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HomeMy WebLinkAbout2011-09-29MINUTES - ADJOURNED REGULAR MEETING - PALM DESERT CITY COUNCIL THURSDAY, SEPTEMBER 29, 2011 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER - 3:00 P.M. Mayor Benson convened the meeting at 3:05 p.m. II. ROLL CALL Present: Councilmember Cindy Finerty Councilmember Jan C. Harnik Councilman William R. Kroonen Mayor Pro Tem Robert A. Spiegel Mayor Jean M. Benson Also Present: John M. Wohlmuth, City Manager/RDA Executive Director David J. Erwin, City Attorney Justin McCarthy, ACM for Redevelopment Stephen Y. Aryan, Assistant to the City Manager Rachelle D. Klassen, City Clerk Bo Chen, City Engineer Russell Grance, Director of Building & Safety Lauri Aylaian, Director of Community Development Paul S. Gibson, Director of Finance/City Treasurer Janet M. Moore, Director of Housing Mark Greenwood, Director of Public Works Frankie Riddle, Director of Special Programs Clayton von Helf, Information Systems Manager Dorian Cooley, Division Chief, Palm Desert Fire/Riverside Co. Fire Dept./Cal Fire Steve Brooker, Fire Marshal, Palm Desert Fire/Riverside Co. Fire Dept./Cal Fire Andrew Shouse, Asst. Chief, Palm Desert Police/Riverside Co. Sheriff's Dept. Grace L. Mendoza, Deputy City Clerk III. ORAL COMMUNICATIONS - A (CLOSED SESSION ITEMS) None MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL IV. ADJOURN TO CLOSED SESSION Request for Closed Session: SEPTEMBER 29, 2011 A. Conference with Real Property Negotiator pursuant to Government Code Section 54956.8: 1) Property: 42-050 Golden Eagle Lane (APN 624-431-001), Palm Desert Negotiating Parties: Agency: John M. Wohlmuth/Justin McCarthy/Janet Moore/ City of Palm Desert/Palm Desert Redevelopment Agency Property Owner: Victoria Hunter/Jeffrey Hunter Under Negotiation: x Price x Terms of Payment 2) Property: 74-506 Falcon Lane (APN 624-430-016), Palm Desert Negotiating Parties: Agency: John M. Wohlmuth/Justin McCarthy/Janet Moore/ City of Palm Desert/Palm Desert Redevelopment Agency Property Owner: Ruben Gonzalez, Jr./Andrea M. Diaz Under Negotiation: x Price x Terms of Payment 3) Property: 43-990 Blueberry Lane (APN 634-061-028), Palm Desert Negotiating Parties: Agency: John M. Wohlmuth/Justin McCarthy/Janet Moore/ City of Palm Desert/Palm Desert Redevelopment Agency Property Owner: Gladys O. Harris Under Negotiation: x Price x Terms of Payment 4) Property: 72-240 Upper Way West (APN 628-130-007), Palm Desert Negotiating Parties: Agency: John M. Wohlmuth/David J. Erwin/City of Palm Desert Under Negotiation: x Price x Terms of Payment 5) Property: 45-640 Highway 74, Palm Desert Negotiating Parties: Agency: John M. Wohlmuth/David J. Erwin/City of Palm Desert Property Owner: EP Monterey Under Negotiation: x Terms of Disposition 2 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 B. Conference with Legal Counsel regarding existing litigation pursuant to Government Code Section 54956.9(a): a) City of Palm Desert v. Federal Housing Finance Agency, Federal National Mortgage Association, and Federal Home Loan Mortgage Corporation, United States District Court Case No. 10-cv-04482 (N.D. Cal.) C. Conference with Legal Counsel regarding significant exposure to litigation pursuant to Government Code Section 54956.9(b): Number of potential cases: 2 On a motion by Spiegel, second by Kroonen, and 5-0 vote of the City Council, Mayor Benson adjourned the meeting to Closed Session at 3:06 p.m. She reconvened the meeting at 4:02 p.m. V. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. None VI. PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA - Mayor Jean M. Benson VII. INVOCATION - Mayor Pro Tem Robert A. Spiegel VIII. ORAL COMMUNICATIONS - B MS. DANIELLE SOTO, representing the South Coast Air Quality Management District (SCAQMD), 21865 Copley Drive, Diamond Bar, CA, distributed materials to the City Council from the District. First, she announced the District's 23rd Annual Clean Air Awards on Friday, October 7, and invited all local elected officials to attend. Second, she called attention to SCAQMD's Permit Amnesty Program now underway through December 31 for small businesses to get their permits in order without fault. Lastly, she referred to the "Powering the Future" brochure, which was done in collaboration with the Southern California Association of Governments (SCAG) and the California Air Resources Board (CARB), and represented a vision statement for the air basin regarding energy and air pollution. MS. KIM HOUSKEN, Somera Road, Palm Desert, commended City Council for moving forward with broadcasting its meetings and, in keeping with that effort, recommended that staff reports be hyperlinked to the posted Council agendas. She 3 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 appreciated the fact that City staff was already quick to respond to her requests but felt in the long run it would save time and would increase participation, with many cities already providing such information electronically. MR. JERRY PATTON, President, College of the Desert (COD), Palm Desert, expressed greetings from the Board of Trustees, faculty and staff, and commended the City Council for its ongoing support of higher education. He said the City had been very helpful to the College and acknowledged this morning's event at the Cal State and UCR Campuses to officially dedicate the completed Berger Drive Ring Road there. He then presented the City Council and Mr. Wohlmuth with a $1 million check, consummating the agreement for the Palm Desert Aquatic Center. Mayor Pro Tem Spiegel thanked Mr. Patton for the presentation and explained to the audience that it represented the agreement between the City and COD whereby it will be conducting classes Monday - Friday mornings at the Aquatic Center during the school year. He noted that schoolchildren wouldn't be using the Center at that time, and it was a very mutually beneficial arrangement. Mayor Benson added that the City has certainly enjoyed a strong working relationship with COD. She commended President Patton for his good work there, acknowledging the recent announcement that he would be retiring at the end of this school year and that his leadership there would be missed. IX. AWARDS, PRESENTATIONS, AND APPOINTMENTS A. PRESENTATION OF PROCLAMATION IN HONOR OF THE 29-YEAR SISTER CITY RELATIONSHIP BETWEEN THE CITY OF PALM DESERT AND THE CITY OF GISBORNE, NEW ZEALAND, AND REAFFIRMING THIS SISTER CITY AFFILIATION. Mayor Benson welcomed the Gisborne, New Zealand, Sister City Delegates in attendance today. She said they'd been touring around the City and Coachella Valley this week. She had lunch with them yesterday and savored the numerous compliments they bestowed upon the City. With the 30-year relationship enjoyed by Palm Desert and Gisborne, many delegates had visited here previously and noted the vast improvements throughout the City in that period of time. She conveyed the City's sincere appreciation for the time they've spent, given the vast distance that must be traveled to get here from Gisborne, and hoped they would enjoy the rest of their stay. On behalf of the City Council, Mayor Pro Tem Spiegel presented the framed proclamation to Gisborne Deputy Mayor Nona Aston, who said she became involved with Sister Cities when she came onto her Council but now is wholeheartedly committed to the program and one of its strongest advocates. She introduced the delegation. First, Kath Crawshaw, President 4 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 of the Gisborne Sister City Committee and widow of the late Brian Crawshaw, who initiated the Palm Desert partnership 30 years ago. Next, Judy Livingston, Community and Economic Development Team Leader for the Gisborne District Council. She introduced Ann and Jim Osler, who are longtime Members of the Gisborne Sister Cities Committee and were making their third trip to Palm Desert. MS. NONA ASTON, Gisborne Deputy Mayor, conveyed her city's appreciation for the recognition and related the tremendous amount of kindness and inspiration that they've received over the years and was sure it had also been reciprocated. She had never felt so welcomed as she had in Palm Desert and the Coachella Valley and was sure her colleagues felt the same. She compared the 30-year Sister City relationship to a marriage between the cities and the resulting birth of a baby being this strong foundation of friendship. She looked forward to the continued partnership and knew it would flourish, especially now that the youth were totally involved and would be ready to take up the mantle others had carried before them. B. PRESENTATION OF PROCLAMATION, EXTENDING CONDOLENCES TO THE FAMILY OF THE LATE BRIAN CRAWSHAW AND RECOGNIZING HIS SIGNIFICANT CONTRIBUTIONS TO THE PALM DESERT - GISBORNE, NEW ZEALAND, SISTER CITY RELATIONSHIP. Mayor Benson noted that from the beginning of Palm Desert's Sister City Program, Brian Crawshaw was instrumental — traveling to Palm Desert and helping establish the program. She added that he and Mrs. Crawshaw were also very hospitable to Palm Desert's delegates who've visited New Zealand over the years, and the City was greatly saddened to hear of his passing. She was sure that all his good work was accounted for and will always be remembered in the City of Palm Desert. On behalf of the City Council, Mayor Pro Tem Spiegel presented the framed proclamation to Mrs. Kath Crawshaw MRS. KATH CRAWSHAW graciously accepted the recognition and thanked the City. She said her husband was very passionate about Gisborne and New Zealand as he was also about Palm Desert, often referring to it as his "second home." 5 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 C. PRESENTATION OF PROCLAMATION DECLARING THURSDAY, SEPTEMBER 29, 2011, AS "CUSS FREE DAY" AND THE FIRST WEEK OF MARCH EACH YEAR AS "CUSS FREE WEEK" IN THE CITY OF PALM DESERT. On behalf of the City Council, Mayor Pro Tem Spiegel presented the framed proclamation to Palm Desert High School No Cussing Club Advisor Dr. Ossil Macavinta. DR. OSSIL MACAVINTA accepted the proclamation on behalf of Palm Desert High School, it's new Principal Robert Hicks, the new campus and administrative team, and the student body. He said it was their hope that the entire Coachella Valley will become Cuss Free — a Garden of Eden in the desert — with the City of Palm Desert being a leader toward this goal. Although they were small currently, they hoped to eventually accomplish great things because of the City's support. D. PRESENTATION OF PROCLAMATION TO DECLARE THE WEEK OF OCTOBER 9 - 15, 2011, AS "FIRE PREVENTION WEEK" IN THE CITY OF PALM DESERT. On behalf of the City Council, Mayor Pro Tem Spiegel presented the proclamation to City Fire Marshal Steve Brooker. Mr. Brooker thanked the City for its support of the 2011 National Fire Prevention Week and said the Fire Department looks forward to continuing to make Palm Desert a very safe community. E. PRESENTATION OF PROCLAMATION TO RECOGNIZE THE MONTH OF OCTOBER 2011 AS "FIRE PREVENTION AND MINI -MUSTER MONTH" IN THE CITY OF PALM DESERT. Mayor Pro Tem Spiegel explained that the Mini -Muster was an annual educational program for third graders put on by the Historical Society of Palm Desert and the City's three Fire Stations to teach fire prevention, fire safety, and to have some fun with the fire -fighting equipment in the process. On behalf of the City Council, he presented the proclamation to Fire Marshal Brooker and Historical Society Mini -Muster Coordinator John Marman. MR. MARMAN thanked the City for the wonderful recognition and support, adding that the Mini -Muster was sponsored by Desert Sands Unified School District, the Historical Society, Riverside County, and wouldn't be possible without the firefighters. He said the first event of 2011 was held today at Gerald Ford School. Over 11,000 third graders have been trained since 6 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 1993 — all of them looking forward to it with great excitement each year. To the best of his knowledge none who participated in the Program had ever started a fire in the City. He provided copies of the 2011 Mini -Muster agenda for City Councilmembers and invited them to participate at any of the schools listed. He added that part of the program included an artwork competition, with a winner chosen from each school whose artwork is framed and then hung in the fire station closest to their school for a period of time during the year. The 2011 awards to be presented at the last City Council Meeting in October. Lastly, Mr. Marman expressed appreciation for the strong Palm Desert - Gisborne Sister Cities Program as a member of the Palm Desert Sister City Foundation Board and called everyone's attention to the large New Zealand Maori Tiki wood carving displayed in the Council Chamber — a gift to Palm Desert that signifies the warm feelings between the two communities. X. CONSENT CALENDAR A. MINUTES of the Regular City Council Meetings of September 8 and September 22, 2011. Rec: Approve as presented. B. CLAIMS AND DEMANDS AGAINST THE CITY TREASURY - Warrant Nos. 57, 58, 62, 63, 71, 80, and 81. Rec: Approve as presented. C. CITY COMMITTEE AND COMMISSION MEETING MINUTES. 1. Marketing Committee Meeting of July 19, 2011. 2. Public Safety Commission Meetings of March 29 and June 8, 2011. Rec: Receive and file. D. REQUEST FOR DECLARATION of Surplus Property for the Pop Jet Interactive Water Feature and Authorization for Staff to Attempt Sale of the Equipment. Rec: By Minute Motion, approve as surplus property the Pop Jet Interactive Water Feature and authorize staff to attempt to sell the equipment via on-line auction. 7 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 E. REQUEST FOR AUTHORIZATION to Negotiate with Southwest Turf Support, LLC, for Greens Fertilizer Products for Desert Willow Golf Resort — Fiscal Year Ending 2012 (Contract No. C31190). Rec: By Minute Motion: 1) Authorize staff and the Desert Willow Golf Resort to negotiate with Southwest Turf Support, LLC, Phoenix, Arizona, for Greens Fertilizer Products FY 2011-2012 in an amount not to exceed the approved budget; 2) determine that Golf Course Greens Fertilizer must be sole source; 3) authorize the City Manager to execute a contract for this purpose — funds are available in Desert Willow Fund 520. F. REQUEST FOR AWARD OF CONTRACT to Automated Power Specialties & Electrical for Irrigation Pump Maintenance and Repair at City Parks — Civic Center, Soccer, and Freedom — for the Period of November 1, 2011, to June 30, 2013 (Contract No. C31090). Rec: By Minute Motion, award the subject contract for Irrigation Pump Maintenance and Repair to Automated Power Specialties & Electrical, Murrieta, California, in the amount of $10,304 — funds are available in General Fund Account Nos. 110-4610-453-3320 - Repair/Maintenance Landscape Services and 110-4611-453-3320 - Repair/Maintenance Landscape Services. G. REQUEST FOR RATIFICATION of Additional Expenditure for Citywide Palm Tree Pruning and Approval of Change Order No. 1 to Contract No. C30450 (Project No. 931-11). Rec: By Minute Motion: 1) Ratify the City Manager's authorization for additional expense in the amount of $4,646 related to the subject contract; 2) approve Change Order No. 1 in the amount of $4,646 to the subject contract with Andy's Landscape and Tree Service, Palm Desert, California, and authorize the Mayor to execute same — funds are available in Account No. 233-4549-454-4001 - Parks and Recreation Facility/Aquatic Facility Capital. 8 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 H. REQUEST FOR APPROVAL of Change Order No. 1 to Contract No. C26670A — Construction of Miscellaneous Drainage Improvements at Several City Locations (Project No. 520-05). Rec: By Minute Motion: 1) Approve Change Order No. 1 in the amount of $13,546 to the subject contract with Tri-Star Contracting II, Inc., Desert Hot Springs, California, to add another location to the project; 2) authorize the transfer of $13,546 from contingency to base for the contract; 3) authorize the Mayor to execute Change Order No. 1. I. REQUEST FOR RATIFICATION of Change Order No. 2 to Contract No. C30300 — Renovation of Fire Station Nos. 33 and 71 Project (Joint Consideration with the Palm Desert Redevelopment Agency). Rec: By Minute Motion: 1) Ratify the City Manager's/Executive Director's approval of Change Order No. 2 in the amount of $6,242 to the subject contract with The PENTA Building Group, Palm Desert, California, to install additional carpet as part of the Fire Station No. 71 Project (Project No. 871-09); 2) authorize the Mayor/Chairman and City Manager/Executive Director to execute said documents; 3) authorize the Director of Finance to transfer $6,242 from the 10% contingency set -aside to the base contract — funds are available in Account No. 851-4220-464-4001. J. REQUEST FOR AUTHORIZATION to Expend CaICOPS Funds for Various Traffic Collision Investigations Courses (Riverside/Palm Desert/Sacramento, California). Rec: By Minute Motion, approve the Palm Desert Police Department's request to expend CaICOPS funds in an amount not to exceed $6,180 for sending Palm Desert Police Officers to various Traffic Collision Investigations Courses (Riverside/Palm Desert/Sacramento, CA) — funds are available under the CaICOPS Program, Account No. 229-4210-422-3914. Upon a motion by Kroonen, second by Finerty, and 5-0 vote of the City Council, the Consent Calendar was approved as presented. XI. CONSENT ITEMS HELD OVER None 9 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL XII. RESOLUTIONS SEPTEMBER 29, 2011 A. RESOLUTION NO. 2011 - 84 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING AND ADOPTING LOCAL GUIDELINES FOR IMPLEMENTING THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) (PUB. RESOURCES CODE §§ 21000 ET SEQ.). Mr. Erwin stated the amendment will bring into compliance the CEQA guidelines for environmental review. Mayor Pro Tem Spiegel asked if the Council had a choice. Ms. Aylaian explained that adoption of the updated guidelines was done on an annual basis as a housekeeping measure, because it kept the City current with recent development in State law. She said the Council can opt not to adopt the amendment, and the City will continue using the 2010 guidelines and forms. Councilmember Harnik moved to waive further reading and adopt Resolution No. 2011 - 84. Motion was seconded by Spiegel and carried by a 5-0 vote. XIII. ORDINANCES A. For Introduction: 1. ORDINANCE NO. 1225A - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING A DEVELOPMENT AGREEMENT FOR AN 82-ROOM HOTEL AND 59-UNIT RESIDENTIAL CONDOMINIUM PROJECT WITH ANCILLARY USES AND AMENITIES ON 4.97± GROSS ACRES OF CURRENTLY VACANT LAND (4.27± ACRES) AND TO -BE -VACATED FRONTAGE ROAD (0.7± ACRES) LOCATED EAST OF HIGHWAY 74, WEST OF OCOTILLO DRIVE, AND SOUTH OF THE IMAGO ART GALLERY— SUBJECT PROPERTY ADDRESS KNOWN AS 45-640 HIGHWAY 74, Case No. DA 09-507 (PDH Partners, LLC, Applicant). Ms. Aylaian stated at the last meeting the City Council had reviewed the Development Agreement (DA) associated with the proposed Rosewood Hotel and did not approve the second reading due to specific concerns within the DA as it stood at the time. The Council directed staff to address three items in particular: 1)reduce the term of the Agreement from ten years to three years; 2) include a non -transferability clause; 3) identify exactly what a 5-star operator is 10 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 to ensure that if the hotel is not operated by Rosewood, it will be operated by a firm that would be equivalent. The Development Agreement as it stood today represented a series of negotiated meetings between the Developer and his legal counsel, City Staff, City Manager, and City Attorney. She said a fourth item was made to the DA as a result of a letter submitted by Ms. Kim Housken, a local resident who was concerned about the DA and the project; a copy of the letter was included in Council's packet. With respect to reducing the term, the DA before the City Council represented a five-year agreement with possible extensions that would bring it up to a total of ten years. The extensions can be exercised if the Developer has continued to make good -faith efforts and proceeds forward with the project as evidenced by continued investment in the project. The Developer self reports they have invested approximately $2.4 million to date on the property and project. The requirement would be they invest another $750,000 over the first five-year term. If they meet that requirement, the term can be extended for two years and then for three one-year intervals. The requirement going forward for each of those is that $300,000 be invested in each successive year. If the project takes ten years to come to fruition, that would represent an overall investment of $4 million taking at face value the Developer's representation of what they have invested to date. For comparison sakes, she researched a couple of other development agreements the City has approved over the years for what were relatively important projects in the City. The Marriott Shadow Ridge, which was 199 units for proposed timeshares had a 20-year term on the DA; the Intrawest Timeshare had a 15-year term; University Village, which is not a hospitality project, but a commercial development had a 10-year term; the Westin Timeshare project by Starwood had a 19-year term; and the Larkspur Hotel, which has not been constructed has a 10-year term associated with it. The second item the Council asked staff to address was the addition of a non -transferability clause. The requirements negotiated and inserted into the Agreement are that the Developer may sell the property, but must first notify the City within 15 days of entering into an agreement with a third party that would market the property. The Developer will also have to allow the City to comment on marketing materials prior to their publication. Additionally, the Developer would have to provide updates to the City Manager every 45 days on the status of their marketing efforts. In the event they successfully negotiate an agreement to transfer the property, they would have to notify the City 60 days before the close of escrow, provide the identification, financial qualifications, and proposed assignment and assumption agreement for the City to review and comment upon. She said transferability clauses differed project to project, and in her research of others, she found this one 11 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 was different, because generally in development agreements is the requirement that the City must give its written consent to a transfer and that written consent shall not be unreasonably withheld or delayed. She said the exact wording changed from one agreement to another, but that is generally what is in place. The third item staff was asked to address was how to quantify a 5-star hotel. She said there is no industry standard on a definition for a 3-, 4-, or 5-star hotel. There are a couple of different organizations that assign stars according to their own criteria. Therefore, staff introduced a new concept that was not in the previous agreement and reinforced a couple that were in there previously. The level of a hotel is now defined by the room size; it has to have the minimum of 500-square feet. It has to provide a full service three -meal restaurant. She said it didn't sound like a big deal, but typically restaurants in hotels are not money makers and are not operated more than they have to. However, 5-star clienteles at hotels demand that they be able to get room service and meals around the clock; therefore, the requirement is for the hotel to provide three meals a day restaurant. Also identified is a minimum cost of $75,000 per room for Furniture, Fixtures & Equipment (FFE). She said the cost per room is a common measure to determine the level of a hotel, and $75,000 per room is considerably above what other 4- and 5-star put into their facilities. She added that $50,000 was closer to what one would see as an industry average. The new clause that was inserted in the proposed DA are 18 different operators that are considered to be 5-star hotels and/or Rosewood and above. Some of the hotels included are Montage, Mandarin Oriental, St. Regis, Waldorf Astoria, Auberge, Peninsula, Four Seasons, Trump, and others. She said these were names proposed by the Developer and staff researched them by room rates, amenities, premises, and determined these would be appropriate. Another clause was inserted, in such that, if the Developer were to propose a different operator, it would be reviewed by at least two or three recognized experts in the field who are actually named in the Agreement. She said if their decision was not acceptable, then there is an appeal's process that could be followed. She said those were the three items the City Council asked to be addressed in the Agreement, and the proposed DA reflected those items. The fourth item was as a result of a suggestion of a resident, which was to make sure the City didn't transfer property from vacation of the frontage road if the project isn't actually built. In order to vacate the frontage road, a separate public hearing will be held, which would be separately noticed. Theoretically, that could have been vacated anytime, and then the Applicant would have had the benefit to use the property if they didn't go ahead with the project. Therefore, a clause was included that tied into the actual effective date to the issuance of 12 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 building permits. She said if it took the Applicant several years to get their financing, the property does not transfer. In fact, if they are not able to develop the property, they do not get the frontage road. She said that summarized the changes from the previous DA to the one being proposed. She added that if the Council felt this project was wrong for the City, no limit on time or transferability will make it the right project. However, if the Council believed it was a good project for the City, then staff believes that the provisions that have been negotiated and inserted into the Agreement reflected better controls than the City's had in the past on other development agreements within the City. She said additional questions were received from a resident today, which have been given to the City Attorney and is prepared to address them. Mr. Erwin stated the questions that have been presented to him are as follows: Question 1 - How can $750,000 be used for to meet a criteria to receive an extension beyond the initial five years. He said the Agreement itself addresses this question, which basically indicates it will be used for project costs, land acquisition, land carry, financing, entitlement cost, architectural engineering, or other costs reasonably related to the development of the project, which could include construction drawings or design of the project; Question 2 - Provide a definition of "land acquisition." He said the definition of land acquisition is just that, the purchase of land; Question 3 - Did "other costs" include advertising or selling cost. He said the answer is yes; Question 4 - The DA states the project shall be constructed to a minimum 4+ star quality standard or higher. If the City wants a 5- star, should not the contract specify a 5-star, and to guarantee this rating, should not the contract place language specifying the standard and name the quality -rating system used to ascertain such compliance. He said staff attempted to insert language in the Agreement on all those items as understood from the industry into consideration to determine a 5-star rating by different rating organizations. He said there is no way to guarantee that, but staff attempted to guarantee a 5-star rating by setting forth those specific items that would address that issue; Question 5 - With regard to the luxury standard, the question is asked to clarify the $75,000. He said the agreement itself is $75,000 per hotel room, which is a mathematical computation. It can be spent upon the hotel rooms, furniture, fixtures, and equipment in those rooms or in publicly available common areas, which is specifically what the Agreement states. He said those are the responses to the questions he was given. 13 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 Councilmember Finerty stated it was not $75,000 per room, because it was including the hallways, lobby, restaurant, spa, etc., which can be pricy to have an impressive lobby and restaurant. Mr. Erwin responded the amount of expenditures are determined by the number of rooms. In other words, if it is 82 rooms, the calculation will be 82 rooms multiplied by $75,000. Further responding, he explained $75,000 per room was a mathematical computation and is not intended to be $75,000 spent specifically on one room. He said the $75,000 will include furniture, fixtures, and equipment, both for the room and publicly available common areas. Councilmember Finerty asked if staff was recommending that for the first five years the Developer needed to spend $150,000 each year in order to qualify to extend years. Ms. Aylaian responded the total amount spent will be looked at after five years. Councilmember Finerty asked if the City had an accounting of the $2.4 million that has been spent to date. Ms. Aylaian answered no, stating that amount was self reported from the Developer. Councilmember Finerty stated staff mentioned the Developer may sell, but needs to notify the City within 15 days for the City to comment and also provide an update to the City Manager every 45 days. She asked if the City Council had any consent or approval to whom they sell to. Ms. Aylaian answered no, stating the Council cannot forbid the property from being sold to a particular party. Councilmember Finerty stated she received correspondence from Jan Coffyn who attached an article about the difference between a 4-star and 5-star hotel according to Mobile Star Lodging criteria, which she believed provided a good definition. She said the 4- and 5-star hotels are obviously providing a luxury environment, but the difference in a 5-star is that there will be a butler to draw a bath or lay out your clothes; the Savoy Hotel in London is cited as an example. They also talk about the differences in service and comprehensiveness; in a 5-star hotel, no guest request is too outlandish or even met with shock, where in a 4-star it is not quite that extensive. She said Mobile offers certain guidelines that she didn't see addressed in the 14 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 proposed 4-star plus. She wasn't aware of the guidelines until today when she was able to glance at Jan Coffyn's letter. She said the information was beneficial if the City was marketing as such and was being told it will be a 5-star hotel, then there is a certain criteria that should be met that is not contained in the proposed DA. With respect to the frontage road, she asked if a public hearing will be held to transfer the property and permits will not be issued. Ms. Aylaian answered yes. Councilmember Finerty asked if by the adoption of this Ordinance, if the City was pre -supposing an anticipated vote on the transfer of the frontage road without the benefit of a public hearing before the Council heard testimony. Ms. Aylaian answered no, stating ultimately the City Council could hold the public hearing, receive public testimony, and could decide not to vacate the right-of-way. Councilmember Finerty asked if the City had an appraisal of the frontage road or ball park figure of what the property is valued at. Ms. Aylaian answered it did not. Mayor Benson noted she had a couple of speaker cards from individuals who wished to speak on the matter. MR. MARC PEVERS, Box Canyon Trail, Palm Desert, stated that apart from aesthetic reasons, this Ordinance should be rejected, because it was not financially viable. He said everyone in the hotel business knew the way to calculate a projected room rental was by taking one -tenth of 1 percent of the room cost. The room cost quoted by the Developer is $75,000, and it's taking into consideration the cost of the entire project, public areas, pools, and parking garage. He said assuming the 60 condos sell for $1 million, it leaves $60 million for the 82 rooms at $75,000 per room, and one -tenth of 1 percent of that is $750 per night for summer or winter. He said there is no hotel in the Coachella Valley that is earning that kind of revenue. He said if this was Paris where they get more than $1,000 a night for a 5-star hotel like Le Meurice, De Crillon, and Le Bristol, but Palm Desert isn't Paris. He said if Palm Desert went forward with this, he asked the Council to look at Rancho Mirage where the Ritz Carlton sits empty, because they couldn't get financing for the last 20%, and they sought a loan from the City of Rancho Mirage, which was a real mess that Palm Desert shouldn't subject itself to. If the building is finished and the 15 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 Developer didn't have the debt service to pay on it, the hotel will wind up in a foreclosure with a lower -level operator such as the Holiday Inn, which is not good for the El Paseo merchants. He agreed a Rosewood Hotel was needed in Palm Desert, but the place for it was at Desert Willow where the 60-foot height would not be a problem, the building can be much larger, and it can be a viable project there. He hoped the three Councilmembers who voted for this project would stop this in its tracks and vote no. MS. KIM HOUSKEN, Somera, Palm Desert, applauded the City for adding the language regarding the granting of the frontage road to the pulling of building permits, but still had areas of concern she wished to address. The first issue deals with Section 8.1.1, a new section that was added to the Development Agreement (DA). She said the staff report acknowledged a portion of it, but failed to mention the last four lines of that section, which reads, "... Transfer of the Property from EP-Monterey LLC to PDH Partners LLC, a Delaware limited liability company, Developer shall provide notice to the city of such Transfer together with a copy of the assignment and assumption agreement between, "...the two entities. Her concern with this section is that it would be a mechanism for these two parties to claim on paper they have spent the $750,000 by one entity purchasing from the other, but no funds actually expended on the project. She asked the City Attorney to provide clarity on her interpretation, because her concern was with the language that allows land acquisition to be part of the $750,000 that is to be expended. She said because the land has already been purchased, if one entity sells to the other entity at a market price of $750,000, it would seem they have already covered that milestone without having done anything Mr. Erwin stated that was a serious question on whether the expenditure there would be a project cost, because in the Agreement itself there are other provisions which say that PDH Partners is part of the development team. He said any cost between the two for that transfer would not be part of the project cost. Further responding to Ms. Housken's question, he couldn't guarantee anything. MS. HOUSKEN stated she questioned that section because EP-Monterey LLC is authorized in the Development Agreement. Furthermore, another area of concern is that the City failed to obtain any information regarding the various entities named in the DA. She found it interesting to hear, regarding the transferability, the Developer would be required to provide financial qualifications of a new entity; however, the City had not required that of the current development team. She requested organizational documents on both entities and 16 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 was told this wasn't something the City would ask for, and the explanation given is that this was a private company and they owned the land. However, she felt the City was investing an asset in this project, which was nearly an acre of land. She disagreed that this land had no value, because it wasn't a mere access point, and this strip of land is needed for the project to move forward. She recommended the Council consider what she said and tighten these areas up. She said if this project was going to move forward, she would like to see it move forward sooner rather than later. MR. BRUCE MAIZE, Stillwater Drive, La Quinta, stated he was a long-time resident of the Coachella Valley, once a ten-year resident of Palm Desert, and business owner in Palm Desert. He said it appeared the Developer has made a sincere and genuine effort to address the concerns of the Council and re -draft the language in the DA consistent with comments made at previous meetings. He didn't have the privilege of reviewing the document, but based on comments made at this and earlier meetings and what's been published in the newspaper, it appears this Developer was doing what the Council is asking for, and at the same time, providing reasonable latitude to develop the project given the dynamic nature of its industry. He said this project had the ability to accomplish what no other project has done for the City and the Valley. It troubled him greatly to hear the continued divisiveness surrounding this project given the multitude of positive impact it will bring to the Desert. It seemed to him this project was being held to a higher standard. It's been stated by staff that other development agreements have much more lenient standards, yet he felt they did not provide the same impact this project had the potential to bring to this Valley. He felt everyone needed to get real on what the needs are and the ability to build this project within realistic time lines and constraints. He believed the proposed DA has been doctored and is a workable document. He said the City deserved this project, and the Developer deserved the support of the City in its consistencies. As a business owner and concerned citizen of this fine Valley, he reaffirmed his support for this project and continues to encourage the Council to vote in the affirmative and move the project forward. MR. DOUG BALOG, Sandpiper, Palm Desert, stated he lived across the street from the proposed project. He said he wished to address three points relating to comments he heard at past meetings, which he believed came down to the basics of construction employment, hotel maintenance and staffing, and businesses on El Paseo. He said the Coachella Valley is experiencing a 13.8% unemployment as of July 31, and 8% was just in the City of Palm Desert; the majority of 17 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 it is related to the construction industry. He said small businesses and entrepreneurs will take us out of this economic debacle, but questioned why the City was turning away job creation. He said the hotel will be hiring a number of construction workers, full and part-time staff, and ancillary businesses will be supplying goods and services to those contractors. He believed once the project is complete the vacancies on El Paseo will be filled. He noted his office KW Luxury Homes by Keller Williams has been on El Paseo for seven years. In response to the concern on whether these condos would sell for $2 million, he said comments and statistics made in the past were unreliable and unrealistic. The information and data he pulled today indicate that in the range of $1- to $2 million homes, there are currently 283 listing, and of those homes, 24 homes sold within the last 30 days and 143 have closed escrow in the last six months, which was almost a 50% absorption rate. In the $2- to $3 million range, 87 listings are on the market and six have sold in the last 40-45 days, and 22 have sold and closed escrow in the last six months, which was a 25% absorption rate. In the $3 million range, there are 82 listings and one has sold in the last 30 days, and 12 have closed escrow in the last six months, which was a 15% absorption rate. His office on El Paseo focuses on luxury homes and he represented 28 properties from sales over $1- to $59 million over the last three years. Finally, he lived in Sandpiper and he cherished the location, because it was a trendy community in a downtown area. He said in most cities, the downtown area has an inherited strength of people wanting to live on the corner where they can walk and take part in the amenities that are presented there. He said there are currently 15 listings in the Sandpiper Community, one sold in the last 30 days, 11 sold over the last six months, and of those eleven sold, he sold five of them. He said as a broker he is required to disclose that this hotel is projected to be there, which has been the greatest strength of the sale. He said the people he sold to were either developers or builders from other areas, and four of those people were from Canada. He also walked all three circles of the Sandpiper Community, and the only area that would be impeded by a view of the west side of the hotel would be the parking lot between Circle 2 and Circle 3. Therefore, if anyone was sitting out in the parking lot that would be the only impediment they would have. He said the City needed tax revenue and employment to fund the safety of the community, including law enforcement, fire, paramedic services, and parks. He wanted to go on record in support of the development of the Rosewood Hotel. MR. ROBERT PARKIN, Sandpiper, Palm Desert, responding to comment that the Developer was being held to a higher standard than others. He said Mr. Joblon needs to be thanked for that standard, 18 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 because he came here promising to deliver a 5-star hotel to be operated by Rosewood and the DA should reflect those promises, but it was now lowered to a 4-star hotel. He said the Council should rethink whether it wanted a 4- or 5-star hotel. The Developer stated at one of the meetings that the Valley was full of 3- and 4-star hotels, and it needed a 5-star hotel, but now he couldn't deliver. Additionally, the staff report states the developer is PDH Partners, but the Agreement is between EP-Monterey. He asked what is the relationship between those entities, and who is PDH Partners, because it was like shaking hands with an octopus. He said in another section of the Agreement is another entity, which is Friedman Equities. He reiterated the Agreement should reflect what has been promised. MS. JAN COFFYN, Sandpiper, stated she assumed the $75,000 per room was for patron room as opposed to per room within the hotel itself. She said the Montage close to Laguna Beach has millions of dollars invested in artwork throughout the hallways, lobbies, and meeting areas, which would deplete the amount of money everyone presumed would go into a patron room. She said it changed the whole perspective for her. In response to the information provided by a previous speaker on the homes sold in the multimillion dollar arena, she wondered what the square footage was and whether they were condos or 3- or 4,000 square -foot homes, because the speaker didn't clarify the comparison he was making. Additionally, she disagreed that the view from Circle 3 would not be impeded as she lived in Circle 3. She said the simulation's presented by the Developer were proof that the light from the top floor would impact her from one end to another, yet the Developer said they will have vegetation to hide the wall on Highway 74. She questioned whether 52-foot trees would be found and the time it will take for them to grow. She said there were so many things that didn't compute. She believed the Council needed to give these things that are in conflict with each other serious consideration, because their decision will affect its citizens for the next 50 to 60 years. She said two decisions were made based on the revenue this project will bring, but can the City wait ten years when even the figures were uncertain. MR. TOM NOBLE, Joshua Tree, Palm Desert, stated he wanted to comment as someone who has been to a hundred of meetings of this sort over 40 years. He said the issues brought up at the last meeting were legitimate and have been dealt with very well. He said it was very dangerous to have things brought up at the last minute and have those used to stop a program that has been well thought out and well handled by staff. He believed there is always something that can be 19 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 found or a question that can be raised, but thought this project had been well vetted on all levels. He personally had great faith in City staff to manage this project to ensure that the representations the City wrote are lived up to. MS. BRIDGET ZAPPIA stated that after reading The Desert Sun article on the Applicant and scandal of the bribery charges followed by another article on how they met, she submitted one as well; but it was not printed. She said this was happening while the Council was working on the changes to the Development Agreement. She said The Desert Sun sent her a message that a decision had already been made and her comments weren't pertinent anymore. She disagreed; therefore, she read her intended article out loud where she listed myths and facts outlining the following concerns: 1) The City was settling for a weaker DA relating to a luxury 5-star hotel; 2) there is no actual agreement between Rosewood and Developer to operate the hotel; 3) the DA has no language on what a 4-star hotel represented; 4) there is no guarantee of a 5-star hotel; 5) Rosewood currently did not own or operate any 5-star hotels within the United States; 6) the language in the DA did not require this Developer to be the one to implement the project; 7) the Agreement allows the Developer to sell the land with the entitlements, including the gift (the frontage road) the City gave for this project after only 30 days; 8) there is no time frame for when this project will provide the promised bed taxes; 9) the DA provides no requirement for the Developer to hire local contractors to build the project or hire Palm Desert residents to staff the hotel; 10) the DA allows a ten-year grace period for construction to commence; 11) the Developer is EP-Monterey LLC in care of Peter Friedman Equities, the man who pleaded guilty for bribery charges and paid $900,000 in restitution in 1999 with other lawsuits tied to his name; 12) the Agreement benefitted the Applicant more than the City. She recognized this project had already been approved by Councilmembers Kroonen, Spiegel and Harnik, but believed there was still time to make this DA become the contract that made their good intentions come true. MR. MATTHEW JOBLON, Applicant Representative, stated he would respond to some of the comment made. He said Mobile Star and others are very political rating services and none of them are consistent. Therefore, in trying to quantify a 5-star, using a rating service was one of the solutions. However, when you go through the list of some of the hotels that Mobile has for a 5-star or 5-diamond, there are tremendous inconsistencies. The second issue raised about requiring certain service standards such as butlers is a problem, because if you go into a prolong severe recession worse than now, 20 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 you need to have the flexibility to possibly cut back on certain things to pay your debt service, employees, and keep the hotel running. He said by putting certain restrictions on how you have to operate the hotel will certainly become a problem at some point in the future. In response to the one -tenth percent to charge $750 per night, he said they made it clear from the very beginning that the residential component was the main financial driver and proceeds from residential sales would pay down the cost basis of the hotel; therefore, they would not need the higher room rates. He said a third party conducted a comprehensive study that indicated reasonable conservative rates, which they believe this hotel can achieve. In response to the question about whom the entities' EP-Monterey and PDH Partners are, he said City Staff, City Manager, and City Attorney, received information about every single partner involved in the project, their entity, and what percentage of the deal they owned in absolute detail; all relationships have been clearly defined and explained. Responding to the issue of $75,000 per room, he explained it is a financial calculation and industry standard used, which includes both the rooms and all public areas available to the public. He said $50,000 was a typical 4- and 5-star hotel. In this Agreement, they have gone oneY times that amount, which is a big burden, but they have committed to it, because it is an excess of a typical 5-star hotel. He said it was true they had a non -binding letter of intent with Rosewood, but that is because they have a policy of not entering into definitive agreement or letter of intents with anyone unless they have entitlements. However, because of their excitement on this project, they were willing to enter into a letter of intent before starting the entitlement process, which demonstrated their commitment. He said definitive commitments cannot be entered into until after the project has its entitlements. A false statement was made that Rosewood did not have any 5-star hotels in the United States. He said according to Conde Nast Traveler Rosewood has had the No.1 hotel in the United States over the last three years with the San Ysidro Ranch in Santa Barbara. They also have the very famous Carlyle Hotel in New York City, which is considered one of the top five hotels in Manhattan. With regard to the financial and when the Transient Occupancy Tax will start to come in, he said they engaged a third —party group that had worked with the City before who did all their findings on their own and presented it to the City Manager and staff. He said they went through a comprehensive process with them vetting out the numbers, timing and such. He said at the end of the day, the whole process has been completely transparent for the last two to three years, and every request regarding transparency has been met, and they will continue to do so. 21 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 Councilmember Finerty asked if EP-Monterey LLC or PDH Partners ever built or managed a 5-star hotel. MR. JOBLON responded those are single -purpose entities for the purpose of owning the land. The partners within those entities have a tract record of building those 5-star hotels and residential projects. Further responding, he confirmed information on all the partners and percentages of ownership was provided to City staff. Councilmember Finerty requested a copy of that information, because it seemed that would be a very pertinent part of a staff report. Mayor Pro Tem Spiegel asked if it was true that for the amount of money that was being paid for the hotel, the rate charged would have to be $750 per night. MR. JOBLON answered no, because the proceeds from the residential component will pay down the cost basis of the hotel, lowering it to a point where they can charge what they estimated to be anywhere from $400 to $450 per night overall. He said that is expected to have a 62% occupancy annually, because of seasonality. MR. ANDREW K. FOGG, Cox, Castle, & Nicholson, Attorney for the Applicant, stated he would respond to a couple of points and provide clarification. He said EP-Monterey and PDH Partners is a single -purpose entity that has an option to acquire land, which has been disclosed to the City Manager. He said they would be very comfortable that any payments between them are excluded from land acquisition costs, which they would be happy to add as a clause under the land acquisition exclusive of payments from PDH Partners to EP-Monterey. He said hopefully that would alleviate Ms. Housken's concern on that point. The other issue is sort of a character attack that is unfortunate, but they have been very transparent with the City on this point. He said they provided information to the City Attorney and disclosed this issue in the past. He said it's always unfortunate when you read something in the front page of a newspaper alleging activities when the newspaper had additional information that they chose not to disclose. He said the true story, which has been verified by the lawyers that were involved in New York. Mr. Friedman has run a company for 40+ years, which has employed hundreds of employees over that period of time. In 1992 one of Mr. Friedman's employees, who was a broker was involved in a scheme where he directed work to a particular construction company in exchange for funds that he put into his house. Mr. Friedman was not aware nor involved, and he did not benefit from it. However, under New York 22 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 law, Friedman Equity Limited/Mr. Friedman is responsible for the acts of his employee, because he was Broker A, the one that signs on the dotted line. Also under New York law, if Mr. Friedman had been involved in these acts, his broker license would have automatically been revoked or suspended by the State Licensing Board; the employee's license was revoked. He said The Desert Sun newspaper knew that, but chose not to publish that information. He said Mr. Friedman's license was not revoked, in fact, the judge specifically noted that Mr. Friedman was able to retain his license. While Mr. Friedman accepted a plea, and people entered into agreements all the time when one can spend millions and several years fighting a case to clear a name or you can say okay maybe the employee should have been overseen more carefully and maybe trust shouldn't have been placed. Therefore, Mr. Friedman accepted responsibility for the employee's actions with the State of New York. He said this happened in 1999 and there has been no action since. He said the court cleared him of any civil wrong doing associated with that activity and allowed him to keep his license. It was unfortunate that someone would choose to disparage him and not present the full facts. He said the facts and information have been submitted to the City Attorney from the lawyers in New York. He understood and assumed the City Attorney has verified that information. He said they have done their best to address all issues and to be transparent for the last couple of years. They have continued to try to be earnest in all requests today and over the last couple of weeks to present a Development Agreement that works for the City and Developer as well. He said they've seen all too frequently in California where project get marred in regulations that they become so oppressive that the project doesn't work or it's not able to respond. He believed the City was protected in this Agreement, but also allows the project to flourish, which is what everyone was striving for. Councilmember Finerty asked if EP-Monterey/PDH Partners have an objection to the City Council having final approval of whom apparently the project will be sold to since their sole purpose was to acquire land. MR. FOGG clarified that when he stated they are a single -purpose entity, the purpose of that entity is to develop a hotel at the site. Further responding, he said the purpose of the entities is to acquire the land and develop this project. He said they have represented that there is no intention today to market the property or to sell it to another developer. He said PDH Partners is intending to develop the site, they have an existing option agreement to acquire the land from EP-Monterey, and they intend to go forward with the development of the site. They would strongly object to having a political body dictate 23 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 who would be able to take title to land. He believed it is not a legal condition. It would be a restraint on alienation, which is strongly disfavored in the law, which he didn't think was appropriate. He said they will provide the City full notice and transparency as to when things would be marketed and provide all marketing materials to the City. He said it was extraordinary that a City would be able to see marketing materials in advance and have an opportunity to comment on it, but they recognize this is a partnership between the Developer and the City, because they want the City to be comfortable with what they are saying. Councilmember Finerty stated that part of being comfortable, from her perspective, is to know who it is the City is allowing to build a hotel and who the operator will be. He said if the Holiday Inn or Ritz Carlton approached the City, it will know who would be building the hotel, but here the City didn't have any certainty. MR. FOGG disagreed, stating the City did have certainty, because the DA includes a list of hotel operators that are permitted, and if it's not one of those operators listed, there is a process to go through in order for the City to allow a different operator to come in. Therefore, he believed the City did have comfort. The answer to whether the Council can say who can build this project with regards to transferability, he said they cannot agree to allowing a political body say a developer is not acceptable for political reasons. He said there could be any sorts of reasons that are not related to the development of a hotel that could come into that calculation. He believed providing the notification, providing the qualifications, financial, and experience is appropriate and should be sufficient, which was a reasonable compromise that they have agreed to. Councilmember Finerty stated Mr. Friedman pled guilty to receiving a bribe and had relief from civil disabilities, which relieved him of any collateral legal ramifications of the felony conviction. She asked if that information was accurate. MR. FOGG answered yes, stating it was a Class E felony in the State of New York (NY), which is the lowest -level felony there is. It was equivalent to someone punching someone in a bar fight in NY, but it was a felony. Councilmember Finerty asked if that was totally different from felonies in California. 24 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 MR. FOGG responded NY has a different criminal code than California; NY has a series of felony levels and every state defined them differently. In fact, California has such a thing as wobblers, which can be either a felony or misdemeanor. His point is that in Mr. Friedman's case, it was a felony at the lowest level where he accepted a plea of receipt of funds in excess of $1,000. He said Mr. Friedman could have spent a million dollars and several years of his life defeating it, which he believed he would have, and as the licensing board indicated, he wasn't personally involved, responsible, nor did he benefit from the scheme that his employee did. He said the employee spent the money building a swimming pool and furnishing his house; it wasn't a company scheme. Mayor Pro Tem Spiegel asked the City Attorney to share his findings. Mr. Erwin noted the Council was provided with a report on the inquiry, which basically confirmed the felony conviction. He also researched for anything that might have occurred since that date forward either through the NY and Federal Criminal Systems, the NY Licensing Real Estate Board, or otherwise and found no further activity. He said there were several typical civil suits that come out of any development company, but nothing of a criminal nature. Councilman Kroonen stated he spent a lot of time reflecting on this situation and its been reported and commented that this project had become a divisive topic in the community, which he hoped wasn't true, but if it was, he had a few thoughts to share. He's had the great privilege of living and working in Palm Desert for the past four decades, and throughout those years, the community almost without exception has been characterized by a working ethic, which supports tolerance for a variety of attitudes, thoughts, behaviors, and opinions. Adherence to that ethic has been readily observable to residents, visitors, and to other communities throughout the region. Deeply seated in this ambience has been and is a value system which, indeed, commands mutual respect and a strong belief that reasonable people can come to agree and to disagree respectfully and without excessive bitterness or reprisals. Particularly important is, as it should be, the sense that no one individual or group has a monopoly on knowing absolutely what is best for our community. And no one individual or group has a monopoly on caring deeply for the community and its welfare. Many good people have stepped forward over the years to plan for and implement the many fine projects which, in sum total, have made Palm Desert what it is, and a positive attitude and mutual respect have been primary factors in bringing about positive results. Particularly noticeable has been a lack of 25 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 egotism, territorialism, and selfish self interest; at the same time there has been continuous celebration of the many fine things which can be accomplished as folks work together harmoniously toward fulfilling dreams for the community. In no way was he suggesting nor calling for a lack of disagreement or dissent. He said honest disagreement is very much a part of the larger discussion, he simply wanted to reinforce the notion that by working together things can move forward with the parameters of an informal, yet highly recognizable community ethic, which went back to the earliest days of the City. He said everyone lived in an era when the Capitols of our State and Nation are filled with rancor, divineness, and bitterness. Here at home, everyone can, should, and will continue to do much better, because it was owed to ourselves, the children, and to the future of the beloved community. He asked everyone to ponder those thoughts in moving forward from this point, because this did not need to be a topic that bitterly divided the community. He called on everyone to participate in working through the situation so that all can benefit in the long run. Additionally, he commented on the editorial that was in The Desert Sun, a topic totally unrelated to this project, which was on how to get rid of trash. He said the late Roy Wilson who was his friend for many years, former Palm Desert Councilmember, and former County Supervisor until he passed away just over two years ago, lead an unpopular charge in the eyes of many. He tried to have the Eagle Mountain Mine converted into a trash dump. He worked on it and was challenged in elections by people who were opposed to him, but he carried forward. Unfortunately, that project was finally beaten down by the United States Supreme Court by an action that wasn't directly associated with what the situation was. However, the community is now left with the prospect of trash being all along the highways through the County and across the County line into another county, which will derive all of the benefit; his point being long-term planning. He is confused when he hears people decrying the fact that there may or may not be revenue coming in from the hotel project for another ten years, yet he didn't know how to get there without planning for it now. He said hopefully it will happen before, but guaranteed that when the revenue did come in, it will be welcomed. It appears to him from what he has been able to find out, this Agreement is tighter, more restrictive, and more oriented to the needs of the City than any other development agreement. He didn't believe there was a prior agreement that has been for less than ten years. He went on to say that he has reviewed, viewed, studies, thought, talked, listened, responded as best possible, and his best judgement still told him that if there is a motion to approve, he would support it. 26 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 Councilmember Finerty understood emotions and passions on both sides were running high, but with good reason. She found it amazing that she first learned about Mr. Friedman's felony conviction from a constituent and not from the Developer or City staff. She said it was troubling to receive such information from a constituent instead of the people that worked for the City. With respect to the transferability, when she asked Mr. Fogg for the City Council to have final approval of the operator in the City of Palm Desert. Mr. Fogg said they would strongly object to have a political body say who can build. She has concerns with a 4-star plus hotel when the City was promised a 5-star, and while there may be differences between them per Mobile or Conde Nast, the Council tried to nail it down with an investment of $75,000 per room as told originally. However, the DA states otherwise as confirmed upon question by the City Attorney. She said it will actually be per room in addition to the common areas, which could be quite extensive. Additionally, she believed the frontage road should be appraised, because the City was giving the Developer something for free. The Developer wants to build a portion of the hotel at 60-feet, which is 25 feet more than what the Ordinance allowed. She asked for storey poles and the Developer denied them, yet they served prior Council's very well. She was told it was old thinking and to move forward. She said the City used simulations with the Hagadone house, but later learned that old thinking and storey poles would have served the City much better. She is further troubled why certain Councilmembers and City staff continue to vote against the very ordinances that were created over many years, because those ordinances build a great City. She said it was the City's Ordinances that built a City that is unique and special that didn't look like every other city. It was like the Constitution, which she believed in, it shouldn't be changed. She said Ordinances shouldn't be adopted if they won't be upheld and questioned why even have them, because they continue to be violated. She understood why developers came to the City wanting more, but it was up to the Council to uphold its own Constitution, which is the General Plan and Ordinances. She said prior Councils had done quite well in building a great City and keeping that special quality that brought everyone here. She is concerned with moving ahead and continuing to violate the City's Ordinance, especially with regard to height, views, and quite frankly, was not comfortable doing business with someone who had been convicted of a felony charge, even having heard the explanation, which wasn't in Palm Desert's best interest. She said for all of those reasons she will continue to vote NO. 27 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 Councilmember Harnik thanked Councilman Kroonen for his opening remarks, because it was a great place to start, which she appreciated. She said at a prior meeting, the Council received a list of signatures labeled Opposition to Rosewood Project As Proposed. On it was a hand-written notation stating "...live in South Palm Desert and would be impacted directly." The word "live" was underscored. She said the Council had 27 minutes from when it was timed -stamped to review. Therefore, she wasn't able to really look at it until after the meeting, and in looking at the list, those addresses with Bermuda Dunes, La Quinta, Joshua Tree, and Rancho Mirage wasdisappointing, and she didn't count the signatures to confirm there were 200 as was represented. She said a friend of hers is on the list who raised her sons here and is opposed to the hotel. That same friend had the opportunity to watch her grandsons graduate from college; she is emotional about this and just wants to see the date groves grow back. However, she also saw a name of a very good friend of hers who has never lived at the address stated, moved to Indian Wells six months ago, and her name was forged. She didn't know what you call that in New York or in California, but as a Palm Desert community member, she calls it very disappointing. Today the discussion is about the Development Agreement that is in place. She said this was America and people do have property rights. She said this has almost taken on a punitive approach with this DA, because the length of time is different than any other. She said the 5-star is a very nebulous rating, it evolves and changes. Three years ago what would have been considered 5-star in a hotel room is different today; Wi-fi might have been important or not. She said 5-star rating evolved and it was like other things, you'll know it when you see it. She said the Ordinances, views, and heights are discussed, because the Council did make variances. She said in order to succeed going forward, the City needed to be flexible. She said the beautiful St. Margaret's Church was an asset to the community and will continue for a longtime going on, but should it be knocked down because it's above the height limit and in front of the mountains. She agreed no one knew when the employment of people will happen, stating it can take five or seven years before this project will bring revenue and jobs to the City, but did the City know that information with any other development agreement. She said it didn't seem logical to make such an issue and place everything on this project. She said Mr. Maize spoke of the dynamic nature of the hotel industry. The City would love for the hotel to get started in a year, but the economy couldn't be controlled and no one had crystal balls, but it did want to start the project at the best possible time. She said when a motion is made, she will absolutely support this project, because this Council needed to start planning. She agreed prior Council's had done a great job, and in 1983 they 28 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 approved a 248-room hotel at the subject location. She said the City now had the potential to have a hotel that is reflective of the elegance of the Palm Desert brand. She believed the Council needed to start planning, move forward, and do it elegantly and intelligently. Mayor Pro Tem Spiegel pointed out that the prior 248-room hotel that was approved was going to be a Red Lion, but the money never became available to the developer. She said this property has been sand for the past 20 years along Highway 74 and near El Paseo. He said this property needed to be used to be profitable for the City and residents, which he believed this project will achieve. With respect to height limits, Councilmember Harnik already mentioned St. Margaret's church, but every hotel in the City and others exceeded the height limit, which includes Intrawest by Desert Willow, Westin Timeshare, Marriott Desert Springs, Embassy Suites Hotel by Highway 111, and Holiday Inn also on Highway 111. He said it wasn't unique to have a hotel, specifically a brand hotel, to exceed the height limit, because it has happened in Palm Desert. One of the reasons he is enthusiastic about the hotel is the need for funds, because half of the General Funds received went to police and fire; funds to pay for those services came from sales tax and hotel occupancy tax primarily. He said police and fire salaries will go up and the City will pay it, because one thing he knew is that it has never cut back on police and fire personnel. He said the Council needs to make sure the funds are there, and this project is one way to make sure funds will be available down the road; therefore, he will vote in support of the hotel. Mayor Benson stated she was opposed to this project, because of the location. She admitted the City had higher story hotels that are in better locations than right on Highway 74. She said the million dollar homes that were sold were not condos, but houses. She believed the hotel condominiums will eventually become part of the hotel. What really disturbed her most about this project is that Councilman Kroonen and herself met with the Developer in a private meeting when he was explaining his project, and when asked if he would include a non -transferability clause, he almost had a heart attack. He said he couldn't possibly do that, because his family might need the money and/or sell it for other reasons. And what is really disappointing is that City staff had a meeting with the Developer and Attorney to work out the DA, which is something that's never been done before. She said to accept 5, 3, and 2 years, which added up to 10 years, was just changing the verbiage, but not the intent. She said to have City staff and City Manager working with a developer to do this was something she's never seen in the 29 years she's been here. She has seen a lot of good and bad things happen to the City of Palm, but 29 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 the bad things seem to be getting more frequent. She said the City had a Chamber of Commerce that calls constituents NIMBYs, which was unacceptable. She said Palm Desert had an incident a number of years ago with a gentleman by the name of Steve Wymer, which some may recall, because it was a ponzi scheme the City got into and lost more than $7 million. She said he was out of prison and can be invited back to work with Mr. Friedman, because they've done their time and why not have them back. She said the City was working with someone that has a bad reputation, and he might have a great one in NY, but it didn't look that way according to the newspaper for Palm Desert. She was in favor of the boutique hotel on El Paseo, but due to the economy it didn't pan out. She is also in favor of one in the proposed location for a 3-, 4- or 5-star hotel, but not this one, because the City was giving a variance and land and not getting anything in return. She said it was a bad fit for Palm Desert's high standards and in everything it did or dealt with. She said the City didn't have to start dealing with people that are involved with this project. Therefore, she is thoroughly against it. Mayor Pro Tem Spiegel moved to waive further reading and pass Ordinance No.1225A to second reading as amended to insert the following language in Section 1.3.2, Line 10, after the word Project, "(exclusive of payments for the acquisition of interests in the project or the property)." Motion was seconded by Kroonen. Responding to question, Mr. Erwin confirmed the amendment to the motion addressed Ms. Housken's concern. Mayor Benson called for the vote and it carried by a 3-2 vote, with Finerty and Benson voting NO. With City Council concurrence, Mayor Benson called for a Recess at 6:08 p.m. She reconvened the meeting at 6:15 p.m. 30 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 2. ORDINANCE NO. 1228 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING SECTIONS 28.06.020 AND 28.08.030 OF TITLE 28 - FLOOD DAMAGE PREVENTION - OF THE PALM DESERT MUNICIPAL CODE (AMENDING ORDINANCE NO. 985) RELATIVE TO THE STATE OF CALIFORNIA DEPARTMENT OF WATER RESOURCES REQUIREMENTS. Mr. Chen stated the Ordinance basically updates the City's current Municipal Code relating to Flood Damage Prevention. He said the minor changes are outlined in the staff report. Responding to question, he said the update was required by the Federal Emergency Management Agency (FEMA). Mayor Pro Tem Spiegel moved to waive further reading and pass Ordinance No. 1228 to second reading. Motion was seconded by Harnik and carried by a 5-0 vote. B. For Adoption: None XIV. NEW BUSINESS A. CONSIDERATION OF REQUEST TO APPLY FOR A TEMPORARY USE PERMIT TO ALLOW THE PALM DESERT CHAMBER OF COMMERCE TO HOLD A VALLEY -WIDE ONE -DAY GARAGE SALE LOCATED AT 72-559 HIGHWAY 111 (ENTRADA DEL PASEO) ON SATURDAY, NOVEMBER 19, 2011, Case No. TUP 11-355 (Palm Desert Chamber of Commerce, Applicant). Assistant Planner Missy Wightman stated the Palm Desert Chamber of Commerce is requesting to hold a one -day garage sale on November 19. It was before the City Council, because the City owns Entrada Del Paseo, and a Temporary Use Permit (TUP) requires property owner permission. The Chamber is reaching out to Valley -wide residents to have a garage sale at Entrada El Paseo, because many homeowner associations (HOA) and communities did not allow these events in their gated communities. There is potential for a maximum of 100 participants on site. Staff contacted Le Spiga, Cuistot, and a representative from the Palm Springs Art Museum, and they have all given their approval of this event. She said Barbara deBoom was available to answer questions. Mayor Benson asked about the fee for resident to be there. 31 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 MS. BARBARA deBOOM, Chamber President responded it will be $50 per parking spot. Further responding, she confirmed the event will be held on Saturday and one of the Chamber members will be providing security and helping with parking direction. She said any remaining items will be taken to a local charity/thrift shop in the area. Mayor Pro Tem Spiegel moved to, by Minute Motion, allow the Palm Desert Chamber of Commerce to apply for a Temporary Use Permit (TUP) to hold a Valley -wide Resident Garage Sale at Entrada del Paseo, and authorize the City Manager to sign as authorized representative. Motion was seconded by Kroonen and carried by a 4-1 vote, with Benson voting NO. B. REQUEST FOR APPROVAL OF $75,000 IN FACADE ENHANCEMENT PROGRAM (FEP) CONSIDERATION FUNDS TO DARDEN RESTAURANTS, INC., FOR THE RED LOBSTER RESTAURANT TO BE LOCATED AT 72-291 HIGHWAY 111 (Darden Restaurants, Inc., Applicant). Councilmember Harnik stated she believed everyone supported the Red Lobster coming on board, but would like to explore other alternatives with the financing at $75,000. Councilmember Harnik moved to, by Minute Motion, continue this item to the meeting of October 13, 2011. Motion was seconded by Spiegel. Councilmember Finerty stated it was her understanding that Facade Enhancement funds were to be used, but there is no facade to enhance. Mr. Wohlmuth responded the City has used FEP funds for sustainability projects like the Village on El Paseo, which was essentially a $750,000 facade enhancement where energy independence improvements were made. Within the rules of facade enhancement, this item qualified with the exception of the boundary, which was modified in 2004. Staff looked at this as a possible tool knowing Water Quality Management Plans will be required in areas that accept drainage from other parking lots. He said the City will have to face this in the near future as it develops and re -develops some empty parcels within the commercial districts. He said staff can look at what the WQMP upgrades will cost within their plans. However, staff will be coming back to the Council to make sure the whole concept of using FEP funds for this type of activity is vetted by the Council. Councilmember Finerty asked if the Red Lobster requested this help. Project Administrator Bryce Lynn White responded the Red Lobster approached staff a year ago for the use of FEP funds. At that time, he informed them they were not within the boundary. Later they approached 32 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 staff at various level, including the City Engineer and Economic Development Manager regarding the problems with complying with the WQMP, which they originally had not intended to comply with. He said the Red Lobster needs to tear apart their parking lot, which they thought would not be affected or have to be developed to put a water retention there. Councilmember Finerty noted the staff report indicated that Red Lobster is looking to invest $4 million to build the restaurant and asked if $75,000 represented less than 2%. Mr. White answered yes, stating it was similar to what the City did at The Gardens on El Paseo where the investment was $35 million and the City invested $750,000. Councilman Kroonen asked if the City needed to be looking at adjusting the boundary. Mr. White responded originally this area was included within the area of the FEP, but in 2004 the boundary was brought back to Highway 74/Monterey area, which was the western terminus of the program. Further responding, he said the main rationale for changing the boundary is that most of the properties are large and the FEP is not well suited to handling those. It just happens to be that this particular location of the Red Lobster is more of a typical property size the City can help. Further responding, he said the water retention would benefit 50% of the La Sombras Center. Mr. Greenwood added that half of the drainage for the overall site went across the Red Lobster property. When staff first approached this project, they thought the site would only have to handle the water that fell onto the Red Lobster property, including its parking lot. Staff had extensive discussions with the Regional Quality Control Board, and they have made it abundantly clear that this site had to deal with all the water that flowed onto its site by any method. Therefore, this property had the disadvantage of being at the lower end of the parking lot and having to deal with a volume of water. Further responding, he confirmed this was a new regulation that was effective January 2011. Councilmember Harnik stated that perhaps the City needed a new fund to help with unreasonable State regulations, which was just a thought. Mayor Benson stated she didn't have a problem with delaying this item for two weeks, but did have a problem with it coming out of the FEP, because she didn't want to open the door for others to come. She said if staff could find another way that would be fine. 33 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 Mayor Spiegel and Councilmember Harnik noted the vacant properties where KFC and Coco's were located will face the same need. Mayor Benson called for the vote and it carried by a 5-0 vote. C. REQUEST FOR AUTHORIZATION FOR STAFF TO NEGOTIATE WITH LANDMARK GOLF LIMITED PARTNERSHIP FOR RETAIUMERCHANDISING CONSULTANT SERVICES AT THE PALM DESERT VISITOR CENTER (CONTRACT NO. C31200). Visitor Center Manager Donna Gomez stated this item is for approval of a contract with a retail and merchandising consultant for the Palm Desert Visitor Center. She said the Council may recall that during budget discussions a few months prior it discussed specifically looking at ideas for growth and opportunity with the new location. There was also the idea of hiring a retail merchandising consultant, because the Visitor Center served as a destination and tourism information center, which can brand Palm Desert with the sale of retail merchandise. She said with the retail sales they can hopefully generate revenue to ultimately help off set the cost of the operation of the Visitor Center. Staff distributed a Request for Proposal and received five, which have been thoroughly reviewed and taken before the Retail Committee for their consideration. Staff recommended approval of Landmark Golf to do a full analysis of the entire retail program. Mayor Pro Tem Spiegel moved to, by Minute Motion: 1) Authorize staff to negotiate with Landmark Golf Limited Partnership, Indian Wells, California, for Retail/Merchandising Services at the Palm Desert Visitor Center; 2) authorize the City Manager to execute a contract for said services; 3) approve an amount not to exceed $15,000 for Professional Services; 4) appropriate $15,000 from Unobligated General Fund to Account No. 110-4419-453-3090 for this contract. Motion was seconded by Harnik and carried by a 5-0 vote. Mayor Benson stated she hoped staff will make it clear to the consultant that it didn't want to compete with other stores on El Paseo, and it would only be for Palm Desert merchandise. Ms. Gomez agreed to continue to emphasize that throughout the process. Mayor Benson called for the vote and the motion carried by a 5-0 vote. 34 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 D. REQUEST FOR APPROVAL OF A TRANSFER AGREEMENT BETWEEN THE CITY OF PALM DESERT AND THE PALM DESERT REDEVELOPMENT AGENCY, TRANSFERRING TO THE CITY THE PORTION OF TAX INCREMENT PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 34194.2, ALSO KNOWN AS THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM (JOINT CONSIDERATION WITH THE PALM DESERT REDEVELOPMENT AGENCY). Redevelopment Accountant Veronica Tapia stated on September 8, 2011, the City Council approved Ordinance No. 1227, which approved the City's ability to continue with Redevelopment under AB X1 27, also known as the Alternative Voluntary Redevelopment Program (AVRP). The proposed Transfer Agreement and Resolutions merely formalize the idea that the Agency would be reimbursing the City for those payments in order to keep the Redevelopment Agency alive. The timing of this is pertinent in that it needs to be done before the City's Statement of Indebtedness is filed, which is on the following day. If not approved, there is a possibility the City can incur additional pass through requirements at a later date. Mayor Pro TemNice Chairman Spiegel moved to: 1) By Minute Motion, approve a Transfer Agreement, substantially as to form, between the City and the Agency to transfer to the City the portion of tax increment pursuant to California Health and Safety Code Section 34194.2, also known as the Alternative Voluntary Redevelopment Program ("AVRP") (Contract No. C31210); 2) Waive further reading and adopt City Council Resolution No. 2011 - 85, authorizing and approving the execution and delivery of a Transfer Agreement pursuant to California Health and Safety Code Section 34194.2, and taking certain other actions in connection therewith; 3) Waive further reading and adopt Redevelopment Agency Resolution No. 589, authorizing and approving the execution and delivery of a Transfer Agreement pursuant to California Health and Safety Code Section 34194.2, and taking certain other actions in connection therewith. Motion was seconded by Finerty and carried by a 5-0 vote. XV. CONTINUED BUSINESS A. MINUTES OF THE REGULAR CITY COUNCIL MEETING OF AUGUST 25, 2011 (Continued from the meeting of September 8, 2011). Mayor Pro Tem Spiegel moved to, by Minute Motion, approve the Minutes of August 25, 2011, as presented. Motion was seconded by Kroonen and carried by a 5-0 vote. 35 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL XVI. OLD BUSINESS SEPTEMBER 29, 2011 A. REQUEST FOR AWARD OF CONTRACT TO HORIZON PROFESSIONAL LANDSCAPE IN THE AMOUNT OF $39,970 FOR THE McCALLUM THEATRE PARKING LOT LANDSCAPE RETROFIT PROJECT (CONTRACT NO. C31150, PROJECT NO. 967-12). Mayor Pro Tem Spiegel moved to, by Minute Motion: 1) Award subject contract for the McCallum Theatre Parking Lot Landscape Retrofit to Horizon Professional Landscape, Coachella, California, in the amount of $39,970; 2) approve a 10% contingency for the project in the amount of $3,997; 3) authorize the Mayor to execute subject contract — funds are available in General Fund Account No. 110-4800-454-3879 — Outside Agency Contribution for the McCallum Theatre, subject to McCallum Theatre's execution of the related agreement with the City for this project. Motion was seconded by Kroonen and carried by a 5-0 vote. XVII. PUBLIC HEARINGS None XVIII. REPORTS AND REMARKS A. CITY MANAGER 1. City Manager Meetina Summaries for the Period of August 31 - September 20, 2011. With Council concurrence, the City Manager's Meeting Summaries was received and filed. 2. Report from the Riverside Local Agency Formation Commission (LAFCO) Public Hearing Being Held Thursday, September 29, 2011, 9:30 a.m., Regarding Case No. 2011-03-4 - Sphere of Influence Amendment to the City of Cathedral City. Mr. Wohlmuth reported that LAFCO met this morning regarding Cathedral City's Sphere of Influence (SOI) request, and he distributed to City Council Ms. Aylaian's written memo regarding the matter. Ms. Aylaian recalled that at the last Council Meeting, discussion occurred regarding areas in Palm Desert's SOI north of 1-10, and City Council gave two specific instructions. First, staff was asked to conduct a fiscal impact analysis of the Sun City area and the commercial property associated with it already in Palm Desert's SOI, and a firm is being engaged to conduct that study now. The second 36 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 issue dealt with Cathedral City's request to modify its SOI such that it came all the way east and abutted the Palm Desert SOI. City Council directed staff to prepare a letter to LAFCO, objecting to the proposed SOI Amendment and asking that the issue be continued for further study. When LAFCO met this morning, it took public testimony, considered the options, and voted to approve Cathedral City's request for modification of their SOI. However, she said one change was made to an area that was of particular concern to the Palm Desert City Council: LAFCO excepted the land between the center line of 1-10 and Palm Desert's current city limits from the Amended Sphere. Therefore, that land will remain in Palm Desert's SOI, and, per Council's direction, staff is taking a look at the fiscal impact of annexing that territory to the City should it decide to do so in the future. She went on to say that what was addressed but not resolved by LAFCO's action today were the concerns that City Council had about provision of emergency services, particularly fire, to the area on the eastern end of what is now Cathedral City's SOI, and it remains a concern. She said that area received a great deal of discussion — Riverside County Fire Chief John Hawkins and Division Chief Dorian Cooley both attended the meeting and spoke on behalf of the City of Palm Desert's concerns. Cathedral City and LAFCO acknowledged this issue would need to be addressed, but the decision indicated it would be addressed at the time there was a move to annex the area and not just in creating the SOI. Further, Ms. Aylaian observed that related to this matter and within the last 48 hours, the Berger Foundation provided a letter (attached to the just -distributed memorandum), as did Supervisor Benoit's Office. The Berger Foundation feels strongly that they do not want to be part of Cathedral City's SOI, and their letter was objecting to being included. She said the Berger Foundation's letter also indicated that they would prefer to be in the Palm Desert SOI; they attended this morning's meeting and made their concerns abundantly clear. Nonetheless, LAFCO included that area in Cathedral City's SOI. She stated that in looking at the fiscal impact analysis being done for Sun City, staff recommends including area roughly from Cook Street over to Palm Desert's SOI. This would include Berger Foundation's property for the Classic Club, Xavier Preparatory High School, and they have several large parcels: one of 64 acres that there are options on for a private physicians -owned hospital, as well as another 23-acre parcel. She felt the reason for including this area, at least for information purposes, is that in a review of the last fiscal analysis done in 2008, Sun City was not financially viable on its own, even with the commercial properties; projection given was that at no point in the foreseeable future would it be. However, she said they also included 37 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 in their analysis an option that would have included the aforementioned land that has just been introduced into Cathedral City's SOI, which she was now referring to as the "Classic Club Area." Under some conditions, inclusion of that area did make the Sun City area fiscally viable. Therefore, in the study being done now, the City was asking as an option that those lands be included, not knowing what the City Council's interests may be since it has not yet heard from the Berger Foundation or from other constituents on the matter. She wanted to give a heads -up to the Council that it may be approached by representatives of the Berger Foundation regarding their strong feelings about preferring to be in Palm Desert's SOI rather than Cathedral City's. Responding to question, she anticipated the Sun City study would take at least 60 days. Mr. Wohlmuth added that the fiscal analysis cost for Sun City, the current SOI, the 200 feet south of the freeway, and potentially the Berger Foundation land is within his signing authority. So staff can get started on the study and bring it back to Council for future consideration. In answer to question about what would happen to the 200 feet of territory from the freeway to city limits, he responded that the area was currently in Palm Desert's SOI and will remain so unless a decision is made to annex it; therefore, it's currently in the County's jurisdiction. Further responding, he said the fiscal analysis for the Classic Club Area could be included with that being done for Sun City and the 200 feet for less than $20,000. He agreed that the prior action taken by Council at the September 8 meeting did not include the Classic Club area, but it could be added by an action taken at this time. Councilmember Harnik moved to, by Minute Motion, include the "Classic Club Area" in the fiscal analysis being performed for Palm Desert Sphere of Influence territory for Sun City and its adjacent commercial property and the 200 feet of territory from the I-10 Freeway southerly to the northern City limits, as proposed (authorization to obtain fiscal analysis approved at City Council Meeting September 8, 2011). Motion was seconded by Spiegel and carried by 4-1 vote, with Finerty voting NO. 3. Rock 'N' Roll Half Marathon Mr. Wohlmuth noted that as Council had probably already heard, the Half Marathon in Palm Desert on New Year's Eve 2011 has been canceled. However, Bruce Walton at The Competitor Group is intent on having an event next year with more time for sign-ups. Therefore, he was asked to send a letter to the City stating this request so that City Council could consider and respond. This would allow more time 38 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 for advance marketing and a successful New Year's Eve 2012, or thereabouts, event. 4. Palm Desert High School Principal Robert Hicks Mr. Wohlmuth announced that new Palm Desert High School Principal Robert Hicks had been invited to the October 13 City Council Meeting. It would be a brief, informal coffee/cookies event at 3:45 p.m., right before the regular City Council Meeting at 4:00 p.m. If not already concluded by that time, Closed Session could be adjourned early for this reception. B. CITY ATTORNEY None C. CITY CLERK None D. PUBLIC SAFETY 1. Fire Department None 2. Police Department Lt. Shouse stated that at the City Manager's request, he would update the City Council regarding a shooting that happened in Palm Desert, along with two pieces of additional public safety information for the City Council's reference. a) Shootina in the 42-000 Block of Verdin Lane — Lt. Shouse related that on Sunday, September 18, about 10:00 p.m., Palm Desert Police Officers responded to a call of shots fired in the 42-000 block of Verdin Lane, with reports of three to five gunshots heard, followed by a call to Dispatch indicating that a male adult, 18 years of age, had been shot and was being transported to the hospital by family. Officers arrived on scene within a few minutes and were flagged down by the vehicle containing the gunshot victim, who was treated at the scene by paramedics and transported to the hospital. Victim said he was walking northbound on Verdin Lane when he saw several males wearing dark clothing and baseball caps walking on the opposite side of the road. Victim reported that one of the subjects yelled at him; he 39 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 then heard three to four shots when he was struck by one of the rounds in the back of the leg, with the wound being non -life - threatening. Subjects fled the area in a dark -colored, four -door -type vehicle in an unknown direction. A search of the area revealed shell casings in the street and that two rounds fired struck the exterior of two residences in the 42-100 block of Verdin Lane, but there were no injuries to residents there. Officers canvassed the neighborhood and interviewed residents for additional witnesses; the area was searched for suspects, but none were located. As a result of the incident, residents of the area have reached out to both City and Sheriff's personnel, concerned for their safety and expressing concerns about crime in the area. Following that communication, the Palm Desert Police Department has met with members of that community to provide statistical information regarding crime in the area and to provide information regarding Neighborhood Watch opportunities and crime prevention information. Palm Desert Police have increased patrols in the area and also coordinated with the Sheriff's Gang Task Force to participate in the investigation, which is ongoing with no arrests made to date. He said the Palm Desert Police Department encourages all residents to remain vigilant, take active measures to protect themselves and their property, and encourages residents to report suspicious activity or criminal incidents immediately to their local police or by using the Crime Stoppers Hotline Number anonymously at (760) 341-STOP. Crime brought to the attention of the Police Department will be investigated thoroughly, and with sufficient evidence, those responsible will be prosecuted to the fullest extent possible. b) FBI 2010 Uniform Crime Reoort (UCRI-Part I Crime Report — Lt. Shouse went on to say there was some good news in relation to release of the subject report last week, which he provided to the City Manager. The UCR indicated that Palm Desert had roughly a 0.55 % reduction in overall Part l Crimes in 2010, and also a 2.4% decrease in Part I Crimes per 1,000 residents. However, he said the community needed to be aware of some bad news associated with crime. The Coachella Valley is home to approximately 2,220 gang members that live in various communities. Those members are transient and move across geographical borders into neighboring cities, and Palm Desert is not immune to this migration. Both active and former gang members live in Palm Desert, but City Council recognized this fact long ago and has elected to fund a Gang Task Force Officer for the past several years. Palm Desert Police Department firmly supports participation in these multi -jurisdictional Task Forces to deal with these subjects who are cross -boundary offenders. 40 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 c) AB 109-Public Safety Realianment Act/U. S. Supreme Court Ruling In addition to the aforementioned challenges, Lt. Shouse said the community should be aware that the Police Department's job will become even more challenging in the coming months. He said because of State legislation, AB 109 -Public Safety Realignment Act signed into law April 2011, coupled with the U. S. Supreme Court ruling in May 2011 for the State to reduce its prison population by 33,000 inmates over the next two years, it will result in more convicted criminals will be released into the streets of communities across California. He explained that the purposes of the Public Safety Realignment Act and Supreme Court decision were to reduce: 1) Costs at the State level; 2) overcrowding of State inmates that was ruled unconstitutional by the Supreme Court. For Palm Desert Police, it meant that supervision of most parolees will now be the responsibility of local counties. Additionally, non-violent, non -serious, and non -high -risk offenders (a.k.a. the 3-Ns) who were sentenced from 18 months to three years in prison, will now do their time in local jails. In Riverside County, with the recent jail discussion, there are only 3,900 beds, and there is a court order not to exceed that limit. But with implementation of AB 109 and the Supreme Court Ruling, the County stands to absorb approximately 1,300 - 1,700 would-be parolees per year to be supervised by County Probation. Further, the County's prisoner population will increase by approximately 5,700 inmates annually, consisting of about 3,400 parole violators, as well as about 2,500 of the 3-N offenders, which previously all went to State Prison. He cautioned that with only 3,900 beds and 5,700 additional inmates per year, the math doesn't add up. Riverside County Sheriff's Department and Probation were looking at options for dealing with that overcrowding, including involuntary home detention, electronic monitoring, work release, and some other post -custody support programs. It was hoped that the potential for increased crime is never realized, given that a decrease has been observed throughout the United States and in Palm Desert; but it was also recognized that we may be nearing the apex of this curve, and the aforementioned numbers gave cause for concern. He said the information was being provided today to inform the City Council and public at -large of these changes to the Criminal Justice system and to understand the challenges facing the City's Public Safety operation in the future. He offered to answer any questions about the information provided. 41 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 E. MAYOR AND MEMBERS OF THE CITY COUNCIL 1. City Council Reauests for Action: a) Consideration of the Appointment of a City Council Liaison to the Palm Desert Cultural Resources Preservation Committee (Councilman William R. Kroonen). Mayor Pro Tem Spiegel moved to, by Minute Motion, appoint Councilman Kroonen City Council Liaison to serve as a non -voting representative on the City's Cultural Resources Preservation Committee. Motion was seconded by Finerty. MR. DON GRAYBILL, Cultural Resources Preservation Committee Chair, said he'd approached Councilman Kroonen after the last Council Meeting. They'd never had a Councilmember participate in their meetings, but he was aware that other Committees have assigned Council Liaisons. He wanted to clarify that his request was not to have a specific Councilmember designated but an invitation to any Councilmember who wanted to participate and provide input at their meetings, which occur on the last Tuesday of the month at 10:00 a.m. in the Administrative Conference Room. For more information about the Committee's objectives, he said it could be obtained in the Cultural Resources Preservation Ordinance. Mayor Pro Tem Spiegel responded that most of the Committees that have a Council Liaison are assigned positions; however, there are some that do not, such as the Planning and Architectural Review Commissions, and currently the Cultural Resources Preservation Committee. He added that up to two Councilmembers could attend a Committee or Commission meeting. Therefore, he felt it would be appropriate that Councilman Kroonen be the designated Council liaison, and he could pick an alternate for those times when he couldn't attend. MR. GRAYBILL replied that if Councilman Kroonen was willing to accept the assignment, it would be wonderful, but he also invited input from each of the Councilmembers that would be most important. 42 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 Councilman Kroonen said his intent was just to bring the request forward, but he would also be willing to serve in this capacity. Mayor Benson called for the vote on the motion to appoint Councilman Kroonen as the Council Liaison to the Cultural Resources Preservation Committee, and it carried 5-0. b) Pet Resort at Barkinaham Palace - Temporary Signs Councilmember Finerty said she'd received an e-mail from Lori Weiner, operator of Barkingham Palace on Spyder Circle. She went on to explain that she'd worked with Ms. Weiner since Barkingham opened in an effort to help alleviate some of the overcrowding of relinquished animals at the Coachella Valley Animal Campus. Ms. Weiner agreed to take several animals to her business to find adoptive homes and has been very successful —finding homes for 17 dogs and two litters of kittens. As soon as she moves one group out, she takes on more to help reduce the number of animals having to be euthanized. But she has run into a problem with City staff in her attempt to locate a single sign in front of her building only during the hours when she has those animals available. Planning told Ms. Weiner that she would have to use it as her one permit/year. Councilmember Finerty went on to recall that the City has been very accommodating to businesses with neon signs, A -frame signs on El Paseo, and real estate signs for open houses; therefore, she questioned why Ms. Weiner was incurring such opposition while trying to save the lives of animals. She asked staff to find a way to allow Barkingham Palace to have an A -frame sign similar to those on El Paseo every day in order for her to advertise when she has adoptable animals available. Mayor Benson asked staff to review, and Mr. Wohlmuth asked for a copy of the correspondence because he was unfamiliar with the issue. Councilmember Finerty added that Barkingham was having a Pet Adoption Event on Saturday from 10:00 a.m. - 1:00 p.m., which will be advertised, so she asked for an immediate resolution and provided her copy of the e-mail to Mr. Wohlmuth. 43 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 2. City Council Consideration of Travel Requests and Reports: a) League of California Cities Annual Conference — Councilmember Harnik said she'd just returned from the Annual Conference in San Francisco. She reported that there was a great deal of valuable information provided, especially in the break-out sessions, such as attracting/maintaining and creative approaches for retail in cities, up to and including land use and leases. She also participated in a session on landscaping and lighting assessment districts and a very valuable one regarding signage. At some point, she'd like to talk to the Chamber in a joint educational effort with the City about how their members can use their signage most effectively, which she anticipated could occur after the new Sign Ordinance is adopted. 3. Citv Council Committee Reports: a) Jacaueline Cochran Regional Airport — Councilman Kroonen announced that the 2011 Annual Air Show would be held on Saturday, November 5, promising to be a very nice event. b) CVAG Transportation Committee — Councilman Kroonen said he'd represented the City for the opening of the Bob Hope Interchange and Overpass Bridge, and it was particularly exciting to be riding in the first van to travel over the new structure. 4. Citv Council Comments: a) Berger Circle/Berger Drive Ring Road — Councilman Kroonen said along with Mayor Pro Tem Spiegel and Councilmember Harnik, he was pleased to formally open the Ring Road Extension at the Cal State and UCR Campuses this morning, representing a significant milestone in the evolution of the development of those campuses. 44 MINUTES ADJOURNED REGULAR MEETING PALM DESERT CITY COUNCIL SEPTEMBER 29, 2011 5. Suggested Items for Future Citv Council Meeting Agendas a) Ordinance Restricting Sex Offenders from Parks — Councilmember Harnik referred to an Orange County ordinance and said Riverside County was also currently looking at a regulation that would restrict sex offenders from being in public parks. When she checked with Riverside County, the regulation they were processing only applied to County territory and wouldn't apply to the City of Palm Desert. She asked staff to look into how it could apply this regulation to City parks. XIX. ADJOURNMENT On a motion by Kroonen, second by Spiegel, and 5-0 vote of the City Council, Mayor Benson adjourned the meeting at 7:08 p.m. ATTEST: R CHELLE D. KLASS , CITY CLERK 1 CITY OF PALM DESERT, CALIFORNIA 45