The luxury industry as a whole maybe on the ascent again, but there appears to be no respite for the tourism industry of northern California. The most recent victim of this struggling economy is the Ritz-Carlton at Lake Tahoe. The high-end hotel project recently went into foreclosure, signaling even more bad news for real estate in Tahoe.
The Ritz-Carlton that occupied the base of Northstar-at-Tahoe was developed by a local company East West Partners. The luxury hotel enjoyed a grand opening in 2009. But that was a terrible time to begin a business. The recession was already in full swing, and the Lake Tahoe Ritz would soon feel the effects.
By March 2010, East West Partners (the owners of the luxury hotel at the time) defaulted on a $157 million loan. In May 2010, Bank of America took over ownership. By end-June, the luxury hotel was auctioned off.
The luxury hotel will continue to bear the Ritz-Carlton tag for the period of duration of the management contract. The hotel currently has about 300 employees on its staff. The East West problem has pushed an area worth $900 million in Northstar-at-Tahoe to the brink of bankruptcy. But it is not the only black spot on the region. Another project, The Chateau at Heavenly Village has been stalled for almost four years now.
Prior to this fiasco, East West had developed various other projects including Eagle Ranch, Avon’s Westin Riverfront Resort and the Manor Vail penthouses. The company is currently associated with projects in Vail, Beaver Creek, Summit County, Denver, Lake Tahoe and Deer Valley (Utah).
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