HomeMy WebLinkAbout1/4/2012 - STAFF REPORTS - 2.G. p.ALM Si09
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Fosto City Council Staff Report
DATE: January 4, 2012 CONSENT
SUBJECT: APPROVE DESTINATION PALM SPRINGS AGREEMENT WITH PS
RESORTS, A MUTUAL BENEFIT CORPORATION, TO CREATE,
FOSTER, AND ENHANCE EVENTS, ATTRACTIONS, CONVENTIONS,
AND ACTIVITIES THAT WILL ATTRACT VISITORS TO PALM SPRINGS
AND PROMOTE PALM SPRINGS AS A PREMIER DESTINATION.
FROM: David H. Ready, City Manager
BY: Douglas Holland, City Attorney
SUMMARY
The major resort hotels of the City are in the process of forming PS Resorts, a mutual
benefit corporation, that will create, foster, and enhance events, attractions,
conventions, and activities that will attract visitors to Palm Springs and promote Palm
Springs as a premier destination. This Agreement provides that the City will provide an
initial "seed" grant of funds to PS Resorts in an amount equal to 50% of the transient
occupancy tax revenues paid to the City and attributed solely to resort fees paid to and
collected by the resort hotels for three years, commencing on December 1, 2010.
RECOMMENDATION:
APPROVE AND AUTHORIZE THE CITY MANAGER TO EXECUTE THE
DESTINATION PALM SPRINGS AGREEMENT WITH PS RESORTS IN A FORM
APPROVED BY THE CITY ATTORNEY UPON THE COMPLETION OF THE
INCORPORATION OF PS RESORTS.
STAFF ANALYSIS:
Prior to November 1, 2010, the City's resort hotels did not collect and did not pay to the
City transient occupancy taxes on resort fees paid to and collected by the resort hotels.
Originally, the City understood the resort fee was an "optional" service and therefore
was not considered a taxable event under the City Transient Occupancy Tax ordinance.
In recent years, the resort fee structures for each hotel evolved into a mandatory fee
assessed on all hotel customers. As a result of this change, the City determined that
resort fees were taxable events under the City's ordinance and subject to the transient
ITEM N0. 2 '&*
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Destination Palm Springs Agreement
January 4, 2012
occupancy tax. Hence as of November 1, 2010, resort hotels commenced collecting
and paying to the City transient occupancy taxes on resort fees.
Additionally, part of the discussions during this policy reevaluation on the resort fees
was the general desire of the City to encourage and work with the tourism stakeholders
to provide additional events or attractions in Palm Springs during certain transitional
periods of time between the summer months and the "season" with the goal of attracting
visitors to Palm Springs. The resort hotels acknowledged this need and expressed a
willingness to assist the City in attaining the goal. The City and resort hotels identified
that a portion of the transient occupancy taxes on resort fees could be used for a period
of time to provide "seed" funds to help finance the efforts of creating events,
conventions, and attractions.
The proposed Destination Palm Springs Agreement is an agreement between the City
and a mutual benefit corporation, PS Resorts (a consortium of hotels that charge resort
fees), which is in the process of completing its incorporation process and its registration
as a non-profit corporation. This Agreement essentially provides that the City will grant
to PS Resorts 50% of the transient occupancy tax revenues derived solely from resort
fees paid to and collected by the resort hotels for 36 months commencing on December
1, 2010, to create, foster, and enhance events, attractions, conventions, and activities
that will attract visitors to Palm Springs and promote Palm Springs as a premier
destination.
FISCAL IMPACT
The cost of the grant 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, 2010. For the period of time
between December 1, 2010 and November 30, 2011, the amount of the grant to PS
Resorts would be $260,000 (this figure represents actual figures for December through
October, with an estimated amount for November, at the time of this staff report) based
on the 50% formula described in this staff report.
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Dougl s Holland, City Attorney David H. Ready, C' nager
Attachment: Destination Palm Springs Agreement
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q4 FOR N� DESTINATION PALM SPRINGS AGREEMENT
THIS DESTINATION PALM SPRINGS AGREEMENT (the "Agreement") is made and
entered into this _ day of 2012, by and between the City of Palm
Springs, a Californiacharter city ("City"), and PS RESORTS, a California mutual benefit
corporation ("PS Resorts"). Collectively the City and PS Resorts are referred to as the
Parties.
RECITALS
A. PS Resorts is a recently organized mutual benefit corporation, consisting of
representatives from each of the resort hotels operating within the corporate
limits of the City and who charge or assess resort fees. The purpose of PS
Resorts is 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 ("Project").
B. City is a charter city that levies and collects a transient occupancy tax on guests
for the privilege of occupancy at hotels, motels, and other visitor serving facilities
as provided in Chapter 3.24 of the Palm Springs Municipal Code.
C. It is the desire of the City to provide an initial "seed" grant of funds to PS Resorts
and assist PS Resorts in the furtherance of this Agreement purpose and to
ensure that there is an appropriate level of start-up funds to reasonably enable
PS Resorts to commence the Project.
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
City agrees to grant to PS Resorts an annual amount equal to Fifty Percent (50%) of
the 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 for thirty-six consecutive
calendar months, commencing on December 1, 2010 and PS Resorts agrees to
undertake 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 following terms and conditions:
AGREEMENT
1. Term. The term of this Agreement shall commence on December 1, 2010 and
terminate on November 30, 2013, unless terminated pursuant to the provisions of
Section 15 of this Agreement.
2. Project. PS Resorts shall initiate and reasonably pursue the creation, fostering,
and enhancement of events, attractions, and activities that will attract visitors to Palm
Springs and otherwise promote Palm Springs as a premier destination.
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3. Status of PS Resorts. PS Resorts is an independent entity, apart from the City,
and shall be wholly responsible for the manner in which it performs the Project as
required by the terms of this Agreement. Nothing in this Agreement shall be construed
as creating a relationship of employer and employee or principal and agent between the
City and PS Resorts or any of PS Resorts' agents or employees. The City shall neither
have nor exercise any control or direction over the methods by which PS Resorts shall
perform its obligations under this Agreement. The City shall not be responsible or liable
for the acts or failure to act, whether intentional or negligent, of any employee, agent, or
volunteer of PS Resorts.
4. Operation as a Non-Profit. PS Resorts shall at all times during the term of this
Agreement operate and otherwise conduct itself as a bona fide mutual benefit
corporation in full compliance with the laws of the State of California and shall timely file
all statement, documents, and submissions required under the laws of the State of
California and the United States. PS Resorts shall also implement appropriate financial
procedures and administrative practices that will ensure that the Board of Directors of
PS Resorts will be accountable for all actions taken in the name of PS Resorts,
including without limitation inclusion on the Board of Directors a representative from
each hotel in the City that collects transient occupancy taxes on resort fees, Board of
Directors review and approval by a majority of the membership of each and every
expenditure in excess of One Thousand Dollars ($1,000.00), and the preparation of
minutes of all Board meetings that reflect all actions taken during each Board meeting.
PS Resorts warrants that it has, or that it will timely secure all necessary licenses and
permits required by the laws of the United States, State of California, or the City, and all
other appropriate governmental agencies, and agrees to maintain these licenses and
permits in effect for the duration of this Agreement. In addition, PS Resorts warrants
that its officers, directors, employees, agents, and contractors shall conduct themselves
in compliance with the laws and licensure requirements including, without limitation,
compliance with laws applicable to non discrimination, sexual harassment, and ethical
behavior.
5. Delegation and Assignment. PS Resorts shall not delegate or assign or
otherwise transfer its duties, nor assign its rights under this Agreement, either in whole
or in part, without the prior written consent of the City's City Manager. The request
must be in writing with a full explanation for the request. Any consent granted by the
City Manager may be conditioned upon and subject to certain actions by PS Resorts as
determined by the City Manager. Any attempted assignment or delegation in
derogation of this Section 5 shall be deemed void.
6. Contingent on Funding and Budget. The obligations of the City under this
Agreement are contingent upon the availability of funds and inclusion of sufficient funds
for the payment of any or all obligations hereunder in the budget approved by the City
Council each fiscal year this Agreement remains in effect or operation. In the event
such funding is terminated or reduced, the City Manager may immediately terminate
this agreement, reduce the City's obligations, if any, or modify this Agreement, without
penalty. The decision of the City Manager shall be binding on PS Resorts. The City
Manager shall provide PS Resorts with written notification of such determination and
PS Resorts shall immediately comply with the City Manager's decision.
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7. Indemnification. PS Resorts agrees to and shall indemnify, defend, and hold
harmless City and its officers, agents, and employees from and against all liability,
claims, losses and demands, damages to property or injuries to or death of any person
or persons, including property of officers, employees, or agents of City, including
defense costs (together, "Claims"), whether resulting from court action or otherwise,
resulting from, related in any manner to, or arising out of the intentional, malicious,
negligent acts, inactions, errors or omissions of PS Resorts, its officers, employees,
agents, and/or its Subcontractors in the performance of this Agreement.
8. Insurance. Without limiting PS Resorts' liability for indemnification of City as set
forth in Section 7 above, PS Resorts shall obtain and maintain in effect, during the term
of this Agreement, reasonable insurance coverage consistent with best practices
applicable to non-profit corporations doing business in the State of California.
9. Covenant against Discrimination. In the performance of this Agreement, PS
Resorts shall not engage in, nor permit any employee or agent to engage in
discrimination in employment of persons or provision of Services or assistance, nor
exclude any person from participation in, nor deny any person the benefits of, nor or
subject any person to discrimination under any program or activity funded in whole or in
part with funds under this Agreement on the grounds of race, religion, color, national
origin, ancestry, physical handicap, medical condition, marital status, gender or sexual
orientation, except as permitted by applicable provisions of Federal and State law. PS
Resorts shall comply with Title II of the Americans with Disabilities Act, (42 U.S.C.
§12101, et. seq.) as it relates to public accommodations.
10. Notice. Any notice, demand, request, consent, approval, or communication
either party desires or is required to give to the other party or any other person shall be
in writing and either served personally or sent by United States Postal Service, pre-paid,
first-class mail to the address set forth below. Either party may change its address by
notifying the other party of the change of address in writing. Notice shall be deemed
communicated seventy-two (72) hours from the time of mailing if mailed as provided in
this Section.
To City: City of Palm Springs
Attention: City Managerr
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
To PS Resorts:
Palm Springs, CA
11. Integrated Agreement. This Agreement contains all of the agreements of the
parties and cannot be amended or modified except by the mutual consent of the parties
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by an instrument in writing.
12. Amendment. This Agreement may be amended at any time by the mutual
consent of the parties by an instrument in writing.
13. Severability. In the event that any one or more of the phrases, sentences,
clauses, paragraphs, or sections contained in this Agreement shall be declared invalid
or unenforceable by valid judgment or decree of a court of competent jurisdiction, such
invalidity or unenforceability shall not affect any of the remaining phrases, sentences,
clauses, paragraphs, or sections of this Agreement, which shall be interpreted to carry
out the intent of the parties hereunder.
14. Audits. PS Resorts shall prepare and maintain adequate records of its
performance under this agreement in sufficient detail to permit an evaluation of the
work and services as generally provided in this Agreement. In this regard, PS Resorts'
books and financial records shall be made available to the City Manager or the City
Manager's designee for inspection at the City Manager's request. Owner shall
indemnify and hold harmless, the City, its elected and appointed officials, agents,
employees and independent contractors free and harmless from any liability
whatsoever based and asserted upon any act or omission of the City for property
damage, bodily injury, or death or any other element of damage of any kind or nature,
relating to or in any way connected with PS Resorts performance of its obligations
under this Agreement, except to the extent such damage is due solely to the City's
negligence or willful misconduct.
15. Termination. The City and PS Resorts each reserves the right to terminate this
Agreement at any time, without cause, upon thirty (30) days written notice to the other
party. In the event the agreement is terminated without cause, PS Resorts will retain
any funds paid to PS Resorts under this Agreement and PS Resorts will expend such
funds only in the manner and for the purposes provided in this Agreement.
16. Authority. The persons executing this Agreement on behalf of the parties
hereto warrant that they are duly authorized to execute this Agreement on behalf of
said parties and that by so executing this Agreement the parties hereto are formally
bound to the provisions of this Agreement.
SIGNATURES ON FOLLOWING PAGE
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates stated below.
City of Palm Springs
Date: By:
David H. Ready, Esq., PhD.
City Manager
ATTEST: APPROVED AS TO FORM:
By: By:
James Thompson Douglas C. Holland
City Clerk City Attorney
Palm Springs PS Resorts
Date: By :
Date:
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