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2005 05 18 RDAeaf 4 Sep adja Redevelopment Agency Agendas are Available on the City's Web Page @ www.la-quinta.org REDEVELOPMENT AGENCY 11 -K1:::'1 THE PURPOSE OF THIS ADDENDUM IS TO CORRECT AN ERROR IN THE STARTING TIME CONTAINED ON THE ORIGINAL VERSION CALL TO ORDER CITY COUNCIL CHAMBERS 78-495 Calle Tampico La Quinta, California 92253 SPECIAL MEETING Wednesday, May 18, 2005 -7:00 P.M. ........................................ 7:00 P*M. Beginning Resolution No. RA 2005- Roll Call: Agency Board Members: Adolph, Henderson, Perkins, Sniff, and Chairman Osborne PLEDGE OF ALLEGIANCE CLOSED SESSION — NONE NOTE: Time permitting, the Redevelopment Agency Board may conduct Closed Session discussions during the dinner recess. In addition, persons identified as negotiating parties are not invited into the Closed Session meeting when the Agency is considering acquisition of real property. PUBLIC COMMENT At this time members of the public may address the Agency Board on items that appear within the Consent Calendar or matters that are not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. When you are called Redevelopment Agency Agenda 1 May 18, 2005 to speak, please come forward and state your name for the record. Please watch the timing device on the podium. For all Agency Business Session matters or Public Hearings on the agenda, a completed "request to speak" form should be filed with the City Clerk prior to the Agency beginning consideration of that item. CONFIRMATION OF AGENDA STUDY SESSION 1. DISCUSSION REGARDING DEVELOPMENT CONCEPTS PURSUANT TO THE EXCLUSIVE NEGOTIATION AGREEMENT BY AND BETWEEN THE LA QUINTA REDEVELOPMENT AGENCY AND DDC DESERT DEVELOPMENT, INC., FOR DEVELOPABLE PARCELS WITHIN SilverRock RESORT. CHAIR AND BOARD MEMBERS' ITEMS .ADJOURNMENT Adjourn to a regularly scheduled meeting of the Redevelopment Agency to be held on Tuesday, June 7, 2005 commencing with closed session at 2:00 p.m. and open session at 3:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING I, June S. Greek, City Clerk of the City of La Quinta, do hereby declare that the foregoing agenda for the La Quinta Redevelopment Agency meeting of Wednesday, May 18, 2005, was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico and on the bulletin boards at 51-321 Avenida Bermudas and 78-630 Highway 1 1 1, on Friday, May 13, 2005. DATED: May 13, 2005 "ZK . ", JUNE S. GREEK, CMC, City Clerk City of La Quinta, California Redevelopment Agency Agenda 2 May 18, 2005 T 0 llodf 4 COUNCIL/RDA MEETING DATE: May 18, 2005 ITEM TITLE: Discussion of Development Concepts Pursuant to the Exclusive Negotiation Agreement By and Between the La Quinta Redevelopment Agency and DDC Desert Development, Inc., for Developable Parcels Within SilverRock RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: STUDY SESSION: L PUBLIC HEARING: That the Agency Board discuss development concepts for SilverRock Resort. FISCAL IMPLICATIONS: None directly associated with this Study Session item. SilverRock Resort has been conceived as a world -class destination resort that will produce recurring revenue to the City's General Fund. Concepts considered will have future cost implications that may be identified and refined with specific development proposals. BACKGROUND AND OVERVIEW: The La Quinta Redevelopment Agency entered into an Exclusive Negotiating Agreement (ENA) with DDC Desert Development, Inc., in March 2005 for purposes of pursuing development options within SilverRock Resort. The ENA is for a period of up to 180 days, the first 90 days of which (i.e., the "First Due Diligence Period") provides for site planning and due diligence activities. Included within these planning activities are a minimum of two public workshops with the Agency. The ENA anticipates that DDC will submit site plans for Agency consideration and approval at the end of the First Due Diligence Period (i.e., by June 30, 2005). The Agency held the first of the aforementioned public workshops, the "idea session," on April 20, 2005. DDC distributed a "Glossary of Terms" (Attachment 1), introduced team members, outlined some preliminary thoughts regarding future development of SilverRock Resort, and heard input, questions and comments from Agency Board Members (see minutes, Attachment 2). Tonight's Special Meeting and Study Session is intended to serve as a "follow-up review session" pursuant to the ENA, and is designed to allow DDC to present a more refined development proposal specific to the project. Attachment 3 represents a graphic depiction of DDC's work -to -date specific to the "dog bone" parcel at the northwest quadrant of the project. DDC representatives will be in attendance at tonight's meeting to present this plan, re -visit the mission statement, architectural concepts and master plan, and consider Agency Board Member comments thereto. The ENA anticipates that DDC will submit site plans to the Agency for review and consideration at the end of the first 90-day due diligence period. Tentatively, presentation of these site plans has been scheduled for the regularly scheduled meeting of July 19, 2005. Pursuant to the ENA, the site plans are to include and delineate the following elements: 1. The type and scope of the portion of the project shown on such site plan; 2. The interface of a phased development with the complete build out of the project site; 3. Required on- and off -site infrastructure improvements, if known; 4. Project, infrastructure, and state and local regulatory requirement costs, if known; 5. Funding responsibilities and sources for development of the project; 6. The parties/entities responsible for the various project development activities; and 7. A detailed project development schedule. DDC and Agency staff seek Agency comment on plans as developed to -date and/or, as deemed appropriate, on the other elements anticipated upon future submittal of the site plans. DCC and Agency staff believe a third public workshop with the Agency Board may be beneficial, and suggest the evening of June 15, 2005, for Agency consideration. Respectfully submitted, Mark Weiss Assistant Executive Director 2 Approved for submission by: Thomas P. Genovese, Executive Director Attachments: 1. DDC's Glossary of Terms 2. Minutes of April 25, 2005 meeting 3. DDC's work -to -date K ATTACHMENT 1 Glossary of Terms Key A separately locked room, suite or equivalent space in a hotel or resort casita available for rent on a nightly basis. Boutique Hotel An intimate, small hotel (40-150 rooms) with a high level of personal service usually with a unique architectural theme. Examples: Bel Air Hotel, Los Angeles; The Boulders Carefree, Arizona; Royal Palms, Phoenix, Arizona. Resort Casitas An investor owned condominium with one or more rental key opportunities and generating TOT and/or TOT equivalent revenue. Residence Club A timeshare (generally sold by the week or more), fractional ownership (generally sold in increment's of 1/3 to 1/12 shares), or Club Membership sold to individuals with a rental program available, generating TOT and TOT equivalent. 5"Star An elite group of hotels with the ultimate in luxury and sophistication. The establishment provides consistently superlative service in an exceptionally distinctive luxury environment with expanded services. Attention to detail is evident throughout from the bed linens to staff uniforms. 4 Star A superior property with high degree of service and amenities. The establishment provides a luxury experience with expanded amenities in a distinctive environment. Services may include, but are not limited to: automatic turndown service, 24 hour room service, and valet parking. 3 Star A hotel/resort which is well-appointed, with a full - service restaurant and expanded amenities, such as, but not limited to: fitness center, golf course, tennis courts, 24 hour room service, and optional turndown service. P. ATTACHMENT 2 OEM rpm LA QUINTA REDEVELOPMENT AGENCY DRAF I SPECIAL MEETING MINUTES APRIL 20, 2005 A special meeting of the La Quinta Redevelopment Agency was called to order at 7:00 p.m. by Chairman Osborne who led the audience in the Pledge of Allegiance. PRESENT: Board Members Adolph, Henderson, Perkins, Sniff, Chairman Osborne ABSENT: None PUBLIC COMMENT — None CONFIRMATION OF AGENDA City Attorney Jenson reported staff had considered adding an item regarding United Irrigation that came up during public comment at the April 19th meeting, but emergency items are not supposed to be added to special meeting agendas. Therefore, the City Manager will execute the change orders for the dispute and bring it back to Council for ratification. Anthony Cunzio, of United Irrigation, expressed appreciation to staff for helping to resolve this issue. STUDY SESSION 1. DISCUSSION REGARDING DEVELOPMENT CONCEPTS PURSUANT TO THE EXCLUSIVE NEGOTIATION AGREEMENT BY AND BETWEEN THE LA QUINTA REDEVELOPMENT AGENCY AND DDC DESERT DEVELOPMENT, INC. FOR DEVELOPABLE PARCELS WITHIN SilverRock RESORT. Assistant Executive Director Weiss presented the staff report. Ted Lennon, 47-827 Silverspur Trail, Palm Desert, President of Lowe Destination Development Corporation (DDC), Desert Operations, stated they believe the site is a three -star location, and feel responsible for making it a special place. He introduced their team members as follows: Tom Cullen, Chief Operating Officer and Senior 5 Redevelopment Agency Special Meeting Minutes K April 20, 2005 Vice President; Rob Lowe, President of Lowe DDC; Gil Martinez and Michael Angus, of Gil Martinez Associates; Don Ziebell, President of Oz Architects; Michael Hardesty, Executive Vice President of Lowe DDC; and John Fitzpatrick, Project Executive with Lowe DDC. Don Ziebell, 6615 N. Scottsdale Road, Scottsdale, Arizona, President of Oz Architects, gave a brief overview of projects they have developed with DDC. Mr. Lennon reviewed their development concepts for the site, divided into eight areas. He stated they envision starting Phase I with a 204- room boutique hotel consisting of one and two -bedroom units in area 1, and requested feedback on their ideas for the ranch house part of the site. Those ideas consisted of either a world class spa or a La Quinta-themed historical restaurant. Area 2 consists of a combined conference center/community center, a 300-room feature hotel, mixed -use retail area, and resort casitas or four -star hotel, and in area 3 they envision a low profile VIP golf cottage addition to the hotel. Area 4 could have a two or three-story, three to four -star hotel, resort casitas, or residence club. He noted area 7 is the second golf course, which they suggest be shorter and more colorful. He stated area 5 is the golf clubhouse, and area 6 is the driving range, with a possible fitness center or short -game school. He noted area 8 is the civic park area, and should be looked at for other venues such as the arts festival. In response to Board Member Perkins, Mr. Lennon stated most of the buildings would be plastered with textured stone, which helps keep the noise down. Area rugs would also be used in areas with a lot of stone and wood. As for the number of hotels they envision, he stated they are looking at approximately 1,000 units. He feels the economic market will continue to be there if the project is done right, and that there is a need for fine hotel rooms in a master -planned resort. He confirmed the project will be subject to ADA regulations, and stated they are looking to include an electric -car shuttle system. Board Member Henderson asked if they envision the hotels to be separately -owned properties that are unique but compatible to the project. Mr. Lennon responded, "Yes." He added the hotels will be seeking a slightly different market. The casitas in Phase I would be part of one hotel, and there would be a relationship between the hotels for booking purposes. L Redevelopment Agency k` Special Meeting Minutes 3 April 20, 2005 Board Member Henderson asked how Transient Occupancy Tax (TOT) would be affected if the units are ownership properties. Mr. Lennon stated it will be important for management purposes to have the units available for rent, and they will need to do a good job to make sure the owners want to participate in the rental program. Board Member Henderson referenced the northeast corner of the site, and asked if they see it as the best place for parking or more appealing for real estate than the southeast corner. Mr. Lennon agreed it's a good location for parking or other public uses, such as an activity center for art sales. He agreed it's more appealing than the southeast corner, but he doesn't feel the busy corner would be good for a hotel. Board Member Henderson commented she would hate to miss something at that corner that should have been considered. She indicated she is very impressed with what they've shown, and feels the potential for having five individually -personalized properties for guests to pick from is exciting. In response to Board Member Adolph, Mr. Lennon stated they envision approximately 1,000 rooms as follows: 205 rooms in the dogbone area; 300 rooms in the feature hotel; 300 keys in the area to the south; and 200-250 keys in area 4. He noted 600 may be rental hotels and 300-400 are residence club timeshares paying equivalent TOT fees. He believes the area will support that many rooms if the mix is right. He stated if a large percentage of the mix is resort casitas, they don't need the same revenue to operate. Board Member Adolph stated his concern is overdeveloping and not being able to rent the rooms, and is looking to DDC to let the Agency know if a 1,000 rooms is the proper mix. Mr. Lennon stated it's a little premature for them to know at this point. Having the feature hotel 80% hotel rooms and 20% penthouse saleable investor -owned suites, can make it financially feasible without needing the same revenues for the hotel rooms. Board Member Adolph asked if they envision a good mix of the casitas being privately owned and the others tied into the hotel for rental 7 t, Redevelopment Agency Special Meeting Minutes 4 April 20, 2005 purposes, to which Mr. Lennon responded, "Yes." Mr. Adolph asked about the retail area. Mr. Lennon stated he feels the retail area will be the hardest to pull off, and that the mixed use will be important. They are checking the market to see what restaurants and shops can be brought in. Board Member Adolph stated he believes retail businesses will come if the people are there, and that it's important for the retail to be developed along with the hotels so the guests that are not golfing will have a place to enjoy themselves. Mr. Lennon stated he believes the trend in the better hotels is to have outlying restaurants. Board Member Adolph inquired if the areas on the map are in order of development. Mr. Lennon stated they recommend starting with area 1 but the other areas are only for identifying the locations. Board Member Adolph agreed the northeast corner is prime property but voiced concern about having a lot of traffic there during events like the Arts Festival. Chairman Osborne asked if he feels their concept for the site will work with the existing room rate constraints. He also asked if they are looking at any specific flag hotels. Mr. Lennon stated he feels their concept will work because the owners will know they are under market for a better product for a short period of time. As for flag hotels, he stated they are not opposed to looking at them if it makes sense for the project, and they have talked to some. Michael Hardesty, Vice President with DDC, stated they are in the business of creating brands or signature properties, and would plan to do that to the maximum extent possible on this site. He indicated they operate a lot of signature properties very successfully but are not opposed to affiliating with a flag hotel if it makes sense for a particular opportunity. He noted the internet has helped to put independent properties on a level playing field as it relates to marketing. Redevelopment Agency Special Meeting Minutes 9 t6 3 April 20, 2005 Chairman Osborne asked their thoughts about the square footage of the retail area. Mr. Lennon stated he feels that area needs the most immediate work for them to respond properly, and is also an area that needs to be developed in balance with the rooms that are created. They are testing the market to find out what five-star names may be interested and that will help determine how much other space is needed. He noted there are a few anchor tenants that will draw other retailers. Chairman Osborne asked if having 1,000 rooms will call for a need to put some major effort in the traffic flow. Mr. Lennon stated he feels a good shuttle system will keep traffic flow okay. He also noted the area can be walked, and some of the units may have their own golf carts. Chairman Osborne stated he likes the way the areas are put together, and agrees the second golf course should be simpler to play. In response to Board Member Perkins, Mr. Lennon stated there could be three or four hotels at buildout, and that it would be better to have 1,000 keys with 600 rooms. He stated they could operate all of the hotels, or there could be a joint venture with the Ritz Carlton. As for the architecture, he noted the Agency has control on everything that is built. He indicated they have 75 days to get a concept together for Phase 1 and 90 days to negotiate a deal. They hope to break ground next summer on the first site, and would like to have a pre -sell trailer by the first of the year. Board Member Henderson asked if he feels the market is ready for a 300-room hotel. Mr. Lennon stated he feels the top penthouse floors need to be saleable to make it work financially, and to be ready in 2009. He noted the first phase will set the stage for quality but the hotel built in 2009/2010 will be the signature hotel. Board Member Henderson asked if he feels a market study will be needed. Mr. Lennon stated their primary investors will require additional marketing studies. 0 Redevelopment Agency Special Meeting Minutes C April 20, 2005 Board Member Henderson stated she agrees a flag hotel is not as important as it was, and asked if they would be interested if another developer comes along that wants to do a joint venture on his signature property. Mr. Lennon stated they would be interested if it fits into their master plan. Board Member Henderson noted the Agency has already adopted an overall architecture style for the site. As for the ranch site, she feels it's important not to destroy it, and feels what has been done to it has not hurt it. It is currently called a retreat, and envisioned to be used for community activities with some type of restaurant site. She stated she can see the possibility of having an exclusive restaurant located there but doesn't want to lose it as a spa site. Board Member Perkins stated he would like to see the ranch site uniqueness preserved and kept different from the rest of the development. Mr. Lennon stated he understands it's important for the community to continue to be able to share the historical area. Board Member Adolph spoke in support of maintaining the ambiance of the ranch site, and noted the community feels the site belongs to them as opposed to the hotel chains. He feels having an exclusive restaurant there would destroy the area. He asked if they contemplate having two and three -bedroom, privately -owned casitas, to which Mr. Lennon responded, "Yes." Mr. Adolph stated he believes there is a market for it. Chairman Osborne asked about the timing for the permanent clubhouse. Mr. Lennon stated it's been their experience that clubhouses come on board about two years after the golf course. He feels it's important to see how the current facility operates, and would like to come back on this issue. He noted everything needs to be looked at collectively. Board Member Osborne stated he agrees with what has been said about the ranch site. He asked about having a golf museum at SilverRock. 10 Redevelopment Agency Special Meeting Minutes 7 April 20, 2005 Mr. Lennon stated he feels a golf museum would be a luxury. He doesn't know how big it would be, and commented on the possibility of incorporating it into a high-tech golf shop. He feels there will be a long list of community wishes to think through, and noted a lot of the things are costly and don't generate revenue. Chairman Osborne asked if they see any funding for the 1,000 rooms coming from the City. Mr. Lennon stated there will be almost no funding from the City for the casita-type product because the funding usually comes when it's pure hotel generated. He stated it's premature to determine the funding at this point. The money won't all come from the City, and it won't all come from DDC. Chairman Osborne asked how they view the golf course operations. Mr. Lennon stated most four or five-star hotels won't come in unless they have control of the golf course. DDC would like to have a say as to how the course is managed and would like to operate it if the opportunity arises. He stated the second course might be different. They could maybe bring in a partner that requires ownership of the second course. In response to Board Member Henderson, Gil Martinez, of GMA, confirmed he has reviewed the architectural influence materials with DDC but he doesn't know if they have seen materials on the temporary clubhouse that The Dahlin Group developed. Board Member Henderson asked about diverting the canal water through the hotel property. Mr. Weiss stated staff has discussed it with CVWD, and they have indicated it would be an arduous process and very expensive. The decision was made not to pursue it as part of the lake system. Mr. Lennon stated he feels a water theme would be very important for a high-level resort in this area. Mr. Weiss inquired about having another meeting on May 1 8tn Board Member Adolph asked if they would have more detail on Phase 1 at that meeting, to which Mr. Lennon responded, "Yes." Mr. Adolph suggested they work with Mr. Martinez on what has already 11 Redevelopment Agency Special Meeting Minutes H April 20, 2005 been done with him, and referenced the need to see something in general terms. Council concurred to scheduled a special meeting on May 18, 2005. ADJOURNMENT There being no further business, it was moved by Board Members Henderson/Adolph to adjourn. Motion carried unanimously. Respectfully submitted, JUNE S. GREEK, Secretary City of La Quinta, California 12 iIfflf- 00(4* S1LVE OCK �` A E $ R T vb4. i �..,, r.V I it i d 11