My plan is to convert the upper half into four 2BR rental units, rent them furnished/utilities/internet included to students on a 9month lease, then airbnb them to tourists & faculty in Jun, Jul & Aug. 

Then some tourist kid has the gall to be site-seeing while you get your 20 minute break from your 14 hr days.

I will recommend building one where there is either a tourist attraction or putting enough amenities/things to do at the campground where people wouldn't have to leave in order to have fun. 

I'm personally doing airbnb's because of the boom of tourists coming after the hurricane.

I manage short-term (Airbnb/vrbo) and corporate rentals in Colorado Springs and interestingly am active on a lot of travel nurse found too--thinking they are good tenants for when tourist season slows down.

Tourist area.What should I do with it?

There are a lot of tourists and tourist events in this city pretty much all year round.

Better off looking just outside city limits of South Lake Tahoe (the county) or in tourist core areas.

With the college, the hospital, and tourists in the summer there will always be a demand for rental property.As an aside, my wife grew up in Newcastle and attended Lincoln Academy.

Thats a lot of money for the city and of course all the tourist dollars that come with the foot traffic.