The City That Wants to Be San Francisco’s Playground

Chris McNamara is selling South Lake Tahoe as an outdoor mecca for Silicon Valley. All he has to do is build it—and that’s more difficult than it sounds.

Chris McNamara, an experienced rock climber and BASE jumper, was dangling from a cliff near the city of South Lake Tahoe in March 2016 when he had a vision: “It was snowy and super beautiful, and I realized this place ought to be a world capital of outdoor recreation—San Francisco’s cool, alternative mountain city, like what Boulder is for Denver,” he says. “We’ve got skiing and mountain biking. There’s sailing and stand-up paddling. I’m trying to get other entrepreneurs to realize they can do what I did, trade in their commute for a better lifestyle and still pop down to San Francisco for meetings.”

Photograph illustration by Simon Abranowicz; Photos: Molly Matalon for Bloomberg Businessweek

South Lake Tahoe sits at 6,000 feet above sea level in the Sierra Nevada mountains on the California-Nevada line. It has 21,000 year-round residents, spectacular nature—and a long way to go in the charm department. Tawdry casinos, strip malls, and run-down motels dominate the landscape. Still, it’s just three hours from the Bay Area; gondolas to the immense Heavenly Ski Resort depart from downtown; and the average home price is $390,000, compared with $1.16 million in San Francisco. McNamara’s vision shouldn’t be that far-fetched: Of all the areas along the lake, South Lake Tahoe has the best combination of affordability and convenience to skiing and beaches. “My inspiration comes from what Tony Hsieh did,” he says, referring to the Zappos chief executive officer’s $350 million attempt at revitalizing downtown Las Vegas.

McNamara, 38, moved to the area in 2004 and co-founded OGL Services, which tests and reviews outdoor gear. Others have followed more recently: In 2015, David and Jamie Orr, formerly of Silicon Valley, bought and remodeled the old South Lake newspaper building to create Tahoe Mountain Lab, an 11,000-square-foot co-working space. “We’re 100 percent occupied, with over 50 businesses represented,” says David, who used to work in sales for Valley startups. He says more than 20 percent of his tenants have moved to South Lake Tahoe in the last three months from the Bay Area, Sacramento, and Colorado.

McNamara recruited friend Corey Rich, an outdoor photographer, to invest in a 2,500-square-foot headquarters for Rich’s video production company, Novus Select, in June 2016. Rich has 12 full-time employees serving an international client roster that includes Google, Facebook, and Subaru. “We fly out of Reno once a week” for international appointments, he says. “Clients love coming out for meetings, too. It’s not a hard sell.”

McNamara
Photographer: Molly Matalon for Bloomberg Businessweek

Across the street from Rich’s business, McNamara rents a 3,000-square-foot commercial space at $1-per-square foot—San Francisco’s average is $70—for his own companies. He also bought three empty lots for mixed commercial-residential development to increase density and lure restaurants. (The Lake House opened last October, and three breweries are in the works, though none is on his property.) McNamara spends weekends building bike trails and hanging off cliffs with a power drill, installing safety hardware to create a family-friendly rock-climbing area. The local chamber of commerce is putting in sidewalks and bike lanes.

Still, South Lake Tahoe has as many problems as there are types of snowflakes. The city barely existed before the 1960 Winter Olympics at Squaw Valley, and then it developed so quickly that horrified locals enacted zero-growth regulatory policies. These are under review. But right now, the only way you can build a hotel is if you tear down an old one of comparable size; the closest thing to a pro-development incentive in South Lake Tahoe is that if the hotel you tear down is in an “environmentally sensitive” area, and you return that property to a state of nature—and then you buy a separate property closer to downtown—your downtown hotel can have three times as many rooms as the one demolished. Wholesale urban renewal could obviously take a while.

Rich, for one, thinks it’ll be worth the wait. “There’s a lot of people living in the Bay Area making big money but, given the cost of living, are essentially lower middle class,” he says. “I just pulled into the parking lot of my own office building, and I can see my employees inside with big grins because we just got 12 inches of fresh snow. Everybody’s going to knock off early to ski powder all afternoon.”

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