Tourism is a major part of the Lake Tahoe economy, especially throughout the Highway 50 corridor from Stateline to South Lake Tahoe. 20,000-30,000 cars travel on the road, daily, and officials say traffic has increased 15 percent in the last five years, as the economy rebounded.

Carl Hasty is the Tahoe Transportation District Manager. He says it is time for some upgrades to the area's infrastructure. "I don't think it takes a lot to look around and see how dated Tahoe's infrastructure is. We've gotten the use and the life out of this infrastructure."

There are five plans for the Highway 50 Project. One of them is to leave everything as it is. The proposed alternative is a 1.1 mile stretch of road that would realign the highway along Lake Parkway East behind MontBleu, Harrah's and the Village Shopping Center. The current highway would become a "Main Street" that would run directly into Pioneer Trail.

The proposed route would require the acquisition of 92 units, including five businesses. However, the project would make room for future mixed use development in the area of Highway 50 and Pioneer Trail.

"We've actually had those business owners come in and talk with us that want to be a part of the potential district that could be done," Russ Nygaard, Transportation Capital Program Manager for Tahoe Transportation District said.

A realignment project has been planned since 1980, but it hasn't gained much footing until now. Nygaard says this project includes all aspects, including traffic, safety, economic development, housing and environmental improvements.

"We're addressing not just transportation need but so  much more for the community," Nygaard said.

The Chateau at the Village opened last year, and work continues on Zalanta Resort at the Village.  Officials expect the Highway 50 Project could create more commercial space. The project would reduce the current highway to two lanes, creating more open space and commercial use. It would be the first downtown in the Tahoe Basin that is not a highway.

"It's gonna have a cycle track," Nygaard said. "I know we already have some of the businesses saying they want to create events, happening along that corridor with the cycle track and with pedestrians to try to draw people in, the ability to close that road and have a street fair."

The proposed highway would go through an area of houses and apartments in the area of Moss Rd. Some residents have described some of those houses as "scummy" and say that would clean up the neighborhood.

Marcia Deerfield's house would be inside the loop and unaffected by the project, but she is concerned for the renters who would be impacted. "I think it would put a lot of people out on the street and I'm not sure if we have enough low-income housing because this is a low-income area."

Hasty says the proposal would replace the housing within the project area. Residents would also be offered relocation assistance for up to four years.  Deerfield says revitalization is necessary as long as there is some balance, saying it would help the entire neighborhood.

"Bringing more people in and beautifying it and also allowing more events to occur," Deerfield said.

Hasty says having the new highway route would also eliminate traffic in adjacent neighborhoods, saying 5,000-8,000 cars travel through side streets in order to avoid the traffic on Highway 50.

"This is the first year that I have ever seen the California Highway Patrol actually issue bulletins, informing motorists to not cut through neighborhoods," Hasty said. "It's been a real problem."

An Environmental Impact Report is expected in late spring, and officials say the project will help Lake Tahoe's clarity.  Studies show that 70 percent of the pollutants that affect the lake, come from transportation systems and developed area run-off. Hasty says the project would allow them to treat the water before it reaches the lake.

The estimate for the realignment project is about $75 million and includes construction, utilities, acquisition and relocation. The earliest construction could begin is still two years away.