Business & Real Estate

Tahoe ski resort Homewood reopens after fire, moves ahead with redevelopment

Fire engulfs Homewood Mountain Resort's South Lodge

Firefighters battled an early morning blaze that burned through a Lake Tahoe ski resort early Wednesday. The fire started at 3:02 a.m. at the Homewood Mountain Resort’s South Lodge.
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Firefighters battled an early morning blaze that burned through a Lake Tahoe ski resort early Wednesday. The fire started at 3:02 a.m. at the Homewood Mountain Resort’s South Lodge.

Lake Tahoe’s tourism industry, after years of stagnation, is being reinvented with hundreds of millions of dollars worth of new hotels, luxury townhomes and more. The fire that temporarily closed Homewood Mountain Resort – site of one of the biggest redevelopment projects planned anywhere in the Tahoe basin – won’t stop that.

As Homewood reopened for business Thursday, its owner reaffirmed that a massive facelift will break ground as scheduled in spring or summer 2017.

“The fire, while unfortunate, won’t really set that back,” said Todd Chapman of JMA Ventures, the San Francisco real estate developer that bought Homewood in 2007. “The timing is right.”

JMA expects to spend upwards of $400 million redeveloping the 54-year-old west shore resort, adding a hotel, more than 300 condominiums and an ice rink. It’s one of several big projects aimed at transforming Tahoe from a weekend or day-trip getaway for Sacramentans and Bay Area residents into a high-end resort area that can attract tourists from around the country and overseas.

The idea is to put Tahoe on par with high-end mountain resorts like Aspen, Colo., or Park City, Utah, where visitors fly in and stay for a week or longer.

“You look at the resorts in Colorado, Utah – they continue to upgrade their facilities and ensure they have world-class resorts, and that is what our resorts are trying to do as well,” said Mike Reitzell, president of the California Ski Industry Association.

Tahoe tourism has been hammered by Indian casinos in Northern California and, more recently, the scarcity of snow because of the drought. Tourism bounced back nicely last winter with the first decent ski season in years; overnight stays at the south shore jumped by 20 percent, according to the Lake Tahoe Visitors Authority.

But Tahoe still faces long-term challenges. Last year, the south shore drew just 1.28 million overnight visitors, a far cry from the 1.66 million who came in 2002, just as the California tribal casinos were beginning to make their presence known.

As a result, ski-resort operators and hotel owners are putting a new face on Tahoe. With climate change in mind, resorts are investing in zip lines, mountain-bike trails and other summer recreation facilities to reduce their dependence on skiing and snowboarding.

Older hotels and motels are giving way to upscale lodges. The south shore’s aging Horizon Casino reopened in 2015 as the Hard Rock Hotel & Casino following a $60 million facelift. Nearby, the old 968 Park and Park Tahoe hotels have been merged and reinvented as the boutique Hotel Becket, operated by the Joie de Vivre chain. Edgewood Tahoe, the area’s most prominent golf course, is building a $100 million hotel that’s expected to open in June.

On the slopes themselves, much of Tahoe’s new look is being financed from out of state.

Squaw Valley was purchased by Denver investment firm KSL Capital Partners in 2010; KSL took over neighboring Alpine Meadows a year later. Another Colorado company, Vail Resorts Inc., owns Heavenly and Kirkwood Mountain and spent $60 million in 2010 to buy a long-term lease to operate Northstar-at-Tahoe.

The out-of-state investors have poured millions into upgrading ski lifts, snow-making equipment and more. Squaw Valley recently won approval from Placer County to build a new hotel, hundreds of condos and additional commercial space.

Change at Tahoe doesn’t always come easily. On the south shore, a six-block stretch of old hotels and motels was torn down near Heavenly a decade ago to make room for a $400 million hotel and conference center. The project then stalled for years, earning the nickname “the hole in the ground,” and is only now starting to emerge in scaled-down form. A small retail center was built two years ago, and another retail complex crowned by 30 condos is under construction.

On the north shore, the fabled Cal Neva has been closed since 2013 and its owner, a developer from Napa, put the resort into Chapter 11 bankruptcy after his efforts at renovation ran short of funds. The Cal Neva was once owned by Frank Sinatra.

Environmental restrictions can also be a roadblock. Planning for the Homewood project was stopped by a federal judge in Sacramento in early 2013 after two environmental groups, Sierra Club and Friends of the West Shore, filed suit. The judge ruled that the planned project violated California’s environmental laws because developers failed to consider whether a less ambitious renovation would make sense.

The case was settled in early 2014 after JMA Ventures agreed to put a portion of the land off-limits to development and reduce the number of new residential units by 13, for a total of 325.

Wednesday’s fire devastated Homewood’s South Lodge and forced the resort to close for the day.

Chapman said the first phase of the redevelopment will steer clear of the area around the South Lodge. It will be located at the north end of the resort and will include a hotel with 100 or more rooms and a portion of the condos.

Dale Kasler: 916-321-1066, @dakasler

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