RockResorts to Operate South Lake Tahoe's "Project 3" Redevelopment

Business Wire, May 10, 2007

The Chateau at Heavenly Village to Feature Two Luxury Condo-Hotels, Convention Center, Spa, Retail

SOUTH LAKE TAHOE, Calif. -- South Lake Tahoe's emergence as a world-class destination with the amenities to complement its spectacular natural setting is reaching another benchmark with the commencement of The Chateau at Heavenly Village (formerly known as "Project 3"), on the California/Nevada border along U.S. Highway 50.

RockResorts International, LLC, a luxury hotel company owned by Vail Resorts, Inc., will operate the $420 million redevelopment project that will feature two luxury condominium-hotels with 477 rooms, a 50,000-square-foot convention center with an additional 21,000 square-foot pre-function area, complete destination spa, 1.5-acre park, and a collection of shops and restaurants.

The Chateau boasts a prime location for year round activities: it's within 50 yards of the Heavenly Village and gondola access to the ski resort as well as Harveys and Harrah's Hotel Casinos, and is just a quarter-mile walk to a private Lake Tahoe beach. A pedestrian overpass across Highway 50 will connect The Chateau with the gondola at Heavenly Village reinforcing the area's philosophy for a central gathering place with convenient pedestrian access and minimal driving.

"Our vision for The Chateau is to create a level of lodging, real estate and hospitality that far surpasses the expectations of the most sophisticated visitor," said Randy Lane of Lake Tahoe Development Co, LLC, the project's developer. "This property will enhance the area economically, environmentally and visually and will reinforce Lake Tahoe as a destination of choice for visitors."

The Chateau, which continues South Lake Tahoe's redevelopment efforts started in 1991, is estimated to cost $420 million. Other financial benefits for the area include an estimated $2.8 million in transient occupancy tax, more than 500 additional jobs, approximately $4 million for area school districts and government agencies, $24 million for affordable housing, consistent shoulder season revenue through meetings and conventions estimated to attract 180,000 visitors, $23 million in room revenue and $56 million in annual discretionary spending.

The centerpiece lodging property will be a six-story RockResorts condominium-hotel, the first, major full-ownership, full-service real estate offering at South Lake Tahoe. RockResorts International, LLC, a luxury hotel company headquartered in Broomfield, Colorado, is a wholly-owned subsidiary of Vail Resorts, Inc. (NYSE:MTN).

The multi-purpose facility will also accommodate concerts, large convention groups and various exhibits. The convention center will be the area's largest with plans to co-op with the Nevada hotel/casinos for expanded meeting groups and events. It will accommodate up to 1,600 for conference or banquet assembly and 4,400 for an event or concert. Also planned are a 16,000 square-foot, two-story spa with 15 treatment rooms and an outdoor swimming pool. A collection of shops, boutiques and restaurants will present a variety of shopping and dining options with convenient underground parking for 717 vehicles.

A 1.5 acre park and plaza will be a unique and significant change to the current area with its outdoor seating, fire pits, waterfall and pond set among a network of pedestrian paths with access to a semi-private beach on the shores of Lake Tahoe. The park will also serve as the gathering place for anyone attending outdoor events such as event receptions, art displays, and food and wine festivals. In addition, a landscaped sidewalk, with street furniture, lighting and art exhibits will blend with the style and design of Heavenly Village to create a cohesive resort feel.

While the 11.53-acre South Lake Tahoe development will reflect the renowned RockResorts quality, it will have its own signature Tahoe style. Recognizing that this redevelopment -- constructed to be LEED Certified, should be visually cohesive and environmentally sensitive, developers are continuing the exterior alpine motif of Heavenly Village (most recent redevelopment phase). The project's exterior materials of native wood and stone in earth tones, along with decorative glass and stucco work, are designed to tastefully blend with Tahoe's natural beauty and integrate with the existing mountain-style architecture prevalent throughout the redevelopment area.

The involvement of Vail Resorts, owner of RockResorts, furthers the area's mandate toward environmental stewardship and complementary long-range community cooperation. The master plan for Heavenly Mountain Resort, also owned by Vail Resorts, was recently approved by the Tahoe Regional Planning Agency and hailed by conservation groups for its environmental sensitivity.

"Vail Resort's participation is a natural," said Lane. "With Heavenly Resort gondola in close proximity to The Chateau, and their business knowledge and involvement in the community, it's just a great match for South Lake Tahoe as we move forward."