Mar. 28, 2004 - TRUCKEE, Calif. -- This rugged railroad town that straddles Interstate 80 near the north shore of Lake Tahoe is Avon 15 years ago: a home for worker bees from nearby resorts, a fill-'er-up stop on the highway. 

That's all about to change. 

Vail-based East West Partners, creator of the town of Beaver Creek and developer of downtown Denver's expansive Riverfront Park, is poised to begin work on close to $3 billion in real estate projects in Truckee and at the base of the Northstar-at-Tahoe ski area 15 miles south. 

The project is likely the largest resort development project in the United States, and it will transform the once modest town into a resort gateway, like Avon, with golf, million-dollar homes and all the trimmings of a vacation getaway community. 

This is 20-year-old East West's largest undertaking, and the project eventually will include four high-end golf and skiing communities composed of 3,000 vacation homes linked by a private club that offers dining, golf at three Truckee-area courses, and skiing at Northstar. 

The project is to break ground next month. 

"We thought being able to take the expertise we've gained in Colorado and bring it out here would be a good idea," said Roger Lessman, who oversaw the early phases of Beaver Creek's development and is guiding East West's plans for land surrounding Truckee. 

East West continues to have a towering presence in Colorado. The company has three residential projects underway in Beaver Creek and Bachelor Gulch; the $1 billion, 2,500-home Riverfront project along the South Platte River in Denver; a 1,100-home community in Eagle; and a $50 million retail and residential complex in downtown Breckenridge. 

East West is a newbie in California, but the company's presence is already felt. 

"East West, oh yeah. They own Truckee now, you know," said John Fraser, a real estate broker and a longtime Truckee resident. "We are going to have to shut the door on development once these guys are done. We're plum out of room." 

In reality, East West owns 2,000 of Truckee's 20,000 acres. That 10 percent stake makes the development company the largest landowner in town. 

Truckee used to be not much more than a place people stopped for gas on their way to San Francisco or Lake Tahoe. Today, the town is enduring growing pains that many Colorado mountain communities wrestled with decades ago. 

The old hardware store is now a "cooking gallery." The gas station, a women's boutique. The local diner has morphed into a jazz bistro, where Paul McCartney -- yes, that Paul McCartney -- recently played an impromptu concert after having a quiet dinner with his wife. The gig included an off-the-cuff number, "Truckee Blues." Traffic clogs streets and workers flee down the eastern slope of the Sierras to Reno, Nev., in search of affordable homes. 

"We used to be the backwater of Tahoe, where the working class lived. No more," said Perry Norris, executive director of the Truckee Donner Land Trust, a preservation group that works to protect natural areas around Truckee. 

East West was invited into the Tahoe area by Vail entrepreneur George Gillett. Gillett's fledgling Booth Creek Ski Holdings paid $127 million in 1996 for the Northstar ski area and two other California ski hills, Sierra-at-Tahoe and Bear Mountain. 

Northstar was master-planned in late 1972 to include several villages of more than 3,700 homes. Only about 1,450 were built by the end of 1979, when construction stopped. 

That 1972 plan was "aesthetically unacceptable," said Booth Creek president Chris Ryman, a former Vail Associates executive, who managed operations at Vail and Beaver Creek. 

"They had things like 10-story buildings," Ryman said. "Development had not been contemplated in a real contiguous way." 

Gillett wanted development ideas for the 8,000-acre expanse of forest Booth Creek acquired from Fibreboard Corp., a Dallas logging company. 

Since Booth Creek owns the 2,400-acre Northstar ski area and does not lease land from the federal government as most every other resort in the country does, the opportunity to sculpt the next Beaver Creek was evident to East West founder Harry Frampton one day, as he stood atop the ski hill. 

East West's California plans were born that day. 

"It was like a lightbulb went off," said Frampton, who also is president of the Urban Land Institute, a 67-year-old national group of 18,000 land planners who advocate responsible development. 

East West is largely funded by Texas-based Crescent Real Estate Equities. 

When its 20-year development plan is complete, East West expects the components of the largest mountain club in the country to look like this: 

• The Village at Northstar: 100 units above 300,000 square feet of timber-and-stone shops and restaurants. The condos will be priced between $500,000 and $3.5 million; more units will follow the opening of the village in the fall of 2005. 

• Highlands at Northstar: hundreds of ski-in, ski-out homes built between the mid-mountain ski slopes at Northstar, with a 255-room high-end hotel. When East West wraps up its work at Northstar, 1,800 homes will have been added to the inventory of existing homes, making it the largest ski-resort community in the country. Resort owner Booth Creek retains ownership of the village and earns 8 percent of residential sales plus a portion of gross profits. 

• Gray's Crossing: a 750-unit community similar to East West's Eagle Ranch outside Eagle, Colo. A mixture of single-family homes, cottages, row houses, lofts and 225 affordable housing units surrounding a public golf course. 

• Old Greenwood: 100 homesites and a fractional-unit project with 154 units available in one-seventeenth shares. A Jack Nicklaus-designed golf course will be finished this June. 

"The idea is to give buyers a chance to play in the Tahoe area and not be overburdened with general tourist traffic," said East West's Lessman, who is based in Truckee. 

It's taken East West about four years to gain local approval for more than 3,000 new homes and three new golf courses around Truckee. Both Gray's Crossing and Old Greenwood were underway when East West bought them and pushed them back to local planners for strategic changes. 

The approvals required plenty of concessions and donations by East West that are designed to mitigate the projects' impact. 

In addition to environmentally sensitive development plans that use recycled and local construction materials, the company agreed to a half-percent transfer tax on all of its sales. That money will fund local conservation and environmental efforts. There is a similar tax levied at Eagle Ranch. 

"They've reduced the number of market-priced homes to make room for more employee housing. They've done a lot of community work. They've given money to a stream preservation project. They are integrated into the community. They've got a holistic approach to environmental design," said Tony Lashbrook, Truckee's community development director. 

"If your working assumption is that these properties are going to get developed, I think the majority opinion is that we would be hard-pressed to find a better company to come in and do that." 

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(c) 2004, The Denver Post. Distributed by Knight Ridder/Tribune Business News.