HomeMy WebLinkAbout1997-02-13MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING
THURSDAY, FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
I. CALL TO ORDER
Mayor Kelly convened the meeting at 4:00 p.m.
H. PLEDGE OF ALLEGIANCE - Councilman Buford A. Crites
M. INVOCATION - Councilman Robert A. Spiegel
IV. ROLL CALL
Present:
Mayor Pro-Tempore Jean M. Benson
Councilman Buford A. Crites (arrived at 4:30 p.m.)
Councilman Walter H. Snyder
Councilman Robert A. Spiegel
Mayor Richard S. Kelly
Also Present.
Ramon A. Diaz, City Manager
David J. Erwin, City Attorney
Mary P. Gates, Deputy City Clerk
John Wohlmuth, ACM/Director of Administrative Services
Richard J. Folkers, ACM/Director of Public Works
Carlos L. Ortega, Redevelopment Agency Executive Director
Paul Gibson, City Treasurer/Finance Director
Pat Conlon, Director of Building and Safety
Steve Smith, Planning Manager
V. ORAL COMMUNICATIONS - A
MR. VINCE DOWNEY, Principal of Palm Desert High School, invited the Council to the first
Aztec Impact Assembly to be held on February 21, 1997, at 9:00 a.m. He also showed samples of
the T-shirts that will be presented to student recipients of Aztec Impact awards, and gave them to the
Councilmembers and staff.
MINUTES
REGULAR PALM DESERT CITY COUNCII, MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
MRS. BARBARA BOWIE, Principal Librarian, reported on January's statistics for the Library as
follows: _
25,220 items were checked out, 100% higher than what was done in January of 1996.
580 new library cards issued.
- 255 children. attended eight programs.
957 people attended 43 meetings in the building.
- 18,000 people through the doors.
12,922 reference questions answered.
Mayor Kelly asked that written reports be prepared as well as the oral report given during the
Council meeting. He said he could use this when he is out in the community and also to answer
letters that come in. Mrs. Bowie responded that she would prepare written reports in the future to
present to the Council.
VI. CONSENT CALENDAR
A. MINUTES of the Regular City Council Meeting of January 23, 1997.
Rec: Approve as presented.
B. CLAIMS AND DEMANDS AGAINST THE CITY TREASURY - Warrant Nos. 43, 44, and
45.
Rec: Approve as presented.
C. CLAIM AGAINST THE CITY (fl3291 by CNA Insurance Company as Subrogee for Francisco
Urrutia in an Unspecified Amount.
Rec: By Minute Motion, deny the claim and direct the City Clerk to so notify the Claimant.
D-1. APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE by EPI Limited Partnership,
Daniel J. McCalla, Janet McCalla, and Donald D. McCalla for Emerald Desert Country Club,
76-000 Frank Sinatra, Palm Desert.
Rec: Receive and file.
D-2. APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE by Dante Gabriel Nunez and
Salvador Soto for Mamacita's, 74-991 Velie Way, Palm Desert.
Rec: Receive and file.
2
NOTES FEBRUARY 13, 1997
REGULAR PALM DESERT CITY COUNCIL. MEETING
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
E. MTNTTTES of the Investment and Finance Committee Meetings of November 12 and December
10, 1996.
This item was removed from the Agenda for separate discussion under Section IX, Consent
Items Held Over, of the Agenda. Please see that section for Council discussion and action.
F. REQUEST FOR RATIFICATION AND AWARD OF CONTRACT for Traffic Signal Repair
at Monterey Avenue and San Gorgonio Way (Contract No. =12160).
Rec: By Minute Motion, ratify the award of Contract C12160 to Macadee Electrical
Construction of Chino Hills in the amount of $5,420.00 plus a ten percent contingency
of $542.00, funds available from Account No. 110-4250-433-3325.
G-1. REQUEST FOR AWARD OF CONTRACT for Engineering Design of Gerald Ford Extension
from Portola Avenue to Cook Street, Project No. 677-96, Contract No. C1222Q.
Rec: By Minute Motion: 1) Approve engineering design proposal from Keith International,
Inc. of Palm Desert for the subject engineering street design in the amount of $73,700
plus a ten percent contingency of $7,730.00 for a total amount of $81,070.00, funds
available from Account No. 400-4357-433-4001; 2) authorize the Mayor to execute the
agreement.
G-2. REQTTFST FOR AWARD OF CONTRACT for Warner Trail Street Improvements, Project
No. 640-97, Contract No. C12120.
Rec: By Minute Motion: 1) Award Contract No. C12120 to Granite Construction Company
of Indio in the amount of $34,679.00 for the Warner Trail Street Improvements and
authorize a ten percent contingency of $3,467.00, funds available from Account No.
400-4675-433-4001; 2) authorize the Mayor to enter into an agreement with Granite
Construction Company.
G-3. REQTTFST FOR APPROVAT, of Agreement Between the City of Palm Desert and Embassy
Suites for Sister City Conference Room Commitment (Contract No. C12230).
Rec: By Minute Motion, authorize the Mayor to enter into an agreement between the City
of Palm Desert and Embassy Suites for block room commitment for the May 16-18,
1997, Southern California Sister City Conference.
H-1. REQUEST FOR APPROVAL of Project Close -Out Change Order (No. 6) to Contract No.
C09700 - Monterey Avenue Bridge at the Whitewater Channel (Project No. 696-95).
This item was removed from the Agenda for separate discussion under Section IX, Consent
Items Held Over, of the Agenda. Please see that section for Council discussion and action.
3
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
H-2. REQUEST FOR APPROVAL, of Change Order No. 1 to Contract No. C11310 - Citywide
Catch Basin Cleaning.
Rec: By Minute Motion, approve Change Order No. 1 to the subject contract in the amount
of $2,880.00.
H-3. REQUEST FOR APPROVAL of Change Order No. 1 to the Street Resurfacing Program
(Contract No. C11470, Project No. 762-97).
Rec: By Minute Motion: 1) Approve Change Order No. 1 to Contract No. C11470 for the
additional construction bid items required for the completion of the Street Resurfacing
Program in the amount of $66,190.92; 2) authorize the transfer of $16,324.80 from
contingency to base; 3) approve an additional amount of $49, 886.12 to Contract No.
C11470 from the Street Resurfacing Account No. 110-4311-433-3320.
H-4. REQUEST FOR APPROVAL of Change Order No. 1 to Contract No. C11770 - Fire
Alarm/Security System at Portola Community Center.
Rec: By Minute Motion: 1) Approve Change Order No. 1 in the amount of $379.37 for
additional work by Protection Service Industries (PSI) as requested by the City Fire
Marshal; 2) authorize the Director of Finance to transfer $379.37 from contingency to
base contract.
H-5. REQUEST FOR APPROVAL of Change Order No. 1 to the Street Resurfacing Program,
Contract No. C11930, Project No. 762-97 Phase II.
Rec: By Minute Motion: 1) Approve Change Order No. 1 to Contract No. C11930 for the
additional construction bid items required for the completion of the Street Resurfacing
Program Phase 11 in the amount of $12,442.50; 2) authorize the transfer of $12,442.50
from contingency to base.
I. REQUEST FOR APPROVAL of Release of Agreements (No. CO2310) for Ordinance No. 416
Improvements.
Rec: By Minute Motion, authorize the Mayor to release the subject agreements between the
City of Palm Desert and McBail Homes.
J. REQUEST FOR ACCEPTANCE OF WORK for Contract No. C11240 - Citywide Sidewalk
Grinding.
Rec: By Minute Motion, accept the work as complete and authorize the City Clerk to file a
Notice of Completion for the subject contract.
4
MINUTES FEBRUARY 13, 1997
REGULAR PALM DESERT CITY COUNCIL MEETING
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
K. CONSIDERATION OF REQUEST from the Southern California Association of Governments
for Adoption of a Resolution to Endorse the State Legislative Leadership Summit.
Rec: Waive further reading and adopt Resolution No. 212.
L. TRITER OF RFSKGNATION from Mr. Frank G.Laiacona as Palm Desert's Representative
to the Joslyn Cove Senior Center Board of Directors.
Rec: Accept with sincere regret.
M. AUDITED FINANCIAL STATEMENTS for the City of Palm Desert Transportation Funds
for Fiscal Years Ended June 30, 1996, and June 30, 1995.
Rec: Receive and file.
N. BEQUEST FOR APPROVAL, of Payment to the County of Riverside for the Riverside County
Multi -Modal Station.
Rec: By Minute Motion, authorize the payment of $6,732.00 from the General Fund to the
County of Riverside.
O. REQUEST FOR APPROVAL, of Payment to the City of Covina to Assist in an Effort to Shift
More Sales Tax Revenue to Individual Cities.
This item was removed from the Agenda for separate discussion under Section IX, Consent
Items Held Over, of the Agenda. Please see that section for Council discussion and action.
P. REQUEST FOR CONSIDERATION of Office of Traffic Safety Grant Application.
Rec Receive and file.
Q. REQUEST FOR APPROVAI, of Out of Town Travel by the City's Transportation Engineer
to Attend the ITE International Conference on Transportation and Sustainable Communities in
Tampa, Florida, March 23-26, 1997.
Rec: By Minute Motion, authorize the attendance at the ITE International Conference on
Transportation and Sustainable Communities, March 23-26, 1997, by the City's
Transportation Engineer.
R. RF.QTTFST FOR ACCEPTANCE OF WORK for Civic Center Tot Lot Shade Structures.
Rec: By Minute Motion, accept the work as complete and authorize the City Clerk to file a
Notice of Completion.
5
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Mayor Kelly noted that there was a typographical error in the recommendation for Item G-2 and that
the amount of the contract should be $34,679.00 instead of $36,679.00 as shown on the Agenda.
Mr. Diaz asked that Item H-1 be removed for separate discussion under Section IX, Consent Items
Held Over, of the Agenda. Councilmember Benson also removed Item 0 for separate discussion,
and Councilman Spiegel removed Item E.
Upon motion by Spiegel, second by Snyder, the remainder of the Consent Calendar was approved
as presented an amended by Mayor Kelly by a 4-0-1 vote, with Councilman Crites ABSENT.
VII. RESOLUTIONS
None
VIII. ORDINANCES
For Introduction:
None
For Adoption:
None
IX. CONSENT ITEMS HELD OVER
E. MINUTES of the Investment and Finance Committee Meetings of November 12 and December
10, 1996.
Councilman Spiegel questioned the Minutes of the December 10, 1996, meeting relative to
rental of the office building adjacent to City Hall. He noted that the building was being
transferred from the Redevelopment Agency to the City of Palm Desert. He asked if a time
certain had been determined yet and if there had been any decision as to what will happen to
those funds.
Mr. Ortega responded that there was an item on the Agenda for this meeting that would make
the transfer from the Agency to the City. Councilman Spiegel asked whether a decision would
be made after that transfer relative to the funds, and Mr. Ortega responded that it would be
done.
Councilman Spiegel moved to receive and file these Minutes. Motion was seconded by Snyder and
carried by a 4-0-1 vote, with Councilman Crites ABSENT.
6
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
H-1. REQTTF-ST FOR APPROVAL of Project Close -Out Change Order (No. 6) to Contract No.
C09700 - Monterey Avenue Bridge at the Whitewater Channel (Project No. 696-95).
Councilman Spiegel moved to hold this matter until after Closed Session. Motion was seconded by
Benson and carried by a 4-0-1 vote, with Councilman Crites ABSENT.
Following Closed Session, Councilman Crites moved to, by Minute Motion: 1) Approve Change
Order No. 6 in the amount of $85,055.33; 2) authorize the transfer of $79,938.10 from contingency to base;
3) authorize the transfer of $5,117.23 from the City's Master Sidewalk Program. Motion was seconded by
Spiegel and carried by unanimous vote.
REQUEST FOR APPROVAT. of Payment to the City of Covina to Assist in an Effort to Shift
More Sales Tax Revenue to Individual Cities.
Councilmember Benson stated that while she had no problem with authorizing payment of
$500.00 to the City of Covina as recommended by staff, she did not see anything in the letter
from the City of Covina asking for money. She questioned paying another City to do
something that the City of Palm Desert is already paying someone in Sacramento to do.
Mayor Kelly said he felt the City of Palm Desert might be able to offer to the City of Covina
the assistance of the City's legislative advocate in Sacramento.
Councilmember Benson stated that the letter from the City of Covina was just requesting that
the City of Palm Desert work with them on this legislation.
Mr. Diaz noted that there was a SCAG committee in place to study the issue of revenue
stability for local cities. One of the areas that was being looked at was the City of Covina bill
among others. He suggested that this matter be continued and said he would contact the City
of Covina and advise that the City of Palm Desert would support their efforts and, if possible,
use the offices of Legislative Advocate Joe Gonsalves to assist them.
Councilmember Benson moved to, by Minute Motion, direct the City Manager to contact the City
of Covina to advise that the City of Palm Desert supports this effort and will work through its legislative
advocate, Joe A. Gonsalves & Son, to assist in any way possible. Motion was seconded by Snyder and carried
by a 4-0-1 vote, with Councilman Crites ABSENT.
X. NEW BUSINESS
A. CONSIDERATION OF PETITION FOR STOP SIGN AT PORTOLA/GRAPEVINE.
Mr. Diaz noted the petition in the packets and stated that if Council wishes, this matter could
be referred to the Traffic Committee.
7
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
MR. ED TUNISAN, 73-820 Grapevine, addressed the Council as one of the signers of the
petition. He said he had personally had several near misses at this intersection and said that
it seemed that no one was abiding by the speed limits. He requested that a three-way stop sign
be installed. He noted that commercial vehicles, including Waste Management trucks, are
traveling in this area, and he felt they should not be allowed to go through from Portola
Avenue to Highway 74. He also requested better Police Department surveillance between the
hours of 6:00 a.m. and 8:00 a.m. and also from 3:00 p.m. to 5:00 p.m.
Mr. Diaz stated that this petition would be referred to the Traffic Committee for review and
recommendation. He also noted that he would contact the Police Chief relative to surveillance
as requested by Mr. Tunisan. With regard to the speed limit, he said staff would work with
the Sheriff's Department on this.
Councilmember Benson asked that the issue of parking on the west side also be looked at. She
said this parking was obstructing line of sight, and vehicles have to get out into the intersection
in order to see if there are other vehicles coming.
Mr. Diaz recommended that this matter be continued to the second meeting in March. He
stated that he would contact Mr. Tunisan and let him know when the Traffic Committee
meeting will be held and that he would also meet with Mr. Tunisan to discuss this matter and
keep him up to date.
Councilman Snyder moved to continue this item to the meeting of March 27, 1997. Motion was
seconded by Benson.
MR. PETE FREESTONE, 72-761 Tamarisk Street, commented that this intersection is a real
problem, especially during school hours. He suggested that in addition to a three-way stop,
some overhead illumination should be installed so that people do not try to drive through the
brick wall and CVWD facility at that location.
Mayor Kelly called for the vote. The motion carried by a 4-0-1 vote, with Councilman Crites
ABSENT.
B. BKPSPN ATION BY RIVERSIDE COUNTY SEARCH AND RESCUE TEAM.
Sgt. Mike Alcorn reviewed the material submitted to the Council relative to the breakdown of
the grant money spent to date from the Cove Commission Grant (on file and of record in the
City Clerk's Office). He noted that reports will be done quarterly and that he would make sure
the Council receives copies.
Councilman Snyder congratulated Sgt. Alcorn and the people who had worked so hard on this
program.
8
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Councilman Spiegel commended Sgt. Alcorn and the team for the voluntary man hours brought
into the organization.
No Council action was taken.
C. REQUEST FOR APPROV AI , OF RETAINER AGREEMENT WITH CULBERTSON,
ADAMS AND ASSOCIATES TO PREPARE EXPANDED INITIAL STUDY AND
DETERMINE APPROPRIATE ENVIRONMENTAL DOCUMENTATION FOR REVISED
TENTATIVE TRACT MAP FOR "THE CANYONS AT BIGHORN" (FORMERLY
ALTAMIRA).
Mr. Diaz noted the report in the packets and stated that Mr. Smith was available to answer any
questions.
Councilman Spiegel moved to, by Minute Motion, authorize the Mayor to execute the retainer
agreement (Contract No. C12240) in an amount not to exceed $50,000 from funds deposited in the City's trust
account by the developer, Winmar Palm Desert LLC. Motion was seconded by Benson and carried by a 4-0-1
vote, with Councilman Crites ABSENT.
D. REQUEST FOR APPROVAL TO CONTINUE SUNLINE/DIAL-A-RIDE PROGRAM.
Mr. Wohlmuth noted the report in the packets and stated that Management Analyst Ray Janes
was available to answer any questions.
Councilman Spiegel moved to, by Minute Motion, authorize the City to continue with its current
Dial -A -Ride program and direct staff to work with Sunline personnel to monitor service related issues.
Motion was seconded by Benson and carried by a 4-0-1 vote, with Councilman Crites ABSENT.
E. REQUF,S;T FOR CONSIDERATION OF TEMPORARY STREET CLOSURE FOR
GARDENS AT EL PASEO PROJECT.
Mr. Diaz noted the report in the packets.
Councilman Spiegel stated that the second paragraph of the report indicates the contractor has
tried unsuccessfully to secure permission to place staging and construction area on the vacant
r.r,r:,.ti at the northeast corner of Shadow Mountain Drive and Larkspur Lane, and he asked
why that property owner would not go along with that.
Mr. Folkers responded that the contractor indicated that apparently the property owner wants
a high amount of money, and the temporary street closure was felt to be the best alternative.
Mayor Kelly suggested that several Councilmembers, the City Manager, and staff meet with
the property owner to try and persuade him to allow the use of the vacant property.
Councilman Spiegel volunteered to attend the meeting with staff and the property owner.
9
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Councilman Spiegel moved to, by Minute Motion, continue this item until after staff meets with the
owner of the vacant rYal at the northeast corner of Shadow Mountain Drive and Larkspur Lane to request
permission to place the staging and construction on this lot. Motion was seconded by Benson and carried by
a 4-0-1 vote, with Councilman Crites ABSENT.
NOTE: COUNCILMAN CRITES ARRIVED AT 4:30 P.M.
F. REQUEST FOR APPROVAT, OF DESERT WILLOW EQUIPMENT LEASE (Contract No.
C12250).
Redevelopment Manager Dave Yrigoyen noted the staff report in the packets and offered to
answer any questions.
Councilmember Benson asked if this equipment was for the gardening and all that was needed
to maintain the North Course, and Mr. Yrigoyen responded that it was for large equipment
such as tractors, grass cutters, etc.
Councilman Spiegel asked if there could be a problem due to the fact that this is a five-year
lease and the arrangement with Kemper is for less than five years.
Mr. Yrigoyen responded that it would not be a problem because the obligation of the
management company will continue, be it Kemper or whoever else, to pay for the monthly
lease payments for the equipment. He said if the City takes over itself instead of Kemper, it
would be paid for out of revenues of the Golf Course.
Upon question by Councilmember Benson, Mr. Yrigoyen responded that this money now was
not coming out of Kemper but that the monthly lease payment was coming out of the monthly
revenues of the Golf Course.
Councilman Spiegel moved to, by Minute Motion, authorize staff to negotiate a lease of equipment
to be used at the Desert Willow Golf Resort, authorizing the Mayor to execute said lease for maintenance
equipment. Motion was seconded by Snyder and carried by unanimous vote.
G. REQUEST FOR APPROVAI, OF CONTRACT FOR EMPLOYEE ASSISTANCE SERVICES
(Contract No. C12260).
Mr. Diaz noted the staff report in the packets.
Councilman Spiegel moved to, by Minute Motion, authorize the Mayor to enter into a contract with
Community Action/EAP Inc. (CA/EAP) to provide an employee assistance program for City employees, their
dependents, and retirees (Contract No. C1226Q). Motion was seconded by Snyder and carried by unanimous
vote.
10
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
H. REQUEST FOR CONSIDERATION OF NEIGHBORHOOD ELECTRIC VEHICLE PILOT
PROJECT FOR THE COACHELLA VALLEY.
Mr. Wohlmuth reviewed the staff report, noting that in December of 1996, CVAG staff took
a request to the Executive Committee to request Senator Kelley to introduce legislation
authorizing the Coachella Valley to be a pilot program for the neighborhood electric vehicles.
That request included the City of Palm Desert providing staff support for CVAG and requested
that Palm Desert staff work with Coachella Valley Cities and Senator Kelley. He said that to
date there were cities in the Coachella Valley that had serious concerns about this legislation
regarding neighborhood electric vehicles on their streets. He said that Senator Kelley appeared
to have opposition in Sacramento from the Highway Patrol, the Automobile Club, and DMV.
At this point staffs recommendation was to go up to Senator Kelley's office in Sacramento to
meet with him regarding this pilot program and request that the program be postponed for a
year to either have another regional entity work on this with CVAG or to get the support in the
Coachella Valley after working with the cities, DMV, and the Highway Patrol so that the
possibility of this Senate Bill being passed is better than it is now.
Councilman Spiegel asked why CVAG had begun the process without knowledge of acceptance
from other cities.
Mr. Wohlmuth responded that he did not think CVAG knew there were concerns from other
cities. He said the Executive Committee vote to support it; since that vote, the other cities
have raised concerns.
Mayor Kelly stated he felt without the backing of all of the cities in the Coachella Valley, it
would not have a chance of surviving, and this would put Senator Kelley in an embarrassing
position.
Councilman Spiegel moved to, by Minute Motion: 1) Authorize staff to inform the Coachella Valley
Association of Governments (CVAG) that Palm Desert cannot currently provide staffing or other funding for
the Regional Neighborhood Electric Vehicle Pilot Program; 2) recommend CVAG respectfully request Senator
Kelley postpone introduction of the Coachella Valley NEC Pilot Project for one year or until a regional entity
provides resources to support CVAG. Motion was seconded by Benson and carried by unanimous vote.
11
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
I. REQUEST FOR APPROVAL, OF LEASE AGREEMENT WITH COLLEGE OF THE
DESERT FOR THE SITE OF THE SOLAR HYDROGEN REFUELING FACILITY (Contract ---
No. C12270).
The following is a verbatim transcript of this portion of the meeting:
Kept
RSK Richard S. Kelly, Mayor
RAD Ramon A. Diaz, City Manager
RAS Robert A. Spiegel, Councilman
PS Paul Shillcock, Economic Development Manager
JMB Jean M. Benson, Mayor Pro Tempore
WHS Walter H. Snyder, Councilman
BAC Buford A. Crites, Councilman
MPG Mary P. Gates, Deputy City Clerk
RSK The next item is a request for approval of a lease agreement with College of the Desert
for the site of the solar hydrogen refueling facility.
RAD Yes, Mr. Mayor and members of the Council, Mr. Shillcock can answer any questions
you have on this. The recommendation, you don't have the agreement before you but,
requires that it be reviewed and approved by the City Attorney prior to our execution.
RAS I have one question. I sent the Council and Mr. Shillcock a copy of an article that
appeared in the L.A. Times approximately a week and a half ago on hydrogen fuel cells
and the fact that in Pasadena in their laboratory there, they were going to begin working
on using methanol rather than hydrogen because of hydrogen being so dangerous, one
of the main reasons, hydrogen being dangerous, and we're talking about putting a
charging station at the College of the Desert, and I know we've been asked to look at
responsibilities for insurance and so on, but I certainly, insurance aside, wouldn't want
to see anybody hurt at a charging station that we put up for the College. So my
question is, how dangerous is it, and if it is in fact dangerous, should we do it?
PS
Mr. Mayor and members of Council. The answer, and certainly that question has been
asked before, the answer is that hydrogen is a fuel, it has to be respected as a fuel,
similar to gasoline or compressed natural gas or propane or any other fuel that is being
used to power vehicles. Actually, it's safer than gasoline and yet we don't seem to be
the least bit concerned about where we place gasoline stations and who does the
refueling of the gasoline stations. But, be that as it may, there is a concern among the
people working in the industry that every possible step be taken to prevent any kind of
an incident because there is a realization that, if there is indeed an incident, it is going
to set back all of the efforts that have been made to try to advance this technology, it's
12
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
going to set it back for many many years. What has been done in this case is a safety
engineer who specializes in using and in handling gaseous fuels has been employed t
do a very thorough safety analysis, and they have designed a system, a system that, a
refueling facility that has a redundant system for every redundant system. They have
taken into consideration every possible incident that could conceivably come along.
They have designed a way to mitigate any kind of danger. Does that result in a
guarantee that there will never ever be any kind of an incident? No, but we have
certainly taken every possible step to make sure that it is safe and that there will be no
problems with it.
RAS Did you have an opportunity to review that article that I sent you?
PS Not in real detail. I know about the methanol program at JPL, it's...there are a number
of different programs around the country that are working with, not necessarily
different fuels, but different means of carrying fuel and then converting to hydrogen on
the vehicle as opposed to having a refueling facility such as we're proposing. The
methanol fuel cell is a brand new technology. They're not sure how well it's going to
work. It's just really in the very very preliminary stages. It solves a lot of problems.
The major problem, again, because the folks working in alternative technology and
alternative fuels, are certainly aware of how to deal with the handling of hydrogen, the
delivery of hydrogen. There are companies that have been doing it for years and years
for industrial purposes and what have you. What methanol does is that it makes it
easier to carry on a vehicle. There are already a number of methanol, 53 I believe,
methanol stations in the L.A. basin, so it's easier to get fuel. Right now the hydrogen
infrastructure is something that's being discussed, it's not in place. So it's more ease
of use rather than a safety issue. Methanol also is dangerous to use just like any other
fuel.
JMB Could you refresh my memory...this is for the use of the College site, but we're not
putting any money in to buying this thing, building it.
PS Yes, the City committed $300,000 cash from Redevelopment funds over the three year
period. Those funds have to be used for bricks and mortar as opposed to paying for
services. And so, part of our commitment will be used to build this facility.
JMB Thank you.
RSK Any other questions.
WHS I move approval of...
RSK Hold it.
13
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
RAS The only comment is that I will vote against it, but I will vote against it not because of
the cost but because of the danger.
RSK You...
WHS I move approval.
BAC I would second it, being willing to vote for it, certainly, because I think most data and
research show fairly clearly that to other fuels, the lack of danger is a reason
to go forward with programs like this.
RSK Any other discussion.
JMB Well, since everybody's explaining why they're voting, I'm voting no because I think
it's not the right site to put this.
RSK I'm going to vote yes, and I'm not going to explain why.
WHS I'm going to vote yes, and I'm not explaining it either except I think it's what we
should be doing.
RSK Well, actually, we have committed ourselves a long time ago to go forward with this
project, and to not move ahead now would be not living up to our commitment. That's
the reason...and regardless of whether the fuel cell project works out or not, solar panel
hydrogen generating facility will be an educational facility that the College can use
forever, so...
JMB But it's only supposed to be there five years.
RSK Well, yes, it can stay there...it's ours, it's there, and it can always be used by the
College. Solar panels are going to be around, a lot more of them, for a long time. It's
a renewable source of energy, which is what's the most important thing we're doing
nowadays in the way of energy development. Any more discussion? Would you please
indicate your pleasure by voting.
MPG The motion carries by a 3-2 vote, with Councilmembers Spiegel and Benson voting no.
For purposes of clarification, Councilman Snyder moved to, by Minute Motion, authorize the Mayor
to enter into a Lease Agreement with College of the Desert (C.O.D.) for the site of the Solar Hydrogen
Refueling Facility, subject to approval by the City Attorney. Motion was seconded by Crites and carried by
a 3-2 vote, with Councilmembers Benson and Spiegel voting NO.
14
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
J. CONSIDERATION OF PALM DESERT POWER DEVELOPMENT CORPORATION
BUDGET.
The following is a verbatim transcript of this portion of the meeting:
Kcy
RSK Richard S. Kelly, Mayor
RAD Ramon A. Diaz, City Manager
RAS Robert A. Spiegel, Councilman
JMB Jean M. Benson, Councilmember
MPG Mary P. Gates, Deputy City Clerk
BAC Buford A. Crites, Councilman
RSK The next item on the Agenda is consideration of Palm Desert Power Development
Corporation budget.
RAD Yes, Mr. Mayor and members of the Council, you received a report today with a
memorandum from me as a cover memo and other materials. I would apologize to the
Council for receiving this material so late, but as indicated in my cover memo, there
are a lot of questions and issues which had to be addressed. There is one item that the
Palm Desert Power Development Corporation, at their last meeting, my understanding
is that they took an action on, and that would be to provide $20,000 to the Economic
Partnership who will provide, I guess, the additional funding to apply for a $25 million
appropriation which would be divided at $5 million a year for the next five years as
indicated in my report. That would be the first and then, after, if we receive the first
$5 million then we would have to apply again and that would cost an additional $10,000
a year for those commitments. If we cannot...if Council does not feel comfortable and
the entire budget that I had here, calling for some $200,000 and shifting of those funds,
we can continue this particular fuel cell program issue to a date certain that the Council
would be more comfortable with, but we could go ahead and instruct staff to forward
the $20,000 to the Palm Desert Power Development Corporation to deal with the
Economic Partnership in terms of that $25 million appropriation, or I can summarize
the whole report. And that would conclude the staff recommendation on this.
RSK Questions or comments?
RAS We've committed an awful lot of money to hydrogen fuel cells at this point, and I, very
honestly, I would like to take a look at the entire program before we vote on any small
part of it. So I would like to continue it.
JMB I would feel the same way.
15
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
RSK Is that a motion?
RAS I'll make the motion.
RSK Do I have a second?
JMB Second.
RSK Other discussion? Please vote.
MPG The motion carries by a 3-2 vote, with Councilmen Crites and Snyder voting no.
BAC When are we going to do this?
RAS Do you want it to a time certain?
BAC Yes. We need to get this accomplished.
RAS Alright, how about our next Council meeting?
RSK I think you could move for a time, pick a time, make a motion.
RAS Continue to the next Council meeting.
RSK Is there a second to that?
JMB I'll second it.
RSK Any discussion? Please vote.
MPG The motion carries by unanimous vote.
K. INFORMATIONAL ITEMS;
1. Update on Interchanges:
a. I-10/Washington Street
b. I-10/Cook Street
c. I-10/Monterey Avenue
Mr. Folkers updated Council on the progress of these interchanges, noting that Cook
Street was scheduled to open in April, 1997, Washington Street in July, 1998, and
Monterey Avenue in September, 1997.
16
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
2. Progress Report on Retail Center Vacancies
Mr. Diaz stated that the committee had met with representatives of the Palm Desert
Town Center operations as well as representatives of some the major stores in the
center. He said progress is being made in that area. A meeting was scheduled for next
month, and during that period of time the mall operators and others will be contacting
the owner/partner of the mall and also discussing with the other majors working out
final problems in that area. He said as far as the theaters, that was very positive and
the arrangements had been worked out.
Mr. Diaz noted the shopping center conferences which would be taking place in Las
Vegas and also in Palm Desert at the Marriott. He said staff was looking at doing a
program and having a facility at the Palm Desert conference as well as having some
attendance at the Las Vegas conference in May. He said the plan was to go out and talk
to some of the majors and helping the centers that we have here also bring in some
retail clients. He noted that progress made with the mall folks, having staff and elected
officials present, had been quite positive.
Mayor Kelly asked if the problem of a transportation center to the north was being
addressed, and Mr. Diaz responded that it was.
` 3. Appointment to the National Committee on Uniform Traffic Control Devices.
Mr. Diaz congratulated Mr. Folkers on his appointment to this committee to serve on
the Construction and Maintenance Technical Committee.
Mr. Folkers noted that Mayor Kelly had had an opportunity to go with him to
Baltimore to see how the Committee operates.
4. Golf Cart Symbol Sign.
Mr. Folkers reviewed the staff report and showed the new symbol which includes a golf
bag and clubs.
XI. CONTINUED BUSINESS
A. CONSIDERATION OF REQUEST FROM STUDENTS CREATIVE RECYCLE ART
PROGRAM FOR A $10,000 CONTRIBUTION (Continued from the Meeting of January 23,
1997).
Mr. Diaz recommended that this matter be continued to the meeting of March 27, 1997.
Councilman Spiegel moved to continue this matter to the meeting of March 27, 1997. Motion was
seconded by Snyder and carried by unanimous vote.
17
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
XII. OLD BUSINESS
A. REQU S FOR AWARD OF CONTRACT FOR LOCAL STREET PAVING - DELAWARE
STREET, LATISHA LANE, MOUNTAIN VIEW (Contract No. C12000).
Mr. Diaz noted the report in the packets and offered to answer any questions.
Councilman Spiegel moved to, by Minute Motion: 1) Award Contract No. C12000 to E.A. Mendoza
Contracting of Anaheim Hills, California, for the construction of street paving on Delaware Street, Latisha
Lane, and Mountain View, in the amount of $306,261.00 plus a ten percent contingency in the amount of
$30, 626.10 and authorize the Mayor to execute the agreement; 2) appropriate construction funding in the
amount of $336,887.10 from the Unobligated Measure "A" Funds for Account No. 213-4675-433-4001; 3)
approve Estimated Revenue in the amount of $336, 887.10 to the Unobligated Measure "A" Fund. Motion was
seconded by Benson and carried by unanimous vote.
B. REQUEST FOR APPROVAI, OF CITY OF PALM DESERT DRAFT CHARTER.
Mr. Wohlmuth reviewed the staff report.
Councilman Snyder moved to, by Minute Motion, approve the City of Palm Desert draft Charter and
direct staff and the Charter City Advisory Committee to implement a community marketing program. Motion
was seconded by Spiegel and carried by unanimous vote.
XIII. REPORTS AND REMARKS
A. CITY MANAGER
1. j t gen4s of Golf Tonrnamest
Mr. Diaz stated that a request had been received from this organization to allow banners
in the City at the same locations as in the past. He said if there were no objections
from the Council, he would approve this request. Council concurred.
2. prohibition of Parking on Portola Avenue North ofFred Waring Drive
Mr. Diaz stated that with regard to the potential prohibition of parking on Portola
Avenue north of Fred Waring Drive between the hours of 7:00 a.m. to 9:00 a.m. and
4:00 p.m. to 6:00 p.m., this was part of the program to create a safer situation for the
pedestrians.
18
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Mr. Folkers stated that this prohibition was currently in place on a temporary basis and
that staff would be going to the residents in the near future to request their input relative
to full time prohibition.
Mr. Diaz added that staff would come back to the Council with a report.
3. Creation of a Utility Committer
Mr. Diaz asked that two members of the Council be appointed to create a utility
committee to deal with the issue of electric power. He said staff is being inundated
with requests for power consultants.
Mayor Kelly stated that he had met with the Mayors of Indian Wells and Rancho
Mirage and discussed the possibility of meeting with the City Managers of the Cove
Communities cities and jointly hiring a consultant. He said staff was currently in the
process of putting together such a meeting at a mutually convenient date the first week
in March. He said if there were no objections, he would continue to work on setting
this date.
Council concurred.
B. CITY ATTORNEY
1) Report and Action on Items from Closed Session Made at This Meeting.
2) Request for Closed Session
Mr. Erwin noted the items on the Agenda and the Agenda Addendum for Closed Session. He
also asked that Council consideration the addition of an item which arose after the Agenda was
posted dealing with real property as follows:
Conference with Real Property Negotiator pursuant to Government Code Section 54956.8:
1) Property: Southern half of Section Four
Negotiating Parties:
Agency: Carlos Ortega/Dave Yrigoyen
Property Owner: Palm Desert Redevelopment Agency
Other party: Intrawest Resorts, Inc.
Under negotiation: ,b Price ... Terms of Payment
Councilman Spiegel moved to add this item to the Agenda for discussion in Closed Session. Motion
was seconded by Snyder and carried by unanimous vote.
19
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Conference with Legal Counsel - Existing Litigation pursuant to Section 54956.9(a):
The Coalition for Economic Equality vs. Pete Wilson, Federal District Court Case No.
C-96-4024
Conference with Legal Counsel - Anticipated Litigation pursuant to Government Code Section
54956.9:
Significant exposure to litigation pursuant to subdivision (b):
Number of potential cases:
NOTE: THE FOLLOWING ITEM WAS LISTED ON AN AGENDA ADDENDUM POSTED 72 HOURS
PRIOR TO THE MEETING:
Conference with Real Property Negotiator pursuant to Section 54956.8:
Property: APN Nos. 771-050-003, 004, and 771-060-002
Negotiating Parties:
Agency: City of Palm Desert
Property Owner: C.C. Meyers
Under negotiation: a_ Price Terms of Payment
C. CITY CLERK
None
D. MAYOR AND MEMBERS OF THE CITY COUNCIL
o City Council Requests for Action:
1. Consideration of Letter from the City of Palm Springs Relative to a Potential
American Airlines Pilot Strike (Mayor Pro-Tempore Jean M. Benson).
Councilmember Benson noted the letter from Mayor Will Kleindienst relative
to the potential American Airlines pilot strike on February 15th. She said it was
very critical that this strike be averted if possible. She asked that staff be
directed to fax a letter to the President similar to the one by Mayor Kleindienst.
Councilman Crites moved to, by Minute Motion, direct staff to prepare a letter to President Clinton,
signed by the Mayor, similar to the letter from the City of Palm Springs, and that said letter be faxed to the
President. Motion was seconded by Spiegel and carried by unanimous vote.
20
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
2. J)icraussion of Grant for MidValley Metrolink Station
Mayor Kelly noted that this issue keeps coming up at the Riverside County
Transportation Commission (RCTC) meetings. He noted that the process got
to a point where agreement was not obtained from surrounding cities to
participate, and it was put on hold. He said the City of Palm Springs went
ahead with theirs, and now there are other projects funded with these same
funds through the California Transportation Commission. He said if we choose
to proceed, staff has to appear at a hearing in March. He said he thought the
last decision was that unless there is participation from surrounding
communities, we are going to hold up on it. He said this is now down to 4th
in priority and is slipping, and the Council needs to decide what to do so that
he will know how to vote when it comes up again at RCTC. He noted there
was an RCTC meeting earlier today, and this issue came up for a vote again and
that he had abstained because he did not know what position the Council wished
him to take.
Mr. Wohlmuth stated that staff is working on this and is requesting that RCTC
and CTC reprogram the $482,000 grant to an intermodal station at the Palm
Desert Town Center north parking lot if the parking structure in the mall
proceeds.
Management Analyst Ray Janes stated that staff had met with Caltrans personnel
who indicated that we have until April 1 to resubmit this addendum to the
original application.
Mayor Kelly stated that someone from staff needs to work with RCTC and find
out when the hearing will be where these particular funds will be discussed in
March. He added that he also needed to be kept better informed as to what is
happening with this.
Mr. Diaz stated that staff will contact RCTC staff and find out the date of the
meeting and will have someone there and will then report back to the Council
as far as where this is going.
3. Consideration of Letter Relative to Leaf Blowers.
Mayor Kelly noted that the Council had received letters relative to leaf blowers
and asked that staff be directed to place this issue on the next City Council
Agenda.
Councilman Spiegel moved to, by Minute Motion, direct staff to place this issue on the next City
Council Agenda and direct the City Manager to send a letter notifying the writer of the letter of this action.
Motion was seconded by Snyder and carried by unanimous vote.
21
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
0 S:ity Council Committee Reports:
NOTE: THE FOLLOWING REPORTS WERE MADE JUST PRIOR TO ADJOURNMENT OF THE
CITY COUNCIL MM.., i u4TG:
1. Councilmember Benson reported that the subcommittee for library zoning met
with Supervisor Roy Wilson on January 30th. She said they had not yet
developed the RFP for someone to operate libraries as a zone in this area. She
said she was instrumental in having language included in the RFP that if the
proposer is not satisfied with this level, they can indicate how much it would
cost for various levels up from that. She said this would be brought back to the
zoning committee before it is mailed out, and it was hoped the RFP's would be
sent out in March, with the award of bid in May and that it would be up and
running in July. She also noted that the City's Library Committee should be
working alongside the RFP to see what it would cost the City if it went out on
its own with Library services.
2. Mayor Kelly stated that Saturday morning was the official first day that Desert
Willow would be in operation. He said the first starting time was acquired by
a Palm Desert resident who went through the normal process of scheduling
starting times. He noted that he would be out there to shake this gentleman's
hand and to wish him well and that Piper Close of Kemper would be doing a
press release. He added that the grand opening was scheduled for February
26th at 10:30 a.m.
XIV. ORAL COMMUNICATIONS - B
None
Upon motion by Spiegel, second by Kelly, and unanimous vote of the Council, Mayor Kelly
adjourned the meeting at 5:10 p.m. to Closed Session, said Closed Session to be held immediately following
adjournment of the Redevelopment Agency meeting.
Mayor Kelly reconvened the meeting at 7:00 p.m.
XV. COMPLETION OF ITEMS HELD OVER FROM 4:00 P.M. SESSION
None
XVI. ORAL COMMUNICATIONS - C
MR. BRUCE PETTINGILL, 44-805 Deep Canyon, stated that he was told that someone would
contact him with information about the Lucky center but that he had not as yet heard from anyone.
22
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Mr. Diaz apologized and said that staff had come up with programs to solve the problems alluded
to by Mr. Pettingill and that it was a matter of getting those programs implemented. He said there
would not be a grand opening until the landscaping questions and other issues are taken care of, such
as lighting of the palm trees, etc.
Mr. Pettingill stated that there was also the problem of ingress and egress, and he added that he did
not think the lights needed to stay on all night..
Mr. Diaz stated that he would make sure Mr. Pettingill is kept informed.
Councilman Crites stated that the City had taken action to inform the stores that there are issues that
need to be corrected before they open their doors. He suggested that staff be instructed to go out and
meet with Mr. Pettingill the next morning to discuss the issues and make sure there are not issues
that staff is missing and not tending to.
Mr. Diaz stated that he would appoint a senior member of staff to meet with Mr. Pettingill in the
morning.
MS. BEVERLY BROWN, 73-450 Country Club Drive, #40, stated that she had a business in the
Lucky shopping center at Monterey and Country Club Drive. She expressed concern with roadside
memorials and stated that she had passed two of them several times that day. She asked that the
Council consider this problem and find a happy ground and possibly limit the time allowed for these
memorials to something like two weeks. She said she felt if the people do not remove these
memorials, perhaps the City could do so.
Mayor Kelly stated that staff would look into this and come back to the Council with a report and
recommendation.
MR. GARY GOUDSWAARD, 44-755 Deep Canyon, stated that his concerns were identical with
those expressed by Mr. Pettingill relative to the Lucky project.
Mayor Kelly suggested that Mr. Goudswaard participate in the meeting scheduled between staff and
Mr. Pettingill the following morning.
MR. CHRIS McFADDEN, 74-251 DeAnza Way, stated that on February 1 he had received a call
from his son because someone had crashed an automobile into a living room two doors down from
his home. He noted that he had a letter from May 4, 1994, from him and his wife asking that a stop
sign be installed at that intersection, and he asked that this matter be considered again for possible
installation of a stop sign.
Mayor Kelly stated that the City Manager and staff would look into this and make a report back to
the Council at its meeting of February 27, 1997.
23
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
XVII. AWARDS, PRESENTATIONS, AND APPOINTMENTS
A. APPOINTMENT TO THE BUILDING BOARD OF APPEALS AND CONDEMNATION TO
FILL THE VACANCY CREATED BY THE EXPIRATION OF TERM OF KEN
STENDELL
Councilmember Benson moved to, by Minute Motion, reappoint Mr. Ken Stendell to a five-year term
on the Building Board of Appeals and Condemnation. Motion was seconded by Spiegel and carried by
unanimous vote.
B. APPOINTMENT TO THE JOSLYN COVE SENIOR CENTER BOARD OF DIRECTORS
TO FILL THE VACANCY CREATED BY THE RESIGNATION OF FRANK LAIACONA.
Councilmember Benson moved to continue this matter to the meeting of March 27, 1997. Motion
was seconded by Crites and carried by unanimous vote.
C. APPOINTMENT TO THE PALM DESERT LIBRARY COMMii 1tt TO FILL THE
VACANCY CREATED BY THE RESIGNATION OF STEPHANIE WEINBERG.
Councilman Spiegel moved to continue this matter to the meeting of February 27, 1997. Motion was
seconded by Snyder and carried by unanimous vote.
XVIII. PUBLIC HEARINGS
A. CONSIDERATION OF APPROVAL OF A DEVELOPMENT AGREEMENT WAIVING
CERTAIN REQUIREMENTS OF THE MUNICIPAL CODE TO ALLOW FINAL
APPROVAL OF A CONDITIONAL USE PERMIT FOR A 310-UNIT RESIDENTIAL
VACATION OWNERSHIP COMPLEX (TIMESHARE) PROJECT AND RELATED
TENTATIVE TRACT MAPS TT28450 AND TT28451, ALL LOCATED ON PROPERTY
IN A PORTION OF SECTION 4 T5S R6E, Case No. DA96-11elating to cases PP/CUP96-28,
TT28450, and 1T28451(Intrawest Resort Ownership Corporation, Applicant) Continued frpm
the Meeting of January 23, 1997,
The following is a verbatim transcript of this portion of the meeting:
Key
RSK Richard S. Kelly, Mayor/Chairman
RAD Ramon A. Diaz, City Manager
CLO Carlos L. Ortega, Executive Director of the Redevelopment Agency
SS Steve Smith, Planning Manager
DJE David J. Erwin, City Attorney
BAC Buford A. Crites, Councilman/Member
JG Jim Gibbons
24
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
MP Mark Pevers
PD Phil Drell, Director of Community Development
JMB Jean M. Benson, Mayor Pro TemporelVice Chairman
RAS Robert A. Spiegel, Councilman/Member
WHS Walter H. Snyder, Councilman/Member
LW Leonard Wolk
JR Jeff Rabin
MPG Mary P. Gates, Deputy City Clerk/Assistant Agency Secretary
RSK First item under public hearings is consideration of approval of a development
agreement waiving certain requirements of the Municipal Code to allow final approval
of a conditional use permit for a 310-unit residential vacation ownership complex
(timeshare) project and related tentative tract maps TT28450 and TT28451, all located
on property in a portion of Section 4.
RAD Mr. Mayor and members of the Council. We can and should take Items A and B
together since they involve the same project. Carlos...
CLO Mr. Mayor, the City Manager is correct. Item A on the agenda is a City Council item
and involves a development agreement. Item B is a disposition and development
agreement between the Agency and Intrawest Resort Ownership Corporation and is the
subject of a joint public hearing this evening. The DDIA is also a public hearing. Both
the hearing on the development agreement and the hearing on the disposition and
development agreement have been advertised in accordance with law. Furthermore, a
copy of the disposition and development agreement has been made available for public
review. Since the development agreement and the disposition and development
agreement are linked, we recommend that you open the public hearing on both Items
A and B and take testimony on either or both. First, we should have the Planning staff
summarize the project and the development agreement. The staff report on the
disposition and development agreement contains a summary of the document including
all of the deal points. If you have any questions, Agency staff, the Agency's fiscal
consultant, and the Agency's legal counsel are here to answer any questions.
RSK Any questions from the Board or the Council. Well, we'll listen, before I open the
public hearing, we'll listen to the remainder of the staff report.
SS Good evening. As Mr. Ortega indicated from the City side of things what is before you
this evening is the development agreement to waive certain requirements of the
Municipal Code to allow the final approval of the conditional use permit for the 310-
unit residential vacation ownership complex.
25
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
DJE Mr. Mayor, I'm sorry to interrupt, Steve. Mr. Mayor, I would ask you to open the
public hearing for the Redevelopment Agency as well.
RSK I didn't open either one, yet. I was going to open them as soon as we finish the staff
report. •
DJE Okay.
RSK I thought I said that.
SS Continuing on...the matter was before the Planning Commission at its meeting of
December 17th. At that time, after a lengthy public hearing, the Planning Commission
approved the precise plan, the conditional use permit, and the two tentative tract maps,
28450 and 28451, all subject to conditions. One of the conditions on the Planning
Commission action requires that the Council approve by ordinance this development
agreement to waive the timeshare requirement that timeshare projects "shall be
developed in conjunction with a resort hotel having 500 or more rooms." You have that
development agreement before you this evening. It contains a recitation of certain
benefits accruing should the City proceed with this project, some of which are also
contained in the DDIA which the Redevelopment people will describe in more detail.
The City Attorney's office has had an opportunity to review the development
agreement. I understand Mr. Erwin has some additional language he wishes to bring
up at this time. I would conclude by saying that subject to his comments, that staff
recommends that you waive further reading and pass Ordinance No. 824 to second
reading. You have the project before you in model form, and the plans are on the wall.
If you need me to describe in more detail, I can, but I'll stop at this point unless there
are questions.
RSK Any questions?
BAC Just one quick one. The disputation over parking requirements between 1.8, 1.5, 1.1,
is now, what?
SS It is now that we are going to have the higher number of parking provided in each
phase and we're going to reevaluate at the end of each phase.
BAC 1.8?
SS I believe that is the number, yes, 1.8.
RSK Any other questions? Did Redevelopment want to do a staff report?
26
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
CLO Mr. Mayor, we do have an extensive summary. It is a very long and complex
agreement. If you want to, I could give a summary of the summary real quick -like, if
you'd like.
RSK You could do that.
CLO Essentially what the agreement contains is the sale of land to Intrawest Resort
Ownership Corporation to build the units that are the subject of the Planning
Commission recommendation which is the 310 units. There are provisions for options
to buy additional r.,.r:,.ty in the future to develop what may ultimately be close to 600
units. The provisions is that there is a land sale, there is a cash down payment of $3.5
million, there is a note backed by a trust deed, plus a corporate guarantee by Intrawest
Corporation of $2.5 million. In addition, there are three sets of additional fees that are
paid. One is what we call a one-time access fee of $12,000 per unit. In addition, to
support the operation of the golf course there's over a period of five years a principal
amount to be increased by Consumer Price Index, but the principal amount of $1.5
million, and that is paid over a period of five years. In addition to that, there is an
ongoing fee of $3,500 per unit which will be paid, and those will be paid as long as
there is a project.
RSK Annually?
CLO Annually, yes, sir. The Agency, by the agreement, is required of course to sell the
land, is required to build and operate the golf course, and is required to provide certain
benefits to the resort owners or the people that buy points in the vacation resort and to
provide the infrastructure up to the property line. That is essentially the agreement.
RSK Questions from the Council and Board? With that, then, I'll open the public hearing
and ask...I guess, first, anybody representing the developer to make any comments they
might have.
JG Mr. Mayor, City Council, Agency staff, the staff of the City, and public. My name
is Jim Gibbons, and I'm with Intrawest Resort Ownership Corporation. We have
available a lengthy presentation which I think most everyone has seen already, but we
have it if anyone wants to see backup materials. I think what I'd like to do is
summarize tonight some of the things that have already been brought forward. Firstly,
the process by which we've gone through the system in the City of Palm Desert. On
the loth day of December, 1996, we received...we successfully went through the
Architectural Review Committee. Same day we had unanimous approval by the Section
4'Committee. On the 17th of December the Planning Commission sent this forward,
and on the 30th of January, the Economic Development Committee met and
recommended approval. Finally, as an endorsement, the project went on the 17th of
January to the Chamber of Commerce Board. In addition to that, we have been out
seeking public opinion. Intrawest prides itself on coming into a community and
27
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
working with the people in the community and to that end we've gone out and tried to
assess any concerns, not only from the people at the City, the people at the
Redevelopment Agency, the people at City Council, and I think that we've addressed
the concerns as much as we could, and I'm very proud to say that never in the history
of my career in this industry with a project this big have we received this kind of a
unanimous approval from the community. We're very proud of what we've
accomplished and we look forward to going forward tonight.
With respect to the development agreement and its dealing with the waiver of the
timeshare ordinance, the City gave us a test and challenged us to meet three very severe
challenges in order to get a waiver of the timeshare ordinance. The first one of those
was that the scope of the proposed development and the credibility of the developer
must justify the waiver, and I think that over the course of the months that we've been
before you that we've been more than able to do that. Also, the unique nature of the
resort club is more akin to a resort hotel because of the fact that it is a single ownership
and that the members all own a share in one entity that is free and clear of financial
encumbrance and the fact that the members can use the, resort not one week at a time
as in traditional fractional ownership but one day at a time as in a hotel and the fact that
the project contains in the 310 units in the first phase it contains 600 keys similar to a
hotel and ultimately up to 1,200 I think satisfies that. And, thirdly, that there would
be substantial direct financial benefit to the community of Palm Desert, and I think as
Mr. Ortega has put forth tonight, we have more than lived up to that part of the
requirement. In closing, unless the Council finds that we should do a more extensive
presentation, I would just like to thank the City staff, the Redevelopment Agency, the
Council, and all of the people here in the City of Palm Desert who have shown us
unbelievable support for the project, and I respectfully request tonight that you grant
us approval of both the DDIA and the development agreement. Thank you.
RSK Any questions from the Council? Anyone else would like to speak to this item at this
time? Seeing...oh, there we go.
MP Mr. Mayor, may I speak against the proposal now, is this the appropriate time?
RSK Yes.
MP My name is Mark Pevers. I reside at 877 Box Canyon Trail, Indian Ridge, in Palm
Desert. I'm concerned both as a taxpayer and as a limited partner in Marriott's Desert
Springs Resort. I read the quote from Mr. Ortega in the current newsletter that "hotels
are back in business, financiers are looking once again to finance hotels, and that
window of opportunity is here in Palm Desert." And then it also said that you've got
commitments from two hotels for two of the pads and the Planning Commission has
approved, I presume, the conference pad for another hotel. This is pretty hard to
believe. There are two pads at the Indian Wells Golf Resort, no hotels on them.
There's a pad at PGA West, no hotel. The Canyon Resort in Palm Springs has not
28
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
been able to get financing. I spoke to an official in the Rancho Mirage city government
today. They'd love resort hotels and more resort hotels in Rancho Mirage. There's
just no interest. And I gave Mr. Ortega a letter which I asked him to distribute to the
Redevelopment Agency. It's from the Marriott's Unlimited Partners dated January 20th
of this year, and if financiers are jumping in to finance these hotels, we as partners, and
Marriott had to look for a year to get anybody to refinance Desert Springs which is the
largest resort in the Valley, I think the most successful resort, and the best they could
come up, the $99 million note is at 8.6% interest, and there are two other notes. One
carries an interest rate of 20%, and one carries an interest rate of 13%, so obviously
the private sector is saying that this is a risky investment. My next point is that if you
have this interest from hotels, obviously there's a tremendous public subsidy involved,
and I feel it is unfair, Desert Springs was built with 100% private money. We are
suffering, we have not seen a nickel from hotel operations in years, and if you read this
letter we're not going to see a nickel for years to come. So something's wrong. Either
we've been conned, the projections were great, as Mr. Ortega said, the proforma for
Desert Willow looks fantastic, it looked fantastic for Desert Springs too. And I think
that with the free golf course, and again, if Intrawest wants to pay for the golf course,
up front, as well as the other hotels, I say fine, but I say it's not fair. We should
be...the playing field should be level, they should have the same terms we had, Desert
Springs has been very successful for Palm Desert. But let's compete and not freeze out
the private sector. We put our equity into it, and right now it's worth next to nothing,
and you're basically giving away the store. And if all these...you have Intrawest and
these other two hotel entities interested, there's obviously a huge public subsidy.
Because financiers aren't coming in. You need 50% equity, and Desert Springs being
a proven hotel, we never missed a mortgage payment, this is the real world out there,
not dealing with public money. I'd like to comment on that rather than just say thank
you. And my next and last point is, three years ago I had a discussion with Ray Diaz,
if this project were totally developed with Desert Springs, you could possibly have a
project worth a billion dollars, and I said to Mr. Diaz, what are you doing about
undergrounding the transmission lines on Country Club. And Mr. Diaz said, well
legally we could use Redevelopment money, but we're not interested in doing it
because it's not revenue producing. And I say if you want a destination resort, a first-
class resort, the twoand a half million dollars to do that is about half of one percent of
the value of this total development if it goes as planned. $20 million was spent on the
north course, $500,000 could have been spent to underground those residential lines on
Frank Sinatra. It wasn't done. You have to have a beautiful environment. You did it
on 111 between Rancho Mirage and Palm Desert. As you drive down there, it's
gorgeous, you see the palm trees, you hardly see the businesses, and you see the
mountains. And no thought has been done as far as I know to do it. The median strip
is tired on Country Club, that certainly should be beautified. I mean, if you're going
to go world -class, do it right. Again, so I'd like specific answers to...my main two
questions are, one, how can you justify unfairly competing with the private sector and,
two, what about getting this undergrounding of the high tension lines and also
29
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
upgrading the median strip on Country Club which is certainly pretty shabby now.
Thank you, and I appreciate your comments.
RSK Is there anyone else who would like to speak to this issue? Seeing none, I will close
the public hearing.
DJE Mr. Mayor, might I add a provision that I would like you to consider in the
development agreement if you are to consider it. It would be adding a paragraph D in
the recitals which deals with the impact mitigation fee that would be paid per unit, and
it is a one-time fee of $7,500 per unit payable six months following the date of the
certificate of occupancy being issued for each unit. There is a recital referencing code
section as paragraph D in the recitals, and it also would be included as paragraph
number eight in the agreement requiring that same payment. That is not in the copy
of the development agreement that you have in your packets.
RSK Is that right, Mr. Ortega?
DJE This is my recommendation that you add to the development agreement.
RSK I thought we had that in there. When you talked to me you said...you mentioned that,
but it didn't get in the agreement? Oh, that's because it's in the ordinance?
CLO No, that's what, I think, the City Attorney and Planning staff have been making sure
it's in there.
PD I'll clarify it. Our ordinance requires $150 payment on each week's share at the sale
of each share. Since this project isn't selling week shares, we had to specify and take
that formula and turn it into the $7,500 per unit, which is the total which is paid. So
instead of having it, again, since we couldn't tie down what a week share was in this
concept, we figured out what the total would have to be paid on each unit, and they will
pay that.
CLO To answer you question specifically, the agreement does contain an overall provision
that the developer will pay all existing City fees, which include the $7,500. What the
City Attorney is doing is clarifying...
RSK You have no problem with that?
CLO No, I have no problem with that.
RSK I'll ask for the Council's direction.
JMB Well, I have a comment. I am very very much opposed to the waiver of the ordinance
that requires a hotel. I don't see any way that condos, by any other name they're still
30
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
condos, the Department of Real Estate states that they're condos whether you call them
resort club or whatever you call them, they're still timeshares, be built without a hotel.
We went through this before we put that ordinance in, and now we're circumventing
our own ordinance to go through and put a development agreement in so that we can
justify putting in the condos, and I don't think it's right. I think that anyone that comes
in that wants to build condos just say well, I'll go by your ordinance but we'll have a
development agreement so I can circumvent it. If we do it for one, we have to do it
for another. The City is selling this land to Intrawest. I think it's totally wrong. I see
no reason for us to get into that position. I think if they want their project out there,
let them build the 500-room hotel. The economic benefit comes from that, not a
dribble here and a dribble there as they build a few condos and then see if they go.
They stated in one of the presentations they expected eight five percent occupancy in
the summer, and I can tell you as chairman of the Palm Springs Desert Resorts Visitors
and Convention Bureau for the last six years the occupancy of all our Valley hotels has
been fifty seven and a half percent. There's no way those condos are going to attract
eighty five percent occupancy, and they're going to find that out the hard way when
people can go someplace else in the summer rather than, come here in June, July, and
August, so that's going to slow down the building on them. I just think that there has
to be some provision in there that everybody that wants to build condos doesn't come
in and say oh well, the City will accommodate us, they'll do a development agreement
and we can put condos in and get rid of the hotel, and we'll really circumvent what we
started when we said we didn't want condos without a hotel. If they want to build 500
units out there and give them to the resort members, that's fine with me. But I think
they need to do it all in one package so that the City of Palm Desert doesn't get stuck
with this, as I can see coming down the road. It also says they have to have an 18-hole
golf course, and they want us to pay for it. We spent $20 million on one, and I for one
don't want to take the flack on $20 million for golf course two that's going to benefit
the condo people. I just think it's totally wrong, I think we're in the wrong direction,
and I am totally opposed to putting condos out there when they're in direct violation of
our own ordinance.
RAS Well, I happen to agree with Councilwoman Benson for maybe some other reasons, and
I don't know that I'm going to answer your concerns, I doubt that I.am. Our general
fund budget for this year for the City of Palm Desert is $22 million. That's what we'll
spend to maintain this city. Of the $22 million, $2.269 million come from property
taxes, which tells you that we don't run the City because of what the people pay in
property taxes here. Our two main money produces that run the City of Palm Desert
are, number one, sales tax. Because we're now the retail center of the Valley, we will
earn $8.15 million in sales tax, or 36% of our total income. The second biggest
amount of money that we receive is $4.7 million in hotel occupancy tax, 21 % of our
budget. Of the $4.7 million, $3.1 million comes from the Marriott Hotel. All the rest
come from smaller hotels in Palm Desert, but $3.1 million of $4.7 million comes from
the Marriott. Now, if you add to that the fact that everything that's purchased there,
whether it's a meal or whether it's something from the gift shop, has sales tax to it,
31
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
conservatively the Marriott Hotel gives this City over $4 million a year in revenues to
run it, almost twice what the City gets in r..y, w l j taxes from the people who live here.
Now that's pretty dramatic. The Marriott Hotel came in with a beautiful destination
resort that had convention facilities and was suggested as the number one hotel in the
Valley. Right now their occupancy rate is about seventy five percent I believe. We are
the only city, major city, in the Valley that has only one destination resort. All the rest
of our hotels are small hotels. People are telling us they like this area to come for a
destination resort. If another destination resort were added to this city, it would give
us at least an additional $2 million to work with to pay police and the fire department
and upgrade the roads and take care of the medians on Country Club, etc., etc., etc.
The Marriott did not put in the timeshares until they were successful with their hotel
and their golf courses. Intrawest, which is a fine corporation and has developed a
wonderful plan, comes from Canada, where they have one of the best ski resorts in the
world, outside Vancouver. But Intrawest built the ski resort, they built the hotels, they
built the restaurants, they built the shops, they built the movies, and then as an
afterthought they said let's try timeshares. Well the timeshares worked pretty good.
But everything was already there, the hotels were there, the homes were there. Now
Intrawest is coming to us and saying hey, guys, we want to put in some timeshares and
then maybe there'll be a hotel that will come along and we'll have the complex. Well,
I agree with Councilwoman Benson. This Council passed an ordinance that said that
you can't have timeshares unless you've got a 500-room hotel, and in my opinion we're
putting the horse before the cart. The City should be out trying to develop a hotel to
go along with our fine golf course, yes it was an expensive golf course, but I viewed
it and I'm not a.golfer, but it's one of the prettiest golf courses that I've ever seen and
I think will attract an awful lot of people to our community. But I can't vote for this
project without the guarantee of the hotel.
JMB I just have another question. I just wonder, on the outside, it says the applicants are
Intrawest Resort Ownership, but the development agreement says it's Resort Ventures,
LP, and why isn't it with Intrawest, and who is Resort Ventures, LP? I have no idea.
PD I believe the party to the development agreement should also be Intrawest Resort
Corporation.
DJE The development agreement that I have is Intrawest Resort Ownership Corporation.
PD Yes, yes, so...
JMB This one I have says development agreement number 97, and it says it is between the
City of Palm Desert, a municipal city, and Resort Ventures, LP, a California Limited
Partnership.
32
Items
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
PD
The version that went to the Planning Commission was that way, but in the interim it
has been the latest draft which was circulated. I don't know which one you're looking
at. You're looking at...
DJE It's a draft that shows some redlining and additions, and it is with Resort Ventures
Limited Partners. I've not seen that one. The only one I've seen is the Intrawest
Resort Ownership Corporation. That may well be from the Planning Commission...
PD Yes, it was from, the packet for the Planning Commission. The latest one is all by itself
and with the ordinance to the Council.
JMB And so all the financial agreements and everything we're doing or approving is with
Intrawest.
PD Intrawest, correct. Intrawest Resort Ownership Corporation.
DJE Intrawest Resort Ownership Corporation.
RAS IROC?
DJE IROC, I-R-O-C.
RAS A subsidiary of Intrawest?
DJE IROC is reputedly a wholly -owned subsidiary of Intrawest.
RAS So it's like signing a contract with Intrawest when you sign a contract with IROC?
DJE No.
RAS Then I don't understand.
DJE Well, you have two separate corporate entities. IROC is a corporate entity.
RAS But it is a subsidiary of Intrawest.
DJE Yes, meaning that Intrawest is the owner of IROC.
RAS Well, if you buy a car from Buick, aren't you buying it from General Motors?
DJE Not necessarily.
JMB Well, Intrawest themselves are responsible for all the financial obligations of this
transaction?
33
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
DJE There are several responsibilities for the financial aspects of the transaction. The
principal is Intrawest Resort Ownership Corporation. There is an additional corporate
guarantee of $2.5 million from Intrawest, the parent company, as I understand Mr.
Ortega's comments. But the principal organization that you're dealing with is Intrawest
Resort Ownership Corporation.
JMB What you're saying is in essence it's Intrawest.
DJE I'm trying to be correct because Intrawest is spoken of as the parent company.
Intrawest Resort Ownership Corporation is a separate company. It is owned by
Intrawest, but it is a separate entity.
RSK But in the agreement, Intrawest itself is the guaranteeing company?
CLO For the $2.5 million corporate guarantee, yes, that's backing the trust deed.
JMB Well, I would think the...
RSK In other words, if IROC were to dissolve and disappear, then Intrawest would be
responsible for $2.5 million, and we would take the project over also.
CLO Correct.
DJE Well, not necessarily. It depends if these go through and the property ownership is in
IROC and IROC pulls up for whatever reason, that does not necessarily mean we step
in and take it over. I think the documents would indicate that, but the question is in to
the bankruptcy courts perhaps.
CLO There is a trust deed and a note, and that is against the property. So, a, we would have
the ability to foreclose on the property. In addition, what we insisted on that in
addition to those, we get a $2.5 million corporate guarantee from Intrawest.
JMB Well, I would think all these papers should reflect the same thing and . we know where
our money is and who's behind our money and who these partners are in this before we
would go into any development agreement with anybody. We're certainly supposed to
be a fiscally responsible Council, and I don't think that's fiscal responsibility to sign
something you don't know what you're signing.
BAC I guess the starting spot seems to be whether or not we would waive the hotel
orientation or requirement and so on. When we placed that requirement on this type
of development about a decade ago, we did it because particular small timeshares in this
Valley, we had a whole pile of them at the time and people were taking over little
abandoned apartment projects and turning them into timeshares and this and that, and
we simply didn't want that to happen in this city, and so the Marriott at the same time
34
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
if I remember correctly wanted to do a project like this and so it was darn convenient
for us to attach it to a 500-room hotel because only the Marriott had such a thing, and
attach it to and 18-hole golf course because they were the only ones that had that, and
we never had to worry about the issue again. To say that we were looking at 500-room
hotels or something like that is, I think, less true than the Marriott and what they had
was a.good darn flag of convenience to make sure we didn't get developments that we
did not think were financially stable at that time. If we believe something is financial
stable and has the resources and has the quality and everything like that, then that's
something we should look at. If we had a 500-room hotel that was run by some
corporations who run hotels, we shouldn't approve that, period. I think the artifice of
a particular number of hotel rooms or something is less important than the issue about
quality and the issue about financial responsibility. That's my solid bias on that. I
have to, on the other hand, also agree with Councilmember Spiegel that the hotel issue
is an important one. The gentleman this evening talked about Marriott Desert Springs
and there aren't any new hotels and so on, well, I think in a very short period of time
we'll have a public chance to discuss two hotels in that general site area that have been
proposed by a major hotel corporation. And I think we've already announced the
name, haven't we in a past meeting?
RAS Not part of this...
BAC Not part of this development. But back over on the corner... catty corner of where the
Cal State campus will be, and those are I think legitimate opportunities. By the way,
redoing Country Club Drive is on our capital works budget, and it couldn't come too
soon if it happened tomorrow morning, in my opinion. Those poor jacaranda trees out
there should be allowed to suffer their last and being given the dignity of a good burial
or composting and get on with life.
RSK And the grass with it.
BAC And the turf with it that gets to battle the sand every year. There's not an argument —
it'll get done. The undergrounding issue, I think, is also an issue that we need to look
at in terms of our capital budget, not on the retail, the small lines, but on those large
lines which are further out, and when development hits on that side, that's one of the
times that will trigger doing that at that time so that we get some money to come in and
work with that at the same time. The answer is yes, we'll do that, it's easy to do when
we're doing the other things at the same time, to pull those out of there and get those
lines underground. I agree totally with you idea of Highway 111. We still have some
up on Highway 74 and things like that. When we started this project originally
Marriott was going to do this and obviously we weren't going to require Marriott to
build a second hotel because they already had a hotel, and then Marriott apparently now
in their judgment unwisely walked away from this, and we had another company that
came in to do in essence an identical project. This was a project that I think was
35
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
acceptable to this body when the Marriott Corporation was doing it with the same
configuration basically in numbers and so on and so forth.
JMB We didn't even talk about the financial with Marriott.
BAC You and I will differ on that, I think we did talk about financial issues with Marriott.
WHS I was one of them that talked to them.
BAC But in any case, whether we did or we didn't, I believe we did. I think a reasonable
question that Councilman Spiegel raises, though, what happens if we approve this
investment, the company goes out and builds the number of units that they are
minimally required to do, and then decides this is not a profitable venture. What
happens, to be more blunt as my colleague said, if they cut bait and run or pull their
line up?
CLO Let me talk about what the agreement says, then I'll have our legal counsel tell you
what legally we are requiring. Number one, there is a $3.5 million cash down payment
that will be in our hands as soon as we close escrow on the property. Number two,
there will be a $2.5 million corporate guarantee. Number three, as soon as we close
escrow, they will then...we will release from the trust deed 40 units at which point they
will be made to pay an additional amount of some $480,000, and that's cash, that's not
note. It reduces the note, of course, and we release those from the trust deed. There
is a minimum payment requirement on a yearly basis that, on a yearly basis, they are
required to pay down an additional 32 units, which again reduces the note...
BAC The 2.5 you mean?
CLO Well, it'll be a note for 4.5.
BAC 4.5, okay.
CLO 4.5. You will recall that initially $480,000 right off the bat in addition to the 3.5, and
then there are requirements for them to pay additional amounts which represents an
additional 32 units per year. There are also the requirements that when we release the
units, some of the other fees are also payable. So there is a schedule of payments, any
of which the failure to pay is a default, and we can foreclose. Now if you want to
know about other personal guarantees that we have required of IROC, our legal counsel
is here to answer those if you'd like.
BAC So the issue, though, and it's an issue that Councilmember Spiegel brings up, we are,
once we start this process, obliged to, and here's a question from the gentleman, do a
basic golf course on the south side. That golf course is not just for IROC, it is also of
36
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
course it'll be used for other playing, public and so on and so forth. How much
money...
JMB The south one I thought was for IROC's development.
RSK Not exclusively.
CLO The golf course is a public golf course to be run and operated by the City in the same
manner as the north golf course. The only agreement with IROC is that their people
have a right to use it, that they have certain reservation rights, just like the public does.
As long as there are tee times available, regardless of who the previous users are, the
public has a right to use it, just like any other golf course, just like the north golf
course.
BAC Now, given the amount of money that we would put into that course, and given the
amount of money that IROC both gives us initially and is corporately responsible for
and so on and so forth, what kind of difference in expenditures versus guaranteed
income is there?
CLO I will have our fiscal consultant tell us that. We have done several scenarios, if you'd
like.
LW (Unclear)...under two scenarios. One scenario is...thank you...can everybody see that,
is it clear?
JMB No.
WHS Lights.
BAC Why don't you pull the...
RAS Why don't you pull it back a little bit.
LW That's better, now focus it more. That's good. We have two separate scenarios. One
is if IROC completes phase one which is the first 311 units. The second scenario is if
they complete everything, phase one, phase two, and phase three, for a total of 591
units. In phase one the land sale payment will be almost $9 million. The golf access
fees which allow them, as Carlos said, priority scheduling on the golf course, is another
$5.7 million, but the big item is the project amenity fee which is a $3,500 fee that's
paid for each unit in perpetuity. This is a 30-year proforma but the payment...
RAS Do you mind if we interrupt you as you go along?
LW Sure, I would like you to do that.
37
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
RAS The guarantee is only 30 units, as I understand.
LW The guarantee?
RAS Yes, they will build 30 units.
LW No.
RAS No?
LW In fact, these payments will be paid whether they go (unclear) or not. I mean, these
are contractual agreements where they will pay these payments whether or not they
build any units.
RAS In other words, if they build 30 units and they're not able to sell the 30 units and decide
they want to get out, the City would get... what is that total number at the bottom...
LW $67 million (unclear)
RAS They would get $57 million...
LW 67.
RAS 67.
LW They are contractually liable to make those payment whether or not they build any
units.
JR Mr. Spiegel, my name is Jeff Rabin, and I'm sure the other Councilmembers recognize
me. I'm with Bill Strausz's office, representing the Redevelopment Agency. The
agreement provides that there's a contractual obligation to make these payments. If
they don't make the payments, the Agency will have a choice either to sue IROC
periodically for making the payments or the Agency can foreclose and take the land
back. The...one modification that we have discussed since the notice of public hearing
was first made was that it should be clarified that if the Agency forecloses, then the
Agency has the land back and the Agency can now dispose of the land and hopefully
would find another buyer and impose these obligations on some new buyer. But IROC
is not going to be obligated to make the payments if the Agency has taken the land
back, whether it's because they didn't make the payments or whether there has been a
default on the promissory note.
LW Thank you, Jeff, for making that clear. So the contractual obligation for IROC on
phase one is a total of $67 million. If they do the whole project, that total reaches $119
million, and these are direct benefits only, it doesn't include the indirect benefits. Let's
38
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
talk about the indirect benefits for a moment. That's number six, Jeff. They should
be in order. The indirect benefits include sales tax, property tax increments, the
transient occupancy tax in lieu, that's $7,500 per unit, and also development fees. In
phase one alone, the total alone is $45 million • For the whole project, it's $75 million,
so that will be added to the total direct benefits. The grand total, number seven, Jeff,
thank you, the grand total for phase one alone is $163 million for the 311 units. For the
whole project, it's almost $245 million direct plus the indirect. Now as far as return
on the investment is concerned for phase one or the whole project, Jeff, number eight,
please, if they complete phase one, 311 units, the total benefits from IROC are $117
million. The cost to build everything we need to build, including the south golf course,
is almost $45 million, so the net financial benefits are almost $73 million. That's a
return on investment of 162 percent, and these are direct benefits only.
RAS Over 30 years.
LW Over 30 years, right. Internal rate of return is almost seven percent, and the present
value, which is net benefits in today's dollars, is almost $5 million, after taking out the
expense of doing everything. You add direct benefits to that and the present value goes
up to almost $22.5 million, the total direct plus the indirect present value in today's
dollars, almost a ten percent internal rate of return. Any other questions?
BAC Let me go back to the question that I was starting with. Assume for a second that we
go and meet all of our obligations. Assume for a moment that they in good faith begin
their project and find out for whatever reason part way through the first phase that they
do not choose to continue it. Where are we in terms of the amount of money that we
have spent versus the amount of money that we will have in hand and the kinds of
ongoing expenses we will have assumed for that area of land?
LW
Before I. answer that, let me show you one more chart which includes the golf course
revenue for the south golf course. Jeff, would you go back to number seven, please.
We looked at chart number seven before, but let me talk about some of the items on it.
The first item is the direct benefits we get from the IROC deal, the deal with IROC.
And that's the land payments and the golf access fees plus the project amenity fees.
That's the $67 million. The resort golf course over 30 years has been projected to
produce net benefits of $50 million over 30 years. That's a total of $117 million, plus
the indirect benefits is another $45 million, so the total is $163 million. The grand total
for phase one plus the other two phases is almost $245 million, I neglected to include
the resort golf course. In getting back to your question, as Carlos said, IROC is
contractually liable to put the $3.5 million as a down payment as soon as we close
escrow. And then there's another $2.5 million guarantee by the Intrawest corporate
entity. That's a total of $6 million. And then they're contractually liable to pay us for
at least 32 units of land each year through the sixth payment period at which time the
note becomes due. That's a total of $576,000 per year for the five years until the note
39
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
becomes due. Now, Jeff, you can talk about what happens if they don't pay off the
note... what are our rights.
JMB Could I ask a question right there?
LW Yes.
JMB You said 38 units...
LW 32.
JMB 32 units a year, and the first phase is 131 units, so how long do the have to build that
first phase?
LW The first phase is 311 units.
JMB 311, and they only have to pay on 32 a year?
LW They pay for the land, 32 units a year, and it takes about a year after they take down
the land to build out the units.
JMB So how many years is it taking to build this first phase?
LW It will take about eight to nine years to build out the first phase.
JMB Okay.
BAC But the note is due in six years.
LW The note is due in six years. They have to pay the note...
JR In five years.
LW ...unpaid balance of the note five years after the close of escrow.
BAC Right. .
LW It's a five-year note.
JMB On the first phase.
LW On the first phase.
40
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
JR If any payments aren't paid, the Agency has...will hold the deed of trust on the
property and will foreclose on that deed of trust and take the land back, and if any
payments aren't made on the project amenity fees, the Agency will have a right to take
back those units for which the project amenity fees haven't been paid. Now that would
mean that IROC, or really the club, will have lost the investment that they made in
building those units, which I understand is several hundred thousand dollars per unit.
They'd lose a $200,000 investment on a $3,500 payment. It's obviously a risk, but one
would have to wonder about the likelihood of that happening once they've made that
investment and built the unit. But the greater risk is really that if IROC doesn't build
out the properties, but the Agency will have full security in the real property.
JMB What you're saying it's not IROC building them, it's Intrawest, because we didn't find
any IROC.
JR IROC is the...did I say Intrawest?
LW You may have, but it is IROC.
JR I mean IROC is the obligor on the promissory note, except to the extent that Intrawest
Corporation is also guaranteeing $2.5 million to the principal on that promissory note.
As IROC makes payments on that promissory note, it reduces Intrawest's guarantee.
For example...
JMB We don't know who IROC is.
JR IROC? IROC is Intrawest Resort Ownership Corporation, which is a separate
corporation, but it's a wholly owned subsidiary of Intrawest Corporation. But, for
example, if IROC makes the first installment payment on the promissory note of
$576,000, Intrawest's guarantee then would be reduced to $1.9 million approximately.
BAC Now, go back to my question again.
JR Your question is what will we have in hand...
BAC As ongoing liabilities should we have to take a piece of property back.
JR I'm not as familiar with the cost of the Agency's investment in constructing the golf
course and the infrastructure improvements as Mr. Wolk is. Do you remember offhand
what that investment is?
LW The total number is about $44 million to build everything that we're required to build,
according to the DDA.
CLO That includes the value of the land.
41
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
LW That's right. The land is $17 million of that, and the infrastructure is about $24
million, and the interest on the bonds would be used to buy the land is another $3
million. And that total should be about $44 million.
BAC That comes right to $44 million.
LW Thank goodness.
BAC Not even give or take a million or two. Now, the golf course, we have one we're
going to open, we have this other one that we're going to use...is the proposal that's
primarily for Intrawest as they grow and for the hotels as they come in and so on and
so forth. What is our maximum yearly projected loss if, as an example, this project
does not go forward and we have that golf course?
LW
Well, the cost to maintain the golf course, we have the economy of scale of having the
north golf course in place. It costs about 50% more to maintain and to operate the
south golf course than it does to operate the north golf course. And that number is
about $1.3 million as I recall to operate the south golf course.
BAC Per year.
LW Per year. We need net income of at least $1.3 million to break even on that golf —
course.
BAC Okay.
LW And the break even point is about 27,000 rounds, 24,000 to 27,000 rounds of golf in
my projection.
BAC And on the north course, as an example, what is your projection for the first year's
number of rounds?
LW It isn't my projection, it's actually Kemper's projection. The first year, I believe, was
37,000 rounds on the north...is that correct, Carlos?
CLO That's correct.
LW 37,000 rounds on the north golf course, on the north golf course.
BAC And what percentage of the $1.3 million in yearly carrying costs of the south golf
course is IROC proposing to make us hold for from the start?
42
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
LW Well, we don't have a guarantee from IROC beyond what was just mentioned, the $2.5
million guarantee by the parent company on the note, and the contractual obligation to
pay golf access fees per year. And also the project amenity fees on an annual basis.
JR I could point to you in the DDA and tell you what sections that's set forth in if you give
me one moment.
BAC I've looked at that, and I'm just... so everybody in the room gets an idea of about how
much money is coming in...
LW Okay, let me tell you that, I have...
BAC ...for that $1.3 million obligation that we have.
LW I'll be right back.
JMB While he's doing that, I just have another question, I guess, of Carlos. If the south
course is going to be open to the public as well as the north, then they would use their
Palm Desert resident card for fees on the south course, too?
CLO No, they would not be residents because they're not buying...
RSK No, she's talking about...the resident card is good at both courses.
CLO Yes, they'll be operated the same way, yes.
JR Well, I can speak to the project amenity first, which is in Section 5.4.3 of the
agreement, and in the second payment period, that's approximately a one-year period
that will start, which we project will start January 1, 1998. The first year it's $70,000,
the second year $140,000, subject to a CPI adjustment, each of these are subject to
increase in accordance with the CPI, then $280,000, then $420,000, then $560,000,
anyhow it scales up to a point then in the tenth year, it will be about $1 million, $1.1
million.
LW And this is without the CPI cost of living adjustment.
JR But the members of the Council can refer to this in Sections 5.4.3 and 5.4.4 for those
numbers. That's the project amenity fee. Then there's the, also, the $12,000 per unit
fee that's paid as the units are released from the lien of the deed of trust.
LW As the land is taken down they pay $12,000 for each unit of land.
JR And that's a one-time fee. The project amenity fees are the major fees that will be used
for offsetting the Agency's cost of construction of the golf course.
43
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
LW In your packet you have as an attachment in the Section 33433 report a 30-year
proforma which includes a CPI cost of living which breaks down on an annual basis
what payments we expect to get from IROC on this deal. What I'm saying, Buford,
is in your packet is an attachment to the Section 33433 report. I have an annual 30-year
proforma for all the payments that we expect to get from IROC.
BAC Yes.
LW It will address this $1.3 million that we have on the golf course, the south course.
BAC And it's number what again now...
LW It's about $1.3 million. That's the cost to operate the south course per year.
CLO That would be assuming you get no play at all.
LW Any other questions?
RSK Anyone have any more questions that require the lights to be out?
BAC Not unless we're napping. No. I have a couple of lights on questions.
RSK Could we have the lights back and see if we can operate without that screen?
BAC Thank you, Leonard.
LW You're welcome.
BAC A couple of small questions. Carlos, I note that according to the development
agreement, if IROC completes phase one, the south golf course will have the "at IROC"
name attached to it.
CLO Right, the...
BAC Now, my recollections last time we discussed that, that would happen if they completed
phase one and built a hotel.
CLO No, the...
BAC I'm just saying as one person, the hotel, six or eight hundred, whatever that is, has as
much right to a name at the end of that as this development does. If it's all one and the
same company, then that's fine and dandy, but if it's the Hilton Hotel, playing golf "at
Intrawest", that's...
44
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
RSK That's not acceptable.
BAC ...that's...here's one person with whom that's not happening.
CLO The whole project is going to be named Desert Willow.
BAC I hear that, but that golf course will have that name added.
CLO The...what we've discussed...I know, you may want to amend that, and we can talk to
the developer about that, but the agreement has always read that when they had
completed x number of units, that whatever name we had given the south course, let's
say we named it...
BAC "Fred's golf course"
CLO "Fred's golf course", that it would be, when they had built so many units, "Fred's golf
course at Intrawest", I believe that's what we had always talked about.
BAC That's what they had always talked about.
CLO Well, we had talked about it, and I think at the...
RSK We never had a good feeling about that, ever.
CLO Well, that's a point that can be discussed with the developer.
BAC And on that same page, one other little question. According to this, we are obligated
on the building of the clubhouse, to build 2,000 square feet of that clubhouse for
Intrawest's exclusive use.
CLO That's correct, and that is part of the proforma. We have added that into the cost
versus benefits.
RSK What do you mean by 2,000 feet, in other words, what...does it mean that you're going
to build a larger...
CLO No, what it is is I think the current plans are that we would build around a 20,000
square foot clubhouse.
BAC It says 20,000 to 25,000.
CLO And we would reserve a space, okay, in that...
RSK Like for what?
45
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
CLO For their club activities, to be used exclusively by their members.
RSK And what would they do there?
CLO I think the developer should answer that, what they would do there.
BAC It says work, in essence, you know, do things where you get strong and muscular
and...
RSK Oh, a fitness center?
BAC Yes, steam room...
JMB For their members.
BAC Furnished health club and lounge.
RSK Well, if we're going to have a fitness center in the clubhouse, why wouldn't we just do
one that would be open to everybody?
CLO Well, we would have if we wanted it open to the public, however part of this agreement
says that they needed 2,000 square foot of that clubhouse for them to use exclusively.
WHS We increased the clubhouse by that much when they asked for that.
BAC And they're providing...
CLO And they provide all the furniture.
BAC ...furniture, fixtures, and equipment.
CLO Right. We just merely have to provide...
BAC We provide the shell.
CLO Right.
JMB We pay for the clubhouse. We're building the clubhouse.
BAC Building, yes.
JMB And building the golf course, and they're getting a free ride.
RSK No. How can you say that? They're paying.
46
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
CLO That's why they're paying all those...
JMB They haven't made it yet, but we've got to build all that before we know.
WHS I have to bring up something when statements like this are made. Right next door to
us, Indian Wells wanted to have some hotels in Indian Wells. So what did they do?
They build two golf courses, they built the golf clubhouse, they paid for every dime,
they spent all the money to build the golf courses and the clubhouse before the hotels
were built, then the hotels were finally come around and built them. They built them
for the purpose of doing that. We're...this is not something that's never been done
before. My God, it's been done next door.
JMB Indian Wells was a little suspect in using Redevelopment money for that too, and they
have been ever since.
WHS All I know is that they're making a hell of a lot of money now and makes another fine
city.
RSK They run the city with it. Well, let's continue with Councilman Crites.
BAC I'll hold for a minute now and ask what Councilman Snyder has for questions, and I'll
set a second.
WHS Well, I'm a little flabbergasted. I've been mixed up with this city 20 years come next
March. I've seen us grow from a little village to what we are, I've been involved
in...what would happen if we built the Town Center. The time it came up the City was
just like now, we were fifty percent against it, we didn't want it, we wanted to be a
village. And somehow we had a group of people get together and come up with some
things and find out a way that we could indeed build a Town Center, which produces
a hell of a lot of the money that we run our city. I was here when the Marriott Hotel
people wanted to come and build a hotel. We had an ordinance that says you can't
build anything more than two stories, and all of a sudden we found out, my God, we
have to change the ordinance if we want that hotel. And somehow we managed to do
it. Somehow we built the most beautiful resort in the Valley, maybe in the State, and
it produces most of the money that runs this city. We get no sales tax, I mean we get
no real estate tax, very little, we have no city tax, it's our duty as members of this
Council, to find a way to come up with the wherewithal to build this city, create the
parks, clean the beautiful streets that you have. We do it because we're willing to sit
down with people, work out programs, take some risks at times, but primarily have a
group of people that have been demonstrating to you tonight the effort that they've put
into it to create this program, the amount of intelligence and skill that has been done
to put together a package that is sensible, reasonable, and something that needs to be
done. We will probably have one of the most renowned resorts in Area 4 in this whole
damn state if all this comes about. If you can't take the chance and move out, then
47
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
you're not going to have a city like we have had and will have and do have by taking
the guts to move out and do something. We have had this..over a year we've been
working on this. We've had some of the most skilled people in the world putting
together a package that makes it feasible, economical, and right. And I think that we
have done one hell of a job, and I would be proud to see this organization in that area.
RSK I suppose I should say something also. First thing I want to emphasize, and I
remember when we had all the problems, the world had a problem with timeshares,
people coming in and turning a little hotel into timeshare and then disappearing in the
middle of the night. And we didn't want any of that to happen in our city. We put that
ordinance in. I'm one of the instigators of the ordinance, to protect the buyer, and no,
really, no other reason than to protect the buyer. Now, the Marriott is a wonderful,
wonderful thing for the City of Palm Desert, no doubt and nobody argues about that,
that we run the City with income from the Town Center and the Marriott Hotel,
basically that's the catalyst of everything we have. And they have timeshares there, and
we approved those timeshares because we knew the Marriott was a solid corporation,
but let's face it, everybody, the Marriott timeshares are a loser. We don't...the only
thing we really make anymore from the Marriott timeshares is that people come there
and what they buy and we get sales tax, they don't pay any transient occupancy tax.
And it's obvious why the Marriott started to deal with us across the road and decided
they didn't want to anymore, they had too good a deal on the other side of the road.
And so that that wouldn't happen to us again we put together a package there and I can
repeat all of those different fees that go in and the ongoing fees that go on forever.
Now we don't get any property tax in our city to run the City, and these are the kinds
of projects that we put together so that whoever sits up here 20 years from now won't
have to worry about cutting the Police Department, cutting the Fire Department, not
patching the holes in the road. And when you look at that income stream that's
created, you look right here on this proforma, right off the top there, it's going to be
an average of over $5 million a year over 30 years, it gets up to $444 million, $445
million just direct income to the City, that doesn't say anything for the indirect income.
And so, you know, as long as we're sure that we are backing it up so that we have
somebody responsible, we have a few other deals we made with public/private
partnerships in the City and didn't succeed but because of the job that our
Redevelopment department did when they wrote the contracts, when they wrote the
agreements, we really benefit. The fact that they disappeared was a benefit. If
Intrawest chose to disappear and we had ourselves 300 units, well, we'd make more
money yet. So the main thing is that we have the agreement written in a way that we're
protected regardless of what happens. And when Indian Wells did their golf courses
I thought then that was the smartest thing anybody ever did. Everybody in Indian
Wells that helps run the city will tell you that without that they'd be broke. I mean,
they may have a big income, but none of that money gets to the city to run the city
without those golf courses they would be, the city itself, there would be no money to
run it with. So, in this case, it's not the same as just bringing a hotel in, it's a case that
nothing was happening and so we decided to make it happen, so we put together the
48
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
whole project there. And when I think of the economic impact that that will have on
the City of Palm Desert and the surrounding communities, and I think of the
jobs...economic development is nothing but jobs, and when you think of the amount
of...what we're spending is nothing compared with what the private sector is going to
spend there, and just the jobs it creates by building the things we're building, the jobs
that we've created already by just building what we've built there, and then when it's
all finished the amount of jobs that are going to be created for people there, I mean
that's going to be the largest economic impact of anything that's happened yet in the
Coachella Valley. And I think that Councilman Snyder said it right, that you can sit
on your hands and worry, but the things we are doing...we had a City Manager before
that was innovative and willing to take a chance, so we've accomplished some
wonderful things that way. I studied this backwards and forwards, it's not just a year
that we've been working on this, it's been two years.
WHS Yes, you're correct.
RSK And it's not like we're just looking at this tonight, we've been looking at these figures
for about a year, most of us have been through it seven or eight times, so it looks to me
like it's an opportunity to move ahead and keep the City financially solvent long after
I'm gone, which probably won't be too long from now.
BAC Don't give people false hope.
WHS No fair lighting candles tonight.
RSK So are there any more questions or discussions or...
CLO Mr. Chairman, I'd just like to add a couple of things now that we've had all these
discussions on benefits to...there's a couple of resolutions. One is an Agency
resolution, another is a City resolution. They say exactly the same thing except they
need to be acted on one resolution by the Agency, one the Council. And these are the
resolutions approving the sale to Intrawest Resort, one by the City and one by the
Agency. When you look at Section 5, there is a blank there, and now that we've had
all this discussion on benefit versus investment, the reason those numbers need to be
there are for the same reason that we had to make available the agreement that
contained all the figures and benefits. By Redevelopment law, we must make a finding
that we are getting not less than the fair market value for the property. Therefore, in
Section 5, we should add the following: "The Agency has obtained an evaluation of the
fair market value of the property from REASCO who has determined that the fair
market value of the r.vr:,.ly at the highest and best use of the property is approximately
$7,775,000 for phase one", that's what we would be adding, "and $7,000,000 for phase
two and three" that is, of course, if the phases are exercised. That would be the
addition to the ordinances, both of them. In Section 8, we would make the Agency
finds, and in the case of the City I presume it would say that the City finds, that the
49
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
consideration of $67 million for phase one and $52 million for phase two, is that phase
two and three, Leonard?
LW That's phase two and three.
CLO Phase two and three, to be paid by IROC is not less than the fair market value of the
property at its highest and best use and so forth. But those would be the add-ons to
both of those resolutions.
WHS Well, if there's no further discussion, I would make a motion, Mr. Mayor.
RSK What's your motion?
WHS I would make a motion, that's the City Council and the Redevelopment Agency, to
these three areas as the legal, Carlos, legal presentation that you would like the motion
to encompass.
CLO Well, the two items...or one by the City Council, the consideration of the development
agreement and then the other ones...the consideration of the disposition and
development agreement...
RSK With the additions that you...
WHS With that which you just reiterated.
CLO Along with these resolutions, which are recommendation one and recommendation two.
WHS That's my motion.
BAC I believe that our City Attorney would like to have any such motion conditioned...
DJE Conditioned upon a report back to the Council on the subcommittee that exists doing
a background and financial check.
BAC Right. Not just a report coming back, but an acceptance.
DJE Report and approval by the Council.
WHS Yes, acceptance by the Council. That is in my motion. He'll give you the motion in
its entirety, right?
BAC So that the motion, then, includes an amendment that any approvals only exist subject
to the approval by the Council of a background and financial check, etc...
50
Items
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
DJE That's correct.
BAC ...will be brought to the Council.
DJE Yes. You have on your development agreement...it's approval is by an ordinance, first
reading tonight, second reading at your next meeting. Hopefully we'll have it by then.
BAC And if not, we don't do anything.
DJE That's correct.
WHS We don't do a second reading.
BAC Just hold it.
DJE Yes, sir.
BAC Either until we are satisfied or hold it because we're not satisfied.
DJE Correct.
BAC Given that, I would so second.
WHS Thank you, sir.
RSK Any other discussion? Would you please vote.
MPG Councilmember Benson, your light did not come on. Motion carries by a 3-2 vote,
with Councilmembers Spiegel and Benson voting no.
BAC I would suggest we take a five-minute recess.
For purposes of clarification, Councilman Snyder moved to waive further reading and pass Ordinance
No. $24 to second reading, approving DA96-1, conditioned upon a report from the Investment and Finance
Committee Subcommittee doing the background and financial check and approval of said report by the City
Council. Motion was seconded by Crites and carried by a 3-2 vote, with Councilmembers Benson and Spiegel
voting NO.
51
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
NOTE: THE REMAINDER OF THE MOTION IS LISTED UNDER PUBLIC HEARING "B" BELOW.
B. CONSIDERATION OF DISPOSITION AND DEVELOPMENT AGREEMENT PURSUANT
TO HEALTH AND SAFETY CODE SECTION 33433 RELATIVE TO INTRAWEST
RESORT OWNERSHIP CORPORATION - 47 ACRES OF LAND LOCATED ON
APPROXIMATELY NORTH OF COUNTRY CLUB DRIVE BETWEEN COOK STREET
AND PORTOLA AVENUE, PALM DESERT (JOINT PUBLIC HEARING WITH THE
PALM DESERT REDEVELOPMENT AGENCY), Continued from the Meeting of
January 23,1997.
See Public Hearing "A" above for verbatim transcript of this public hearing.
For purposes of clarification, Councilman/Member Snyder moved to: 1) Waive further reading and
adopt City Council Resolution No. 97-10 approving the sale by the Palm Desert Redevelopment Agency to
Intrawest Resort Ownership Corporation of approximately 47 acres of real property north of Country Club
Drive, west of Cook Street, and east of Portola Avenue; 2) waive further reading and adopt Redevelopment
Agency Resolution No 334 approving the sale by the Palm Desert Redevelopment Agency to Intrawest Resort
Ownership Corporation of approximately 47 acres of real yivy:.,ty north of Country Club Drive, west of Cook
Street, and east of Portola Avenue, with both actions conditioned upon a report from the Investment and
Finance Committee Subcommittee doing the background and financial check and approval of said report by
the City Council/Redevelopment Agency Board. Motion was seconded by Crites and carried by a 3-2 vote,
with Councilmembers/Members Benson and Spiegel voting NO.
C. REQUEST FOR APPROVAL. OF TRANSFER OF LAND AND FACILITIES FROM THE
REDEVELOPMENT AGENCY TO THE CITY OF PALM DESERT (JOINT PUBLIC
HEARING WITH THE PALM DESERT REDEVELOPMENT AGENCY).
The following is a verbatim transcript of this portion of the meeting:
K
RSK Richard S. Kelly, Mayor/Chairman
RAD Ramon A. Diaz, City Manager
CLO Carlos L. Ortega, Executive Director of the Redevelopment Agency
JMB Jean M. Benson, Mayor Pro Tempore/Vice Chairman
BAC Buford A. Crites, Councilman/Member
RAS Robert A. Spiegel, Councilman/Member
JR Jeff Rabin
MPG Mary P. Gates, Deputy City Clerk/Assistant Agency Secretary
RSK The next item is a request of approval of transfer of land and facilities from the
Redevelopment Agency to the City of Palm Desert, joint public hearing with the Palm
Desert Redevelopment Agency. Staff report.
52
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
RAD Yes, Mr. Ortega will run us through this portion of the Agenda.
CLO Mr. Mayor, this public hearing is no different than the other one except that in this case
the Agency proposes to transfer land and other public facilities to the City. The law
requires that we do the same thing. A summary of what is being transferred has been
available to the public. The requirements are a little bit different, however, in that we
don't have to prove that we are getting compensation for the City in this case because
what we are doing is transferring public facilities to be operated for the public and to
be owned by the City. There are several transfers of property. Some of them do not
necessarily need to be done tonight. Some of them there is an urgency that it be done;
for example, one of them is the north course which you know will be open on Saturday
which will begin to incur expenses, and the City needs to provide for those expenses.
We also need for you to give authority as an Agency to transfer that and as a City to
transfer that to the City. The other one is allowing us to spend money for the
construction of the publicly -owned south golf course. The other one is for you to allow
the transfer of the office buildings to the City. The other one is for you for allow the
transfer of the rest of the Civic Center, including the ballfields, including the picnic
areas, and including the two buildings. Another item that we are requesting is...
JMB Could I just ask a question.
CLO Yes.
JMB Why are we just now transferring the ballfields and all of that now. Why does that
have to be done now?
CLO Simply because we should have done that and we hadn't gotten around to it. Basically,
there was no specific urgency to do it, they were being used by the public, they are
owned by the Agency, we need to officially do that.
JMB So what's the urgency now if there wasn't before?
CLO Well, in that eventually they must be transferred to the City. We the Agency cannot
continue to own them forever. You know, while they were under construction, they
were being developed, you know, it was fine, but now we need to ultimately transfer
them to the City.
BAC Jean, do you have an objection to transferring them?
JMB Well, some of these I'm just wondering why they were all thrown in with the north
course, the south course, and all the other property when this could have been done at
any time, and you've got all these thrown in, the building and you've got those through
the park, and then you come in the north course, and then the south course, and...
53
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
RSK They should have done it (unclear).
JMB I guess, but it seems to me the wrong time to be doing it now in conjunction with all
this other stuff.
CLO The reason is because in looking at the codes that we put our attorneys to work at, they
basically have to do a lot of legal research, and as long as they had done it for one
building, basically we thought let's just do it all now since they've already done the
research as opposed to doing them, you know, one at a time.
RAS Let me ask a question, please, if you're finished, Jean.
JMB Yes.
RAS It looks like all of the items, one through ten, relate either to the north course that goes
over right away, the adjacent buildings or the baseball fields, except for items number
two and number eight which relate specifically to the south course.
CLO Right.
RAS Okay, which there's been no money brought forth, how much it's going to cost us,
what we're going to agree on, and I don't feel comfortable with approving a south
course that I don't know anything about tonight.
CLO You can leave those two out, as I stated at the beginning.
RAS That's what I would like to do if the Council has no objection to that.
RSK I agree.
RAS Is there a problem with that?
JR Can I answer your question about that? Yes, code... Redevelopment law requires the
City and the Agency to approve, at a public hearing, the Agency expenditure of funds
for buildings that are publicly owned, if they're using tax increment. And so the proper
way to do that is to have that approval done by the Agency. It doesn't mean that
there's a transfer, it doesn't mean that anybody's approving any expenditure of funds
or the specific amount. It just means in concept that the Agency and the City are
approving that the Agency can use tax increment for that purpose.
RAS Well, I'm not suggesting that we shouldn't approve the office buildings, I'm not
suggesting we shouldn't approve the north course, and I'm not suggesting that we
shouldn't approve the ballparks. All I'm saying is the south course, nothing has been
54
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * • * * *
shown to us, I have no feeling for it at all, and I would just as soon not approve the
south course until I have a little more knowledge.
CLO We will readvertise.
RSK Is there any problem with us pulling those right now?
JR Well, periodically, the Agency will be spending money in development of the south
course, and it would be...
BAC Not until we approve it.
RAS Not until it's approved.
JR I'm not saying the specific amounts, it has...in the past approved expenditures...
RSK But we didn't do this until after we did everything else, so we'll just do the same thing
with the south course.
CLO Jeff, what we will do is when the Council approves the budget, we will readvertise the
public hearing and we'll do that for those two things. No problem.
JR That would be fine.
RAS I mean, the north course is finished, so that's...there's nothing you can do about the
north course, it's there. And the buildings are there, and the ballfields are there. The
south course is there. Thank you very much.
RSK We all agree to pull two and eight, right?
CLO If you would approve everything except two and eight.
RAS I move that we approve the request for transfer of land, etc. etc., except for items
number two and number eight which relate to the south golf course at Desert Willow.
CLO And on five and six, before you take the vote, we'd like to add that the City can charge
an appropriate interest, appropriate legal interest.
RSK Is there a second to that?
BAC I'd make a second to that.
RSK Any further discussion? Would you please vote.
55
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
MPG The motion carries by unanimous vote.
RSK Wait a minute, that was a public hearing. I'll open the public hearing. Would anyone
like to speak to Item C? Seeing no one, I'll close the public hearing.
MPG Would you vote again, please, and I'll reannounce the vote.
RSK Okay, we'll do it real official. Would you please vote again.
MPG The motion carries by unanimous vote.
For purposes of clarification, Councilman/Member Spiegel moved to approve the following items
from the Agenda: 1) waive further reading and adopt City Council Resolution No. 97-11 approving payment
by the Palm Desert Redevelopment Agency for all or part of the value of the land for and cost of the
installation and construction of a publicly owned golf course and related facilities and improvements (North
Golf Course); 3) waive further reading and adopt City Council Resolution No. 97-13 approving payment by
the Palm Desert Redevelopment Agency for all or part of the value of the land for and cost of the installation
and construction of publicly owned buildings (two office buildings); 4) waive further reading and adopt City
Council Resolution No 97-14 approving payment by the Palm Desert Redevelopment Agency for all or part
of the value of the land for and cost of the installation and construction of publicly owned buildings, facilities,
structures, and improvements (Civic Center); 5) authorize the appropriation of $648,400.00 from the City's
Unobligated General Fund reserves providing for the first three months' operations fund for the Desert Willow
Golf Course, including charging appropriate interest; 6) authorize the appropriation of $40,000.00 to the
Parkview Office Complex fund from the City's Unobligated General Fund reserves to provide for the first two
months' operation expense, including charging appropriate interest; 7) waive further reading and adopt
Redevelopment Agency Resolution No. 33.5 approving payment by the Agency for all or part of the value of
the land for and cost of the installation and construction of a publicly owned golf course and related facilities
and improvements (North Golf Course); 9) waive further reading and adopt Redevelopment Agency
Resolution No. 32 approving payment by the Agency for all or part of the value of the land for and cost of
the installation and construction of publicly owned buildings (two office buildings); 10) waive further reading
and adopt Redevelopment Agency Resolution No. 3$ approving payment by the Agency for all or part of
the value of the land for and cost of the installation and construction of publicly owned buildings, facilities,
structures, and improvements (Civic Center), and to take no action on Items 2 and 8 of the Agenda dealing
with the South Golf Course. Motion was seconded by Crites and carried by unanimous vote.
Mr. Ortega noted as a matter of information that staff had the financial statements for
December for the facilities. He said the net revenue of approximately $500,000 would go to
the City as general fund revenues.
Councilman Spiegel asked if this matter could be placed on the Agenda for discussion as far
as what should be done with that money.
Mayor Kelly suggested that this be placed on the Agenda. Council concurred.
56
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Councilman Spiegel moved to, by Minute Motion, direct staff to place this matter on the next
-- Agenda. Motion was seconded by Benson and carried by unanimous vote.
D. CONSIDERATION OF APPROVAT, OF A SENIOR HOUSING COMPLEX
DEVELOPMENT AGREEMENT RELATING TO AFFORDABLE HOUSING
REQUIREMENTS FOR A 20-UNIT SENIOR ASSISTED LIVING COMPLEX AT THE
SOUTHEAST CORNER OF SAN CARLOS AVENUE AND CATALINA WAY, Case No.
DA97-1(General Construction Management, Applicant).
Mr. Smith reviewed the staff report and recommendation.
Upon question by Councilman Crites relative to the Planning Commission consideration, Mr.
Smith responded that the project had been approved subject to passage of City Council
Ordinance No. 825.
Councilman Spiegel asked how the Architectural Review Commission had vote, and Mr. Smith
responded that it was approved 5-0 by the Architectural Review Commission on November 26,
1997, with Commissioner Ron Gregory absent.
Mayor Kelly declared the public hearing open and invited testimony in FAVOR of or OPPOSED to
this request.
MR. GARY COVEL, General Construction Management, spoke as a representative of Pacific
Assisted Living, which he said was looking forward to doing business in the City of Palm
Desert. He offered to answer any questions.
Upon question by Councilmember Benson, he responded that all of the units meet the assisted
living requirements.
With no further testimony offered, Mayor Kelly declared the public hearing glascd.
Councilman Crites moved to waive further reading and pass Ordinance No. $25 to second reading.
Motion was seconded by Spiegel and carried by unanimous vote.
XIX. ORAL COMMUNICATIONS - D
None
57
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 13, 1997
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
XX. ADJOURNMENT
Mr. Erwin announced the following action from Closed Session:
1. Termination of landscape Contracts
By unanimous vote, authorized termination of the following landscape contracts with Sir Michael's
Enterprises as per written 30-day termination clause cited in contracts: 1) Contract No. C09941 (AD Zone
2 - Haystack Greenbelt); 2) Contract No. C09931 (AD Zone 5 - Cook Street, Country Club Drive, Eldorado
Drive, Frank Sinatra Drive, and Hovely Lane East Medians); 3) Contract No. C09951 (AD Zone 6 - The
Glen, Monterey Meadows, Sonata II, Hovely Collection, Hovely Estates, La Paloma, Sonata, and the San
Tropez Medians); 4) Contract No. C09961 (Community, Ironwood, and Cahuilla Parks); 5) Contract No.
C07412 (AD Zone 10 - Dinah Shore Medians); 5) Redevelopment Agency agreement for landscape
maintenance of Parkview Office Complex.
Upon motion by Spiegel, second by Crites, and unanimous vote of the City Council, Mayor Kelly
adjourned the meeting at 9:30 p.m. to Closed Session. He reconvened the meeting at 10:05 p.m. and
adjourned it to 12:00 p.m. on Wednesday, February 19, 1997, for discussion of budget philosophy.
ATTEST:
MARY P. , DEPUTY CITY CLERK
CITY OF PA M DESERT
RI6HARD S. KLLLY, MAYOR
58