The purpose of this chapter is to provide an incentive program
for the operation and maintenance of quality and first class hotel
facilities which enhance the tourist and travel experience for visitors
to the city of Palm Springs, maximize the use of the city's convention
center, provide attractive and desirable visitor serving facilities
and experiences, and assist the city in achieving its tourism goals.
In the implementation of this program, the city council finds:
(a)
The
general welfare and material well being of the residents of the city
of Palm Springs depend in large measure upon the growth and expansion
of the tourism and travel industries in the city.
(b)
The
operation, maintenance, and expansion of the inventory of quality
hotels and first class hotels in the city of Palm Springs will create
desirable visitor serving facilities that will contribute to the growth
and expansion of tourism and travel opportunities in the city, ensure
utilization of the city's convention center, provide employment opportunities
for the residents of the city, and promote and enhance the economy
of the city.
(c)
It
is in the best interest of the city of Palm Springs to induce and
encourage the, operation, and maintenance of hotel facilities that
would not otherwise exist, thereby creating new sources of tax revenues
for the city's general fund which supports the public services that
the city provides its residents.
(d)
The
authority granted and the purposes to be accomplished by this chapter
are properly local governmental and public purposes for which public
funds can be expended and that the operation, maintenance, and expansion
of the inventory of quality and first class hotels is of paramount
importance to the city of Palm Springs, its residents, and businesses.
(Ord. 1730 § 2, 2008)
For the provisions of this chapter, the following definitions
shall apply:
means the hotel operations incentive program tax rates which
shall be exclusively utilized for the calculation of the operating
assistance to be paid by the city to qualified operators of hotels
participating in the hotel performance incentive program. For hotels
of 124 rooms or less, the adjusted tax rate shall be 10.9 percent
of the rent charged by the operator of the hotel for transient occupancies.
For hotels of 125 rooms or more, the adjusted tax rate shall be 12.1
percent of the rent charged by the operator of the hotel for transient
occupancies. The adjusted tax rate set forth in this section shall
exclusively apply for the calculation of any and all operating assistance
for the term of the hotel performance incentive program without regard
to any increases at any time in the city of Palm Springs' transient
occupancy tax rates.
means the amount of money that the operator of a renovation
hotel plans to invest in the course of a Phase II Renovation Project,
and (1) documents to the city's satisfaction, in its Hotel Operations
Incentive Program application, all improvements proposed, and subsequently
(2) certifies in writing, to the city manager or their designee, upon
completion of the project, the actual costs and expenses incurred.
If a Phase II Renovation Project includes hotel rooms, the amount
of the investment shall not be less than $5,000.00 per room subject
to the project. If the project includes any common area or amenity,
or any other area for guest use at the hotel, the amount of the investment
shall not be less than the amount, if any, invested in rooms, added
to the total number of rooms at the hotel that will exist at the end
of the project multiplied by $5,000.00.
means a hotel which provides appropriate standards of physical
features and operational services established for hotels by the American
Automobile Association, J.D. Power & Associates, Forbes, or Smith's
Travel Research Service.
means the Palm Springs convention center's committable rooms
program which provides the convention center with a list of hotel
properties and a count of hotel rooms available, one year in advance
or more, for potential reservation by meeting groups and/or conventions
in the city.
means the process of making, building, fabricating, installing,
and setting up tangible physical enhancements to a hotel that include
without limitation, one or more of the following: (1) modification
of an existing structure or amenity, (2) new or upgraded furniture,
fixtures or equipment, (3) new or upgraded landscaping. Construction
may address hotel rooms, common areas, and/or other areas for guest
use.
means a property that was constructed, occupied, and used
as a hotel on or before January 1, 2006.
means standards of physical features and operation which
qualify a hotel as a first class hotel and which include operation
of the hotel on a 24 hours per day/seven day a week basis with housekeeping
services, food and beverage services, room services, banquet and meeting
services, concierge and bellman services, and parking services.
means a hotel which provides standards of physical features
and operational services which meet or exceed the higher rating criteria
established for hotels by the American Automobile Association, J.D.
Power & Associates, Forbes, or Smith's Travel Research Service.
means a hotel that has received and/or been issued all discretionary
permits and entitlements from the city required for the construction
of a new hotel.
means any property containing four or more guest rooms used
by four or more guests for compensation and where the guest rooms
are designed and intended as transient occupancy accommodations.
means a hotel or first class hotel or comfort hotel that
is or was fully entitled as a hotel after January 1, 2008, but before
December 31, 2014 and which is under construction prior to December
31, 2017. The term "new hotel" does not include all, or any portion
of, or addition to, an existing hotel.
means the covenants described in Section 5.26.050 of this Code.
means the person who is proprietor of a hotel, whether in
the capacity of owner, lessee, sublessee, mortgagee in possession,
licensee, franchisee, or any other capacity, or the assignee or designee
of such proprietor.
means the one-time increase to the Phase II Renovation Project
Transient Occupancy Tax Base after the fifth anniversary date of the
renovation approval date of the hotel. This increase shall be in an
amount equal to three percent, or the annual percentage change in
the most recent month's data in the Consumer Price Index, whichever
is higher. The Consumer Price Index used in calculating this adjustment
shall be the "Consumer Price Index, Los Angeles-Long Beach-Anaheim,
All Items, 1982-84=100 base, All Urban Consumers (CPI-U)."
means the annual average, during the 36-month period prior
to the date when the city deems the Hotel Operations Incentive Program
application of a potential renovation hotel to be complete, of transient
occupancy tax owed to the city.
means the amount of transient occupancy tax that a renovation hotel owes to the city annually, pursuant to Chapter 3.42 of this code, after the renovation approval date, minus the Phase II Renovation Project Transient Occupancy Tax Base as adjusted by the transient occupancy tax base adjustment.
means a hotel improvement project constructed by a renovation hotel commencing no more than 12 months after the city's execution of the operating covenant for that hotel, and completed no later than December 31, 2028. The hotel may suspend all or some of its operations during construction of the project. Collection and payment to the city of transient occupancy tax under Chapter 3.24 of this code for any portion of the hotel that remains open during construction of the project shall continue until the project's completion, without any consideration to the operator pursuant to this chapter. Whether the hotel suspends operations or not, collection and payment to the city of transient occupancy tax under Chapter 3.24 of this code by a Phase II Renovation Project hotel pursuant to this chapter shall commence immediately on the renovation approval date.
means a property improvement program undertaken by an existing
hotel which invests no less than $15,000.00 per room, or invests no
less than $1,000,000.00 in ancillary non-hotel room facilities and/or
space. The property improvement program shall be comprehensively executed
in a single renovation project on the property and be under construction
no later than December 31, 2014 and completed no later than December
31, 2015.
is the date of the city's final inspection and approval of
improvements constructed pursuant to a Phase II Renovation Project.
means a "hotel" as defined in Palm Springs Zoning Code Section 91.00.00, as the city may amend that section from time to time, which hotel participates in the hotel operations incentive program as a Phase II Renovation Project hotel. Upon the adoption of the ordinance codified in this chapter, "hotel" is defined "any building
or portion thereof containing six or more guest rooms used by six
or more guests, for compensation (excepting jails and hospitals),
where provision for cooking may be made in a limited number of individual
suites, and which rooms are designed and intended as temporary or
overnight accommodations." In order to qualify and apply for participation in the hotel operations incentive program under this chapter, a renovation hotel must be in operation for a period of five years prior to the date when the city accepts the hotel operations incentive program application of an operator of a proposed renovation hotel as complete. This five-year period may include changes in the ownership and/or name of the hotel in question and may include lapses in operation. Additionally, the five-year period is not required to be the five years immediately preceding the date when the city accepts the hotel operations incentive program application of an operator of a proposed renovation hotel as complete. However, a renovation hotel shall only be eligible to receive an incentive pursuant to Section 5.26.040(d)(2), if the renovation hotel has been in operation for a total of at least five years within the 15 years immediately preceding the date when the city accepts the hotel operations incentive program application of an operator of a proposed renovation hotel as complete. A renovation hotel that has not been in operation for a total of at least five years in the 15 years immediately preceding the date when the city accepts the hotel operations incentive program application of an operator of a proposed renovation hotel as complete shall only be eligible to receive an incentive pursuant to Section 5.26.040(d)(3). No property that operates as a homeshare or vacation rental pursuant to Chapter 5.25 of this code may also operate as a renovation hotel or receive any payment under this chapter.
means the average of the last 36 months of annualized transient
occupancy tax owed to the City by an existing hotel prior to the commencement
of a qualified renovation program.
means the difference between the transient occupancy tax
base and the amount of transient occupancy tax owed to the city by
an existing hotel after the recordation of the operating covenants
by the city.
means an uninterrupted stay of no more than 28 consecutive
calendar days.
means that all necessary discretionary entitlements have
been approved by the city of Palm Springs, grading and building permits
have been issued, and that inspection approvals by the city of Palm
Springs of grading and foundations to grade level have been obtained,
vertical construction of hotel rooms has begun, and the operating
covenants have been recorded.
(Ord. 1730 § 2, 2008; Ord. 1742 § 1, 2008; Ord. 1772 § 1, 2010; Ord. 1821 § 1, 2013; Ord.
1972 § 1, 2019; Ord. 2087, 9/14/2023)
(a)
To
qualify for the hotel operations incentive program for new first class
hotels, the operator shall:
(1)
Complete and submit to the City Manager, the City's application for
the hotel operations incentive program;
(2)
Subscribe to the Palm Springs convention center's committable rooms
program;
(3)
Provide independent, third-party, certification acceptable to the City of the level of quality of the new hotel as a first class hotel as defined in Section 5.26.020;
(4)
Participate in the City's convention center hotel shuttle service
on a proportional basis equal to the number of total hotel, or condo-hotel
rooms in the first class new hotel;
(5)
Execute the operating covenants which shall include provisions regarding
continuing use, maintenance, non-discrimination, and such other provisions
as the city council in its sole discretion, may reasonably determine
are necessary or appropriate to preserve the goals and intent of this
chapter.
(b)
To
qualify for the hotel operations incentive program for new comfort
hotels, the operator of each new comfort hotel shall:
(1)
Complete and submit to the City Manager, the City's application for
participation in the hotel operations incentive program;
(2)
If requested by the City, subscribe to the Palm Springs convention
center's committable rooms program;
(3)
Execute the operating covenants which shall include provisions regarding
continuing use, maintenance, non-discrimination, and such other provisions
as the city council in its sole discretion, may reasonably determine
are necessary or appropriate to preserve the goals and intent of this
chapter.
(c)
To
qualify for the hotel operations incentive program for existing hotels,
the operator of each existing hotel shall:
(1)
Complete and submit to the City Manager, the City's application for
participation in the hotel operations incentive program, including
documentation satisfactory to the City certifying the renovation project
for an existing hotel as a qualified renovation program;
(2)
If requested by the City, subscribe to the Palm Springs Convention
Center's committable rooms program;
(3)
Execute the operating covenants which shall include provisions regarding
continuing use, maintenance, non-discrimination, and such other provisions
as the city council in its sole discretion, may reasonably determine
are necessary or appropriate to preserve the goals and intent of this
chapter.
(d)
To
qualify for the Hotel Operations Incentive Program and undertake a
Phase II Renovation Project, the operator of a Renovation Hotel shall:
(1)
Complete and submit to the City Manager, the City's application for
participation in the Hotel Operations Incentive Program as a Phase
II Renovation Project hotel, including documentation, satisfactory
to the City, of
(2)
If requested by the City, subscribe to the Palm Springs Convention
Center's "committable rooms" program;
(3)
Execute an operating covenant that includes provisions regarding
continuing use, maintenance, good faith, non-discrimination, and such
other provisions as the city council, in its sole discretion, may
reasonably determine to be necessary or appropriate in order to advance
the goals and intent of this Chapter.
(Ord. 1730 § 2, 2008; Ord. 1742 § 2, 2008; Ord. 1772 § 2, 2010; Ord. 1821 § 2, 2013; Ord.
1972 § 2, 2019)
(a)
First Class New Hotels. The city shall pay to an operator of
a first class new hotel an amount equal to 75 percent of the adjusted
tax rate. Such payments shall be made for 30 years or until the operator
has been paid $50,000,000.00, whichever event occurs first.
The city and a qualified participant under this section may
enter into an agreement, at the sole discretion of the city, to receive
an increase in the percent of the adjusted tax rate, for no longer
than the first two years of the qualified participant's incentive
program.
Without regard to any preceding conditions of this section,
the program shall terminate at any point the first class new hotel
is not operated as a first class hotel.
(b)
Comfort New Hotels. The city shall pay to an operator of a comfort
hotel with 125 or more rooms an amount equal to 50 percent of the
adjusted tax rate and such payments shall be made for 20 years or
until the operator has received $25,000,000.00, whichever event occurs
first. The city shall pay to an operator of a comfort hotel with 51
to 124 rooms an amount equal to 50 percent of the adjusted tax rate
and such payments shall be made for 10 years or until the operator
has received $20,000,000.00, whichever event occurs first. The city
shall pay to an operator of a comfort hotel with 49 or fewer rooms
an amount equal to 50 percent of the adjusted tax rate and such payments
shall be made for 10 years or until the operator has received $15,000,000.00,
whichever event occurs first. Without regard to any preceding conditions
of this section, the program shall terminate at any point the deluxe
hotel is not operated as a comfort hotel.
(c)
Existing Hotels. The city shall pay to an operator of an existing hotel an amount equal to 50 percent of the transient occupancy tax increment collected and remitted to the city pursuant to Chapter 3.24 of this code and such payments shall be made for 10 years, or until the operator has received $25,000,000.00, whichever event occurs first.
(d)
Phase II Renovation Project Hotels. Operators shall only receive
an incentive pursuant to this chapter in accordance with this subsection.
(1)
On a hotel's renovation approval date, the city shall inspect
that hotel, and verify that the operator has implemented all Phase
II Renovation Project improvements, and that the improvements remain
onsite. Further, on or before a hotel's renovation approval date,
the operator of that hotel shall submit to the city such documentation
as the city may require, and thereby certify and demonstrate the expenditure
of that operator's certified renovation investment. Any unexpended
portion of the certified renovation investment shall be subtracted
from the certified renovation investment as that sum pertains to an
operator's recoupment of same in accordance with Subsection (d)(2)
of this section.
(2)
For a Phase II Renovation Project hotel with 36 complete months of transient occupancy tax payments in the past three years prior to the date when the city deems the hotel operations incentive program application of a potential renovation hotel to be complete and that has been in operation for at least a total of five years within the 15 years immediately preceding the date when the city accepts the hotel operations incentive program application of an operator of a proposed renovation hotel as complete, the city shall on an annual basis, return, reimburse and pay to the operator of a Phase II Renovation Project hotel an amount equal to 50 percent of the Phase II Renovation Project Transient Occupancy Tax Increment collected and remitted to the city. Renovation hotels that are Class 1 Historic Sites as defined in Palm Springs Municipal Code Chapter 8.05, shall receive an amount equal to 75 percent of the Phase II Renovation Project Transient Occupancy Tax Increment. The city shall continue making such payments until the 10-year anniversary of the first payment hereunder, or until an operator has recouped their certified renovation investment, whichever occurs first. Notwithstanding any other provision in this chapter, city payments to an operator, or the successor of an operator of a Phase II Renovation Project hotel under this subsection (d) shall terminate immediately and permanently at the end of any period of 30 days during which the hotel in question is not operated as a hotel, unless the city has consented to a suspension of operations pursuant to an operating covenant.
(3)
For a Phase II Renovation Project hotel with less than 36 complete months of transient occupancy tax payments in the past three years prior to the date when the city deems the hotel operations incentive program application of a potential renovation hotel to be complete or that has not been in operation for a total of at least five years in the 15 years immediately preceding the date when the city accepts the hotel operations incentive program application of an operator of a proposed renovation hotel as complete, the city shall on an annual basis, return, reimburse and pay to the operator of a Phase II Renovation Project hotel an amount equal to 50 percent of the Phase II Renovation Project Transient Occupancy Tax Increment collected and remitted to the city. Renovation hotels that are Class 1 Historic Sites as defined in Palm Springs Municipal Code Chapter 8.05, shall receive an amount equal to 75 percent of the Phase II Renovation Project Transient Occupancy Tax Increment. The city shall continue making such payments until the 10-year anniversary of the first payment hereunder, or until an operator has recouped their certified renovation investment, whichever occurs first. Notwithstanding any other provision in this chapter, city payments to an operator, or the successor of an operator of a Phase II Renovation Project hotel under this subsection (d) of this section shall terminate immediately and permanently at the end of any period of 30 days during which the hotel in question is not operated as a hotel, unless the city has consented to a suspension of operations pursuant to an operating covenant.
(e)
No renovation hotel receiving any amount of Phase II Renovation Project Transient Occupancy Tax Increment or any other consideration pursuant to an operating covenant entered pursuant to this chapter may apply for any additional benefit pursuant to this chapter, based upon a second Phase II Renovation Project or otherwise, until the termination of that renovation hotel's receipt of such consideration or benefit in accordance with subsection (d)(2) of this section.
(Ord. 1730 § 2, 2008; Ord. 1742 § 3, 2008; Ord. 1772 § 3, 2010; Ord. 1786 § 1, 2011; Ord.
1821 § 3, 2013; Ord. 1972 §§ 3, 4, 2019; Ord. 2087, 9/14/2023)
(a)
Each
operator eligible to participate in the City's hotel operations incentive
program shall execute an operating covenant negotiated between the
City and the operator, approved by the city council, and recorded
in the official records of Riverside County.
(b)
Each
operating covenant shall state that a Renovation Hotel receiving any
portion of Phase II Renovation Project Transient Occupancy Tax Increment
or any other benefit under this Chapter shall include the following
language, modified only as approved by the City Attorney:
1.
Prevailing Wage. In accordance with California Labor
Code section 1781(a)(2), the Participant acknowledges that the City
has expressly indicated to the Participant and persons associated
with the Participant that laborers employed relative to the construction
of the Project must be paid the prevailing per diem wage rate for their labor classification, as determined by the State of California, pursuant to Labor Code Sections 1720, et seq. and Palm Springs Municipal Code Section 7.06.030(1). The Participant agrees with the City that the Participant shall assume the responsibility and be solely responsible for payment of the prevailing per
diem wage rate for their labor classification.
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The Participant, on behalf of itself, its successors, and assigns,
waives and releases the City from any right of action that may be
available to it pursuant to California Labor Code Sections 1726 and
1781. The Participant acknowledges the protections of Civil Code Section
1542 relative to the waiver and release contained in this section
_____, which reads as follows:
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"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT
THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT,
IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY."
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BY INITIALING BELOW, THE PARTICIPANT KNOWINGLY AND VOLUNTARILY
WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE
WAIVERS AND RELEASES OF THIS SECTION _____.
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________________
Participant's Initials
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Additionally, in accordance with this section _____, the Participant
shall indemnify, defend with counsel acceptable to the City, and hold
the City harmless against any claims pursuant to California Labor
Code Sections 1726 and 1781 arising from this Covenant or the construction
or operation of the Project.
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2.
General Indemnification. Participant agrees, for itself and for its successors and assigns, to indemnify, defend with counsel acceptable to the City, and hold the City, together with its officers, members, officials, employees, agents, volunteers, and representatives, harmless from and against any loss, liability, claim, or judgment arising from or related to participant's participation in the Hotel Operations Incentive Program pursuant Palm Springs Municipal Code Chapter 5.26.
(c)
In
the event that a proposed Renovation Hotel's projected Certified Renovation
Investment documented in an application for participation in the Hotel
Operations Inventive Program equals $100,000 or more, city council
consideration of the operating covenant for that Renovation Hotel
shall take place at a public hearing subject to all requirements of
California Government Code 53083 applicable to grants of economic
development subsidies, as that statute may be amended from time to
time.
(Ord. 1730 § 2, 2008; Ord. 1972 § 5, 2019)
Notwithstanding the provisions of Sections 3.24.030, 3.24.035, and 3.24.310 of this code, all transient occupancy tax revenues or transient occupancy tax increment remitted to the city by an operator of a hotel covered by operating covenants as provided in this chapter shall be deemed general fund revenues of the city and shall be deposited in the city's general fund.
(Ord. 1730 § 2, 2008)
Consistent with the intent and goals of this chapter, the city
manager may adopt administrative rules and regulations for implementation
and furtherance of the requirements of this chapter.
(Ord. 1730 § 2, 2008)
