HomeMy WebLinkAbout3/7/2018 - STAFF REPORTS - 2.B. City Council Regular Meeting 2.6.
Meeting Date: 03/07/2018
Subject
OPERATING COVENANT FOR THE AUBERGE PROJECT:
RECOMMENDATION:
Table the Public Hearing with no public testimony at this time.
Additional Information
No Materials.
750 N Gene Autry Trail
mediagroup Palm Springs,CA 92262
R E L E I tp!r Tel:760-778-0578/Fax 760.778-4731
.I T •t f f �t"1 n• �y;;,i vanO:nau>roo MFH OR Email:legals@thedeserlsun.mm
2010 MAR -5 P A OL09FN
"t
e JlIIlY apiyp� M My� 7, 2g14 at 6:0f pm. er r loon
dt a let lrkeaarQ jke Oly couryl of me Oty.of Palm
f i C e u tbtdddd a pukRc head p In the council Chamber
�Tbll��F CALIFORNIA SS. way,Palm 6pdrp,CA g2262
want
to
COUNTY OF RIVERSIDE "d '. Iw nant biThe
f'Covenad' tl flew
'Clq�s Hotel Opaat[ora InavlNvao
6 a ma Paten 6pdm�s Mumppal CodA,aM
y�
a Palm Springs
CITY OF PALM SPRINGS/LEGALS pfOPmr nant'k provided pursuant
ard
PO BOX 2743 • d r as mW aUJer badmw anti
the lass"dory of to amnamlc
PALM SPRINGS CA 92263 ddmkMd in the•3tete of Nevads doing
CA tt]64. m for serda at paom
doln9 aBA N.Carson Sveet
MApO klassi 0 applicable, for the etaaaade
Provide an awnomic subsidy to Developer
rs, or until the
I am over the age of 18 years old,a citizen of the went_Develqpar has receivedlvedaunt
arbddY.Indwlaq she
United States and not a party to,or have interest in eta �tomaabe aley�,als addroyvrwa loft, qia
this matter. I hereby certify that the attached a nor to irta�In da form of a rablta
('Ad LWW TOT') a a lama, and for a
advertisement appeared in said newspaper(set in the mature and she of my new hotel,and
mat meet Program n7ltala.The program has
end Improved hotels In the .In 2ooe
type not smaller than non panel)in each and entire wmm approximately to $13,DOD For the
issue of said newspaper and not in an supplement ram whkh wa or Ina[ art to expire
Y PP aamnde i Program deadlines for projects on
thereof on the following dates,to wit: hatel project planned by Developer,Iw a
sahtmayAube�arasortscaN �Ia
a A tatea Tb1 fortlN ry po)yyeeean or uMMID�
mmr first On Juy 24 3017,the clly
02/25/18 dkkMd'D+at le to Cwawmwraboms wish the pre�r��
pybt he n .1 Dembper will rpri ast a rebate a I %of the
TOT dro o a dperatlon,m be redwd to a 75%
I acknowledge that I am a principal clerk of the v�iaa��aaa 1 o400a NZ app V°s�ri' ���
.kvetl�mbet SIN Ida oaCharlarOry.
approves tldsCway rt wall It_*the
printer of The Desert Sun,printed and published step egih madaad reporting tltnugle the
weekly in the City of Palm Springs, County of yti",aepfrAona, a he ISso
MoJa�anent be bulkllw City council I&
TI
Riverside, State of California. The Desert Sun was Project Indatha of m"e props restoration a
the oldrq,m a pnorq matter.One of me
adjudicated a Newspaper of general circulation on dw no6k N sad sp4 both a wtk9 VAN g be a am dais
March 24, 1988 by the Superior Court of the me A 'o Me* fire
the ft*wouM ailsnimte H nkkant blight sherr
County of Riverside, State of California Case No. ddraw m13N•m I am 'h° °rO hd%NW
go Then od lapwr aegc0% starting
rtin m tla mu r parcels tat
191236. km"_° to Identify and re cane el Ali 2 s d q.
and fuMNt DRYWOWs vision.to hily 2017 Dmpwt ar 4weed,as
wdl ro islet in older m hre any Pngym pab,
aN6[lee and rwta r the Au6eVe�holom
I declare under penalty of perjury that the foregoing 10 1Ma bras agatry r a muk Of den eanankt!Coymant
consistent with the ftpwn do
is true and correct. Executed on this 26th of 1r�r VW Tb mandn' ah dtoW Mr or ealtpr"ba WItht
a 1 ley a rbulfaiwl e.�dWtOeggadyyea�a.
February 2018 in Palm Springs,California. dta t a*tese f1 OM and 25%of �I r�taammfi
N dNaM11tY1Rpallod and (10 a high �� AdJubd Tot
asanXl do Dan has received
.AORTA te TOt nor Co ns lta[�,cite tees pnpded an
rW Mtela maultam Allen D. n a YIM bu Darn
iM AuMga Projnrt w18 dMd$20^7 of non-TOT tea
f!br.Rom- a 'aq•dba'Aafkra as en 6y,,gyaps,.
a4 k mabmtbad a b 'OLY CIad4
togethde mks Is
save Prm i
drs mx TTn -dude mks ax rawnw from Mmnw 0.
refer this oral November.Aolgrtl4g ,an adjagemed in
reserve In inekamaat a f2t.70D,bred p
eppropdab, a b WaaluHW
DECLARANT non 70Ttetnbenefitto the CNy $31
.. drden4 a lmM W dna o°!!o1 giddy,
Dt O"w date Indkala ihr the W Poallorm
wvMrly-dre f731 rmrawafWulrL�Nme yuM,anus ba-cif a'w�°�ow
. 1n9a61b M an Auker3a Raab Collection property.
Ad#:0002754078 ppegN are.In~to KW this public hearing and
.kMarat vdfeesw.Mena Ikbd abew. Tat{full tad a the Covenant
P O:New Church II LLC Pub Hearing AYah 7 WIN ten dna Citf Nam from March 1 2018
#of Affidavits:1 of rch 7 't.sul- � r 14Q� 02
at tM Cky a Nbn Sprintrp h%l Jay
"rmrate; Director a Community and
&aromk Wvelopnem.
0mIc Mmjk%MMC
ty Clerk yMllYad:123/tt
i
750 N Gene Autry Trail
mediagroup Palm Springs,CA92262
RECEIVED Tel:760-77E-4578/Fax 760-7784731
31TY OF PALM SP` Itti4 .1 Of THE t 7,Z NHErwoex Email:legals@thedesertsun com
2919 MAR —5 P9109.5 I ,
NOTICE IS HEREBY GIVEN that on March 7, 2018, at 6:00 p.m. or as soon
C thereafter as the matter may be heard. the City Council of the City of Palm
OFFICE L�r I F Springs ("Ciryry) will meet and hold a publlc hearing in the Council Chamber
STA'I'��FCALIFORNIA SS. I«ated at 3200 E.Tahqultz Canyon Way, Palm Springs, U 92262,to consider
the Ciry's entry into an Operating Covenant("Covenant'/wkh devel.per New
COUNTY OF RIVERSIDE church II,LLC,a Nevada limited OabiliTy company(^Developer ).The Covenant
to be considered is an agreement to be recorded in the CounTy's official
records, entered pursuant to the City's Hotel Operations Incent Program
("Program"), codified in Chapter 5.26 of the Palm Springs Municipal Code,and
Section 300 of the Charter of the City of Palm Springs.
The followingy Information about the proposed Covenant is provided pursuant
CITY OF PALM SPRINGSILEGALS to Section 53083(a)of the California Government Code.
PO BOX 2743 1-The name and address of all corporations or any other business entities,
exceppt for sole proprietorships, that are the beneficiary of the economic
developman,subsidy,irf applicable.
Developer is a single purpose entity domiciled in the State of Nevada doing
PALM SPRINGS CA 92263 business from P.O Box 6528,Malibu,CA 902".The Agent for service of pr«ass
to Developer is Paracorp Incorpp.rated, doing business at 319 N.Carson Street,
Suite 208,Canon City,NV 89701.
2.The start and and dates and schedule, H applicable, for the economic
development subsidy.
If approved the Covenant would provide an economic subsidy to Developer
through a term of thirty (30) years, or until the Developer has received
I am over the age of 18 years old,a citizen of the $50,0 ,000 pursuant to the Program,whichever event occurs first.
3.A description of the economic deve2irent subsidy,including the estimated
United States and not a to,or have interest in total amount of the expenditure of public funds by,or of revenue lost to,The
Party local agency as a result of the economic development subsidy.
A The Program provides operating assistance to hotels In th
this matter. I hereby certify that the attached of adjusted transient occupancy tax ( Adjusted TOT") at e form of a rebate
a level, and for
duration that varies depending upon the nature and size of any new hotel,and
advertisement appeared in said newspaper(set in at a fixed level for existing hotels that meet Program criteria.The Program has
stimulated extensive investment in new and improved hotels in the City.In 2008
type not smaller than non pariel)in each and entire hotel generated revenue to the City was approximately f13,000,000. For the
current foral year, that revenue has increased To approximately f29,",000.
issue of said newspaper and not in any supplement
The City Council has extended the Program,which was onyinallyy set to expire
at the end of December 2012,and extended Program deadlines tar projects on
a case-by-case basis,including this project.
thereof on the following dates,t0 wit: B.Per the Program,the first class new hotel project planned by Developer,I.e.,a
hotel In the Auberge Resorts Collection, see httpsJ/aub.,9imsxrtb.c«N (the
Auberge Project"),is rebated 75%of Adjusted TOT for thirty(30)years or until
the rebate totals$50,000,000, whichever comes first.On July 26,2017,the City
02/25/18 Council directed that staff present a Covenant consistent with the Prooggram.
CAT the public hearing the Developer will request a rebate of 100% of the
Adjusted TOT for the first ten(10)years of operation,to be reduced to a 75%
rebate thereafter, until either thirty (30) years pass, or the Adjusted TOT
rebated reaches f50,000,000. If City approves the rebate requested by the
I acknowledge that I am a principal clerk of the Developer,itwill do so under its authors(y as a Charter City.
g P P D The public funds to be spent if the Oty approves this Covenant will be the
staff cons of administration, and statutorily mandated reporting Through the
printer of The Desert Sun,printed and published p p p term ofthe Programfthe rebate subsidy.
4..T seamm tee of the public purposes for the economic development
annsubsidy.
sixty-
five weekly in the City of Palm Springs,County of five( Developer represents that absent the Program rebate,the planned shed
live(65)room Auberge Project cannot be built.The City Council has ration ief
Riverside, State of California.The Desert Sun was development of the Auberge Project inclusive of ri. proper restoration of
multiple Class 1 designated historic structures,as a priority matter.One of the
historically designated structures, the old church building, will serve as The
adjudicated a Newspaper of general circulation on :pace for he hotel's restaurant and spa, both of which will be open to the
public.
March 24, 1988 by the Superior Court of the B.The Auberge Project would eliminate significant neighborhood blight that
has resulted from the long term decay of the project site, and major fire
County of Riverside,State of California Case NO. damage during 2013,The Developer acquired title to the multiple parcels that
comprise the Auberge Project in stages, starting In 2009. Since that time,
191236. Developer has worked to identify and refine a hotel project that meets City
standards and fulfills the Developer's vision.In July 2017 Developer agreed,and
the Covenant will require that in order to receive any Program rebate,
Developer's project must be and remain the Auberge Project.
S.Pro'ected tax revenue to the local al agency as result of the econcrnk
I declare under penalty of perjury that the foregoing development subsidy.
A.The Crty can either approve a Covenant consistent with the Program that
provides for 25% of Adjusted TOT to remain with the City, or agree with
s true and correct. Executed on this 26th of De elopceer's request for the 100%reba a of Adju tad TOT.The Council may also
grant[he 100%rebate requested by Developer,but for less than ten(10)years.
February 2018 in Palm Springs,California. under the Covenant the CiN)syAdjrsaste0 TOT received will range between(i)a
I
of$0 for the first ten 1U0 ea and 25%of Adjusted To
thereaker until
the Program rebate period ends, and (ii) a high of 25% of Adjusted TOT
througgh 30 years,or until the Developer has received f50,000,000.
B.In addition t.Adjusted TOT revenue received the Developer has provided an
economic study by real estate consultam Allan D. Kotin of Malibu-based
A0 estimating that the Au
Project will yield f288,867 of non-TOT tax
revenue per year,e. Fir
g.,p perry tax, Tors-site'sales tax on purduses by guests,
utility taxes,etc This study o maimalned as a public record by the b Clerk,
j� and ported on the City's we
a together with this notice
.
f' x C.The studys projection did not nclude sales tax revenue from Measure D,
s+lt-•1}i IN/J1/JNI/I P.(1 approved by the CiTy's voters this part November.Accordingly,an adjustment in
V uV projected non-TOT tax revenue In the amount of$27.500,based upon the Kotin
data regarding onsite sales tax is appropriate, yieldingg a total adjusted
DECLARANT estimated of annual non-TOT tax benefit to the Cityof$316,370.
b.Estlmated number of jobs created by the ecorromic development subsidy,
roken down by full-time,part-time,and temporary posldons.
Developer data indicates that the Auberge Project will create as many as
seventy-five(75)new full-time jobs,and an unknown number of part-time and
temporary jobs as required in order to maintain the level of service to guests
and visitors requisite at an Auberge Resorts Collection property.
Atl#:0002754078
All imerested persons are invited to attend this public hearing and exppress
opinions upon the items listed above. The full text of the Covenant w.I be
P O:New Church 11 LLC Pub Hearing available for review at Palm Springs City Hall from March 1,2018 through and
including March 7, 2018.Anyy written materials to be submitted regarding this
#of Affidavits:1 public hearing should be wbmitted to the City Clerk at least twenty-tour(24)
hours prior to the hearing.Further information on these items may be obtained
at the City of Palm Springs, Attn: lay Vlrata. Director of Community and
Economic Development
Anthony J.Mepa,MMC
City Clerk Published'2125/18
CITY OF PALM SPRINGS
PUBLIC NOTIFICATION
!'AWII
y01 1
O
�IIION,'
Date: March 7, 2018
Subject: New Church II, LLC Operating Covenant - Auberge
AFFIDAVIT OF PUBLICATION
I, Cynthia A. Berardi, CMC, Chief Deputy City Clerk, of the City of Palm Springs, California,
do hereby certify that a copy of the attached Notice of Public Hearing was published in the
Desert Sun on February 25, 2018.
1 declare under penalty of perjury that the foregoing is true and correct.
Cynt is A. erardi, CMC
Chief Deputy City Clerk
AFFIDAVIT OF POSTING
I, Cynthia A. Berardi, CMC, Chief Deputy City Clerk, of the City of Palm Springs, California,
do hereby certify that a copy of the attached Notice of Public Hearing was posted at City
Hall, 3200 E. Tahquitz Canyon Drive, on the exterior legal notice posting board, and in the
Office of the City Clerk on February 22, 2018.
1 declare under penalty of perjury that the foregoing is true and correct.
Cynthia A. Berardi, CMC
Chief Deputy City Clerk
NOTICE IS HEREBY GIVEN that on March 7, 2018, at 6:00 p.m. or as soon thereafter as the matter may be
heard,the City Council of the City of Palm Springs("City")will meet and hold a public hearing in the Council
Chamber located at 3200 E. Tahquitz Canyon Way, Palm Springs, CA 92262, to consider the City's entry
into an Operating Covenant ("Covenant") with developer New Church II, LLC, a Nevada limited liability
company ("Developer"). The Covenant to be considered is an agreement to be recorded in the County's
official records, entered pursuant to the City's Hotel Operations Incentive Program ("Program"), codified
in Chapter 5.26 of the Palm Springs Municipal Code, and Section 300 of the Charter of the City of Palm
Springs.
The following information about the proposed Covenant is provided pursuant to Section 53083(a) of the
California Government Code.
1. The name and address of all corporations or any other business entities, except for sole
proprietorships, that are the beneficiary of the economic development subsidy, if applicable.
Developer is a single purpose entity domiciled in the State of Nevada doing business from P.0 Box 6528,
Malibu, CA 90264.The Agent for service of process to Developer is Paracorp Incorporated,doing business
at 318 N. Carson Street, Suite 208, Carson City, NV 89701.
2. The start and end dates and schedule, if applicable,for the economic development subsidy.
If approved,the Covenant would provide an economic subsidy to Developer through a term of thirty (30)
years, or until the Developer has received $50,000,000 pursuant to the Program, whichever event occurs
first.
3. A description of the economic development subsidy, including the estimated total amount of
the expenditure of public funds by, or of revenue lost to, the local agency as a result of the economic
development subsidy.
A. The Program provides operating assistance to hotels in the form of a rebate of adjusted transient
occupancy tax ("Adjusted TOT") at a level, and for a duration that varies depending upon the nature and
size of any new hotel, and at a fixed level for existing hotels that meet Program criteria.The Program has
stimulated extensive investment in new and improved hotels in the City. In 2008 hotel generated revenue
to the City was approximately $13,000,000. For the current fiscal year, that revenue has increased to
approximately$29,000,000.The City Council has extended the Program,which was originally set to expire
at the end of December 2012, and extended Program deadlines for projects on a case-by-case basis,
including this project.
B. Per the Program, the first class new hotel project planned by Developer, i.e., a hotel in the
Auberge Resorts Collection, see https://aubergeresorts.com/ (the "Auberge Project"), is rebated 75% of
Adjusted TOT for thirty (30) years or until the rebate totals $50,000,000, whichever comes first. On July
26, 2017,the City Council directed that staff present a Covenant consistent with the Program.
C. At the public hearing, the Developer will request a rebate of 100% of the Adjusted TOT for the
first ten (10) years of operation, to be reduced to a 75% rebate thereafter, until either thirty (30) years
pass, or the Adjusted TOT rebated reaches$50,000,000. If the City approves the rebate requested by the
Developer, it will do so under its authority as a Charter City.
D. The public funds to be spent if the City approves this Covenant will be the staff costs of
administration, and statutorily mandated reporting through the term of the Program rebate/subsidy.
4. A statement of the public purposes for the economic development subsidy.
A. The Developer represents that absent the Program rebate,the planned sixty-five (65) room
Auberge Project cannot be built. The City Council has identified development of the Auberge Project,
inclusive of the proper restoration of multiple Class 1 designated historic structures, as a priority matter.
One of the historically designated structures, the old church building, will serve as the space for the
hotel's restaurant and spa, both of which will be open to the public.
Notice of Public Hearing
Operating Covenant—Auberge
Page 1 of 2
B. The Auberge Project would eliminate significant neighborhood blight that has resulted from the
long term decay of the project site, and major fire damage during 2013.The Developer acquired title to
the multiple parcels that comprise the Auberge Project in stages, starting in 2009. Since that time,
Developer has worked to identify and refine a hotel project that meets City standards and fulfills the
Developer's vision. In July 2017 Developer agreed, and the Covenant will require that in order to receive
any Program rebate, Developer's project must be and remain the Auberge Project.
S. Projected tax revenue to the local agency as a result of the economic development subsidy.
A. The City can either approve a Covenant consistent with the Program that provides for 25%of
Adjusted TOT to remain with the City,or agree with Developer's request for the 100% rebate of
Adjusted TOT. The Council may also grant the 100% rebate requested by Developer, but for less than ten
(10)years. Under the Covenant, the City's Adjusted TOT received will range between (i) a low of$0 for
the first ten (10)years,and 25%of Adjusted TOT thereafter until the Program rebate period ends, and
(ii)a high of 25%of Adjusted TOT through 30 years, or until the Developer has received $50,000,000.
B. In addition to Adjusted TOT revenue received,the Developer has provided an economic study by
real estate consultant Allan D. Kotin of Malibu-based ADK&A estimating that the Auberge Project will
yield $288,867 of non-TOT tax revenue per year,e.g., property tax, "on-site" sales tax on purchases by
guests, utility taxes,etc.This study is maintained as a public record by the City Clerk, and posted on the
City's website together with this notice.
C. The study's projection did not include sales tax revenue from Measure D, approved by the City's
voters this past November.Accordingly, an adjustment in projected non-TOT tax revenue in the amount
of$27,500, based upon the Kotin data regarding on-site sales tax, is appropriate,yielding a total
adjusted estimated of annual non-TOT tax benefit to the City of$316,370.
6. Estimated number of jobs created by the economic development subsidy, broken down by full-
time,part-time, and temporary positions.
Developer data indicates that the Auberge Project will create as many as seventy-five (75) new full-time
jobs, and an unknown number of part-time and temporary jobs as required in order to maintain the
level of service to guests and visitors requisite at an Auberge Resorts Collection property.
All interested persons are invited to attend this public hearing and express opinions upon the items
listed above.The full text of the Covenant will be available for review at Palm Springs City Hall from
March 1, 2018 through and including March 7, 2018. Any written materials to be submitted regarding
this public hearing should be submitted to the City Clerk at least twenty-four(24) hours prior to the
hearing. Further information on these items may be obtained at the City of Palm Springs, Attn:Jay
Virata, Director of Community and Economic Development.
Anthony J . Mejia, M C
City Cler
Notice of Public Hearing
Operating Covenant—Auberge
Page 2 of 2