HomeMy WebLinkAboutAgenda Package - StudySession_Jun12_2025
PALM DESERT CITY COUNCIL
STUDY SESSION MEETING
AGENDA
Thursday, June 12, 2025
2:15 p.m.
Council Chamber, City Hall
73-510 Fred Waring Drive
Palm Desert, California
NOTICE IS HEREBY GIVEN that the purpose of the Study Session is to review the items listed on the
agenda. No action will be taken.
This is a joint meeting of the Palm Desert City Council, Successor Agency to the Palm Desert
Redevelopment Agency, Palm Desert Housing Authority, and Palm Desert Board of Library Trustees.
Pursuant to Assembly Bill 2449, this meeting may be conducted as a hybrid meeting allowing public
access via teleconference or in person, and up to two Councilmembers may attend remotely.
WATCH THE MEETING LIVE: Watch the City Council meeting live at the City’s website:
https://palmdesert.zoom.us/ or on the City's YouTube Channel.
OPTIONS FOR PARTICIPATING IN THIS MEETING:
Send your comments by email to: CityClerk@palmdesert.gov.
Emails received prior to 10:00 a.m. on the day of the City Council meeting will be made part of the
record and distributed to the City Council. Emails will not be read aloud at the meeting.
Pages
1.CALL TO ORDER - STUDY SESSION
2.STUDY SESSION TOPICS
2.a UPDATE ON THE DINING DECK PROGRAM 3
RECOMMENDATION:
Receive and file an update on the dining deck program.
2.b STRATEGY DISCUSSION - 2025 COMMERCIAL BROKERS’ REPORT 5
RECOMMENDATION:
Provide feedback on strategies in the 2025 Commercial Brokers’ Report to
guide further analysis and future implementation.
3.ADJOURNMENT
4.PUBLIC NOTICES
NOTE: Pursuant to Assembly Bill 2449, this meeting may be conducted by
teleconference. Study Session is accessible in person or on the City’s website:
www.palmdesert.gov under the Meeting Agendas link at the top of the page.
Agenda Related Materials: Pursuant to Government Code §54957.5(b)(2) the
designated office for inspection of records in connection with this meeting is the
Office of the City Clerk, Palm Desert Civic Center, 73-510 Fred Waring Drive,
Palm Desert. Staff reports for all agenda items considered in open session, and
documents provided to a majority of the legislative bodies are available for
public inspection at City Hall and on the City’s website at www.palmdesert.gov
by clicking “Council Agenda” at the top of the page.
Americans with Disabilities Act: It is the intention of the City of Palm Desert to
comply with the Americans with Disabilities Act (ADA) in all respects. If, as an
attendee or a participant at this meeting, or in meetings on a regular basis, you
will need special assistance beyond what is normally provided, the City will
attempt to accommodate you in every reasonable manner. Please contact the
Office of the City Clerk, (760) 346-0611, at least 48 hours prior to the meeting to
inform us of your needs and to determine if accommodation is feasible.
AFFIDAVIT OF POSTING
I, Michelle Nance, Acting Assistant City Clerk of the City of Palm Desert, do
hereby certify, under penalty of perjury under the laws of the State of California,
that the foregoing agenda for the Palm Desert City Council, Successor Agency
for the Palm Desert Redevelopment Agency, and Housing Authority, was posted
on the City Hall bulletin board and City website www.palmdesert.gov no less
than 72 hours prior to the meeting.
/S/ Michelle Nance
Acting Assistant City Clerk
City Council Study Session
2
Page 1 of 2
CITY OF PALM DESERT
STAFF REPORT
MEETING DATE: June 12, 2025
PREPARED BY: Carlos Flores, AICP, Interim Deputy Director of Development Services
Vanessa Mager, Business and Community Outreach Coordinator
SUBJECT: STUDY SESSION: UPDATE ON THE DINING DECK PROGRAM
RECOMMENDATION:
Receive and file an update on the dining deck program.
BACKGROUND/ANALYSIS:
Since 2020, the City of Palm Desert has monitored its outdoor Dining Deck Program (Program)
that permits restaurant owners along El Paseo to build and utilize dining decks within city streets
and public rights-of-way. The City Council has held multiple meetings since 2020 to discuss and
act on the Program.
In 2021, the Council took several actions to extend and refine its outdoor dining deck
program along El Paseo. The Program was initially extended through June 2022, with
direction to develop design guidelines approved by the Architectural Review Commission
(ARC). Subsequent extensions pushed the Program through June 2024 and then to June
2026, along with the adoption of updated guidelines.
In 2024 and 2025, the City held study sessions to discuss and move forward with
implementing an annual lease fee and to plan for the El Paseo Street Rehabilitation
project scheduled for Summer 2025. The most recent meetings discussed establishing
the lease rate in October 2024 and awarding the rehabilitation project contract in May
2025.
City Council discussions and actions relative to the Program are outlined below:
Date Topic/Action Meeting Link
June 24, 2021 Extended Program through June 30, 2022, and provide direction to establish
ARC approved dining deck guidelines
Link
June 9, 2022 Extended Program through June 30, 2024 Link
November 16, 2023 Extended Program through June 30, 2026, and adopted updated dining deck
guidelines
Link
April 11, 2024 Study session to discuss annual fee Link
May 23, 2024 Study session to receive direction on El Paseo Street Rehabilitation project
going into Summer 2025 and move forward with annual lease rate
Link
October 24, 2024 Establish an annual lease rate for dining decks Link
May 22, 2025 Award contract for El Paseo Street rehab project for Summer 2025 Link
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City of Palm Desert
Dining Deck Program Update___________________________________________________
Page 2 of 2
Summary of Outreach Efforts
Over the last year, City staff has conducted outreach with all dining deck restaurant operators to
discuss the following:
Information on the impacts of the Summer 2025 El Paseo rehabilitation project (Rehab
Project)
Requirement to remove dining decks by June 1st
Requirement for a new Temporary Use Permit (TUP) to construct and operate a dining
deck after the Rehab Project is completed
Updated dining deck guidelines that will need to be followed with the new TUP
Annual lease rate that will be required for the new TUP
Status update on state legislation allowing the sale of alcohol on dining decks, which is
currently set to expire on July 1, 2026.
Additionally, City staff met with and received input on dining decks from SoCalGas who wanted
staff and operators to be aware of:
These decks might be near or above gas infrastructure
SoCalGas needs access to their utility facilities for maintenance, inspections, excavation,
repairs, and new connections. Cost of repairs would be borne by the private owner.
Enclosing the deck above or adjacent to gas facilities is a concern for ventila tion
As a part of the TUP process, Staff will work with applicants and SoCalGas to provide this
information and add appropriate conditions of approval.
City staff will provide Council an update on the Program, including the current status of dining
decks, next steps for the Program, and expectations of the dining deck guidelines in FY 2025-
26.
Legal Review:
This report has been reviewed by the City Attorney’s Office.
FINANCIAL IMPACT:
There is no fiscal impact to the General Fund with this action.
ATTACHMENT:
1. Presentation
4
Page 1 of 3
CITY OF PALM DESERT
STAFF REPORT
MEETING DATE: June 12, 2025
PREPARED BY: Vanessa Mager, Management Analyst
SUBJECT: Strategy Discussion - 2025 Commercial Brokers’ Report
RECOMMENDATION:
Provide feedback on strategies in the 2025 Commercial Brokers’ Report to guide further analysis
and future implementation.
BACKGROUND/ANALYSIS:
At its May 22, 2025, meeting, the Palm Desert City Council received and filed the 2025
Commercial Brokers’ Report and requested a Study Session to further discuss broker feedback
and the strategies recommended by staff.
Key takeaways from the brokers include:
Strategic Location Remains a Key Strength.
o Palm Desert’s central location continues to be a major draw for businesses;
however, the limited availability of small commercial space presents an
ongoing challenge.
Addressing Rising Lease Rates and Limited Space.
o Increasing lease rates, coupled with constrained inventory, may be an
opportunity for the City to create additional programs to help support small
businesses.
Maintain Proactive Communication with Stakeholders.
o Continued outreach to tenants and brokers is essential to keep them informed about
City programs, zoning regulations, and available support resources.
Streamline Façade Update Processes.
o Positive feedback on improvements to discretionary processes for building
façade updates suggests this effort is working well and should be expanded.
Enhance the Approval Process.
o A streamlined, transparent, and business-friendly approval process will remain
critical in attracting and retaining businesses in Palm Desert.
Support Development of Smaller-Scale Commercial Projects.
o With increased demand for smaller commercial and retail spaces, the City should
consider encouraging projects that align with market needs—such as mixed-use
developments and flexible leasing formats that accommodate small businesses.
Revitalize Underutilized Areas.
o Encourage new retail development in underused areas and explore adaptive
reuse strategies to repurpose vacant spaces, particularly for small square footage
retail units in high-demand zones.
5
City of Palm Desert
Strategy Discussion - 2025 Commercial Brokers’ Report
Page 2 of 3
Based on discussions with the commercial brokers, staff identified the following strategies that
may support both brokers and small businesses:
1. Support Small Business Access to Space.
a. Launch a Small Commercial Space Incentive Program .
i. Provide financial or permitting incentives to property owners who subdivide
larger vacant spaces into smaller, leasable units suitab le for small
businesses.
b. Create a Small Business Rent Support Grant.
i. Help offset rising lease rates for qualifying small businesses, particularly in
prime locations, to keep them competitive and prevent displacement.
2. Streamline and Promote Development Processes.
a. Expand Streamlined Façade Improvement Program.
i. Continue refining discretionary processes and provide clear, simplified
guidelines for façade improvements, with focused outreach to increase
participation.
b. Develop a Business-Friendly Development Toolkit.
i. Provide a centralized, easy-to-navigate online resource that outlines the
entire approval process, available programs, and support services for
prospective tenants and developers.
3. Revitalize and Repurpose Underutilized Areas.
a. Implement Adaptive Reuse Incentives.
i. Offer financial or zoning incentives for the conversion of vacant big-box or
underutilized buildings into multi-tenant spaces or small business hubs.
b. Target Redevelopment Zones.
i. Identify key corridors or districts for revitalization efforts and partner with
developers to create smaller-scale, flexible retail and office projects.
4. Strengthen Communication and Stakeholder Engagement
a. Enhance Broker and Tenant Outreach.
i. Continue regular outreach through The Business Bulletin, stakeholder
roundtables, and targeted briefings to ensure businesses and brokers stay
informed.
b. Establish a Commercial Real Estate Advisory Group.
i. Form a working group of local brokers, property owners, and business owners
to provide real-time feedback and collaborate on solutions.
The strategies presented in the brokers’ report were developed as an initial framework in
response to broker feedback and identified market needs. These concepts have not been fully
researched or vetted and may carry significant financial implications depending on the direction
taken. Prior to any implementation, staff will need to conduct additional research and preliminary
cost analysis to better understand feasibility and impact. At this time, staff is seeking the City
Council’s input and guidance on the proposed concepts to help shape a more detailed and
actionable plan moving forward.
6
City of Palm Desert
Strategy Discussion - 2025 Commercial Brokers’ Report
Page 3 of 3
FINANCIAL IMPACT:
The financial impact will ultimately depend on the specific strategies selected by the City Council.
Once direction is provided, additional research will be conducted, and staff will return with a full
overview, including the anticipated costs and potential funding source , such as grant
opportunities, budget reallocations, or a request for General Fund support.
ATTACHMENTS:
1. 2025 Brokers’ Report
2. Presentation
7
8
Commercial Brokers
Report 2025
Analyzing Key Trends and
Insights From Local Brokers
Economic Development
9
Now in its third edition, the City of Palm Desert’s Commercial Brokers Report
continues to serve as an essential resource for engaging the commercial real
estate community. Building on the success of previous editions, the City has
committed to publishing this report on a bi-annual basis.
Feedback from past reports has directly shaped several important updates,
including:
A re-evaluation of the Downtown Edge Transition Overlay, enabling multi-use
businesses in areas previously subject to more restrictive zoning.
Updates to land use definitions, particularly to accommodate flexible auto
retail and medical uses, addressing current market needs.
The introduction of The Business Bulletin, a quarterly communication tool
launched in 2024 to strengthen the City’s dialogue with the business
community.
Commercial brokers have responded positively to these changes. The expanded
flexibility within the Downtown Edge Transition Overlay and updated land use
definitions have been particularly well received, resulting in increased leasing
activity across the city. Additionally, The Business Bulletin has enhanced
communication and transparency, reinforcing the City’s commitment to
responsive economic development.
This latest report reflects what we’ve learned from our 2024 broker discussions
and includes broader economic insights gathered from a range of sources.
Background
10
Developed through direct conversations with leading brokers across the Coachella
Valley, the 2025 report captures timely insights into leasing trends, market
demands, and structural challenges affecting the city's commercial landscape.
Key takeaways reflect a tight industrial market, rising lease rates, shifting space
demands, and regulatory barriers affecting development. Feedback gathered in
late 2024 also reinforces the value of recent City-led initiatives and highlights
further opportunities for strategic adjustments to support small businesses.
Recommendations from brokers have shaped several actionable strategies aimed
at aligning City policy with current market realities.
Executive Summary
Key Takeaways:
Severe Industrial inventory shortage
Demand for smaller, flexible spaces
Rising lease rates
El Paseo and Highway 111 occupancy remain strong
City policy and initiative opportunities
Broker engagement and communication are working
11
Industrial in Palm Desert
The Coachella Valley is experiencing an industrial boom, particularly along the
I-10 corridor, with the development of large warehouses and logistics centers.
Industrial buildings in the area are concentrated in and around the popular resort
cities of Palm Springs and Palm Desert. Tenant demand softened from mid-2022
into 2024, but several large tenant move-ins boosted net absorption into positive
territory and lowered availability at the end of 2024.
Industrial Sector Performance
Industrial inventory vacancy is less than 1%.
No new industrial spaces are under development in Palm Desert
due to high construction costs.
Lease rates for industrial space are comparable to office rents,
averaging $1.30 per square foot.
Storage space is highly sought after, but there is limited
development capacity due to space constraints.
Broker Feedback
Statistical Information
The vacancy rate as of May 2025 is 2.7%, with a total
of 52, 800 vacant square feet.
12
Retail in Palm Desert
Retail turnover remains low, with El
Paseo continuing to have steady lease
opportunities and limited availability.
There is increasing demand for smaller
locations, 2,000 to 5,000 square feet.
The City’s restrictions on drive-thrus
along Highway 111 have made it more
challenging for brokers to pursue
certain fast-food and casual dining
opportunities.
Retail space availability in the Coachella Valley has inched up recently but
remains near all-time lows, trending at 7.6% as of the third quarter of
2024. Leasing has been a bit subdued recently, but demand remains
strong enough to keep vacancies in the market low.
Retail Sector Performance
Broker Feedback
Statistical Information
The vacancy rate as of May 2025 is 7.2%,
with only 450,000 vacant square feet.
The market asking rent per square foot is
currently at $28.87.
The vacancy rate on El Paseo is 6%, with a
market asking rent of $36.65 per square foot.
The vacancy rate on Highway 111 is 6.6%.
13
Businesses serving local consumers, such as healthcare providers and
government agencies, account for most office users. Demand for medical
space has helped suppress vacancies, although net absorption in the market
was negative in 2023-24. Vacancy measures 5.9% as of the first quarter of
2025, near all-time lows.
Office Sector Performance
Broker Feedback
Statistical information
Off ice in Palm Desert
Office rents are at an all-time high, averaging around $1.25 - $1.50
per square foot.
Smaller office spaces of 950-1,250 square feet are in high demand.
Office requests near the freeway are on the rise.
Office vacancy as of May 2025 is 9.9% overall, a total of
212,000 per square foot.
Vacancy Rate by Class
Class A 16%
Class B 8.5%
Class C 10.90%14
Leasing rates continue to rise steadily, making it increasingly
difficult for small businesses to secure space in high-demand,
prime locations.
Challenges and Risks
The local commercial real estate
market continues to face a mismatch
between supply and demand. While
demand for small commercial spaces
remains high, the inventory of these
spaces is limited. At the same time,
large-format or “big box” spaces are
Low turnover in property
ownership is contributing to a
lack of redevelopment activity,
as long-term owners are less
likely to initiate significant
improvements or changes.
The City’s Façade Enhancement Program remains underutilized,
primarily because improvements to older buildings often trigger
costly requirements, such as ADA compliance upgrades and
prevailing wage obligations, which can discourage participation.
readily available, but demand for them is low. With no new
development occurring—largely due to high construction costs—this
imbalance is expected to persist in the near term.
15
Strategic Location Remains a Key Strength:
Palm Desert’s central location continues to be a major draw for businesses;
however, the limited availability of small commercial space presents an ongoing
challenge.
Addressing Rising Lease Rates and Limited Space:
Increasing lease rates, coupled with constrained inventory, may be an
opportunity for the City to create additional programs to help support small
businesses.
Maintain Proactive Communication with Stakeholders:
Continued outreach to tenants and brokers is essential to keep them informed
about City programs, zoning regulations, and available support resources.
Streamline Façade Update Processes:
Positive feedback on improvements to discretionary processes for building
façade updates suggests this effort is working well and should be expanded.
Enhance the Approval Process:
A streamlined, transparent, and business-friendly approval process will remain
critical in attracting and retaining businesses in Palm Desert.
Support Development of Smaller-Scale Commercial Projects:
With increased demand for smaller commercial and retail spaces, the City should
consider encouraging projects that align with market needs—such as mixed-use
developments and flexible leasing formats that accommodate small businesses.
Revitalize Underutilized Areas:
Encourage new retail development in underused areas and explore adaptive
reuse strategies to repurpose vacant spaces, particularly for small square footage
retail units in high-demand zones.
Key Takeaways
16
1.Support Small Business Access to Space
Launch a Small Commercial Space Incentive Program
Provide financial or permitting incentives to property owners who subdivide
larger vacant spaces into smaller, leasable units suitable for small businesses.
Create a Small Business Rent Support Grant
Help offset rising lease rates for qualifying small businesses, particularly in prime
locations, to keep them competitive and prevent displacement.
2.Streamline and Promote Development Processes
Expand Streamlined Façade Improvement Program
Continue refining discretionary processes and provide clear, simplified guidelines
for façade improvements, with focused outreach to increase participation.
Develop a Business-Friendly Development Toolkit
Provide a centralized, easy-to-navigate online resource that outlines the entire
approval process, available programs, and support services for prospective tenants
and developers.
3.Revitalize and Repurpose Underutilized Areas
Implement Adaptive Reuse Incentives
Offer financial or zoning incentives for the conversion of vacant big-box or
underutilized buildings into multi-tenant spaces or small business hubs.
Target Redevelopment Zones
Identify key corridors or districts for revitalization efforts and partner with
developers to create smaller-scale, flexible retail and office projects.
4.Strengthen Communication and Stakeholder Engagement
Enhance Broker and Tenant Outreach
Continue regular outreach through The Business Bulletin, stakeholder
roundtables, and targeted briefings to ensure businesses and brokers stay
informed.
Establish a Commercial Real Estate Advisory Group
Form a working group of local brokers, property owners, and business owners to
provide real-time feedback and collaborate on solutions.
Forward-Looking Strategies
17
Thank you to the following
Commercial Brokers Engaged:
Baxley Properties: Matthew Longstreth
Coldwell Banker: Steve Lyle & Curtis Barlow
Progressive: Heather Sharpe
Desert Pacific Properties: Susan & Emily Harvey
Johnson Commercial: Matt Johnson
Lee & Associates: Shawna Strange & Maggie Montes
Smoketree Investments: Josef Jonathan
The Firm: Adam Gilbert
Chartwell Properties: Amy Smith, Bob Baker, Cheryl Beckel and Ed Levey
Wilson and Meade: Noel Ramos & Matt Rifkin
18