South Lake Tahoe sues Tahoe Air for unpaid rent, fees

One of South Lake Tahoe's ill-fated attempts at airline service could end up in court.

The city will file suit to obtain $67,000 in unpaid rent, passenger facility charges and miscellaneous fees from Tahoe Air.

Tahoe Air started commercial jet service at the Lake Tahoe Airport last summer. A few months later, it closed its operations and filed for bankruptcy, leaving a string of debts in its wake.

Because Tahoe Air is protected under bankruptcy laws, the council agreed to pursue legal action against TEM Enterprises, which supplied Tahoe Air with its jets, and Travelers Casualty Company of America, a Missouri bonding company that backed the startup service.

Travelers put up a $70,000 bond for Tahoe Air but won't allow the city to collect on its portion of the debt.

"I've written many letters and spoken to several people, and it has all been unsuccessful," City Attorney Catherine DiCamillo said.

Mayor Pro Tem Hal Cole said it was time to go after what the city is owed.

"We're demanding payment," he said. "The city doesn't usually file a lawsuit until enough doors are slammed in its face - I think we've gotten to that point."

Cole said he wants the City Council and staff to reassess its commitment to the airport.

"The airport has been bleeding money," he said. "And personally I think we've given it a number of years."

Other airport businesses also owe money to the city.

In a February council meeting, Airport Manager Rick Jenkins said that the Tail Spin Restaurant owed about $22,000. Another $38,000 was also owed by Oasis Aviation, a fueling and general aviation service, at that time. DiCamillo said the restaurant still owes, but Oasis Aviation has made considerable progress in its debts.

Allegiant Air, which also offered commercial jet service out of the airport last summer and abandoned its Lake Tahoe service just months after its first flight, has always paid its bills.

The lawsuit against Tahoe Air and the two affiliated businesses could be filed as early as next week in El Dorado Superior Court, DiCamillo said.