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HomeMy WebLinkAboutPA4 - Minutes - 06/15/097 PALM DESERT REDEVELOPMENT AGENCY CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES JUNE 15, 2009 CALL TO ORDER Chairman Fred Benford called a regular meeting to order on Monday, June 15, 2009, at 3:00 p.m. ROLL CALL Members Present: Members Absent: Charles Ash Javier Lopez Fred Benford Susan McMillen Russ Campbell Jane Daugherty Robert Duncan Roberta Grubb , 1 Kelly Litecky F�-PCa BY RDA 6—C' Douglas Luhring ON q _ 04_ 09 Also Present: VERIFIED BY �9-Jk- Martin Alvarez, Redevelopment Manager Lauri Aylaian, Director of Planning Original on file with City Cler 's Office Randy Case, Palm Desert Country Club Phyllis Harkins, Palm Desert Country Club Association Maria Hunt, Recording Secretary Justin McCarthy, ACM for Redevelopment Hart Ponder, Code Compliance Manager Arla Scott, Senior Financial Analyst Lt. Andrew Shouse, Palm Desert Police Department Dave Simmons, Palm Desert Country Club Robert Spiegel, Councilmember Catherine Walker, Senior Management Analyst John M. Wohlmuth, City Manager Dave Yrigoyen, Director of Redevelopment/Housing CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 Ill. ORAL COMMUNICATIONS Mayor Spiegel asked the Committee members to introduce themselves. Member Ash requested an update on the Sheriff Station located in the Palm Desert Country Club. Lt. Shouse stated that the City did contact the owner of the complex and were able to negotiate a new contract for an additional year lease at $1 per year. The Sheriff Substation will be open for at least another year. Member Ash noted that the rent had been $1 per year and later was increased to $60,000 per year. The City had decided to close the Substation because the new Sheriff Station would service the area. In the meantime, the owners contacted the City and offered them the $1 per year lease, so the City decided to keep the station until such time as the new facility is completed. IV. CONSENT CALENDAR APPROVAL OF MINUTES OF THE CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MEETING OF MARCH 16, 2009. With Committee concurrence, the Minutes of the April 20, 2009 meeting were approved with the following corrections: (1) Include Councilmember Richard Kelly to list of attendees; (2) Under Oral Communications change 300 feet to 15 feet. V. UNFINISHED BUSINESS None VI. NEW BUSINESS None VI1. CONTINUED BUSINESS None VIII. OLD BUSINESS None G.\rda\Mans Hunt\WPDATA\COMMITTEES\PA #4\Minutes\2009 Minutes\Minutes 061509.doc2 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 IX. INFORMATIONAL ITEMS A. STATUS ON PALM DESERT COUNTRY CLUB GOLF COURSE Justin McCarthy, Assistant City Manager for Redevelopment, reported that the PDCC LLC had tendered a proposal to the City whereby the City would acquire 10,000 rounds of golf per year for the sum of approximately $200,000 or $20 per round. We have looked at that and found that it is based on a number of assumptions that cannot be validated. Staff's direction to date is that we are not prepared to contemplate that participation. I think it would be helpful to put a couple of things into perspective. The $200,000 per year is not fully adequate to solve the challenges that are out at Palm Desert Country Club at this time. The proposal requires approximately another $450,000 in revenues to meet the objectives of the proposal. Of those, $250,000 is contemplated to be revenues derived from the sale of the 10,000 rounds, plus another $250,000 per year in ancillary revenues. So that means you have approximately a $650,000 a year challenge to right -size the asset within the parameters proposed by the developer. I can't speak to whether it is accurate or whether it would be appropriate. I just want to put that on the table so that everybody understands that we are not just talking about $200,000 per year. We estimate approximately 1,650 different lots in PDCC. If you assume $200,000 per year, that is about $10 a month per lot. If you reduce that by approximately the 850 homes that surround the golf course, then you get to about $20 a month to support the $200,000. So, there are a variety of options. One would be for the homeowners to look at could they possibly be a part of the solution out there. Another option is to look at an assessment district, and at this time, we are trying to evaluate that to see if it is feasible. Member Grubb asked what the $650,000 was that he had mentioned. Mr. McCarthy replied that it is what we estimate the total revenues necessary for the assumptions within the proposal tendered by the developer. That comprises the $200,000 per year proposed as the purchase of the 10,000 rounds a year by the City; another $250,000 that is assumed to be generated by the sales of those discounted sales; and then another $200,000 of ancillary revenue. These are averages. One of the concerns that staff has in terms of reading and following a lot of the dialogue is that there may be this apprehension that only $200,000 a year solves the problem. I felt it was important to put that on the table so people understand the kind of dilemma that the City is confronted with. G\rda\Maria Hunt\WPDATA\C0MMITTEES\PA#4\Minutes\2009 Minutes\Minutes 061509.doc3 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 Chairman Benford inquired about the number of homes in PDCC. Mr. McCarthy stated it depends on how you calculate it. We came up with 1,643 parcels, not including apartments, etc. It breaks down to about 1,540 single-family residences. You divide that into the $200,000 and you get a sense of the requirement, if indeed the owners of the residential properties participate at the proposed $200,000 a year. Chairman Benford stated that those who do not live on the golf course will be affected just as much as those who do live on the golf course. I personally think that if there is an assessment that the City includes everyone in the community because everybody would be affected value wise. Mr. McCarthy stated that this is one of the challenges that staff is confronted with when evaluating an assessment district concept. There is a direct correlation between the benefit that accrues to properties that abut the golf course, i.e. the view that they have. You have this very sizable greenbelt that backs up to your property, and it is a direct benefit. An appraiser could actually identify what the premium value of that benefit might be. It gives you a straightforward base on which you could allocate benefit and charge appropriately. When you get to the lots that are not on the course, under the laws and the structure of assessment districts, it becomes extremely tenuous. That is one of the challenges with the assessment district concept. Another complexity of this situation is that you have an HOA, but it does not necessarily represent all the property owners. Chairman Benford stated that the Council could definitely take into consideration the benefits of each. Mr. McCarthy explained that the City does not have the ability under the assessment district structure to arbitrarily allocate. The benefit has to be defined through an engineering process. It is easy to do with the lots that abut the course; but it is much more tenuous and difficult to arrive at what a benefit should be for those that do not. It would be a much smaller share of the benefit and, therefore, the cost would accrue to lots off the course. The question as to whether you can make a finding of benefit through the appropriate process, if indeed that is possible, has not been answered. Mayor Spiegel asked Mr. McCarthy to explain how an assessment district is set up. Mr. McCarthy explained that basically you identify a public benefit. An engineering firm is hired to do a study to identify how much that benefit accrues to each lot. A larger lot might have a bigger share based on how much view they have. This is not quite the same as evaluating the overhead undergrounding process. We know these are defined costs to the undergrounding, and the costs are usually spread by some kind of objective criteria in terms of lot size, etc. We are talking about something a bit more ambiguous such as what is the benefit of having a golf course right next to your house G:\rda\Maria Hunt\WPDATA\C0MMITTEES\PA#4\Minutes\2009 MinutesUnutes 061509.doc4 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 or a block away. We would have to go through a process to identify that benefit. From staff's perspective, I understand, having talked to the HOA Manager, that there are challenges under the HOA approach that are not even conceivable in theory that it could arrive at this with a much less onerous process than the City could through an assessment district. Chairman Benford stated that this onerous process will take an immense amount of time; Mr. McCarthy agreed. Chairman Benford added that the golf course could be closed before an assessment is approved by the City. Mr. McCarthy stated that we are not sure yet whether the golf course will be closed. It may wind up going through some sort of receivership process where at least a minimal operating level could be achieved. Staff is talking to legal advisors to determine what the City can do to at least mitigate this process. One of those things might be that we intervene with the courts and request that some minimal level of maintenance be maintained, at least to prevent the course from going fallow and become a blighted condition that existed prior to the redevelopment of the course. Member Ash asked how much money the City of Palm Desert receives from the State for redevelopment. Mr. McCarthy replied he did not know off hand. He asked if they were just talking about Project Area No. 4, or throughout the City. Member Ash stated that he was not talking about the City. Member Ash asked if it was at Mr. McCarthy's discretion on how the redevelopment money is spent. Mr. McCarthy stated that they should take the word "discretion" out of that dialogue. He stated that the Palm Desert Redevelopment Agency currently gets approximately $80-$90 million per year in gross revenue. A very sizable portion of that is passed through to the County and other taxing agencies, substantially reducing that number. Then you have debt service on the bonding commitments, which is another substantial number that it is reduced. Plus, most of the redevelopment money has to be spent in the specific project area from whence it is derived. Therefore, how much the Agency gets relative to this issue is not relevant; Member Ash disagreed. Mr. McCarthy stated that it would be a fair discussion to say how much does Project Area No. 4 get. Now if you are asking are there adequate funds in Project Area No. 4 to try to respond to this proposal, the answer is "Yes". That is a policy decision on the part of the Council. There are a variety of alternatives that seem to be more appropriate than tapping into public dollars. Member Ash stated that one of his primary objections was when Councilmember Finerty made the comment that was printed in the paper that said she is more concerned about Desert Willow than anything else in town. I know that it is a public course owned by the G:\rda\Maria Hunt\WPDATA\COMMITTEES\PA #4\Minutes\2009 Minutes\Minutes 061509.doc5 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 City, but to make a comment like that says basically forget about everybody else. He told Mr. McCarthy that he was not putting him down or sticking up for the management because he had been misled on this $200,000. My point is that I think that the golf course is going to go under before any kind of assessment district is in place or approved. We need to look to see if there is a way it could be helped. Mr. McCarthy stated that there is one entity in this entire discussion that no one has been willing to take into consideration, and that is the lender, who has substantial debt on the property. Is the Lender just going to sit idly by and let the value of securing its debt completely wither on the vine? That question has not been answered yet. Chairman Benford asked if he was indicating that they might repossess. Mr. McCarthy replied that all lenders have an ability to foreclose on a property. If you foreclose on a property, especially if it is a revenue bearing asset, you do not want it to go to zero revenue so that all its value gets destroyed, and the security for your loan and your ability to recover at a higher percentage is destroyed in the process. We need to understand that there is another player beyond the City, the developer, and the community. Where does the lender stand in all this? None of us know. Chairman Benford asked Randy Case to present his comments. Mr. Case reported that many questions have been raised and people want answers. The street markings and signage for the golf cart path crossings have finally been completed. The Executive Course was closed on June 1 and will not be watered or mowed for the summer for the over -seeding process. It is a financial issue for us because we are losing money maintaining the course. Chairman Benford asked if he was the majority of the financial ownership of the company. Mr. Case replied that there are three owners. The ownership used to be Dahoon Investment Corporation. In 2006, it was transferred to PDCC Development LLC, who is the owner of the golf course and property. He explained that he owns 15%, Larry Kosmont 15%, and Dahoon 70%. He stated that Mr. McCarthy had done a great job, and they were privileged to be working with the City and the Committee. Unfortunately, we are at a crossroads. There are 130+ courses out here and this is one of three or four that gets no money from homes that front the golf course. We got into this development knowing that. Member Ash asked Mr. Case how much PDCC received from D.R. Horton on the sale of the lots. Mr. Case replied that 95 lots were entitled with the City's help, and 92 were sold for about $14.5 million. In 2003-2004, the golf course was closed to operations but not for maintenance. It costs about $2 million to maintain a golf course. G:\rda\Maria HuntMPDATA\COMMITTEES\PA #4\Minutes\2009 Minutes\Minutes 061509.doc6 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 When it is closed, it takes about $1.5 million to maintain. It cost $1.5 million ongoing for three years for maintenance during the renovation, plus $13 million for the renovation. That has put us where we are today. There is no hidden agenda. Because of our overruns, for which we take responsibility, higher gas prices, and the economy, we have $1.5 million behind us that we have to take care of. We are $17.5 million into it, which is $4 million less than what we have. It is not like we took the money and ran; we put it all back into the golf course and maintained it to the level that was necessary to get it open in 2006. Member Ash asked if PDCC Development, LLC would be willing to open their books to the City prior to any consideration that they might have. Mr. Case replied absolutely, we gave their consultant all the numbers in January/February. There is no tape running on the side for me, my partners, or anyone else. It costs what it costs to operate a golf course. Unfortunately, the market is different today than it was three years ago. It is about trying to preserve what we created out there, and for which we received an award in 2007, and not having to go back to what it was before. As far as the $200,000 per year, the things in the paper, media, and what Mr. McCarthy talked about, this was a cooperative discussion among City staff, me, and the ownership of Palm Desert. Is $200,000 a year going to make it for us? No, it is not. What it was going to enable us to do was to go back to Wilshire State Bank, the major lender who has the First Trust Deed in the amount of $6.8 million. We have met with the bank several times, and have another meeting set up in ten days to capitalize that cash flow stream. We thought it was a good idea for citizens to get a discount at Desert Willow, and why not give them another opportunity. We have the capacity in the high season. The City asked us all those questions, and we gave them all those answers. It does sound like a bailout, but it is not. We would be helping 65,000 Palm Desert residents enjoy play at $25 at Palm Desert Country Club. People need another option. Courses like ours are either city -owned courses or they have backup from the homeowners. Unfortunately, we were formed in 1962 and they didn't think about it then. Now, it is impossible. Question was raised as to who gets the homeowners' fees that are paid annually. Mr. Case replied that the HOA gets the fees, the golf course gets nothing. All the golf courses in Project Area No. 4 receive money monthly. I am not advocating an assessment. We are looking for possible solutions, and one of them is the City's assistance. It was the City staff who came up with the idea of the City buying rounds in a discussion we had with them. We explored the idea, and decided we could do that. Now, it sounds as though we are threatening Desert Willow. The economy is tough. In the long-term prosperity of our G:\rda\Mada Hunt\WPDATA\COMMITTEES\PA #4\Minutes\2009 Minutes\Minutes 061509.doo7 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 course, it needs either an assessment or it needs some assistance. Let's at least observe it, recognize it, and find a way to fix it. We fixed the course, and it is one of the best in the entire area. We don't want to lose that. Chairman Benford asked if an assessment is approved, does it have to be voted upon by the area residents. Member Ash stated that if it's the same format as the undergrounding, it would take 70% of the vote to even put it out for vote. Then, it would take 51 % of the homeowners to approve the assessment district. Mayor Spiegel added that some people would have more of a vote than others based on the size of the house and its location. Mr. Case addressed a couple of items that Mr. McCarthy had mentioned. We are working extensively with the lender, Wilshire State Bank, and they have been very patient with us. A couple of meetings have been scheduled with their executives next week to try to figure out how they can play a significant role. We went to them first. The other item is the discussion about the $650,000. We opened in 2006, and we knew that the first year would be a loser. It was about a $1 million loser; second year was about $600,000; and this year it is about $350,000. We are working toward a profitable venture. We do not need $650,000 to make this thing work. The $200,000 doesn't do it, because I have to get rid of $1.5 million that was one of the leases I'm carrying. We're optimistic that by next year we will be cash flow neutral. We are right on the numbers for this year, not $650,000. We will be happy to share all those and more if that is what is needed. We have been working for two full years towards profitability, but have been hit by double digit unemployment, high gas prices, and no economy. We have had a productive first half of the year. We will have the water and electricity tomorrow, but the day after that I don't know. Member Grubb stated that each time Mr. Case came to a meeting he told us wonderful things about what's going on with the golf course. The one thing that is missing is that we should see some sort of financial statement. You think that it takes just $200,000 to get you out of trouble; then someone else says it would not be $200,000 but $650,000. Then if you wanted to assess those that abut the golf course, it would be about $62 a month for 12 months and that would bring in $650,000 based on 850 homes. Mr. Case replied that they could provide simple numbers such as revenue and expenses. There is nothing proprietary, nothing hidden, and no agenda. Our only agenda is 5,000 people. Most people have asked us, why not just walk away? We have a reputation here and in Southern California. We are proud of what we built. I may never recoup a dime of the Girda\Maria HuntUPDATA\COMMITTEES\PA #4\Minutes\2009 Minutes\Minutes 061509.doc8 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 money that I put in, and I am not walking away from this and neither is Larry Kosmont. Chairman Benford announced that there were some questions from the audience. He asked that they limit their comments to three minutes and to not repeat what somebody has already commented on. Dennis Davis, 77-330 Colorado St., Palm Desert, noted that Mr. Case had mentioned that Horton had paid $14 million for the land, and another $6.8 million was borrowed from the bank. So you are really talking about $22 million, and going through all that in three years. Mr. Case replied that when they started the project, he had stood in front of the Council in 2004 and advised them that the budget would be about $9 million, which included the $6.8 million plus the lots. He added that they got sued, and other things had happened. Instead of $9.1 million, it ended up costing about $13 million to build it. In addition to that, operating it negatively daily for 5 years has gotten us to where we are. We spent about $22 million. Mr. Davis stated that we've heard the term "bailout", and thought it was unwise to look at it as a bailout situation. We are concerned about the homes and the values of 5,000 property taxpayers. The reason that the picture of the rounds wasn't considered by one of the Council members is because they felt it would be in direct competition to Desert Willow. Actually, I think it would be an adjunct to the golfing experience in Palm Desert to have this kind of facility available because there are many times during season and after season that you can't get a tee time at Desert Willow. Some of this traffic could be routed. The experiences are not exactly the same because Desert Willow is a more difficult course and more upscale situation, but our course and facility are nice. I think it might be an adjunct to the City of Palm Desert to have that available to them as opposed to not have anything available to them. Chairman Benford asked Fred Simmons if he still wanted to comment on reviewing the PDCC books, to which Mr. Simmons replied that enough had been said. Jim Reithoffer, 43-360 Illinois Ave., stated he was a PDCC homeowner with a home on the golf course. There are three people who are seriously impacted by this whole situation. The developers, to my mind's eye, have justified that they made an investment and things happened. I believe that their interests are sincere to preserve what they created, and I see the tremendous impact it has had on this neighborhood. It turned a "slum" into something that we have pride in. All of us were major benefactors from that and I think we are all very grateful, or should be, at least to the development. As such, we will be negatively impacted just like the old timers who saw when it G:\rda\Maria HuntMPDATA\COMMITTEES\PA #4\Minutes\2009 Minutes\Minutes 061509.doc9 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO.4 MINUTES June 15, 2009 happened. We stand to benefit, the club stands to benefit, and most definitely the City has a major investment in that they have put that substation at the mouth of our development for a reason. We have a very vulnerable and very tenuous position in that area with 50-year old homes ranging around 1,000 square feet, that is on the brink of being a sustainable reasonable neighborhood or being a slum. Since they have brought in their development, we have seen a huge influx of personal individuals with pride developing their homes, increasing the tax base for the City, and minimizing the crime issue. The City has a large investment in it. We, the benefactors, particularly those on the golf course, have a major investment and benefit that we should be grateful for. So I see three people who should get together and do some heavy lifting as a group to solve this problem. One is to protect the City and its integrity; and the other is the neighborhood influence and benefits that we all enjoy. I would hope that some committee or citizens' committee could get together to analyze this situation to see what everybody can do to make this a tenable situation. There is no reason why this neighborhood has to become what it once was, and which took 17 years to crawl out of. Don Colletta, President of the Men's Club of the Palm Desert Country Club, 43-790 Venice Drive, La Quinta. He stated he was speaking for the nine member board and also believed for the entire Men's Club membership. I have been a member of PDCC since 1989. 1 have seen many changes of ownership over the years and have experienced all degrees of turmoil. I will share a time in the early 90's when the course was unattended and overgrown. My neighbors and I had to sleep with loaded guns, as we feared for our lives with all the uninvited activity that was going on after dark on the course. Areas, as large as this Country Club if left to go seed, invite some undesirables and the danger that accompanies them. The City has spent a lot of money remodeling and revitalizing this area, and I cannot accept letting this Country Club go under without a fight. We must do something to keep this Country Club alive. Homeowners' property taxes have to be reassessed, hence lowering the tax revenue to the City in the event this club goes to seed. We are an ungated community and do not have homeowner's revenues supporting the golf course. I read a letter in the Desert Sun's Opinion section discussing a possible solution on Sunday. That solution would charge the homeowners an assessment protecting the club from this recurring problem. This strikes me as very viable. The article reads a modest yearly assessment is a reasonable way to maintain the community, as well as protecting the value of individual providence. The terms "bailout funds" or "welfare" are being used to discourage any type of short-term or long-term solutions. We have the perfect facility to handle the golfers of any age and a reasonable G:\rda\Maria Hunt\W PDATA\COMMITTEES\PA #4\Minutes\2009 Minutes\Minutes 061509.doc 10 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 fee. My final point is that the publicity this situation has generated will put the real estate activity around the course at a complete standstill, unless a solution is reached quickly. This problem affects many people, their homes, and their savings. We, the members, are willing to work with the Committee for a fast and reasonable solution. Lena Slayton, 77-275 California Drive, referred to Member Grubb's calculation. If she's right, and it only takes $62 from us, why would we not do it to save our golf course? I live on the golf course and I do not want to see it go bad. There is a lake out there, and I am scared to death that it may draw unwelcome activity. We should do whatever it takes to save the golf course. Member Grubb noted it was just her own math. Ms. Slayton stated she pays $300 to the HOA, and she has been disappointed with them because they don't take care of business. If they get $300 a year, why can't those of us who live on the golf course at least shell out $200? It is just a suggestion. Gary Houtz, 77-370 Minnesota Ave., stated he had a couple of quick observations. This all began because a previous owner let the property run down into a condition that was pretty much unplayable and sad. I am a little unnerved by the fact that the same owner owns 70% of the company that runs the golf course. Secondly, I own several properties at PDCC, all on the golf course, except one. I paid premium prices for the lots on the golf course. My property tax is based on the fact that I paid more for my house than the guy across the street that is not on the golf course. Lastly, I do not want the golf course to go down. If it is not able to be maintained by the current owners, perhaps there is a possibility of the City of Palm Desert becoming the owner, as has been mentioned in the media. Randy Talmage, P.O. Box 4842, Orange, CA, stated he and his wife were buying a house in the area, and were concerned about this special assessment going up the following year. Chairman Benford pointed out that Member Grubb's $62 could be a little on the high side. It could be much lower if it's spread beyond those that are on the golf course. Carol Benford, 42-880 Tennessee, Palm Desert, thanked Don Colletta for referring to the letter in the Desert Sun that she had written. I am sad that the word "bailout" continues to be used because that sends shivers down everybody's spine these days. I am sure the City is not happy about what has occurred here and having to deal with this circumstance. What follows is not going to be easy for them or for the residents. I really do feel that all of the residents need to step up and be part of the solution. With the number of homes in the Country Club, if there is an assessment, either through an assessment district or homeowners' organization, it would be a fairly small amount that G:\rda\Maria Hunt\WPDATA\COMMITTEES\PA #4\Minutes\2009 Minutes\Minutes 061509.doc1 1 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 everybody would have to pay. Some residents would say, and I have heard this, I don't five on the golf course, I don't play golf, and I don't even like golf. Everyone should care about the value of their property and the safety of their neighborhood. In gated communities, no one can say, well I don't use the pool and I don't play tennis, so therefore I don't have to pay my assessment. It doesn't work that way. Everybody has to maintain the integrity and the safety of their neighborhood and their community. What I would hope for from the City would be some wisdom, may be some flexibility and to help out with this problem. I definitely feel the residents have a responsibility here too. Ray Hofcos, 77-365 Missouri Dr., Palm Desert, stated he was a homeowner at Palm Desert Country Club. He came to California in 1950 while he was in U.S. Navy. I lived in the City of Torrance in 1957, which was the all American city. I was on the formation committee for the City of Carson when it was becoming a city. Also lived and worked in Hawthorne for 37 years. The reason I mention this, is because I have lived in Palm Desert for 20 years, and I think this is one of the most progressive cities that I have ever seen. The City does a number of things for the residents, such as music in the park, fireworks show, and parks and recreation. I want to remind you that Joe Mann Park was property donated by PDCC HOA to the City, where we now have a dog park and recreation facility. The greatest thing is the Set -to -Save Program, which if people haven't taken advantage of it they have lost something because it is a great program. Now we have two proposals. I really think this is not a bailout, but a purchase by the City to provide the residents with something nice. How many times can a person play a round of golf at a country club golf course for $25. 1 think it is a win -win situation because the City keeps their tax base, the revenue keeps up, doesn't devalue our homes, and the residents keep Palm Desert Country Club going. Jerry Archer, 77-185 Michigan Drive, Palm Desert, stated that this was the first time he had approached a group on this type of subject matter, and hoped that he did not offend anyone with his comments. I have lived in Palm Desert Country Club since 1988, and have owned a house on the golf course since 1990. 1 have seen a number of owners come and go, and nobody has taken care of this course like the current owners. I would be a shame to let it go. There has been a lot of talk of different avenues to support this endeavor to keep it going, which would be beneficial to both the City and those of us who live in the Country Club. G.\rda\Maria Hunt\WPDATA\COMMITTEES\PA #4\Minutes\2009 Minutes\Minutes 061509.doc1 2 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 I personally think that the Homeowners' Association needs to be disbanded. I am spending $300 a year for a facility that I don't use. I heard that there was a proposal originally presented by this development group to purchase that Association. They would replace it with some new facilities that would still provide more benefit to those of us that live in the club than supporting all the outside groups. Not only that, but we could take the revenues they have built up to purchase it and refund it to homeowners who have been paying into this and have not been using it for all these years. Then turn around and have that same assessment, which would probably be even less, charged to each of the homeowners. They would be given a social benefit in the club with more benefits, and it would resolve a lot of these financial issues. I would think that if that could happen that this assistance for buying these rounds of golf could probably be eliminated in two to three years. I really do support this group and what they are trying to do. I think our City ought to step up for the almost 2,000+ homeowners that live there. This would benefit all of us. Chairman Benford asked Mayor Spiegel to comment on the homeowners' association and what the City can or cannot do. Mayor Spiegel stated that the City cannot do anything about the homeowners' association. If you are talking about the PDCC, what it was when I came on the Council 14 years ago and what it is today, it's like day and night. What that golf course has done for the community is really dramatic. I am not saying the money was managed properly because I know nothing about that. It used to be part of Riverside County. There were no curbs, gutters and the streets were not maintained. We have put some moderate income housing in there that looks terrific, and have torn some things down and have built them up again. Joe Mann Park is a great little pocket park. Mayor Spiegel mentioned that a comment was made that Palm Desert Country Club is a threat to Desert Willow. It is no threat to Desert Willow, nor is Desert Willow a threat to Palm Desert Country Club. Palm Desert Country Club is not the only golf course in our City that is in trouble right now. If we were using that ugly word "bailout" to come up with some way to give money to PDCC, I know of five other course owners that would be in my office tomorrow asking, what are you going to do for me? Assessment districts can't go up just because it is more expensive next year; every raise would have to be voted on. As Charlie Ash indicated, you need 70% of the people saying "Yes let's go out and vote". All you need is 51 % of the people voting for it to create it. G:\rda\Maria Hunt\WPDATA\C0MMITTEES\PA#4\Minutes\2009 Minulesftnutes 061509.doc1 3 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 Barbara Wallen, 43-655 Tennessee Ave., Palm Desert, stated she is a local realtor who has lived on the golf course in Palm Desert Country Club for 21 years. I have sold seven houses in Palm Desert to Canadian people who do not live in the state. They rent the houses and are not able to play Desert Willow when they come down two to three weeks a year. There are heavy restrictions on who can play at Desert Willow. It would seem to me that you could expand those qualifications to those people, especially the Canadians, who are watching their dollars and would be very happy to play at PDCC. It would be a tremendous credit to the City. Personally, I would be happy to pay the assessment, but asked that it be included in her property taxes. Mayor Spiegel stated that the assessment would be included in the property taxes. Member Ash stated he wanted to speak as a resident and not as a member of this Committee. He wanted to respond to Mr. Archer's comments. The City has never offered to buy this facility. I spend a lot of time on the Homeowner's committee. When someone buys a piece of property within the confines of the PDCC HOA, they are told that they have to become a member of the Homeowners' Association, whether you use it or not that's your choice. There are two distinct groups. There is the original group of 958 homes that belonged to the homeowners. There was some financial difficulty with Oliphant and some of the original developers, so two tracts were sold, which reduced the amount of homes. Those two groups are not part of the homeowners' association. When you buy a piece of property within the confines of the PDCC Homeowners Association, you have to join, whether you use it or not that's your choice. You have the right to use the hall and pools at any time. I tell everybody you have two choices, pay your homeowner's dues or sell your house and move. The other point is that when this group came along and said we are going to do this and that, the City somewhat got behind everything. I was one of the members that helped sell it. We thought that with the City behind it we would never find ourselves in this situation again. Well, here we are. I can certainly understand where the City stands. As the Mayor commented, if they approved any kind of loan for Palm Desert Country Club, there would be another five course owners in his office tomorrow. 1 think that we all need to come up with some means of solving this. It's not going to be easy, and a tax assessment district is going to be a tough sale. I don't think people would go for it, even though it is going to keep up their property values. Member Campbell stated that prior to this meeting he had done some checking. I do know that I can back up what Mayor Spiegel said to one degree, and that is I am quite familiar with the general manager who is watching this closely. He will be in the Mayor's office the next C,:\rda\Mans HuntUPDATA\COMMITTEES\PA #4\Minutes\2009 Minutes\Minutes 061509.doc1 4 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 day. I also know of a business owner who is watching this closely and will be in here. We have a City who has been cutting back trying to cut about $5 million. The problem you are faced with is that this is not the entire City of Palm Desert. This is one area and the City Council must be aware of the entire City. There are other golf courses and other businesses that are hurting so bad, that I would recommend to the City Council a "No". Then you have to work it out yourselves because I don't believe the City can afford to take on this risk. Question from audience: "How can they afford not to?" Just think of the taxes that you would lose on the valuation of all those properties that are involved. I am for Palm Desert 100%, and I don't want to see them lose all that valuation by becoming a slum area. They used to call it the ghetto. We don't want that again, and neither do you if you're a Palm Desert fan. Member Campbell replied that he is a fan and has lived here many years. I have served on several different committees and I do care. As the Mayor can testify, I care very much about this city. They cannot take on all the costs of this entire city's businesses and golf courses that are in trouble. It is just not possible. If they were to take it on, you would find the City in trouble just like the State of California. We cannot be myopic about this. I apologize if I have upset you. Chairman Benford stated that he disagreed with Member Ash's comment that it would be difficult to get 70% of the homeowners to vote in favor of looking into an assessment district, based on the comments from this audience. He asked Mayor Spiegel about the mechanics to get this started. Mayor Spiegel referred the matter to Mr. McCarthy. Mr. McCarthy stated it would be best to do a formal poll of the community. It could be via letter to see what the response is. If staff was directed by the City Council to do a poll, we would be more than happy to do a poll. I would hope that the poll would reflect that the property owners are prepared to self -assess through either an HOA or an assessment district. Mayor Spiegel stated that the Committee needs to make a recommendation to the City Council. If that is the recommendation of the Committee, then it will go to the City Council. Member Grubb stated she needed to know more about the HOA. If the HOA is collecting $300 per year, it could raise the amount and have some of the funds go to the golf course. Member Ash asked to keep the HOA out of it because it has nothing to do with this problem. Chairman Benford asked for a motion. GArda\Maria Hunt\WPDATA\COMMITTEES\PA #4ftnules\2009 MinutesUnutes 061509.docl 5 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 Motion was made by Member Campbell and seconded by Member Ash to recommend to the City Council that a letter be sent to all the homeowners requesting their feelings towards an assessment of some type. Motion was approved by unanimous vote. Question from audience: Would it be possible for the City of Palm Desert to guarantee a loan in the interim period so that the golf course does not go into disrepair? Mayor Spiegel replied that if the assessment district is created, he was sure the City would have the ability to provide funding to cover that assessment until the money comes in. Homeowners would not be paying the money until they pay their taxes, which the soonest would be in November. If the golf course cannot exist until November and there is an "X" number of dollars coming in, I'm sure there is a way that we could garner those dollars that are required to keep the golf course going. The resident wanted to know how soon the letter would go out. Mayor Spiegel responded he did not know because he is only one vote. There are five of us and we need three "yes" votes to send the letter out. We have a meeting a week from this Thursday, and it could be agendized for that meeting. Mayor Spiegel suggested that they attend the meeting and express their feelings. Member Grubb stated that the Committee needs more information on the poll. Would only those properties that abut the golf course be assessed? Mayor Spiegel stated that the purpose of the poll is to find out if homeowners are interested in an assessment district. It won't guarantee an assessment district, but it will start the wheels moving. Questions from audience: Is it true that the City would not allow the golf course to go under? Does the City have a maintenance agreement with the golf course owner? If they don't have any money and the grass starts growing, is the City going to step in and take care of that problem? Mayor Spiegel replied that he could not answer those questions, and as he had previously stated, he is only one vote. Question from audience: What are the developer and owner going to do if the City is not willing to assist, or if they are not able to hold out until the community decided what to do? Mr. Case replied that they are optimistic that some sort of solution could be worked out, whether through an assessment, investor, or the bank. I can't give you an honest answer about how long our funds are going to last. Mr. Case stated that it would be unwise for the bank not to step up and do something so they do not lose their investment value. Mayor Spiegel asked Mr. Case to let the City know how they proceed. Mr. Case reported that the 2009-2010 reassessment value had been received, G:\rda\Maria HuntMPDATA\COMMITTEES\PA #4\Minutes\2009 Minutes\Minutes 061509.doc1 6 CITIZENS' ADVISORY COMMITTEE FOR PROJECT AREA NO. 4 MINUTES June 15, 2009 which was $5 million less. The reassessed value of the property is between $7.1 to $7.2 million, which was based on the $13 million value and not on what it is selling for today. Question from the audience: Would it help to attend the Council meeting to encourage the assessment of the properties, or to give them some financial breathing space in reassessing properties? Is there any way the Committee could be helpful in getting it further reassessed? Mayor Spiegel replied that the reassessment is done through the County. X. REPORTS AND REMARKS A. COMMITTEE CHAIRPERSON/MEMBERS B. AGENCY BOARD LIAISONS C. PLANNING COMMISSION LIAISON D. STAFF XI. ADJOURNMENT The next meeting is scheduled for July 20, 2009 at 3:00 p.m. There being no further business, the meeting was adjourned at 4:27 p.m. CMaria Hunt, Recording Secretary G:\rda\Maria HuntUPDATA\COMMITTEES\PA #4\Minutes\2009 MinutesUnutes 061509.doc1 7