HomeMy WebLinkAbout11/7/2001 - STAFF REPORTS (20) DATE: cs 17,20001
TO: CITY COUNCIL
FROM: REDEVELOPMENT DIRECTOR
APPROVAL OF A MEMORANDUM OF UNDERSTANDING WITH COLLIERS SEELEY
INTERNATIONAL, INC. TO MARKET THE TAHQUITZ CREEK GOLF RESORT AS A
RESORT HOTEL SITE AND PERFORM A MARKET AND FEASIBILITY STUDY ON SUCH
A HOTEL
RECOMMENDATION:
It is recommended that the City Council approve a Memorandum of Understanding
with Colliers Seeley International, Inc. to market the Tahquitz Creek Golf Resort as a
resort hotel site and to commission a market and feasibility study for the hotel at its
own cost.
SUMMARY:
The City issued a Request for Proposal to the development community in July,2000 for
the development of a resort hotel at the Tahquitz Creek Golf Resort. The brokerage firm
of Colliers Seeley International,Inc.was the sole respondent,and has brought to the City
several interested developers. Colliers has entered an agreement with Goodkin
Consulting,one of the world's leading hotel location consultants,to conduct the feasibility
analysis on the site at Colliers' own cost, in return for an agreement that allows the
brokerage firm to market the site. Included in the study would be the potential impacts
of Knotts' purchase of the Oasis Water Park as well as the dispute with DWA over the
6.25 acre portion of the current driving range.
BACKGROUND:
This MOU allows Colliers to market the site on the City's behalf; in return for that
right, they will commission and pay for a first-class feasibility study. The firm is
one of the largest real estate brokerage firms in the world and has already
brought in several interested prospects to discuss the course. Under this revised
Agreement, the City retains the right to terminate the Agreement with Colliers if
the Marketing Study shows that the project is not feasible.
J;OHN RAYMO' D
Redeve pment ' ector
APPROVED z
City Manager
ATTACHMENTS:
1. Minute Order
2. Memorandum of Understanding
��IA
MEMORANDUM OF UNDERSTANDING
NOVEMBER 7, 2001
GOLF COURSE HOTEL MARKET STUDY AND PROJECT DEVELOPMENT
Colliers Seeley International, Inc. an international real estate brokerage, working with Goodkin
Consulting (in a strategic relationship with PricewaterhouseCoopers), have proposed a
Memorandum of Understanding with the City of Palm Springs to assist the City determine the
feasibility of a resort hotel development on the City's golf course, known as the Tahquitz Creek
Golf Resort, and to assist in securing a quality hotel developer for the project. In return for
representing the City in negotiations with prospective hotel/resort developers, Colliers Seeley
will, at its own cost, commission Goodkin Consulting to undertake the market analysis of the
prospective site. Included in the analysis will be the impacts of the recent court decision on the
Desert Water Agency/disputed parcel and the purchase of Oasis Water Park by Cedar Fair and
that company's possible interest in developing a hotel.
R E C I T A L S
WHEREAS, the City of Palm Springs owns land in the City adjacent to the Tahquitz Creek
Resort golf courses and driving range on which it contemplates developing a hotel and
complementary facilities (the "Project"); and
WHEREAS, the City will require a marketing study to assess the viability of the Project and
attract a quality hotel developer and operator; such study Colliers Seeley, in conjunction with
Goodkin Consulting or other qualified hospitality industry consultant chosen by Colliers Seeley, is
willing to provide; and
WHEREAS, if the City determines, based on the marketing study, that the Project is viable,
Colliers Seeley desires to obtain from the City the exclusive right to sell or lease the Project to a
hotel developer.
NOW, THEREFORE, and in consideration of the mutual covenants hereinafter contained, it
is mutually agreed upon by the parties as follows:
SECTION 1. NATURE OF NEGOTIATIONS.
A. Purpose of the Agreement. The purpose of this MOU is to document the
intent of the parties to plan, develop and market the development of a golf course hotel and resort
at the Tahquitz Creek Golf Resort owned by the City of Palm Springs.
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B. Good Faith. The City and Colliers Seeley agree that, for the period set forth
in Section 2 herein, they will negotiate diligently and in good faith to prepare a market study and
secure a development agreement (the "Development Agreement") with a first-class hotel developer
consistent with the provisions of this section for the development of the Project on the Site. The
development will be subject to all rules, regulations, standards, and criteria set forth in the City's
Zoning Code and General Plan, and applicable County and State regulations, and with this
Agreement. The Development Agreement will be in a form negotiated by the City with the
development entities.
C. Proiect Scope. The facility shall be comprised of at least a hotel of no fewer
than 200 rooms, but may also include vacation ownership units, tennis facilities, a golf clubhouse,
restaurants, meeting facilities, and other amenities as determined by the market study and the
project developer.
D. Project Location. The Project shall be located at the Tahquitz Creek Golf
Resort upon the real property to be designated as the "Site." The final Project site will be
determined prior to the execution of the Development Agreement.
SECTION 2. PERIOD OF NEGOTIATIONS.
A. Proiect Review Meeting. Upon completion of the Marketing Study
described in Section B. below, the parties shall meet and review the status of the project under this
Agreement (herein "Review Meeting"). If in the sole opinion of the City, the City determines that the
Project is not economically feasible or is marginal, then City may terminate this Agreement upon
giving written notice to Colliers Seeley.
B. Work Performed Under This Agreement.
1. Marketing Study. Within 90 days after the Effective Date, Colliers Seeley
will prepare and deliver to the City, without charge to the City, a comprehensive market
study for the Project including supportable average daily rates, projected occupancy rates
for the initial three years of operation, suggested number and types of rooms/suites and
public areas/meeting rooms, suggested recreation amenities, suggested market positioning
and a list of potential developers and hotel brands. The marketing study will be prepared by
Colliers Seeley in conjunction with Goodkin Consulting or other qualified hospitality
consultant selected by Colliers Seeley. The Marketing Study shall be subject to the
following criteria:
a. The value of the study, were the City to contract for the same, shall
be no less than $30,000.
b. The study shall report on the feasibility of a golf course hotel project
on the Site in current and foreseeable economic conditions,
including the optimum composition of the resort, likely
brands/operators, anticipated ADR and occupancy and the overall
economic viability of the project.
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C. The study shall look at the overall site with and without the disputed
6.25 acre parcel, as well as determine the economic benefits of a
relationship with Knott's/Cedar Fair.
d. If the study is not delivered within the specified timeframe in this
Section, or if the study determines that the feasibility or economic
benefits of the project are, in the opinion of City, marginal within a
reasonable timeframe, then pursuant to Section A, the City has the
right to terminate the Agreement without penalty or any further
compensation to Colliers Seeley.
2. Representation. Colliers Seeley shall have three months from the date of
the execution of this Agreement to deliver the marketing study to the City. If at that time the
City determines that the project is feasible, it shall enter an exclusive brokerage agreement
with Colliers Seeley on the subject property for a period of six months. The brokerage
agreement shall exclude clients developed by the City. he percentage fee payable to
Colliers Seeley would be two and one-half percent (2.5%) of the fair market value of the
subject property, payable at actual closing, if Colliers Seeley is the procuring cause of a
sale or development ground lease of the Project property.
3. Marketing. The exclusive brokerage agreement will provide that Colliers
Seeley will diligently market the Project to hotel developers, equity investors, hotel
companies and other potential lessees/ purchasers selected by Colliers Seeley and
approved by the City.
C. City Approval. Colliers Seeley understands and acknowledges that if
negotiations culminate in a Development Agreement with a hotel developer, such agreement shall
be effective only after and if the agreement has been considered and approved by the City Council
after public hearing thereon as required by law.
D. Preparation of Agreement. If agreement is reached on the business terms
for inclusion in the Development Agreement, the City shall prepare such agreement for
consideration by the selected hotel developer.
E. Exclusions. Should the City be successful in its negotiations with Cedar
Fair, L.P., Knotts Berry Farm, Oasis Water Park or any of its related companies on locating a water-
park-related hotel on the City's property, such a project is excluded from this agreement. Should
the City sell the disputed 6.25 acre Option Parcel to the Desert Water Agency, such property sale is
also excluded from this Agreement.
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SECTION 3. MISCELLANEOUS.
A. Ownership of Documents. If the negotiations contemplated by this
Agreement do not result in the execution of an agreement, Colliers Seeley shall transfer to City
copies of any reports, studies, analysis, site plan layouts, engineering studies, memorandums, or
similar documents regarding the proposed development and prepared during the period of
negotiation which copies shall become the property of City. Such transfer shall be made without
any representation or warranty by Colliers Seeley as to the accuracy or sufficiency of the contents
of such documents and shall be made subject to the rights of the preparers of such documents
including, without limitation, the copyright (if any) associated with such documents.
B. Purpose of Contract. It is expressly understood and agreed by the parties
hereto that this is an Agreement regarding the conduct of contract negotiations only and does not
convey any interest in any property whatsoever. It is further agreed and understood that this
Agreement does not imply any obligation on the part of the City to enter into any agreement that
may result in negotiations contemplated herein.
C. Miscellaneous. This Memorandum contains the entire agreement of the
City and Colliers Seeley with respect to the Project and supersedes all prior or contemporaneous
written or oral agreements and discussions between the parties on that subject. This Memorandum
may only be amended by a document in writing signed by the parties hereto. This Memorandum
can be signed in counterparts. There are no third party beneficiaries of this Memorandum. If any
provision of this Memorandum is determined to be unenforceable, it shall be deemed automatically
amended to the extent necessary to render it enforceable if such can be done without materially
altering the intent of the parties as expressed herein, but otherwise shall be severed from the
remaining provisions of this Memorandum.
D. Corporate Authority. The persons executing this Agreement on behalf of the
parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized
to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement,
such party is formally bound to the provisions of this Agreement, and (iv) the entering into this
Agreement does not violate any provision of any other Agreement to which said party is bound.
E. Assignment. This Memorandum is non-assignable by either party without
the prior written consent of the other party.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day first
above written.
"City"
THE CITY OF PALM SPRINGS, a public body,
corporate and politic
City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
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"BROKER"
COLLIERS SEELEY INTERNATIONAL, INC.
(Check One: individual, partnership, corporation)
[NOTARIZED]
Signature
Print Name:
Print Title:
[NOTARIZED]
Signature
Print Name:
Print Title:
Mailing Address:
(Corporations require two signatures; one from each of the following: (A) Chairman of Board,
President, any Vice President; AND (B) Secretary, Assistant Secretary, Treasurer, Assistant
Treasurer, or Chief Financial Officer.)
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74 47
MINUTE ORDER NO.
APPROVING A MEMORANDUM OF
UNDERSTANDING WITH COLLIERS
SEELEY INTERNATIONAL, INC.
REGARDING THE FEASIBILITY ANALYSIS
AND MARKETING OF A RESORT HOTEL
PROJECT AT THE TAHQUITZ CREEK GOLF
RESORT
I HEREBY CERTIFY that this Minute Order, approving a Memorandum of Understanding
with Colliers Seeley International, Inc. regarding the feasibility analysis and marketing of
a resort hotel project at the Tahquitz Creek Golf Resort, was adopted by the City Council
of the City of Palm Springs, California, in a meeting thereof held on the 17th day of
October, 2001.
PATRICIA A. SANDERS
City Clerk
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