Some bad things have happened to a large chunk of downtown Kings Beach over the past decade — like being bought by the mastermind of a Silicon Valley Ponzi scheme who was nicknamed ‘Baby Face’ for his innocent looks. But since 2006, when Michael Schneider’s Ponzi scheme collapsed and much of downtown Kings Beach was sold off to developer Steven Brown in the resulting bankruptcy and fraud case, things had been looking promising.
A town center, where people could get out of their cars and congregate, was in the works by Brown. And the opportunity to erase the haphazard 1960s development pattern and remake the center of Kings Beach into a true town core was heralded by many local, county, and regional organizations.
Recently, however, all that promise looked like it could end in disappointment.
The bank notes on the 15 parcels spread over three acres of downtown Kings Beach had come due and developer SK Brown could not come up with the full amount owed to the bank. Extensions were denied. The developer, community, and county faced the very real possibility that the center of downtown Kings Beach, once headed for a cohesive, master-planned redevelopment, could be broken up, re-sold in pieces, and redeveloped in a disorderly fashion similar to the 1960s pattern you see in today’s downtown.
So, the Placer County Redevelopment Agency did something it has never done before. In an agreement with the bank and the developer, the redevelopment agency assumed the notes, essentially becoming the banker of much of downtown Kings Beach.
‘There were $7 million of notes suddenly due and BB LLC (a division of SK Brown Investments) was not in a position to pay them,’ said Jim LoBue, deputy director of the Placer County Redevelopment Agency. ‘The redevelopment agency did not want to see the property foreclosed on and sold piecemeal.’
The redevelopment agency negotiated a 40-percent reduction in the prices of the bank notes before purchasing them, said LoBue. And their position as the banker on the property gives the county more leverage in pushing for what they want to see in the parcel.
Already, the redevelopment agency is opening North Tahoe offices in the old Kentucky Fried Chicken building. And the project is the preferred location to build Placer County’s long-planned North Tahoe Government Center.
But the redevelopment agency and the county may become more involved in the project, said LoBue, leveraging their financial backing of the project to partner with the developer on features they would like to see.
LoBue said the project could begin hosting early public meetings on the design of the project as soon as this spring, which would lead into the drafting of the environmental impact report on the project. The release of a final environmental report is one of the last steps a project takes before going up for approval before Placer County’s Board of Supervisors and the Tahoe Regional Planning Agency.
Another future obstacle will not deter the redevelopment agency or the county, said LoBue. As California Gov. Jerry Brown’s plan to eliminate all local and county redevelopment agencies grows more likely, the prospect of the evaporation of the redevelopment agency was factored into the recent downtown Kings Beach deal. If the redevelopment agency is eliminated, the notes on the Kings Beach property will revert to Placer County, said LoBue.
‘So far, we went to our board a few weeks ago with an agreement, anticipating that this might happen with the state, that if the redevelopment agency goes away, we would transfer money to the county and the county would carry out these projects,’ said LoBue.
