South Lake City Council decides to move to airport building

After reviewing its options Thursday, the South Lake Tahoe City Council decided to continue on its path to temporarily move from the government services center to the Lake Tahoe Airport

The council awarded the contract to DML Construction to renovate the aviation facility for $682,110. The company will do an assortment of jobs, from painting and laying carpet to electrical and cabinetry work. About 20 people were at the meeting to tour the airport grounds.

The council has leased the building that houses the council chambers and 21 planning and building staffers for a decade for $120,000 a year on Lake Tahoe Boulevard. It determined buying the building was not fiscally feasible. Staff will move into the Tata Lane city administrative building that the local government owns. When all is said and done by May, those 25 employees, including City Manager Dave Jinkens, are due to move out to the airport.

"We really looked at this as an investment," Mayor Hal Cole said of the airport move after the meeting.

With the work completed so far, the city has figured it would cost $400,000 to abandon the project. Bathrooms have been remodeled to be compliant with the Americans with Disabilities Act, asbestos removed, and carpet taken up. The council spent $70,000 on staff time and permits to start the job; of that, laborers cost $2,000. The total cost of the move is estimated to be $850,000.

Cole said the city studied with an open mind whether to buy the building. The rent was going up another $30,000. William Floyd, the property owner, put it up for sale for $1.6 million.

The whole point is to escape high rent until a multi-use facility proposed to be shared with the Lake Tahoe Unified School District and El Dorado County comes into fruition.

Commercial property on the average goes up in value of 2 to 3 percent.

"The city is not in the real estate speculation business," Cole said. "If (this) would've come up six months ago, we would have considered it."

City management said it explored every scenario.

"Investing in this piece of property on a speculative basis would not be fiscally responsible, and against state law," city Finance Director Christine Vuletich said.

The city's investments are currently earning 4 percent. They're invested in the state Treasurer's Local Agency Investment Fund and securities with high credit quality and liquidity, which enhances the local government's rate of liability.

"Purchasing the (government) services center for permanent office facilities is not a long-term solution," City Jinkens said.

The services center has filled to capacity anyway.