City Council
MEETING DATE: 2/11/2015
TITLE:
Title
Amendment No. 2 to the Transient Occupancy Tax Sharing Agreement for the Desert Princess Hotel (Doubletree)
End
FROM:
Leisa Lukes, Economic Development Manager
RECOMMENDATION:
Recommendation
Staff recommends that the City Council approve the Amendment.
Body
BACKGROUND:
T Alliance One Palm Springs, LLC (Owner) acquired the 275-room Desert Princess Hotel (Hotel) in 2013. Prior to this acquisition, the Hotel had had no major renovations or improvements in many years and was a significantly under-performing property. The Owner determined that extensive improvements would be necessary to bring the Hotel up to the standards required to obtain branding by a national hotelier. This would increase the rate of revenue generated for both the Owner and, through transient occupancy taxes (TOT), the City. In March 2013, the City Council approved a Tax Sharing Agreement with the Owner providing for a percentage of the TOT generated by the Hotel to be shared with the Owner on a performance-driven basis to incentivize the investments needed for the hotel transition.
DISCUSSION:
Upon acquisition of the Desert Princess Hotel in 2013, the Owner commenced discussions with Hilton Worldwide and has completed an agreement to designate the Hotel as a Doubletree property pending completion of the required renovations. The renovation plans have been completed, as well as completion of several model rooms in the Hotel. Ongoing negotiations between the Owner, the landowners and Las Estancias Development Co., the master lessor of the property upon which the Hotel is located, are addressing the timing and implementation of the renovations.
The Agreement entered into between the City and the Owner in March 2013 established that 50 percent of new TOT above a base year amount is to be shared with the Owner for 17 years. Commencement is to begin upon Hotel Opening (i.e., Doubletree) and oth...
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