Activity, 2017 to 2022 YTD ................................................................ 8 Table 3: Non-Residential Sales Activity, 2017 to 2022 YTD......................................................... 9 Table 4: Estimated Revenue Generation from Increased Real Estate Transfer Tax, Flat Rate Per $1,000 of Value .......................................................................................................10 Table 5: Estimated Revenue Generation from Increased Real Estate Transfer Tax, Percent of Sale Value .....................................................................................................................11 Table 6: Housing Units by Vacancy Status and Tenure, 2020....................................................18 Table 7: Commercial Vacancies, City of South Lake Tahoe, December 2022 ..........................19 Table 8: Estimated Revenue Generation, Commercial Vacancy Tax..........................................21 Table 9: Establishments, Jobs, and Annual Wages by Industry Sector, South Lake Tahoe, 2021....................................................................................................................................24 Table 10: Estimated Revenue from Payroll Expense Tax, 0.1-1.0 Percent Rates.....................25 Table 11: Estimated Revenue from Employee Headcount Tax, $25-$75 Rates.......................26 Table 12: Financing Gap Analysis, Tax Credit Affordable Multifamily ........................................32 Table 13: Financing Gap Analysis, Non-Tax Credit Workforce Multifamily.................................32 Table 14: Induced Demand for Workforce housing and Equivalent Linkage Fee .....................35 List of Figures
Figure 1: Transient Occupancy Tax (TOT) Collections, FY 15-15 to FY 20-21.............................. 4 Figure 2: Total Taxable Sales, City of South Lake Tahoe 2015-2021........................................13 Figure 3: Housing Vacancy by Type, 2020 5-Year ACS ...............................................................17 874
i

EXECUTIVE SUMMARY
The City of South Lake Tahoe is considering possibilities for establishing locally controlled, dedicated, and permanent funding sources that can be used to advance new programs and projects with the intent of making a meaningful impact on the state of the housing crisis. The local housing funding study report provides an overview of seven different potential local funding sources, including revenue generation potential, procedures for establishing each funding source, and a high-level assessment of potential impacts to stakeholders.

The funding sources considered for this research include five special taxes, including increases to existing rates for transient occupancy tax (TOT), real estate transfer tax, and sales and use tax. The analysis also considers the creation of new vacant real estate taxes, including for both residential and non-residential uses, as well as alternative business tax and license fee structures, including a business payroll expense tax and an employee headcount tax. In addition, the analysis also evaluates the potential for an inclusionary housing in-lieu fee and commercial linkage fee that may be imposed on new development projects, including consideration of the impact of such fees on the financial feasibility of new development.

The 2022-2027 Housing Element of the General Plan functions as the community’s main strategic planning document for housing and outlines a variety of policies and programs that the City is committed to implementing. The cost associated with implementing the programs and actions may be covered in a variety of ways, including the use of General Fund revenues, special tax revenues, and one-time grand funding, among other approaches. According to City staff, there are seven categories of housing programs and actions that would benefit from creation of dedicated local funding sources with a total annual funding need of $3.35 million.

Exhibit A on the following pages provides a summary of key information pertaining to each of the potential funding sources evaluated as part of this research. 875
ii
Exhibit 1: Summary of Potential Funding Sources (Page 1 of 2) Source: BAE, 2022
Existing Taxes in
Funding Source Type Voter Approval? Nearby Jurisdictions Evaluated Change Revenue Generation Stakeholder Impacts Transient Occupancy General - Simple Majority; Placer County - 10% 2% Rate Increase $2.8-$3.3 million per year Overnight Visitors; Tax (TOT) Special - 2/3rds Majority South Lake Tahoe 12%-14% Accommodations Providers El Dorado County - 14%
Douglas County - 14%
Real Estate Transfer Charter Cities Only; $1.10 per $1,000 of assessed Variable Rates Residential Uses - $164,340 Buyers and sellers of real Tax General - Simple Majority; value, split betw een South Lake Up To $15 per $1,000 (at existing $0.55 rate) to $4.5 property; low er-income Special - Not Authorized Tahoe and El Dorado County of Assessed Value million (at $15 per $1,000) buyers (if not assumed by Under Prop. 13 Non-Residential Uses - $5,572 seller, as this is negotiable) (at existing $0.55 rate) to
$151,959 (at $15 per $1,000)
Sales and Use Tax General - Simple Majority; South Lake Tahoe - 8.75% 0.5% Rate Increase $2.5 Million Per Year Low er-income resident Special - 2/3rds Majority Tow n of Truckee - 8.75% households purchasing El Dorado County - 7.25% goods in South Lake Tahoe
Placer County - 7.25%
Carson City - 7.6%
Douglas County - 7.1%
Washoe County - 8.27%
Real Estate Vacancy Special - 2/3rds Majority; Residential Residential Residential Residential Tax General Tax Authority Vancouver - 3% of Ass. Value $3,000 Per Unit Held $11.4 Million Per Year Second Home Ow ners; Unsetttled Under Prop 218 Oakland - $3,000 Flat Vacant for Seasonal Short-Term Rental Ow ners/ Berkeley - $3,000 Flat on SFR or Occasional Use Managers; Other Ow ners $6,000 Flat on MFR of Seasonal Use Property
San Francisco - $2,500 to $5,000
Flat; Escallates
Commercial Commercial Commercial Commercial
Oakland - $6,000 Flat $1,000 to $10,000 per $335,000 to $3.4 Million Per Year Ow ners and Lessee's of San Francisco - $250 Per Linear 1,000 Square Feet of Commercial Property Foot of Frontage; Gross Leasable Area
Escalates
- Continued on Next Page -
876
iii
Exhibit 1: Summary of Potential Funding Sources (Page 2 of 2) Source: BAE, 2022
Existing Taxes in
Funding Source Type Voter Approval? Nearby Jurisdictions Evaluated Change Revenue Generation Stakeholder Impacts Alternative Business General - Simple Majority; San Francisco - 0.38 Percent on Pay Payroll Expense Tax Payroll Expense Tax Business Ow ners and Taxes Special - 2/3rds Majority Santa Clara - $45 per employee and 0.1 to 1.0 percent $474,808 to $4.8 million Per year Operators; Employees $15 per rental unit
Employee Headcount Tax Employee Headcount Tax
$25 to $75 Per Employee $238,125 to $714,375 Per Year
Inclusionary Housing Council l Legislative Action; Placer County - $2.45 Per Habitable Up to $59,000 Per Market Up to Betw een $1.2 and $1.5 Residential Real Estate In-Lieu Fee Voter Approval Not Required Square Foot of Market Rate Rate Unit Proposed; Million Per Year (Applied to All Developers, Buyers, and Tow n of Truckee - $134,413 Per Does Not Limit Feasibility New SFR Units); or $177,000 Occupants Affordable Unit Required per Year (Applied to 5k SF Units) Commercial Linkage Council l Legislative Action; Placer County - $2.45 Per Habitable Retail/Restaurant Retail/Restaurant Non-Residential Real Fee Voter Approval Not Required Square Foot of Market Rate Up to $239 Per Square Foot; $1.8 Million at $90 per Leasable Estate Developers, Buyers, Tow n of Truckee - $134,413 Per Only Marginally Feasible Square Foot for High-End Retail and Occupants Affordable Unit Required at up to $9.38 Projects; Up to $5.2 million for High-End Tourist Mixed-Use
When Combined w ith Hotel Fee
Hotel/Motel
Up to $99 Per Square Foot; Hotel/Motel
Only Feasible at $5.00 per Up to $5.2 Million at $44 for square foot w ith full retail Tourist Mixed-Use
linkage fee
877
1 INTRODUCTION
The availability and affordability of housing for full-time residents and workers within the greater Lake Tahoe region has been an issue of increasing urgency for many years. The recent impacts of the Coronavirus pandemic have stretched many to a breaking point, with businesses struggling to remain in business/provide adequate services under the combined weight of housing induced worker shortages, supply chain disruptions, and increasing inflation.

Recognizing these drivers, along with concern for the wellbeing of the community, the City of South Lake Tahoe is considering possibilities for establishing locally controlled, dedicated, and permanent funding sources that can be used to advance new programs and projects with the intent of making a meaningful impact on the state of the housing crisis.

The following report provides an overview of seven different potential local funding sources, including five special taxes, including increases to existing rates for transient occupancy tax (TOT), real estate transfer tax, and sales and use tax. The analysis also considers the creation of new vacant real estate taxes, including for both residential and non-residential uses, as well as alternative business tax and license fee structures, including a business payroll expense tax and an employee headcount tax. In addition to these seven special tax categories, the analysis also evaluates the potential for establishing an inclusionary housing in-lieu fee and commercial linkage fee that may be imposed on new development projects, including consideration of the impact of such fees on the financial feasibility of new development.

Please note that the revenue generation estimates provided in this report are point-in-time estimates, representing estimated revenue generation in a single given year versus over time.

They are based on specific assumptions regarding tax rates and economic conditions. As a result, the figures presented in this report should be interpreted with caution. In addition to providing estimates of potential revenue generation, this memo also outlines key considerations for establishing or increasing each funding source, such as voter approval requirements. The evaluation also identifies stakeholder groups likely to be impacted by implementation of each funding source, such as property owners or businesses.

Projected Revenue Requirements
The City of South Lake Tahoe published the draft 2022-2027 Housing Element in December 2021, which was found in compliance with applicable state law by the California Department of Housing and Community Development (HCD) in August of 2022. The Housing Element of the General Plan functions as the community’s main strategic planning document for housing and outlines a variety of policies and programs that the City is committed to implementing through 2027. The cost associated with implementing the programs and actions outlined in the Housing Element may be covered in a variety of ways, including the use of General Fund revenues, special tax revenues, and one-time grand funding, among other approaches. 878
2 According to City staff, there are seven categories of housing programs and actions that would benefit from identification of dedicated local funding sources, summarized in Table 1, below.

Table 1: Projected Annual Programmatic Funding Needs
Sources: City of South Lake Tahoe; BAE, 2022.

Annual Funding
Priority Housing Programs Requirements
New Construction Program $1,000,000
Locals Rental Incentive Program (Lease-to-Locals) $300,000 Rental/Deposit Assistance Program $200,000
Multifamily Acquisition and Rehab Program $1,000,000
Rehabilitation Loan Program $200,000
Housing Issues Hotline and Fair Housing Programs $150,000 Special Needs Housing Programs $500,000
Total, Priority Housing Programs $3,350,000
879
3 SPECIAL TAX REVENUE SOURCES
Under existing state law, local jurisdictions and special districts may levy a variety of special taxes, either for general or special purposes. The following section reviews the basic structure and procedures for establishing and changing local special tax rates and provides examples of how much revenue may be generated as a result of implementation in South Lake Tahoe.

Voter Approval of Tax Measures (Prop 13 and Prop 218)
Proposition (Prop) 218 was passed by voters in 1996, resulting in an amendment to the California Constitution that requires that new local property-related tax measures be approved by public vote.1 A general tax, which generates revenues which are available for all general governmental purposes at the discretion of the governing body, must be approved by a simple majority vote of the electorate. Under Proposition 13, a special tax, which generates revenues that are reserved for a specified purpose, must be approved by a two-thirds vote. State law also requires that votes regarding new or increased general taxes must be “…consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body.”2 These requirements apply to all of the local taxes discussed below. Additional requirements may also apply and are identified, as appropriate, in the relevant subsections.

Transient Occupancy Tax (TOT)
California Revenue and Taxation Code, section 7280, authorizes cities and counties to levy a tax on the “privilege” of occupying a room, or rooms, in a hotel, inn, tourist home or house, motel, or other lodging establishment for less than 30 days, excluding the right of an owner of a time-share or membership camping contract to occupy their respective unit or space.3 Establishing or Changing a TOT
Transient Occupancy Taxes (TOTs) are typically structured as a percentage of the gross nightly room rent collected by the lodging provider. The California Revenue and Taxation Code authorizes all general law cities to institute a TOT.4 The authority of a charter city to adopt a TOT is not preempted. While the Revenue and Taxation Code broadly defines the basic levy and exemption framework for a TOT, the specifics of the levy, any additional exemptions, and local administrative procedures are left to local government to define as part of the ordinance 1 California Legislative Analyst’s Office. (December 1996). Understanding Proposition 218. Available at:
https://lao.ca.gov/1996/120196_prop_218/understanding_prop218_1296.html 2 California Constitution, Article XIIIC, Section 2. Available at:
https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=CONS&division=&title=&part=&chapter =&article=XIII%20C. 3 State of California. (August 2022). California Revenue and Taxation Code, Chapter 1, Section 7280. Available at:
http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=7280. 4 Ibid. 880
4 adoption process. The establishment, or increase, of a TOT is required to receive necessary voter approval.

Existing TOT in South Lake Tahoe
Data produced by the California State Controller and published by CaliforniaCityFinance.com indicate that TOT revenue accounts for around nine percent of total General Fund revenue among cities that impose a TOT levy within their jurisdiction.5 Within the City of South Lake Tahoe, TOT revenues represent the single largest revenue source for the City, accounting for more than 35 percent of the total General Fund budget, followed by property tax and sales and use tax at 19 and 13 percent, respectively.6
Figure 1: Transient Occupancy Tax (TOT) Collections, FY 15-15 to FY 20-21 (a) Note:
(a) Excludes audited collections and supplemental two percent Measure P collections.

Sources: City of South Lake Tahoe, Transient Occupancy Tax Report, Revenue Collected in January 2022 for the Month of December 2021; BAE, 2022.

As of the 2021-2022 fiscal year, the City budget assumed $16.97 million in total TOT revenue.7 The City budget narrative also acknowledges that TOT revenue in a visitor-oriented economy like that of South Lake Tahoe can be quite volatile. For example, the City received $18.1 million in TOT revenue in the 2018-2019 fiscal year, which dropped to $14.4 million during the 2019-2020 fiscal year due to onset of the COVID-19 pandemic, as well as the ongoing impacts of Measure T,8 which phased out vacation home rental (VHR) permits in residential areas and multifamily properties over three-years ending in December 2021. As of 5 California State Controller. (2022). Transient Occupancy Tax Revenues as a Percentage of General Revenues – California Cities. Sacramento, CA: CaliforniaCityFinance.com Available at:
http://californiacityfinance.com/TOT19p.xlsx 6 Finance Department. (August 17, 2021). 2022 Annual Budget: Fiscal Year 2021-2022. South Lake Tahoe, CA:

City of South Lake Tahoe. Available at: https://cityofslt.us/595/City-Budget 7 Ibid. 8 For more information on Measure T, please visit the City’s website at: cityofslt.us/1157/Measure-T $12.5
$15.5
$16.6
$17.4
$18.1
$14.4
$16.9
$10
$11
$12
$13
$14
$15
$16
$17
$18
$19
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Millions
Fiscal Year
881
5 fiscal year 2022, TOT revenue has not yet recovered to pre-pandemic levels.9 Absent the impacts of the pandemic and restrictions on VHRs, however, TOT revenues accruing to the City of South Lake Tahoe have increased steadily since at least the 2014-2015 fiscal year, as illustrated in Figure 1.

The City of South Lake Tahoe has two different TOT rates. There is a base rate of 10 percent that applies throughout the city, with a rate of 12 percent applying to specific properties in the tourist core associated with past redevelopment activity.10 Measure P, passed in November 2016, added an additional two percent, with revenue set aside for a new recreation complex.11 This brings the combined TOT rate to 12 citywide and 14 percent in redevelopment areas.

Comparison with Nearby Jurisdictions
According to the California State Controller, TOT rates among jurisdictions in California in 2020 ranged from a minimum of only four percent to a maximum of 15.5 percent and an average of

10.2 percent.12 The City of South Lake Tahoe falls towards the upper end of this range with 12 percent (citywide) to 14 percent (redevelopment only). TOT rates in surrounding Lake Tahoe Basin jurisdictions, including those in both California and Nevada, range from a low of 10 percent in Placer County to 14 percent in parts of South Lake Tahoe and in Douglas County. As of November 2022, voters in El Dorado County approved an increase in the TOT rate from 10 percent to 14 percent. Therefore a two percent increase of the general TOT rate in the City of South Lake Tahoe would bring the jurisdiction in line with the maximum for adjoining jurisdictions.

Estimated Revenue Potential
Evaluation of historical TOT collections data indicate that the City’s base 10 percent TOT rate (excluding the Measure P enhancement) generated an average of $16.7 million in revenue per year over the last five fiscal years (i.e., 2016-2017 to 2020-2021).13 14 This translates to a 9 Finance Department. (2022). Transient Occupancy Tax Report: Revenue Collected in June 2022 for the Month of May 2022. South Lake Tahoe, CA: City of South Lake Tahoe. Available at: https://www.cityofslt.us/452/TransientOccupancyTax#:~:text=The%20Transient%20Occupancy%20Tax%20(TOT,12%25%20at%20specific%20redevelopment%20pr operties. 10 City of South Lake Tahoe. (2022). Transient Occupancy Tax and SLT Tourism Improvement District. Available at:
https://www.cityofslt.us/452/Transient-OccupancyTax#:~:text=The%20Transient%20Occupancy%20Tax%20(TOT,12%25%20at%20specific%20redevelopment%20pr operties. 11 City of South Lake Tahoe. (2022). Measure P Report. Available at: https://cityofslt.us/972/Measure-P-Report 12 California City Finance. (November 2020). Transient Occupancy Tax by City. Available at:
http://californiacityfinance.com/TOT19p.xlsx
13 City of South Lake Tahoe. (April 2022). Transient Occupancy Tax Report. Available at:
https://cityofslt.us/DocumentCenter/View/17109/TOT-Web-Pub-Apr-2022-PDF?bidId=. 14 This includes the most recent market peak in the 2018-2019 fiscal year, when the City collected $18.2 million in base 10 percent TOT revenue, as well as the most recent trough in the market during the 2019-2020 fiscal year, when the City collected $14.4 million in base 10 percent TOT revenue. 882
6 five-year average of roughly $167 million in gross revenue to lodging providers. Assuming that the City were to adopt an additional two percent TOT add-on to the general TOT rate, in addition to Measure P, the City could expect to collect approximately $2.8 to $3.3 million in annual TOT revenues that could be dedicated to affordable and workforce housing programs.

If the increase were limited to areas outside of the tourist core only (i.e., increasing the Tot rate to 14 percent citywide), the City could expect to receive approximately $1.8 to $2.2 million in additional TOT revenue per year.

Assessment of Stakeholder Impact
The burden associated with an increase in the effective TOT rate lays primarily with persons visiting from outside the area who are in need of short-term overnight accommodations. Local residents and employees will not be directly impacted, unless they need temporary short-term overnight accommodations in a local hotel, motel, or VHR. Local lodging businesses may be impacted to the extent that an increase in the local TOT rate increases the combined cost of lodging in South Lake Tahoe. To the extent that consumers set the price for lodging based on their willingness to pay (i.e., the intersection of pricing and vacancy), lodging providers may, in some cases, need to reduce their nightly rates to compensate; however, in instances where vacancy is low, the cost imposed by the increased TOT rate would be borne by the consumer.

Also, to the extent that the cost of overnight accommodations impacts visitors’ willingness to select South Lake Tahoe as a tourism destination, the increased TOT rate may also impact other businesses and employees that are reliant upon overnight visitor spending.

Real Estate Transfer Tax
The California Documentary Transfer Tax Act of 1967 authorized jurisdictions to impose an excise tax on the privilege of transferring ownership or leasehold rights to real property,15 which is also commonly known as a real estate or property transfer tax or a documentary transfer tax. The maximum real estate transfer tax that may be levied under General Law is $1.10 per $1,000 of assessed value.16 This is typically levied at the county level, though general law cities are entitled to share evenly in the proceeds resulting from transfers of real property located within their jurisdiction. Charter cities in California have the ability to impose additional real estate transfer or conveyance taxes without special authorizing legislation.

Changing the Real Estate Transfer Tax
To impose a supplemental real estate transfer tax, an incorporated jurisdiction must be, or become, a charter city. To become a charter city, the governing board of a jurisdiction, or an elected charter commission, must draft and adopt a charter, which must then be ratified by a 15 State of California. (August 2022). California Revenue and Taxation Code, Chapter 2, Section11911-11930.

Available at: https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=RTC&division=

2.&title=&part=6.7.&chapter=2.&article=. 16 The California Revenue and Taxation Code identifies the maximum real estate transfer tax as being equal to $0.55 per $500 of assessed value, which is equal to $1.10 per $1,000 of assessed value. The higher denominator is commonly used, presumably, to simplify calculation of tax liabilities. 883
7 majority vote of the electorate.17 A charter may be wide ranging in its scope, availing upon all of the rights afforded to cities to manage ‘municipal affairs,’18 or may be more limited.19 While charter cities may enjoy broader taxation powers compared to general law cities, they are still subject to Proposition 218, Article XIIIC of the California Constitution, and any limitations imposed by their charter. This means that a new or increased tax must receive voter approval.

Charter City Real Estate Transfer Taxes
According to data published by CaliforniaCityFinance.com, 22 of the 125 charter cities in California imposed supplemental real estate transfer taxes as of March 2022.20 The method for calculating the tax varies by jurisdiction. A flat tax per $1,000 of assessed value is most common, with tax rates ranging from $1.10 to $15.00 per $1,000 of value. Some jurisdictions alternatively structure the transfer tax on an ad valorem basis (i.e., as a percent of assessed or market value), with tax rates ranging from 0.45 to 4.45 percent. Some jurisdictions also apply different tax rates based on the assessed value of the property. For example, Oakland charges a one percent property transfer tax on properties valued at less than $300,000, which increases progressively up to 2.5 percent for properties valued at more than five million dollars.

Existing Transfer Tax in South Lake Tahoe
Based on data presented in Table 2, there were a total of 394 residential sales in South Lake Tahoe between January and December 15th of 2022, with an average sale price of just under $792,000. This overall sales volume is consistent with average annual sales documented in 2017, 2018, and 2019, but is notably below the annual sales volumes during the pandemic period, which included 625 sales in 2020 and 513 sales in 2021 (i.e., well above the historical average). The average sales price in 2022, however, remained well above the market average for the pre-pandemic period, and is more in line with the 2021 average.

Home sales in South Lake Tahoe in 2022 grossed approximately $312 million in sales revenue. At a rate of $0.55 per $1,000 of value, the existing real estate transfer tax 17 State of California. (2022). California Constitution, Article XI, Section 1-15. Available at: https://leginfo. legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CONS&sectionNum=SEC.%203.&article=XI 18 The home rule provision of the California Constitution authorizes a charter city to exercise plenary authority over municipal affairs over which a city has sovereignty, free from any constraint imposed by general law and subject only to constitutional limitations. Whether a given activity is a municipal affair or a statewide concern is not clearly defined in the law and is therefore a legal determination that is settled by the courts on a case-by-case basis. 19 For example, the City of San Bruno is pursing placement of a new city charter on the November 2022 ballot. The charter is specifically intended to allow the City the right to impose a real estate transfer tax on residential properties with five units or more, and on all non-residential property (e.g., commercial, industrial, etc.), at a rate of one percent of assessed value. The current draft charter was narrowly written using the following language:
“…Limitation on Powers. (a) The City shall exercise only the rights, powers and authority granted to a city under the general laws of the State of California, unless otherwise provided in this Charter…” 20 CaliforniaCityFinance.com. (July 2020). Property Transfer Tax / Documentary Transfer Tax Rates. Available at:
http://californiacityfinance.com/PropTransfTaxRates.pdf 884
8 applicable in the City of South Lake Tahoe likely generated approximately $171,600 in gross tax revenue to the City.

Table 2: Residential Sales Activity, 2017 to 2022 YTD
Note:
(a) As of December 15, 2022.

Sources: ListSource; BAE, 2022.

Non-residential sales volumes in the South Lake Tahoe have been historically slow, with relatively low valuations, though there was a considerable uptick in sales volumes and pricing following onset of the pandemic and the VHR moratorium. As shown in Table 3, the period from 2017 to 2019 averaged 13 sales per year, which increased to 33 in 2020 and 43 in 2021. There were a total of 25 transactions between January 2st and December 15th of 2022. The average value per transaction also increased significantly over the past few years from only $226,233 in 2019 to $1.05 million as of December 2022. BAE estimates that as of 2019, non-residential sales generated approximately $1,866 in transfer taxes to the City. As of 2021, that value increased to an estimated $9,758. BAE estimates that non-residential sales in 2022 may gross the City upwards of $14,400 in calendar year 2022. 2022
All Residential Units 2017 2018 2019 2020 2021 YTD (a) All Sales Number of Sales 348 341 389 625 513 394 2,610
Median Sale Price $385,000 $420,000 $435,000 $500,000 $602,000 $642,500 $500,000 Ave. Sale price $462,097 $514,954 $557,259 $624,223 $765,300 $791,868 $631,386 Ave. Size (sq. ft.) 1,494 1,495 1,552 1,626 1,561 1,548 1,556 Ave. Sale Price per sq.ft. $311 $345 $365 $384 $493 $521 $408 Maximum Sale Price $2,337,500 $2,450,000 $5,300,000 $5,200,000 $5,550,000 $5,300,000 $5,550,000 Minimum Sale Price $71,000 $100,500 $46,000 $3,500 $50,000 $75,000 $3,500 2022
Single Family Homes 2017 2018 2019 2020 2021 YTD (a) All Sales Number of Sales 333 322 368 585 483 367 2,458
Median Sale Price $389,000 $425,000 $440,000 $505,000 $613,000 $650,000 $505,000 Ave. Sale price $462,217 $525,288 $563,064 $632,835 $783,050 $809,834 $641,131 Ave. Size (sq. ft.) 1,505 1,512 1,577 1,659 1,585 1,579 1,580 Ave. Sale Price per sq.ft. $310 $349 $362 $381 $496 $522 $408 Maximum Sale Price $2,200,000 $2,450,000 $5,300,000 $5,200,000 $5,550,000 $5,300,000 $5,550,000 Minimum Sale Price $71,000 $100,500 $46,000 $3,500 $75,000 $75,000 $3,500 2022
Condominiums 2017 2018 2019 2020 2021 YTD (a) All Sales Number of Sales 15 19 21 40 30 27 152
Median Sale Price $295,000 $265,000 $346,500 $354,250 $417,500 $480,000 $363,750 Ave. Sale price $459,433 $339,816 $455,524 $498,275 $479,533 $547,667 $473,803 Ave. Size (sq. ft.) 1,236 1,203 1,106 1,144 1,171 1,118 1,156 Ave. Sale Price per sq.ft. $328 $289 $421 $417 $445 $505 $414 Maximum Sale Price $2,337,500 $799,000 $1,250,000 $2,700,000 $1,180,000 $1,349,000 $2,700,000 Minimum Sale Price $180,000 $168,000 $97,500 $165,000 $50,000 $232,500 $50,000 885
9 Table 3: Non-Residential Sales Activity, 2017 to 2022 YTD Note:
(a) As of December 15, 2022.

Sources: ListSource; BAE, 2022.

Estimated Revenue Potential
Revenue generation associated with imposition of a local real estate transfer tax above and beyond that authorized under State law for general law cities is highly dependent on three key factors. These include the applicable tax rate(s), as well as the number and pricing of sales or transfers that occur within the jurisdiction, which can vary significantly from year to year. Table 4 and Table 5 report the estimated revenue that may be generated through imposition of an increased local real estate transfer tax, under specific sales volume and pricing assumptions, which is structured either as a flat rate per $1,000 of value or as a percent of the sale value.

For residential uses, the analysis assumes an average of 390 sales per year, which is consistent with the average sales volume in 2019 and 2022, both pre- and post-pandemic.

This value is used to reflect a more ‘typical’ sales volume after accounting for the significant increase in activity experienced since the onset of the pandemic in 2020. The assumed average sales price is based on the average sale price for sales that occurred between January 1st to December 15th of 2022 to reflect the recent state of the market.21 Based on these assumptions, the City may expect to gross around $171,600 in a typical year as a result of imposing the existing $0.55 transfer tax on residential sales. Table 4 then illustrates the potential revenue that could be generated through an increase to the real estate transfer tax in increments up to $15 per $1,000 of value, which is equal to the highest local real estate transfer tax currently in place in California. The table also identifies the estimated cost to the buyer of residential real estate on a per sale basis. Table 5 shows similar data, however the tax rate is expressed as a percent of the sale value.
21 BAE anticipates that while sales volumes have already begun to slow due to the impacts of return to work and increasing interest rates, sales prices appear more resistant to rapid adjustment; though that does not preclude the possibility of a downward adjustment in the future due to changing macroeconomic conditions. 2022
All Non-Residential 2017 2018 2019 2020 2021 YTD (a) All Sales Number of Sales 6 18 15 33 43 25 140
Median Sale Price $6,250 $115,000 $85,000 $160,000 $209,000 $1,025,000 $204,500 Ave. Sale price $305,000 $268,289 $226,233 $470,335 $412,581 $1,050,140 $496,916 Ave. Land Size (sq. ft.) 35,864 16,988 34,064 10,336 11,143 12,424 15,448 Ave. Sale Price per sq. ft. $12 $19 $27 $113 $77 $355 $119 Ave. Land Size (acres) 0.82 0.39 0.78 0.24 0.26 0.29 0.35 Ave. Sale Price per acre $501,156 $830,597 $1,159,517 $4,925,097 $3,334,407 $15,463,529 $5,198,903 Maximum Sale Price $1,750,000 $1,200,000 $890,000 $3,550,000 $2,275,000 $2,200,000 $3,550,000 Minimum Sale Price $3,500 $500 $3,000 $3,500 $13,000 $130,000 $500 886
10 For non-residential uses, the analysis is based on the average number of sales per year from 2017 to December 2022, as well as the weighted average sale price per transaction. Note that this approach places greater weight on recent transactions compared to the assumptions used for the residential transfer tax revenue estimates. This is due to increased activity in the non-residential market resulting from imposition of the VHR moratorium and renewed investment activity in commercial real estate in the tourist core area.

Table 4: Estimated Revenue Generation from Increased Real Estate Transfer Tax, Flat Rate Per $1,000 of Value
Notes:
(a) Based on the average number of sales per year in 2019 and 2022, both pre- and post-pandemic. This equals a value that is higher than the historical average between 2017 and 2019, but below the pandemic induced highs in 2020 and 2021. (b) Based on the average price per transaction from January to December of 2022. (c) Based on the average sales per year from 2017 to December 2022. (d) Based on the weighted average price per transaction 2017 to December 2022. (e) Based on the difference between estimated gross receipts and gross receipts under the existing transfer tax.

Sources: ListSource; BAE, 2022.

RESIDENTIAL NON-RESIDENTIAL
Ave. Number of Sales 360 (a) 23 (c)
Ave. Sale Price $830,000 (b) $440,460 (d)
Gross Sales Value $298,800,000 $10,130,584
Transfer Tax Rate Revenue Revenue
(Per $1,000 of Value) Gross Add-On (e) Gross Add-On (e) $0.55 (Existing) $164,340 $0 $5,572 $0
$1.00 $298,800 $134,460 $10,131 $4,559
$2.00 $597,600 $433,260 $20,261 $14,689
$3.00 $896,400 $732,060 $30,392 $24,820
$4.00 $1,195,200 $1,030,860 $40,522 $34,951
$5.00 $1,494,000 $1,329,660 $50,653 $45,081
$10.00 $2,988,000 $2,823,660 $101,306 $95,734
$15.00 $4,482,000 $4,317,660 $151,959 $146,387
Transfer Tax Revenue Revenue
(Ave. Per Sale) Gross Add-On (e) Gross Add-On (e)
$0.55 (Existing) $457 $0 $242 $0
$1.00 $830 $374 $440 $198
$2.00 $1,660 $1,204 $881 $639
$3.00 $2,490 $2,034 $1,321 $1,079
$4.00 $3,320 $2,864 $1,762 $1,520
$5.00 $4,150 $3,694 $2,202 $1,960
$10.00 $8,300 $7,844 $4,405 $4,162
$15.00 $12,450 $11,994 $6,607 $6,365
887
11 Table 5: Estimated Revenue Generation from Increased Real Estate Transfer Tax, Percent of Sale Value
Notes:
(a) Based on the average number of sales per year from 2017 to 2021. (b) Based on the average price per transaction from January 1st to December 15th of 2022. (c) Based on the average sales per year from 2017 to December 2022. (d) Based on the weighted average price per transaction 2017 to December 2022. (e) Based on the difference between estimated gross receipts and gross receipts under the existing transfer tax.

Sources: ListSource; BAE, 2022.

Assessment of Stakeholder Impact
The burden associated with an increase in the local real estate transfer tax rate would fall to the buyers and sellers of real property. It is customary in most markets, though not all, for the seller to pay the county portion of the real estate transfer tax and the buyer and seller to split the city portion. However, this division is negotiable, and in tight housing markets that favor sellers, such as the recent market in South Lake Tahoe, it is not uncommon for the buyer to pay most of the required taxes and fees. To the extent that the buyer must pay a portion, if not all, of the tax, a significant increase in the local real estate transfer tax rate may function to make home ownership less affordable (i.e., higher up-front cost) for existing and new residents. However, this risk may be mitigated to some extent through the use of a tiered rate structure, like that in use in communities like Oakland, Richmond, and San Francisco.

RESIDENTIAL NON-RESIDENTIAL
Ave. Number of Sales 390 (a) 23 (c)
Ave. Sale Price $800,000 (b) $500,000 (d)
Gross Sales Value $312,000,000 $11,500,000
Transfer Tax Rate Revenue Revenue
(Percent of Value) Gross Add-On (e) Gross Add-On (e)

0.055% (Existing) $171,600 $0 $6,325 $0

0.10% $312,000 $140,400 $11,500 $5,175

0.50% $1,560,000 $1,388,400 $57,500 $51,175

1.00% $3,120,000 $2,948,400 $115,000 $108,675

2.00% $6,240,000 $6,068,400 $230,000 $223,675

3.00% $9,360,000 $9,188,400 $345,000 $338,675

4.00% $12,480,000 $12,308,400 $460,000 $453,675

5.00% $15,600,000 $15,428,400 $575,000 $568,675
Transfer Tax Rate Revenue Revenue
(Percent of Value) Gross Add-On (b) Gross Add-On (b)
$0.55 (Existing) $440 $0 $275 $0

0.10% $800 $360 $500 $225

0.50% $4,000 $3,560 $2,500 $2,225

1.00% $8,000 $7,560 $5,000 $4,725

2.00% $16,000 $15,560 $10,000 $9,725

3.00% $24,000 $23,560 $15,000 $14,725

4.00% $32,000 $31,560 $20,000 $19,725

5.00% $40,000 $39,560 $25,000 $24,725
888
12 Sales and Use Tax
The Bradley-Burns Uniform Local Sales and Use Tax Law of 1955 formally authorized local jurisdictions to impose local sales and use taxes on the privilege of selling tangible property at retail, as well as on the storage, use, or other consumption of tangible personal property purchased from a retailer.22 This authority was subsequently augmented by Senate Bill (SB) 566 in 2003.23 While sales tax is imposed on retailers, and then often passed through to consumers, the use tax is imposed directly on the purchaser. The State of California imposes a sales and use tax rate of six percent and a supplemental uniform local tax of 1.25 percent that is split between the city and county, for a combined rate of 7.25 percent. SB 566 legally authorized all cities in California to levy additional local sales taxes, also known as district taxes, but established a cap on the combined value at two percent over the statutory 7.25 percent. While passage of SB 566 theoretically caps the combined sales and use tax rate at

9.25 percent, the California legislature has routinely allowed local governments to petition for special legislation authorizing local sales taxes above that authorized by SB 566.24 25 Changing the Sales and Use Tax
Passage of a new local sales and use tax measure is subject to the same voter approval requirements as other local tax measures. Increasing the local sales tax rate beyond the statutory two percent requires the passage of special state legislation.

Existing Sales Tax in South Lake Tahoe
In November 2020, a new general sales tax measure was approved by voters in the City of South Lake Tahoe called Measure S. The measure increased the local sales and use tax by one percent from 7.75 to 8.75 percent. The measure went into effect on April 1, 2021 and is projected to generated between $5.9 and $6.2 million annually. The City Council began allocating these funds in the second half of the 2021 fiscal year for several critical projects, including Fire Station II Rehabilitation, Public Safety Radio Communication System Replacement, Road Rehabilitation and Computer Aided Dispatch System upgrades.

Recognizing passage of Measure S, the City of South Lake Tahoe could increase the local sales tax by up to 0.5 percent before reaching the statutory limit of 9.25 percent. 22 State of California. (August 2022). California Revenue and Taxation Code, Chapter 1, Section 7200-7212.

Available at: https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=RTC&division=2.&title =&part=1.5.&chapter=1.&article=. 23 State of California. (2022). Revenue and Taxation Code, Chapter 1, Sections 7251.1-7251.4. Available at:
https://www.cdtfa.ca.gov/lawguides/vol1/tutl/transactions-and-use-tax-law-ch1-all.html 24 According to the California Department of Tax and Fee Administration (CDTFA), there are 328 jurisdictions, out of 1,786 reported, or around 18 percent, that have combined sales tax rates of more than 9.25 percent with a maximum of 10.75 percent. Most of these jurisdictions are located in large metropolitan areas, including jurisdictions located in the counties of Alameda, Contra Costa, Los Angeles, Monterey, San Mateo, Santa Clara, Santa Cruz, and Sonoma.
25 California Department of Tax and Fee Administration. (April 1, 2022). California City and County Sales & Use Tax Rates. Available at: https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx 889
13 Comparison with Nearby Jurisdictions
According to data published by the California Department of Tax and Fee Administration (CDTFA), the City of South Lake Tahoe and the Town of Truckee are the only jurisdictions in the Lake Tahoe region to levy supplemental sales taxes.26 All other jurisdictions in the counties of Alpine, Placer, and El Dorado charge the statewide base rate of 7.25 percent. Communities located in the unincorporated area of Nevada County charge 7.5 percent, while the incorporated cities of Nevada City and Grass Valley charge 8.38 and 8.5 percent, respectively.

The applicable rates in nearby parts of Nevada range from 7.1 percent in Douglas County to

7.6 percent in Carson City, and 8.27 percent in Washoe County, including Incline Village.

Estimated Revenue Potential
According to the CDTFA, taxable sales originating with outlets located in the City of South Lake Tahoe totaled $489 million in 2021. Figure 2 illustrates the overall trend in taxable sales in South Lake Tahoe from 2015 to 2021. The figure clearly shows the decrease in taxable sales experienced in 2020 as a result of decreased tourist visitation; however, the data indicate that as of 2021, taxable sales had nearly returned to the growth trend indicated during the 2015 to 2019 period. More specifically, the average growth rate in taxable sales from 2015 to 2019 was 3.1 percent, while the average growth rate between 2019 and 2021 was 4.0 percent.

This suggests that taxable sales have largely recovered from pandemic induced impacts. At current taxable sales levels (i.e., $490.7 million per year), the imposition of an additional 0.5 percent sales tax would generate approximately $2.5 million per year in revenue to the City.

Figure 2: Total Taxable Sales, City of South Lake Tahoe 2015-2021 Sources: California Department of Taxation and Fee Administration (CDTFA), Taxable Sales – Cities by Type of Business (Taxable Table 4); BAE, 2021.

Assessment of Stakeholder Impact
Sales tax measures are generally considered regressive in that they proportionately impact lower-income households to a greater extent than higher income households. This is because lower-income households spend a greater proportion of their total income each year and 26 The current sales tax rate in the Town of Truckee is 8.25 percent. The data indicate that Nevada City and Grass Valley also impose supplemental sales taxes with effective rates of 8.38 and 8.5 percent, respectively. -10.0%
-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%
$300
$350
$400
$450
$500
2015 2016 2017 2018 2019 2020 2021
Millions
Year
Taxable Sales, Total Year-Over-Year Change
890
14 subsequently pay more of their income to taxes. In the case of an increased sales and use tax in a visitor-oriented market like South Lake Tahoe, a majority of the burden would fall to out of town visitors (both overnight and day-trippers) who account for a greater proportion of the local taxable sales. However, to the extent that full-time residents and workforce households purchase retail goods and services within the community (e.g., persons with more limited access to transportation), versus in other nearby consumer markets like Minden or Carson City, these households would be impacted by increased taxation.

Real Estate Vacancy Tax
As the severity of California’s housing crisis continues to escalate, cities like Berkeley and San Francisco have recently joined the likes of Oakland and Vancouver, B.C., with imposition of real estate vacancy taxes. Vacancy taxes may target residential or non-residential uses, or both.

The ordinances establishing vacancy taxes clearly specify procedures for identifying properties that were unoccupied during the fiscal year for a specified length of time (often 60 to 90 days) and impose a financial penalty on the property owner. The intent of a vacancy tax is to encourage the active use of vacant property and, as a secondary objective, to generate revenue that can be used for specific purposes. Vancouver, British Columbia, and Oakland, California, are two examples of jurisdictions that have successfully implemented residential vacancy tax policies. New residential vacancy taxes were also recently approved by voters in San Francisco and Berkeley. Non-residential vacancy taxes are much less prevalent, with San Francisco currently being the only jurisdiction known to implement such a policy.

Establishing a Vacancy Tax
Vacancy tax policies are most often structured as excise or flat taxes but are in some cases levied on an ad valorem basis. For example, the residential vacancy tax model being used in Oakland, as well as those recently approved by voters in Berkeley and San Francisco, applies a flat fee per housing unit per year, while the Vancouver residential vacancy tax is based on assessed value. San Francisco’s commercial vacancy tax is also structured as an excise tax that is set at a flat rate per linear foot of frontage. Under California law, the ordinance implementing a vacancy tax must identify relevant exemptions. Passage of a vacancy tax measure would be subject to the same voter approval requirements as other local taxes.

Vacancy Taxes in Other Jurisdictions
Vancouver B.C. (Residential) - In 2018, the City of Vancouver in British Columbia instituted the first real estate vacancy tax in North America. In Vancouver, the vacancy tax is ad valorem (i.e., assessed value in the previous tax year). The rate was initially set at 1.0 percent between 2017 and 2019, then stepped up to 1.25 percent in 2020 and 3.0 percent in 2021.27 Under 27 City of Vancouver. (2022). Empty Homes Tax FAQ. Available at: https://vancouver.ca/home-propertydevelopment/empty-homes-tax-frequently-asked-questions.aspx#:~:text=The%20Empty%20Homes%20Tax%20is ,Homes%20Tax%20rate%20is%203%25.&text=For%20more%20information%2C%20review%20the,)%20PDF%20fi le%20(127%20KB)
891
15 the ordinance, properties are vacant if they are unoccupied for more than six months during the tax year. Property owners must file a property status declaration each year or be deemed vacant and subject to the tax. According to the City of Vancouver, the tax generated approximately $106 million in revenue to the municipal government between 2017 and 2021 (i.e., between $21 and 34 million per year).28 The program reportedly cost $7.5 million in onetime startup costs, as well as $2.5 million per year in ongoing operating costs. The remaining proceeds are used for multi-year housing capital grants and other housing initiatives. The City of Vancouver reports an overall five percent increase in the number of residential units in the city between 2017 and 2020, with a 20 percent increase in the number of tenanted properties, a 26 percent decrease in the number of vacant properties, and a 23 percent decrease in the number of exempt properties.

Oakland, CA (Residential and Commercial) - In November 2018, voters in the City of Oakland approved Measure W, which instituted a special use vacant property tax of $3,000 for residential units and vacant ground floor commercial spaces, and $6,000 for non-residential and undeveloped parcels. According to Measure W, the City of Oakland estimated in 2018 that, once implemented, the tax would generate roughly $10 million per year in revenue. The measure authorized the tax for a 20-year term. Revenue from the tax is deposited into a vacant property tax fund. Key authorized uses of funds include code enforcement and remediation of illegal dumping, homeless service provision, preservation and production of affordable housing, and administrative costs from implementation of the vacancy tax.

A property is “vacant” if it is “in use less than fifty days in a calendar year.” The exact method that the City uses to determine use status is unclear. For parcels with multiple units, the parcel is not vacant if at least one unit is occupied; however, condominium, duplex, and townhome units under separate ownership are treated as separate parcels for the purposes of the vacancy tax. There are ten categories of exemption under the ordinance, including:
- Very low-income owner
- Low-income senior owner
- Disabled owner
- Non-profit organization owner
- Property otherwise exempt from ad valorem tax
- Substantially complete planning application
- Active construction
- Demonstrated financial hardship
- Demonstrated other hardship (unrelated to finances)
- Exceptional specific circumstances
28 City of Vancouver. (November 1, 2021). Empty Homes Tax Annual Report: 2020 Vacancy Reference Year (January 1, 2020 to December 31, 2020). Available at: https://vancouver.ca/files/cov/vancouver-2021-emptyhomes-tax-annual-report.pdf 892
16 The City of Oakland began distributing notices of vacancy to property owners in February of 2022. Property owners are then offered the opportunity to submit a Petition of Vacancy if they believe the property was incorrectly identified as vacant, or if they believe that the property is eligible for one of the ten allowable exemptions.

Berkeley, CA (Residential) - The ballot initiative approved by Berkeley voters in November 2022 imposes a $3,000 to $6,000 tax on single-family and apartment units, respectively, which sit vacant for at least six months. The tax doubles in the second tax year. Owners of apartments with fewer than five units who live on the property (and don’t own other homes), will be exempt. The city expects roughly 700 homes to be returned to the rental market in the first year, with the tax generating between $3.9 and $5.9 million per year in general tax revenue.

San Francisco, CA (Residential) - The San Francisco ballot measure approved by voters in November 2022 is based on those adopted in Vancouver and Oakland, but controversially excludes single-family homes. The new vacancy tax will apply a tiered structure that imposes a $2,500 flat tax on smaller units and $5,000 flat tax for larger units, which escalates to $10,000 and $20,000, respectively, over three years if the unit(s) remains vacant.29 The City projects that the tax could bring 4,500 units back onto the rental market and generate as much as $38 million per year in revenue to the City.30
San Francisco, CA (Commercial) – Voters in the City and County of San Francisco approved a commercial vacancy tax in March 2020, which went into effect as of January 1, 2022. For most entities, filing ad payment of the commercial vacancy tax will begin in 2023. The tax applies to ground floor commercial (i.e., non-residential) space that is vacant for 182 days or more in the calendar year. Spaces must be located in one of the Named Neighborhood Commercial Districts (NCDs) or Named Neighborhood Commercial Transit Districts (NCTs) that are adjacent or tangent to a public right of way. The cost associated with the tax is to be paid by the property owner, or may be passed through to the lessee or sublessee. The tax is unsecured with rates starting at $250 per linear foot of frontage on the public right of way, which escalates to $500 in year two and $1,000 per year thereafter.

Other Jurisdictions – Recognizing the escalation of the housing crisis that has occurred in recent years, a variety of communities throughout California placed vacancy tax measures on November 2022 ballots, including Berkeley, San Francisco, and Santa Cruz. Vacancy tax measures were approved by voters in both Berkeley and San Francisco, but failed to garner necessary voter approval in Santa Cruz. Additional communities elected not to place vacancy 29 Schneider, B. (February 28, 2022). S.F.’s plan to tax 40,000 empty homes under scrutiny. San Francisco Examiner. Available at: https://www.sfexaminer.com/the_fs/fixes/s-f-s-plan-to-tax-40-000-empty-homes-underscrutiny/article_386da20e-0215-59a9-96a4-7c4396c17cc6.html 30 City of San Francisco, Budget and Legislative Analyst’s Office. (January 31, 2022). Policy Analysis Report:

Residential Vacancies in San Francisco. Available at: https://sfbos.org/sites/default/files/BLA.Residential% 20Vacancies.013122_final.pdf
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17 tax measures on the ballot in 2022, including Napa County and the City of Los Angeles. New York State also considered statewide legislation during the 2021-2022 legislative session that would allow jurisdictions with more than one million residents to institute commercial vacancy taxes, though the legislation remains under committee review.

Estimated Revenue Potential
The revenue generation potential of a possible vacancy tax within the City of South Lake Tahoe is contingent on the way that the tax is structured and the properties to which it applies.

Residential Vacancy Tax
BAE assumes that a residential tax would exempt properties that are vacant as a result of being actively sold or rented, or held vacant for later occupancy by seasonal workers, and would be targeted towards properties held vacant for seasonal or occasional use.

To estimate the number of vacant units in the City of South Lake Tahoe, BAE applied the distribution of housing units by vacancy status reported in the 2020 five-year American Community Survey (ACS), illustrated in Figure 3, with the total number of vacant housing units reported in the 2020 Census.31 Additional data on vacancy by unit type indicates that 67 percent of all vacant housing units in the city (inclusive of those vacant but for lease or sale, or vacant and intended for seasonal workforce occupancy) were detached single-family homes.

Figure 3: Housing Vacancy by Type, 2020 5-Year ACS
Source: U.S. Census Bureau, 2020 American Community Survey 5-Year, Table B25004; BAE, 2022. 31 While these estimates fail to capture the impacts of the coronavirus pandemic, they represent the most recent available data on residential vacancy. Using this approach, BAE estimates that as of 2020 there were approximately 5,629 housing units held vacant for seasonal or occasional use. 6%
1% 1% 2%
84%
0%
5%
For rent
Rented, not occupied
For sale only
Sold, not occupied
For seasonal, recreational, or
occasional use
For migrant workers
Other vacant
894
18 To estimate the possible order of magnitude of the revenue that may be generated under a likely residential vacancy tax scenario, BAE assumed a tax of $3,000 per vacant unit, which is generally consistent with the tax being charged in Oakland. Assuming that all housing units held vacant for seasonal or occasional use would be subject to the tax, BAE estimates that a vacancy tax could theoretically generate up to around $16.8 million per year.

Table 6: Housing Units by Vacancy Status and Tenure, 2020 Source: U.S. Census Bureau, 2020 Decennial Census, Table H1; U.S. Census Bureau, 2020 American Community Survey 5-Year, Tables B25024 and B25032; BAE, 2022.

This report also considered applying the residential vacancy tax only to single-family properties held for seasonal or occasional use. While the Census Bureau does not specifically report the required statistic, the available data does indicate that there were around 4,500 single-family homes that were vacant for any reason as of the 2020 Decennial Census (i.e., roughly 47 percent of the single-family housing stock).32 Assuming that the vacancy tax applies to singlefamily properties only, that are vacant for any reason, the tax could yield roughly $13.5 million per year in revenue.

Applying the citywide seasonal vacancy rate of 84 percent (i.e., the percent of vacant units held for seasonal or occasional use) to the 2020 vacant single-family inventory produces a conservative estimate of around 3,800 single-family units held for seasonal or occasional use.

If the vacancy tax is applied only to single-family units held vacant for seasonal or occasional use, the tax may generate approximately nearly $11.4 million per year in revenue. 32 Preliminary estimates published as part of the 2021 5-year American Community Survey (ACS) suggest a nine percent increase in overall residential vacancy between 2020 and 2021, which was likely induced by the COVID-19 pandemic. It is not clear how this development will translate into future residential vacancy rates in South Lake Tahoe; however a significant increase in residential vacancy would theoretically translate into increase revenue from a residential vacancy tax.

Occupied
Units in Structure Vacant Renter Ow ner Total
1, detached 4,507 1,751 3,314 9,609
1, attached 175 396 73 636
2 292 526 162 971
3 or 4 566 729 17 1,315
5 to 9 397 750 3 1,144
10 to 19 161 575 13 738
20 to 49 197 319 21 536
50 or more 296 89 34 428
Mobile home 103 254 240 585
Boat, RV, van, etc. 0 0 0 0
Total, All Units 6,695 5,390 3,876 15,961
Percent 42% 34% 24% 100%
895
19 Commercial Vacancy Tax
The only known contemporary example of a commercial vacancy tax is in San Francisco, which applies the tax on vacant commercial frontage on a per square foot basis. This makes sense in San Francisco, which features a dense urban streetscape. The goal of the tax is to encourage property owners to maintain active streetscapes to avoid the appearance of urban blight. This model does not translate easily to the South Lake Tahoe context, which features an urban fabric that is much less dense. Therefore, BAE recommends that the City consider applying a potential vacancy tax not on commercial street frontage, but rather based on the gross square footage of the vacant commercial property.

Table 7: Commercial Vacancies, City of South Lake Tahoe, December 2022 (a) Notes:
(a) Based on anecdotal observations made by City staff, as well as a review of current listings on CoStar. Data may exclude vacant properties not current listed for-sale or for-lease. (b) Based on reported gross building square footage, as reported by the El Dorado County Assessor and CoStar.

Sources: City of South Lake Tahoe; El Dorado County Assessor; CoStar; BAE, 2022.

Only limited information currently exists regarding the prevalence of vacant commercial property in South Lake Tahoe (See Table 7). City staff provide BAE with a list of assessor’s parcel numbers (APNs) associated with vacant commercial properties that were identified by City staff on an anecdotal basis. To supplement this data, BAE also reviewed data from CoStar regarding commercial properties that are currently listed for-lease or for-sale to identify Estimated
Vacant
Former Occupant APN Address Sq. Ft. (b) Source
Winters Electric 23251008 2280 Lake Tahoe Blvd. 3,073 City of South Lake Tahoe Unknow n 27040007 Unknow n 25,089 City of South Lake Tahoe Carrow s 31290039 2375 Lake Tahoe Blvd. 24,050 City of South Lake Tahoe Teps 27090022 3450 Lake Tahoe Blvd. 11,520 City of South Lake Tahoe Runnels 23523013 986 Emerald Bay Rd. 1,568 City of South Lake Tahoe Ahern Rentals 31091005 2724 Lake Tahoe Blvd. 5,275 City of South Lake Tahoe Verizon 23251017 2230 Lake Tahoe Blvd. 5,841 City of South Lake Tahoe Lily's Tire 31258019 2635 Lake Tahoe Blvd. 6,472 City of South Lake Tahoe Sunray 31257007 2659 Lake Tahoe Blvd. 20,996 City of South Lake Tahoe Hair Salon 31241011 2634 Lake Tahoe Blvd. 850 City of South Lake Tahoe Bagan Toyota 31041009 2296 Lake Tahoe Blvd. 288 City of South Lake Tahoe Chevy's 27071030 3678 Lake Tahoe Blvd. 10,114 City of South Lake Tahoe Avalon Lodge 29041061 4075 Manzanita Ave. 8,084 City of South Lake Tahoe Don Cheepo 27010002 3349 Lake Tahoe Blvd. 240 City of South Lake Tahoe Ambassador 29051020 4130 Manzanita Ave. 22,794 City of South Lake Tahoe Chateau 29690002 4139 Lake Tahoe Blvd. 15,247 City of South Lake Tahoe Kmart Garden Center 32299102 1030 Tata Ln. 12,852 City of South Lake Tahoe Kmart 23430032 1020 Lake Tahoe Blvd. 144,117 City of South Lake Tahoe Sato Japanese Rest. 27090006 3430 Lake Tahoe Blvd. 8,215 City of South Lake Tahoe Humane Society 23182005 884 Emerald Bay Rd. 1,139 City of South Lake Tahoe Unknow n 27361005 3331 Sandy Way 3,000 CoStar
Unknow n 32291023 1030 Tata Ln. 1,200 CoStar
Unknow n 27361005 3331 Sandy Way 3,000 CoStar
Total Est. Vacant Sq. Ft. 335,024
896
20 properties with no existing tenant (i.e., did not add properties to the vacant commercial inventory if they were listed for-lease or for-sale but had identifiable tenants already occupying the space). Please note that the inventory reported in Table 7 may exclude some properties that are vacant but which are not actively being listed for-lease or for-sale. Based on this approach, BAE estimates that there is roughly 335,000 square feet of vacant commercial real estate in South Lake Tahoe.

As there are no known commercial vacancy taxes applied on the basis of gross leasable area, there are no comparable tax rates to use as the basis for estimating potential revenue generation. Table 8 illustrates the hypothetical revenue that could be generated through imposition of a commercial vacancy tax at various tax rates ranging from $1,000 to $10,000 per 1,000 square feet of vacant gross leasable area. At these rates and estimated current vacancy levels, a commercial vacancy tax could potentially generate anywhere from $335,000 to upwards of $3.35 million per year in revenue to the City of South Lake Tahoe.

Table 8 also highlights the estimated tax burden that would accrue to each identified vacant property. Even at the lowest estimated tax rate, some properties may be subject to a very high relative tax burden. For example, the 144,117 square foot former Kmart space on Lake Tahoe Boulevard could be subject to an annual commercial vacancy tax burden of upwards of $144,000, which could increase to more than $1.4 million per year under the higher tax rate scenarios. For this reason, BAE would recommend placing a cap on the gross tax amount that may apply to any given property, though such a cap may limit revenue generation. 897
21 Table 8: Estimated Revenue Generation, Commercial Vacancy Tax Notes:
(a) Based on anecdotal observations made by City staff, as well as a review of current listings on CoStar. Data may exclude vacant properties not current listed for-sale or forlease. (b) Based on reported gross building square footage, as reported by the El Dorado County Assessor and CoStar. (c) The reported tax rates are intended to be representative only. Additional analysis and community outreach may be necessary prior to establishing the applicable tax rate.

Sources: City of South Lake Tahoe; El Dorado County Assessor; CoStar; BAE, 2022.

Estimated
Vacant Revenue Generation by Tax Rate (Per 1,000 Sq. Ft.)(c) Former Occupant APN Address Sq. Ft. (b) $1,000 $2,500 $5,000 $7,500 $10,000 Winters Electric 23251008 2280 Lake Tahoe Blvd. 3,073 $3,073 $7,683 $15,365 $23,048 $30,730 Unknow n 27040007 Unknow n 25,089 $25,089 $62,723 $125,445 $188,168 $250,890 Carrow s 31290039 2375 Lake Tahoe Blvd. 24,050 $24,050 $60,125 $120,250 $180,375 $240,500 Teps 27090022 3450 Lake Tahoe Blvd. 11,520 $11,520 $28,800 $57,600 $86,400 $115,200 Runnels 23523013 986 Emerald Bay Rd. 1,568 $1,568 $3,920 $7,840 $11,760 $15,680 Ahern Rentals 31091005 2724 Lake Tahoe Blvd. 5,275 $5,275 $13,188 $26,375 $39,563 $52,750 Verizon 23251017 2230 Lake Tahoe Blvd. 5,841 $5,841 $14,603 $29,205 $43,808 $58,410 Lily's Tire 31258019 2635 Lake Tahoe Blvd. 6,472 $6,472 $16,180 $32,360 $48,540 $64,720 Sunray 31257007 2659 Lake Tahoe Blvd. 20,996 $20,996 $52,490 $104,980 $157,470 $209,960 Hair Salon 31241011 2634 Lake Tahoe Blvd. 850 $850 $2,125 $4,250 $6,375 $8,500 Bagan Toyota 31041009 2296 Lake Tahoe Blvd. 288 $288 $720 $1,440 $2,160 $2,880 Chevy's 27071030 3678 Lake Tahoe Blvd. 10,114 $10,114 $25,285 $50,570 $75,855 $101,140 Avalon Lodge 29041061 4075 Manzanita Ave. 8,084 $8,084 $20,210 $40,420 $60,630 $80,840 Don Cheepo 27010002 3349 Lake Tahoe Blvd. 240 $240 $600 $1,200 $1,800 $2,400 Ambassador 29051020 4130 Manzanita Ave. 22,794 $22,794 $56,985 $113,970 $170,955 $227,940 Chateau 29690002 4139 Lake Tahoe Blvd. 15,247 $15,247 $38,118 $76,235 $114,353 $152,470 Kmart Garden Center 32299102 1030 Tata Ln. 12,852 $12,852 $32,130 $64,260 $96,390 $128,520 Kmart 23430032 1020 Lake Tahoe Blvd. 144,117 $144,117 $360,293 $720,585 $1,080,878 $1,441,170 Sato Japanese Rest. 27090006 3430 Lake Tahoe Blvd. 8,215 $8,215 $20,538 $41,075 $61,613 $82,150 Humane Society 23182005 884 Emerald Bay Rd. 1,139 $1,139 $2,848 $5,695 $8,543 $11,390 Unknow n 27361005 3331 Sandy Way 3,000 $3,000 $7,500 $15,000 $22,500 $30,000 Unknow n 32291023 1030 Tata Ln. 1,200 $1,200 $3,000 $6,000 $9,000 $12,000 Unknow n 27361005 3331 Sandy Way 3,000 $3,000 $7,500 $15,000 $22,500 $30,000 Total Est. Vacant Sq. Ft. 335,024 $335,024 $837,560 $1,675,120 $2,512,680 $3,350,240 898
22 Assessment of Stakeholder Impact
The burden associated with imposition of a vacancy tax would fall on owners and lessees of real property.

Residential property owners that occupy the subject property as their primary residence or rent out the unit for more than the minimum statutory time period would be exempt from a residential vacancy tax. The City may identify other categories of exemption, like in Oakland (lower-income property owners) and San Francisco (single-family homes). The property owners most likely to be impacted include owners of second homes that do not rent out their property for at least the minimum term. The extent to which short-term rental and multifamily property owners would be impacted is contingent on how the tax is structured.

Owners and lessees of commercial property would be subject to an applicable commercial vacancy tax in cases where the vacancy exceeded the allowable timeframe. The tax may be particularly onerous for owners of properties that are significantly dilapidated, and which would require significant renovation to make them attractive to new prospective occupants.

The financial penalty may induce some property owners to make the sites available for redevelopment, or other forms of reinvestment; though the ability to pass the tax penalty through to lessee’s who aren’t currently occupying the space may mute this effect.

In either taxation scenario, residential or commercial, allowances should also be considered for properties that are actively being leased, sold, renovated, or redeveloped, with limitations imposed on those exemptions to discourage bad actors (e.g., applying for a building permit only to never complete the described renovations as a way to defer payment of the tax).

Alternative Business Taxes
Local jurisdictions in California apply various approaches to generating revenue through taxation of local business activity. Some local governments shy away from taxes that expressly penalize revenue generation and/or jobs creation, others more open recognize the relationship between business activity, employment generation, and local efforts to address workforce housing and related infrastructure needs. As a result, some local governments levy minimal business license fees intended to offset administrative costs associated with license issuance and compliance monitoring, while others levy other supplemental business taxes.

El Dorado and Placer counties currently only administer nominal flat rate business license fees. Douglas Counties in Nevada does not issue business licenses, while Carson City charges a nominal flat fee based on the type of business. The City of South Lake Tahoe currently levies 899
23 business license fees based on gross receipts using a graduated rate scale ranging from $1.07 to $2.69 per 1,000 of gross receipts.33 Washoe County uses a similar model.

Other jurisdictions utilize still other taxation models. The City of Santa Clara, for example, levies a tax of $45 per employee, and $15 per rental unit for landlords. Until recently, San Francisco levied both a gross receipts tax and what is known as a payroll expense tax.

The City of South Lake Tahoe, therefore, has the option of updating the business license fee ordinance to include alternative revenue models. The following subsection reviews revenue generation potential associated with a potential payroll expense or employee headcount tax.

Establishing a Payroll or Headcount Tax
Business license fees levied by local jurisdictions with the express goal of offsetting the cost of providing services to businesses in the form of license issuance and compliance monitoring are considered administrative fees, rather than taxes, and may be instituted by ordinance without a public vote. Supplemental business taxes intended to generate general or special purpose revenue to a jurisdiction, such as a business payroll or employee headcount tax, are subject to the same voter approval requirements as other local taxes.

Existing Payroll and Headcount Taxes
San Francisco, CA - As noted above, prior to 2020 the City and County of San Francisco levied both a gross receipts and a payroll expense tax. Under the Business and Tax Regulations Code, ‘payroll expense’ was defined to include all salaries, wages, bonuses, commissions, stock options, and other compensation for services to owners of pass-through entities.34 There were a variety of business categories that were exempt based on applicable state and federal law, including for non-profits, skilled nursing facilities, and certain banks, insurance companies, and financial corporations, among other categories. There were also local exclusions and incentives aimed at facilitating economic development and job creation, including for businesses active in clean technology and film production, as well as for businesses located in the Central Market Street and Tenderloin area. The applicable payroll expense rate as of 2018 was 0.38 percent. With passage of Proposition F in November 2020, voters repealed the payroll expense tax and increased the gross receipts tax rate across most industries, while providing more relief to small businesses.

Santa Clara, CA – The City of Santa Clara hosts offices for a variety of large tech companies, including Applied Materials, Intel, Advanced Micro Devices, and Nvidia, among others. Prior to 33 City of South Lake Tahoe. (FY 2022-2023). City of South Lake Tahoe Business and Professions Tax: New Application Form. Available at: https://www.cityofslt.us/DocumentCenter/View/16968/BLN-Packet-22-23- PDF?bidId=
34 For more information on the San Francisco payroll expense tax prior to it’s repeal in 2020, please visit:
https://sftreasurer.org/media/513/download?attachment and https://sftreasurer.org/files/ 2019- 08/BT_Payroll%20Expense%20Tax%20Rate%20Memeo_07.01.19.pdf 900
24 voter approval of new business tax reforms in late 2022, the City’s business license structures had not been updated since 1992. The existing tax structure charged between $15 and $500 based on a business’s industry sector and number of employees. With the maximum payment for businesses with 500 or more employees capped at $500, local tax reform advocates argued that the existing tax structure did not require the city’s largest companies to pay their fair share for City services and infrastructure. With voter approval of Measure H in November 2022, the business license tax was increased to $45 per employee and $15 per rental unit for landlords. The revised tax structure is projected to generate around six million dollars per year until ended by voters, with periodic independent financial audits.

Estimated Revenue Potential
Table 9 reports the estimated number of business establishments, as well as average annual employment and annual average wages by industry sector for the City of South Lake Tahoe, as reported in the Quarterly Census of Employment and Wages (QCEW) published by the California Employment Development Department (EDD).

Table 9: Establishments, Jobs, and Annual Wages by Industry Sector, South Lake Tahoe, 2021
Note:
(a) Data for this sector was suppress by the California Employment Development Department (EDD) to protect against disclosure of potentially confidential employment and wage information.

Source: California Employment Development Department (EDD), Quarterly Census of Employment and Wages (QCEW); BAE, 2022.

Annual
Industry Sector Establishments Jobs Wage
11 Agriculture, Forestry, Fishing and Hunting 2 (a) (a) 22 Utilities 8 151 $138,057
23 Construction 80 262 $52,060
31 Manufacturing 12 60 $45,994
42 Wholesale Trade 18 108 $51,193
44 Retail Trade 122 1,433 $36,405
48 Transportation and Warehousing 11 174 $44,628
51 Information 11 56 $56,066
52 Finance and Insurance 28 137 $50,592
53 Real Estate and Rental and Leasing 59 306 $47,913
54 Professional, Scientific, and Technical Services 58 152 $51,812 55 Management of Companies and Enterprises 2 (a) (a)
56 Administrative and Support and Waste Management 55 488 $64,248 61 Educational Services 4 (a) (a)
62 Health Care and Social Assistance 154 1,198 $76,657
71 Arts, Entertainment, and Recreation 22 (a) (a)
72 Accommodation and Food Services 164 2,706 $30,583
81 Other Services (except Public Administration) 72 366 $42,422 92 Public Administration 15 1,343 $73,274
Total, All Industries 895 9,525 $49,849
901
25 According to this data, there were 895 business establishments in 2021 which employed an annual average of 9,525 persons. Average annual wages vary by industry, ranging from $30,583 per year in the Accommodation and Food Services industry to $138,057 in the Utilities industry, with an average of $49,849 per year across all industry sectors.

The four reported industry sectors with the most employees on average include Accommodation and Food Services (2,706 jobs; average annual wage of $30,583), Retail Trade (1,433 jobs; average annual wage of $36,405), Public Administration (1,343 jobs; average annual wages of $73,274); and Healthcare and Social Assistance (1,198 jobs; average annual wages of $76,657). Please note that data for some sectors is suppressed.

Payroll Expense Tax Revenue
Table 10 reports the estimated revenue that could potentially be generated through institution of a payroll expense tax at rates ranging from 0.1 to 1.0 percent of total annual wages.

Table 10: Estimated Revenue from Payroll Expense Tax, 0.1-1.0 Percent Rates Notes:
(a) These figures illustrate the potential revenue that may be generated through institution of a payroll expense tax at rates ranging from 0.1 to 1.0 percent of total annual wages.
(b) Data for this sector was suppress by the California Employment Development Department (EDD) to protect against disclosure of potentially confidential employment and wage information.

Source: California Employment Development Department (EDD), Quarterly Census of Employment and Wages (QCEW); BAE, 2022.

Total
Annual' Payroll Expense Tax Revenue (a)
Industry Sector Wages 0.1% 0.5% 1.0%
11 Agriculture, Forestry, Fishing and Hunting (b) (b) (b) (b) 22 Utilities 20,846,556 20,847 104,233 208,466
23 Construction 13,639,665 13,640 68,198 136,397
31 Manufacturing 2,759,633 2,760 13,798 27,596
42 Wholesale Trade 5,528,821 5,529 27,644 55,288
44 Retail Trade 52,168,360 52,168 260,842 521,684
48 Transportation and Warehousing 7,765,243 7,765 38,826 77,652 51 Information 3,139,723 3,140 15,699 31,397
52 Finance and Insurance 6,931,057 6,931 34,655 69,311
53 Real Estate and Rental and Leasing 14,661,337 14,661 73,307 146,613 54 Professional, Scientific, and Technical Services 7,875,412 7,875 39,377 78,754 55 Management of Companies and Enterprises (b) (b) (b) (b) 56 Administrative and Support and Waste Management 31,353,066 31,353 156,765 313,531 61 Educational Services (b) (b) (b) (b)
62 Health Care and Social Assistance 91,834,540 91,835 459,173 918,345 71 Arts, Entertainment, and Recreation (b) (b) (b) (b)
72 Accommodation and Food Services 82,757,252 82,757 413,786 827,573 81 Other Services (except Public Administration) 15,526,345 15,526 77,632 155,263 92 Public Administration 98,406,808 98,407 492,034 984,068 Total, All Industries 474,808,424 474,808 2,374,042 4,748,084 902
26 At a rate of 0.1 percent, the tax would generate nearly 475,000 in annual revenue. If increased to 0.5 percent, the tax would generate almost $2.4 million per year. If set at 1.0 percent, the tax would generate $4.7 million per year. For comparison, the 2018 payroll expense rate for the now repealed payroll expense tax in San Francisco was 0.38 percent, which would yield around 1.8 million per year if instituted in South Lake Tahoe.

These estimates are based on total annual wages paid to persons employed in the City of South Lake Tahoe in 2021. The data notably exclude self-employed persons. To the extent that a payroll expense tax excludes certain types of businesses or industry sectors, the revenue generation potential would decrease accordingly. Table 10 provide additional estimates by industry to facilitate additional analysis. Resulting revenues may also be less in the event that the total tax payment assigned to any given business is capped.

Employee Headcount Tax Revenue
Table 11 reports the estimated amount of revenue that could potentially be generated through creation of an employee headcount tax, similar to that recently instituted in Santa Clara.

Table 11: Estimated Revenue from Employee Headcount Tax, $25-$75 Rates Notes:
(a) These figures illustrate the potential revenue that may be generated through institution of a employee headcount tax at rates ranging from $25 to $75 per employee per year.
(b) Data for this sector was suppress by the California Employment Development Department (EDD) to protect against disclosure of potentially confidential employment and wage information.

Source: California Employment Development Department (EDD), Quarterly Census of Employment and Wages (QCEW); BAE, 2022.

Average Employee Headcount Tax Revenue (a)
Industry Sector Employment $25 $50 $75
11 Agriculture, Forestry, Fishing and Hunting (b) (b) (b) (b) 22 Utilities 151 $3,775 $7,550 $11,325
23 Construction 262 $6,550 $13,100 $19,650
31 Manufacturing 60 $1,500 $3,000 $4,500
42 Wholesale Trade 108 $2,700 $5,400 $8,100
44 Retail Trade 1,433 $35,825 $71,650 $107,475
48 Transportation and Warehousing 174 $4,350 $8,700 $13,050 51 Information 56 $1,400 $2,800 $4,200
52 Finance and Insurance 137 $3,425 $6,850 $10,275
53 Real Estate and Rental and Leasing 306 $7,650 $15,300 $22,950 54 Professional, Scientific, and Technical Services 152 $3,800 $7,600 $11,400 55 Management of Companies and Enterprises (b) (b) (b) (b) 56 Administrative and Support and Waste Management 488 $12,200 $24,400 $36,600 61 Educational Services (b) (b) (b) (b)
62 Health Care and Social Assistance 1,198 $29,950 $59,900 $89,850 71 Arts, Entertainment, and Recreation (b) (b) (b) (b)
72 Accommodation and Food Services 2,706 $67,650 $135,300 $202,950 81 Other Services (except Public Administration) 366 $9,150 $18,300 $27,450 92 Public Administration 1,343 $33,575 $67,150 $100,725 Total, All Industries 9,525 $238,125 $476,250 $714,375
903
27 At a rate of $25 per employee, the employee headcount tax could generate approximately $238,000 per year in revenue. If the rate were increased to $75 per employee, the revenue would similarly increase to approximately $714,400 per year. For comparison, the City of Santa Clara employee headcount tax rate is $45 per employee, which would yield around $476,250 per year in revenue if instituted in South Lake Tahoe.

These estimates are based on average annual employed in the City of South Lake Tahoe in 2021. The data notably exclude self-employed persons. To the extent that an employee headcount tax excludes certain types of businesses or industry sectors, the revenue would decrease accordingly. Table 11 provides additional estimates by industry to facilitate analysis.

Resulting revenues may also be less in the event that the total tax payment assigned to any given business is capped, as is the case in some jurisdictions.

Assessment of Stakeholder Impact
The burden associated with imposition of a payroll expense or employee headcount tax would fall to business owners and operators. A payroll tax would impact businesses with large number of employees, as well as smaller businesses with higher paying jobs. An employee headcount tax would be more targeted, having a larger impact on businesses with more employees. As a tourism-based economy, many of the businesses in South Lake Tahoe with the largest employee counts are associated with lower margin and lower wage industries like Accommodations and Food Service and Retail Trade. Institution of payroll expense and employee headcount taxes function to increase the relative cost of labor. This may limit businesses’ ability to increase wages in response to changes in the cost of living (e.g., housing costs, consumer inflation, etc.) and may induce some businesses to reduce staffing levels. 904
28 DEVELOPMENT DEPENDENT REVENUE

SOURCES
Under California law, local governments may establish requirements that new housing developments set aside a specified share of the total housing inventory for occupancy by households with incomes at or below specified thresholds. These requirements are exercised under a jurisdiction’s general police power to regulate land use and development to promote the public welfare. Jurisdictions are required to provide alternative means of compliance, which often includes the option to pay a fee in-lieu of building the required housing units.

These requirements are legally differentiated from housing impact fees intended to mitigate the specific impacts of a project. Inclusionary housing requirements, as they are known, are alternatively designed to serve a constitutionally permissible public purpose other than mitigating the impact of the proposed development project. As such, California law no longer requires inclusionary housing policies to be based on an essential nexus or to reflect rough proportionality between the requirement and the estimated impact on the community.

Alternately, many jurisdictions also impose housing impact fees on non-residential development. These requirements are legally differentiated from inclusionary housing requirements in that they are functionally designed to mitigate a projects’ estimated impacts on the community at large. Commercial linkage fee requirements, as they are often termed, must be based on an established essential nexus between the proposed project and the impacts being mitigated. The law also requires that the actions being taken to mitigate the impacts of the project must be roughly proportional to the impact being mitigated. Therefore, a commercial linkage fee for housing must be based on the workforce housing demand generated by the project as well as the relative cost of providing that housing.

The following section reviews the basic structure and procedures for establishing inclusionary housing policies (including in-lieu fees) and commercial linkage fees and provides examples of how much revenue may be generated as a result of implementation in South Lake Tahoe.

Inclusionary Housing In-Lieu Fee
California law authorizes jurisdictions to impose requirements that new residential developments set aside a specified share of the total new housing inventory for occupancy by households with incomes at or below specified thresholds. The ordinance specifies the expected term of affordability and outlines alternative options for complying with the ordinance, such as paying an in-lieu fee.

Applicable Legal Framework (AB 1505 and Related Legal Precedent) The 2009 California Court of Appeals decision in Palmer/Sixth Street Properties, L.P., et al. v.

City of Los Angeles affirmed a Superior Court decision that struck down elements of the City of Los Angeles inclusionary housing policy that required residential and mixed-use projects with 905
29 10 or more dwelling units per lot to set aside a portion of the units for occupancy by lowincome households. The Court of Appeals found that requiring a newly constructed rental housing project to provide affordable housing units at restricted rents conflicted with the rights afforded to developers under the Costa-Hawkins act, which sets limits on municipal rent control ordinances and enshrined a developers’ right to establish the initial rental rate for a new housing unit.

Assembly Bill (AB) 1505 was drafted and approved by the legislature in 2017 in response to the Palmer decision. The legislation authorizes local governments to adopt ordinances that require, as a condition of development of residential rental units, that the development set aside a specified share of the total housing inventory for occupancy by households with incomes at or below specified thresholds. AB 1505 requires jurisdictions to provide alternative compliance options, potentially including in-lieu fees, land dedication, off-site construction, or acquisition and rehabilitation of existing units. In cases where the applicable jurisdiction has not submitted their annual housing element report(s), or has not met at least 75 percent of their regional housing needs allocation (RHNA), AB 1505 authorizes the California Department of Housing and Community Development (HCD) to review ordinances that require more than 15 percent of the total housing inventory in a project to be affordable.

Jurisdictions may adopt requirements in excess of 15 percent, but must provide an economic feasibility study that demonstrates that the ordinance does not “unduly constrain” housing production.

Prior to the passage of the ‘Palmer Fix’ in 2017, the 2015 ruling in the California Building Industry Association (CBIA) v. City of San Jose by the Supreme Court of California determined that the adopted inclusionary housing requirement on for-sale housing was designed “to serve a constitutionally permissible public purpose other than mitigating the impact of the proposed development project.” As a result, the Court concluded that the ordinance was neither an exaction, nor a taking, under the Nolan/Dolan line of decision and, therefore, need not demonstrate that an essential nexus or rough proportionality exists between the requirement and the projected impact of the proposed land use.

Establishing an Inclusionary Housing Ordinance
The authority of local governments to establish inclusionary housing policies, as codified by AB 1505, is grounded in a jurisdictions constitutional police power which permits local governments to regulate the use of land in such a way as to advance the public welfare.

Establishment of an inclusionary housing policy may, therefore, be accomplished through legislative action of the applicable governing body and does not require a voter approval.

Comparison with Nearby Jurisdictions
Neither the City of South Lake Tahoe, nor El Dorado County, currently have inclusionary housing ordinances.
906
30 Placer County adopted an updated Affordable Housing and Employee Accommodation Ordinance and fee as of April 19, 2022.35 36 The ordinance requires projects with more than 100 units to set aside at least 10 percent of the units for sale or rent at affordable prices.

Projects with between eight and 200 units have the option to pay an in-lieu fee of $2.45 per habitable square foot of each market rate housing unit. The ordinance also establishes a commercial linkage fee, which is discussed in more detail in a later section.

The Town of Truckee applies a 15 percent inclusionary housing requirement.37 For inclusionary units offered as rental housing, either 100 percent of the units must be affordable to low-income households, or one-third may be very low-income, one-third may be low-income, and one-third may be moderate-income. For inclusionary housing units offered for-sale, all units maybe affordable to moderate-income households, or one-third may be low-income, onethird may be moderate-income, and one third may be above moderate-income. Projects with fewer than eight units, the developer may elect to pay the in-lieu fee of $134,413 per required affordable housing unit at their discretion without additional review or approval from either staff or the Town Council. There are also a variety of exemptions, including for individual single-family dwelling units on single-family lots.

Establishing an Inclusionary Housing Percentage
As discussed above, AB 1505 and applicable case law eliminated the requirement for local governments to establish a nexus between the impacts created by a project and any mitigating requirements, such as the creation of affordable and workforce housing units. While AB 1505 authorizes HCD to review inclusionary housing policies with percentages greater than 15 percent, it does not prohibit jurisdictions from establishing higher rates, but rather imposes a requirement that the jurisdiction potentially demonstrate that such a rate does not unduly hinder the financial feasibility of new development. Therefore, the City of South Lake Tahoe may establish an inclusionary housing percentage at the discretion of the City Council.

Appendix A provides the results of an abbreviated affordable and workforce housing nexus analysis for residential development. The analysis found that development of a typical newly constructed single-family home priced at $815,000 would generate demand for 0.9 workforce housing units, including 0.03 units at low- to extremely low-incomes, 0.02 at moderate incomes, and 0.02 at achievable incomes. Excluding the highest income category (i.e., greater than single-family achievable at 180 percent of AMI), the effective multiplier is 0.06. The 35 County of Placer. (July 1, 2020). Affordable Housing and Employee Accommodation Ordinance and Fee.

Available at: https://www.placer.ca.gov/DocumentCenter/View/62116/AH-and-EH-Accommodation-Ordinanceand-Fee-Fact-Sheet-Updated-070122 36 County of Placer. (October 6, 2020). An Ordinance to repeal and replace Placer County Code, Chapter 15, Article 15.65 (Affordable Housing). Available at: https://www.placer.ca.gov/DocumentCenter/View/48557/Ord6050-B_BOS-approved-10-27-20?bidId= 37 Town of Truckee. (May 3, 2007). Ordinance 2007-05. Available at:
https://portal.laserfiche.com/Portal/DocView.aspx?id=36704&repo=r-6a91ddbc 907
31 analysis also found that for high-end luxury single-family homes, the impacts are higher at

0.17 across all income levels, or 0.12 covering extremely low-income through single-family achievable (i.e., up to 180 percent of AMI)
Equivalent Fee In-Lieu of Development
There are different philosophies regarding identification of a justifiable fee to be applied in-lieu of developing required inclusionary housing units. Some jurisdictions, seeking to limit the potential impact on development feasibility, limit the in-lieu fee to be equivalent to the anticipated contribution from local government in support of affordable housing development.

Other jurisdictions set the in-lieu fee amount based on the full cost, more or less, of providing the required housing unit, recognizing that the in-lieu fee is intended to be equivalent to construction of the unit on-site as part of the planned market rate development.

According to an October 4, 2022, staff report to City Council, the City of South Lake Tahoe contributed $2.44 million towards construction of the Sugar Pine affordable housing development, which began site preparations in fall 2022. With a total of 248 units planned, this equals a subsidy amount of $9,845 per unit in direct city subsidy.

Alternatively, Table 12 identifies the approximate financing gap associated with low-income housing units built with the use of low-income housing tax credit (LIHTC) equity, excluding the remaining funding sources used in projects like Sugar Pine. The intent of these calculations is to illustrate the financing gap that the City may need to help close in the event that other special funding programs, such as Multifamily Housing Program (MHP), Affordable Housing and Sustainable Communities (AHSC), Infill Infrastructure Grant (IIG), and other similar programs, are no longer available. The calculations illustrate that affordable multifamily housing projects using tax credits without supplemental subsidy sources may have funding gaps ranging from more than $395,000 per low-income unit (i.e., 80 percent of AMI) to nearly $552,000 per extremely low-income unit (i.e., 30 percent of AMI).

Table 13 highlights the potential funding gap that may exist for non-tax credit rental housing restricted to occupancy by households in the moderate-income (i.e., 120 percent of AMI) and multifamily achievable (125 percent of AMI) categories. The cost basis for these units is much less compared to tax credit projects due to reduced regulation, but nonetheless range from nearly $42,000 per multifamily achievable unit to almost $59,000 per moderate-income unit.

The analysis summarized in Appendix A indicates that the minimum in-lieu fee that would align with estimated workforce housing demand induced by new single-family development, as documented in the nexus analysis would range from just under $15,000 to nearly $29,000 per unit. That assumes an inclusionary percentage of between nine and 12 percent and that each project proportionately accounts for its impacts across all income levels. However, under state law, the City may establish a percentage up to 15 percent, which if requiring delivery of all low-income housing could justify an in-lieu fee of up to $59,300 per market rate unit. 908
32 Table 12: Financing Gap Analysis, Tax Credit Affordable Multifamily Notes:
(a) Based on a 3-person Household
(b) Affordable rents equal to 30 percent of gross monthly income, minus a utility allowance. (c) Data from 2018 tax credit funding applications for affordable housing projects in Placer and Sacramento Counties. (d) Based on the standard required assumption for affordable housing financing and tax credit applications. (e) Affordable monthly rent minus operating expenses and vacancy. (f) Operating subsidy is necessary for units with a negative net operating income based on the restricted rent level. (g) Net operating income plus operating subsidy, divided by the debt coverage ratio: 1.15 (h) Assumes an interest rate of 6.0 percent and a 30-year loan term. (i) Assumes 90% of total cost are eligible for LIHTC. Assumes the 4-percent LIHTC program. Assumes $0.92 per tax credit. (j) Based on the Sugar Pine Affordable Housing average construction cost. (k) Total development cost per unit minus the per unit supportable loan amount.

Sources: CTCAC, 2022; City of South Lake Tahoe, 2022; BAE, 2022.

Table 13: Financing Gap Analysis, Non-Tax Credit Workforce Multifamily Notes:
(a) Based on a 3-person Household
(b) Rents are equal to 30 percent of gross monthly income, minus a utility allowance. (c) Assumes operating costs are equal to 33 percent of gross income. (d) Based on the standard assumption by market-rate developers. (e) Monthly rent minus operating expenses and vacancy.
(f) Estimates the market value by dividing the Net Operating Income by the market capitalization rate. (g) Based on the estimated development cost for market-rate multifamily developments in the Tahoe area. (h) Total development cost per unit minus the per unit supportable loan amount.

Sources: City of South Lake Tahoe, 2022; BAE, 2022.

Extremely Low Very Low Income Low Income
Income (30% AMI) (50% AMI) (80% AMI)
Household Income Limit (a) $27,400 $45,600 $72,950
Maximum Affordable Monthly Rent Per Unit (b) $554 $1,009 $1,693 Monthly Operating Expenses (c) $529 $529 $529
Vacancy (d) 5% 5% 5%
Net Operating Income Per Unit (e) ($2) $430 $1,079
Net Operating Subsidy from Other Sources (f) $2 $0 $0
Permanent Financing
Monthly Supportable Debt Service Per Unit (g) $0 $374 $939 Loan Amount (h) $0 $62,356 $156,566
LIHTC Equity (i) $273,315 $273,315 $273,315
Affordable New Unit Development Cost (j) $825,227 $825,227 $825,227 Financing Gap Per New Unit (k) ($551,912) ($489,556) ($395,346) Income Level
Moderate Income MF Achievable
(120% AMI) (125% AMI)
Household Income Limit (a) $110,400 $115,000
Maximum Affordable Monthly Rent Per Unit (b) $2,629 $2,744 Monthly Operating Expenses (c) $868 $906
Vacancy (d) 5% 5%
Net Operating Income Per Unit (e) $1,630 $1,701
Capitalization Rate 5.00% 5.00%
Market Value (f) $391,195 $408,307
Affordable New Unit Development Cost (g) $450,000 $450,000 Financing Gap Per New Unit (h) ($58,805) ($41,693)
Income Level
909
33 Financial Feasibility Testing
Appendix B provides detailed static proforma financial worksheets outlining the costs and revenues associated with construction of a luxury single-family residential property valued at approximately $3.125 million. Based on this analysis, such a project would have no difficulty absorbing the highest identified potential in-lieu fee amount of $59,000 per market rate unit, without overly impacting the developers anticipated return requirements.

Estimated Revenue Potential
Based on the nexus analysis calculations provided in Appendix A, the City should consider setting an in-lieu fee amount(s) of not less than $15,000 per median priced single-family unit or $29,000 per luxury unit.38 These values represent the minimum that the City should consider to ensure that new developments are required to offset their estimated impacts on the community at large. If adopted at these levels, the residential in-lieu fee could generate somewhere between $300,000 and $720,000 per year in revenue to the City of South Lake Tahoe, assuming between 20 and 25 new single-family homes per year. If the City elects to pursue a more rigorous inclusionary housing policy (i.e., at least a 15 percent inclusionary requirement) and an in-lieu fee of no less than $59,000 per market rate unit, the residential in-lieu fee could generate between $1.2 and $1.5 million per year, assuming 20 to 25 new single-family homes built per year on average (i.e., equal to the average number of newly completed single-family homes per year over the past five years). If the City elects to apply a policy that only applies to large luxury single-family homes over 5,000 square feet in size, the City may reasonably expect to receive around $177,000 per year in revenue, assuming an average of three new luxury single-family homes over 5,000 square feet per year.

Assessment of Stakeholder Impact
The burden associated with imposition of a new inclusionary housing requirement is primarily borne by the development community and by buyers of newly built residential properties.

Inclusionary housing requirements and associated in-lieu fees effectively increase the cost of new development by either requiring a developer to build units that require subsidy (i.e., for rental or sale at below market rates) or to pay a fee in-lieu. The increased cost increases the price point at which the unit must be sold or rented in order for the developer to achieve the same return. Therefore, either the developer must accept a lesser return, or the price is increased to the extent that the market will bear. However, as is noted in the financially feasibility analysis later on in this report, it appears likely that higher-end luxury single-family development may readily absorb the added cost imposed by a new inclusionary requirement. 38 Figures are rounded to the nearest $1,000.
910
34 Commercial Linkage Fee
Many jurisdictions also impose housing impact fees on non-residential development. These requirements are legally differentiated from inclusionary housing requirements in that they are functionally designed to mitigate a projects’ estimated impacts on the community at large.

Commercial linkage fee requirements, as they are often termed, must be based on an established essential nexus between the proposed project and the impacts being mitigated.

The law also requires that the actions being taken to mitigate the impacts of the project must be roughly proportional to the impact being mitigated.

Establishing a Commercial Linkage Fee Ordinance
Unlike inclusionary housing policies, which are permitted under local police powers, business linkage fees are intended to offset the estimated impact(s) imposed on the community by a newly proposed non-residential development project. Such policies are, therefore, subject to the provisions of the California Mitigation Fee Act (Government Code Section 66000 et seq.), which requires local governments to prepare a nexus study that demonstrates a reasonable relationship between the impacts of new development, the facilities needed to address those impacts, and the fees that the jurisdiction intends to charge. Assembly Bill (AB) 602 further requires that nexus studies “identify the existing level of service for each public facility, identify the proposed new level of service, and include an explanation of why the new level of service is appropriate.”39 Therefore, prior to adopting a business linkage fee, the City would need to go through the exercise of documenting the level of service, which in this case would be equal to the current inventory of publicly-assisted affordable and workforce housing in South Lake Tahoe and must demonstrate that construction of new non-residential space creates additional demand for affordable and workforce housing that cannot be met with existing resources (e.g., very low vacancy rates). Once the nexus study is completed, the commercial linkage fee may be adopted by the governing body by ordinance and does not require a vote.

Comparison with Nearby Jurisdictions
Neither the City of South Lake Tahoe, nor El Dorado County, currently have commercial linkage fee ordinances. Placer County imposes an “Employee Accommodation” fee of $2.45 per net building square foot which applies to all new non-residential (i.e., commercial) development in the Sierra Nevada and Lake Tahoe Basin. The Town of Truckee requires that non-residential developments construct housing equivalent to accommodate between 3.5 and 14 percent of the estimated employment generated directly by the project itself, with units being rented directly by persons employed at the development or to low-income households in the community. In Truckee, developers may also pay a fee in-lieu of building required units of $134,413 per housing unit required.
39 See Government Code Section 66016.5(a)(2).
911
35 Table 14: Induced Demand for Workforce housing and Equivalent Linkage Fee Notes:
(a) Based on the 2022 Tahoe Regional Planning Agency (TRPA) Residential Bonus Unit Program income limits. (b) As calculated based on data reported in the U.S. Census Bureau’s Public Use Microdata Sample (PUMS) dataset. (c) Based on an assumed 500 square feet per employee for retail uses and 1,500 square feet per employee for tourist accommodation use, distributed based on the proportion of total jobs at each income level reported in the line above. (d) Based on the estimated jobs per 1,000 sq. ft. reported for each land use divided by the estimated average number of workers per workforce household by income level. (e) Based on the net cost to provide housing at each income level as reported in Tables 12 and 13.

Sources: Census, American Community Survey Public-Use Microdata Sample (PUMS) 2016-2020; California Department of Housing and Community Development (HCD), Section 8 Income Limits; Tahoe Regional Planning Agency (TRPA), Residential Bonus Unit Program income limits; BAE, 2022.

Estimated Household Income as a Percent of AMI (a)
Land Use Type
Extremely Low
(30% AMI)
Very Low
(50% AMI)
Low
(80% AMI)
Moderate
(120% AMI)
MF Achievable
(125% AMI)
SF Achievable
(180% AMI)
Higher Income
(>180% AMI) Total, All
Retail/Restaurant
Proportion of Total Jobs (b) 6.3% 7.9% 17.7% 24.5% 0.1% 14.9% 28.5% 100% Estimated Jobs Per 1,000 Sq. Ft. (c) 0.13 0.16 0.35 0.49 0.00 0.30 0.57 2.00 Worker Households Per 1,000 Sq. Ft. (d) 0.12 0.12 0.24 0.28 0.00 0.17 0.30 1.22 Net Cost Per Unit Provided (e) $551,912 $489,556 $395,346 $58,805 $41,693 20,200.00 n.a. n.a.

Equivalent Fee Amount $64,092 $60,443 $94,366 $16,602 $65 $3,352 n.a. $238,920 Per Square Foot $64 $60 $94 $17 $0.06 $3.35 n.a. $239
Hotel/Motel
Proportion of Total Jobs (b) 6.1% 16.4% 17.1% 21.7% 1.6% 10.6% 26.5% 100% Estimated Jobs Per 1,000 Sq. Ft. (c) 0.04 0.11 0.11 0.14 0.01 0.07 0.18 0.67 Worker Households Per 1,000 Sq. Ft. (d) 0.04 0.09 0.08 0.08 0.01 0.04 0.09 0.42 Net Cost Per Unit Provided (e) $551,912 $489,556 $395,346 $58,805 $41,693 $20,200 n.a. n.a.

Equivalent Fee Amount $20,859 $42,199 $30,333 $4,906 $246 $790 n.a. $99,333 Per Square Foot $21 $42 $30 $4.91 $0.25 $0.79 n.a. $99
912
36 Essential Nexus and Maximum Justifiable Fee
Table 14, above, identifies induced employment associated with retail/restaurant and hotel/motel type uses in South Lake Tahoe. The analysis assumes an average of 500 square feet per employee for retail/restaurant uses and 1,500 square feet per employee for hotel/motel uses. The induced employment per 1,000 square feet of development is distributed by income level and household size based on analysis of information contained in the U.S. Census Bureau’s Public Use Microdata Sample (PUMS) dataset. The analysis then applies the net cost to provide housing at each income level to identify the equivalent fee amount per 1,000 square feet of new development and subsequently per square foot of new development. Based on this approach, BAE estimates that the maximum legally justifiable commercial linkage fee that may be applied to retail/restaurant uses is $239 per square foot, and $99 per square foot for hotel/motel uses.

As discussed in the following section, it is unlikely that new developments can absorb the full legally justifiable fees. Recognizing that linkage fees are “ride along” fees (i.e., are only generated as a result of new development), most jurisdictions adjust the applicable fee downwards as to not unduly constrain desirable new development. There are two approaches that the City may consider to identify an acceptable fee level. First, the City may consider whether they want to craft the ordinance to only require mitigation for workforce housing demand that falls into specific income categories, such as extremely low- through low-income, or whether the ordinance should account for all induced demand. Second, the City may simply consider the fee that may be reasonably absorbed by new development, regardless of whether it covers the full impacts within a given income category.

Financial Feasibility Testing
Appendix B provides detailed static proforma financial worksheets outlining the costs and revenues associated with construction of stand-alone retail, hotel, and tourist mixed-use developments in South Lake Tahoe.

Overall, the financial feasibility testing exercise found that neither of the pure hotel prototypes are likely to be able to absorb much in the way of an additional linkage fee burden.

The retail prototype may likely be able to absorb imposition of a linkage fee, though only because it’s positioned at the top of the local retail real estate market. Retail projects that are less well positioned are unlikely to be able to absorb imposition of a commercial linkage fee.

The tourist mixed-use prototype is likely to be able to absorb imposition of a potentially significant commercial linkage fee, with options available for how the fee is applied across the various retail versus condotel project components.
913
37 Tourist Mixed-Use
The development type with the greatest potential for feasibility is the high-density tourist mixed-use prototype, which includes 72 hotel units and 66 for-sale condominium units, with 18,400 square feet of ground floor retail and structured parking on 1.5 acres of land. Based on current listings for land available for purchase in the tourist core, the project may face land costs between $3.5 and $5.0 million per acre. With a residual land value of nearly $8.1 million per acre, BAE estimates that a project of this type could potentially support imposition of a hotel linkage fee of up to $44 per square foot, or the retail linkage fee of $239 plus a hotel linkage fee of $7 per square foot. In either scenario, the City would be imposing a fee burden equal to approximately $5.2 million. Note however, that the retail component of the project is likely being subsidized by the condotel component; therefore, an impact fee imposed on the condotel component would be more efficient and less likely to be impacted by adjustments in the ancillary aspects of the project design. In terms of revenue generation potential, the potential value capture is significant, though projects such as this are relatively infrequent.

Traditional Hotel Uses
This analysis includes evaluation of two different hotel prototypes. The first is a smaller boutique hotel, similar to the Desolation property, while the second is based roughly on the Hampton Inn redevelopment. The analysis indicates that the smaller boutique hotel prototype is marginally feasible without imposition of linkage fees, while the larger hotel prototype is more challenged (i.e., only feasible with minimal land use commodity costs and relatively aggressive assumptions regarding occupancy and average daily rates). At current land prices, neither project is likely able to absorb much in the way of additional linkage fee burden. While economic theory suggests that imposition of fees would put downward pressure on land values, land values tend to be resistant to such forces in practice and it can often take numerous economic cycles to realize the anticipated effects.

Lifestyle Retail Center
The financial feasibility analysis included one retail prototype, which was modelled off the Building A retail pad located on part of the Whole Foods shopping center property at 3640 Lake Tahoe Boulevard. This represents a premium new build retail property. The proforma model assumes a 12,000 square foot standalone building on 1.6 acres. Based on an evaluation of the subject property, the analysis assumes relatively high rents and an aggressive capitalization rate, which nets a residual land value of approximately $3.6 million per acre, which notably above the $2.8 million that was paid for the land in 2019. As such, the retail prototype is expected to be feasible under current market conditions, with the potential to absorb a small commercial linkage fee of up to $90 per square foot, equal to approximately $1.08 million in total additional project cost. However, please note that this represents a very high-end retail project and that less well positioned projects may not be able to absorb the same additional impact fee burden. Also, the city may be challenged to apply 914
38 linkage fees to existing buildings undergoing tenant improvements (TI), as an argument can be made that the impacts of the development have already accrued within the community.

Estimated Revenue Potential
Based on the financial feasibility analysis, as described above on pages 36 and 37 and in Appendix B, BAE does not expect that the City could feasibly impose a hotel linkage fee on smaller to medium sized hotel projects without impacting development feasibility, though the tourist mixed-use could likely absorb an impact fee up to $44 per square foot for the hotel component only, or $239 per square foot for the retail component plus up to $7 per square foot for the hotel component.

It is also likely feasibly impose a linkage fee on new retail uses, except for projects positioned at the very highest-end of the market. For example, the retail prototype used for this analysis could potentially absorb a linkage fee of up to $90 per square foot, or approximately $1.08 million for a 12,000 square foot building. Also, the city may be challenged to apply linkage fees to existing buildings undergoing tenant improvements (TI), as an argument can be made that the impacts of the development have already accrued within the community.

It is likely that the City may impose either a retail linkage fee or a hotel linkage fee on high-end tourist mixed use development in the tourist core. Assuming a land cost of $3.5 million per acre, the modeled development could potentially absorb roughly $5.2 million in total linkage fees, applied to the hotel component only or divided between the retail and hotel project components respectively, as discussed on page 36.

Assessment of Stakeholder Impact
The burden associated with imposition of a new commercial linkage requirement is primarily borne by the development community and potentially by tenants of the new project.

Commercial linkage fees effectively increase the cost of new development, which must either be absorbed by the developer in terms of a reduced return or passed on to tenants in the form of higher rental rates (to the extent that the market will absorb such an increase without a commensurate increase in vacancy).
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39 APPENDIX A: RESIDENTIAL NEXUS ANALYSIS
The following represents an abbreviated nexus analysis that identifies the minimum inclusionary housing percentage that would offset the impacts imposed by new single-family housing development. This information is provided to help inform potential deliberations regarding an appropriate inclusionary housing percentage and should not be interpreted as legal direction recognizing that state law does not require establishment of an essential nexus.

Rather, BAE recommends that the City use this information to inform the minimum inclusionary percentage that can be expected to offset the direct impacts of a project and that a higher percentage may be considered to provide a supplemental benefit to the community.

Establishing an Informational Nexus
To provide a representative analysis illustrating the impact of new single-family development on demand for local workforce housing in South Lake Tahoe, BAE evaluated two alternative scenarios. The first scenario considers the workforce housing demand that is induced based on household spending associated with full-time occupancy of a typical newly constructed single-family home. The second scenario considers the impacts of a high-end luxury property.

Under both scenarios, BAE reviewed the available information on assessed value for properties with building permits issued within the last five years with construction having been completed in 2022. BAE’s assessment indicates that an average new build single-family home is valued at approximately $815,000, while a typical luxury housing unit is valued at roughly $3.125 million. Exhibits A1 and A2 roughly illustrate the income needed to purchase properties at these price points, indicating that the purchase of a median priced newly built unit would require an income of roughly $205,000 per year, while a luxury property would require an income of roughly $786,000 per year, assuming the properties were financed.40 Based on the estimated household incomes needed to afford newly constructed single-family housing in South Lake Tahoe, either at the median price or a luxury unit, BAE then estimated the number of jobs that would be supported based on household spending associated with the occupant household. This analysis assumes that the units are occupied full time. This is a simplifying assumption recognizing the observed variation in how second homes are used; however, it reflects the likely high-end potential impacts associated with a property that may be used as a primary residence or as a second home with varying occupancy levels. 40 Incomes associated with buyers of second homes in South Lake Tahoe likely exceed these estimates, recognizing that these households would also own a primary residence. However, it is not possible to estimate the actual household income of second home buyers without having access to private income tax data, which is not available.

Therefore, this analysis uses the minimum income needed to purchase the properties, which is likely conservative. 916
40 Exhibit A1: Household Income Required to Purchase a Typical New Single-Family Home in South Lake Tahoe, 2022
Notes:
(a) Represents the estimated value of a typical newly constructed single-family home in South Lake Tahoe in 2022. (b) Monthly ownership costs are based on the following assumptions:

Sources: ListSource; Local Mortgage Brokers; California Department of Insurance, Homeowners Premium Survey; BAE, 2022.

Exhibit A2: Household Income Required to Purchase a New Luxury Single-Family Home in South Lake Tahoe, 2022
Notes:
(a) Represents the estimated value of a newly constructed luxury single-family homes in South Lake Tahoe as of 2022. (b) Monthly ownership costs are based on the following assumptions:

Annual Interest Rate 6.6%
Loan Term (Years) 30 years
Down Payment (% of Sale Price) 20%
Property Tax (Annual) 1.0%
Homeowners Insurance (% of Sale Price) 0.4%
(c) Assumes that housing costs do not exceed 30 percent of household income. (d) This assumes that the hypothetical development project contains a total of 10 units. This assumption provides for ease of analysis and does not impact the results of the analysis.

Sources: ListSource; Local Mortgage Brokers; California Department of Insurance, Homeowners Premium Survey; BAE, 2022.

Exhibit A3 reports the estimated induced employment generated by occupancy of new singlefamily homes in South Lake Tahoe within both the median and luxury markets. The estimates were generated using the Impacts for Planning (IMPLAN) economic impact model. Due to the limited impacts per household, the analysis calculates impacts assuming a total of 100 households at each income level, then coverts the estimates to reflect the total impact per Estimated Sale Price, New Units (a) $815,000
Monthly Housing Cost, New units (b) $5,122
Annual Housing Cots $61,460
Household Income Required (c) $204,867
Estimated Sale Price, New Units (a) $3,125,000
Monthly Housing Cost, New units (b) $19,638
Annual Housing Cots $235,660
Household Income Required (c) $785,534
917
41 household. Based on this approach, BAE estimates that occupancy of a typical newly built single-family home in South Lake Tahoe may generate demand for 15 new jobs for every 100 households, which represents a jobs multiplier of 0.15 per household. Occupancy of 100 luxury single-family homes would generate demand for 28 new jobs, or .28 jobs per household. To the extent that these units are occupied less than full-time, the impacts would be reduced.

Exhibit A3: Estimated Economic Impacts Per 10 New Households Notes:
(a) Based on estimated household spending associated with 100 households earning approximately $204,867 per year. (a) Based on estimated household spending associated with 100 households earning approximately $785,534 per year.

Sources: Impacts for Planning (IMPLAN) Economic Impact Model; BAE, 2022.

Exhibit A4, on the following page, further breaks down the induced jobs estimates from Exhibit A3 by income level and convers jobs to workforce households based on the average number of workers per household within each income category. Based on this data, occupancy of newly constructed single-family homes in South Lake Tahoe likely generates demand for approximately one new workforce housing unit for every ten median priced units constructed.

Excluding higher income workforce housing demand (i.e., greater than 180 percent of AMI), this ratio decreases to one workforce unit for every 15 median priced market rate units.

Meanwhile, occupancy of newly constructed luxury single-family homes likely generates demand for one new workforce housing unit for every six new luxury properties, or for every eight luxury properties if excluding higher income (i.e., greater than 180 percent of AMI) workforce housing demand. Note that if the City of South Lake Tahoe were to establish an inclusionary policy at these levels, it would be well below the allowable 15 percent.

Typical New Single-Family Homes (a)
Impact Type Employment Labor Income Value Added Output
Direct 0.0 $0 $0 $0
Indirect 0.0 $0 $0 $0
Induced 15 $729,648 $1,261,719 $2,114,969
Total 15 $729,648 $1,261,719 $2,114,969
Per Job 1 $49,081 $84,871 $142,267
Per Unit 0.15 $7,296 $12,617 $21,150
New Luxury Single-Family Homes (b)
Impact Type Employment Labor Income Value Added Output
Direct 0 $0 $0 $0
Indirect 0 $0 $0 $0
Induced 28 $1,271,001 $2,345,086 $3,807,455
Total 28 $1,271,001 $2,345,086 $3,807,455
Per Job 1 $44,925 $82,889 $134,578
Per Unit 0.28 $12,710 $23,451 $38,075
918
42 Based on the distribution of workforce housing demand by income level illustrated in Exhibit A4, BAE then calculated the estimated cost associated with bringing those units to market.

Exhibit A5 reports the estimated total cost associated with building housing units at each income level as well as the net funding gap that would need to be closed to bring these units to market.41
Exhibit A4: Induced Employment and Workforce Housing Demand by Income Level Notes:
(a) Based on estimated household spending associated with 10 households earning approximately $204,867 per year. (b) Based on the distribution of induced jobs industry sector, as reported by IMPLAN, combined with the distribution of workers by industry and household income, as reported in the Public Use Microdata Sample (PUMS) for the greater South Lake Tahoe area.
(c) Based on the distribution of workers by industry sector and household income level, as reported in the PUMS. (d) Based on estimated household spending associated with 10 households earning approximately $785,534 per year.

Sources: IMPLAN; U.S. Census Bureau, Public Use Microdata Sample (PUMS); BAE, 2022. 41 The analysis assumes that housing targeted towards households earning less than 80 percent of the area median income (AMI) would be funded in part by state and federal tax credits. As such, the cost to deliver those units is quite elevated at more than $825,000 per unit. Housing targeted towards moderate income households (i.e., 81-120 percent of AMI) and multifamily achievable (i.e., 120-125 percent of AMI) are assumed to be market rate multifamily rental units, with an estimated total development cost of $450,000 per unit. Housing targeted towards households in the single-family achievable income (i.e., 125-180 percent of AMI) category are assumed to be detached single-family homes. Where the analysis assumes new construction for units serving the multifamily achievable income category and below, BAE assumes that households in the single-family achievable income category would be purchasing existing housing units at market rates.

Typical New Single-Family Homes (a)
Ave. Workers Est. Worker Per
Household Income Level Jobs (b) Per Household (c) Households New unit Extremely Low (30% AMI) 0.7 1.1 0.6 0.01
Very Low (50% AMI) 1.0 1.3 0.8 0.01
Low (80% AMI) 2.3 1.5 1.6 0.02
Moderate (120% AMI) 3.4 1.7 2.0 0.02
MF Achievable (125% AMI) 0.3 1.8 0.1 0.00
SF Achievable (180% AMI) 2.6 1.8 1.4 0.01
Higher Income (>180% AMI) 4.6 1.9 2.4 0.02
Total, All Income Levels 14.9 1.7 8.9 0.09
Per New Unit 0.15 0.02 0.09
New Luxury Single-Family Homes (d)
Ave. Workers Est. Worker Per
Household Income Level Jobs (a) Per Household (b) Households New unit Extremely Low (30% AMI) 1.3 1.1 1.2 0.01
Very Low (50% AMI) 1.9 1.3 1.5 0.02
Low (80% AMI) 4.6 1.5 3.1 0.03
Moderate (120% AMI) 6.5 1.7 3.8 0.04
MF Achievable (125% AMI) 0.5 1.8 0.3 0.00
SF Achievable (180% AMI) 4.8 1.8 2.7 0.03
Higher Income (>180% AMI) 8.7 1.9 4.5 0.05
Total, All Income Levels 28.3 1.7 17.0 0.17
Per New Unit 0.28 0.02 0.17
919
43 Exhibit A5: Estimated Funding Gap and Equivalent In-Lieu Fee Amount Notes:
(a) Based on estimated household spending associated with 10 households earning approximately $204,867 per year. (b) Represents the estimated new workforce housing demand by income level generated by household spending associated with a newly constructed single-family housing unit. (c) Reflects the estimated total cost and net financing gap associated with providing housing at each income level. Housing targeted for occupancy at 80 percent of AMI or below is assumed to be new construction funded using state and federal tax credits. Housing occupied by households in the moderate-income (81-120 percent of AMI) and multifamily achievable (121- 125 percent of AMI) income categories is assumed to be newly constructed market rate multifamily rental housing. Housing occupied by households in the single-family achievable (126-180 percent of AMI) income category is assumed to be existing single-family resale inventory.
(e) Based on estimated household spending associated with 10 households earning approximately $785,534 per year.

Sources: IMPLAN; U.S. Census Bureau, Public Use Microdata Sample (PUMS); BAE, 2022.

Typical New Single-Family Homes (a)
New Workforce Equiv. In-Lieu
Housing Demand Per Estimated Cost Per Workforce Unit (c) Fee Per Market Household Income Level New M arket Rate Unit (b) Total Cost Net Gap Rate Unit (d) Extremely Low (30% AMI) 0.01 $825,227 $551,912 $3,333
Very Low (50% AMI) 0.01 $825,227 $489,556 $3,718
Low (80% AMI) 0.02 $825,227 $395,346 $6,228
Moderate (120% AMI) 0.02 $450,000 $58,805 $1,167
MF Achievable (125% AMI) 0.00 $450,000 $41,693 $62
SF Achievable (180% AMI) 0.01 $642,500 (e) $20,200 $286 Higher Income (>180% AMI) 0.02 n.a. n.a. n.a.

Total, All Income Levels 0.09 $14,794
Excluding Higher Income
(>180% AMI)

0.06 New Luxury Single-Family Homes (e)
New Workforce Equiv. In-Lieu
Housing Demand Per Estimated Cost Per Workforce Unit (c) Fee Per Market Household Income Level New M arket Rate Unit (b) Total Cost Net Gap Rate Unit (d) Extremely Low (30% AMI) 0.01 $825,227 $551,912 $6,380
Very Low (50% AMI) 0.02 $825,227 $489,556 $7,355
Low (80% AMI) 0.03 $825,227 $395,346 $12,181
Moderate (120% AMI) 0.04 $450,000 $58,805 $2,207
MF Achievable (125% AMI) 0.00 $450,000 $41,693 $123
SF Achievable (180% AMI) 0.03 $642,500 $20,200 $536
Higher Income (>180% AMI) 0.05 n.a. n.a. n.a.

Total, All Income Levels 0.17 $28,782
Excluding Higher Income
(>180% AMI)

0.12 920
44 Estimated Revenue Potential
Based on the nexus analysis discussed above, BAE recommends that the minimum inclusionary housing percentage that the City might consider as part of a potential inclusionary housing policy would range from six percent for typical newly built single-family homes to 12 percent for newly built luxury single-family homes. Note that state law permits establishment of an inclusionary housing percentage up to 15 percent without HCD review and that jurisdictions may set requirements even higher if it can be demonstrated that it would not overly inhibit the financial feasibility of new development. Based on the nexus analysis calculations provided in Exhibits A1 through A5, the City should consider setting in-lieu fee amounts of not less than $15,000 per median priced single-family unit and $29,000 per luxury unit.42 These values represent the minimum that the City should consider to ensure that new developments are required to offset their estimated impacts on the community at large. If the City were to set an inclusionary requirement at 15 percent, a fee up to approximately $59,000 may also be justifiable (i.e., 15 percent of $395,000, which is equal to the net financing gap for multifamily rental units affordable to low-income households). 42 Figures are rounded to the nearest $1,000.
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45 APPENDIX B: PROFORMA FINANCIAL

FEASIBILITY TESTING
Building on previous sections of this report, this Appendix presents an analysis of the potential financial feasibility of five real estate development prototypes for the purposes of identifying linkage fee amounts that would not negatively affect the feasibility of new development projects in South Lake Tahoe.

Prototype Formulation
For the purposes of this research, City staff requested analysis of five unique development prototypes which are generally representative of the types of development the city has experienced in the recent past and/or expects to see in the near future. Summarized in Exhibit B1 below, the development prototypes include:

Hotel Prototype #1 – Luxury/Boutique
The first of the two hotel prototypes is a small-scale luxury boutique hotel development, similar in scale and finish to the Desolation hotel property. While the Desolation Hotel is a unique condo style hotel, the prototype project would be of similar scale and finish but differs in room design and count. It would be located on a 0.69-acre site, with a 16,640 square foot three story building, with 40 rooms with an average of 300 square feet. This represents a land coverage ratio of 76 percent. The project includes a 1,040 square foot restaurant space that is considered incidental to the primary hotel use on the site. The project is assumed to be surface parked.

Hotel Prototype #2 – Upper Mid-Scale
The second hotel prototype is an upper mid-scale offering with 120 rooms, compared to the 40 in hotel prototype number one. The project includes an approximately 60,000 square foot three story building, located on a 2.3-acre site, which equals a coverage ratio of 73 percent.

The project includes a 2,000 square foot retail/restaurant space that is again considered incidental to the primary hotel use. The project is assumed to be surface parked. This prototype is roughly modelled on the Hampton Inn project, which represented redevelopment of a previously existing hotel property. Therefore, as part of the analysis, BAE tested the extent to which reusing existing land use commodities improved feasibility.

Retail Prototype – Stand-Alone Retail Pad
City staff requested analysis of a stand-alone retail pad development similar to Building A at the Bijou Marketplace at 3640 Lake Tahoe Boulevard. The project includes a 12,000 square foot building located on a 1.6-acre site. Including significant surface parking and hard landscaping, the project has an estimated coverage ratio of 81 percent. The project is assumed to be located in a premium location and subsequently includes premium rental rates and is expected to absorb what is effectively a premium land cost. 922
46 Tourist Mixed-Use Prototype – Condotel and Retail
The fourth commercial prototype is loosely based on the Zalanta project, located in the tourist core. The prototype assumes a 136,750 square foot building on a 1.5-acre site. The project mostly relies on structured parking, though some surface parking is also provided. Including hard landscaping, the approximate coverage ratio is 79 percent. The project includes 72 dedicated hotel rooms, as well as 66 condominium properties. The condominium units are assumed to be used by owners for an average of 90 days per year, with the units being available for rent as tourist accommodations for the remaining 275 days per year. The project assumes 18,400 square feet of retail space on the ground floor fronting the main roadway.

Residential Prototype – Luxury Single-Family
The fifth and final prototype represents a luxury single-family residential project consisting of a single 6,250 square foot home on 0.65 of an acre. Based on a review of recently completed properties in South Lake Tahoe, this project is valued at approximately $3.125 million. As such, the proformas assume relatively high-end finishes. Land costs appear to vary significantly for this type of product and can range from $300,000-$500,000 per acre to upwards of two or three million dollars per acre, depending on the location of the property.

Exhibit B1: Development Prototype Specifications
Sources: City of South Lake Tahoe; BAE, 2022.

Development Cost Assumptions
BAE estimated development costs for each prototype based upon information collected from a variety of sources including research conducted by BAE for other similar projects and key stakeholder interviews, as well as published secondary sources like RS Means. The development costs reported in Exhibit B3, which form the basis for the proformas, represent the middle- to high-end range of comparable costs, meaning that the cost estimates are likely to be conservative and, if anything, overstate the likely costs of development. Key components of the total estimated development cost include:

Parcel Size Building Size Hotel Parking Spaces
Project Type Acres Sq. Ft. Gross Sq. Ft. Hotel Retail Condos Rooms Structured Surface Hotel Prototype #1:

Luxury/High End
Hotel

0.69 30,056 16,640 15,600 1,040 0 40 0 42
Hotel Prototype #2:

Upper Mid-Scale
Hotel

2.3 100,188 60,800 58,800 2,000 0 120 0 124
Retail Prototype 1.61 70,132 12,000 0 12,000 0 n.a. 0 100 Tourist MixedUse/Condotel

1.5 65,340 136,750 35,280 18,400 66 72 120 0
Luxury Residential 0.65 28,314 6,250 0 0 6,250 1 0 0
923
47 Site Preparation Costs
Site preparation costs include costs associated with grading, utility connections, paving and surface parking, and landscaping, among other items. Based on feedback from local developers and real estate professionals active in the greater Lake Tahoe region, this analysis assumes a site preparation cost of $15-$20 per site square foot depending on the prototype.

It should be noted that this analysis assumes the sites to be vacant and relatively flat. This analysis also assumes that all necessary infrastructure is in place to service the prototypes.

Land Use Commodity Acquisition
Projects proposed for development within the Lake Tahoe Basin must acquire necessary land use commodities issued and managed by the Tahoe Regional Planning Agency (TRPA). These include development rights (i.e., tourist accommodation units, commercial floor area, residential units of use, etc.), residential allocations, site coverage, etc. The proformas generally assume that new development will have to acquire necessary development rights and coverage at full market value, without use of multipliers, or reuse of existing rights.

However, in the case of the mid-scale hotel prototype, the analysis does include some sensitivity testing recognizing that recent development of this type reused existing development rights that were previously associated with the site. Pricing for development rights is based on an appraisal conducted by the City of South Lake Tahoe in April 2020.

Planning, Building and other Permit Fees.

Exhibit B2 reports building permit and building permit fee estimates for each of the five prototypes provided by City staff, as well as information on water and sewer connection fees provided by the South Tahoe Public Utility District (STPUD). Fees charged by TRPA were excluded from the analysis at the request of City staff due to the extreme variability that exists in the fees charged based on unique project characteristics. For example, two projects with similar specifications may be proposed on two different sites with fee estimates ranging from the tens of thousands to many millions of dollars.

Hard Construction Costs
Hard costs include primarily labor and materials costs and are based both on RS Means and on BAE’s experience with comparable recent projects constructed within the Tahoe region.

Podium Parking Hard Construction Costs
Based on BAE’s professional experience, this analysis assumes podium parking costs of $50,000 per space for a single-level podium structure.
924
48 Exhibit B2: Estimated Planning, Building, and Connection Fees by Prototype Sources: City of South Lake Tahoe; South Tahoe Public Utility District (STPUD); BAE, 2022.

Prototype #1 Prototype #2 Prototype #3 Prototype #4 Prototype #5 Boutique Hotel Upper Mid Hotel Retail Center Mixed Use Condotel Luxury SFR Planning Permits
Design Review $2,921 $2,921 $2,921 $2,921 $2,921
CEQA $74 $74 $74 $74 $74
Subtotal Planning Permits $2,995 $2,995 $2,995 $2,995 $2,995 Building Permit
Administrative Fee $ Hour $0 $0 n.a. $0 $0
Fire Plan Review $3,332 $3,332 $3,332 $3,332 $3,332
Planning Plan Review $232 $232 $232 $232 $232
Technology Fee $11 $11 $11 $11 $11
General Plan Maintenance Fee $1.00 Per $1,000 Value $7,510 $24,293 $3,422 $63,001 $1,660 State Building Standards Fee $1.00 Per $25,000Value $300 $972 $137 $2,520 $66 SMIP Fee $28.00 Per $100,000 Value $6,802 $6,802 $958 $17,640 $465 Building Permit Fee 2.0% of Value $150,209 $485,850 $68,447 $1,260,011 $33,195 Lake Tahoe Unified School District Fee $12,500 $62,000 $9,360 $89,700 $20,625 Subtotal Building Permit Fees $180,897 $583,491 $76,540 $1,436,447 $59,586 PUD Water and Sewer Connection Fees
Water & Sew er Fees $117,979 $556,800 $116,831 $566,800 $34,008 Subtotal Water and Sewer Connection Fees $117,979 $556,800 $116,831 $566,800 $34,008 Total Fees, All Types $301,871 $1,143,286 $196,366 $2,006,242 $96,589 925
49 Exhibit B3: Estimated Development Costs by Prototype Sources: City of South Lake Tahoe; BAE, 2022.

Project Type Hard Costs Site Costs Soft Costs Financing Profit Land Use
Commodities/
Entitlements
Planning &
Building Fees
Linkage
Fees Total Costs
Costs/
Sq. Ft.

Hotel Prototype #1:

Luxury/High End Hotel
$5,657,600 $601,128 $1,251,746 $502,724 $1,362,748 $1,272,641 $301,871 $0 $10,950,458 $658 Hotel Prototype #2:

Upper Mid-Scale Hotel
$18,240,000 $2,003,760 $4,048,752 $1,636,794 $3,099,806 $3,925,470 $1,143,286 $0 $34,097,868 $561 Retail Prototype $1,800,000 $1,051,974 $570,395 $232,866 $956,348 $1,414,704 $196,366 $1,109,348 $7,332,000 $611 Tourist MixedUse/Condotel $51,193,650 $1,306,800 $10,500,090 $4,394,458 $11,015,188 $4,033,350 $2,006,242 $0 $84,449,778 $618 Luxury Residential $1,100,000 $283,140 $276,628 $61,077 $625,000 $22,500 $96,589 $59,000 $2,523,935 $404 926
50 Developer Profit
Measured as a percentage of total development costs, developers typically seek a gross profit of between ten and 15 percent for commercial real estate projects. For single family residential projects, many developers aim for returns equal to 20 percent of gross sales.

Financing Costs
In terms of construction financing costs for commercial real estate projects, this analysis assumes a 65 percent loan-to-cost ratio, and a 7.0 percent annual interest rate over a 24- month period, an upfront 1.5 percent loan fee, and a 60 percent drawdown factor.

Land Acquisition and land residuals
The five proformas presented in this analysis do not include a land cost. Instead, the tables are structured with an assumed developer return and solve for the “land residual” as the bottom-line measure of feasibility after accounting for all other costs and developer profit.

Development Revenue Assumptions
BAE estimated revenue assumptions for each prototype based upon information from a variety of sources including research completed by BAE for other similar projects, stakeholder interviews, other proprietary developer development budgets, and CoStar.

Commercial Rental Revenues
Feedback from local business owners and real estate professionals indicates that premium retail NNN lease rates range from $3.00 to more than $4.00 per square foot depending on location and amenities for more newly developed and well-maintained properties.

Commercial Vacancy Rate
Due to potential turn over and perceived challenges in retrofitting built-out space, this analysis assumes a commercial vacancy rate of ten percent at stabilization.

Condominium Sales Price
Based on feedback from local developers and real estate professionals, this analysis assumes both the townhome-style and condotel condominiums could garner an average of $625 per square foot in sales revenue. Local real estate professionals indicate that the average per square foot sale prices could increase significantly depending on location and views of the lake or other scenic and lifestyle amenities.

Upper Mid-Scale Hotel Room Revenues
This analysis assumes that hotel rooms in the upper mid-scale hotel prototype will capture an average daily room rate (ADR) of $180. Recognizing that newer hotel product will likely capture higher room revenues than the area’s relatively aged existing stock, this assumed rate is on the higher end of ADRs that CoStar reports for this class of properties in the market area. 927
51 Small Luxury/Boutique Hotel Room Revenues
This analysis assumes that hotel rooms in the small luxury/boutique prototype will capture an ADR of $240 per night. Once again, recognizing that newer hotel product will likely capture higher room revenues than the area’s relatively aged existing stock, this assumed rate is generally higher than ADRs reported by CoStar for luxury/boutique hotels in the market area.

Full-Service Hotel Condo Rental Revenues
This analysis assumes that condominium units returned to the hotel pool managed by the hotel operator will capture an ADR of $350. This recognizes that these larger units that have more amenities than a traditional hotel room (i.e., kitchens, living rooms, multiple bedrooms, etc.). Once again, while local hotel developers generally confirmed this analysis’ assumption, it should be noted that ADRs can range widely depending on depending on location and scenic/lifestyle amenities. The ADR used for this analysis does not assume a view premium.

Feasibility Results
Overall, the financial feasibility testing exercise found that neither of the pure hotel prototypes are likely to be able to absorb much in the way of an additional linkage fee burden.

The remainder of this section provides a more detailed discussion of the results of the financial feasibility analysis, with summary tables and detailed proforma worksheets provided as Exhibits B4 through B9.

Hotel Prototype #1: Luxury/Boutique
The feasibility analysis indicates that this prototype would likely be feasible before the addition of new linkage fees. Total residual land value for this property is estimated to be $1.86 million per acre compared to prevailing land cost of roughly $1.7 million for this type of property in the South Lake Tahoe tourist core. Sensitivity testing reveals that adjusting cost and revenue assumptions such as ADRs, the assumed capitalization rate, and other key inputs could significantly improve project performance and yield higher residual land value.

Hotel Prototype #2: Upper Mid-Scale
Of the five prototypes, this project yields the lowest overall residual land values assuming that the development would incur full land use commodity entitlement costs. Without the land use commodity entitlement costs, the prototype may be marginally feasible, yielding a positive land 928
52 value per acre of approximately $850,000 which may be sufficient to cover the cost of land in less prime locations on the edge of the tourist core or along outlaying commercial corridors.

Retail Prototype – Stand-Alone Retail Pad
Assuming premium rents, an aggressive cap rate and relatively modest overall development costs, this prototype would be feasible yielding approximately $3.6 million per acre in residual land value per acre compared to the prevailing market value of $2.8 million per acre for this property type use. At this level of profitability, the project could potentially absorb up to around $90 per square foot in additional commercial linkage fee burden, equal to approximately $1.08 million in total additional project cost. However, please note that this represents a very high-end retail project and that less well positioned projects may not be able to absorb the same additional impact fee burden.

Tourist Mixed-Use Prototype – Condotel and Retail
The preliminary feasibility analysis for the condotel prototype indicates that the project would likely be feasible before the addition of the retail and hotel linkage fees, yielding a positive residual land value of approximately of $8.1 million per acre compared to prevailing land costs of $3.5 to $5.3 million for this property type. It is important to note, however, that a large percentage of the value attributed to this prototype would be generated by very high assumed ADRs for the condotel portion of the project, and is thus highly dependent on the continued strength of this product type in the local lodging market.

With such a high residual land value, BAE estimates that a project of this type could potentially support imposition of a hotel linkage fee of up to $44 per square foot, or the retail linkage fee of $239 plus a hotel linkage fee of $7 per square foot. In either scenario, the City would be imposing a fee burden equal to approximately $5.2 million. Note however, that the retail component of the project is likely being subsidized by the condotel component; therefore an impact fee imposed on the condotel component would be more efficient and less likely to be impacted by adjustments in the ancillary aspects of the project design.

Residential Prototype – Luxury Single-Family
Of all of the prototypes considered in this analysis, the luxury single-family prototype would perform the strongest in terms of its ability to generate a substantial residual land value in excess of prevailing land costs for comparable properties. As shown below, this project would yield nearly in $900,000 per acre in land value per acre compared to an assumed land cost of approximately $500,000 per acre for a comparable parcel of single-family zoned land. This includes imposition of the recommended inclusionary housing in-lieu fee amount of $59,000. 929
53 Exhibit B4: Estimated Residual Value and Value Capture Potential Notes:
(a) A residual value of this magnitude is likely within the margin of error of most proforma financial models. (b) The assumed land cost is based on sites located within the tourist core. Sites on the periphery and some commercial corridors may be available at a lower cost which could prove feasible under some circumstances.

Source: BAE, 2023.

Residual Market Value Value Capture
Land Value/Acre Land Value/ Capture Potential Per
Project Type Adjustments w/o Linkage Fee Acre Potential Sq. Ft./Unit Hotel Prototype #1:

Luxury/High End Hotel
n.a. $1,863,877 $1,700,000 $163,877 $10 (a)
Hotel Prototype #2: w / land use comm. ($1,321,704) $1,700,000 ($3,021,704) ($30) Upper Mid-Scale Hotel w /o land use comm. $850,714 $1,700,000 ($849,286) ($14) (b) Retail Prototype n.a. $2,800,000 $2,800,000 $0 $0 (a)
Tourist MixedUse/Condotel n.a. $8,098,107 $3,500,000 $4,598,107 $34 Luxury Residential n.a. $905,870 $500,000 $405,870 $405,870 930
Exhibit B5: Prototype #1 Pro Forma - Small Luxury/Boutique Hotel Development Program Assumptions Cost and Income Assumptions Development Cost Analysis Residual Land Value AnalysisLot Size (acres/sf) 0.7 30,056 Construction Fees and Exactions Revenues Site Preparation Costs (per site sf) (b) $20 Linkage Fees $0 Room Revenues $2,102,400 Building Hotel Hard Costs (per sq. ft.) $340 Land Use Commodities Cost $1,272,641 Food and Beverage Revenues $176,097 # of Avg. Total Soft Cost, (% of Hard Costs) 20% Other Operated Department Revenues $134,634 Keys sf sf Construction Costs Miscellaneous Income $57,858 Hotel Room Characteristics 40 300 12,000 Revenues Site Prep Costs $601,128 Retail $37,440 Average Daily Room Rate (per night) $240 Hotel Hard Costs $5,657,600 Total Revenues $2,508,430 % sf Room Revenues (% Total Rev.) 87.2% Permit and Impact Fees $301,871 Circulation 20% 2,400 Food and Beverage Revenues (% of Total Rev.) 8.4% Soft Costs $1,251,746 Expenses Walls and Shafts 10% 1,200 Other Operated Department Revenue (% of Total Rev.) 6.4% Subtotal Construction Costs $7,812,345 Room Expenses ($489,917) Hotel Gross Area 15,600 Miscellaneous Income (% of Total Rev.) 2.8% Food Costs ($135,604) Retail NNN $/Sq/ Ft. $3.00 Financing Costs Other Operated Department Expenses ($36,818) Retail 1,040 Interest on Construction Loan $426,554 Undistributed Operating Expenses (d) ($685,970) Expenses Points on Construction Loan $76,170 Management Fee ($84,436) Gross Building Area 16,640 Room Expenses (% of Room Revenues) 23.3% Subtotal Financing Costs $502,724 Replacement Reserves ($63,556) Food Costs (% of Food Revenues) 77.0% Insurance Costs ($22,012) # Avg Total Other Operated Department Expenses 60.9% Developer Profit (15%) $1,362,748 Real Estate Taxes ($120,455) Parking Configuration (a) Stalls sf Parking sf Undistributed Operating Expenses (% of Total Rev.)(c) 27.3% Retail Operating Costs ($13,104) Surface Parking 42 350 14,700 Management Fee (% of Total Rev.) 3.4% Total Project Costs $10,950,458 Total Expenses ($1,651,872) Replacement Reserves (FF&E) (% of Total Hotel Rev.) 2.5% Operations Insurance (% Total Hotel Rev.) 0.9% Net Operating Income (NOI) $856,557 Days Open per Year 365 Real Estate Taxes (% of Project Costs Net Sales Rev.) 1.1% Available Room Nights 14,600 Retail Operating Costs (Percent of Gross Rev) 35.0% Capitalized Total Project Value $12,236,533 Average Annual Occupancy 60.0% Financing
Occupied Room Nights 8,760 Loan to Cost Ratio 65% Residual Land Value $1,286,075 Initial Construction Loan Fee (points) 1.5% Value per Acre $1,863,877Interest Rate 7.00%Period of Initial Loan (Months) 24Drawdown Factor 60%Total Hard + Soft Costs + Land $7,812,345 Total Loan Amount $5,078,024
Source: BAE, 2023.
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Exhibit B6: Prototype #2 Pro Forma - Upper Mid-Scale Hotel Development Program Assumptions Cost and Income Assumptions Development Cost Analysis Residual Land Value AnalysisLot Size (acres/sf) 2.3 100,188 Construction Fees and Exactions Revenues Site Preparation Costs (per site sf) (b) $20 Linkage Fees $0 Room Revenues $5,518,800 Building Hotel Hard Costs (per sq. ft.) $300 Entitlement Commodities Cost $0 Food and Beverage Revenues $462,255 # of Avg. Total Soft Cost, (% of Hard Costs) 20% Other Operated Department Revenues $353,415 Keys sf sf Construction Costs Miscellaneous Income $151,878 Hotel Room Characteristics 120 350 42,000 Revenues Site Prep Costs $2,003,760 Retail $48,000 Average Daily Room Rate (per night) $180 Hotel Hard Costs $18,240,000 Total Revenues $6,534,348 % sf Room Revenues (% Total Rev.) 87.2% Permit and Impact Fees $1,143,286 Circulation 25% 10,500 Food and Beverage Revenues (% of Total Rev.) 8.4% Soft Costs $4,048,752 Expenses Walls and Shafts 15% 6,300 Other Operated Department Revenue (% of Total Rev.) 6.4% Subtotal Construction Costs $25,435,798 Room Expenses ($1,286,031) Hotel Gross Area 58,800 Miscellaneous Income (% of Total Rev.) 2.8% Food Costs ($355,962) Retail NNN $/Sq/ Ft. $2.00 Financing Costs Other Operated Department Expenses ($96,647) Retail 2,000 Interest on Construction Loan $1,388,795 Undistributed Operating Expenses (d) ($1,786,920) Expenses Points on Construction Loan $247,999 Management Fee ($219,953) Gross Building Area 60,800 Room Expenses (% of Room Revenues) 23.3% Subtotal Financing Costs $1,636,794 Replacement Reserves ($165,561) Food Costs (% of Food Revenues) 77.0% Insurance Costs ($57,341) # Avg Total Other Operated Department Expenses 60.9% Developer Profit (15%) $2,707,259 Real Estate Taxes ($327,578) Parking Configuration (a) Stalls sf Parking sf Undistributed Operating Expenses (% of Total Rev.)(c) 27.3% Retail Operating Costs ($16,800) Surface Parking 124 350 43,400 Management Fee (% of Total Rev.) 3.4% Total Project Costs $29,779,851 Total Expenses ($4,312,793) Replacement Reserves (FF&E) (% of Total Hotel Rev.) 2.5% Operations Insurance (% Total Hotel Rev.) 0.9% Net Operating Income (NOI) $2,221,555 Days Open per Year 365 Real Estate Taxes (% of Project Costs Net Sales Rev.) 1.1%Available Room Nights 43,800 Retail Operating Costs (Percent of Gross Rev) 35.0% Capitalized Total Project Value $31,736,494Average Annual Occupancy 70.0%Occupied Room Nights 30,660 Financing Residual Land Value $1,956,642 Loan to Cost Ratio 65% Value per Acre $850,714Initial Construction Loan Fee (points) 1.5% Value per SF $32.18Interest Rate 7.00%Period of Initial Loan (Months) 24Drawdown Factor 60%Total Hard + Soft Costs + Land $25,435,798 Total Loan Amount $16,533,269
Source: BAE, 2023.
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Exhibit B7: Prototype #3 Pro Forma - Retail Center
Development Program Assumptions Cost and Income Assumptions Development Cost Analysis Residual Land Value AnalysisLot Size (acres/sf) 1.6 70,132 Construction Fees and Exactions CommercialTotal Building Area (sf) 12,075 Site Preparation Costs (per site sf) (c) $15 Linkage Fees $0 Gross Scheduled Comm'l Rents $597,600 Retail Hard Costs (d) $150 Land Use Commodities Cost $1,414,704 Less Vacancy ($59,760) Building Restaurant Hard Costs (d) $175 Less Operating Expenses ($50,400) Retail (sf) 12,000 Soft Cost, (% of Hard Costs) 20% Construction Costs Plus CAM Reimbursables $45,360 Restaurant 0 Site Prep Costs $1,051,974 Net Operating Income (NOI) $532,800Circulation Factor 0% OperationsComm'l Gross Area (sf) 12,000 Average Rental Rate (per sf NNN) $4.15 Retail Hard Costs $1,800,000 Total Project Value $11,840,000 Operating Costs (35% of Gross) 35.0% Restaurant Hard Costs $0 Residual Land Value $5,783,750 Parking Vacancy Rate 10% Planning and Building Permits $196,366 Residual Land Value/Acre $3,592,391 # Total Soft Costs $570,395
Parking Configuration (b) Stalls Parking sf Financing Subtotal Construction Costs $3,618,735 Surface Parking (Residential) 0 0 Loan to Cost Ratio 65%Surface Parking (Commercial) 100 37,500 Initial Construction Loan Fee (points) 1.5% Financing Costs Total Required Parking 100 37,500 Interest Rate 7.00% Interest on Construction Loan $197,583 Period of Initial Loan (Months) 24 Points on Construction Loan $35,283 Average sf per space 375 Drawdown Factor 60% Subtotal Financing Costs $232,866 Total Hard + Soft Costs + Land $3,618,735
Total Loan Amount $2,352,178 Developer Profit (15%) $789,946 Total Project Costs $6,056,250
Sources: BAE, 2023.
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Exhibit B8: Prototype #4 Pro Forma - Mixed-Use Condotel Development Program Assumptions Cost and Income Assumptions Development Cost Analysis Feasibility AnalysisLot Size (acres/sf) 1.5 65,340 Construction Fees and Exactions RevenuesTotal Building Area (sf) 136,750 Site Preparation Costs (per site sf) (d) $20 Linkage Fees $0 Hotel Revenues Hotel Hard Costs (per key) $330 Land Use Commodities Cost $4,033,350 Room Revenues $4,415,040 Hotel Condo Hard Costs (per sf) $375 Food and Beverage Revenues $2,034,403 # of Avg. Total Restaurant Hard Costs (per sf) $175 Construction Costs Other Operated Department Revenues $250,334 Keys sf sf. Conference Space Hard Costs (per sf) $150 Site Prep Costs $1,306,800 Miscellaneous Income $263,199 Hotel Room Characteristics 72 350 25,200 Parking Podium Hard Costs (per space) $50,000 Hotel Hard Costs $11,642,400 Subtotal Hotel Revenues $6,897,285 Soft Cost, (% of Hard Costs) 20% Condo Hard Costs $31,151,250 % sf Restaurant Hard Costs $0 Condo Revenues
Circulation 25% 6,300 Revenues Conference Space Hard Costs $0 Room Revenues $3,303,300Walls and Shafts 15% 3,780 Hotel Revenues Retail Hard Costs $2,400,000 Food Revenues $1,681,256Hotel Gross Area 35,280 Average Daily Room Rate (per night) $240 Parking Podium Hard Costs $6,000,000 Other Operated Department Revenues $263,920 Room Revenues (% Total Hotel Rev.) 64.0% Permit and Impact Fees $2,006,242 Miscellaneous Income $208,227 Hotel Operations Food and Beverage Revenues (% of Total Hotel Rev.) 29.5% Soft Costs $10,500,090 Subtotal Condo Revenues $5,456,703 Days Open per Year 365 Other Operated Department Revenue (% of Total Hotel Rev.) 3.6% Subtotal Construction Costs $65,006,782 Retail Revenues $66,400 Available Room Nights 26,280 Miscellaneous Income (% of Total Hotel Rev.) 2.9% Total Revenues $12,420,389Average Annual Occupancy 70.0% Construction Financing CostsOccupied Room Nights 18,396 Condo Revenues (e) Interest on Construction Loan $3,549,370 Expenses Sale Price (per sf) $625 Points on Construction Loan $845,088 Hotel Expenses Condo Average Daily Room Rate (per night) $350 Subtotal Const. Financing Costs $4,394,458 Room Expenses ($1,138,968) # of Avg. Room Revenues (% of Total Condo Rev.) 60.5% Developer Profit (15%) $11,015,188 Food Expenses ($1,400,821) Condo Unit Types Units sf Res. sf Food Revenues (% of Total Condo Rev.) 30.8% Total Project Costs $84,449,778 Other Operated Department Expenses ($162,264) 1-Bed 23 800 18,400 Other Operated Department Revenue (% of Total Condo Rev.) 4.8% Less Condo Sales ($39,937,500) Undistributed Operating Expenses ($1,682,806) 2-Bed 33 1,000 33,000 Miscellaneous Income (% of Total Condo Rev.) 3.8% Plus Marketing Costs $1,198,125 Management Fee ($200,835)3-Bed 10 1,250 12,500 Replacement Reserves ($132,478) Total 66 63,900 Expenses Project Costs Net of Sales Revenue $45,710,403 Insurance ($69,079) Hotel Expenses Real Estate Taxes ($502,814)
% sf Room Expenses (% of Room Revenues) 25.8% Condo Expenses Circulation 20% 12,780 Food Costs (% of Food Revenues) 68.9% Room Expenses ($495,495) Walls and Shafts 10% 6,390 Other Operated Department Expenses (% or OODR) 64.8% Food Expenses ($1,157,656)Condo Gross Area 83,070 Undistributed Operating Expenses (% of Total Rev.)(g) 24.4% Owners' Revenues ($1,403,903) Management Fee (% of Total Rev.) 2.9% Retail Expenses ($23,240) Condo Operations Replacement Reserves (FF&E) (% of Total Hotel Rev.) 1.9% Total Expenses ($8,370,359) Average Annual Occupancy 65.0% Insurance (% Total Hotel Rev.) 1.0% Real Estate Taxes (% of Project Costs Net Sales Rev.) 1.1% Net Operating Income (NOI) $4,050,030 Days Available per Year (Owner) 90 Retail Expenses 35.0%Available Room Nights Per Year (Owners) 5,940 Project Value $57,857,565Occupied Room Nights Per Year (Owner) 3,861 Condo Expenses Residual Land Value $12,147,161 Sales Marketing (% of Room Revenues) 3.0% Land Value/Acre $8,098,107 Days Available Per Year (Guest) (b) 275 Room Expenses (% of Room Revenues) 15.0%% of Condo Units in Hotel Pool 80% Food Costs (% of Food Revenues) 68.9%Available Room Nights Per Year (Guests) 14,520 Owner's Revenue Share (% of Total Revenues) 50.0%Occupied Room Night Per Year (Guests) 9,438 Financing
Hotel Amenities Loan to Cost Ratio 65%
Conference/Event Space (sf) 0 Initial Construction Loan Fee (points) 2.00%Restaurant (sf) 0 Interest Rate 7.00% Period of Initial Loan (Months) 24
Commercial Space Drawdown Factor 60%Gross Retail 18,400 Total Hard + Soft Costs + Land $65,006,782 Total Loan Amount $42,254,408
Parking # Avg Total
Parking Configuration Stalls sf Parking sf
Surface Parking 0 375 0Podium Parking 120 375 45,000
Total 120 45,000
Source: BAE, 2023.
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Exhibit B9: Prototype #5 Pro Forma - Luxury Single Family Home Development Program Assumptions Cost and Income Assumptions Development Cost Analysis Residual Land Value AnalysisLot Size (acres/sf) 0.650 28,314 Construction Fees and Exactions Revenues Site Preparation Costs (per site sf) (c) $10 Land Use Commodities Cost $22,500 Residential Sales Revenue $3,125,000Residential Hard Costs (per sf) $176 Linkage Fees $0 Less Marketing Costs ($93,750) Residential Unit Type Res. sf Soft Costs (% of Hard Costs) 20% Luxury SFR 6,250 Construction Costs Total Project Value $3,031,250 Residential Gross Area (sf) 6,250 Operations Site Prep Costs $283,140 Less Total Project Costs $1,839,935 Sale Price (per sf) $500 Residential Hard Costs $1,100,000 Less Developer Profit $625,000 Marketing Costs as a % of Sale Price 3% Permit and Impact Fees $96,589 Financing Costs Soft Costs $276,628 Residual Land Value $566,315 Financing Interest on Construction Loan $43,953 Subtotal Construction Costs $1,756,357 Residual Land Value/Acre $871,254 Loan to Cost Ratio 65% Points on Construction Loan $17,124 Initial Construction Loan Fee (points) 1.5% Subtotal Financing Costs $61,077 Financing $61,077Interest Rate 7.00% Period of Initial Loan (Months) 12 Total Project Costs $1,839,935Drawdown Factor 55%Total Hard + Soft Costs $1,756,357 Total Loan Amount $1,141,632
Developer Profit (% of Sales Revenue) 20%
Source: BAE, 2023.
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City of South Lake Tahoe
Agenda Item Executive Summary
Joe Irvin, City Manager
Meeting Date: March 14, 2023
Agenda Item #: 29
Agenda Item: City Development Rights Annual Report
Executive Summary: Pursuant to City Council Resolution 2022-051, the Development Services Department shall have an appraisal prepared annually, analyzing the sale of development rights and recommending a fair-market value for such rights.

Requested Action / Suggested Motions: Pass a Resolution accepting the development rights appraisal prepared by Johnson Valuation Group Limited and establishing a price point for the calendar year 2023 at one-third of the recommended fair market value outlined in the appraisal.

Responsible Staff Member: John Hitchcock, Planning Manager Responsible Staff Member: John Hitchcock, Planning Manager Reviewed and Approved By:

Susan Blankenship, City Clerk
Olga Tikhomirova, Director of Finance
Heather Stroud, City Attorney
Attachments:
01-Staff Report - Development Rights Appraisal
02-Development Rights Accounting.docx
03-Resolution 20222-051.pdf
04-2023_Appraisal.pdf
05-Resolution - Development Rights
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Council Agenda Report- March 14, 2023 Page 1 of 3
City of South Lake Tahoe
Report to City Council
Meeting Date: March 14, 2023
Title: City Development Rights Annual Report
Location: Citywide
Responsible Staff Member: John Hitchcock, Planning Manager, (530) 542-7472 Background: The City maintains an inventory of potential residential units of use, single and multi-family residential units of use, tourist accommodation units, commercial floor area, and land coverage, which have been accumulated from various sources (e.g., Environmental Improvement Projects, implementing of Community Plans and Area Plans, City purchase of land with attached development right). See Attachment 02 for an inventory of development rights owned by the City.

In order to establish a clear City policy for the disposition of these assets, the City Council on September 3, 2019, adopted Resolution 2019-067, which provided for a consistent and equitable disposition process, promoted the achievement of the City's affordable housing and community development goals, and provided certainty for the development community. The adopted resolutions 1) established an annual determination for the fair market value of the development rights and specifies that the City Council will establish a price point for each category by applying a factor of one-third to be the recommended rate, 2) provides for the earmarking of sales revenue in the City's new Workforce Housing Fund (to be used for targeted affordable housing initiatives), 3) provides for the sale of development rights for deed-restricted housing projects at no cost, 4) provides for the sale of development rights for multi-family residential projects and mixed-use projects within an established Town Center at no cost, 5) provides for the sale of development rights for commercial or industrial projects that redevelop distressed properties at no cost, and 6) delegates authority to complete transactions to the City Manager.

On May 3, 2022, the City Council adopted Resolution 2022-051 (see Attachment 03) amending the previous resolution to set aside 20 City banked tourist accommodation units to be converted to residential units of use and provided at no cost to construct new accessory dwelling units. The resolution also set aside 20 tourist accommodation units to be converted and used to build new multi-family projects. The resolution requires deed restrictions be placed on the properties prohibiting their use as a vacation home rental and for multi-family projects, deed-restricting the occupancy of units to tenants employed at least 30 hours per week at a place of business located in the Tahoe Basin. Language was also adopted, restricting the conversion of commercial floor area to other development rights.

As of the writing of this staff report, the City has netted $394,989.95 in revenue from the sale of commodities that is set aside for Housing program and project implementation and has approved the conversion and transfer of five units of use for the construction of new accessory dwelling units.
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Council Agenda Report- March 14, 2023 Page 2 of 3
Issue and Discussion: Pursuant to Resolution 2019-067 and 2022-051, the City contracted with Mr. Ben Johnson of Johnson Valuation Group Limited, to appraise and estimate the market value of the assets owned by the City. Mr. Johnson was tasked with providing a general overview of the market conditions in the Lake Tahoe Basin and providing a detailed analysis of the market for each development right and recommending a per unit market value for each development right.

Mr. Johnson's scope of work included interviewing experienced land use planners well versed in TRPA's growth management system and project permitting, real estate agents, developers and the staff of the California Tahoe Conservancy (CTC) & Nevada State Lands. Historically, these two state agencies have been the primary source for development rights in the Tahoe Basin. Mr.

Johnson also did extensive research on the existing market conditions, analyzed the sale of development rights, and completed a comparable sales analysis of each development right.

Appraisal and findings on the current state of the market are included in Attachment 04, which analyzes the change in market conditions for development rights from January 1, 2022 to December 31, 2022. After extensive research and careful consideration of all data available, site inspections, and comparative analysis of comparable properties, Mr. Johnson recommends changes to the fair market value for 1b land coverage and potential coverage in the Upper Truckee River watershed. No changes are recommended for all other development rights.

In the original appraisal and subsequent updates to the appraisal, the value per square foot of 1b land coverage was estimated to be $25.00 per square foot. The CTC has a present asking price of $30 per square foot for 1b land coverage. In discussions with land planners, it was indicated that there is a relatively small market for 1b coverage, and sellers are primarily able to name their price as the primary buyers are higher-end residential properties with inelastic demand. Land planners reported sale prices of up to $35 per square foot for 1b land coverage in 2022.

Generally, they indicated that the market accepts the CTC's present asking price of $30 per square foot for the primary basis of establishing value. Based on the CTC's current asking price, the market value for 1b Coverage is estimated at $30 per square foot.

Mr. Johnson also recommends increasing the value of potential coverage in the Upper Truckee Watershed from $6.00 per square foot to $7.50 per square foot. This recommended change would align the City market value with the CTC, which is the primary agency in the basin selling potential land coverage for the construction of residential uses.

Mr. Johnson recommends the following market values for city-owned development rights.

Development Right Market Value Per Unit Based
on Typical Retail Quantity
Price Point Based on
City Council policy
Land Coverage 1B $30/Sq. Ft. $9.99/Sq. Ft.

Land Coverage 4-7 (Potential)
South Stateline HRA
Upper Truckee HRA
$7.50/Sq. Ft.
$7.50/Sq. Ft.
$2.50/Sq. Ft.
$2.50/Sq. Ft.

Land Coverage 4-7 (Hard) $25/Sq. Ft. $8.33/Sq. Ft.

Commercial Floor Area (Bijou/Al
Tahoe Community Plan)
$25/Sq. Ft. $8.33/Sq. Ft.

Commercial Floor Area (Tahoe
Valley Area Plan)
$25/Sq. Ft. $8.33/Sq. Ft.
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Council Agenda Report- March 14, 2023 Page 3 of 3
Commercial Floor Area (South Y
Industrial)
$25/Sq. Ft. $8.33/Sq. Ft.

Commercial Floor Area
(Citywide)
$25/Sq. Ft. $8.33/Sq. Ft.

Potential Residential Units of
Use
$5,000/Unit $1,666/Unit
Residential Units of Use $15,000/Unit $5,000/Unit
Tourist Accommodation Units
(City Owned)
$15,000/Unit $5,000/Unit
Tourist Accommodation Units
(Successor Agency)
$15,000/Unit $5,000/Unit
Environmental Considerations: Implementing a policy for the sale of development rights and land coverage is not approval of a project under the California Environmental Quality Act (CEQA) Guidelines Sections 15352 and 15378. Any proposed project that uses development rights and /or land coverage purchased from the City would be required to go through a project-level environmental analysis pursuant to the CEQA Guidelines.

Financial Implications: Revenue generated from the sale of development rights and/or land coverage is used to support City Council Housing priorities. The revenue generated from direct sales of the development rights/land coverage is earmarked to support the City's Workforce Housing Fund (to be used for targeted housing initiatives). Satisfaction with all conditions of an approved sale, including project completion, is required before the funds are available for use.

Currently, the Development Services Department has resources to implement the program, including coordinating the sale of development rights with the City Manager's office and the Finance Department, preparing TRPA transfer applications, and tracking the sale and transfer of development rights and land coverage.

Policy Implication:

The City Council policies for distribution of development commodities is consistent with the following General Plan Land Use Element policy. Note that the target number of residential units has been updated in the recently adopted Housing Element.

Policy LU1.10: Future Residential Development Rights (RDR) Commodities. The City shall pursue the maximum amount of available residential unit allocations from the Tahoe Regional Planning Agency in order to use them as an incentive for revitalization, including workforce housing, up to an additional 940 market rate units and 222 affordable units. (Note: please see the Housing Element for additional policies related to market rate and affordable housing, incentives, and locations).
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CITY VERIFIED & BANKED DEVELOPMENT RIGHTS

STATELINE HYDROLOGIC AREA
Low Capability Hard Coverage 68,143 SF
Low Capability Hard Coverage (ROW) 4,170 SF
High Capability Hard Coverage 69,024 SF
High Capability Hard Coverage (ROW) 40,220 SF
Soft Coverage 7,706 SF
Soft Coverage (ROW) 4,134 SF

SOUTH UPPER TRUCKEE HYRDROLOGIC AREA
Low Capability Hard Coverage 92,956 SF
Low Capability Hard Coverage (ROW) 1,927 SF
High Capability Hard Coverage 24,849 SF
High Capability Hard Coverage (ROW) 37,367 SF
Soft Coverage 0 SF
Soft Coverage (ROW) 2,625 SF

OTHER DEVELOPMENT RIGHTS
Airport 1b Hard Coverage 63,472 SF
SEZ Restoration Credit1 42,260 SF
Potential Residential Unit of Use (PRUU) 0
Existing Residential Unit of Use (ERUU) 10.5
Tourist Accommodation Unit (TAU) City 156
Tourist Accommodation Unit (TAU)
Successor Agency 18
CFA Banked 20,390 SF
Sewer Units 67

COMMERCIAL FLOOR AREA POOLS
South Y Industrial Community Plan 0 SF
Bijou/Al Tahoe Community Plan 6,150 SF
Tahoe Valley Area Plan 944 SF
Tourist Core Area Plan 0 SF
EIP 1 Pool 2,664 SF
EIP 2 Pool 8,000 SF
Community Plan Recharge 5,106 SF

RESIDENTIAL ALLOCATIONS
Single Family Pool 4
Multi-Family Pool 6
Town Center Pool 57

1. 25,000 SF of SEZ restoration credit reserved for the California Tahoe Conservancy.
940

CITY-OWNED COMMODITIES TRANSACTIONS
Location Project Type
Development
Right Cost Notes
1195 Ski Run
Blvd
Recreation - Ski
Run Park Coverage $0.00 City Council granted at no cost 2877 Lake
Tahoe Blvd
Commercial
Remodel Coverage $23,349.00
Coverage for LTSLT Office
Remodel
1772 D Street Commercial Coverage $316,540.00
Coverage for New
Commercial/Industrial
Buildings
1772 D Street Commercial CFA $9,384.69
CFA for New
Commercial/Industrial
Building
980 Link Rd Commercial CFA $8,096.76
CFA for New Commercial
Building
Tahoe Valley
MFD Project
Multi-Family
Residential CFA $14,000.00
CFA Converted for 14 Unit
market Rate Multi-Family
Project
1181 Emerald
Bay Rd
Commercial
Addition CFA $5,705.00
CFA for Outdoor Dining at the
Lake House Restaurant
933 Poplar
Tourist
Accommodation CFA $5,414.50
CFA for Maggi's Restaurant
(Desolation Hotel)
1056 Ski Run
Blvd
Single Family
Residential ERUU $7,500.00
ERUU to Convert Commercial
Building to a Residential Unit
2494 Conestoga
Multi-Family
Residential ERUU $5,000.00 ERUU for a New Duplex
3067 Bellevue
Ave ADU ERUU $0.00 TAU to ERUU Conversion
1061 William
Ave ADU ERUU $0.00 TAU to ERUU Conversion
3737 Beach Rd ADU ERUU $0.00 TAU to ERUU Conversion
1051 William
Ave ADU ERUU $0.00 TAU to ERUU Conversion
1320 Bonanza
Ave ADU ERUU $0.00 TAU to ERUU Conversion
1029 Tata Ln
Multi-Family
Residential (SPV) ERUU $0.00 ERUU for Manager's Unit
941
2022 RESIDENTIAL BUILDING PERMITS
Project Type Count
New Accessory Dwelling Units 61
New Multi-Family 832
New Single-Family Residential 393
TOTAL 128

1. 1 unit received Certificate of Occupancy

2. units received Certificate of Occupancy. Includes 82 units in the Tahoe Valley Area Plan Town Center District.

3. 2 units received Certificate of Occupancy
HOTEL/MOTEL ANALYSIS1
Total Acreage Total Units Total Density Average Density # of Parcels
Exceeding
Max Density
# of Parcels
Below Max
Density
105 5229 50 44 81 37

1. Does not include timeshares
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Resolution 2022-051
Adopted by the City of South LakeTahoe
City Council
May 3, 2022
Policy Regarding Disposition of Tahoe Regional Planning Agency TRPA) Development Commodities Owned by City of South Lake Tahoe Replacing Resolution 2019-067)

BACKGROUND
A. The Tahoe Regional Planning Authority ( TRPA) is the land use authority and has established a development rights system to manage future development and a system to regulate the amount of land coverage in the Tahoe basin.

B. The TRPA development rights are land use units that must be acquired before a property can be developed. Development rights include potential residential units of use ( PRUs), single and multi-family residential units of use ( RUUs), tourist accommodation units (TAUs), and commercial floor area (CFA).

C. Permanent land coverage is also regulated by the TRPA to protect the Lake Tahoe watershed. Parcels are limited to a specified amount of land coverage and, in some cases, may be transferred to maximize the allowable amount on a given parcel.

D. The City of South Lake Tahoe is subject to applying the development rights and land coverage systems to our review and approval of land use entitlement applications that are subject to the TRPA/City Memorandum of Understanding.

E. The City has TRPA development rights and land coverage which have accumulated from various sources ( e.g., Environmental Improvement Projects, implementation of Community Plans and Area Plans, City purchase of land with attached development rights, the retirement of rights, and TRPA allocation of development).

F. The City has been approached by project developers/applicants interested in securing development rights and land coverage from the City.

G. The City has independently sold or provided various TRPA development rights and land coverage to project developers/applicants based on the merits of the individual project.

H. Through the sale of TRPA development rights and land coverage the City has also provided an environmental and economic incentive to projects which otherwise would not have been economically feasible.

I. The City believes it is appropriate, and transparent, to establish a policy that addresses the future distribution and sale of development rights and land coverage maintained by the City.

Res 2022- 051 May 3, 2022 943

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BASED ON THE FACTS SET FORTH IN THE BACKGROUND, BE IT RESOLVED, that the City Council of the City of South Lake Tahoe:

1. Acknowledges and reserves the right to retain all necessary TRPA development rights and land coverage to support City-sponsored municipal projects; and

2. Hereby authorizes the distribution and sale of City maintained TRPA development rights and land coverage subject to the provisions of this policy; and

3. The City Council adopts the following policy for the distribution and sale of TRPA development rights and land coverage:

A. Distribution and sale of TRPA development rights and land coverage shall be directed toward the development of residential, commercial, mixed-use, and industrial properties in the City of South Lake Tahoe.

B. Distribution and sale of City-owned TRPA development rights and land coverage shall be consistent with the TRPA Regional Plan, TRPA Code of Ordinances, City of South Lake Tahoe General Plan and Municipal Code, and all other applicable community or area plan policies. i. When a developer/applicant requests City maintained TRPA development rights and/or land coverage for a project to be located within the City, the proposed project shall be evaluated to ensure the project is consistent with the following criteria;
a. The subject property must be in the City of South Lake Tahoe; and
b. The developer/applicant must have a planning application on file with the Development Services Department, prior to a project developer/applicant requesting development rights and/or land coverage; and
c. The proposed project provides an environmental and/or economic benefit for the community.

C. The distribution and sale of development rights and land coverage shall be to the affected parcel(s), not the developer/applicant; and i. Any change to an approved project (e.g., elevations, building size or siting, land uses, or density) may result in the revocation of prior reservation and/or allocated development rights and/or land coverage. The City Manager has the discretion to require any project change to be reviewed by the City Council to determine whether development rights or land coverage should be revoked. If revoked, the developer/ applicant will return to the City the allocated development rights and/or land coverage. The City shall reimburse the developer/applicant the price of sale, less the City's Res 2022- 051 May 3, 2022 944

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administrative processing fee.

D. The distribution and sale of TRPA development rights and land coverage shall be at no cost for the following projects:
i. The sale of city-owned development rights and land coverage shall be at no cost to single or multi-family residential projects, which are deed restricted to accommodate low, very-low, and moderate-income families, as defined by the Department of Housing and Community Development HCD) annual State Income Limits, pursuant to Health & Safety Code Section 50093.
ii. The sale of city-owned development rights and land coverage shall be at no cost to a developer/applicant of a multi-family residential project or a mixed-use project containing multi-family residential units, if the project is located with the boundaries of an identified Town Center. a. A mixed-use project can be the horizontal or vertical mix of uses residential, commercial and industrial).
iii. The sale of city-owned development rights and land coverage shall be at no cost to commercial/industrial projects, when the property is deemed to be distressed and/or blighted, and the value of the proposed improvements and/or new construction are greater than fifty-one percent of the El Dorado County assessed value.
iv. Up to 20 City banked Tourist Accommodation Units may be converted to Residential Units of Use and sold at no cost for the construction of new Accessory Dwelling Units.
v. Up to 20 City banked Tourist Accommodation Units may be converted to Residential Units of Use and sold at no cost for the construction of new multifamily (2 or more units) projects where the developer/applicant provides evidence that all residential units utilizing converted City Tourist Accommodation Units are deed-restricted for occupancy by a tenant employed at least 30 hours per week at a place of business located in the Tahoe Basin.

Should an approved residential, commercial, mixed-use, or industrial project later choose to subdivide the land (pursuant to the Subdivision Map Act), all previously required deed restrictions will remain in force or the developer shall reimburse the City the full market rate for said development rights/land coverage at the time of subdivision.

E. Should the City provide or sell development rights or land coverage for a project containing residential units, a deed restriction shall be placed on the property prohibiting use as a Vacation Home Rental as defined in City Code Section

3.50.370.

F. Commercial Floor Area shall only be provided or sold to a commercial project and shall Res 2022- 051 May 3, 2022 945

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not be converted to other development right types.

4. The City Council adopts the following implementation strategy for the distribution and sale of development rights and land coverage:

A. The Development Services Department will have an appraisal prepared by a California licenses appraiser, analyzing the sale of each development right ( potential residential units of use (PRUs), single and multi-family residential units of use (RUUs), tourist accommodation units ( TAUs), commercial floor area ( CFA); and land coverage), for the preceding calendar year.
i. The appraiser shall prepare the above-described report for presentation to the City Council on or before February 1 of each calendar year. a. The report shall describe the methodology used in determining the value of each development right category, including commercial floor area, and
b. The report shall contain recommendations for each development right category, including land coverage; and
c. The report shall also include a recommended tiers rate structure to address variances based on the scale of the project.
ii. The City Council reserves the right to annually set the price point for each development right type and/or land coverage; and
a. The established cost per category, shall be based upon one-third of the recommended appraisal rate.
iii. A developer/applicant shall have one-year from the date of the approved development right/land coverage request to submit and obtain a building permit, issued through the City. If this milestone is unachievable the applicant may apply for an extension or relinquish the City granted development rights and land coverage.
iv. One, one-year extension for the retention of approved development rights/ land coverage may be granted by the City Manager, based on the project continuing to meet the distribution policy and proceeding in a diligent manner, or relinquish the City granted development rights and land coverage.
v. The sale and transfer of development rights/land coverage shall be completed prior to the issuance of a Certificate of Occupancy. vi. If any of the associated City Planning, Building and/or TRPA permits expire, the allocated development rights/land coverage shall be returned to the City. The City shall also reimburse the developer/applicant for the cost of those development rights/land coverage, less the City's administrative processing fee.

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vii. Should the project parcel(s) change ownership the development rights may be transferred to a new owner so long as the project is constructed as approved. Any change to an approved project (e.g., elevations, building siting, interior configuration) may result in the revocation of prior reservation and/or allocated development rights and/or land coverage. viii. When approved development rights/land coverage is banked on a sending parcel, the developer/applicant shall obtain TRPA Transfer of Development Rights approval prior to the issuance of a certificate of occupancy.
ix. The proceeds from the sale of city-owned development rights/land coverage shall be dedicated to the City's Workforce Housing Fund to support the City's affordable housing initiatives.

B. The City Council hereby delegates to the City Manager the authority to approve or deny, and to complete the distribution and sale of the development rights/land coverage inside the City of South Lake Tahoe consistent with the criteria outlined in this policy.

C. The City Council reserves the sole right to distribute and sell development rights/land coverage to private developers and other public agencies outside the City of South Lake Tahoe, and all such distribution and sales shall be at the full market rate at that time.

D. The City Council hereby directs the implementation of an annual review process of this policy to be completed prior to February 1, of each calendar year.

E. These policies supersede all other distribution and sale of development rights and land coverage policies adopted by the City Council through Resolution No. 2017-73.

Adopted by the City of South Lake Tahoe City Council on May 3, 2022 by the following vote:

Yes: Bass, Creegan, Friedrich, Middlebrook and Wallace
Date:_________
Devin Middlebrook, Mayor
Attest:

Susan Blankenship, City Clerk
The presence of electronic signature certifies that the foregoing is a true and correct copy as approved by the South Lake Tahoe City Council.

Res 2022- 051 May 3, 2022
Sue Blankenship ( May 25, 2022 09: 04 PDT)
Devin Middlebrook ( May 25, 2022 09:25 PDT) May 25, 2022 947
Res 2022-051 Policy Regarding TRPA
Commodities Revision
Final Audit Report 2022- 05-25
Created: 2022- 05-25
By: jo Mcdonough ( jmcdonough@cityofslt. us)
Status: Signed
Transaction ID: CBJCHBCAABAAtGyrc2ECgvByyBwRi0dvs3q0zrXmOaug Res 2022-051 Policy Regarding TRPA Commodities Revision" History
Document created by jo Mcdonough ([email protected]) 2022- 05- 25 - 3:51:49 PM GMT- IP address: 128. 92.136. 146 Document emailed to Sue Blankenship ([email protected]) for signature 2022- 05- 25 - 4:00:12 PM GMT
Email viewed by Sue Blankenship ( sblankenship@cityofslt. us) 2022- 05- 25 - 4:04:13 PM GMT- IP address: 128. 92.136. 146 Document e-signed by Sue Blankenship ([email protected]) Signature Date: 2022- 05-25 - 4:04:28 PM GMT - Time Source: server- IP address: 128. 92.136. 146 Document emailed to Devin Middlebrook ([email protected]) for signature 2022- 05- 25 - 4:04:30 PM GMT
Email viewed by Devin Middlebrook ([email protected]) 2022- 05- 25 - 4:24:45 PM GMT- IP address: 66.189. 255. 213 Document e-signed by Devin Middlebrook ([email protected]) Signature Date: 2022- 05-25 - 4:25:04 PM GMT - Time Source: server- IP address: 66.189. 255. 213 Agreement completed.
2022- 05- 25 - 4:25:04 PM GMT
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  
JohnsonValuation Group, Ltd.

Post Office Box 11430 124 McFaul Way, Ste. 201 Lake Tahoe, Nevada 89448 (775) 588-4787 www.johnsonvaluationgroup.com
California / Nevada
February 16, 2023
Via E-Mail: [email protected]
Mr. John Hitchcock
Planning Manager
City of South Lake Tahoe
Re: TRPA Intangible Development Rights Valuation update letter Dear Mr. Hitchcock:

This is in response to your request for a letter addressing updated Market Values of the City of South Lake Tahoe’s Lake Tahoe Basin Development Rights (intangible development rights). These Development Rights include Land Coverage, Commercial Floor Area (CFA), Residential Development Rights, Residential Units of Use, Potential Residential Units of Use, and Tourist Accommodation Units (TAUs). The undersigned previously prepared a narrative appraisal of the City’s TRPA Development Rights with a date of valuation of January 30, 2020 and a date of issuance of March 26, 2020 (“Original Appraisal”). Subsequently, on August 28, 2020, the First Supplemental Letter to the Original Appraisal addressing updated market conditions from January 30, 2020 to August 28, 2020 was issued. On January 14, 2021, the Second Supplemental Letter to the Original Appraisal addressing Market Conditions from January 30, 2020 to January 14, 2021 was issued. On February 24, 2022 the Third Supplemental Letter to the Original Appraisal, with an effective date of valuation of January 31, 2022 was issued. This letter is the Fourth Supplement Letter to the Original Appraisal and is predicated upon a date of valuation of January 31, 2023. This Fourth Supplemental Letter is incorporated by reference to the Original Appraisal, the First Supplemental Letter, the Second Supplemental Letter, and the Third Supplemental Letter. It is assumed the reader of this update letter has access to all aforementioned documents that are incorporated by reference herein and has reviewed full copies of all of these documents.

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This report is being prepared as a new Appraisal Report under Standard Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice (USPAP). It is an extraordinary assumption1
of this appraisal that the reader of this appraisal has access to and has fully reviewed a full copy of the Original Appraisal and First and Second Supplement letters.

Advisory Opinion 3 of the 2020/21 edition of USPAP provides the following guidance relative to updating a prior appraisal.
“When developing an opinion regarding a property that was the subject of a previous assignment, the scope of work in the new assignment may be different from the scope of work in the prior one. In addition, rather than duplicating steps in the appraisal process, the appraiser can elect to incorporate some of the analyses from the previous assignment (those items that the appraiser concludes are credible and in compliance with the applicable development Standard) into the new assignment through the use of an extraordinary assumption.” This appraisal incorporates by reference the Original Appraisal. Advisory Opinion 3 of the 2020/21 edition of USPAP provides the following guidance relative to incorporating by reference a prior appraisal when completing a new assignment:
“a new report that incorporates by reference specified information/analysis from the prior report so that, in combination, the referenced portions and the new information/analysis added satisfies the applicable reporting requirements. When this incorporation by reference option is used, the following items from that prior report should be specifically identified in the new report to avoid being misleading:
• subject property
• client and any other intended users
• intended use
• appraiser(s)
• effective date of value or assignment results

1 This report, and the value conclusion(s) set forth herein, is subject to an extraordinary assumption. An extraordinary assumption is defined by the 2020/21 version of USPAP as “an assignment specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.”1 DRAFT - For Discussion Purposes Only
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• date of report, and
• interest(s) appraised”
Pursuant to your request, I have prepared this Fourth Supplemental Letter to update the 100% fee simple Market Values for TRPA commodities owned by the City of South Lake Tahoe to January 31, 2023 in typical retail quantities as identified in the Original Appraisal. In order to analyze how market conditions may have changed, the undersigned has reviewed market conditions for the improved commercial and residential real estate market and the changes in the market for TRPA Development Rights and interviewed various market participants. The Client and Intended User of this letter is the City of South Lake Tahoe. The intended use is to assist the City of South Lake Tahoe in establishing the value of their owned TRPA intangible development rights in considering potential offers they may receive to purchase some of these rights.

First, the improved residential real estate market was considered. The initial effect of the COVID pandemic was a pause in sales activity. However, once reopening began, the number of sales of residential properties increased substantially in the South Shore. The South Lake Tahoe Board of Realtors has collected the following data for the California side of the Lake Tahoe Basin.:

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Total sales volume in the area greatly increased in 2020 due to demand generated by the COVID-19 pandemic. Sales volume increased by 69.5% on the California side of South Shore.

In 2021, the California side of South Shore saw a drop in total sales volume of -4.5% and a further 16.7% in 2022 . Median and average sales prices showed sizable increases ranging from

22.1% and 21.0% in 2021 and much smaller 5.4% and 5.5% increases in 2022. Price per square foot showed very large gains over 2020 with the median and average sale price per square foot in the El Dorado County portion of the Tahoe Basin increased 31.7% and 24.3%, respectively. The average price per square foot rate of increase slowed to 8.4% in 2022.

Brokers and Realtors do not expect continued price appreciation, with general indications that buyers are becoming more price resistant at the present time and the increases in interest rates in 2022 have had an adverse affect on affordability.

Currently there are 75 listing in the El Dorado County portion of South Shore. The median list price is $807,000 and average list price is $1141,615. Inventory remains low with DRAFT - For Discussion Purposes Only
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less than a two-month supply of inventory (active and pending) presently available for on the market based on 2022’s total number of sales. The low available inventory has likely led to the average and median sale price being insulating from broader current economic conditions.

Changes in the commercial market have also been considered. The demand for sale commercial properties is largely being driven by buyers completing tax deferred exchanges (1031 exchange) and desiring a replacement property in the Tahoe area. The market for development land has experienced strong headwinds due to the increases in costs of construction (both labor and materials) and increased interest rates. Many commercial agents and owners indicate the market is in stage of pause at the present time.

Next, the market for TRPA development rights has been considered. The undersigned interviewed staff at the California Tahoe Conservancy, real estate agents, and private TRPA consultants in January and February of 2023. These interviews indicated that there has been very limited sales of TRPA development rights over the last year and market participants have widely varying views of pricing and demand. Due in part to the very limited sales volume, market participants do not appear to have enough data points through which to form a consolidated view of market conditions and pricing for some TRPA development rights.

Class 1b Land Coverage
In the Original Appraisal and prior update appraisals, the value per square foot of 1b land coverage was estimated to be $25.00 per square foot. The California Tahoe Conservancy has a present asking price of $30 per square foot for 1b land coverage. In discussions with Land Planners it was indicated that there is a relatively small market for 1b coverage and sellers are largely able to name their price as the primary buyers are higher end residential properties that have inelastic demand. Land Planners reported sale prices of up to $35 per square foot for 1b Land Coverage in 2022, but generally indicated that the market accepts the CTC’s present asking price of $30 per square foot for the primary basis of establishing value.. Based on the CTC’s current asking price the Market Value for 1b Coverage is estimated at $30 per square foot.

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High Capability Potential Coverage – Upper Truckee
In the Original Appraisal, the Market Value of high capability potential coverage in the Upper Truckee Hydrologic Basin was estimated at $6.00 per square foot. The CTC presently has an asking price of $7.50 per square foot and
Below is a summary of the high capability potential coverage sales by the CTC in 2022 for the Upper Truckee Hydrologic Basin:

High Capability Potential Coverage Sales
Upper Truckee Hydrological Basin
Ammount of Coverage Sale Price per SF Sale Price Sending Bailey Sending IPES Escrow Close Date 287± sq. ft. $1,597.50 4,5 811 8/10/2022
111± sq. ft. $7.50 $832.50 3,4,5 7/15/2022
297± sq. ft. $7.50 $2,227.50 5,7 844 7/8/2022
380± sq. ft. $7.50 $2,850.00 4 775 7/8/2022
955± sq. ft. $7.50 $7,162.50 4 753 6/13/2022
295± sq. ft. $7.50 $2,212.50 7 775 5/3/2022
391± sq. ft. $7.50 $2,932.50 5 846 4/22/2022
48± sq. ft. $7.50 $360.00 6 0 1/26/2022
As indicated, all of the CTC’s sales of high capability potential coverage in the Upper Truckee Hydrologic Basin in 2022 were for $7.50 per square foot. Based on this data the Market Value of high capability potential coverage in the Upper Truckee Hydrologic Basin is estimated at $7.50 per square foot for a typical retail quantity.

High Capability Potential Coverage – South Stateline
In the Original Appraisal, the Market Value of high capability potential coverage in the South Stateline Hydrologic Basin was estimated at $7.50 per square foot. The CTC presently has an asking price of $7.50 per square foot and
Below is a summary of the high capability potential coverage sales by the CTC in 2022 for the South Stateline Hydrologic Basin:

High Capability Potential Coverage Sales
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South Stateline Hydrological Basin
Ammount of Coverage Sale Price per SF Sale Price Sending Bailey Sending IPES Escrow Close Date 305 Sq. Ft. $7.50 $2,287.50 7 743 4/4/2022
266 Sq. Ft. $7.50 $1,995.00 1b,7 775 2/23/2022
614 Sq. Ft. $7.50 $4,605.00 7 0 1/25/2022
516 Sq. Ft. $7.50 $3,870.00 7 0 1/25/2022
179 Sq. Ft. $7.50 $1,342.50 4 812 12/13/2022
As indicated, all of the CTC’s sales of high capability potential coverage in the South Stateline Hydrologic Basin in 2022 were for $7.50 per square foot. Based on this data the Market Value of high capability potential coverage in the South Stateline Hydrologic Basin is estimated at $7.50 per square foot for a typical retail quantity.

Restored Hard Coverage
In the Original Appraisal, the Market Value of restored hard coverage in the South Stateline Hydrologic Area and the Upper Truckee Hydrologic Area was estimated at $25.00 per square foot. The undersigned is not aware of any 2022 sales of restored hard coverage . The CTC’s present asking price for restored hard coverage is $25.00 per square foot. Based on the limited information, the Market Value of restored hard coverage in the South Stateline Hydrologic Area and the Upper Truckee Hydrologic Area is estimated at $25 per square foot.

Commercial Floor Area (CFA)
In the Original Appraisal, the value per square foot of CFA was estimated to be $25.00 per square foot. The undersigned is aware of one 2022 sale and one current pending sale at $25 per square foot. This is supportive of the prior year’s conclusion of $25 per square foot.

Residential Unit of Use (RUU)
In the Original Appraisal, the value of an Residential Unit of Use (RUU) was estimated to be $22,500. Based on the research conducted as part of this market conditions update letter, one sale of an RUUs in South Lake Tahoe for $27,500 in 2022 was found. The undersigned is also aware of CFA being converted to residential units of use to create new RUUs, with property owners using existing CFA that was already owned or CFA that they acquired on the open market. At the current market price of $25 per square foot for CFA and 300 square feet of CFA DRAFT - For Discussion Purposes Only
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being convertible to a single-family residential unit of use, it indicates the implied value of an RUU is $7,500. However, this process takes time, uncertainty and cost to purchase and covert CFA into an RUU. The lack of sales data uncovered as part of this assignment for RUUs indicates that buyers would rather go through the process of converting CFA as opposed to buying an RUU right on the open market at the present time. On the other hand, there would likely be a market premium attached to a RUU as opposed to buying CFA and converting it as occurred with the one sale of an RUU for $27,500 in South Lake Tahoe in 2022. This one sale represents the motivations of a single buyer and provides a wide range between the price at which it is possible to effectively achieve a RUU through CFA conversion. Based on the information considered herein, it is estimated that an RUU is presently worth in the range of $15,000/each, which is unchanged from the Third Update Letter.

Tourist Accommodation Unit (TAU)
In the Original Appraisal, the value of an TAU was estimated to be $17,500. Based on the research conducted as part of this market conditions update letter, no sales of TAUs were found. Based on market interviews and the TRPA conversion table, which treats TAUs and RUUs as having the same value, it is indicated that the market value of TAUs and RUUs has equalized. Therefore, the estimated present value of a TAU is $15,000/each.

Potential Residential Unit of Use (Formerly Residential Development Right) In the Original Appraisal, the Market Value of a Potential Residential Unit of Use was estimated at $5,000. The undersigned is not aware of any 2022 sales of a Potential Residential Unit of Use and the value is opined to be unchanged.

Overall, the market values summarized herein are based on limited sales data and values may continue to change in the near term as additional transactions occur. It is noted that of the various interviews conducted, many had materially different views of the pricing and future demand for various TRPA development rights. The value conclusions are summarized as follows:

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Summary of Value Conclusions
Development Resource Acronym
Market Value Per Unit
Based on Typical Retail
Quantity
Land Coverage 1B N/A $25.00/SF
Potential High Capability Land Coverage
South Stateline Hydrological Area N/A $7.50/SF
Potential High Capability Land Coverage
Upper Truckee Hydrological Area N/A $7.50/SF
Restored Hard High Capability Land Coverage
South Stateline and Upper Truckee Hydrological Areas N/A $25.00/SF Commercial Floor Area CFA $25/SF
Residential Unit of Use RUU $15,000/Ea.

Tourist Accommodation Unit TAU $15,000/Ea.

Potential Residential Unit of Use PRU $5,000/Ea.

Respectfully Submitted,
_________________________________
Benjamin Q. Johnson, MAI
California Certified General Appraiser
License Number AG043925
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APPRAISER’S CERTIFICATION
Each of the undersigned do hereby certify that, unless otherwise noted in this appraisal report:
• I have not made a personal inspection of the property that is the subject of this report as it involves intangible development rights.
• I have no present or contemplated future interest in the real estate that is the subject of this appraisal report.
• I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.
• I am acting independently of the borrower.
• To the best of my knowledge and belief, the statements of fact contained in this appraisal report, upon which the analysis, opinions, and conclusions herein are based, are true and correct.
• This report sets forth all the limiting conditions (imposed by the terms of our assignment or by the undersigned) affecting the analysis, opinions, and conclusions contained in this report.
• The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice.
• My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. • The appraisal was not based upon a requested minimum valuation, a specific valuation, or the approval of a loan.
• My engagement in this assignment was not contingent upon developing or reporting predetermined results.
• This appraiser has performed services involving the subject property within the prior three years as an appraiser from the date of acceptance of this assignment.

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• No one other than the undersigned prepared the analyses, conclusions and opinions concerning real estate that are set forth in this appraisal report. • The Appraisal Institute conducts a mandatory program of continuing education for its designated members. As of the date of this report, Benjamin Q. Johnson has completed the requirements under the continuing education program of the Appraisal Institute.
• The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

Respectfully Submitted,
____________________________
Benjamin Q. Johnson, MAI
California Certified General Appraiser
License Number AG043925
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STANDARD ASSUMPTIONS AND LIMITING CONDITIONS
The acceptance of this appraisal assignment and the completion of the appraisal report submitted herewith are contingent upon the following assumptions and limiting conditions.

LIMITS OF LIABILITY
This report was prepared by Johnson Valuation Group, Ltd. All opinions, recommendations, and conclusions expressed during the course of this assignment are rendered by the staff of Johnson Valuation Group, Ltd., as employees, not as individuals. The liability of Johnson Valuation Group, Ltd. and its employees and associates is limited to the client only and to the fee actually received by the appraisal firm. There is no accountability, obligation, or liability to any third party. If the appraisal report is disseminated to anyone other than the client, the client shall make such party or parties aware of all limiting conditions and assumptions affecting the appraisal assignment. Neither the appraisers nor the appraisal firm is in any way to be responsible for any costs incurred to discover or correct any physical, financial and/or legal deficiencies of any type present in the subject property. In the case of limited partnerships or syndication offerings or stock offerings in real estate, the client agrees that in the event of a lawsuit brought by a lender, a partner or part owner in any form of ownership, a tenant or any other party, the client will hold the appraiser(s) and the appraisal firm completely harmless in such action with respect to any and all awards or settlements of any type in such lawsuits.

COPIES, PUBLICATION, DISTRIBUTION AND USE OF REPORT
Possession of this report or any copy thereof does not carry with it the right of publication, nor may it be used for any purpose or any function other than its intended use, as stated in the body of the report. The appraisal fee represents compensation only for the analytical services provided by the appraiser(s). The appraisal report remains the property of the appraisal firm, though it may be used by the client in accord with these assumptions and limiting conditions.

This appraisal is to be used only in its entirety, and no part is to be used without the whole report. All conclusions and opinions concerning the analysis as set forth in the report were prepared by the appraiser(s) whose signature(s) appears on the appraisal report, unless it is indicated that one or more of the appraisers was acting as "Review Appraiser." No change of any item in the report shall be made by anyone other than the appraiser(s). The appraiser(s) and the appraisal firm shall bear no responsibility for any such unauthorized changes.

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CONFIDENTIALITY
Except as provided for subsequently, neither the appraiser(s) nor the appraisal firm may divulge the analyses, opinions or conclusions developed in the appraisal report, nor may they give a copy of the report to anyone other than the client or his designee as specified in writing. However, this condition does not apply to any requests made by the Appraisal Institute for purposes of confidential ethics enforcement. Also, this condition does not apply to any order or request issued by a court of law or any other body with the power of subpoena.

INFORMATION SUPPLIED BY OTHERS
Information (including projections of income and expenses) provided by informed local sources, such as government agencies, financial institutions, Realtors, buyers, sellers, property owners, bookkeepers, accountants, attorneys, and others is assumed to be true, correct and reliable. No responsibility for the accuracy of such information is assumed by the appraiser(s). Neither the appraiser(s) nor the appraisal firm is liable for any information or the work product provided by subcontractors. The client and others utilizing the appraisal report are advised that some of the individuals associated with Johnson Valuation Group, Ltd. are independent contractors and may sign the appraisal report in that capacity. The comparable data relied upon in this report has been confirmed with one or more parties familiar with the transaction or from affidavit or other sources thought reasonable. To the best of my judgment and knowledge, all such information is considered appropriate for inclusion. In some instances, an impractical and uneconomic expenditure of time would be required in attempting to furnish absolutely unimpeachable verification. The value conclusions set forth in the appraisal report are subject to the accuracy of said data. It is suggested that the client consider independent verification as a prerequisite to any transaction involving a sale, a lease or any other commitment of funds with respect to the subject property.

TESTIMONY, CONSULTATION, COMPLETION OF CONTRACT FOR APPRAISAL

SERVICE
The contract for each appraisal, consultation or analytical service is fulfilled and the total fee is payable upon completion of the report. The appraisers(s) or those assisting in the preparation of the report will not be asked or required to give testimony in court or in any other hearing as a result of having prepared the appraisal, either in full or in part, except under separate and special arrangements at an additional fee. If testimony or a deposition is required, the client shall be responsible for any additional time, fees and charges, regardless of the issuing party. Neither the appraiser(s) nor those assisting in the preparation of the report is required to engage in post- appraisal consultation with the client or other third parties, except under a separate and special arrangement and at an additional fee.

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EXHIBITS AND PHYSICAL DESCRIPTIONS
A survey of the property has not been made by the appraiser(s) and no responsibility is assumed in connection with such matters. Any maps, plats, or drawings reproduced and included in the report are there to assist the reader in visualizing the property and are not necessarily drawn to scale. They should not be considered as surveys or relied upon for any other purpose, nor should they be removed from, reproduced or used apart from the report.

TITLE, LEGAL DESCRIPTIONS, AND OTHER LEGAL MATTERS
No responsibility is assumed by the appraiser(s) or the appraisal firm for matters legal in character or nature. No opinion is rendered as to the status of title to any property. The title is presumed to be good and merchantable. The property is appraised as if free and clear, unless otherwise stated in the appraisal report. The legal description, as furnished by the client, his designee or as derived by the appraiser(s), is assumed to be correct as reported. The appraisal is not to be construed as giving advice concerning liens, title status, or legal marketability of the subject property.

ENGINEERING, STRUCTURAL, MECHANICAL, ARCHITECTURAL CONDITIONS This appraisal should not be construed as a report on the physical items that are a part of any property described in the appraisal report. Although the appraisal may contain information about these physical items (including their adequacy and/or condition), it should be clearly understood that this information is only to be used as a general guide for property valuation and not as a complete or detailed report on these physical items. The appraiser(s) is not a construction, engineering, or architectural expert, and any opinion given on these matters in this report should be considered tentative in nature and is subject to modification upon receipt of additional information from appropriate experts. The client is advised to seek appropriate expert opinion before committing any funds to the property described in the appraisal report.

Any statement in the appraisal regarding the observed condition of the foundation, roof, exterior walls, interior walls, floors, heating system, plumbing, insulation, electrical service, all mechanicals, and all matters relating to construction is based on a casual inspection only. Unless otherwise noted in the appraisal report, no detailed inspection was made. For instance, the appraiser is not an expert on heating systems, and no attempt was made to inspect the interior of the furnace. The structures were not investigated for building code violations, and it is assumed that all buildings meet the applicable building code requirements unless stated otherwise in the report.

Such items as conditions behind walls, above ceilings, behind locked doors, under the floor, or under the ground are not exposed to casual view and, therefore, were not inspected, unless specifically so stated in the appraisal. The existence of insulation, if any is mentioned, DRAFT - For Discussion Purposes Only
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was discovered through conversations with others and/or circumstantial evidence. Since it is not exposed to view, the accuracy of any statements regarding insulation cannot be guaranteed.

Because no detailed inspection was made, and because such knowledge goes beyond the scope of this appraisal, any comments on observed conditions given in this appraisal report should not be taken as a guarantee that a problem does not exist. Specifically, no guarantee is given as to the adequacy or condition of the foundation, roof, exterior walls, interior walls, floors, heating systems, air conditioning systems, plumbing, electrical service, insulation, or any other detailed construction matters. If any interested party is concerned about the existence, condition, or adequacy of any particular item, we would strongly suggest that a mechanical and/or structural inspection be made by a qualified and licensed contractor, a civil or structural engineer, an architect or other experts. This appraisal report is based on the assumption that there are no hidden, unapparent or apparent conditions on the property or improvements which would materially alter the value as reported. No responsibility is assumed for any such conditions or for any expertise or engineering to discover them. All mechanical components are assumed to be in operable condition and standard for the properties of the subject type.

Conditions of heating, cooling, ventilating, electrical and plumbing equipment are considered to be commensurate with the condition of the balance of the improvements unless otherwise stated.

No judgment is made in the appraisal as to the adequacy of insulation, the type of insulation, or the energy efficiency of the improvements or equipment which is assumed to be standard for the subject's age, type and condition.

TOXIC MATERIALS AND HAZARDS
Unless otherwise stated in the appraisal report, no attempt has been made to identify or report the presence of any potentially toxic materials and/or condition such as asbestos, urea formaldehyde foam insulation, PCBs, any form of toxic waste, polychlorinated biphenyl, pesticides, lead-based paints or soils or ground water contamination on any land or improvements described in the appraisal report. Before committing funds to any property, it is strongly advised that appropriate experts be employed to inspect both land and improvements for the existence of such potentially toxic materials and/or conditions. If any potentially toxic materials and/or conditions are present on the property, the value of the property may be adversely affected and a reappraisal at an additional cost may be necessary to estimate the effects of such circumstances.

SOILS, SUB-SOILS, AND POTENTIAL HAZARDS
It is assumed that there are no hidden or unapparent conditions of the soils or subsoil which would render the subject property more or less valuable than reported in the appraisal. No engineering or percolation tests were made and no liability is assumed for soil conditions. Unless otherwise noted, the land and the soil in the area being appraised appeared to be firm, but no investigation has been made to determine whether or not any DRAFT - For Discussion Purposes Only
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detrimental sub-soil conditions exist. Neither the appraiser(s) nor the appraisal firm is liable for any problems arising from soil conditions. These appraisers strongly advise that, before any funds are committed to a property, the advice of appropriate experts be sought.

If the appraiser(s) has not been supplied with a termite inspection report, survey or occupancy permit, no responsibility is assumed and no representation is made for any costs associated with obtaining same or for any deficiencies discovered before or after they are obtained.

Neither the appraiser(s) nor the appraisal firm assumes responsibility for any costs or for any consequences arising from the need or lack of need for flood hazard insurance.

An Agent for the Federal Flood Insurance Program should be contacted to determine the actual need for flood hazard insurance.

ARCHEOLOGICAL SIGNIFICANCE
No investigation has been made by the appraiser and no information has been provided to the appraiser regarding potential archeological significance of the subject property or any portion thereof. This report assumes no portion of the subject property has archeological significance.

LEGALITY OF USE
This appraisal report assumes that there is full compliance with all applicable federal, state and local environmental regulations and laws, unless non-compliance is stated, defined and considered in the appraisal report. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a non-conformity has been stated, defined and considered in the appraisal report. It is assumed that all required licenses, consents, or other legislative or administrative authority from any local, state or national government, private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based.

COMPONENT VALUES
Any distribution of the total value between the land and improvements, between partial ownership interests or any other partition of total value applies only under the stated use.

Moreover, separate allocations between components are not valid if this report is used in conjunction with any other analysis.

COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT
The Americans with Disabilities Act ("ADA") became effective January 26, 1992. It is assumed that the property is in direct compliance with the various detailed requirements of the ADA.

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AUXILIARY AND RELATED STUDIES
No environmental or impact studies, special market studies or analyses, special highest and best use studies or feasibility studies have been requested or made by the appraiser(s) unless otherwise specified in an agreement for services and so stated in the appraisal report.

DOLLAR VALUES AND PURCHASING POWER
The estimated market value set forth in the appraisal report and any cost figures utilized are applicable only as of the date of valuation of the appraisal report. All dollar amounts are based on the purchasing power and price of the dollar as of the date of value estimates.

ROUNDING
Some figures presented in this report were generated using computer models that make calculations based on numbers carried out to three or more decimal places. In the interest of simplicity, most numbers have been rounded. Thus, these figures may be subject to small rounding errors.

QUANTITATIVE ANALYSIS
Although this analysis employs various mathematical calculations to provide value indications, the final estimate is subjective and may be influenced by my experience and other factors not specifically set forth in this report.

VALUE CHANGE, DYNAMIC MARKET, ALTERATION OF ESTIMATE BY

APPRAISER
All values shown in the appraisal report are projections based on my analysis as of the date of valuation of the appraisal. These values may not be valid in other time periods or as conditions change. Projected mathematical models set forth in the appraisal are based on estimates and assumptions which are inherently subject to uncertainty and variations related to exposure, time, promotional effort, terms, motivation, and other conditions. The appraiser(s) does not represent these models as indicative of results that will actually be achieved. The value estimates consider the productivity and relative attractiveness of a property only as of the date of valuation set forth in the report.

In cases of appraisals involving the capitalization of income benefits, the estimate of market value, investment value or value in use is a reflection of such benefits and of the appraiser's interpretation of income, yields and other factors derived from general and specific client and market information. Such estimates are as of the date of valuation of the report, and are subject to change as market conditions change.

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This appraisal is an estimate of value based on analysis of information known to us at the time the appraisal was made. The appraiser(s) does not assume any responsibility for incorrect analysis because of incorrect or incomplete information. If new information of significance comes to light, the value given in this report is subject to change without notice. The appraisal report itself and the value estimates set forth therein are subject to change if either the physical or legal entity or the terms of financing are different from what is set forth in the report.

ECONOMIC AND SOCIAL TRENDS
The appraiser assumes no responsibility for economic, physical or demographic factors which may affect or alter the opinions in this report if said economic, physical or demographic factors were not present as of the date of value of this appraisal. The appraiser is not obligated to predict future political, economic or social trends.

EXCLUSIONS
Furnishings, equipment, other personal property and value associated with a specific business operation are excluded from the value estimate set forth in the report unless otherwise indicated. Only the real estate is included in the value estimates set forth in the report unless otherwise stated.

SUBSURFACE RIGHTS
No opinion is expressed as to the value of subsurface oil, gas or mineral rights or whether the property is subject to surface entry for the exploration or removal of such materials, except as is expressly stated.

PROPOSED IMPROVEMENTS, CONDITIONED VALUE
It is assumed in the appraisal report that all proposed improvements and/or repairs, either on-site or off-site, are completed in an excellent workmanlike manner in accord with plans, specifications or other information supplied to these appraisers and set forth in the appraisal report, unless otherwise explicitly stated in the appraisal. In the case of proposed construction, the appraisal is subject to change upon inspection of the property after construction is completed. The estimate of market value is as of the date specified in the report. Unless otherwise stated, the assumption is made that all improvements and/or repairs have been completed according to the plans and that the property is operating at levels projected in the report.

MANAGEMENT OF PROPERTY
It is assumed that the property which is the subject of the appraisal report will be under typically prudent and competent management which is neither inefficient nor superefficient.

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FEE
The fee for any appraisal report, consultation, feasibility or other study is for services rendered and, unless otherwise stated in the service agreement, is not solely based upon the time spent on any assignment.

LEGAL EXPENSES
Any legal expenses incurred in defending or representing ourselves concerning this assignment will be the responsibility of the client.

CHANGES AND MODIFICATIONS
The appraiser(s) reserves the right, at the cost of the client, to alter statements, analyses, conclusions, or any value estimates in the appraisal if any new facts pertinent to the appraisal process are discovered which were unknown on the date of valuation of this report.

DISSEMINATION OF MATERIAL
Neither all nor any part of the contents of this report shall be disseminated to the general public through advertising or sales media, public relations media, new media or other public means of communication without the prior written consent and approval of the appraiser(s).

The acceptance and/or use of the Appraisal Report by the client or any third party constitutes acceptance of the Assumptions and Limiting Conditions set forth in the preceding paragraphs. The appraiser’s liability extends only to the specified client, not to subsequent parties or users. The appraiser’s liability is limited to the amount of the fee received for the services rendered.

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QUALIFICATIONS OF APPRAISER
BENJAMIN Q. JOHNSON
Professional Designations
MAI – Designated Member of the Appraisal Institute
State Licensing and Certification
Certified General Appraiser – State of California
License Number AG043925
(Certified through April 29, 2024)

Certified General Appraiser – State of Nevada
License Number A.0205542-CG
(Certified through November 30, 2024)
Professional Experience
Johnson Valuation Group, Ltd. 2015 to Present

Johnson-Perkins & Associates, Inc.

Principal Appraiser 2009 to 2015
Senior Appraiser 2008 to 2009
Intern Appraiser 2006 to 2008
Research Assistant 2005 to 2006
General Electric 2002-2004
Finance Intern (Summers Only)
Formal Education
Santa Clara University – Santa Clara, CA 2005
Bachelor of Science in Commerce; Major in Economics
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QUALIFICATIONS OF
BENJAMIN Q. JOHNSON, (CONTINUED)
Qualified as an Expert Witness
Second Judicial District Court – State of Nevada
Third Judicial District Court – State of Nevada
Ninth Judicial District Court – State of Nevada
Superior Court of California, County of El Dorado
U.S. Bankruptcy Court, District of Nevada
U.S. Bankruptcy Court, Northern District of California
Offices Held and Appointments
Nevada State Board of Equalization
Board Member 2012 to 2022
Chairman 2019 to 2022

Tahoe Regional Planning Agency
Land Use Commodities Market Steering Committee 2014
Appraisal Institute
Reno-Carson-Tahoe Chapter
Director 2011
Secretary 2012
Vice-President 2013
President 2014
Treasurer 2015
Chair of Candidate Guidance Committee 2013 to 2015
Nevada Chapter
Northern Nevada Branch Chapter Vice Chair 2017
Region 1
Nominating Committee 2015 to 2018

Eagle Scout Board of Review, Board Member 2016 to Present Association Memberships and Affiliations
Leadership Development and Advisory Council (LDAC) 2010 Executives Association of Reno (EAR) 2009 to 2012
Tahoe Regional Young Professionals (TRYP) 2015 to 2016

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Resolution 2023-XXX March 14, 2023 Page 1 of 3
.

Resolution 2023-XXX
Adopted by the City of South Lake Tahoe
City Council
March 14, 2023
Accepting the development rights appraisal prepared by Ben Q. Johnson, Johnson Valuation Group Limited, and establish a price point for each development right category, pursuant to City Council Resolution 2022-051

BACKGROUND
A. The City has TRPA development rights and land coverage, which have accumulated from various sources (e.g., Environmental Improvement Projects, implementation of Community Plans and Area Plans, City purchase of land with attached development rights, the retirement of rights, and TRPA allocation of development).

B. On May 3, 2022, the City Council adopted City Council Resolution 2022-051, establishing a policy that addresses the future distribution and sale of development rights and land coverage maintained by the City.

C. Resolution 2022-051, which provided for a consistent and equitable disposition process, promoted the achievement of the City’s affordable housing and community development goals, and provided certainty for the development community. The adopted resolution 1) established an annual determination for the fair market value of the development rights and land coverage.

D. The Development Services Department contracted with Ben Q. Johnson (Valuation Group Limited) a California licensed appraiser, to analyze the sale of each development right/ E. Ben Q. Johnson prepared an appraisal dated February 10, 2023 for consideration by the City Council.

F. The appraisal describes the methodology used in determining the value of each development right category, and includes a recommended fair market value for each right.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, BE IT RESOLVED, that the City Council of the City of South Lake Tahoe:

1. Accepts the development rights appraisal dated February 10, 2023, prepared by Ben Q.

Johnson, Johnson Valuation Group Limited and the recommended rates.

2. Establishes the price point for each development right by applying a factor of one-third to the recommended rates included in the appraisal and as shown in Exhibit 1 of this resolution.
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3. This resolution is effective immediately upon adoption.

Adopted by the City of South Lake Tahoe City Council on March 14, 2023 by the following vote:

Yes:

No:

Absent:

Abstain:
________________________ Date:_________
Cristi Creegan, Mayor
Attest:
________________________
Susan Blankenship, City Clerk
The presence of electronic signature certifies that the foregoing is a true and correct copy as approved by the South Lake Tahoe City Council.
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Exhibit 1
Development Right Market Value Per Unit Based
on Typical Retail Quantity
Price Point Based on
City Council policy
Land Coverage 1B $30/Sq. Ft. $9.99/Sq. Ft.

Land Coverage 4-7 (Potential)
South Stateline HRA
Upper Truckee HRA
$7.50/Sq. Ft.
$7.50/Sq. Ft.
$2.50/Sq. Ft.
$2.50/Sq. Ft.

Land Coverage 4-7 (Hard) $25/Sq. Ft. $8.33/Sq. Ft.

Commercial Floor Area $25/Sq. Ft. $8.33/Sq. Ft.

Potential Residential Units of
Use
$5,000/Unit $1,666.00/Unit
Residential Units of Use $15,000/Unit $5,000/Unit
Tourist Accommodation Units
(City Owned)
$15,000/Unit $5,000/Unit
Tourist Accommodation Units
(Successor Agency)
$15,000/Unit $5,000/Unit
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City of South Lake Tahoe
Agenda Item Executive Summary
Joe Irvin, City Manager
Meeting Date: March 14, 2023
Agenda Item #: 30
Agenda Item: Ratification of Amendment 1 to Concessionaire Agreement with On Course Events for Live at Lakeview Summer Concert Series
Executive Summary: On November 5, 2019 City Council approved an Agreement with On Course Events to produce Live at Lakeview Summer Concert Series during summer months at Lakeview Commons. The Agreement requires the City to contribute $5000 per season in cash in addition to in-kind services needed to support the event each week. The Agreement expired on November 5, 2022 with the option to extend the Agreement for an additional 24 months upon mutual agreement of both parties. On November 4, 2022 On Course Events confirmed the desire to extend the Agreement and requested an additional cash payment from the City of $5000 per season. Today Council is being asked to ratify the amendment to the agreement to extend the agreement for two years and approve the additional cash payment bringing the total cash payment per season to $10,000. The additional $5000 is recommended to be transferred from Recreation Programs account 100-04220-45012 to Recreation Administration Advertising 100-04105-44030 for the 2023 season and incorporated into the FY 23/24 budget for the remainder of the Agreement which now expires on November 5, 2024.

Requested Action / Suggested Motions: Pass a Motion authorizing and directing the Mayor to execute the Ratification of Amendment 1 to the Agreement with On Course Events to extend the Agreement for 2 years and for $5000 of additional funding annually for 2023 and 2024 to produce Live at Lakeview Summer Concert Series.

CEQA Determination: Lakeview Commons Summer Concert Series is categorically exempt from review under the California Environmental Quality Act (CEQA) because the events will allow for the normal operations of existing facilities for public gatherings for which the facilities were designed (CEQA Guidelines section 15323 – Normal Operations of Facilities for Public Gatherings).

Responsible Staff Member: Lauren Thomaselli, Director of Parks and Recreation Responsible Staff Member: Lauren Thomaselli, Director of Parks and Recreation (530) 542-6197 Reviewed and Approved By:

Susan Blankenship, City Clerk
Olga Tikhomirova, Director of Finance
Heather Stroud, City Attorney
Attachments:
01-Staff_Report_-_On_Course_Events_Contract_Amendment_1.docx 02-C-136-2019 On Course Events Concessionaire Agreement.pdf 03-In Kind Services Estimate.pdf
04-Amendment_1_to_Agreement_with_On_Course_Events.docx
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City of South Lake Tahoe
Report to City Council
Meeting Date: March 14, 2023
Title: Ratification of Amendment 1 to Concessionaire Agreement with On Course Events for Live at Lakeview Summer Concert Series
Location: Lakeview Commons El Dorado Beach
Responsible Staff Member: Lauren Thomaselli, Parks and Recreation Director (530) 542-6197
Background: The inaugural Live at Lakeview Summer Concert Series was introduced to the City during summer 2012 by Rob Giustina, owner of On Course Events Production Company. Following the 2012 concert series and other successful events at Lakeview Commons, Council expressed an interest in supporting signature events that offer free and unique community gathering opportunities.

On March 19, 2013, City Council authorized the release of a Request for Proposal for Signature Events at Lakeview Commons. One proposal was received from Rob Giustina of On Course Events.

On April 16, 2013, City Council made the following action: “to award to On Course Events the Live at Lakeview summer concerts for the 2013 and 2014 summer seasons and offer sponsorship in the amount of $2,500; and to recognize Live at Lakeview as a city signature event with no rental fees assessed; and to include the crafting of termination language”.

On Course Events proceeded to fulfill the terms of the contract and successfully produce weekly summer music concerts in 2013 and 2014. Due to the growing popularity and interest in continuing the music series, the City released another Request for Proposals (RFP) for Lakeview Commons Signature Summer Events on January 5, 2015. The City received one proposal from Rob Giustina of On Course Events.

On March 3, 2015 City Council moved to “award a five (5) year agreement(2015,2016,2017,2018,2019) to On Course Events for producing the City of South Lake Tahoe’s Signature Summer Event; To designate the City of South Lake Tahoe as the title sponsor and to read, “City of South Lake Tahoe and On Course Events Presents”; To pay an annual payment to On course Events of $5,000 for year one (1) of the contract period and to reduce that annual payment amount to $2,500 for contract years two (2) through five (5); To approve the time extension for the stage tear down to be completed by 9:00am on the following morning; And for the City of South Lake Tahoe’s Planning Department to review and approve the flyer/signage for this year and for future contracted years events. The fifth year concluded on August 29, 2019.

On August 20, 2019 City Council authorized the release of Request for Proposal for Signature Summer Events at Lakeview Commons. The City received one proposal from Rob Guistina, owner of On Course Events (Attached).

On November 5, 2019 City council moved to “award a thirty six (36) month agreement beginning November 5, 2019. The City may exercise an option to extend for two (2) additional twelve (12) month periods.” The November 5, 2019 Agreement (Attachment 02) included an increase in cash donation of $2500 per year from the City bringing the total annual cash contribution to $5,000 per year. 974
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Issue and Discussion: The first thirty-six (36) month term ended on November 5, 2022. On September 12, 2022, staff contacted On Course Events to exercise the option to extend the contract for the additional two (2) twelve (12) month periods with the new contract expiration date of November 5, 2024. The Concessionaire replied on November 4, 2022, with a desire to continue the contract in addition to requesting additional funding from the City in the amount of $5000 annually. Because the agreement has expired, staff is also asking City Council to ratify the amendment to extend the agreement for two years from November 5, 2022.

The Concessionaire states increased costs of production including labor costs, artist rates, and event materials combined with the loss of an entire summer season of event production during the pandemic as the rationale for increased funding request from the City. Under the direction of the City Manager, City staff recommend Council consider an increase in annual funding for the production of Live at Lakeview Summer Concert Series in the amount of $5000 per year bringing the total annual contribution to $10,000.

Financial Implications: Under the current Agreement, the cost to the City to produce the Summer Concert Series includes both in-kind services and cash donations for a total annual cost of $24,246.

Attachment 03 demonstrates the estimated costs of in-kind services per season. In-kind services include personnel from the Public Works, and Parks and Recreation for street closures, Cal Trans permit, signage, additional parks maintenance, supplies, and clean up. Rental fees are waived for Lakeview Commons under the premise that the concessionaire provides a service to the City to produce the concerts. The total rental fees waived per year are estimated to be $9,910 (ten events at $991 per event).

To support the costs of production, the Concessionaire is requesting cash contributions in the amount of $10,000 per year for two remaining years. Cash contributions are paid from Advertising account 100-04105- 44030. Should City Council approve the additional funding, the total cost to the City to produce Live at Lakeview each season would be $29,246 ($10,000 cash contribution and $24,246 in kind services). The additional $5000 cash contribution per year would be transferred from Recreation Program Supplies account 04220-44030-45012 to Recreation Advertising account 100-04105-44030 in 2023 and 2024.

Environmental Considerations: Lakeview Commons Summer Concert Series is categorically exempt from review under the California Environmental Quality Act (CEQA) because the events will allow for the normal operations of existing facilities for public gatherings for which the facilities were designed (CEQA Guidelines section 15323 – Normal Operations of Facilities for Public Gatherings).

Policy Implications: Strategic Plan Priorities supported by the summer concert series includes:

Community for All
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CITY OF SOUTH LAKE TAHOE

CONCESSIONAIRE/VENDOR AGREEMENT
This Agreement is made and entered into as of the Sfh day of November 2019 by and between the City of South Lake Tahoe, a municipal corporation ("City") and On Course Events, a Sole Proprietorship ("Concessionaire").

RECITALS
A. WHEREAS, The City manages that certain real property more commonly known as Lakeview Commons at El Dorado Beach in South Lake Tahoe, California.

B. WHEREAS, the City desires to hire a Concessionaire to host, manage and promote a summer event series at said real property.

C. WHEREAS, Concessionaire has the skill and experience necessary to host, manage and promote a summer event series at said real property.

AGREEMENT

1. Scope of Agreement. The City, in consideration of Concessionaire's duties hereinafter specified and of the covenants and agreements herein contained to be performed by Concessionaire, does hereby grant to Concessionaire the right to host, manage, promote and operate that real property more commonly known as Lakeview Commons at El Dorado Beach and more specifically described and shown in Exhibit A (hereinafter the "Facility"), for the purposes of a summer concert series as described in Exhibit B. Concessionaire does hereby agree to use its best efforts, at all times during the Term of this Agreement, in order to manage and operate the Facility for the purposes hereinafter stated. In the event of any inconsistencies between this Agreement, the attached exhibits, and any required regulatory permits including the annual Special Events Permit, the following order of precedence applies: ( 1) Regulatory permits; (2) Agreement; (3) Exhibits.

2. Use. Concessionaire's right to use the Facility is nonexclusive, and Concessionaire and the City, its agents, employees and contractors shall have the right to enter the Premises for any purpose that does not unreasonably interfere with the rights granted to Concessionaire under this Agreement. Such purposes may include but are not limited to the City entering to: inspect the C-136-2019
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Facility; determine whether Concessionaire is complying with the Agreement; make repairs, alterations or improvements.

Concessionaire hereby acknowledges that it shall use its best efforts to fulfill the purposes of this Agreement consisting of hosting weekly events which are free of charge to all members of the public at the Facility from mid-June through August each year. The event series shall be held weekly during this time period, except that no events shall take place during the week of July 4, and the events shall be held no more than once a week. Concessionaire shall submit the proposed dates of the event series to the City no later than March 15 of each year and the event dates shall be authorized by the City Manager in writing.
a. Qualifications on Use. Concessionaire's right to use the Facility shall be for hosting concert events which are free of charge to all members of the public, including the right to "set up" and "take down" all event related activities, materials and equipment. All other uses shall be considered a breach of this Agreement, and shall give the City authority to immediately terminate this Agreement. b. Prior Encumbrances. This Agreement is subject to all easements, leases, liens, conditions, restrictions, encumbrances and claims of title which may affect the Premises. Concessionaire accepts the Facility in its present condition.
c. Licenses, Permits, etc. Concessionaire represents and warrants to City that it has all licenses, permits, qualifications, insurance and approvals of whatsoever nature which are legally required of Concessionaire to practice its profession and to host the summer event series at the Facility, including, but not limited to all road closure, right of way, and other permits required by California Department of Transportation. Concessionaire represents and warrants to City that Concessionaire shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement, any licenses, permits, insurance and approvals which are legally required of Concessionaire to practice its profession.

Concessionaire shall maintain a City of South Lake Tahoe business license at all times services are performed under this Agreement.

Concessionaire acknowledges that payments made pursuant to this Agreement may be withheld until this provision has been satisfied.

Concessionaire shall complete a Special Event Application annually in accordance with the Lakeview Commons Special Event
Guidelines. The completed application shall be submitted to the 2 C-136-2019
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Recreation Services Superintendent no later than ninety (90) days prior to the first event of the summer season.
d. Alcohol sales. Upon issuance of all required permits including a license from the California Department of Alcoholic Beverage Control, Concessionaire may sell wine and beer during the weekly events to be consumed with a defined area with additional security in place, to be specified in the annual Special Event Permit. e. Promotion and Signs. Concessionaire shall not display and shall not permit any other person to display any signs whatsoever within the Facility without the prior signed, written consent of the City Manager or his designee, and without obtaining applicable City permits and approvals. Application for such consent shall show in reasonable detail the type, character, and size of any such sign Concessionaire desires to display. City agrees not to withhold or delay approval of reasonable requests for signs. All promotional materials and signs for the event shall prominently display the City of South Lake Tahoe logo. f. Vendors. City reserves the right to prohibit the sale, rental, or use by Concessionaire of any article or item which City regards as objectionable or beyond the scope of this Agreement.

Objectionable merchandise includes, but is not limited to, drugs or drugs paraphernalia, obscene literature/merchandise, weapons or any merchandise deemed objectionable by the City Manager or his designee. Permissible vendors include those selling merchandise, food and drink. Vendors involving carnival rides, bounce houses, climbing walls and other similar activities are expressly prohibited. All vendors are required to comply with applicable City Code provisions and shall obtain and maintain all required permits and licenses.

Concessionaire shall submit to the City a list of all vendors who will participate in the summer event series fifteen ( 15) business days prior to the first event in 2020. The City may approve or reject the use of certain vendors, based on the scope of this paragraph, 2(e), and the City shall provide Concessionaire written notification of its approval or rejection.
g. Chemicals. No pesticides, herbicides, or fungicides may be used by Concessionaire on the Facility that are not approved in writing by City in advance of proposed use.
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3. Term. This Agreement is granted for a term of thirty-six (36} months beginning on the date set forth above. The City may exercise an option renew the Agreement for two (2) additional twelve ( 12}-month periods.

4. Security Deposit. Concessionaire shall pay to the City a deposit to be held by the City in the amount designated in the Lakeview Commons Special Event Guidelines specific to the expected number of attendees. Deposit shall be paid to the City no later than ten ( l Ol days before the first day event of the season by check or money order made payable to the City of South Lake Tahoe and shall be given directly to the City Recreation Services Department.

5. City Contribution. As consideration for the public benefit provided by offering this free weekly concert series, for each year during the term of this Agreement, the City agrees to contribute funding in the amount of five-thousand dollars ($5,000.00}. City also agrees to waive the fees for the annual Special Event Permit, provide access to City electricity and water at no cost, and provide event support from City staff at no cost, including support from the Police Department and Public Works Department at a level deemed appropriate by the City Manager, in his sole discretion.

6. Revenues. The Concessionaire shall provide the City Manager a sworn statement of annual gross revenues resulting from the operation of the Facility before December l of every calendar year.
a. Gross Revenues. The term Gross Revenues as used herein shall include the total aggregate amount of the business done, sales made, rentals, deposits, commissions received, and services performed by Concessionaire in, on, or from the Facility for cash and on credit (it being understood that sales on credit are to be included in Gross Revenues whether or not payment is actually made to Concessionaire}. Any transaction on an installment basis involving the extending of credit shall be treated as a sale for the full price at the time such transaction was entered into, irrespective of the time of payment or when title passes. No deduction shall be allowed for uncollected credit accounts and returned checks. 'Gross Revenues' shall not include the amount of any tax on sales from the Facility where such taxes are added to the selling price, stated separately, and paid by Concessionaire's customers, and remitted directly to the taxing authorities by Concessionaire. In the event merchandise is taken in trade, Gross Revenues shall mean the full price of the merchandise sold.

7. Records and Inspection. Concessionaire shall keep true and accurate books and records showing all of its income and expenses and business transactions 4 C-136-2019
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in connection with the Facility in separate records of account in a manner reasonably acceptable to City, and City shall have the right through its representatives, and at all reasonable times, including any time during the one year period following the termination of the Agreement, to inspect such books and records, including, profit and loss statements, State of California sales tax return records, Federal and State income tax returns, and Federal and State payroll tax reports. If such audit reveals that there is a deficiency in the manner Concessionaire maintains its records, Concessionaire shall immediately cure such deficiency and shall pay all City expenses incurred for such audit immediately upon demand by City. If such audit reveals that there is a deficiency in the payment of any Fee, then such deficiency shall become immediately due and payable together with interest thereon at the rate of twelve percent ( 12%), or the highest rate permitted by law, whichever is less, per annum from the past date due until paid and Concessionaire shall immediately pay for the costs of any audit by City if the audit reveals that Concessionaire either understated annual Gross Revenues by more than one half percent (0.5%) of the Gross Revenues for any year or underpaid the Concessionaire's Fees by greater than One Thousand Dollars ($1,000.00). In the event that the City discovers a pattern of deficiency, this pattern shall constitute a default of this Agreement. Concessionaire shall pay the costs of all audited financial statements required by the City under this Agreement.

Any information obtained by City pursuant to the provisions of this Section 6 shall be treated as confidential, except in any proceedings between the parties hereto, and except further that City may divulge such information to a lender and/or to any person as required by law. The City is subject to the California Public Records Act and, if required by the California Public Records Act, may disclose certain information.

8. No Partnership Formed. City is not, and shall not in any way or for any purpose become an agent, partner, or joint venturer of Concessionaire in its business or otherwise.

9. Termination. At any time during the Term of this Agreement, Concessionaire shall have the right to terminate this Agreement upon ninety (60) days prior written notice to the City. At any time during the Term of this Agreement, the City shall have the right to terminate this Agreement upon thirty (30) days prior written notice to Concessionaire for any reason.

10. Ownership Of Documents.

All plans, studies, documents and other writings, including working notes and internal documents, prepared by and for Concessionaire, its officers, employees and agents and subcontractors in the course of implementing this Agreement, shall become the property of City upon payment to 5 C-136-2019
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Concessionaire for such work, and City shall have the sole right to use such materials in its discretion without further compensation to Concessionaire or to any other party. Concessionaire shall, at Concessionaire's expense, provide such reports, plans, studies, documents and other writings to City upon written request. All documents prepared by Concessionaire are confidential and shall be maintained to preserve their confidential nature. Release of any such documents to third parties shall only be made upon written consent of City.

11. Employees, Volunteers, and Personnel. All persons employed or utilized in connection with the operation of the Facility, including relatives and minors, age of fourteen and above, with valid work permits and employed under the strict guidelines of California Child Labor laws, shall be adequately trained for such purposes. If in the reasonable judgment of City, any such person is incompetent, disorderly, discourteous, or otherwise objectionable, such person, including relatives, Concessionaire shall ensure that such person not be a part of the activities set forth in this Agreement.

Concessionaire acknowledges and agrees that Concessionaire's employees and volunteers are independent contractors and are solely the employees and volunteers of Concessionaire and not the City and shall not be eligible for any City employee benefits and, to the extent Concessionaire's employees otherwise would be eligible for any City employee benefits of any kind but for the express terms of this Agreement, Concessionaire (on behalf of itself and its employees) hereby expressly declines to participate in such City employee benefits of any kind.

Concessionaire shall ensure that all employees who supervise minors meet the provisions of the Public Resources Code, Section 5164, that Concessionaire will require employees that have direct supervision over or conduct programs with minors, to be fingerprinted. Livescan fingerprinting service is available at the South Lake Tahoe Police Department. Concessionaire shall file with the City a certificate showing that within the last two years, every person employed in the Facility's programs with minors has been examined and has been found to be free of communicable tuberculosis, all in accordance with the provisions of the Public Resources Code, Section 5164.

12. Operating Schedule. Concessionaire may access the Facility to set up events beginning at 7:00 a.m. on the day of events. Concessionaire must remove all equipment, staging, merchandise, signs, and every object associated with Concessionaire's services under this Agreement by midnight ( 12:00 a.m.) on the night of events. If extenuating circumstances arise, Concessionaire may complete removal no later than 9:00 a.m. the following day provided that Concessionaire notifies City as soon as possible of the need for an extension.

The City will facilitate the Concessionaire's "take down" of all event 6 C-136-2019
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equipment, staging, merchandise, signs and all other objects by providing Concessionaire the necessary access and keys for removal of such objects and things. Any changes to this operating schedule must be noted in the annual Special Event Permit application submitted ninety (90) days prior to the first event of the season.

13. Quality of Concessionaire's Services. The Concessionaire shall conduct its operations in a business-like manner in accordance with this Agreement and so as to not unreasonably interfere with the public's use of other areas of the Facility or infringe upon the normal method of operations of any parties authorized as of the date hereof to conduct business near the Facility.

The Concessionaire shall control the conduct, demeanor, performance, and appearance of its officers, members, employees, agents, volunteers, independent contractors, subcontractors, representatives, customers, and patrons, and upon reasonable objection of the other party concerning the conduct, demeanor, performance or appearance of any such person, the party to whom such objection is made shall immediately take all necessary steps in the discretion of either party to correct the cause of the such objection. The City reserves the right to reasonably request that the Concessionaire remove any such person in the event that the steps to correct such objection are unsuccessful.

Concessionaire shall furnish good, prompt, and efficient service adequate to meet all reasonable demands therefor. The City Manager may periodically evaluate Concessionaire's performance under the Agreement. As a result of these performance evaluations, the City Manager may reasonably request Concessionaire to modify its operation so as to furnish good, prompt and efficient service.

The Concessionaire shall not conduct any business or activity not specifically authorized by this Agreement, unless approved by the City Manager.

14. Independent Contractor. It is understood that Concessionaire and his employees, volunteers, and assigns, in the performance of the work and services agreed to be performed, shall act as and be an independent contractor and shall not act as an agent or employee of City. Concessionaire shall obtain no rights to retirement benefits or other benefits which accrue to City's employees, and Concessionaire hereby expressly waives any claim it may have to any such rights. All employees, agents, contractors or subcontractors hired or retained by Concessionaire are employees, agents, contractors or subcontractors of Concessionaire and not of the City. 7 C-136-2019
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15. Professional Ability of Concessionaire. City has relied upon the professional training and ability of Concessionaire to perform the services hereunder as a material inducement to enter into this Agreement. Concessionaire shall therefore provide properly skilled professional and technical personnel to perform all services under this Agreement. All work performed by Concessionaire under this Agreement shall be in accordance with applicable legal requirements and shall meet the standard of quality ordinarily to be expected of competent professionals in Concessionaire's field of expertise.

16. Compliance with Laws. Concessionaire shall comply with all applicable federal, state, regional and local laws, codes, ordinances and regulations in carrying out his/her duties under this Agreement. Concessionaire shall observe and comply with all applicable laws, ordinances, regulations and codes of federal, state and local governments, and shall commit no trespass on any public or private property in performing any of the work authorized by this Agreement. The City, its officials, officers, elected officials, appointed officials and employees shall not be liable at law or in equity as a result of any failure of Concessionaire to comply with this section.

In the event it is determined that the Concessionaire is required to pay prevailing wages for the work performed under this Agreement, the Concessionaire shall pay all penalties and wages as required by law.

17. Indemnity. CONCESSIONAIRE, AS A MATERIAL PART OF THE CONSIDERATION

TO CITY, HEREBY ASSUMES ALL RISK OF DAMAGE TO PROPERTY INCLUDING, BUT

NOT LIMITED TO, CITY'S EQUIPMENT AND ALTERATIONS OR INJURY TO PERSONS

IN, UPON OR ABOUT THE FACILITY, AND CONCESSIONAIRE HEREBY WAIVES ALL

CLAIMS AND RECOURSE AGAINST THE CITY, INCLUDING THE RIGHT TO

CONTRIBUTION FOR LOSS OR DAMAGE BY REASON OF DEATH OR INJURY TO

PERSONS OR DAMAGES TO PROPERTY, WHETHER THE PERSON OR PROPERTY OF

CONCESSIONAIRE, ITS AGENTS OR EMPLOYEES, OR THIRD PERSONS ARISING

FROM ANY CAUSE, EXCEPT CLAIMS ARISING FROM THE SOLE GROSS

NEGLIGENCE OR SOLE WILLFUL MISCONDUCT OF CITY, ITS OFFICERS, DIRECTORS, AGENTS, OR EMPLOYEES. THE PROVISIONS OF THIS ENTIRE SECTION SHALL SURVIVE THE TERMINATION OR EXPIRATION OF THIS AGREEMENT.

Concessionaire hereby agrees that City shall not be liable for injury to Concessionaire's business or any loss of income therefrom or for damage to the property of Concessionaire, or injury to or death of Concessionaire, Concessionaire' employees, invitees, customers, agents or contractors or any other person, whether such damage or injury is caused by fire, steam, flood, electricity, gas, water or rain, or from the breakage, leakage or other defects of sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause, whether said damage or injury results from conditions 8 C-136-2019
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arising upon the Facility, or from other sources or places, and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to Concessionaire, except damage or injury caused solely by City's gross negligence or willful misconduct.

Concessionaire shall indemnify, hold harmless, and defend the City, and its officers, directors, agents and employees (each of which is an indemnitee) from and against any and all claims, losses, damages, demands, liabilities, suits, costs, expenses, including attorneys' fees, penalties, judgments or obligations whatsoever for or in connection with injury (including death) or damage to any person or property or pecuniary or monetary loss resulting from, arising out of, or in any way related to activity conducted by Concessionaire, including, but not limited to, Concessionaire's development, construction, occupation, use, operation, or maintenance of the concession, Facility, or any facilities, including events occurring on the Facility regardless of how the injury or damage was caused or suffered unless the injury or damage resulted from the sole gross negligence or the intentional and willful misconduct of City, its officers, directors, agents, or employees.

City shall have no responsibility to safeguard the equipment and property of Concessionaire or any of its invitees. City shall have no responsibility to safeguard or protect the Concessionaire, or its employees, agents, officers, directors, or any of its invitees from bodily injury (including death) or personal injury.

In the event a claim is made against City or City is named a co-defendant in any action, arising out of, or in any way related to activity conducted by Concessionaire, Concessionaire shall immediately notify City of such fact and, at City's option, shall either retain legal counsel to represent City in such action at Concessionaire's sole expense or reimburse City for City's litigation costs, expenses, and attorney' fees in undertaking its own legal representation.

In the event a claim is made against both City and Concessionaire for the joint and several liabilities of City and Concessionaire, the determination as to the apportionment of liability between City and Concessionaire shall be made by the judge in a court of competent jurisdiction. Neither City nor Concessionaire shall request that the apportionment of liability be determined by a jury.

Notwithstanding the apportionment of liability between City and Concessionaire, Concessionaire shall nevertheless be responsible to indemnify and hold harmless City as fully set forth above, unless the court determines that the injury or damage resulted from the sole gross negligence or intentional and willful misconduct of City, its officers, directors, agents, or employees. 9 C-136-2019
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a. Waiver. The Concessionaire hereby waives any claim against the City, its officers, directors, agents, or employees for damage or loss caused in connection with or as a result of any suit or proceeding directly or indirectly attacking the validity of this Agreement or any part thereof or as a result of any judgment or award in any suit or proceeding declaring this Agreement null, void, or delaying the same or any part thereof from being carried out.

The Concessionaire further waives any claim against the City, its officers, directors, agents, or employees in any way related to or arising out of loss to the Concessionaire due to the City hosting similar events the summer concert series at the Facility.

18. Insurance Requirements.
a. Concessionaire, at Concessionaire's own cost and expense, shall procure and maintain, for the duration of the contract, the following insurance policies.
i. Workers' Compensation Coverage. Concessionaire shall maintain Workers' Compensation Insurance and Employer's Liability Insurance for his/her employees in accordance with the laws of the State of California. In addition, Concessionaire shall require each subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California for all of the subcontractor's employees. Any notice of cancellation of all Workers' Compensation policies must be received by City at least thirty (30) days prior to such change. Concessionaire shall provide thirty (30) days Written notice of nonrenewal of any Workers' Compensation policies. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work
performed by Concessionaire for City.
ii. General Liability Coverage. Concessionaire shall maintain commercial general liability insurance in an amount not less than one million dollars ($1,000,000) per occurrence for bodily injury, personal injury and property damage. If a commercial general liability insurance form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit.
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iii. Automobile Liability Coverage. Concessionaire shall maintain automobile liability insurance covering bodily injury and property damage for all activities of the Concessionaire arising out of or in connection with the work to be performed under this Agreement, including coverage for owned, hired and nonowned vehicles, in an amount of not less than one million dollars ($1,000,000) combined single limit for each occurrence. v. Fire and Property Coverage. Concessionaires shall maintain fire and property insurance on all improvements and
equipment owned by the Concessionaire. Standard Fire
Insurance with extended coverage and vandalism and
malicious mischief endorsements thereon, on all improvements owned by the Concessionaire, placed or constructed upon the Facility by Concessionaire, in an amount equal to ninety percent (90%) of the full replacements cost thereof, and insuring the interests of the City and the Concessionaire as same shall appear. Concessionaire and City agree, to extent permissible, that they will waive their rights to subrogate fire damage. The policy shall contain a special endorsement that such proceeds shall be disbursed and used to repair or rebuild and such improvements so damaged or destroyed (if such
course of action is required by this Agreement.)
b. Endorsements. Each general liability and automobile liability insurance policy shall be with insurers possessing a AM Best's rating of no less than A:VII and shall name the City as an additional insured. c. Deductibles and Self-Insured Retentions. The Concessionaire shall be responsible for all deductibles in all of Concessionaire's insurance policies. The amount of deductibles for insurance coverage required herein shall be reasonable.
d. Certificates of Insurance. Concessionaire shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Concessionaire shall not commence work under this contract until all insurance required under this section has been approved by City as to form, amount and carrier, nor shall Concessionaire allow any subcontractor to commence work on any subcontract until all similar insurance required and reasonably consistent limits of the subcontractor has been so obtained and approved. Certificates of insurance shall contain no exclusions unless negotiated with the City Attorney and approved, in writing, by the City Attorney.
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19. Facilities and Equipment Provided by City. City and Concessionaire have jointly inspected the Facility prior to execution of the Agreement, and Concessionaire agrees that they have performed tests as they determined in their sole discretion to determine the condition of the Facility. The Parties agree that all improvements appurtenances and equipment existing on the Facility shall remain on the Facility for use by the Concessionaire in accordance with and subject to the limitations set forth in this Agreement.

Concessionaire acknowledges and agrees that the Facility is in good and tenantable condition. Concessionaire has determined that the Facility is acceptable for Concessionaire's use, and Concessionaire acknowledges that City has not made any representations or warranties in connection with the physical condition, improvements, structures or appurtenances of the Facility or their fitness for Concessionaire's use upon which Concessionaire has relied directly or indirectly for any purpose. All improvements, structures, and fixtures are provided to Concessionaire without warranty of any kind including, without limitation, implied warranties of merchantability and fitness for a particular purpose.

20. Facilities and Equipment Provided by Concessionaire. Concessionaire shall provide, at its own expense, all equipment required for execution of its duties under this Agreement that does not already exist on or at the Facility.

21. Concessionaire's Maintenance Obligations. Concessionaire agrees to maintain in good order and repair and in a clean and safe condition any and all concession structures, facilities, improvements, and equipment at the Facility, at Concessionaire's sole cost and expense, during the entire Term of this Agreement. Concessionaire is responsible for returning the venue to the original condition following each scheduled event as outlined in the Special Event Guidelines. Concessionaire shall repair any area damaged by Concessionaire, Concessionaire's agents, employees, invitees and visitors whether through active or passive negligence. Should Concessionaire fail, neglect or refuse to do so, the City shall have the right, but not the obligation, to perform such maintenance or repairs for the Concessionaire's account, and the Concessionaire agrees to promptly reimburse the City for the cost thereof (plus an additional twenty percent (20%} for overhead}, provided, however, that the City shall first give Concessionaire ten ( l O} days' written notice of its intent to perform such maintenance. City shall not be obligated to make any repairs to or maintain any improvements on or at the Facility unless otherwise required by this Agreement.

City reserves the right of entry for its employees and agents to inspect the Facility as deemed necessary by City, and the right (but not obligation} to do any and all work of any nature necessary for preservation, maintenance and 12 C-136-2019
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operation of the Facility. Concessionaire shall be given reasonable notice when any such work may become necessary and will adjust concession operations to permit City to proceed expeditiously with such work. City shall not be liable to Concessionaire for injury or damage that may result from any defect in the construction or condition of the Facility, nor for any damage that may result from interruption of Concessionaire's use of the Facility during any repairs by City. Concessionaire waives any right to repair the Facility at the expense of City under any applicable law.

City shall have the obligation to repair the Facility to the extent the damage or destruction is caused by the sole negligence of City. Concessionaire shall have the obligation to repair or replace in all other cases. Concessionaire expressly agrees, at its own cost and expense, to maintain and operate all of the Facility in a clean, safe, wholesome, and sanitary condition free of trash, garbage or obstructions of any kind and in compliance with any applicable laws, rules or regulations of any governmental authority having jurisdiction over the Facility. Concessionaire shall remedy without delay any defective, dangerous, or unsanitary conditions.

22. Title to Improvements. Concessionaire hereby acknowledges the title of City in and to the Facility described in this Agreement, including real property improvements existing or erected thereon, and the Fixtures (as defined below), and hereby covenants and agrees never to assail, contest, or resist said title.

Subject to the following paragraph, upon expiration or termination of this Agreement, any alterations to the Facility or to any structures located thereon, and all fixtures, including, without limitation, restrooms, and arenas (collectively, the 'Fixtures'), shall remain upon the Facility and be surrendered to and become the property of the City.

23. Notices. Any notice required to be given under this Agreement shall be in writing and either served personally or sent prepaid, first class mail. Any such notice shall be addressed to the other party at the address set forth below.

Notice shall be deemed communicated within 48 hours from the time of mailing if mailed as provided in this section.

If to City: City of South Lake Tahoe
City Manager
1901 Lisa Maloff Way
South Lake Tahoe, CA 96150
Provide a copy to:City Attorney's Office
City of South Lake Tahoe
1901 Lisa Maloff Way, Suite 300
South Lake Tahoe, CA 96150
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If to Concessionaire: Rob Guistina, Owner
On Course Events
981 Tulare Ave
South Lake Tahoe, CA 96150
[email protected]

24. Assignment and Subcontracting. The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Concessionaire. Assignments of any or all rights, duties or obligations of the Concessionaire under this Agreement will be permitted only with the express written consent of the City Manager. Concessionaire shall not voluntarily or by operation of law assign, transfer, sublet, or otherwise transfer or encumber all or any part of Concessionaire's interest in the Agreement or in the Facility, without City Manager's prior written consent, which may be granted or denied in City's discretion, which shall not be unreasonable withheld. If City consents to such subcontract, Concessionaire shall be fully responsible to City for all acts or omissions of the sublessee or subcontractor. Nothing in the Agreement shall create any contractual relationship between City and sublessee or subcontractor nor shall it create any obligation on the part of City to pay or to see to the payment of any monies due to any such subcontractor other than as otherwise required by law.

Nothing in this Agreement prohibits Concessionaire from contracting for services at the Facility with the exception of those limitations set forth in paragraph 2(e) herein. Examples of such services include food vendors, merchandise vendors, etc.

25. Waiver. Waiver of a breach or default under this Agreement shall not constitute a continuing waiver of a subsequent breach of the same or any other provision under this Agreement. No delay, failure or omission of City to re-enter the Facility or to exercise any right, power, privilege, or option or be accrued shall impair any such right, power, privilege, or option or be construed as a waiver of such default or a relinquishment of any right or acquiescence therein.

26. Taxes. Concessionaire shall pay when due all taxes levied on personal property used or maintained upon the Facility and shall pay any possessory or use tax that may be levied in connection with use of the Facility.

Concessionaire agrees to indemnify and save City harmless from all taxes 14 C-136-2019
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whatsoever arising out of or in any way connected to the operations conducted by Concessionaire upon the Facility.

27. Payment of Debts; No Liens. Concessionaire shall promptly pay all debts incurred by it for materials, supplies, equipment, merchandise or services used, including assistance and services of City staff as set forth in paragraph 2(g) herein, in or about or in connection with its business or operations, and the wages and salaries and payroll taxes of all employees employed thereon.

Concessionaire shall permit no liens to be levied upon or to attach to the Facility used by it in the performance of this Agreement. Concessionaire shall pay before delinquency all license fees, taxes, and assessments imposed, levied or assessed upon items or upon any property used by Concessionaire in the performance of this Agreement or upon Concessionaire's possessory interest therein, upon Concessionaire's business or activity conducted hereunder or Concessionaire's right to conduct same, or based upon the proceeds of such business or activity. If any lien is filed, Concessionaire shall cause such lien to be released and removed within ten (10) days after the date of filing, and if Concessionaire fails to do so, City may take such action as may be necessary to remove such lien and Concessionaire shall pay City such amounts expended by City.

28. Default. The occurrence of any one or more of the following events shall constitute a material default ('Default') of this Agreement by Concessionaire. a. The violation of any provision, term or requirement of this Agreement. b. The abandonment, vacation, or discontinuance of operations on the Facility for more than one day unless discontinuance of operations has been previously approved by the City in writing. Abandonment or discontinuation by Concessionaire of operations hereunder. "Discontinuation" shall mean any closing (other than a scheduled closing or closing necessitated by acts beyond the control of the Concessionaire) or failure to provide all services or amenities for thirty (30) consecutive days or more. "Abandonment" shall mean an implied or express repudiation or renunciation of any operations under this Agreement or any material part thereof, subject to the renovation and refurbishment authorization provided for in this Agreement.
c. The failure of Concessionaire to make any payment of Concession Fees or any other payment required to be made by Concessionaire hereunder, after ten (10) days written notice from City of non-payment. 15 C-136-2019
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d. The interest of Concessionaire in the Agreement is assigned, transferred, passes to, or devolves upon, by operation of law or otherwise, to any other person, firm, or corporation without the prior written consent of the City. e. The failure to maintain the Facility and the improvements constructed thereon in a state of repair required by this Agreement, and in a clean, sanitary, safe condition, where such failure continues for more than ten (1 OJ days after written notice from the City for correction thereof. Nothing herein shall prohibit the City from requiring that safety and health conditions shall be corrected in accordance with the requirements of the Uniform Building Code or Uniform Fire Code, as may be adopted by the City from time to time.
f. Deterioration of service for any period which materially and adversely affects the operation or service required to be performed by Concessionaire under the Agreement which is not corrected within thirty (30J days after written notice from the City for correction thereof; and the failure to maintain service standards thereafter.
g. The failure of Concessionaire to be in compliance with local, state and federal law.
h. The filing of a voluntary petition in bankruptcy by Concessionaire, the adjudication of Concessionaire as bankrupt, the appointment of any receiver of Concessionaire's assets, the making of a general assignment for the benefit of creditors, and/or a petition or answer seeking a reorganization of Concessionaire under the federal bankruptcy laws or any other federal or state laws.
i. Concessionaire's misrepresentation or inaccuracy of facts in its required forms, documents, and submittals required as part of this Agreement or in the submittals in the solicitation and selection of a Concessionaire to perform the services under this Agreement.
j. The filing of any lien or stop notice on account of Concessionaire where such lien/notice is not removed or enjoined and/or a bond for satisfaction of such lien is not posted within ten ( 1 OJ days.
k. The failure of Concessionaire to operate in the manner required by this Agreement, or Concessionaire' breach of or default under any provision of this Agreement not otherwise specified above, where such failure or default continues for more than fifteen ( 15J days after written notice from the City to correct the condition specified.
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I. The discovery of any material fraudulent statement in the Concessionaire's proposal leading to award of this Agreement, within three (3) years from the Effective Date, which significantly affects the Concessionaire's qualifications to perform under the Agreement following notice by the City Manager.
m. If a Principal or Owner of Concessionaire has been found guilty of, regardless of final adjudication, or a plea of nolo contendere to, any illegal conduct or activity which (i) is customarily considered to be a "white collar crime" such as, fraud, embezzlement or misappropriation of funds, or (ii) involves an act of moral turpitude, or (iii) which results in a felony conviction, unless Concessionaire has demonstrated to the satisfaction of the City within fifteen ( 15) days after adjudication of said Principal or Owner that action is being diligently taken to remove said Principal or Owner from any aspect of the business' operation pending an appeal of the conviction and, in not even shall such removal take longer than One Hundred Twenty ( 120) days. For the purposes of this section, the term "moral turpitude" shall mean conduct or acts that tend to degrade the Principals or Owners in society or bring them into public hatred, contempt, scorn or ridicule, or that will tend to shock, insult or offend the community or ridicule public morals or decency or harm the image of the City by virtue of its association with the facility.

29. Remedies. In the event of a Default by Concessionaire, City may:
a. Terminate this Agreement in which case Concessionaire shall immediately surrender possession of the Facility and all City owned-Improvements and Equipment to City.
b. Take possession of the Facility as the agent and on account of Concessionaire, and if it so elects may license or rent the whole or any part of the Facility for the balance or any part of the term of this Agreement and retain any license fees received and apply the same in payment on account of Concessionaire. The performance of any or all of said acts by City shall not release Concessionaire from the full and strict compliance with all of the terms, conditions and covenants of this Agreement on Concessionaire's part, and Concessionaire shall pay any deficiency that may exist after deducting any license fees received, if any.

30. Dispute Resolution. Any dispute concerning this Agreement will be first submitted to the City Manager or his designee for resolution. If no resolution is reached, such dispute shall be submitted to the City Council. The decision of the City Council shall be final and shall be appealable only to the El Dorado 17 C-136-2019
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Superior Court pursuant to California Code of Civil Procedure§ 1094.5, and as provided by law.

31. Right of Entry. Concessionaire agrees that City and its agents may enter upon the Facility at all reasonable times to inspect the same, and to fulfill any of the rights granted City under the terms of this Agreement, or otherwise to protect any of the rights of City and there shall be no liability against City for damages thereby sustained by Concessionaire nor shall Concessionaire by entitled to any abatement or reduction of rental herein by reason of the exercise by City of any such right herein reserved.

32. Controlling Law Venue. This Agreement and all matters relating to it shall be governed by the laws of the State of California and any action brought relating to this Agreement shall be held exclusively in the Superior Courts in the County of El Dorado, South Lake Tahoe Division.

33. Prohibited Interests. Concessionaire maintains and warrants that it has not employed nor retained any Concessionaire or person, other than the independent contractors hired in accordance with Concessionaire's standard business practice, to solicit or secure this Agreement. Further, Concessionaire warrants that it has not paid nor has it agreed to pay any Concessionaire or person, other than a bona fide employee working solely for Concessionaire or an independent contractor hired as discussed above, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

34. Equal Opportunity Employment. Concessionaire represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color; national origin, disability, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Concessionaire shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan, or other related programs or guidelines currently in effect or hereinafter enacted.

35. Drug-Free Workplace Certification. By signing this Agreement, Concessionaire hereby certifies under penalty of perjury under the laws of the State of California that the Concessionaire will comply with the requirements of the 18 C-136-2019
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Drug-Free Workplace Act of 1990 (Government Code Section 8350, et seq.) and will provide a drug-free work place by taking the following actions:
a. Publish a statement notifying employees that unlawful manufacture, distribution dispensation, possession, or use of a controlled substance is prohibited and specifying actions to be taken against employees for violations, as required by Government Code Section 8355 (a). b. Establish a Drug-Free Awareness Program as required by Government Code Section 8355(b) to inform employees about all of the following:
i. The dangers of drug abuse in the workplace;
ii. The person's or organization's policy of maintaining a drug-free workplace;
iii. Any available counseling, rehabilitation and employee assistance program; and
iv. Penalties that may be imposed upon employees for drug abuse violations.
c. Provide, as required by Government Code Section 8355(c), that every employee who performs grant activities under this Agreement:
i. Will receive a copy of the Concessionaire's drug-free policy statement; and
ii. Will agree to abide by the terms of the Concessionaire's statement as a condition of employment on this Agreement.

Failure to comply with these requirements may result in suspension of payments under this Agreement or termination of the Agreement, or both, and Concessionaire may be ineligible for award of any future City agreements if City determines that any of the following has occurred: the Concessionaire ( l) has made false certification, or (2) violates the certification by failing to carry out the requirements as noted above.

36. Americans with Disabilities Act. By signing this Agreement, Concessionaire assures the City that it complies with the American with Disabilities Act (ADA) of 1990, (42 U.S.C. 12101, et.seq.), which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to ADA.

37. Amendments. This Agreement may be modified or amended only by a written document executed by both Concessionaire and City and approved as to form by the City Attorney.
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38. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect.

39. Entire Agreement. This Agreement constitutes the complete and exclusive statement of Agreement between City and Concessionaire. All prior written and oral communications, including correspondence, drafts, memoranda, and representations, are superseded in total by this Agreement.

40. Execution. This Agreement may be executed in several counterparts, each of which shall constitute one and the same instrument and shall become binding upon the parties when at least one copy hereof shall have been signed by both parties hereto. In approving this Agreement, it shall not be necessary to produce or account for more than one such counterpart.

41. Time is of the Essence. Time is of the essence for this Agreement.

42. Authority to Enter Agreement. Concessionaire has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and to bind each respective party.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date first written above.

CITY OF SOUTH LAKE TAHOE: CONCESSIONAIRE:

By ___________ By ____________ _
Jason Collin, Mayor Rob Guistina, Owner
Business License # -------
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signed in counterpart
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38. 39.

40. 41.

42. severobj!ily. u ony term or po,1ion of this Agreement is held lo be invalid, illegol.

Q( olherWise unentotceob!e by o court of competent turisdiction, the rcmoioing provisions of lhis Agreemenl $hall continue in full face ond eftecl. £ntire Aareement. This Agreemenl constitvtes the complete end exctusive statement ol Ag:reemenl between City ond Conc&ssiono'.re. All prior 'Mitten ond orol communicoUons. including cOffcspoodcnce. droHs, memOJondo. ond representations. ore superseded in total by this Agreement. &ocvfiOn. This Agreement may be executed in se-veral covntcrpor1s. each of whioh shall conslilule one and the some in.sttument ond shall become binding upon the parties ,vhen ol leost one copy hereof shot
l
ho"e been signed by
bOfh parties hereto. In approving lhis Agreement i1 shall nol be necessoty 10 produce°' account tor more than one svch covnterport.

Time is of fhe Essence. Time is of the essence tor this Agreement.

Aufhority to Enter Agreeme,,t, Concessionoi"e has oll requisite power and outhori1y lo conduct its business ond to execute. deliver. and perf0<m the Agreement. Each porty warrants mot the indMduols who hove signed this Agreement hove the legal pawe<. righ1. and authority to make this Agreement and to bind each respective pony.

IN WITNESS WHEREOF. the parties hove caused this Agreement to be executed on the dote first written above.

CITY OF SOUTH LAKE TAHOE: CONCESSIONAIRE:
� /
S
y::-- -,- .
a
_
y
_O< ___ �istino, Owner
Business license # 0c:94 ?"f[3
signed in counterpart
Jason Collin M
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By��
Heather L. Stroud, City Attorney
ATTEST:

By��
Susan Blankenship, City Clerk
Attachments:

Exhibit A - Description of the Facility and Map
Exhibit B - On Course Events Proposal
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APPROVED AS TO FORM:

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EXHIBIT A

DESCRIPTION OF FACILITY
Lakeview Commons at El Dorado Beach is located at Highway 50 & Lakeview Ave in South Lake Tahoe. The facility includes amphitheater style seating for 2200 persons, onsite food and non-motorized watercraft concessionaires, picnic tables and barbeques throughout. The facility provides a central gathering place for visitors and residents of South Lake Tahoe. Any event proposed for Lakeview Commons is required to allow public access at all times. According to the Lakeview Commons Event Guidelines no more than one third of the beach may be occupied by Special Event Activity, tents and structures must not create an unreasonable obstruction to the panoramic view and natural setting of the venue. (L VC Guidelines p. 5 2m).
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Lake Tahoe

IL------
No \fendors on aeach
Lakeview Drive
"' Engineering
Department
City of South Lake Tahoe - Lakeview Commons
Full Rental '1l [ j I S J f QI r - Large Event > 500 Guests Legend
§] Bike Valet
� Beer Garden
D Vendors
Io 25
0 :��t 1.000 I
+&<>·�·�· n1J
C,tyotSLT
f/lr.'OIJ
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EXHIBIT B

ON COURSE EVENTS PROPOSAL
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EVENT
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Oit:OUBS£
EVENTS
September 9, 2019
Dear Frank Rush, City Manager, and members of the South Lake Tahoe City Council; This letter is submitted in response to a Request for Proposal from On Course Events in relation to production of the Live at Lakeview Summer Music Series at Lakeview Commons, South Lake Tahoe, California.

In celebration of the continued improvements the City has made to the area surrounding Lakeview Commons, On Course Events proposes to renew the agreement for continued production the Live at Lakeview Summer Music Series to highlight the positive changes taking place in the local community.

In the summer of 2012, On Course Events created and produced this unique, free concert series at the newly renovated Lakeview Commons venue. Over the past eight seasons, with 83 concerts successfully produced, this weekly series has become the pinnacle of summer in South Lake Tahoe. Each week, 800- 1000 guests enjoyed free music, local vendors, food concessionaires, a free bike valet, and a beer/wine garden. Through innovative venue design and professional, responsive event execution, locals and visitors alike came to experience the sense of community that this location and event series provided.

In addition to Live at Lakeview, On Course Events has played an instrumental role in planning and producing successful events at Lakeview Commons since the venue's renovations including Race the Lake of the Sky, South Shore's Best Sunset Band, Laser Day, the Wednesday Night SUP Series and more.

Throughout the body of this document, you will find details to establish why On Course Events should be awarded with another multi-year contract for this community event series as well as receive support from the City Council and other City Services units. You will also find the latest event application submitted by On Course Events in Spring of 2019. The On Course Team is confident that with the City's support these events can continue to be a positive and culturally influential experience for our community.

Thank you, in advance, for your time and considerations.

Respectfully submitted,
Rob Giustina
On Course Events
C: 530-545-9382
E: [email protected]
ONCOURS£
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Table of Contents
B. Related Experience, Background and Qualifications ..................................................... 3 C. Proposed Signature Event Plan ...................................................................................... 5 D. Compliance with Lakeview Commons Special Event Guidelines ....................................... 8 E. Event Financing Plan ............................................................................................................... 24 F Financial Capability of Proposer ............................................................................................. 25 G. Local Business Preference ..................................................................................................... 26 H. Professional References ........................................................................................................ 27 Appendix A-C: Professional References ................................................................................... 28 ON COURSE.

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B. Related Experience, Background and Qualifications
On Course Events is an award-winning event planning and production company based in South Lake Tahoe, CA. With over 15 years of successful event production experience, the On Course Team has an extensive background in festival and concert production, action sports exhibitions and competitions, corporate meetings, and fundraising events.

On Course Events is responsible for founding and producing the Live at Lakeview Summer Music Series, at Lakeview Commons since the opening of the new venue in 2012. As the creators of this Signature Summer Events Series, the company has continued to build upon its successes while being extremely responsive to any issues that may have arrived. Upon the successful completion of 83 Live at Lakeview concerts in the past eight seasons, On Course Events has developed and solidified a comprehensive operations plan, secured the necessary funding to produce the event through sponsorships, and garnered a loyal following within the community.

As outlined below in figure 1.1, this production company also holds an extensive resume of professional experience; locally, domestically and internationally Live at Lakeview A free community concert series on the Created, produced, and managed a total Lakeview Commons shores of beautiful South Lake Tahoe. The of 83 concerts over 8 seasons.

Summer , South event highlights the unique recreation of Music Lake the area with a free bike valet, a variety of Managed all aspects of production Series Tahoe,CA live music, live painting, local vendors and including staffing, marketing, non-profit booths and a beer/wine promotions, staging, sound, vendors, and 2012-2019 garden. entertainment.

Live at Sierra-at- A free outdoor concert series on the brand Created, produced, and managed 4 Grandview Tahoe new Solstice Plaza in the base area of outdoor concerts in inaugural season; 3 Equinox Resort, Sierra-at-Tahoe Resort. The event series additional concerts are currently Spring Twin highlights the unique recreation of the scheduled for 2015 Festival Bridges, area with skiing/snowboarding and a
CA variety of live music and local vendors. Managed all aspects of production 2014-2015 including staffing, marketing,
promotions, staging, sound, vendors, and
entertainment.

Snowglobe Lake Local skiers/snowboarders perform a Built, maintained, and managed the Big Music Tahoe variation of flips and grabs over 30 feet Air Exhibition and its athletes.

Festival Big Commun it above the festival crowd on Lake Tahoe's Air y College, largest man-made feature. Provided operational support in areas Exhibition South including artist relations and event setup. 2012-2019
ONCOURS£
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.

Lake
Tahoe,CA
SUP Series Lakeview Weekly Standup Paddle races right from Provided staff and consultation services Commons the heart of South Lake Tahoe. The event for this popular competition 2012-2015 , South attracts competitors and spectators of all Lake ages and abilities.

Tahoe,CA
Race the Lakeview A world class Standup Paddle competition Provided staff and consultation services Lake of the Commons that attracts people from all around the for this world class competition Sky , South world to enjoy the unique recreation of
Lake Lake Tahoe.
2012-2014 Tahoe,CA
US ASA Lake USASA is the world's largest snowboard Directed and managed 1 of 33 regional South Tahoe and freeski association with 33 regions series, hosting 14-18 local events each Tahoe (Various across the nation. Competitors of all ages winter season.

Series Resorts) compete in a variety of disciplines to earn points to qualify for Nationals held in
2011-2013 April.

US ASA Copper The National Championships of the United Manage venue, course, and overall National Mountain, States Snowboard and Freeski Association completion.

Champions co attracts competitors from all 33 regions.
hips
2001-2015
Stateline Heavenly A series of 5 snowboard competitions Developed and managed a series of 5 Showdown Mountain paired with a concert series. The event snowboard competitions.

Series Resort, allowed guests to enjoy the unique
South recreation of Lake Tahoe during the day Developed and managed a series of 2012 Lake followed by live music. concerts to supplement competitions.

Tahoe,CA
Blows ion Pacific Over 40 of the world's greatest Watercraft Developed and managed International Jet Surf Slam City, OR Freeriders and Racers gather to compete Ski Competition Operations including in this action packed competition on the vendor management, competition 2009-2018 Oregon Shoreline. management, equipment, stage, sound, and staffing.

ON COURSE.

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C. Proposed Special Event Plan
On Course Events is proposing to continue the Live at Lakeview Summer Music Series for an additional five years. This section will outline the overall concept and theme that has been established for the proposed event series. It will cover the overall design of the event series as well as new improvements and innovative ideas to attract residents and visitors alike.

Figure 2.1 Live at Lakeview Summer Music Series 2018
Concept and Theme Development
During the inaugural season of Live at Lakeview in 2012, the series quickly became the pinnacle of summer for families, visitors and local residents of all ages. These events were initially created to provide an opportunity for the community of South Lake Tahoe to gather on a weekly basis to enjoy the unique beauty and recreation that this area has to offer.

Each Thursday, from 4:30 - 8:30 p.m., On Course Events proposes to host a free community concert on the shores of Lake Tahoe at Lakeview Commons for a total of ten weeks. Each event will feature live music selected from a variety of genres, which may include Jazz, Funk, Rock, ON COURSE.

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Reggae, Latin, Bluegrass, lndie and World. Other highlights include a free bike valet, local vendors, food concessionaires, non-profit organizations and a beer/wine garden.

In an effort to limit the event's footprint and promote recreation, a free bike valet will be offered again. Local non-profit organizations are given the opportunity to run and operate the valet as a fundraising tool. The Live at Lakeview Bike Valet has helped to raise over $3000 for local non-profit organizations over the past three seasons.

From hand-crafted, locally made jewelry and gifts to delicious kettle corn, the local vendors and food concessionaires add a great value and large amount of energy to each event. Over the course of the past three seasons, these events have resulted in over a dozen new business license permits for the City of South Lake Tahoe. As shown below in Figure 2.2 those who attend Live at Lakeview thoroughly enjoy the variety of options each local vendor offers.

Figure 2.2 Vendors at Live at Lakeview Summer Music Series 2014 ,/ - �I
Live at Lakeview has been built as a community event series and offers a variety of fundraising and awareness opportunities for local non-profit organizations. Over a dozen local NPO's have participated in the series over the course of the past eight years. In an effort to provide support back to the local community, On Course Events donates a portion of the Beer/Wine Garden proceeds benefit the Heavenly Ski & Snowboard Foundation resulting in thousands of dollars in scholarships for local athletes.

ONCOUBS£
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Figure 2.3 Live at Lakeview Summer Music Series 2019 Poster 6/20
6/27 ��g� �
e
R�ff
erlon Band w/ Big Sticky Mess
7 /11 Tap Waler w/ Barnsmoke World Twang / Americana
7/18 1��:Jgg;cr Siring Band w/ Patrick Walsh
7 /�5 t:j�fl�zg!it
al w I Boca do Rio
8/1 The Golden Cadillacs w/ Jimbo Scoll Country Rock
8/8- Shamorr, Allen+ The Underdawgs w/ Tahoe Tribe
New Or eons Funk I Reggae
8/15 The S�lone1 w{ Chile Verde
West coast Sou
8/22 Mojo Green w/ Boot Juice Funk
8/29 J Ras+ The Higher Elevation w/ Miki Roe+ Toking Root Reggae Roofs
Beer Garden I Food + Craft Vendors j live Art + Music
FREE Bike Valel I Hike or Bike! j Please, NO DOGS
Located @ Lakeview Commons Sc,o.lhtobt"1'1c>I! c•cc,.,..,o.tff.Y�£ lo!l�"'""'·"ddf\G�r11,or-.J..\G�S.l t1:1:ce.-,-tUtNtW� I -l'iffi LIV EA TLAK EVI EW .COM
After successfully executing 83 concerts over the course of eight seasons, a comprehensive production and operations plan has been established. A solid marketing and promotions campaign has also been established including a variety of sponsorship packages, public relations efforts, and a heavy utilization of social media communication.

As shown above in Figure 2.3 On Course Events developed and established the branding and logo for the Live at Lakeview Summer Music Series through the creation of its website, flyers, social media lineup, video commercials and logo to brand the series. Sponsor logos are displayed based on the level of event sponsorship and priority with title sponsors aligned on the main stage banners and all promotional materials. The same campaign will be used in future promotions to maintain consistency in branding the series.

ON COURSE.

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Design and Quality of Improvements
In this section you will find a description of the design and layout of the event at the Lakeview Commons Venue, along with some innovative ideas to attract residents and visitors.

Each Thursday, for the past eight summers, locals and visitors alike have gathered in droves at Lakeview Commons to experience the variety of live music and sense of community that the Live at Lakeview Summer Music Series provides. This community atmosphere is created through the innovative design that On Course Events has implemented at this magnificent venue. The lakeside stage coupled with a breathtaking backdrop of Lake Tahoe and amphitheater style seating set the stage for this event series. In previous years, this event design has attracted guests on foot, bicycles, standup paddleboards, boats and jet skis.

On Course Events adds more value by offering local vendors and food concessionaires throughout the upper plaza section. The beer and wine garden is placed along the east side of the venue, designed to offer a perfect view of the stage and the lake.

As shown below in Figure 2.4, the Live at Lakeview Bike Valet holds an average of 300 bikes each week with a consistent overflow of bikes around the venue. In response to the growing popularity of the series, On Course Events is exploring options to expand the footprint of the beer and wine garden. This may include increasing the area of the current beer and wine garden or submitting for a permit to open the full park up as a designated, drinkable area with additional security in place.

Figure 2.4 Live at Lakeview Bike Valet ,......,., ...... ...--- On Course Events plans to continue its proactive stance on informing and educating the public in regards to any parking plans, road closure times, and free bike valet service to ensure all pertinent event information is available. Volunteer marshals and various media outlets will be ONCOURS£
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utilized to achieve this, including local television and radio, print advertising, press releases, and social media outlets.

D. Compliance with Lakeview Commons Special Event Guidelines On Course Events has proven its responsiveness to the Lakeview Commons Event Application Guidelines since they were implemented in 2013. Each component of the Event Guidelines is explained in detail below.
(a) Event Name
(b) Event Dates
(c) Event Location
Figure 3.1 Event Description
-- 1�- -- 1111 ,H·.-.1i11F.1e<· '" �,.,, • Ill ·-1.-<,ur,ur,1,1 Live at Lakeview Summer Concert Series
Thursdays in 2020-June 18, 25;July
2,9,16,23,30; August 6, 13, 20, 27
Lakeview Commons, South Lake Tahoe, CA
(d) Beneficiaries of Fundraising Not primary purpose of event. l<ey summer fund raising opportunity for South Shore
non-profit organizations.
(e) Changes for This Year Expand footprint of beer and wine garden and continue to inform and educate the
community on free bike valet and current
parking available.

1. Event Description
(a-c) Event name, date & location:

On Course Events is proposing to continue hosting the Live at Lakeview Summer Concert Series at Lakeview Commons. The proposed event series would be held on 10 Thursday evenings each summer. The dates for 2020 include June 18, 25; July 2,9,16,23,30; August 6, 13, 20, & 27. (d) Beneficiaries of fundraising:

While this is not the primary purpose for the event series, On Course Events offers a variety of fundraising opportunities for local non-profit organizations including the Bike Valet, Beer/Wine Garden and vendor booth spaces. Over the past three seasons, these events have helped to raise over $3000 for various non-profits that operated our bike valet. On Course Events also donates a portion of the Beer/Wine Garden proceeds benefit the South Tahoe BMX Association resulting in thousands of dollars in scholarships for local athletes.

While fundraising is secondary to creating a sustainable event series, On Course Events prides itself in being the key summer fund raising opportunity for many of South Lake Tahoe's nonprofit organizations. (e) Changes for this year
To build upon the success of the first eight seasons of Live at Lakeview, On Course Events is exploring options to expand the footprint of the beer and wine garden. This may include increasing the area of the current beer and wine garden or submitting for a permit to open the ONCOURS£
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full park up as a designated, drinkable area with additional security in place. On Course Events will also continue to inform the public about parking, road closures, and the free, extra-large, bike valet through volunteer efforts and various media outlets.

Figure 3.2 Event Details (a-h)
Live at Lakeview Event Details (a·h}
(a) Event Times
(b) Attendance
(c) Notification
(d) Traffic
(e) Alternative Transportation
(f) Parking
(g) Disabled Access
(h) Personnel

2. Event Details
(a) Event Times:

Set-up 7:00 am - 4:00 pm
Event 4:30 pm- 9:00 pm
Breakdown complete by next day at 9:00 am
800-1000 guests per event
All residents and businesses within 300 feet
will be notified by May 18, 2020
Develop traffic plan to minimize disruptions.

Maintain emergency access at all times
Operate free bike valet (increased size)
Designate an area of parking for set up,
deliveries, and vendor access
Partner with local businesses to provide
off-site parking
Designate a curbside "loading zone"
All staff and volunteers will park offsite or ride
bicycles
Additional handicap parking spaces provided
upon City requests
Venue is ADA compliant
On Course Events will ensure no temporary
structures are blocking access points
See Figure 3.3 for complete breakdown of On
Course Events personnel
Each event will take place on a Thursday with live music from 4:30-9:00 pm. Set-up for the event will begin at 7:00 am the day of the event. Set-up will begin this early so our staff can place the stage without disrupting the public use of the beach. Due to the safety needs of our staff and the noise constraints of the night, breakdown will be complete by 9:00 am the following morning prior to public use of the beach. At that time, a full sweep of the venue will be made by our staff and volunteers to ensure no trash or equipment is left behind.

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(b) Attendance:

An average of 800-1000 attendees gathered for each Live at Lakeview concert over the past three seasons. With approximately 60% of attendees arriving on bicycles, paddleboards, and kayaks, we are able to reduce the number of cars driven by attendees, limiting the impact on traffic and parking in the surrounding area.
(c) Notification:

On Course Events will notify all residents and businesses within 300 feet of Lakeview Commons about our proposed event series prior to May 18, 2020. This written notification will include the dates of the entire event series, planned hours of operation, expected number of attendees, hours of amplified music, weekly genres of music, road closures, and event content. (d) Traffic:

On Course Events will work with the City staff and Police Department, as needed, to develop the most appropriate traffic plan to minimize any disruptions to business and residential traffic flows. We plan to run and operate a free bike valet again this year to limit the parking impacts around the venue. Our staff will ensure emergency access is maintained at all times. (e) Alternative Transportation:

Similar to the first three seasons, On Course Events will encourage Live at Lakeview attendees to use the free bike valet service. Public transportation and carpooling will also be encouraged.

On Course Events plans to designate an area of parking for event set up, delivery of supplies, an access for vendors. Road closures will be requested for each event to ensure safety of all attendees, vendors, and event staff m·embers.
(f) Parking:

On Course Events will work with the City's Recreation Complex and other event partners to provide off-site parking for event attendees, similar to the first three seasons. Our staff will designate curbside "loading zone only" area for supply load in and out. All event staff will use offsite parking or ride bicycles to ensure minimal impact on the limited public parking available on-site.
(g) Disabled Access:

Additional handicap parking spaces will be provided and clearly marked in the on-site parking areas, as the City of South Lake Tahoe advises. All restrooms, pathways, and viewing areas at Lakeview Commons are currently ADA compliant and On Course Events will ensure no event displays or tents block any of these access points.

ON COURSE.

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(h) Personnel:

Figure 3.2 Live at Lakeview Staff/Personnel
'
Event Director/
Producer
Rob Giustina
'
I I I I ' '\ ' ' ' ' ' '
Stage Manager Venue & Vendor Waste Volunteer Management Manager Director Coordinator ' / " ,, ' ,, ' I ' '\
Volunteer
Marshals
,,
Event Director/Producer- Responsibilities include oversight of all aspects of the event including set-up, breakdown, security, staffing, volunteers, staging, sound, and vendors.

Stage Manager- Responsibilities include oversight of entertainment, sound management, staging, and sound staff.

Venue and Vendor Manager- Responsible for vendor solicitation, registration, oversight of setup and breakdown of vendor booths. Also responsible to ensure all vendors meet city license requirements.

Waste Management Director- Organize and supervise all zero-waste stations, coordinate with South Tahoe Refuse Company to ensure proper waste management. Coordinate weekly beach clean-up efforts to ensure minimal impact to venue or surrounding areas.

Volunteer Coordinator- Manages and trains all volunteers with effective communication methods to prevent confusion or misdirection of volunteers. Responsible for ensuring an adequate number of volunteers are in position throughout the event. On Course Events will provide a minimum of 5 volunteers at each event.

Volunteer Marshal- Supports entire staff efforts during set-up and breakdown as well as weekly beach clean-ups. Support events by educating the public on city ordinances and rules, encouraging positive behavior, and assisting guests with directional and waste management questions.

All volunteers and staff will assist with the safe exit of event attendees after each event.

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F. 1gure 34E vent D ·1 (" ) eta1 s 1-.9
•• 1•.1.:.r. .. F.1� ...
-
- - -l � mml llr:H:11� ,
(i) Community Noise Impacts, Event Zero noise complaints 2012-2019; Sound maintain same sound management plan
(j) Sale or Handouts of Food, Beverages All vendors will be required to submit proof of and Merchandise necessary paperwork
List of event vendors will be submitted to the
City 15 business days prior to event
Food concessionaires will be solicited and
booked upon approval and proof of required
certifications
(k) Alcohol Necessary permits will be obtained from ABC prior to operating beer garden and selling
alcohol on site.
(I) Signs and Banners All signage will comply with City code Signage will be kept to a minimum
Main stage signage with event logo and
sponsor logos
One 24" x 24" sign stand in center of venue
plaza
(m) Temporary Structures Staging 16' x 24' (will not occupy more than 1/3 of beach)
All tents and staging will be placed to ensure it
does not create unreasonable obstruction to
the view and natural setting.
(n) First Aid Provisions Provided as deemed necessary by Special Events Review Team
(o) Safety All power cords will be taped down
Maintain 20' corridor for emergency vehicles.
(p) Security Implement set schedule, emergency protocol, and communication plans
2 licensed and bonded security guards in the
beer garden area
1-2 additional volunteer security guards
patrolling the venue
(q) Waste Management & Environment Striving for a zero-waste event series Oii COURSE.

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Partner with South Tahoe Refuse Co.

Waste Management Directors & Coordinators
(i) Community Noise Impacts, Event Sound:

On Course Events will maintain the same sound management plan as the previous eight years.

The sound levels, music genres, and overall set-up will be maintained as there were zero noise complaints during the past eight seasons. In the event of a complaint, On Course Events will be responsive and immediately implement a new sound management plan which will include a decibel reading, prior to each event, at the property line during sound check. Any necessary adjustments will be made at that time, in order to abide by sound limits. (j) Sale or Handouts of Food, Beverages and Merchandise:

On Course Events has a current Business License issued by the City of South Lake Tahoe. All local vendors will be required to submit proof of a valid City of South Lake Tahoe Business License. All vendors will also be required to obtain and show proof of a Temporary Sellers Permit from the California State Board of Equalization noting the physical location of the event to be at 1001 Lakeview Ave, South Lake Tahoe, CA 96150. The Vendor Manager will also ensure all non-local vendors provide the City of South Lake Tahoe a $50 business tax fee.

All food concessionaires are subject to the approval of the on-site concessionaire and are also required to submit proof of a food handler safety certification for the El Dorado County Environmental Health Department. In addition, all cooking equipment will be required to have cleared inspection from the Fire Department. These vendors will also be required to provide proof of a valid City of South Lake Tahoe Business License, plus a Temporary Sellers Permit from the California State Board of Equalization noting the physical location of the event to be at 1001 Lakeview Ave, South Lake Tahoe, CA 96150.

On Course Events will submit a list of all event vendors to the Community Services Department at least 15 business days prior to each event of the series. Each vendor list submitted will include a detailed description of vendors with names, products, and permit information. Only event related products will be sold on site and On Course Events will ensure no product sales significantly compete with adjacent merchants.

All vendor permits will be clearly displayed to provide easy inspection by the City of South Lake Tahoe.
(k) Alcohol:

On Course Events will obtain the necessary permits from ABC prior to operating the beer garden and selling alcohol onsite. As indicated on the site plan (see Appendix A) the sale of alcohol will be restricted inside the perimeter of the beer garden, located on the east side of ON COURSE.

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the Lakeview Commons venue. On Course Events will provide the required licensed and bonded security personnel to maintain safety and strict compliance to all city codes and regulations. (I) Signs and Banners:

All signage and banners will comply with the City code governing signs and banners (Chapter 25-7 item O). In order to secure sponsorship dollars to provide the community with a free concert each week, On Course Events will need to hang banners on the main stage with event-related information (name of concert and title/presenting sponsors). As indicated in our site plan (see Appendix A) there will also be one 24" x 24" sign stand in the center of the plaza with event-related information along with directional and informational signage around the venue. Overall, signage will be kept to a minimum and will not create an unreasonable obstruction to the view and natural setting of the Lakeview Commons. (m) Temporary Structures:

As shown in Appendix A, all tents and staging areas will not be placed in a manner that creates an unreasonable obstruction to the panoramic view and natural setting of Lakeview Commons.

The 16' x 24' stage will not occupy more than 1/3 of the beach to ensure the public has plenty of beach access during the event. On Course Events will ensure that all tents meet the NFPA standards and are approved by the SLTFD. We plan to coordinate, if necessary, with the City's Building Official for any inspections of temporary structures to ensure compliance within the Lakeview Commons Event Application Guidelines.
(n) First Aid Provisions:

On Course Events will provide any necessary First Aid Provisions as deemed by the special events review team of the City of South Lake Tahoe.
(o) Safety:

Our site plan (see Appendix A) indicates all of the considerations for safety hazards during the Live at Lakeview events. Electrical cords along the staging area will be taped down, as will any power cords running throughout the venue. On Course Events will maintain a designated 20' corridor on Lakeview/Harrision Avenues to allow access for emergency vehicles at any time during the event. On Course will also ensure access to fire hydrants is unobstructed at all times during the event.
(p) Security:

On Course Events assumes the responsibility for the behavior of event participants and will have appropriate security in place at each event of the series. Our team will continue the implementation of a set schedule, emergency protocol, and communication plans to minimize any risks of security problems. On Course Events will continue working with the City Police, as needed, to develop the most efficient and appropriate security plan for the event series.

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With an expected attendance ranging from 500-1000 attendees at each event, where alcohol will be for sale, On Course Events will hire 1-2 licensed and bonded security personnel to patrol the beer garden area for each event of the series.

On Course will also provide an additional 1-2 volunteer security guards to patrol the venue. Our volunteers will remain committed to educating and informing the community of city ordinances; however, neither the licensed and bonded or volunteer security guards can enforce city ordinances outside the confinements of the beer garden. (q) Waste Management & Environment:

On Course Events strives to host a zero-waste event series and intends to provide multiple extra trash and recycling bins around the venue. We know that Lake Tahoe is the jewel of the Sierras and it must be protected. The On Course Team remains committed ensuring this event series has a very minimal impact, if any, on the event facility and its surrounding environment.

Weekly beach cleanups, initiated during the inaugural season in 2012, will continue be hosted again every Monday morning to keep the area clear of any litter and debris from these events as well as the full weekend of use at Lakeview Commons.

We plan to partner with the South Tahoe Refuse Company again to host various zero-waste stations with volunteers posted at each to direct and educate our guests. On Course Events will also encourage vendors to use recycled content products, compostable cups, and utensils and materials.

3. Site Plan and/Route Map
Please refer to appendix A for a complete layout of the site plan for the Live at Lakeview Summer Concert Series.

4. Rental Fees
On Course Events will be requesting sponsorship from the City of South Lake Tahoe to cover these rental fees.

5. Deposit Requirements
On Course Events will submit a deposit for $500 based on the expected attendance of 800-1000 guests.

6. Not-for-Profit Events
On Course Events offers a variety of fund raising opportunities for local non-profit organizations including the Bike Valet, Beer/Wine Garden and vendor booth spaces. Over the past three seasons, these events have helped to raise over $3000 for various non-profits that operated our bike valet. On Course Events also donates a portion of the Beer/Wine Garden proceeds benefit the South Tahoe BMX Association resulting in thousands of dollars in scholarships for local athletes.

ON COURSE.

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While fundraising is secondary to creating a sustainable event series, On Course Events prides itself in being the key summer fundraising opportunity for many of South Lake Tahoe's nonprofit organizations.

7. City Services
(a) Police:

On Course Events plans to continue working with the South Lake Tahoe Police Department to ensure event attendees remain compliant with City Ordinances.

In addition, On Course Events will be requesting a road closure on Lakeview Ave. for the safety of our attendees, staff, vendors, and entertainment. We will coordinate with the South Lake Tahoe Police Department to ensure closures are complete before the road is used for event set-up.
{b) Fire Department:

On Course Events will comply with any necessary requirements of the Fire Department and will remain responsive to any necessary site inspections, etc. (c) Street Occupancy:

Due to the high traffic of Lakeview Ave, and the high number of attendees entering the venue from that direction, On Course Events will be requesting road closures to ensure the safety of all attendees, staff, vendors, and entertainment. On Course Events will also be requesting barricades and signage to ensure street occupancy needs are met and that the safety of attendees and the general public is ensured. We are requesting sponsorship from the City of South Lake Tahoe to cover the staff costs associated with this service. (d) Equipment:

On Course Events is requesting sponsorship from the City of South Lake Tahoe in the form of traffic control equipment including cones, lane divider poles, and safety vests. (e) Access to Water or Power:

We will be utilizing the same power as the first three seasons, which includes power at the stage, at the bottom of the stairs for exit lighting and in the beer garden area as well.

8. Event Organizer Contact Information
Please refer to figure 3.3 below for the appropriate event organizer contact information.

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Primary Contact
Public/Media
Contact
On-Site Liaison
Additional
On-Site Liaison

9. Insurance
Rob Giustina
Leslie Schultz
Rob Giustina
CarolAnne
Giustina
( 530 )545-9482 [email protected]
(530)721-0333 [email protected]
(530)545-9482 [email protected]
{949)510-8632 [email protected]
On Course Events possesses the necessary insurance certifications and can provide proof of this documentation upon request.

10. General Conditions
On Course Events staff and volunteers will work hard to educate and inform all event attendees of the city ordinances and general conditions. However, neither the licensed and bonded or regular volunteer security staff can enforce city ordinances outside the confinements of the beer garden.

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City of South Lake Tahoe
Special Event Appllcauon
Page5
Please note that the City of South Lake Tahoe is subject to the provisions of the Freedom of Information and Protection of Privacy Act, and therefore, cannot guarantee that any information provided can be held in confidence.

On behalf of the applicant organization, I/we acknowledge that I/we have read and understood the conditions in the Special Event Application Guidelines and agree to comply with them.

I/we acknowledge that I/we have received a copy of, read and understood the City of South Lake Tahoe's Special Events Guidelines and agree to be bound by and comply with the terms and conditions.

By signing below, the event producer I applicant agrees to indemnify and save harmless the City in respect of any and all claims, demands, suits and costs arising out of any act or omission of the organizer or of any servant, agent or officer of the organizer arising out of or resulting from the use of the site/route by the organizer.

Signature: L.,u,k S�

ATTACHMENTS

1. Sound Management Plan

2. Schedule of performing artists

3. Site Plan / Route Map (see #4)

4. Production Schedule

5. Insurance certificates
Please return application form to:
�
�
�
�
�
DatJ Sentember 9. 2019
attached D not applicable
attached D not applicable
attached D not applicable
attached D not applicable
attached D not applicable
Copy of 2018 COi attached. 2019 will be subcnitted within 10 business dayg of first event City of South Lake Tahoe, Community Services Department Attention: Special Event Application
1180 Rufus Allen Blvd.

South Lake Tahoe, CA 96150 Phone (530)542-6058 Fax: (530)542-2981

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1. Sound Management Plan
On Course Events will maintain the same sound management plan as in prior years.

This event series will include amplified entertainment, music, and announcements each week.

The sound levels, music genres, and overall set-up will remain the same as there were zero noise complaints during the first three seasons of the event series. Our stage manager, lead producer, and sound technician will maintain sound levels to comply with City's noise regulations. This will be maintained through numerous decibel readings around the venue and the property line.

In the event of a community complaint, On Course Events staff is prepared to alter this sound management plan. Any necessary adjustments will be made at that time, in order to abide by sound limits.

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2. Schedule of Performing Artists - 2020
IDilm ffliffi1C!lM'afil
Thursday, June 18 4:30 - 8:30 pm
Thursday, June 25 4:30 - 8:30 pm
Thursday, July 2 4:30 - 8:30 pm
Thursday, July 9 4:30 - 8:30 pm
Thursday, July 16 4:30 - 8:30 pm
Thursday, July 23 4:30 - 8:30 pm
Thursday, July 30 4:30 - 8:30 pm
Thursday, August 6 4:30 - 8:30 pm
Thursday, August 13 4:30 - 8:30 pm
Thursday, August 20 4:30 - 8:30 pm
Thursday, August 27 4:30 - 8:30 pm
- -1rdl� � -
Funk TBD
Soul TBD
Rock & Roll TBD
Soul TBD
Bluegrass TBD
Reggae TBD
Americana TBD
Rock & Roll TBD
Funk TBD
Reggae TBD
Rock & Roll TBD
ON COURSE.

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3. Site Plan
Live at Lakeview Summer Music Series
Event Site Map
Lake r�1,ne
1·
-=_!-=
·�
· f i Engineering lt�,M'' Department
City of South Lake Tahoe - Lakeview Commons
Full Rental Version 1 with No Street Closure • Large Event> 500 Guests

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Legend
� BikcValot
!B) Beer Garden
Vendors
IO . 2" 500 Feet
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4. Production Schedule
...
......
7:00
:...

AM
�r:1•11
-
:..
3:00 PM
!Ir.1Tr
Event
111iO!mi:0
Setup
2:00 PM Road closure
2:00 - 4:00 PM Vendor Setup
3:00 - 4:00 PM Band Load-in &
Sound Check
4:30- 5:45 PM Event Starts:

Opening Act
Plays
5:45 - 6:00 PM Set change I
Announcements
6:00 - 8:30 PM Headlining Act
Plays
8:30 - 11:00 PM Strike Venue
9:00AM Final Strike
.. - ,.11 ...... ,,111
Lakeview
Commons (upper
and lower level)
Lakeview Ave from
Highway 50 to
Harrison Avenue
Lakeview Plaza
(upper level)
Boat Ramp and
Stage Area
Stage Area
Stage Area
Lakeview
Commons (upper
and lower level)
Lakeview
Commons (lower
level)

ONCOURSL
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�
(1) 1:15 min set
Beer garden
opens and
vendors are
selling items
2 sets with a 15
min break.

Finishing
touches and
final sweep of
the beach
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E. Event Financing Plan
The Live at Lakeview Summer Music Series has been successfully funded and executed, for the past eight years, through a strong blend of On Course Events infrastructure, ongoing event sponsorships, vendor booth sales, beer garden proceeds, and community donations of both cash and time. Upon approval of event permit and Signature Event Status, On Course Events will immediately continue to solicit sponsorships and renew ongoing partnerships. Businesses will be offered packages at Co-Title, Presenting, Associate, Supporting and Community Levels.

These businesses will supply capital and in-kind-trade in exchange for varying levels of exposure through the following outlets:
• Event entitlement of Series ("Co-Sponsor's" Live at Lakeview") Logo recognition on Stage Banner(s)
• Banner or flag locations at event site
• Logo inclusion in all print and promotional materials • Radio, TV and On-Site Announcer mentions
• Booth space for each weekly event for promotion or VIP • Social media recognition and highlights
In addition, On Course Events is seeking support from the South Lake Tahoe City Council and other city services to keep the Live at Lakeview Summer Concert Series as a financially viable option. Upon completing of the first eight seasons, we have developed and solidified an event budget to keep Live at Lakeview entertaining the community for the next five years and hopefully more in the future. On Course Events seeks to request the city waive the venue rental fees in exchange for providing this free concert series to the community and tourists of South Lake Tahoe as a Signature Event Series.

On Course Events also requests that the City of South Lake Tahoe continue as a recognized co-title sponsor of the Live at Lakeview Summer Concert Series, through a nominal support of $5000 support package per season. This equates to $454.55 per week for the 11-week concert series.

The City of South Lake Tahoe will be recognized as a sponsor through:
• Prominent logo inclusion as co-title sponsor in all print and promotional materials • Prominent logo recognition as co-title sponsor on Stage Banners • Prominent logo recognition as co-title sponsor through on-site vendor booth tents • Radio, TV and On Site Announcer mentions as co-title sponsor • Booth space as needed for City event promotions and community outreach • Social media recognition as co-title sponsor
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F. Financial Capability of Proposer
On Course Events is a financially viable company with significant infrastructure to effectively produce the Live at Lakeview Summer Concert Series. In the first eight seasons of the series, the On Course team has secured sponsorships to cover the hard costs of the event including staff, security, entertainment, production, insurance, sound engineering, marketing, and promotions.

Supplementary revenue will come from capital sponsorships, vendor booth sales, alcohol sales and community donations.

The entire community and various local businesses have continued to support Live at Lakeview and they are all eager to enjoy this concert series again for many seasons to come. Based upon the growing success of the first eight years of Live at Lakeview and the strong relationships On Course Events has built, the necessary sponsorships are in place to continue to run this series for many years to come.

In order to continue this growth trend and secure future additional sponsor support in a timely and professional manner, which is typically 6 months to a year in advance, On Course Events is seeking a five-year contract with the City of South Lake Tahoe. This multi-year contract will enable On Course Events to provide long-term value to the City and all event sponsors that are supporting this community-focused event.

ON COURSE.

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G. Local Business
On Course Events is based in the City of South Lake Tahoe with a current Business License in place.

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1028
Ratification of Amendment No. 1 to Concessionaire/Vendor Agreement with On Course Events (C-136-2019)
The Concessionaire /Vendor Agreement (C-136-2019) entered on November 5, 2019, between the City of South Lake Tahoe, a municipal corporation (“CITY”) and On Course Events, a Sole Proprietorship (“Concessionaire”) is hereby amended as set forth below.

3. Term. This Agreement is granted a renewal for two (2) additional (12) month periods, retroactive to November 4, 2022. The expiration date of the Agreement is November 5, 2024.

5. City Contribution. As consideration for the public benefit provided by offering this free weekly concert series, for each year during the remaining term of this Agreement, the City agrees to contribute funding in the amount of ten-thousand ($10,000). City also agrees to waive the fees for the annual Special Event Permit, provide access to City electricity and water at no cost, and provide event support from City staff at no cost, including support from the Police Department and Public Works Department at a level deemed appropriate by the City Manager, in his sole discretion.

IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to Agreement to be executed on March 14, 2023.

CITY OF SOUTH LAKE TAHOE CONCESSIONAIRE
By:__________________________ By:_____________________
Cristi Creegan, Mayor Rob Guistina, Owner
On Course Events
Business License #04798
APPROVED AS TO FORM: ATTEST:
___________________________ __________________________
Heather Stroud, City Attorney Susan Blankenship, City Clerk The presence of electronic signature certifies that the foregoing is a true and correct copy as approved by the South Lake Tahoe City Council.
1029
City of South Lake Tahoe
Agenda Item Executive Summary
Joe Irvin, City Manager
Meeting Date: March 14, 2023
Agenda Item #: 31
Agenda Item: City Council South Shore Transit Subcommittee Executive Summary: At their February 14, 2023, City Council meeting, Councilmember Bass requested the creation of a South Shore Transit Subcommittee be brought back for discussion (Wallace second). The City Council are asked to determine if a South Shore Transit Subcommittee is needed and if so, define the purpose and term of the Subcommittee.

Requested Action / Suggested Motions: The City Council are asked to determine if a South Shore Transit Subcommittee is needed and if so, define the purpose and term of the Subcommittee. If determined, Pass a Motion to establish an ad hoc South Shore Transit Subcommittee and appoint two council members to serve as part of the subcommittee for the defined purpose and term.

Responsible Staff Member: Susan Blankenship, City Clerk Responsible Staff Member: Susan Blankenship, City Clerk Reviewed and Approved By:

Heather Stroud, City Attorney
Attachments:
01-Staff Report - South Shore Transit Subcommittee.docx 1030
Council Agenda Report March 14, 2023 Page 1 of 1
City of South Lake Tahoe
Report to City Council
Meeting Date: March 14, 2023
Title: City Council South Shore Transit Subcommittee
Location: Citywide
Responsible Staff Member: Susan Blankenship, City Clerk (530) 542-6005 Background: At their February 14, 2023, City Council meeting, Councilmember Bass requested the creation of a South Shore Transit Subcommittee be brought back for discussion (Wallace second).

City Council Protocols, Section I., (8) Placement of Item on Future Agenda, states:
“Under Councilmember Reports, a Councilmember may request that an item be placed on a future agenda. Upon the support of one (1) additional Council Member, direction shall be given to the City Manager to calendar the item for a convenient future agenda, but no sooner than the second meeting after the request was made.”
City Council Protocols, Section VII., (2) Subcommittees, states:
“City Council subcommittees are formed on an as needed basis with a clearly defined purpose and term. Subcommittees will consist of two Councilmembers agreed upon by a consensus of the Council. Meetings of the Council subcommittees are not open to the public, unless specified by the Council.”
Issue and Discussion: The City Council are asked to determine if a South Shore Transit Subcommittee is needed and if so, define the purpose and term of the Subcommittee.

Financial Implications: Minimal amount of City staff time to provide administrative support to the Subcommittee.

Environmental Considerations: This is not a “project” subject to review under the California Environmental Quality Act (CEQA) under CEQA Guidelines section 15378(b)(2) (continuing administrative or maintenance activities, such as purchases for supplies) Policy Implications: The creation of City Council Subcommittees conforms to City Council Protocols.
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City of South Lake Tahoe
Agenda Item Executive Summary
Joe Irvin, City Manager
Meeting Date: March 14, 2023
Agenda Item #: 32
Agenda Item: Agenda Planning Calendar
Executive Summary: The Agenda Planning Calendar is a projection of items coming before City Counci, for consideration.

Requested Action / Suggested Motions: A Councilmember may request that an item be placed on a future agenda. Upon the support of one (1) additional Council Member, direction shall be given to the City Manager to calendar the item for a convenient future agenda, but no sooner than the second meeting after the request was made, and/or modify the Agenda Planning Calendar as desired.

Responsible Staff Member: Joseph Irvin, City Manager
Responsible Staff Member: Joseph Irvin, City Manager (530) 542-6043 Reviewed and Approved By:

Susan Blankenship, City Clerk
Attachments:

APC -03 09 2023.pdf
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2023 Agenda Planning Calendar (Updated 03 14 2023)
Agenda Item Agenda Section
March 28, 5:30 p.m. City Manager Electric Vehicle Charging Contract CM/CA Annexation Study NB
City Clerk Protocol Update & Mayor 9 month rotation discussion NB Dev Services General Plan Annual Report NB
City/LTCC Student Housing RUU Agreement
Arts and Crafts Fair Regulation Discussion
Finance 2022-2023 Master Fee Schedule Consent
Parks & Rec Amendment 1 to Bijou Bike Park Association Maintenance Agreement Consent Police 2022 Annual Report
Public Works Pioneer Trail Phase II Project Update and Funding Requst NB Javiation Amendment for Hanger Lane and Mainteance Building Repair April 4, 5:30 p.m. City Attny Authorization to Join National Opiod Settlement City Manager Comprehensive Energy Services Contract
Social Media Policy Update
Dev Services Solar APP + Software Grant NB
Department
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2023 Agenda Planning Calendar (Updated 03 14 2023)
Bijou/Al Tahoe (Midtown) Area Plan consultant PSA
Housing Funding Outreach Report
Finance Ski Run Business Improvement District Annual Assessment PH Public Works/CA Consider amendments to Purchasing Ordinance/Public Works Contracts NB Public Works Parking Restriction and Enforcement Code Modification NB Annual Report NB
Grant Acceptance from TRPA Regional Grant Program NB
Pavement Management Plan Update NB
Vision Zero Grant Acceptance
Fire Station 3 Remodel NB
CTC Prop 1 Grant Funding
School Zone Designation for Lake Tahoe Blvd NB
US 50 Safety Upgrade Project
Financing Options for Stormwater Management and Snow Operations May 2, 9 a.m. CA/CM Franchise Agreement with South Tahoe Refuse UB Dev Services Permit Tracking and Public Portal Software PSA Award 1034
2023 Agenda Planning Calendar (Updated 03 14 2023)
3900/3908 Lake Tahoe Blvd DDA
Finance City ACFR FYE 9/30/2022 Consent
Police AB 481 Ordinance Renewal Consent
SRO/LTUSD Contract 2023-2024 Consent
May 16, 5:30 p.m. Dev Services REACH Code options UB
EV Charging Station Ordinance
June 6, 9 a.m. Public Works Facility Condition Assessment Presentation NB June 20, 5:30 p.m.Dev Services TVAP Update

CC/STRSA
South Tahoe Refuse Report
PLHA Formula Grant Amendment
City/CTC land exchange agreement
TCAP Update
Finance Annual Special Tax for CFD 2001-1 Series 2015 FY 2023-2024 Consent Mello-Roos Special Tax for Community Facilities District No. 1995-1 Consent City Attorney Parking Garage License Agreement with Verizon Unscheduled/Pending
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2023 Agenda Planning Calendar (Updated 03 14 2023)
City Attny/PW Amendments to Small Cell Policy
City Clerk Records Management Policy (Updated)
Policy - Use of Personal Devices for City Business
City Manager SW Gas Prestentation Renewable Energy Goals Liberty Utilities Critical Resource Center MOU
Joint Council/TTD Board Mtg
Electric Municipality - Legal Feasability Analysis
Customer satisfaction survey(s)
SEED Solar Photovoltaic Project PPA
Dev Services TCAP Amendment – Montreal
Plan Area Statement Update for Tourist Accommodation Uses Plan Area Statement 111 amendment
Single Room Occupancy Program Amendments
Finance Software Purchase
Fire Weed abatement/nusance Program - Defensable Space Policy Type III Fire Engine Purchase
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2023 Agenda Planning Calendar (Updated 03 14 2023)
Parks & Rec Parks Foundation MOU
Tahoe Swim Team Use Agreement
Bijou Golf Course "Rock the Lake" Event and Review
Public Works Award Contract PD - Community Recource Center Renovations Broadband Master Plan Draft Recommendations
Bijou Creek Park Project Update
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South Lake Tahoe City CouncilMarch 14, 2023

South Lake Tahoe City Council
March 14, 2023