HomeMy WebLinkAboutLegal Financial Feasibility of Development of Hotel and Resort Properties at DW PALM DESERT REDEVELOPMENT AGENCY
STAFF REPORT
REQUEST: AUTHORIZE AGENCY COUNSEL TO INVESTIGATE LEGAL AND
FINANCIAL FEASIBILITY OF DEVELOPMENT OF HOTEL AND
INTERVAL OWNERSHIP RESORT PROPERTIES AT THE
DESERT WILLOW GOLF RESORT
SUBMITTED BY: LAURI AYLAIAN, DEVELOPMENT MANAGER
DATE: MARCH 11, 2004
Recommendation:
By Minute Motion, that the Agency Board:
1. Authorize 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 and near the Desert Willow Golf
Resort; and
2. Appropriate $150,000 for said consulting service fees, plus $5,000 for
incidental expenses from unobligated Project Area No. 2 funds for this
work.
Executive Summary:
Approval of the staff recommendation will allow Agency counsel to assist Agency staff
with the exploration of legal and financial feasibility of embarking upon a project
involving the development of hotel uses at Desert Willow.
Discussion:
There are currently five undeveloped parcels at or adjacent to the Desert Willow Golf
Resort on which the Agency would like to develop hotel or resort properties. To date,
staff and the Agency Board have considered a number of proposals for development,
but none of the various proposals have come to fruition and there are neither Exclusive
Negotiating Agreements nor Disposition and Development Agreements currently under
consideration for these properties.
In order to maximize the likelihood for success during this period of difficult hotel
financing and uncertain travel markets, innovative strategies will be necessary to
achieve the Agency's goals at Desert Willow. Therefore, Agency staff is recommending
Staff Report
Authorize Agency Counsel to investigate legal/financial feasibility of development of
hotel and interval ownership resort properties at Desert Willow
Page 2 of 2
March 11, 2004
that the Agency Board use specialty consultants to explore the legal and financial
feasibility of embarking on a project involving the development of commercial resort
uses at Desert Willow.
Staff requests that the Agency Board authorize the Redevelopment Agency's legal
counsel to undertake such research and studies as counsel deems necessary to
determine the feasibility, including engaging on behalf of the Agency any consultants
counsel deems necessary and directing the work of these consultants. By having
Agency's legal counsel determine the appropriate scope of the necessary research and
studies and by having counsel direct that work, the findings will be confidential and
protected by the attorney work product privilege.
The total aggregate cost of any consultants engaged by counsel shall not exceed
$150,000 plus $5,000 for incidental expenses. 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 Yrigoy
Development Manager Director o using
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Ap•royal: r
J : i McCarthy Paul S. Gibson
CM 'edevelop - Director of Finance
Carlos L. Orteg
Executive Dire tor
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VERIFIED BY_____________
Original on file with City Ierk's Office
G.\RDA\Marra Hunt\W PDATA\AYLAIAN\STFRPTS\031104hosptItyconsultant.dw.doc