HomeMy WebLinkAbout1973 ORDINANCE NO. 1973
AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA,
AMENDING SECTION 94.08.10 OF THE PALM SPRINGS ZONING
CODE, PROVIDING FOR A FIRST AMENDMENT TO THE VIRGIN
HOTEL DEVELOPMENT AGREEMENT WITH DTPS B-3, LLC,
REVISING THE PERFORMANCE SCHEDULE FOR
CONSTRUCTION PROPOSED ON BLOCK B-1 OF THE
DOWNTOWN PALM SPRINGS SPECIFIC PLAN, LOCATED AT
THE NORTHEAST CORNER OF MUSEUM WAY AND BELARDO
ROAD, ZONE CBD, SECTION 15, AND MAKING ADDITIONAL
REVISIONS (CASE 5.1427 DA AMENDMENT).
City Attorney's Summary
This Ordinance amends Section 94.08.10 of the City's Zoning Code
relating to a first amendment to the Development Agreement with
DTPS B-3, LLC, to revise the performance schedule for construction
of the Virgin Hotel Project proposed on Block B-1 of the downtown
Palm Springs Specific Plan, granting an additional two (2) years for
performance of remaining obligations, making revisions to the
provisions related to the hotel operations covenant related to that
schedule, adding a covenant against non-discrimination, and
revising the provision regarding prevailing wage laws.
THE CITY COUNCIL FINDS AND ORDAINS AS FOLLOWS:
A. On December 2, 2009, the City Council adopted Resolution No. 22625 certifying an
Environmental Impact Report (SCH No. 2008061084), approving a Mitigation
Monitoring and Reporting Program and adopting a Statement of Overriding
Considerations ("Specific Plan EIR"), for the Museum Market Plaza Specific Plan and
enacted Ordinance No. 1764, thereby approving the Museum Market Plaza Specific
Plan ("Specific Plan") which covers the land use, development standards and design
guidelines for the Specific Plan area.
B. On October 17, 2012, the City Council certified an Addendum to the Specific Plan EIR
(Addendum #1), and approved a Conformity Review for implementation of a revised
Downtown Revitalization Plan entitled"Downtown Palm Springs" as conforming to and
being consistent with the approved Museum Market Plaza Specific Plan.
C. On October 28, 2015, November 12, 2015, December 9, 2015, and January 13, 2016,
the Planning Commission considered amendments to the Specific Plan, including
changing the document name to "Downtown Palm Springs Specific Plan",
modifications of land uses within the different Blocks, adjustments to building heights
and other various amendments and changes.
Ordinance No. 1973
Page 2
D. On March 2, 2016, and reaffirmed on April 6, 2016, the City Council adopted
Resolution No. 23977, certifying an Addendum to the Specific Plan EIR (Addendum
#2), redesignated as the Downtown Palm Springs Specific Plan, finding that
Addendum #2 prepared for the Downtown Palm Springs Specific Plan appropriately
described the impacts of the Downtown Palm Springs Specific Plan, including
construction of the proposed land uses (inclusive of a proposed hotel on Block B-1),
and also finding that:
1. Changes in the Downtown Palm Springs Specific Plan would not result in a new
significant impact not previously analyzed in the EIR and its addenda, nor result in
any new mitigation measures beyond those proposed in the EIR and its addenda,
insofar as the EIR analyzed a more intense project, and impacts associated with
the revisions in the Specific Plan Amendment will either be reduced or be
equivalent to those analyzed in the EIR Addendum.
2. Changes in the Downtown Palm Springs Specific Plan, inclusive of a hotel
proposed on Block B-1, will not result in an increase in the severity of an
environmental impact, and no change to the proposed mitigation measures is
required, since reductions in project intensity will not result in significant changes
in potential impacts, particularly those associated with transportation and traffic.
3. Changes in the Downtown Palm Springs Specific Plan, inclusive of the Virgin Hotel
proposed on Block B-1, will not result in a feasible project alternative or mitigation
measure not considered in the certified EIR or the EIR Addendum.
4. The FEIR Addendum #2 was prepared in conformance with the requirements of
the California Environmental Quality Act.
5. The City Council considered the information contained in the certified EIR, EIR
Addendum No. 1 and EIR Addendum No. 2 prior to approving the Downtown Palm
Springs Specific Plan, inclusive of a hotel proposed on Block B-1.
6. The EIR Addendum #2 reflected the City Council's independent judgment and
analysis.
E. Palm Springs Promenade, LLC, a California limited liability company, predecessor in
interest to DTPS B-3, LLC, a California limited liability company, ("Applicant") filed an
application with the City, pursuant to the Specific Plan and Section 94.04.00 of the
Zoning Code, for a Major Architectural Application (Case No. 3.3908-MAJ) to allow
the construction of a Virgin brand new hotel consisting of a six-story, 112,862-square
foot building with 142-room resort hotel and ground floor commercial-retail on Specific
Plan Block B-1 located at the northeast comer of Belardo Road and Museum Way,
(APN 513-560-044) ("Project").
F. On April 20, 2016, the Architectural Advisory Committee voted 4-2 to recommend
conditional approval of the Project to the Planning Commission.
Ordinance No. 1973
Page 3
G. On October 28, 2015, November 12, 2015, December 9, 2015, January 13, 2016, and
April 20, 2016, a public hearing to consider the Project was held by the Planning
Commission in accordance with applicable law.
H. On April 20, 2016, the Planning Commission held a public hearing receiving testimony
and made a recommendation of approval of the Project to the City Council.
I. On April 20, 2016, the City Council carefully reviewed and considered all of the
evidence presented in connection with the public hearing to consider the Project,
including, but not limited to, the staff report, and all written and oral testimony
presented, and adopted Resolution No. 24003 approving the Project.
J. Pursuant to Section I.C. of the Downtown Palm Springs Specific Plan, in its adoption
of Resolution No. 24003 on April 20, 2016, the City Council found that the Project
complies with the Specific Plan's guiding principles as follows:
1. The highest quality development which provides an exciting and safe living,
working and shopping experience for all.
The Project will enhance the experience of those living, working and shopping within
the Specific Plan area. Amenities such as dining, meeting space and lounge areas
are proposed. Commercial space provides excitement along street frontages and the
pedestrian paseo, Market Street. A high-end hotel brand will operate the property.
Consequently, the development will be of high-quality and provide an exciting and
safe living, working and shopping experience for all.
2. Connections from the Palm Springs Art Museum to the ResowConvention Center.
In order to achieve connections between the Art Museum and Resort/Convention
Center, the Specific Plan sets development standards for new developments. The
proposed building incorporates adequate sidewalk areas and building separation
space consistent with the Specific Plan requirements. Thus, the Project meets
connections requirements envisioned by this finding.
3. The development of retail commercial development which successfully mixes
national and regional chain stores with local businesses, focused on the major
roadways which bound the site, including North Palm Canyon, Indian Canyon,
Tahquitz Canyon and Belardo.
The Project will allow commercial retail stores on street frontages and provide
overnight accommodations for tourists and visitors to the City. The hotel operator is
a national brand that will enhance the development. Other commercial space within
the building may be operated by regional chains or a local business.
Ordinance No. 1973
Page 4
4. A balance of commercial and residential development which assures the success
of the area by increasing the number of homes in the downtown, thereby
increasing the customer base of the commercial uses.
The proposed commercial use provides overnight, short-term accommodations for
tourists and visitors. Such guests are expected to increase customer base of
commercial uses downtown. While no residential is proposed on this block, it may be
permitted in other locations within the Specific Plan area. Thus, the Project aids in the
balance of commercial and residential development and assists in the success of the
area.
5. The development of residential units which relate synergistically to the commercial
development around them, and encourage a pedestrian lifestyle with little use for
the automobile.
No residential use is approved as part of the Project. However, the hotel will have
overnight guests that relate synergistically to the surrounding commercial
development. With the location in the heart of downtown, it is expected that these
guests will walk to their destinations and avoid automobile use when unnecessary.
6. The development of additional resort hotels which provide luxury accommodations
and increase the visitors to the City's downtown.
The proposed resort hotel will provide luxury accommodations and increase the
visitors to the City's downtown. With international recognition, the operator is
expected to attract greater activity to the area and would be the first location for its
brand in the Coachella Valley.
7. View corridors to the mountains at Museum Way and Andreas Road through the
site shall be created, while views to the mountains from Tahquitz Canyon Way
shall be preserved or enhanced to the greatest extent possible.
View corridors of mountains are provided with building separation on Museum Way
and Andreas Road. With varying widths along Museum Way, there will be at least 70-
feet between buildings to enhance mountain views. Additionally, the 69-foot building
is setback from Palm Canyon Drive, which will further preserve views.
8. The Downtown Palm Springs project is pedestrian oriented and all buildings must
be sensitively designed to the human scale with active, pedestrian friendly
frontages on the ground floor. Structures are to be massed to reduce their visual
dominance and preserve view corridors. The built form is to be effectively
permeated with public and private open spaces, thereby avoiding the creation of
overwhelming and impenetrable mega-blocks.
Ordinance No. 1973
Page 5
The Project provides adequate pedestrian space and is sensitively designed to the
human scale. The pedestrian experience is provided between the building and street
curb in an area ranging from 12 to 28-feet in width, which enables sufficient space for
circulation, planters and outdoor dining. The proposed building reaches a height of
69-feet, and is massed/scaled appropriately from Palm Canyon Drive to ensure it does
not create an overwhelming and impenetrable mega-block.
K. Pursuant to Section 94.04.00(D) of the Palm Springs Zoning Code, in its adoption of
Resolution No. 24003 on April 20, 2016, the City Council found:
The City Council has examined the material submitted with the architectural approval
application and has examined specific aspects of the design and determined the
Project will (1) provide desirable environment for its occupants; (2) is compatible with
the character of adjacent and surrounding developments, and (3) aesthetically it is of
good composition, materials, textures and colors. City Council evaluation is based on
consideration of the following:
1. Site layout, orientation, location of structures and relationship to one another and
to open spaces and topography. Definition of pedestrian and vehicular areas, i.e.,
sidewalks as distinct from parking lot areas,
The Project proposes a new six-story building with pedestrian circulation around all
sides. Pedestrian pathways will be separated from vehicular streets with curbs and
landscape treatment. Pavers, landscaping and sidewalk furniture will provide an
enhanced experience on the site. Sidewalks and other walkways are provided to
accommodate the change in topography across the site. Pedestrian access is
provided to the underground parking via stairways and elevators.
2. Harmonious relationship with existing and proposed adjoining developments and
in the context of the immediate neighborhood / community, avoiding both
excessive variety and monotonous repetition, but allowing similarity of style, if
warranted,-
The proposed structure is an L-shaped configuration surrounding a second floor pool
deck. The height is lower than the hotel to the south. The proposed architecture is of
a contemporary style consistent with surrounding development, but introduces design
elements, colors and materials of a higher quality than the existing development in the
vicinity. The selection of design elements differs from those of the adjacent blocks
within the Downtown Palm Springs Specific Plan area, yet they contribute to the
overall identity of an up-scale contemporary center.
3. Maximum height, area, setbacks and overall mass, as well as parts of any structure
(buildings, walls, screens, towers or signs) and effective concealment of all
mechanical equipment,
Ordinance No. 1973
Page 6
The proposed building's overall height will be 69-feet. Exterior elevations show
projections at building edges. Mass is divided with exterior building articulation. A
large void above the second floor pool deck reduces overall building bulk. Rooftop
mechanical will be concealed from view.
4. Building design, materials and colors to be sympathetic with desert surroundings;
5. Harmony of materials, colors and composition of those elements of a structure,
including overhangs, roofs, and substructures which are visible simultaneously;
The building architecture is contemporary in style, with a color and material palette
that introduces muted color tones, with limited use of accent colors via metal, concrete
and glass. Covered walkways for outdoor seating, pedestrian circulation and solar
control are integrated into the building design.
6. Consistency of composition and treatment;
The building design uses consistent forms and treatments across each elevation. The
contemporary elements interact with each other in a consistent and rhythmic manner.
7. Location and type of planting, with regard for desert climate conditions.
Preservation of specimen and landmark trees upon a site, with proper irrigation to
insure maintenance of all plant materials;
A landscape plan has been submitted and includes a mix of common tree and plant
materials used in drought tolerant environments, as well as some identified by Table
III-5, Landscape Palette, of the Specific Plan.
8. Signs and graphics, as understood in architectural design including materials and
colors;
Pursuant to Chapter 93.20 of the Palm Springs Municipal Code, the Applicant will be
required to submit a sign program for the Project meeting the architectural design
standards of the Specific Plan.
L. The Applicant submitted a request for a Development Agreement (Case 5.1427 DA)
to establish conditions, terms and obligations for the development of the Project (the
"Development Agreement").
M. To strengthen the public planning process, encourage private participation in
comprehensive planning, and reduce the economic risk of development, the
Legislature of the State of California has enacted California Government Code §
65864 et seq. (the "Development Agreement Statute"), which authorizes City to enter
into an agreement with any person having a legal or equitable interest in real property
regarding the development of such property. The Development Agreement has been
Ordinance No. 1973
Page 7
processed, considered, and approved in accordance with the procedures and
requirements as set forth in the Development Agreement Statute.
N. Pursuant to Government Code section 65865(c), the City of Palm Springs previously
adopted Ord. 1829 § 3, 2013; Ord. 1294, 1988 [PSMC § 94.08.00], that set forth rules
and regulations establishing procedures and requirements for consideration of
development agreements. The Development Agreement has been processed,
considered, and approved in accordance with the procedures and requirements as
set forth in the City's Ordinances and Municipal Codes.
O. A notice of a public hearing of the Planning Commission of the City of Palm Springs,
California to consider the Development Agreement related to the Project was given in
accordance with applicable law, and on November 15, 2017, the Planning
Commission carefully reviewed and considered all of the evidence presented in
connection with the hearing on the Development Agreement, including but not limited
to the staff report, and all written and oral testimony presented, and voted 6-0 to
recommend approval of the Development Agreement for the Project, with
recommendations for amendment, to the City Council.
P. A notice of public hearing of the City Council of Palm Springs, California to consider
the Development Agreement was given in accordance with applicable law and on
November 15, 2017, the City Council carefully reviewed and considered all of the
evidence presented in connection with the hearing on the Development Agreement,
including but not limited to the staff report, all written and oral testimony presented,
and voted 3-2 to approve the Development Agreement, by introducing Ordinance
1940 with a second reading on November 29, 2017. The approved Development
Agreement included a Performance Schedule that included the requirement that
certain milestones be met.
Q. On December 5, 2018, the Applicant submitted a First Amendment to the
Development Agreement Case 5.1427 DA, ("First Amendment") to revise the
Performance Schedule and extend certain dates.
R. A notice of a public hearing of the Planning Commission of the City of Palm Springs,
California to consider the proposed First Amendment was given in accordance with
applicable law and on December 12, 2018, the Commission carefully reviewed and
considered all of the evidence presented in connection with the hearing on the First
Amendment, including but not limited to the staff report, all written and oral testimony
presented and voted 5-2 to recommend conditional approval to the City Council.
S. A notice of a public hearing of the City Council of the City of Palm Springs, California
to consider the proposed First Amendment was given in accordance with applicable
law and on January 9, 2019, the City Council carefully reviewed and considered all of
the evidence presented in connection with the hearing on the First Amendment,
including but not limited to the staff report, all written and oral testimony presented
Ordinance No. 1973
Page 8
and voted 5-0 to approve the First Amendment with revisions as determined by the
City Council.
T. In approving the First Amendment, the City Council determined that the First
Amendment associated with the Project is considered a"project' pursuant to the terms
of the California Environmental Quality Act ("CEQA").
U. The City Council also found that no further environmental documentation beyond the
documentation prepared in conjunction with the Specific Plan EIR and subsequently
approved Addenda for the Project is required because:
1. There are no substantial changes in the project that will require major
revisions to the EIR due to the involvement of new significant environmental
effects or a substantial increase in the severity of previously identified
significant effects;
2. There are no substantial changes with respect to the circumstances under
which the project is being undertaken which will require major revisions of
the EIR due to the involvement of new significant environmental effects or
a substantial increase in the severity of previously identified significant
effects; and
3. There is no new information of substantial importance which was not known
and could not have been known with the exercise of reasonable diligence
at the time the EIR was certified showing that:
a. The project will have one or more significant effects not discussed
in the EIR;
b. Significant effects previously examined will be substantially more
severe than shown in the EIR;
c. Mitigation measures or alternatives previously found not to be
feasible would in fact be feasible, and would substantially reduce
one or more significant effects of the project, but those mitigation
measures or alternatives have not been adopted; or
d. Mitigation measures or alternatives considerably different from
those analyzed in the EIR would substantially reduce one or more
significant effects on the environment, but the mitigation measures
or alternatives have not been adopted.
(Public Resources Code section 21166; CEQA Guidelines section 15162.)
V. The City Council also found that the First Amendment to the Virgin Hotel Development
Agreement complies with the provisions of Palm Springs Zoning Code Section
94.08.00, as follows:
1. Is consistent with the objectives, policies, general land uses and programs
specified in the general plan and any applicable specific plan,
The Development Agreement is consistent with the City of Palm Springs General
Plan in that the Development Agreement directly reflects the land use approved
through the Downtown Palm Springs Specific Plan Case No. 5.1204-SP and Major
Ordinance No. 1973
Page 9
Architectural Application Case No. 3.3908-MAJ by the City Council, and the land
use is permitted in the General Plan Land Use Element and the Specific Plan.
2. is compatible with the uses authorized in, and the regulations prescribed for,
the land use district in which the real property is located;
The Project is consistent with the Specific Plan, because the Specific Plan
designation for the site is for various land uses, including Retail Goods, Personal
Services, Food and Beverage Services, Services for Groups, Office and Related,
Residential, Tourist and Related Services, Public and Semi-public, and compatible
accessory uses. The Specific Plan allows for construction of up to two hotels with
a maximum of 300 hotel rooms located west of Palm Canyon Drive. The City
Council previously approved a Preliminary Planned Development District for the 6-
story Rowan Hotel on Block C-1 of the Specific Plan (Case No. 5.1290 PD-361),
with a total of 155 hotel rooms. The Project was approved with a maximum of 142
hotel rooms, establishing a maximum of 297 hotel rooms located west of Palm
Canyon Drive, and is thus consistent with the Specific Plan in terms of density.
3. Is in conformity with public convenience, general welfare and good land use
practice;
The Development Agreement is in conformance with established City goals,
objectives, and regulations outlined in the City's General Plan, the Specific Plan,
and the City's Zoning Ordinance.
4. Will not be detrimental to the health, safety and general welfare;
The Development Agreement is not detrimental to the health, safety, and welfare
of the community in that all established zoning and development standards
continue to be applicable.
5. Will not adversely affect the orderly development of property or the preservation
of property values.
The Development Agreement reflects the approved conditions of approval of the
Project which serve to insure the preservation of property values in the vicinity.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM SPRINGS,
CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. The findings and determinations reflected above are all true and
correct, and are incorporated by this reference herein as the cause and foundation for the
action taken by and through this Ordinance.
Ordinance No. 1973
Page 10
SECTION 2. The Specific Plan EIR and its Addenda have been and remain the
controlling environmental documents for the Council's consideration of the First
Amendment to the Development Agreement for the Project.
SECTION 3. In accordance with Section 94.08.00 of the Palm Springs Zoning
Code, the City Council hereby approves the First Amendment to the Development
Agreement now proposed, and amends Exhibit D to the Development Agreement in its
entirety, to read as follows:
EXHIBIT D
PERFORMANC}�E SCHEDULE
S3 ' u yr iif �''T]Y�9i� `
11/15/2017 City Council — Approval of Development Agreement;
Introduction and First Reading of Ordinance
12/06/2017 City Council — Second Reading and Adoption of Ordinance
01/05/2018 Effective Date of Ordinance and Development Agreement
03/31/2018 Finalize Capital Commitment;
Initiate preparation of Construction Drawings
03/31/2019 Complete clean-up of the Project Site to eliminate any
nuisance condition, and install art viewable by the public
07/31/2021 Complete Construction Drawings
Submittal to City for Building Permit Application
09/30/2021 Complete Building Plan Check Review
11/30/2021 Complete General Contractor Bidding Process
01/31/2022 Complete Property Appraisal;
Secure Construction Loan Funding
03/31/2022, Issuance of City Building Permit
12/31/2023 Complete Vertical Construction
01/31/2024 Obtain Final Building Permit Inspections;
Issuance of City Certificate of Occupancy;
Turn-Over of Virgin Hotel to Operator
03/01/2024 Grand Opening of Virgin Hotel
SECTION 4. The City Council authorizes the City Manager to execute the First
Amendment to the Development Agreement between the City of Palm Springs and DTPS
B-3, LLC in a form substantially similar to that attached to this Ordinance, and
incorporated by this reference herein as EXHIBIT "A," and to take all steps necessary to
complete its recordation.
SECTION 5. Palm Springs Zoning Code Section 94.08.10 is hereby amended by
adding a new subdivision (A)(4) to read as follows:
Ordinance No. 1973
Page 11
"4. First Amendment to Development Agreement. At the time of the first annual review
of the developer's performance under the Virgin Hotel Development Agreement, the City
Council approved a first amendment modifying Exhibit D, the "PERFORMANCE
SCHEDULE." The approved modification provided for a construction timeline originally
scheduled to commence on July 31, 2019 and to conclude on March 1, 2022 with the
opening of the Virgin Hotel, to commence on July 31 , 2021 and conclude on March 1,
2024. The Council also approved (i) a revision to the Agreement as originally adopted
regarding dates reflected in the provision defining the Hotel Operations Covenant to
coincide with the revised performance schedule, (ii) the Developer's covenant against
non-discrimination, and (iii) a revision to the Agreement's language regarding prevailing
wage laws."
SECTION 6. The Applicant shall submit a plan for a quality temporary overlay use
of the Project Site including high quality fencing, landscaping, and an art installation
satisfactory to and approved in writing by the City Council Downtown ad hoc
subcommittee or the subcommittee's designee, and shall implement the plan within sixty
(60) days of the adoption of this Ordinance.
SECTION 7. The Mayor shall sign and the City Clerk shall certify to the passage
and adoption of this Ordinance and shall cause the same, or the summary thereof, to be
published and posted pursuant to the provisions of law and this Ordinance shall take
effect thirty (30) days after passage.
ADOPTED THIS 23rd DAY OF JAN
77
ROBE AT MOON
MAYOR
A EST:
TH Y J. ME MC
CITY CL
Ordinance No. 1973
Page 12
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, Anthony J. Mejia, City Clerk of the City of Palm Springs, hereby certify that
Ordinance No. 1973 is a full, true and correct copy, and was duly introduced at a regular
meeting of the City Council of the City of Palm Springs on January 9, 2019, and adopted
at a regular meeting of the City Council of the City of Palm Springs on January 23, 2019,
by the following vote:
AYES: Councilmembers Holstege, Middleton, Roberts, and Mayor Moon
NOES: None
ABSENT: Mayor Pro Tern Kors
ABSTAIN: None
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of Palm Springs, California, this 3►S�- day of 7�n,.aq 20 ram,
Ayy�
HONY 4.
CITY CLERK
RECORDING REQUESTED BY:
CITY OF PALM SPRINGS
AND WHEN RECORDED MAIL TO:
CITY OF PALM SPRINGS
OFFICE OF THE CITY CLERK
3200 E.TAHQUITZ CANYON WAY
PALM SPRINGS,CA 92262
SPACE ABOVE FOR RECORDER'S USE ONLY
Pursuant to Government Code Section 6103,recording fees shall not apply
FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
BY AND BETWEEN
CITY OF PALM SPRINGS
AND
DTPS B-3, LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY
FOR
DOWNTOWN PALM SPRINGS SPECIFIC PLAN
BLOCK B-1 , "VIRGIN HOTEL"
CASE NO. 5.1204 SP AMEND
CASE NO. 3.3908 MAJ, CASE NO. 5.1427 DA
Title of Document
THIS AREA FOR
RECORDER'S
USE ONLY
FIRST AMENDMENT TO
DEVELOPMENT AGREEMENT
THIS FIRST AMENDMENT TO DEVELOPMENT AGREEMENT BY AND BETWEEN
CITY OF PALM SPRINGS AND DTPS B-3, LLC, A CALIFORNIA LIMITED LIABILITY
COMPANY FOR DOWNTOWN PALM SPRINGS SPECIFIC PLAN BLOCK B-1, 'VIRGIN
HOTEL" CASE NO. 5.1204 SP AMEND CASE NO. 3.3908 MAJ, CASE NO. 5.1427 DA ("Fiist
Amendment") is entered into by and between the City of Palm Springs, a California charter city
and municipal corporation, and DTPS B-3, LLC, a California limited liability company, pursuant
to California Government Code § 65864 et sue.
RECITALS
A. Development Agreement as Adopted. On November 29, 2017, the City Council
of Palm Springs, California adopted Ordinance No. 1940 approving that certain
"DEVELOPMENT AGREEMENT BY AND BETWEEN CITY OF PALM SPRINGS AND DTPS
B-3, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY FOR DOWNTOWN PALM
SPRINGS SPECIFIC PLAN BLOCK B-1, "VIRGIN HOTEL" CASE NO. 5.1204 SP AMEND
CASE NO. 3.3908 MAJ, CASE NO. 5.1427 DA" (the "Development Agreement").
B. On December 5, 2018, the Applicant submitted this First Amendment to the City,
proposing to modify the Performance Schedule in the Development Agreement with respect to
construction, extending certain dates.
C. The Planning Commission considered the First Amendment at a duly noticed
public hearing on December 12, 2018. In accordance with applicable law, the Planning
Commission carefully reviewed and considered all of the evidence presented in connection
with the hearing on the First Amendment, including but not limited to the staff report, and all
written and oral testimony presented. The Planning Commission voted to recommend
conditional approval of the First Amendment to the City Council.
D. The City Council considered the First Amendment at a duly noticed public hearing
on January 9, 2019. In accordance with applicable law, the City Council carefully reviewed and
considered all of the evidence presented in connection with the hearing on the First
Amendment, including but not limited to the staff report, and all written and oral testimony
presented. The City Council made findings in compliance with State law, including but not
limited to the California Environmental Quality Act, and the Palm Springs Zoning Code, and
approved the First Amendment as modified, to provide for a modification of the Performance
Schedule with respect to construction, extending certain dates by two (2) years, and making
additional revisions to the Development Agreement as originally adopted on November 29,
2017, said modification and revisions being memorialized in this First Amendment.
1.8.19 FIRST AMENDMENT TO VIRGIN DEVELOPMENT AGREEMENT
1
FIRST AMENDMENT
NOW, THEREFORE, in consideration of the promises, covenants, and provisions set
forth herein, the receipt and adequacy of which is hereby acknowledged, the parties agree as
follows:
ARTICLE 1. DEFINITIONS.
SECTION 1.1. "City' is the City of Palm Springs, a California Charter City and municipal
corporation.
SECTION 1.2. "City Council" means the City Council of the City of Palm Springs.
SECTION 1.3. "Developer" is DTPS B-3, LLC, a California limited liability company.
SECTION 1.4. "Development Agreement" means that certain "DEVELOPMENT
AGREEMENT BY AND BETWEEN CITY OF PALM SPRINGS AND DTPS B-3, LLC, A
CALIFORNIA LIMITED LIABILITY COMPANY FOR DOWNTOWN PALM SPRINGS SPECIFIC
PLAN BLOCK B-1, 'VIRGIN HOTEL" CASE NO. 5.1204 SP AMEND CASE NO. 3.3908 MAJ,
CASE NO. 5.1427 DA" approved by the City Council of November 29, 2017 via the adoption of
Ordinance No. 1940.
SECTION 1.5. "Effective Date' shall have that meaning set forth in Section 3.01 of this
First Amendment.
SECTION 1.6. "First Amendment" means this this "FIRST AMENDMENT TO
DEVELOPMENT AGREEMENT BY AND BETWEEN CITY OF PALM SPRINGS AND DTPS
B-3, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY FOR DOWNTOWN PALM
SPRINGS SPECIFIC PLAN BLOCK B-1, "VIRGIN HOTEL" CASE NO. 5.1204 SP AMEND
CASE NO. 3.3908 MAJ, CASE NO. 5.1427 DA" approved by the City Council of January 23,
2019 via the adoption of Ordinance No. 1973.
SECTION 1.7. "Planning Commission" means the Planning Commission of the City of
Palm Springs.
SECTION 1.8. "Term" shall have the meaning set forth in Section 3.02 of this First
Amendment' this meaning of "term" shall replace and supersede the meaning set forth in the
Development Agreement.
ARTICLE 2. CONSTRUCTION, INCORPORATION OF RECITALS.
Section 2.1. Development Agreement Remains in Full Force and Effect. This First
Amendment is supplemental to the Development Agreement, and is by reference made part of
said Development Agreement. All of the definitions, terms, conditions, and provisions of the
Development Agreement, unless specifically modified herein, shall continue in full force and
effect. In the event of any conflict or inconsistency between the provisions of this First
Amendment and any of the provisions of the Development Agreement, the provisions of this
1.17.19 First Amendment to Virgin Development Agreement
2
First Amendment shall in all respects govern and control.
Section 2.2. Recitals. The true and correct Recitals set forth above, the introductory
paragraph preceding the Recitals, and all exhibits referenced in both, are hereby incorporated
by this reference into this First Amendment, as material facts upon which the parties have relied
in entering this First Amendment, as if set forth herein in full.
ARTICLE 3. EFFECTIVE DATE AND TERM.
Section 3.1. Effective Date. This First Amendment shall become effective as of the
date when the Ordinance through which this First Amendment is approved takes effect, and
the City executes this First Amendment (the "Effective Date").
Section 3.2. Term. The term of the Development Agreement shall continue upon the
Effective Date of this First Amendment, and shall continue in effect until March 1, 2024, unless
the Term is terminated or modified as set forth in the Development Agreement or by mutual
consent of the parties hereto.
ARTICLE 4. PERFORMANCE SCHEDULE.
Section 4.1. Performance Schedule for Development Agreement. The following
"PERFORMANCE SCHEDULE" shall replace and supersede the Performance Schedule in
EXHIBIT "D" to the Development Agreement.
11/15/2017 City Council —Approval of Development Agreement;
Introduction and First Reading of Ordinance
12/06/2017 City Council— Second Reading and Adoption of Ordinance
01/05/2018 Effective Date of Ordinance and Development Agreement
03/31/2018 Finalize Capital Commitment;
Initiate preparation of Construction Drawings
03/31/2019 Complete clean-up of the Project Site to eliminate any nuisance condition,
and install art viewable by the public
07/31/2021 Complete Construction Drawings
Submittal to City for Building Permit Application
09/30/2021 Complete Building Plan Check Review
11/30/2021 Complete General Contractor Bidding Process
01/31/2022 Complete Property Appraisal;
Secure Construction Loan Funding
03/31/2022 Issuance of City Building Permit
12/31/2023 Complete Vertical Construction
01/31/2024 Obtain Final Building Permit Inspections;
Issuance of City Certificate of Occupancy;
Turn-Over of Virgin Hotel to O erator
03/01/2024 Grand Opening of Virgin Hotel
1.17.19 First Amendment to Virgin Development Agreement
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ARTICLE5. AMENDMENTS TO TEXT OF DEVELOPMENT AGREEMENT
REGARDING HOTEL OPERATIONS COVENANT.
Section 5.1. Hotel Operations Covenant. The first paragraph of Section 4.03 of the
Development Agreement shall be amended in its entirety, to reflect and be consistent with the
modification of EXHIBIT "D," the Performance Schedule, and to read as follows:
Section 4.03. Hotel Operations Covenant. In consideration of City entering into
this Agreement, Developer agrees to terminate the Amended and Restated Operations
Covenant, Agreement No. 6641, approved May 4, 2016, and that it will develop the
Project and comply with the terms and conditions of the Operations Covenant approved
and included concurrent herewith, in substantially the form attached hereto and
incorporated by this reference herein as Exhibit "C."Further, Developer covenants and
agrees that it shall secure a building permit for vertical construction of the core and shell
of the 142-room Virgin Hotel not later than March 31, 2022, complete vertical
construction of the 142-room Virgin Hotel not later than December 31, 2023, obtain a
certificate of occupancy by January 31, 2024, and begin operations of the Hotel no later
than March 1, 2024. Developer further agrees that the Project Site will be owned,
managed, and operated only as a Virgin brand hotel (and no other hotel flag or brand),
as a First Class Hotel, in accordance with the requirements of Chapter 5.26 of the Palm
Springs Municipal Code and the Operations Covenant. Operation of a Virgin brand hotel
is a mandatory condition to Developer's continued participation in the City's Hotel
Operations Incentive Program pursuant to Chapter 5.26 of the Palm Springs Municipal
Code (the "Program').
Section 5.2. Hotel Operations Covenant. Section 5.02 of the Development Agreement shall
be amended in its entirety, to reflect and be consistent with the modification of EXHIBIT "D,"
the Performance Schedule, and to read as follows:
Section 5.02. Hotel Operations Covenant. in consideration of Developer
entering into this Agreement, City agrees to terminate the Amended and Restated
Operations Covenant, Agreement No. 6641, approved May 4, 2016, permit the
development of the Project in accordance herewith, and that it will comply with the terms
and conditions of the Operations Covenant included herewith as Exhibit"C" and agrees
that, provided Developer secures a building permit for vertical construction of the core
and shell of the 142-room Virgin Hotel not later than March 31, 2022, completes
construction of the 142-room Virgin Hotel not later than December 31, 2023, and
Developer owns, manages, and operates the Project Site as a Virgin Hotel in a first-
class manner, in accordance with the requirements of Chapter 5.26 of the Palm Springs
Municipal Code and the Operations Covenant, City will pay Developer its share of
transient occupancy tax revenues pursuant to the Hotel Operations incentive Program
(the "Program'). Operation of a Virgin brand hotel is a mandatory condition to City's
continued payment to Developer of its share of transient occupancy tax revenues
pursuant to the Program. The parties understand and agree that to the extent the Virgin
brand hotel no longer operates as a Virgin brand hotel, or if Virgin ceases operation at
the Project site, or is terminated for cause by Developer after at least five years of
1.17.19 First Amendment to Virgin Development Agreement
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operation as a Virgin brand hotel, then City's payments to Developer of its share of
transient occupancy tax revenues will cease upon the date by which the Virgin brand
hotel is operated as any other flag or brand of hotel, unless an amendment to this
Agreement and the Operations Covenant recorded concurrent herewith, is approved by
the City Council which provides for a substitute operator that is of a first class quality
that is commensurate with or superior to Virgin's market share and position as of this
Agreement's Effective Date. If such a substitute operator is approved by the City
Council, the benefits accruing pursuant to the Program will continue as described herein.
ARTICLE 6. COVENANT AGAINST NON-DISCRIMINATION.
Section 6.1. Covenant against Non-Discrimination. Section 4.04 is added to the
Development Agreement, to read as follows:
Section 4.04. Covenant against Non-Discrimination. In connection with its
performance under this Development Agreement, including without limitation
performance under the Development Agreement, Developer shall not discriminate
against any employee or applicant for employment because of actual or perceived race,
religion, color, sex, age, marital status, ancestry, national origin (i.e., place of origin,
immigration status, cultural or linguistic characteristics, or ethnicity), sexual orientation,
gender identity, gender expression, physical or mental disability, or medical condition
(each a "prohibited basis'). Developer shall ensure that applicants are employed, and
that employees are treated during their employment, without regard to any prohibited
basis. As a condition precedent to City's lawful capacity to enter this First Amendment,
including without limitation all provisions of the Development Agreement that remain in
force and effect, and in executing this First Amendment, Developer certifies that its
actions and omissions hereunder shall not incorporate any discrimination arising from
or related to any prohibited basis in any Developer activity, including but not limited to
the following: employment, upgrading, demotion or transfer, recruitment or recruitment
advertising; layoff or termination; rates of pay or other forms of compensation; and
selection for training, including apprenticeship; and further, that Developer is in full
compliance with the provisions of Palm Springs Municipal Code Section 7.09.040,
including without limitation the provision of benefits, relating to non-discrimination in city
contracting.
ARTICLE 7. PREVAILING WAGE.
Section 7.1. Prevailing Wage Laws. Section 7.12 of the Development Agreement is
amended in its entirety, to read as follows:
Section 7.12 Prevailing Wage Laws. In accordance with Labor Code section
1781(a)(2), Developer acknowledges that the City has expressly indicated to the Developer
and persons associated with the Developer that in the event Developer receives any
consideration, pursuant to the Operations Covenant approved concurrent with the
Development Agreement and/or Chapter 5.26 of the Palm Springs Municipal Code, laborers
employed relative to the construction of the Project must be paid the prevailing per diem wage
1.17.19 First Amendment to Virgin Development Agreement
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rate for their labor classification, as determined by the State of California, pursuant to Labor
Code Sections 1720, et seq. and Palm Springs Municipal Code Section 7.06.030(1). The
Developeragrees with the City that the Developershall assume the responsibility and be solely
responsible for payment of the prevailing per diem wage rate for their labor classification.
The Developer, on behalf of itself, its successors, and assigns, waives and releases the City
from any right of action that may be available to it pursuant to Labor Code Sections 1726 and
1781. The Developer acknowledges the protections of Civil Code Section 1542 relative to the
waiver and release contained in this Section 4.9, which reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE
CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO
EXIST IN HiS OR HER FAVOR AT THE TiME OF EXECUTING THE RELEASE
AND THAT, iF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED
PARTY."
BY INITIALING BELOW, THE DEVELOPER KNOWINGLYAND VOLUNTARILY WAIVES THE
PROVISIONS OF SECTION 1542 SOLELY 1N CONNECTION WITH THE WAIVERS AND
RELEASES OF THIS SECTION 7.12.
Developer's Initials
Additionally, in accordance with this Section 7.12, the Developer shall indemnify, defend with
counsel acceptable to the City and hold the City harmless against any claims, pursuant to Labor
Code Sections 1726 and 1781, which claims arise from or relate to this Development
Agreement or the construction or operation of the Project.
IN WITNESS WHEREOF, the City of Palm Springs California, a California Charter City
and municipal corporation, has authorized the execution of this First Amendment in duplicate
by its City Manager and attestation by its City Clerk, and approved by the Council of the City
on the day of January, 2019, and Developer has caused this First Amendment to be
executed by its authorized representative.
SIGNATURES FOLLOW
1.17.19 First Amendment to Virgin Development Agreement
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"CITY„
City of Palm Springs
Date: By:
David H. Ready, PhD, Esq.
City Manager
APPROVED AS TO FORM: ATTEST
By: By:
Edward Z. Kotkin Anthony J. Mejia, MMC
City Attorney City Clerk
APPROVED BY CITY COUNCIL:
Date: Agreement No.
Corporations require two notarized signatures. One signature must be from Chairman of Board. President,or any Vice President.
The second signature must be from the Secretary,Assistant Secretary,Treasurer,Assistant Treasurer,or Chief Financial Officer.
"DEVELOPER"
DTPS B-3, LLC,
a California limited liability company
By By
Signature(Notarized) Signature (Notarized)
Michael Braun, Manager Octavio P. Hernandez, Manager
Printed Namerritle Printed Name/Title
1.17.19 First Amendment to Virgin Development Agreement
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