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Home My WebLink About6/4/2008 - STAFF REPORTS - 3.A. F pPL/W g 41 V N 9Few •e c4`�F°R"'PY City Council Staff Report DATE: JUNE 4, 2008 LEGISLATIVE SUBJECT: AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING SECTIONS 5.26.020 AND 5.26.040 OF THE PALM SPRINGS MUNICIPAL CODE, RELATING TO AMENDMENTS TO THE CITY'S HOTEL OPERATIONS INCENTIVE PROGRAM FROM: David H. Ready, City Manager BY: Community & Economic Development Department SUMMARY: This Ordinance amends the existing hotel incentive program by revising certain tax rate calculations to reflect actual application in the City and to add "Deluxe Hotels" as a hotel type that would be eligible for the incentive program. RECOMMENDATION: Waive Reading and introduce for first reading Ordinance No. , "AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING SECTIONS 5.26.020 AND 5.26.040 OF THE PALM SPRINGS MUNICIPAL CODE, RELATING TO AMENDMENTS TO THE CITY'S HOTEL OPERATIONS INCENTIVE PROGRAM" STAFF ANALYSIS: This action amends the City's Hotel Operations Incentive Program by correcting an inaccuracy in the calculation of the "Adjusted Tax Rate," which is the Hotel Operations Incentive Program tax rates which shall be exclusively utilized for the calculation of the operating assistance to be paid by the City to qualified Operators of Hotels participating in the Hotel Performance Incentive Program. For Hotels of one hundred twenty-four (124) rooms or less, the Adjusted Tax Rate shall be 10.9% of the rent charged by the Operator of the Hotel for transient occupancies. For Hotels of one hundred twenty-five (125) rooms or more, the Adjusted Tax Rate shall be 12.1% of the rent charged by the Operator of the Hotel for transient occupancies. Item No. 3 . A . The amendment also creates an additional hotel category of"Deluxe Hotel," meaning a Hotel which provides standards of physical features and operational services which include operation of the Hotel on a twenty-four (24) hour per day/seven (7) days per week basis, housekeeping services, meeting room services, bellman services, and parking services but does not reach the standard of First Class Hotel as defined in the original Ordinance. _AZ �Y ohn S/iRaym n , Director of Thomas JyWilson &aawfiunity & E@6nomic Development Assistant City Manager DAVID H. READY City Manager Attachments: Ordinance ORDINANCE NO. AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING SECTIONS 6.26.020 AND 526.040 AND SUBSECTION (a) OF SECTION 5.24.030 OF THE PALM SPRINGS MUNICIPAL CODE, RELATING TO AMENDMENTS TO THE CITY'S HOTEL OPERATIONS INCENTIVE PROGRAM. CityAttorney's Summary This Ordinance amends the existing hotel incentive program by revising certain tax rate calculations to reflect actual application in the City and to add "Deluxe Hotels" as a hotel type that would be eligible for the incentive program. The City Council of the City of Palm Springs ordains: Section 1. Section 5.26.020 is amended by amending the definition for "Adjusted Tax Rate", adding a new definition for the term "Deluxe Hotel," and amending the definition for the term "New Quality Hotel" as follows: "Adjusted Tax Rate" shall mean the Hotel Operations Incentive Program tax rates which shall be exclusively utilized for the calculation of the operating assistance to be paid by the City to qualified Operators of Hotels participating in the Hotel Performance Incentive Program. For Hotels of one hundred twenty-four (124) rooms or less, the Adjusted Tax Rate shall be 10.9% of the rent charged by the Operator of the Hotel for transient occupancies. For Hotels of one hundred twenty-five (125) rooms or more, the Adjusted Tax Rate shall be 12.1% of the rent charged by the Operator of the Hotel for transient occupancies. The Adjusted Tax Rate set forth in this Section shall exclusively apply for the calculation of any and all operating assistance for the term of the Hotel Performance Incentive Program without regard to any increases at any time in the City of Palm Springs' Transient Occupancy Tax Rates. "Deluxe Hotel" means a Hotel which provides standards of physical features and operational services which include operation of the Hotel on a twenty-four (24) hour per day/seven (7) days per week basis, housekeeping services, meeting room services, bellman services, and parking services. "New Hotel" and "First Class New Hotel," and "Deluxe New Hotel" means a Hotel or First Class Hotel or Deluxe Hotel that is or was Under Construction as a Hotel after January 1, 2008, but before December 31, 2012. The term "New Hotel" does not include all, or any portion of, or addition to, an Existing Hotel. "New Quality Hotel" means a Hotel that is not a First Class Hotel or a Deluxe Hotel and is a Hotel that is, or was, Under Construction as a Hotel after January 1, 2008, but before December 31, 2010. Section 2. Subsection (a) of Section 5.26.030 of the Palm Springs Municipal Code is amended to read: MOM Ordinance Page 2 (a) To qualify for the Hotel Operations Incentive Program for New First Class Hotels and New Deluxe Hotels, the Operator shall: (1) Complete and submit to the City Manager, the City's application for the Hotel Operations Incentive Program. (2) Subscribe to the Palm Springs Convention Center's Committable Rooms Program. (3) Provide independent, third-party, certification acceptable to the City of the level of quality of the New Hotel as a First Class Hotel or Deluxe Hotel as defined in Section 5.26.020. (4) Participate in the City's Convention Center Hotel Shuttle Service on a proportional basis equal to the number of total hotel, or condo—hotel rooms in the First Class New Hotel or Deluxe New Hotel- (5) Execute the Operating Covenants which shall include provisions regarding continuing use, maintenance, non-discrimination, and such other provisions as the City Council in its sole discretion, may reasonably determine are necessary or appropriate to preserve the goals and intent of this Chapter. Section 3. Section 5.26.040 of the Palm Springs Municipal Code is amended to read: 5,26.040 Incentive Program (a) First Class New Hotels. The City shall pay to an Operator of a First Class New Hotel an amount equal to fifty percent (50%) of the Adjusted Tax Rate. Such payments shall be made for twenty (20) years or until the Operator has been paid Fifty Million Dollars ($50,000,000.00), whichever event occurs first. Without regard to any preceding conditions of this Section, the Program shall terminate at any point the First Class New Hotel is not operated as a First Class Hotel- (b) Deluxe New Hotels. The City shall pay to an Operator of a Deluxe Hotel an amount equal to fifty percent (50%) of the Adjusted Tax Rate. Such payments shall be made for twenty (20) years or until the Operator has received Twenty-Five Million Dollars ($25,000,000.00), whichever event occurs first. Without regard to any preceding conditions of this Section, the Program shall terminate at any point the Deluxe Hotel is not operated as a Deluxe Hotel. (c) New Quality Hotels. The City shall pay to an Operator of a Quality New Hotel an amount equal to fifty percent (50%) of the Adjusted Tax Rate. Such payments shall be made for ten (10) years or until the Operator has received Twenty-Five Million Dollars ($25,000,000.00), whichever event occurs first. Without regard to any preceding conditions of this Section, the Program shall terminate at any point the New Quality Hotel is not operated as a New Quality Hotel. Ordinance Page 3 (d) Existing Hotels. The City shall pay to an Operator of an Existing Hotel an amount equal to fifty percent (50%) of the Transient Occupancy Tax Increment collected and remitted to the City pursuant to Chapter 3.24 of this Code. Such payments shall be made for ten (10) years, or until the Operator has been received Twenty-Five Million Dollars ($25,000,000.00), whichever event occurs first. Without regard to any preceding conditions of this Section, the Program shall terminate at any point the Existing Hotel is not operated as a Hotel. Section 3. 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 upon adoption. APPROVED, PASSED, AND ADOPTED THIS _ DAY OF June, 2008. STEPHEN P. POUGNET, MAYOR ATTEST: JAMES THOMPSON, CITY CLERK CERTIFICATION: STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, California, do hereby certify that Ordinance No. _ is a full, true, and correct copy, and was introduced at a regular meeting of the Palm Springs City Council on _, and adopted at a regular meeting of the City Council held on by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California HOW