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CgOF00%9 City Council Staff Report
DATE: December 4, 2013 CONSENT CALENDAR
SUBJECT: APPROVE AN AMENDMENT TO DESTINATION PALM SPRINGS
AGREEMENT NO. 6187 WITH PS RESORTS, EXTENDING THE
AGREEMENT FOR AN ADDITIONAL THREE YEARS.
FROM: David H. Ready, City Manager
BY: Chief of Staff/City Clerk
SUMMARY
The City Council will consider an amendment to the Destination Palm Springs
Agreement with PS Resorts, to extend the agreement for three years. Additionally, the
amendment includes a commitment for PS Resorts to contribute $100,000 in each year
of the extension towards the Palm Springs Trolley program.
RECOMMENDATION:
1. Approve Amendment No. 1 to Agreement No. A6187 with PS Resorts.
2. Authorize the City Manager to execute the amendment to the agreement.
STAFF ANALYSIS:
Prior to November 1, 2010, the City's resort hotels did not collect and pay to the City
transient occupancy taxes on resort fees paid to and collected by the resort hotels.
Originally, the fee was an "optional" service and therefore was not considered a taxable
event under the City Transient Occupancy Tax Ordinance.
In more recent years, as a result of changing hotel industry norms, resort fee structures
for each hotel evolved into a mandatory fee assessed on all hotel customers. Pursuant
to this change, the City determined that resort fees were taxable events under the City's
ordinance and subject to the transient occupancy tax. Hence, as of November 1, 2010,
resort hotels commenced collecting and paying to the City transient occupancy taxes on
resort fees.
Subsequently, the major resort hotels of the City have formed PS Resorts, a mutual
benefit corporation, that creates, fosters, and enhances events, attractions,
conventions, and activities that attract visitors to Palm Springs and promote Palm
Springs as a premier destination. In February 2012, the City entered into a partnership
agreement with PS Resorts — providing them with funding equal to 50% of the transients �\
ITEM NO._ �—
City Council Staff Report
December 4, 2013— Page 2
Destination Palm Springs Agreement
occupancy tax revenues paid to the City, attributed solely to resort fees paid to and
collected by the resort hotels, for three years commencing on December 1, 2010 to
November 30, 2013. The purpose of the agreement was to share a portion of the
collected resort fee transient occupancy tax with PS Resorts to further their mission of
attracting new tourism business to the City.
For past last three years, PS Resorts has worked with the City and tourism stakeholders
to provide additional events and or attractions in Palm Springs, especially during
transitional periods of time between the summer months and the "season" with the goal
of attracting visitors to Palm Springs. A sampling of projects contributed to by PS
Resorts include the following:
• Marilyn Sculpture
• Concerts at Marilyn Park
• Film Friendly Program
• Amgen Bicycle Tour
• Liberace Movie Premiere
• PS Restaurant Week
• Tachevah: A PS Block Parry
• World Chili Cook-Off
The proposed amendment extends the current agreement by three years through
November 30, 2016. Further, this amendment stipulates that PS Resorts will provide
$100,000 funding for each year of the extension toward the proposed Palm Springs
Trolley program designed to support the Downtown and Uptown hotels, restaurants and
businesses. If City Council chooses not to proceed with a Trolley program, PS Resorts
would be relieved of this obligation.
FISCAL IMPACT
The percentage of funding provided under the Destination Palm Springs agreement will
be 50% of the transient occupancy tax revenues attributed solely to the resort fees
collected by the resort hotels commencing on December 1, 2013, through November
30, 2016.
Under the current agreement, for the past 12 month period, PS Resorts received
$370,000 in revenue. For the term of the extension, revenues provided to PS Resorts
are estimated to range between $350,000 and $400,000 annually. Attached is the PS
Resorts Financial Summary Report (2012-2013).
ES THOMPSON DAVID H. READY
Chief of Staff/City Clerk City Manager
Attachment:
Amendment
PS Resorts Financial Summary Report 02
AMENDMENT NO. 1 TO DESTINATION PALM SPRINGS AGREEMENT
PS RESORTS
This Amendment No. 1 to the Destination Palm Springs Agreement
("Amendment') is made and entered into this 6T" day of December, 2013, by and
between the City of Palm Springs, California, a California charter city ("City), and PS
Resorts, a California mutual benefit corporation ("PS Resorts").
RECITALS
A. City and PS Resorts have entered into a funding Agreement, dated
May 28, 2012, to create, foster, and enhance events, attractions, and activities that will
attract visitors to Palm Springs and otherwise promote Palm Springs as a premier
destination ("Agreement').
B. City and PS Resorts are agreeable to modifying certain terms and
conditions to the Agreement pursuant to the terms of this Amendment.
C. City and PS Resorts desire to continue funding to PS Resorts in the
furtherance of its purpose and the purposes of the Agreement.
AGREEMENT
In consideration of the promises and covenants contained in this Amendment
and other good and valuable consideration, the City and the PS Resorts agree:
SECTION 1. City agrees to grant to PS Resorts an annual amount equal to fifty
percent (50%) of the net transient occupancy tax revenues paid to and retained by the
City, attributed solely to resort fees paid to and collected by the member hotels of PS
Resorts (`Resort Fee TOT") for thirty-six consecutive calendar months, commencing on
December 1, 2013, and PS Resorts agrees to continue the Project, and create, foster,
and enhance events, attractions, and activities that will attract visitors to Palm Springs
and otherwise promote Palm Springs as a premier destination, subject to the terms and
conditions of the Agreement. For the purposes of this Agreement "net transient
occupancy tax revenues" means transient occupancy tax revenues paid to the City and
attributed solely to resort fees paid to and collected by the member hotels of PS Resorts
less any rebates, refunds, or incentive program payments pursuant to Chapter 5.26 of
the Palm Springs Municipal Code or by agreement between the City and a Developer or
Operator of a hotel.
SECTION 2. Section 1 of the Agreement is amended to read:
1. Term. Unless earlier terminated in accordance with Section 15 of this
Agreement, this Agreement shall continue in full force and effect for a period of three (3)
years ending on November 30, 2016, unless extended by mutual written agreement of
the parties.
Destination Palm Springs Amend. No. 1
PS RESORTS 03
Page 1 of 2
SECTION 3. Subsection (c) of Section 6, titled "Funding," is added to the
agreement to read:
(c) Funding of the Palm Springs Trolley by PS Resorts. PS Resorts
commits to fund a minimum of $100,000 annually during the life of this agreement
extension to the proposed City of Palm Springs trolley program, as generally described
at the City Council meeting of November 20, 2013, and subject to further refinement
and modification. One-half of each annual payment to the City for this purpose will be
due and payable on May 1 and November 1 of each year this agreement remains in
effect. PS Resorts shall be recognized as a sponsor of the Palm Springs Trolley
Program in a manner as determined by the City Manager and PS Resorts. In the event
that City Council does not approve such a trolley program, PS Resorts will be relieved
of this obligation —which would be in writing from the City Manager.
SECTION 4. The persons executing this Amendment on behalf of the parties
hereto warrant that they are duly authorized to execute this Amendment on behalf of
said parties and that by so executing this Amendment the parties hereto are formally
bound to the provisions of this Amendment.
SECTION 5. City and PS Resorts agree that the terms of the Agreement, shall
remain unchanged and in full force and effect, except as specifically provided in this
Amendment.
In witness whereof, City and PS Resorts have executed and entered into this
Amendment as of the date first written above.
CITY OF PALM SPRINGS, PS RESORTS
A California Charter City A California Mutual Benefit Corp.
David H. Ready, City Manager Aftab Dada, President
ATTEST:
James Thompson, City Clerk Tim Ellis, Vice President
APPROVED AS TO FORM:
Douglas C. Holland City Attorney
9 h/ Y
Destination Palm Springs Amend. No. 1
PS RESORTS 4
Page 2 of 2
RESORTS
f
PS RESORTS
FINANCIAL SUMMARY
2012 - 2013
190 Amado Road Palm Springs, CA 92262 760-275-0963 ww V -RESORTS.co
RESORTS
The City prepared a check in the amount of$262,414.97 to PS Resorts that
represents the unspent proceeds of 50% of the Total TOT on Resort Fees
collected with the TOT for the period of December 1, 2010 through
January 31, 2012.
Opening Balance $262,414.97
City of PS TOT 50%
Grant Fee 2012
February 2012 TOT $27,587.00
March 2012 TOT $44,637.00
April 2012 TOT $35,733.00
May 2012 TOT $29,047.00
June 2012 TOT $27,319.00
July 2012 TOT $28,916.00
August 2012 TOT $24,599.00
September 2012 TOT $23,658.00
October 2012 TOT $19,651.00
November 2012 TOT $28,540.00
December 2012 TOT $28,444.00
TOTAL: 318,131.00
City of PS TOT 50%
Grant Fee 2013
January 2013 TOT $24,927.00
February 2013 TOT $33,971.00
March 2013 TOT $47,722.00
April 2013 TOT $35,346.00
May 2013 TOT $32,493.00
June 2013 TOT $28,098.00
July 2013 TOT $25,264.00
August 2013 TOT $26,704.00
September 2013 TOT $21,899.00
TOTAL: 276,424.00
TOTAL: 856,969.97
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190 Amado Road • Palm Springs, CA 92262 760-275-0963 • w w✓P'�;:-RESORTS.com
g . RESORTS
Over the past 3 years since the formation of PS Resorts the
following events we have sponsored or created:
1. Amgen $50,000.00
2. Best of the Best Awards $ 566.67
3. C.V.S.P.LN $ 2,000.00
4. Desert Fashion Demolition Party $ 739.00
S. Festival of Lights Parade 12'/13' $30,000.00
6. Film Friendly Project $15,000.00
7. Forever Marilyn Events
- PS Resorts Statue contribution/unveiling $30,000.00
- Movies in the Park $11,200.00
- Summer 2013 $10,000.00
- Concerts in the Park x (6) $60,000.00
- PS It's Christmas @ FM 12' $12,000.00
- Christmas Concert @ FM 13' $ 8,000.00
8. Liberace Movie Premiere - Convention Center $ 3,200.00
9. Market Research Firm - Utopia $32,286.89
10. Market Share Group - Linda O'Brien $18,000.00
11. Mayor's Race 12'/13' $30,000.00
12. Palm Springs International Film Festival $30,000.00
13. PS Promise $28,380.00
14. Palm Springs Hospitality Assn. $ 3,000.00
15. Restaurant Week PS Sponsorship $ 2,500.00
16.SO Palm Springs Brochure $15,000.00
17. Shelter from the Storm $ 2,500.00
18. SW Passenger Rail $ 2,386.10
19. Tachevah: A PS Block Party $30,000.00
20. US Pentathlon $20,000.00
21. UpTown Brochure $15,000.00
22.White Party Entertainment $ 5000.00
23.World Chili Cook off $30,000.00
24.Women's Leadership $ 1,500.00
Total: $498,258.66
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190 Amado Road • Palm Springs, CA 92262 • 760-275-0963 • wvw . S-RESORTS.com
RESORTS
PS RESORTS OPERATIONAL EXPENIDURES 2012/2013
Expenses Total Expense Description
Palm Springs Sign behind Forever
Advertising 5,493.82 Marilyn & Kiosk at FM Site
Forever Marilyn promotional materials
Collateral 2,346.86 produced by Buzz Factory
Media 3,733.40 Equipment Rental for FM Installation
Membership Fees for Chamber, PSHA,
Dues & Subscriptions 1,962.95 QuickBooks& Leadership CV
BOD Directors Insurance, FM Liability &
Insurance 4,544.00 Tachevah: A PS Block Party Insurance
Legal& Professional Fees
Accounting Fees 3160.00 Taxes
Administration 53,330.17 Contract&Staff 2 ears
Le al Fees 14 838.53 Slovak, Baron Em e , Murphy& Pinkne
Miscellaneous Expenses 330.27 Materials for FM Events
Office Expenses 1,105.35 Computer&Office Supplies
FM Movie Night&concert generator
Equipment Rental 1,189.30 rental
Postage 46.52
Public Relations Fees 39 236.90 FM Branding, Social Media & PR
Rent or Lease 6,600.00
FM Maintenance, Forever Marilyn
concrete pad, installation, grading & labor
Re air& Maintenance 18 839.89 costs;
Supplies 49.59
Utilities 0.00
Telephone 1 047.76
TOTAL EXPENSES: $157,855.31
TOTAL SPONSORSHIPS: $498,258.66
ENDING BANK BALANCE 11M13: $200,856.00
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190 Amado Road • Palm Springs, CA 92262 • 760-275-0963 • wvw . '9-RESORTS.cori