HomeMy WebLinkAboutExpansion of Palm Springs Desert Resorts Convention & Visitors Auth Boundaries (CVB)CITY OF PALM DESERT
COMMUNITY SERVICES/ASSISTANT CITY MANAGER
STAFF REPORT
REQUEST: Concur with the Recommendation of the Marketing Committee to
Approve the Expansion of the Palm Springs Desert Resorts Convention
And Visitors Authority Boundaries to Include the Morongo Hotel,
Morongo Casino, Hadley's, and the Factory Outlets.
DATE: December 9, 2004
CONTENTS: 1. Memorandum from Michael E. Fife dated November 4, 2004.
2. Draft Minutes of the November 16, 2004, Marketing Committee
Meeting.
3. Memo dated November 22, 2004, relaying comments from
Melinda Byrd of The Gardens
SUBMITTED BY: Sheila R. Gilligan, Assistant City Manager for Community Services
Recommendation: By Minute Motion, concur with the recommendation of the Marketing
Committee to approve the expansion of the Palm Springs Desert Resorts Convention and
Visitors Authority (CVA) boundaries to include the Morongo Hotel, Morongo Casino,
Hadley's, and the Factory Outlets.
Discussion: Since the Desert Hills Premium Factory Outlets opened, it has vigorously
pursued a membership in the Palm Springs Desert Resorts Convention and Visitors
Authority (CVA), but the opposition from Palm Desert and Palm Springs kept it from being
approved.
Expansion Of the Palm Springs Desert Resorts Convention And Visitors Authority
Boundaries To Include The Morongo Hotel, Morongo Casino, Hadley's And The Factory
Outlets
December 9, 2004
Since that time, however, the Morongo Hotel and Casino has been opened and the Outlets
has doubled in size. Supervisor Wilson asked that the CVA consider expanding the
boundaries to include the Cabazon area in that the County is working on an agreement that
would provide for the Morongo Hotel and Casino to pay an in lieu fee of 1.4% of its gross
room revenues (same as TOT) which will go to the CVA. It is estimated that this amount
would be $100,000.
The hotel would also pay a $3,500 membership fee to the CVA as does Fantasy Springs
Casino, Spotlight 29 Casino, and the Palm Springs Spa Casino. The CVA states that
quantifiable goals to consider in this issue include:
1. Generate new membership revenue for the CVA (specific numbers to be developed
but at least $125,000 annually);
2. Develop new visitors to the Palm Springs Desert Resorts from the Factory Outlets
group tourism market (specific numbers to be developed);
3. Gain additional exposure for Palm Springs Desert Resorts at the Factory Outlets to
encourage shoppers to visit the Palm Springs Desert Resorts;
4. Distribute Palm Springs Desert Resorts, information and brochures at the Factory
Outlets to encourage shoppers to visit the Coachella Valley.
In addition, the Palm Springs Desert Resorts would be included in the major advertising and
promotional programs by the Factory Outlets and Morongo Hotel and Casino. These are
more difficult to quantify but would be an important benefit to the Palm Springs Desert
Resorts.
Under this proposal, the Factory Outlet stores would be eligible for membership in the CVA,
and it is estimated this could amount to $50,000.
Initially, staff was reluctant to consider this proposal. Kristy Kneiding and Assistant City
Manager Sheila Gilligan met with Mike Fife to review the pros and cons. Our concerns
included:
2
Expansion Of the Palm Springs Desert Resorts Convention And Visitors Authority
Boundaries To Include The Morongo Hotel, Morongo Casino, Hadley's And The Factory
Outlets
December 9, 2004
Would boundary expansion create a seat on the CVA Board? The answer is no.
The expanded boundary would remain under the representation of the County seat
on the Board of Directors which is currently filled by Tom Freeman.
Would the CVA be expected to provide significant promotional efforts on behalf of the
entities included in the boundary expansion? The answer to this is also no. This new
area will be included in existing CVA collateral material and the Casino and Factory
Outlets will now tout themselves as a partner with the Palm Springs Desert Resorts
Convention and Visitors Authority.
On November 16, 2004, staff took the proposal to the City's Marketing Committee (a section
of the draft Minutes is attached). This Committee has representatives from Westfield
Shoppingtown Palm Desert, The Gardens, Marriott, and the McCallum. These
representatives were very enthusiastic about the idea, especially in light of the fact that
hotels in the valley are currently bussing people to the Outlets. Mayor Spiegel, liaison to the
Committee, expressed concern that the majors at the Shoppingtown and The Gardens
might be concerned about the competition and asked that the representatives of these two
entities go back and investigate how they might feel. Both Norine Bowen (Westfield) and
Melinda Byrd (The Gardens) have since responded that their inquiries were met with
positive support and enthusiasm.
The CVAG TAC Committee ,received a presentation from Mike Fife as well. City Manager
Carlos Ortega brought the subject back for review in an internal meeting which included
Councilmember Benson, Ruth Ann Moore for Business Support, City Manager Carlos
Ortega, Assistant City Manager Sheila Gilligan for Marketing, and Mike Fife and Gary
Scherwyn of the CVA. Ms. Moore was very supportive of the program in that she felt
including them in the CVA had merit, especially since the proposal provides for cross
promoting and the potential for bringing the highly desirable Asian Market (currently visiting
and shopping in Cabazon) to the Coachella Valley.
While this issue has not been presented to the El Paseo Business District, Ms. Moore
believes that the Marketing Committee's representation of El Paseo (Michael Shimer of
Tommy Bahama's and Melinda Byrd of The Gardens) was a positive indicator of how that
Board would react. In addition, she noted that Churchill Management, which represents a
good percentage of El Paseo merchants, had been approached, and it was in favor of the
proposal.
3
Expansion Of the Palm Springs Desert Resorts Convention And Visitors Authority
Boundaries To Include The Morongo Hotel, Morongo Casino, Hadley's And The Factory
Outlets
December 9, 2004
Mike Fife will be present at the City Council meeting to respond to questions the City
Council may have. Since boundary expansions do not require official approval from the
member cities, staff is recommending that the Council take action to support the proposal.
jr i ed By:
HEILA R. GILLIG
Assistant City Manager
Approval:
f/r"
CARLOS L. TEGA
City Manager
unity Services
C
PAU GIBSON
Finance Director
GICOCAWamn RessoVlgenda 8ems%CVA Membership Bowrdabes Wd 4
MEMORANDUM
TO: PALM DESERT MARKETING GROUP
FROM: MICHAEL E. FIFE, Presiders
DATE: NOVEMBER 4, 2004
SUBJECT: CVA MEMBERSHIP BOUNDARIES
In considering the expansion of the CVA membership boundaries, it would be appropriate to establish
quantifiable goals so that the member cities and JPA Executive Committee representatives could more easily gauge
the positive impact of expanding the CVA Membership Boundary to include Cabazon.
By expanding the boundary, Morongo Hotel, Morongo Casino, Hadley's and the Factory Outlets would all be
entitled to become CVA Members. There maybe other businesses in that immediate area that choose to join the
CVA, but those are the businesses that have indicated the most interest in joining the CVA.
Some quantifiable goals to consider include:
■ Generate new membership revenue for the CVA (Specific numbers to bd developed but at least $125,000
annually)
■ Develop new visitors to the Palm Springs Desert Resorts from the Factory Outlets group tourism market.
(Specific numbers to be developed)
■ Gain additional exposure for Palm Springs Desert Resorts at the Factory Outlets to encourage shoppers
to visit the Palm Springs Desert Resorts.
■ Distribute Palm Springs Desert Resorts information and brochures at the Factory Outlets to encourage
shoppers to visit the Coachella Valley.
In addition, the Palm Springs Desert Resorts would be included in the major advertising and promotional
programs by the Factory Outlets and Morongo Hotel and Casino. These are more difficult to quantify but would
be an important benefit to the Palm Springs Desert Resorts.
There are other goals and other ways to approach this opportunity to develop new Partnerships and new revenue
for promotional/marketing programs. The CVA is open to any suggestions you have to insure the success of this
new relationship.
MEF/tm
Serving the Desert Resort Communities of Riverside County
Cathedral City - Desert Hot Springs • Indian Wells • Indio • La Quinta a Palm Desert . Palm Springs s Rancho Mirage
_.......... ............................ ........ .......... ._........ .................................. .............._....._........................................................................................... .. _.. .................
70-100 Highway 111 • Rancho Mirage, CA 92270 • TF: 800-967-3767 • T: 760-770-9000 a F: 760- 7 70 -9001 • palrrispringsusa.com
Washington, OC Sales Office e 515 King Street, Suite 315 • Alexandria, VA 22314 • T: 703-549-8026 s F 703-519-7579
_.. ....... ........ .._................. .... .... _........................ ... ........ .................. ........._.................. ........ ... --..........._............................................. ...... .._.......................
C. PRESENTATION BY GARY SHERWIN REGARDING THE
EXPANSION OF THE CVA BOUNDARIES TO THE CABAZON
OUTLET STORES. (Added item by unanimous vote.)
Councilmember Benson gave the history of this proposal. The
owners of the Morongo Hotel approached the CVA regarding their
inclusion in the CVA's marketing material. The addition of the
Morongo Hotel would contribute quite a bit of money to the CVA.
Ms. Benson said there are additional details to be worked out with
the tribes. She felt the shops at Cabazon need to be contributors
as well if they are to be included in the expansion. She added that
there was discussion about the expansion agreement being a 3-
year trial agreement.
Gary Sherwin said they have had dialogue with the Outlet Stores in
the past and the Joint Powers Association chose not to collaborate
at that time. He said the most valuable part of this current proposal
is the 1.4% of gross hotel sales being voluntarily contributed by the
Morongo Tribes to become members of the CVA. The rough
estimate is about $100,000 a year to the CVA from the Morongo
Hotel and $30,000 a year from the Outlet Stores. The Marriott is in
support of the proposal for expansion. The JPA approved to
pursue this proposal. The CVA has been carefully considering this
because they understand the concern about whether or not to
extend the boundaries. On the other hand, the CVA sees an
opportunity to this expansion.
Chairman Rodriguez said the contribution of $130,000 is small
compared to the CVA's overall budget so it would easy to design
the agreement with a 3-year escape clause. He agreed that the
Cabazon market is a day market. There would have to be other
opportunities for this expansion to really be beneficial to the
Coachella Valley.
Norine Bowen offered to meet with Mr. Sherwin to discuss the
Desert Hills Premium Outlets. Simon, the largest shopping center
developer in the United States, purchased the Desert Hills Premium
Outlet. They do about $2 million in volume on a yearly basis. The
Cabazon Outlet is separate from the Desert Hills Premium Outlet.
She added that she saw the expansion as a compliment to
Westfield and The Gardens
Ms. Byrd was torn on the issue. She said there is traffic going to
Cabazon from the Coachella Valley but she didn't believe the
reverse was happening. She would be comfortable supporting the
expansion with the inclusion of a 3-year escape clause.
�. r
Mayor Spiegel suggested that Ms. Bowen speak with the
merchants at The Westfield Mall, and that Ms. Byrd speak with the
merchants at The Gardens to seek their comments on the
expansion proposal. He wanted to know if there would be concerns
among these merchants.
Ms. Gilligan asked that Ms. Byrd and Ms. Bowen get the above -
referenced information back to her before the City Council meeting
of December 9t"
Ms. Kneiding asked how many additional marketing dollars would
be going out of the budget to reach that customer. Mr. Sherwin
said it would simply be expanding the current marketing effort. The
maps would be changed; a few pages would be added to the Visitor
Guide. He said it would be a negligible expense.
Chairman Rodriguez stated that there was a consensus from the
committee members to support the expansion of the CVA
boundaries with the inclusion of a 3-year clause period and that the
information from The Gardens and Westfield Mall merchants be
supportive of this proposal.
CITY OF PALM DESERT
DEPARTMENT OF COMMUNITY SERVICES
INTEROFFICE MEMORANDUM
To: Sheila Gilligan
From: Lori Wimbish
Date: November 22, 2004
Subject: Telephone conversation with Melinda Byrd
Melinda Byrd called Friday, November 19t" at 4:15 p.m. Her message was as follows:
She made an attempt to speak with the store managers at The Gardens regarding the
proposed expansion of the CVA boundaries. There were two scenarios: 1) the manager
was not in the store, or 2) the manager was in the store but did not feel that he/she could
respond without speaking with corporate.
Melinda believes that many of them do not know who the CVA is or what they do. She
added that the bottom line of her research was that they simply didn't care one way or the
other.
MEMO 70 SHEILA