The League to Save Lake Tahoe says in the lawsuit that city council plans are illegal because they were not reviewed by the Tahoe Regional Planning Agency as required by a federal bi-state compact for Nevada and California.
South Lake Tahoe City Attorney Patrick Enright said Monday he had no immediate comment because he had not yet seen the lawsuit.
The suit filed recently in U.S. District Court in Sacramento, Calif., says the planning blueprint -- combined with intended road expansions -- will result in increased ozone emissions, airborne dust and erosion, which are three of the chief culprits blamed for the decline in the clarity of the alpine lake's waters over the past four decades.
The suit entered Friday says the plan would allow for construction of 1,000 new housing units in six-story buildings spread over 100 acres in the community on the California side of Tahoe's south shore, west of the casino district in Stateline, Nev.
"This is really about whether Lake Tahoe moves in the direction of much greater urbanization or whether it remains primarily a scenic and recreational resource," said Rochelle Nason, executive director of the nonprofit conservation group founded in 1957.
"It's about whether we are going to sacrifice long-term values for short-term needs," she told The Associated Press on Monday.
Tahoe Regional Planning Agency spokesman Jeff Cowen said Monday that while the agency reviews local plans it is not charged with approving them. He said South Lake Tahoe's general plan has embraced many of the same "sustainable planning concepts" TRPA is incorporating in the Lake Tahoe Regional Plan update scheduled to be completed by the end of 2012.
"Both the city's plan and the regional plan update are calling for substantial reductions in pavement, cleaner air through pedestrian-transit oriented development and many world-class environmental improvements through environmental redevelopment," he said.
The lawsuit says, however, that several parts of the city's general plan contradict existing regional standards. That includes height limits on proposed development to protect visual and scenic qualities in the Tahoe basin as well as carrying capacity standards aimed at limiting the total number vehicle miles traveled within the basin.
The general plan -- combined with other development in the basin -- would allow for miles traveled to increase by up to 9 percent, the lawsuit said. It said that in addition to increased vehicle traffic around the high-density housing units, the plan proposes increased airport use that will add to the noise, air and water pollution.
It asks the court to declare the city's general plan update in violation of the Tahoe Regional Planning Compact and grant an injunction blocking implementation of the plan.
"Lake Tahoe holds far more potential as a destination that boasts stunning natural resources and abundant low-impact outdoor recreation opportunities, rather than as a den of empty condos," Nason said.
The legal action comes at a time conservationists say the lake is under an assault on several fronts.
Critics of the regional planning agency's restrictions on development at the lake pushed legislation in the Nevada Legislature's special session this spring calling for the state's immediate withdrawal from the federal bi-state compact created in 1969 to regulate and protect the lake.
Under the amended bill lawmakers approved and Gov. Brian Sandoval signed earlier this month, Nevada would pull out of the Tahoe Regional Planning Agency in 2015 unless the governor agrees to extend the state's participation until 2017. After that, a new law would have to be passed for Nevada to rejoin the regulatory agency.
Nason said conflict over development on the lake's shores has "deep historical roots" going back nearly a century. But she said since a major revision of regional planning agency regulations in 1980, "the driving force behind planning at Lake Tahoe has been to achieve and maintain environmental standards and to protect scenic and recreational values."
"Today, both the Tahoe Regional Planning Agency and local governments are pressing for a change to a more urbanized vision for the area ... one that relies on much taller buildings and much more pavement of the watershed than has been contemplated before, at least since 1980," she told the AP.
"It's important for people to understand that the agreement that really united business, conservation, property rights and government interests up until the mid-2000s have broken down."