Most of Tahoe City's lakefront commercial space is in two buildings at the east end of downtown, and both are tied up. The Lighthouse Center lost its street-front anchor last October and has been empty since. Boatworks Mall skipped its foreclosure auction by filing for bankruptcy the day before. Meanwhile, a bookstore opened this summer in a space at the north end that had sat vacant for nearly 20 years. People want to shop in Tahoe City. Deeds, loans and leases are what keep these two buildings empty, and on September 30, 2026 Sacramento changed one of those rules.
Placer County Supervisor Cindy Gustafson, who represents North Tahoe, told Moonshine Ink this summer that "the majority of commercial square footage in our town is tied up in those two properties." That's why October matters on this side of town. Some businesses are closing for the season, and one is closing for good.
Two October closures, only one with a reopening date
Sunnyside Restaurant & Lodge closes October 5 and plans to reopen April 1, 2027. The Sierra Sun reported a $5 million, six-month renovation. It covers the lodge, kitchen and dining room, moves the bar, adds private dining space, and improves the marina and waterfront. T S Restaurants, which has run Sunnyside for 39 years under a lease, is stepping away. The ownership group is partnering with Mark Estee's Local Food Group, based in Reno. Estee once cooked at the Lone Eagle Grille and founded Moody's.
Estee says the fried zucchini will stay. The Hula Pie is trademarked by T S Restaurants, so it leaves with them, and Estee plans to create a new dessert to take its place. Local Food Group has offered to rehire Sunnyside staff. More than 100 people have signed up, and they're scheduled to return in March.
Jake's on the Lake, at 780 North Lake Blvd. inside Boatworks, has no reopening date. Managing partner Jeff Hill told the Sierra Sun in June that the plan was to stay open through the end of October, though the timing could change. In July, Hill told Moonshine Ink that after 48 years, Jake's would close in October unless new owners offered a deal too good to turn down. "Should a path illuminate, we would walk it, but I just don't see what that would be," he said. No public notice has given an exact last night yet, so call before you go.
Both are lakefront restaurants closing in the same month. Sunnyside's change is a handoff between a property owner and a new operator, with a budget and a date. Jake's is closing because its building has been in financial trouble.
Boatworks is still open while it reorganizes
Boatworks was set for a public foreclosure auction in Roseville on August 12 at 10:30 a.m. A day earlier, Boatworks at Tahoe LLC filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Eastern District of California. The notice of sale put the unpaid loan balance and other charges at more than $15.5 million.
Nobody bought the building. The filing pauses the foreclosure, and the current owner keeps control while it asks the court to approve a plan. Marie Murphy, CEO of MJD Capital Partners, said the mall and the Inn at Boatworks will stay open during the reorganization. She said the company still sees a mixed-use redevelopment, with hotel lodging, a spa, residential condominiums and independent commercial spaces, as "the best way to revitalize Boatworks."
Moonshine Ink's July reporting shows what that means inside the building:
| Boatworks detail | Status as reported, July 2026 |
|---|---|
| Occupancy | About half occupied |
| Businesses open daily | Eight, according to Tahoe Wine Collective owner Allison Yonto |
| Lease terms | Month-to-month for every tenant except Jake's |
| Recent departures | Geared for Games, Tahoe Core Pilates, Tahoe T-Shirtery |
| Announced departure | Acorn Home Furnishings & Design, planned for the end of August |
| Former anchor restaurant | Hacienda del Lago, closed 2021, space still empty |
Moonshine Ink reported that several tenants left because they expected the building to be torn down for the redevelopment. So the plan meant to revive the property also helped empty it before any work started. Yonto summed it up for the paper: "We're not going to magically start making more money until this building has some reason for people to come here." Mountain Lotus Yoga, Tahoe Fit and the Tahoe Wine Collective were all still in the building at that time.
The old Safeway building comes with a deed restriction
Next door, the Lighthouse Center has a different problem. Safeway moved to its new store at 100 W. River Road on October 16, 2025. That left the center without its only street-front business. A Santé Lakeside Fitness and Tahoe National Brewing Co. are still open in the back. CVS and the Tahoe City Post Office are in a separately owned building.
Tahoe City has had one grocery store since October 2023, when Save Mart lost its lease so Safeway could move into that site. The remodel took two years. When Safeway's old space came open, people hoped another grocer would take it. Moonshine Ink reported that the building is for sale with a non-compete clause. A local agent told the paper the seller wanted a deed restriction that would bar grocery use, and that offers of $10 million had been turned down against a $12 million asking price. Gustafson said grocers in the region who tried to buy the site told her the same thing.
On June 9, Gustafson wrote to Safeway's headquarters in Pleasanton:
"The continued vacancy of this highly visible property has become a significant community concern. Residents frequently describe the site as an eyesore and a missed opportunity at one of Tahoe City's most important commercial locations."
Todd Paradis, a Safeway real estate manager, replied on June 22 that the company was reviewing the concerns and would be in touch. Six weeks later, Moonshine Ink reported, the supervisor's office still had not heard back. We haven't found any later public report of a sale or a new tenant.
What the new grocery law changes
On July 22, Gustafson wrote in support of Assembly Bill 1857, the Grocery Store Access Act. The bill passed the Senate 39–0 on August 26 and the Assembly 76–0 the next day. Governor Newsom included it in the list of bills he signed on September 30, 2026.
The enrolled bill text works in two ways:
- Existing restrictions. A recorded or unrecorded covenant that blocks grocery use becomes void and unenforceable against an interested party if a grocery store once operated on the site and has closed, and if an approved restrictive covenant modification document has been recorded with the county.
- New restrictions. Starting January 1, 2027, no one may create or record a new covenant of that kind on a former grocery site, with some exceptions.
None of this happens on its own. Someone with an ownership interest has to file the modification document, and a grocer still has to want the building at a price that works. The law doesn't decide what goes into the Lighthouse Center. It takes away one restriction that, according to the supervisor and Moonshine Ink's reporting, has been keeping grocers out.
Long-empty spaces elsewhere in town have filled
Look at the rest of Tahoe City and the vacancies look more like a problem with these two buildings than a sign that demand has dried up.
The Understory, Annie Stefani's bookstore, opened June 30 at 945 N. Lake Blvd., in front of Urgent Care and the Trading Post Shopping Center. The partly underground space had been empty for close to 20 years.
Savoie opened July 1 at the west entrance on State Route 89. Chefs Mark and Alison Sullivan own and run it on the rebuilt site of the former Pfeifer House.
Press + Pour held its grand opening March 14 in the former Gravity Shop space. The cold-pressed juice and coffee cafe is at 475 North Lake Tahoe Blvd., Suite 111, in the Cobblestone Center, backed by Tahoe Tap Haus Group investors.
Add Safeway's move to West River Road, and much of the town's new daily traffic has headed west and north this year. The east end still has the most lakefront.
What to watch on the east end this winter
- Jake's final weeks. The plan is to stay open through the end of October, but no last night has been announced.
- The Boatworks reorganization plan. It has to go before the bankruptcy court. Whatever is approved will shape what happens to the month-to-month tenants still in the building.
- January 1, 2027. The ban on new grocery-blocking covenants takes effect that day. Any filing to void the existing restriction at the Lighthouse Center would be a public record with the Placer County recorder.
- March 2027. Sunnyside staff return ahead of the April 1 reopening, the only firm date in this story.
Questions about Tahoe City property often come down to what's happening a few doors away. If you own near the Boatworks or the Lighthouse Center, or you're thinking about buying there, Team Fondnazio can walk you through what these filings and deadlines could mean for that stretch of North Lake Blvd. Let's Connect.
