June 22, 2025
RE: 39° North Incentive Request – TAU Allocation & NTEDIP Compliance
Dear Chair Gore and Members of the Board,
We write on behalf of Strong North Tahoe, a community-led platform advocating for responsible growth, transparency, and meaningful public return on public resources. As you prepare to consider renewed incentive requests for the 39° North project in Kings Beach, we urge the Board to pause any decision on Tourist Accommodation Units (TAUs) or taxpayer-backed subsidies until core public safeguards are in place—including environmental review, fiscal transparency, and enforceable community benefits. Once approved, these decisions are difficult to reverse, and the public’s leverage is lost.
The 39° North proposal represents one of the most consequential land use decisions in recent North Lake Tahoe history. It involves:
- A revised TAU request of 106 units (down from the 146 previously sought and rejected by the Board in January 2024)
- A $1.55 million forgivable public loan, repayable through future TOT revenue beginning no earlier than December 31, 2028
- Up to $30.9 million in Transient Occupancy Tax (TOT) rebates over 20 years
These are not routine development approvals. They are extraordinary public investments on taxpayer-owned land and must be measured against the full standards of the North Tahoe Economic Development Incentive Program (NTEDIP)—not fast-tracked based on momentum or speculative benefit.
The 39° North site is public land, assembled and stewarded by taxpayers for the long-term benefit of Kings Beach and North Tahoe. Any decision to subsidize private development on this land must be held to the highest standard—not just for what gets built, but for what the community gets back. Public land has been under contract since 2018 with no community-serving use delivered—tying up a rare, central parcel with no guaranteed return, nor forecasted return on the taxpayer investment. This project is no longer a mixed-use community anchor—it’s a separate hotel complex with ground floor residential and a separate housing complex. Due to the separation and lack of integration of uses the project does not meet a definition of mixed-use.
📋 Where the Project Falls Short
NTEDIP standards and expectations are drawn from Placer County Board-approved program goals and supporting staff reports (e.g. January 23, 2024 – Item 13A; June 24, 2025 – Item 13A).
NTEDIP was created to ensure public tools like TAUs, TOT rebates, and loans are used strategically, equitably, and with verified community benefit. As of June 2025, the 39° North project still does not meet key NTEDIP criteria:
| NTEDIP Standard | Intended Safeguard | 39° North Status |
| CEQA Review Complete | Ensure environmental protections before approval | ❌ Not initiated |
| Community Engagement | Inclusive, ongoing dialogue with residents | ❌ Limited to two meetings; no engagement plan |
| Project Readiness | Clear site control, funding, and timelines | ❌ Escrow has been open since 2018; no pro-forma, public-facing evidence of financing, construction plan, or financial guarantees |
| Development Agreement | Defined, enforceable public benefits | ❌ None in place |
| Public Land Use | Maximize long-term value from taxpayer land | ❌ Short-term lodging prioritized over civic use and small business |
While the developer has reduced its TAU request and revised the design to meet Tahoe Basin Area Plan (TBAP) guidelines, the core issues remain unchanged:
- ❌ No CEQA review has been initiated
- ❌ No community benefit agreement has been presented or signed
- ❌ No verified financing or project timeline has been disclosed
- ❌ No transparency on how tens of millions in public funds would be used, repaid, or deliver return to the public
- ❌ TAU and TOT terms are being proposed ahead of any public-facing CEQA or financial disclosure
- ❌ Entering into a multi-year Option Agreement reserves scarce TAUs and locks in financial terms before the public has reviewed or approved the final project, reducing public leverage and the ability to protect public funds.
- ❌ No public analysis of fire evacuation, traffic congestion, or infrastructure capacity has been provided—despite legal precedent that projects must fully mitigate impacts to evacuation safety and emergency access before approval (e.g. Bonta v. County of Lake, 2023), issues that CEQA is designed to evaluate before approvals are granted
- ❌ The developer has not closed escrow, and the County retains full control of the land—demonstrating that no irreversible action is necessary before proper review
- ❌ Workforce housing remains physically separated from the hotel and retail core, counter to the Town Center Plan’s goals for walkable, integrated mixed-use
In fact, the County’s own 2020 BAE report warned that outdated infrastructure—particularly water and sewer—adds substantial and often unpredictable costs that can derail project feasibility and environmental sustainability. Yet no public-facing analysis of these systems or upgrade plans has been included for review.
🗾️ Upholding the Program the County Created
NTEDIP isn’t just a framework—it’s a promise Placer County made to its communities. The program was created in response to a clear market failure: projects in the Tahoe Basin were stalling due to excessive cost and risk. As noted in the 2020 Bay Area Economics report, substantial incentives were necessary—but only for proposals that were ready, aligned with long-standing public priorities, and able to deliver real environmental and economic benefit. Readiness was never optional; it was the foundation that justified public support.
NTEDIP was designed to ensure that public tools like TAUs, TOT revenue, and land are used strategically and transparently. Its purpose is to unlock catalyst projects that support mixed-use town centers, local economic diversification, and environmental resilience—not to back early-stage lodging concepts on public land. The program is only as strong as its consistent application.
The 39° North proposal does not yet meet these standards. Proceeding now would undermine the County’s ability to apply NTEDIP with integrity. If one of the first recipients is allowed to move forward without CEQA, enforceable community benefit, or verified financing, future applicants will reasonably expect the same treatment—weakening the County’s ability to require accountability in later cases.
Approving an Option Agreement that reserves TAUs and defines TOT terms before the project meets NTEDIP readiness standards creates a dangerous workaround that undermines the purpose of the program itself.
Furthermore, under CEQA precedent (Save Tara v. City of West Hollywood, 2008), jurisdictions cannot take actions that limit their discretion or signal a commitment to a project before completing full environmental review. The California Supreme Court made clear that even conditional agreements—like an option or subsidy—can constitute unlawful “pre-commitment” if they restrict future decision-making. The County risks legal and procedural exposure if it proceeds without full CEQA analysis and public transparency.
Even if TRPA concludes that a full Environmental Impact Statement (EIS) is not required under their process, Placer County must still comply independently with CEQA. If the County is proceeding with a lesser environmental document, the public must be provided with the technical reports and a clear process for input prior to any agreement that commits public resources or development rights..
🛌 Precedent Matters
Approving long-term incentives without environmental review or enforceable public benefits—especially on public land—may also invite scrutiny from oversight agencies such as the California Attorney General’s Office, which has increasingly investigated local incentive programs that lack transparency or deliver limited public return.
If 39° North becomes the one of the first recipients, it must be a model project: CEQA-compliant, fiscally transparent, community-aligned, and shovel-ready. Doing so risks redefining NTEDIP as a tool for speculative early-stage projects, rather than a performance-based program tied to verified outcomes.
By contrast, the Evo Hotel application reflects the original intent of NTEDIP: it completed CEQA, required no public land, included a recorded Operations Covenant to secure community benefit, and applied only after delivering measurable outcomes.
This is the type of model project NTEDIP was designed to support—unlike the current 39° North proposal, which not only lacks CEQA compliance and enforceable benefit, but also departs significantly from the community-serving vision laid out in the 2018 Purchase and Sale Agreement. That agreement outlined a vision for the Kings Beach Center site that included 15,000 square feet of retail and 2,000 square feet of civic use—reflecting a mixed-use approach aimed at year-round community vitality.
Those elements have since disappeared. The current proposal offers only 2,300 square feet of leasable retail, with the rest of the commercial space dedicated to a hotel restaurant and café—uses primarily serving hotel visitors. Civic space has been eliminated entirely. Yet the public land remains discounted, valued according to those 2018 PA expectations despite the significant shift away from the original balance of public and private benefit. The current proposal no longer justifies that valuation.
⛔️ Public Resources Require Public Return
While Kinsbarn’s NTEDIP application claims alignment with the Tahoe Basin Area Plan and references workforce housing benefits, these representations are incomplete. The proposed workforce housing units are not located on the TAU-incentivized site, nor are they secured through any binding development agreement tied to this proposal. Additionally, the project’s loss of civic space and drastic reduction in commercial frontage directly contradict the Town Center goals the Area Plan was designed to advance.
Public subsidies are not entitlements. They are meant to unlock community-serving growth, not underwrite private ventures without clear accountability.
The proposed TOT rebate of up to $30.9 million over 20 years would redirect 80% of new tax revenue from hotel stays to a single private developer. Without a public fiscal analysis, it’s unclear how this would impact regional funding for snow removal, transit, housing, or emergency services.
The project also lacks:
- A full project pro forma or cost breakdown (This must include all Taxpayer Costs)
- Transparent terms outlining how the forgivable loan would be administered and monitored
- Any public plan for tracking job creation, wage levels, or benefit to local workers
- A leasing or retail strategy to ensure small businesses and local-serving uses are prioritized on public land
Despite repeated assurances that CEQA would begin before major decisions, the County has not submitted a Notice or Preparation, provided a project description for public review, or published a timeline for environmental review milestones. While the developer is granted an option to secure TAUs and major public subsidies, the County has not yet secured any enforceable public return. There is no binding development agreement, no community benefit agreement, no site control confirmation, and no guarantee that the project will deliver promised outcomes. The Option Agreement locks in public incentives based on future conditions, while only requiring limited, conditional commitments from the developer—placing public leverage at risk with no guaranteed benefit in hand. While this is couched as a further assurance to the developer this is actually an end run around community transparency and engagement.
This approach contrasts sharply with the intent of NTEDIP, which was designed to tie public subsidies to verified outcomes—not speculative proposals. Subsidizing a project before it secures financing, completes CEQA, or signs a development agreement runs counter to the very accountability NTEDIP was created to ensure.
In January 2024, the Board declined a similar request due to lack of CEQA progress, absence of a development agreement, and concerns over public benefit. Since then, no material change has occurred in these areas—only in the TAU request and design aesthetics.
✅ Our Request to the Board
We respectfully ask the Board to uphold the integrity of NTEDIP by taking the following actions:
- Delay de facto approval by the reservation of TAUs and public subsidies until CEQA is complete, a binding Development Agreement is in place, and meaningful community engagement has occurred
- Disclose the financial terms, project assumptions, and projected public return on investment before any commitments are made
- Circulate the technical studies so that the BOS and public can be equally informed.
- Apply NTEDIP criteria consistently, ensuring that public resources are allocated based on readiness and measurable community benefit—not speculative potential
This is not a call to halt revitalization. It is a call for due diligence, transparency, and responsible stewardship of limited public resources.
The Kings Beach community has waited since the 2018 purchase agreement to see a proposal that aligns with community priorities. Let’s not compromise now. Tahoe deserves thoughtful, accountable decisions that prioritize long-term public value over short-term pressure.
Let’s set a precedent that reflects the values of North Lake Tahoe—one that protects the public interest, honors a transparent process, and ensures this once-in-a-generation site delivers lasting benefit to the people it’s meant to serve: the year-round communities who have long waited for thoughtful, inclusive, and enduring investment in their future.
Sincerely,
Strong North Tahoe Leadership Team
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