HomeMy WebLinkAbout2/2/2005 - STAFF REPORTS (8) MEMORANDUM
TO: ALL MEMBER CITY COUNCILS
FROM: GARY C. SHERWIN,Vice President Market Development
DATE: JANUARY 20, 2005
SUBJECT: EXPANSION OF PARTNERSHIP BOUNDARIES
As a follow-up to the JPA Executive Committee meeting of January 18, 2005,the CVA is requesting that
that the following issue is placed on your City Council agenda for consideration. The following details
the request to expand the boundaries of the Joint Powers Authority west of Palm Springs to include the
Cabazon area, more specifically, Cabazon Outlet stores,Hadley's and Morongo Casino Resort&Spa for
a three-year trial basis.
ISSUE/STATEMENT
The CVA was approached by the Morongo Casino Resort&Spa in the spring of 2004 about the
possibility of joining the organization. The CVA previously had inquiries made by the Cabazon Outlet
Factory and Hadleys as to membership since they derive much of their business from the Pahn Springs
Desert Resorts. This has been suggested at least twice during the last ten years, but the JPA Executive
Committee, citing competitive concerns, declined to pursue the matter. The western most part of the
CVA boundaries currently extends to include the Whitewater Trout Farm.
With the addition of the Morongo Casino Resort&Spa and its hotel funding formtda,the CVA could
potentially realize an additional$100,000 in revenue and it is estimated that the outlets and other
businesses could generate another$30,000 in Industry Partnership (IP) fees. It has been suggested by
many members of the hospitality community that the outlets are perceived to be a vital part of the Palm
Springs Desert Resorts experience,even though they are currently outside the CVNs marketing
jurisdiction. Currently,the CVA is precluded from promoting the outlets and Morongo Casino Resort &
Spa.
Additionally,the outlets are a prime draw for many group tour operators and Asian visitors many of
whom do not currently come to the Palm Springs Desert Resorts. It is anticipated that if the boundary
change takes place,the CVA can work closely with the outlet management team to develop programs
that would encourage group tour operators and the Asian visitors to extend their stayto include the
desert. Many Asian tour operators have indicted that they would be willing to work with the CVA in
creating new destination experiences for their clients.
CVA Staff Report Re: Expansion of Boundaries
January 20,2005
Page 2
After discussion with local retail leaders and hoteliers,which have indicated that the boundary extension
is a positive benefit for the CVA and the local tourism industry in general,the CVA staff recommended
on January 18, 2005 that the organization extend its boundaries to include the Morongo Casino Resort &
Spa and the Cabazon Outlet Stores.
The JPA Executive Committee approved changing the boundaries to include the "Cabazon area", more
specifically the Morongo Casino Resort&Spa, Cabazon Outlet Stores and Hadley's based on a three-
year agreement. This agreement would allow each parry to "opt out" of the arrangement at the end of
the term(December 31, 2007) if either party did not think there was sufficient benefit. At the end of the
third year, if all parties are satisfied with the benefit,the CVA boundary expansion would become
permanent.
Since this change affects the CVA's Joint Powers Agreement, it is required that two-thirds of the active
member cities approve this proposal before the change becomes effective.
Attached is a diagram of the proposed expansion. (Exhibit 1)
BACKGROUND/RESEARCH
The Morongo Casino Resort&Spa is located outside the Coachella Valley and outside the current
membership boundaries approved bythe JPA Executive Committee and the Hospitality Industry and
Business Council November 17, 1998. The western boundary currently stops at Write water Trout Farm
on White water Road.
The Morongo Casino Resort&Spa combined with the Factory Outlets and other businesses; offer an
estimated$133,500 in additional funding, generated to supplement the CVNs existing marketing efforts.
From the proposed expansion,the CVA estimates bythe end of 2007 it would receive the following
investment for added marketing value:
1.4% of Gross Hotel Room Sales &IP Fee $100,000
Morongo Casino IP Fee $ 3,500
Outlet Mall and other Business dues . 30,000
Total 2005 funding impact $133,500
CVA Staff Report Re:Expansion of Boundaries
January 20,2005
Page 3
STAFF RECOMMENDATION
It is staff's recommendation that your City Council review the proposed boundary change and consider
the potential partnership revenue generated to benefit the marketing efforts bythe CVA on behalf of the
Palm Springs Desert Resorts and its member cities/County.
It is further requested that your City Cotmcil authorize CVA staff to file the following amendments to
the JPA Agreement to include:
1. Change of CVA building address to 70-100 Highway 111, Rancho Mirage, CA 92270
2. Expansion of membership boundaries west of the Coachella Valley to include the "Cabazon
Area". This extension would incorporate the Morongo Casino Resort and Spa,Factory Outlet
Stores and Hadley's. The new partnership boundary area to the west would include the western
frontage of Fields Road. (Exhibit 2)
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H ' 11 0 P '>O R �5
MINUTE ORDER NO.
APPROVING CERTAIN AMENDMENTS TO THE JOINT
POWERS AUTHORITY AGREEMENT FOR THE PALM
SPRINGS DESERT RESORTS CONVENTION AND
VISITORS AUTHORITY
---------------
I HEREBY CERTIFY that this Minute Order, approving certain amendments to the Joint
Powers Authority Agreement for the Palm Springs Desert Resorts Convention and
Visitors Authority was adopted by the City Council of the City of Palm Springs, California,
in a meeting thereof held on the 2"d day of February, 2005.
James Thompson
City Clerk