The new Ritz-Carlton Highlands, Lake Tahoe has gone into default, the latest hit the Lake Tahoe economy has taken due to the dramatic drop in resort real estate values.
“Ultimately, the financial position of [the developer] does not impact our operations," said Steven Holt, director of public relations for the hotel. “We had an amazingly successful winter season ahead of all projections. We are currently closed for three weeks of preventative maintenance.”
Holt said the maintenance includes steam cleaning carpets, hardwood floor cleaning and detailing, and making the transition from a winter to a summer resort. He said the hotel will reopen May 10.
The default notice is the first step toward possible foreclosure. It was filed against the hotel March 31, about a month after the developer than runs the hotel, East West Resort Development, put nearly $1 billion worth of real estate clustered around the Northstar-at-Tahoe ski resort into bankruptcy reorganization. The default notice gives the borrower time to pay any debt and keep the property.
The hotel is behind on $18.7 million in loan payments totaling $157 million, according to a default notice filed in Placer County by Bank of America. The developer has said it ran into problems as the recession brought down values of luxury real estate in Lake Tahoe.
