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Home My WebLink AboutNon Agenda Public CommentMay 19, 2022 To: The Mayor of Palm Desert and the Palm Desert City Council: Re: Strengthening Municipal Codes to Exclude Timeshares in R-1 Neighborhoods Respectfully, we appreciate the attention paid to the issue of multi-family dwelling ownership, or timeshare” in R-1 zones at the last Council meeting. However, we further encourage the Mayor and City Council to consider further strengthening the ordinance in the City’s Municipal Code to keep “timeshare-like” properties, similar to the Pacaso model, excluded from residential R-1 neighborhoods. As you are aware, the City’s Municipal Code currently permits timeshare projects in areas zoned for 1.) Planned residential, 2.) General commercial and 3.) Planned commercial resorts. The Pacaso model which claims it is not a timeshare but only a fractional ownership model however functions as a timeshare and should not be allowed in R-1 neighborhoods. In our neighborhood there are now three of these Pacaso residences within a 3 block area South of Haystack; specifically 72-985 Somera, 72-694 Skyward and 72- 870 Bel Air. The property at 72-694 Skyward is not currently displayed on the Pacaso website but it is listed as a co-ownership property so could there be others out there? Our Somera neighborhood has now experienced the first over-night visitors at the Pacaso property located at 72985 Somera which began on May13, 2022 and ended on May 15, 2022. In this instance the extreme noise and bright lights on our rather dark non-street lighted street were similar to those of a busy open-air commercial restaurant venue on El Paseo. While we understand that homeowners have the right to live as they wish in their homes, these 8 Pacaso LLC shareholders and their unlimited number of guests can function as "timeshare" participants with less understanding and respect for their surroundings. They arrive most often with a party-like attitude which is not generally compatible with our quieter R1 neighborhood settings. Long term effects of escalating home prices will occur as Pacaso overpays for houses and then forms a LLC so they can charge a higher price for each of the 8 shareholders and takes a significantly high fee based on the higher price. They then pass through all costs for running the home and add a little extra to the monthly fees in case of inevitable rising costs. When you take the cost of a single share for each of these 8 shareholders the end result is a property that is nearly 20% higher than the original sale price hence inflating the real value of the property and downgrading the neighborhood as a whole. And is it not true that the Pacaso model of timeshare fractional ownership does not pay Transient Occupancy Tax to the City? Converting these single family residences to multi-family ownership timeshare properties eliminates residential dwelling units that could have been available for long term residential use. Scarce, stable and desirable neighborhoods could become less desirable, and the City loses the potential of active community members who can vote and contribute to the health and welfare of Palm Desert. Much more can be said of the disturbance of increased noise, trash and on street parking with visitors who arrive frequently with many more inhabitants and cars than normal for a single-family residence. We will have transient occupants in our neighborhoods who “come and go” every 2-24 days carrying suitcases since they are only able to leave personal belongings in a designated locker inside the garage. Hence you have more cars parking outside and on the streets. Strengthening Municipal Codes to Exclude Timeshares in R-1 Neighborhoods May 19, 2022 Page 2 As we understand the issue, the 8 shareholder owners may allow their family members and friends to use the home but the question is how many guests and guests of guests of shareholders will be coming through the house? Shareholders are required to sign a Code of Conduct agreement with the Pacaso Management Company that their shares cannot be rented out but according to sources this agreement is not binding and is not written into the deed and can be changed in the future. And just imagine if Pacaso LLC Management Company seizes to exist what sort of dire straits these timeshare dwellings might fall into thus further jeopardizing the sanctuary and value of the single family R-1 neighborhoods. In closing, it appears our neighboring city of Palm Springs has petitioned Pacaso to cease and desist as they classify Pacaso as a time share which does not align with their Zoning Regulations. Rancho Mirage also has much concern about the effect of these timeshare ownerships have on their residential neighborhoods. Cities like Santa Barbara, Carmel and South Lake Tahoe (see attached excerpt) all petitioning Pacaso to leave town. To join in accordance with our neighboring Desert cities, as well other cities throughout California, we respectively ask that the Mayor and the Palm Desert City Council strengthen the existing ordinance regulating timeshares so business models like Pacaso are not allowed to run their business in our residential R-1 neighborhoods. Thank you, Neighbors on the 72-000 Block of Somera Road, Palm Desert, CA: Jan Ball 72-830 Somera Bruce Elwood 72-755 Somera Brad and Linda Kelleran 72-775 Somera James Paschke 72-775 Somera Aron Frenz 72-775 Somera Jerry Preece and Debbie 72-790 Somera Paul Robie 72-895 Somera Kim Vesling and Kim Mathias 72-950 Somera Mark and Jeannie Blalock 72-855 Somera Allan and Marie Kaplan 72-875 Somera Gerard and Michele Anthoine 92-925 Somera Ken and Kim Cosgrove 72-965 Somera Carol Adney 72-835 Somera Craig and Denise Pearson 72-935 Somera Michele Drinkwater 72-930 Somera Don and Linda Padgett 72-945 Somera Ellen Kane 73-015 Skyward (adjacent to Somera) Dwight and Kim Von Haden 72-920 Somera Jeff and Pam Oligney 72-890 Somera Jason Cason and Burt Carter 72-665 Somera Sue and Frank Schmidt 72770 Somera Strengthening Municipal Codes to Exclude Timeshares in R-1 Neighborhoods May 19, 2022 Page 3 Excerpt from the City of South Lake Tahoe’s “CEASE AND DESIST” Letter to Pacaso written by Ms. Heather L. Stroud, City Attorney who approved using her position in this letter to the Mayor and Palm Desert City Council: “Under California law, a “time-share plan” is similarly broadly defined to mean “any arrangement, plan, scheme, or similar device, other than an exchange program, whether by membership agreement, sale, lease, deed, license, right to use agreement, or any other means, whereby a purchaser, in exchange for consideration, received ownership rights in or the right to use accommodations for a period of time less than a full year during any given year, on a reoccurring basis for more than one year, but not necessarily for consecutive years” Bus. & Prof. Code 11212(z). “However, under the definition above, a “sale” or “deed” resulting in ownership rights in or the rights to use accommodations for a period of time less than a full year during any given year . . .” is a “Time-Share Plan”. Time-share plans of 10 or fewer units are not subject to the Vacation Ownership and Time-Share Act of 2004, citing Business & Professions Code Section 11211.5(b)(1). This does not mean that time-share plans of 8 units (or shares) are not time-share plans, just that they are not regulated by the State of California under this statute. The Vacation Ownership and Time-Share Act of 2004 includes a savings clause that expressly preserves the local jurisdictions to regulate time-shares through “zoning, subdivision, or building code or other real estate use law, ordinance or regulation” Bus. & Prof. Code Section 11280(b). Please Note the complete Letter can be found, along with the Letter from Palm Springs Attorneys BB&K, on the website www.stoppacasonow.com :