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HomeMy WebLinkAboutC32900 - JW Marriott DS - Robbins Research Intl CITY OF PALM DESERT CITY MANAGER'S OFFICE STAFF REPORT REQUEST: CONSIDERATION OF FINANCIAL ASSISTANCE FOR THE JW MARRIOTT DESERT SPRINGS PALM DESERT TO HOST THE ROBBINS RESEARCH INTERNATIONAL PROGRAM GONFERENCE IN DECEMBER 2013 SUBMITTED BY: John M. Wohlmuth, City Manager DATE: June 13, 2013 CONTENTS: 1) Draft Agreement (Contract No. C 32900 ) 2) Letter from Marriott Desert Springs dated May 6, 2013 Recommendation By Minute Motion: 1) Approve an agreement with the JW Marriott Desert Springs Palm Desert (Contract No. C329oo ) to assist with the travel expenses for Mr. Tony Robbins and associates to and from Orlando, Florida, and Palm Desert, California, in the amount of $20,000 (one-third of the $60,000 expense); 2) Appropriate $20,000 from unobligated general fund reserves to the Outside Agency Contributions Account (110-4800-454-3880) for FY 2013/2014 Budget. Back�round The Robbins Research International Program held its conference at the Marriott Desert Springs Resort & Spa last year. The Marriott desires to book this conference again in December 2013. The Robbins Research International booking represents 5,100 room nights at the Marriott, or approximately $82,000 in transient occupancy tax (TOT) to Palm Desert. Robbins Research International, in order to sign a contract with the Marriott, has requested assistance for travel to and from Orlando, Florida, for Mr. Tony Robbins and his associates. The cost of the private plane is estimated to be $60,000. In analyzing the City's loss of TOT if the Robbins Research International Program was not held in Palm Desert at the Marriott, one could not assume it would be $82,000. Contract No C32900 Staff Report Financial Assistance for JW Marriott Desert Springs for Robbins Research �nternational Program Conference in December 2013 Page 2 June 13, 2013 Some number of room nights at the Marriott would still be sold, and TOT would still be collected. The City estimated the difference by comparing last year's December TOT (2012)with the prior year(2011) and estimates a loss of $31,000 - $32,000. Therefore, staff is recommending approval of the City's share of the $60,000 travel expenses at $20,000 and has drafted an agreement between the Marriott and the City that reflects this amount. Fiscal Analvsis The JW Marriot Desert Springs has indicated approximately $82,000 in City of Palm Desert TOT revenues was generated from the Robbins Research International Program Conference held at its facility in 2012. The City of Palm Desert has agreed to help keep this event for one more year and to contribute $20,000 toward the $60,000 estimated travel costs. If approved by the City Council, an appropriation of $20,000 would be required in the FY 2013/2014 Budget to cover this cost. Submitted By: CITY COUNCILACTION ,✓ APPROVED DENTED RECEIVED OTHER MEETI G�'�fE T ` � � �� AYES: - o n M. Wohlmuth, City Manager NOES: ABSENT: ABSTAIN: Reviewed: VERIFIED BY: �riginal on File wit6 Ci erk's Oftice Paul S. Gibson, Director of Finance Contract No C32900 AGREEMENT TO PROVIDE A FINANCIAL CONTRIBUTION TO THE JW MARRIOTT DESERT SPRINGS FOR THE PURPOSE OF SECURING THE ROBBINS RESEARCH INTERNATIONAL PROGRAM CONFERENCE This Agreement is entered into between the City of Palm Desert (CITY) and JW Marriott Desert Springs Palm Desert, (MARRIOTT), on this day of , 2013, for the purpose of partnering in the financial sponsorship of the Robbins Research International Program Conference. 1. Background: MARRIOTT requested CITY financial participation in the acquisition of the Robbins Research International Program, which represents large corporate business reservations generating 5,100 room nights or $82,000 in Transient Occupancy Tax to the City of Palm Desert. This event expects to nearly book the MARRIOTT for a week-long conference in the month of December 2013. The ultimate goal is to increase and restore corporate business travel to Palm Desert and potentially provide substantial business to Palm Desert business and City revenue through sales tax. 2. Description: The CITY is to contribute $20,000 toward the budget needed to transport and host said group in Palm Desert. The CITY's funds shall represent one- third of the budget and are to be utilized for air transportation of Mr. Robbins and associates to and from Orlando, Florida, and Palm Desert for a stay at the MARRIOTT property. It is agreed that the MARRIOTT will be responsible for the remaining agreed- upon travel costs. 3. Compliance. The MARRIOTT shall comply with this agreement and the specifications set forth. MARRIOTT shall also comply with all laws, statutes, ordinances, rules, regulations, permits, licenses, authorizations, directives of all governments and governmental authorities, which now or hereafter may be applicable to the services provided under this agreement. 4. Termination Rights. The CITY shall have the right to terminate this Agreement, without any compensation to MARRIOTT, if said terms and/or conditions of this Agreement are not met, including; a) Said event does not occur, or b) MARRIOTT fails to contribute its share of the travel costs as outlined. Contract No. C32900 IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed by their duly authorized officials, this Agreement which shall be deemed an original on the date first above written. CITY OF PALM DESERT JW MARRIOTT DESERT SPRINGS gy; By: John M. Wohlmuth, City Manager Ralph Scatena, General Manager Attest: Attest: Rachelle D. Klassen, City Clerk Signature Approved as to form: David J. Erwin, City Attorney � , � . JW MARRIOTT DESERT SPRINGS PALM DESERT May 6, 2013 � � � �� n� Mr. John M. Wohlmuth, City Manager ss+ =��o City of Palm Desert N omn 73-510 Fred Waring Drive — n�^� Palm Desert, CA 92260-2578 = v v�rn -�, _ op Dear John: � �" — a� N � Thank you for allowing me the opportunity to discuss the Robbins Research International Program � with you. This is an annual event that is held in December and features Tony Robbins as the speaker. Last year, the program generated more than 5,100 room nights with an occupancy tax value to the City of Palm Desert of+$82,000. Unfortunately, Robbins Research has notified us of their intent to cancel the December 2013 program and relocate it to the Orlando, Florida, region. This change of venue is due to Anthony Robbins mov- ing his personal residence from the Coachella Valley to Orlando and the need for a larger venue. The contract with Robbins Research allows him to cancel within the year with no penalty up until May 31, 2013. I have been in contact with the Robbins Research CEO and have worked diligently to try to maintain this important business for 2013. It will require significant concessions to make it worth- while for them to stay in Palm Desert for 2013. These concessions will cost the resort approximately $200K to deliver. In addition to my concessions, Robbins Research is requesting reimbursement of up to $60,000 for a private aircraft to transport Anthony Robbins to and from Florida. I have included the proposed addendum I negotiated that spells out the specific concessions, and that have been verbally agreed upon, to maintain the business for 2013. If this business cancels, we would not be able to replace it and, therefore, we would have a significant revenue shortfall in 2013. Given the material impact of keeping this business for 2013, the resort is requesting any help you can provide with funding of the requested concessions. If we are unsuccessful in keeping this business for Decemher, the City of Palm Desert will also feel the impact with a potential reduction in occupancy tax of$80K. The city's help with these concessions would help us maintain this critical event and revenue source for both the resort and the city. Thank you for your time and interest in the success of the JW Marriott Desert Springs Resort & Spa. We are excited about our continued partnership and driving additional business that contributes to the success of the resort and the City of Palm Desert. Sincerel , Ralph catena Gener 1 Manager JW MarriotY Desert Springs Resort&Spa desertspringsresort.com 74855 Country Club Drive,Palm Desert,California gzz6o USA Tel 76o.3yi.zzii Fax 76o.34i.i87z . � ' � JW MARRIOTT DESERT SPRINGS RESORT&SPA ADDENDUM TO GROUP SALES AGREEMENT BETWEEN Robbins Research International AND JW Marriott Desert Springs Resort&Spa Revised April 9, 2013 This Addendum amends the original Group Sales Agreement signed on December30,2011by and betweenRobbins Research International(hereafter referred to as"Group")and JW Marriott Desert Sprinqs Resort&Spa(hereafter referred to as "Resort").Only the items defined below are modified from the original agreement,all other terms of the original agreement remain binding and in effect. COMMISSION: Resort will increase the percentage of commission paid, per revenue generating group guest room, from 10%to 30%of the room rate; with a minimum dollar value of$180,000 based on group actualizing at least 3,500 paid room nights. All other terms and conditions regarding commission payment as defined in the original executed contract will remain in effect. CONCESSIONS: 1. Resort will contribute up to and not exceeding$60,000 for a Private Aircraft to transport Tony Robbins and guests to/from Palm Beach, Florida for the 2013 Date with Destiny program at Resort. Group and Resort will collaboratively work together to find the most economical contracting for this service,with Robbins Research approving the selected vendor. Group is responsible for contracting and coordinating the travel manifest for Tony Robbins; and will submit an invoice from the Charter service to Resort for payment. Group on behalf of itself,Tony Robbins, and other guests that will fly in the Private Aircraft, hereby covenants not to bring any suit, claim or make any demand against the hotel, management company of the hotel,or owner of the hotel that is related to or in connection with the Private Aircraft(other than for the up to$60,000 contribution set forth above). Group is responsible for ensuring that the Private Aircraft is safe and suitable for the Group's travel needs and Hotel does not make any representations regarding the Private Aircraft. 2. Resort will make all reasonable efforts to cool the meeting space to an acceptable temperature range of the Group. The Resorts Chief Engineer and/or designated leadership will personally be at the resort each morning of the program,at least two hours prior to the start of each day's program,to ensure the Resort is making all reasonable efforts to maintain the desired temperature range in the ballroom space. ROOMS CANCELLATION From signature date of this addendum to arrival date,should Robbins Research International cancel this program for any reason,the Group would owe 100%of Total Room Revenue as liquidated damages to the Resort.The two paragraphs under Room Cancellation in the original agreement that start with the phrase "Should Robbins Research cancel . . ." are hereby deleted and of no continuing force and effect. Marriott Confidential and Proprietary Information LaCross, Mary Subject: FW: agenda From: TERRYPROD©aol.com [mailto:TERRYPRODC aol.corn Sent: Sunday, June 09, 2013 11:00 PM To: InformationMail Subject: agenda Hi Jan, Why are we considering giving 20,000 from general fund to Tony Robbins to come to Marriott? He is so rich to begin with and then we want to charge special assessments on taxpayers like Indian Ridge and University.Taxpayers would not be happy with this and I see a lot of money going to advertising ....why are we sinking money when we haven't reached an agreement as a community in what would bring more people here. Terry Klassen, Rachelle Subject: FW: Contact Us Submission Original Message From: info(aci.palm-desert.ca.us [mailto:infoOci.palm-desert.ca.us] Sent: Thursday, June 13, 2013 11:18 AM To: InformationMail Subject: Contact Us Submission Submission information Submitter DB ID : 2231 Submitter's language : Default language IP address : 67.49.237.119 Time to take the survey : 6 min. , 26 sec. Submission recorded on : 6/13/2013 11:18:02 AM Survey answers Your Contact Information First name: * Joan Last name: * Beasley E-mail Address: * ernbeaslev(aaol.com Address line 1 45875 Hwy 74 Address line 2 Not answered City Palm Desert State CA Zip code: * 92260 Phone number 760-568-4364 I Am a: Palm Desert Business Owner [] Palm Desert Resident [x] Comments: Since the N America Marriott Corporation published their first quarter 2013 financial statement showing a 25% increase in profit over 2012 and since their projection for the remainder of the year is the same, there is no reason the taxpayers of Palm Desert should underwrite their functions. While the city may gain some bed tax, the hotel earns many times that so if they want to profit let them invest. 1