HomeMy WebLinkAboutLegal Expenses for Hotel-Internal Ownership Resort Properties PALM DESERT REDEVELOPMENT AGENCY
STAFF REPORT
REQUEST: AUTHORIZE AGENCY COUNSEL TO INCREASE SERVICES
FOR INVESTIGATION OF LEGAL AND FINANCIAL FEASIBILITY
OF DEVELOPMENT OF HOTEL AND INTERVAL OWNERSHIP
RESORT PROPERTIES AT DESERT WILLOW
SUBMITTED BY: LAURI AYLAIAN, DEVELOPMENT MANAGER
DATE: SEPTEMBER 23, 2004
Recommendation:
By Minute Motion, that the Agency Board:
1. Authorize an increase in the amount of $37,000 for fees plus $2,500
for expenses to Agency counsel, Richards Watson & Gershon, for
additional services by hospitality consultant providing specialty advice
related to the legal and financial feasibility of development and asset
management of resort and commercial properties at and near the
Desert Willow Golf Resort; and
2. Appropriate $39,500 for said consulting service fees and incidental
expenses from unobligated Project Area No. 2 funds for this work.
Executive Summary:
Approval of the staff recommendation will allow Agency counsel to complete assistance
to Agency staff in the evaluation of legal and financial alternatives among potential
developments for a project involving hotel and resort uses at the Desert Willow Golf
Resort.
Discussion:
In March 2004, the Agency Board authorized Agency counsel, Richards Watson &
Gershon, to retain a hospitality consultant to provide specialty advice related to the legal
and financial feasibility of development and asset management of resort and
commercial properties at the Desert Willow Golf Resort. The Board appropriated
$150,000 for the fees associated with these specialty services.
Agency counsel retained a hospitality consultant, PricewaterhouseCoopers, to provide
some of these specialty consulting services. Since beginning work in March, Richards
Watson & Gershon, together with their specialty consultant, has assisted staff by
A ~
Staff Report
Authorize Increase to Agency Counsel for legal/financial feasibility of development of
hotel and interval ownership resort properties at Desert Willow
Page 2 of 2
23 September 2004
providing detailed market and feasibility analyses, and has helped to structure and issue
a Request for Qualifications (RFQ) aimed toward identifying a developer who is
capable, qualified, motivated, and well-suited for completing the resort development at
Desert Willow. They have also met with a number of interested developers and have
performed a detailed analysis of the responses received to the RFQ.
Because of the overwhelming response to the RFQ, more time has been expended
meeting and conferring with potential developers and evaluating the responses than
was anticipated at the outset. Additionally, a greater number of qualified developers will
be interviewed and investigated in depth than was originally envisioned. Consequently,
an increase in the number of hours of service, and the corresponding fees for this time
is appropriate. Staff anticipates that an additional $37,000 of professional services will
be required to complete the interview process, make recommendation to the Agency
Board, and provide as-needed advice during the structuring and negotiation of the DDA
expected to result from this process.
Staff requests that the Agency Board authorize the Redevelopment Agency's legal
counsel to increase by $37,000 the amount of specialty advice to be provided relative to
the legal and financial feasibility of development and asset management of resort and
commercial properties at Desert Willow. Staff requests an additional $2,500 be made
available for reimbursement of incidental expenses associated with this undertaking.
Staff recommends that payment to any specialty consultants engaged by counsel be
made directly to the consultants in order to streamline reimbursement processes for
said consultants.
Submitted by: Department Head:
Lauri Aylaian Dave Yrig fi /
Redevelopment Manager Director Redevelopment/Housing
Ap•royal:
. sti McCarthy Paul S. Gibson
AC Redevelopmen Director of Finance
Carlos L. Ortega, ecutive Director 1 a ci BY RDA?
ON •d3 '6M
VERIFIED BY 1
G\RDA\Maria Hunt\WPDATAWYLAIAN\STFRPTS\09230pwccontractamendment.dw.doc Original on file with City erk's Office