2009 06 16 RDARedevelopment Agency agendas are
available on the City' web page
@ www.la-quinta.org
REDEVELOPMENT AGENCY
AGENDA
CITY COUNCIL CHAMBERS
78-495 Calle Tampico
La Quinta, California 92253
Regular Meeting
TUESDAY, JUNE 16, 2009
DUE TO THERE BEING NO CLOSED SESSION SCHEDULED, THE REDEVELOPMENT
AGENCY WILL CONVENE AT 4:00 P.M.
Beginning Resolution No. RA 2009-003
CALL TO ORDER
Roll Call:
Agency Board Members: Adolph, Evans, Henderson, Sniff, Chairperson Franklin
PUBLIC COMMENT
At this time members of the public may address the Redevelopment Agency on any matter
not listed on the agenda. Please complete a "request to speak" form and limit your
comments to three minutes.
CLOSED SESSION - NONE
CONFIRMATION OF AGENDA
APPROVAL OF MINUTES
1. APPROVAL OF MINUTES OF JUNE 2, 2009.
2. APPROVAL OF SPECIAL MEETING MINUTES OF JUNE 9, 2009.
Redevelopment Agency Agenda 1 June 16, 2009*e0 v 001
CONSENT CALENDAR
NOTE: Consent Calendar items are considered to be routine in nature and will be approved
by one motion.
1. APPROVAL OF DEMAND REGISTER DATED JUNE 16, 2009.
2. RECEIVE AND FILE TREASURER'S REPORT DATED APRIL 30, 2009
3. RECEIVE AND FILE REVENUE & EXPENDITURES REPORT DATED APRIL 30,
2009.
4. APPROVAL OF AMENDED AGREEMENT FOR LEGAL SERVICES WITH
RUTAN & TUCKER, LLP.
5. ADOPTION OF A RESOLUTION ADOPTING THE INVESTMENT POLICY OF
THE CITY OF LA QUINTA FOR FISCAL YEAR 2009/2010.
BUSINESS SESSION
1. CONSIDERATION OF A 2009 LA QUINTA MARKET STUDY.
A. MINUTE ORDER ACTION
STUDY SESSION — NONE
CHAIR AND BOARD MEMBERS' ITEMS — NONE
PUBLIC HEARINGS — NONE
ADJOURNMENT
The next regular meeting of the Redevelopment Agency will be held on July 7,
2009, commencing with closed session at 3:00 p.m. and open session at 4:00
p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253.
Redevelopment Agency Agenda 2 June 16, 2009
DECLARATION OF POSTING
I, Veronica Montecino, City Clerk of the City of La Quinta, do hereby declare that
the foregoing agenda for the La Quinta Redevelopment Agency meeting of June
16, 2009, 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 111, on June 12, 2009.
DATE : June 12, 2009
VERONICA J. NTECINO, City Clerk
City of La Quinta, California
Public Notice
Any writings or documents provided to a majority of the Redevelopment Agency regarding
any item on this agenda will be made available for public inspection at the City Clerk
counter at City Hall located at 78-495 Calle Tampico, La Quinta, California, 92253, during
normal business hours.
•*1.. 003
Redevelopment Agency Agenda 3 June 16, 2009
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COUNCIL/RDA MEETING DATE: June 16, 2009
ITEM TITLE: Demand Register Dated
June 16 2009
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
Receive and File the Demand Register Dated
June 16, 2009 of which $7,487,392.45
represents Redevelopment Agency Expenditures
AGENDA CATEGORY:
BUSINESS SESSION
CONSENT CALENDAR
STUDY SESSION
PUBLIC HEARING
PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA
,,,.0 ; 004
s
cF'y OF
AGENDA CATEGORY:
COUNCIL/RDA MEETING DATE: .tune 16, 2009 BUSINESS SESSION:
ITEM TITLE: Receive and File Transmittal of CONSENT CALENDAR: —c2--
Treasurer's Report as of April 30, 2009
STUDY SESSION:
PUBLIC HEARING:
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
Receive and file.
PLEASE SEE RELATED BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA
�MwU 0 0 5
a.
F`y OF
AGENDA CATEGORY:
COUNCIL/RDA MEETING DATE: June 16, 2009 BUSINESS SESSION:
ITEM TITLE: Receive and File Transmittal of Revenue CONSENT CALENDAR:
and Expenditure Report for April 30, 2009
STUDY SESSION:
PUBLIC HEARING:
RECOMMENDATION:
Receive and File.
BACKGROUND AND OVERVIEW:
Receive and File Transmittal of the Statement of Revenue and Expenditures for
April 30, 2009 for the La Quinta Redevelopment Agency.
Respectfully submitted,
r L
John M. Falconer, Finance Director
Approved for submission by:
Thomas P. Genovese, Executive
Director
Attachment: 1. Revenue and Expenditures for April 30, 2009
o..0,- 006
A I I AUMVICIM I
07/01/2008-0413012009
LA OUINTA REDEVELOPMENT AGENCY
.REMAINING
%
REVENUE SUMMARY
BUDGET
RECEIVED
BUDGET
RECEIVED
PROJECT AREA NO. 1:
LOWIMODERATE TAX FUND:
Tax Increment
11.169,000.00
4,892,439.08
6,276,560.92
43.800%
Allocated Interest
25,000.00
(23,436.15)
48,436.15
-93.740%
Non Allocated Interest
0.00
1,072.43
(1,072.43)
0,000%
Miscellaneous revenue
0.00
0.00
0.00
0.000%
Non Allocated Interest
0.00
0.00
0.00
0.000%
LORP-Rent Revenue
225,000.00
201,676.20
23,323.80
89.630%
Home Sales Proceeds
150,000.00
0.00
150,000.00
0.000%
Sale of Land
0.00
0.00
0.00
0.000%
Sewer Subsidy Reimbursements
650.00
603.34
46.66
92.820%
Rehabilitatiodloan Repayments
0.00
0.00
0.00
0,000%
2nd Trust Deed Repayment
100,000.00
92,500.00
7,500.00
92.500%
Transfer In
0.00
0.00
0.00
0.000%
TOTAL LOWIMOD TAX
11,669,650.00
5,164,854.90
6,504,795.10
44.260%
DEBT SERVICE FUND:
Tax Increment
44,676,000.00
19,569,756.27
25,106.243.73
43.800%
Allocated Interest
173,600.00
172,385.14
1,214.86
99.300%
Non Allocated Interest
0.00
0.00
0.00
0.000%
Interest - County Loan
0.00
0.00
0.00
0.000%
Interest Advance Proceeds
0.00
0.00
0.00
0.000%
Transfers In
4,444,479.00
4,444,519.53
(40,53)
100,000%
TOTAL DEBT SERVICE
49,294,079.00
24,186,660.94
25,107,418.06
49.070%
CAPITAL IMPROVEMENT FUND - NON-TAXABLE
Pooled Cash Allocated Interest
590,000.00
417,836.16
172,163.84
70.820%
Non Allocated Interest
173,000.00
168,836.06
4,163.94
97.590%
Developer Agreement Funding
0.00
0.00
0.00
0.000%
Sale of Land Proceeds
0.00
0.00
0.00
0.000%
Rental Income
0.00
0.00
0.00
0.000%
Transfers In
5,000,000.00
5,000,000.00
0.00
100.000%
TOTAL CAPITAL IMPROVEMENT
5,763,000.00
5,586,672.22
176.327.78
96.940%
07/01/2008 - 04/30/2009
LA OUINTA REDEVELOPMENT AGENCY
REMAINING
%
REVENUE SUMMARY
BUDGET
RECEIVED
BUDGET
RECEIVED
PROJECT AREA NO. 2:
LOWIMODERATE TAX FUND:
Tax Increment
5,843,250.00
2.793.088.27
3,050,161.73
47.800%
Allocated Interest
320,500.00
230,233.18
90,266.82
71.840%
Non Allocated Interest
0.00
0.00
0.00
0.000%
Developer funding
0.00
0.00
0.00
0.000%
Vista Dunes MHP Rental Rev
0.00
0.00
0.00
0.000%
2nd Trust Deed Repayment
45,000.00
40,458.25
4.541.75
89.910%
ERAF Shift- Interest
0.00
0.00
0.00
0.000%
Sale of Land
0.00
0.00
0.00
0.000%
Miragores Note Repayment
0.00
0.00
0.00
0.000%
Transfer In
0.00
0.00
0.00
0,000%
TOTAL LOWIMOD TAX
6.208.750.00
3,063,779.70
3,144,970.30
49.350%
2004 LOWIMODERATE BOND FUND:
Allocated Interest
0.00
0.00
0.00
0.000%
Home Sale Proceeds
0.00
0.00
0.00
0.000%
Non Allocated Interest
165,000.00
163,043.05
1.956.95
98.810%
Transfer In
0.00
0,00
0.00
0.000%
TOTAL LOWIMOD BOND
165.000.00
163,043.05
1,956.95
98.810%
DEBT SERVICE FUND:
Tax increment
23,373.000.00
11,172,353.13
12,200,646.87
47.800%
Allocated Interest
280,000.00
217,418.94
62,581.06
77.650%
Non Allocated Interest
0.00
0.00
0.00
0.000%
Interest Advance Proceeds
0.00
0.00
0.00
0.000%
Transfer In
1,953,598.00
1.953.597.94
0.06
100,000%
TOTAL DEBT SERVICE
25,606,598.00
13,343,370.01
12,263,227.99
52.110%
CAPITAL IMPROVEMENT FUND:
Allocated Interest
36,000.00
32.047.08
3,952.92
89.020%
Non Allocated Interest
0.00
0.00
0.00
0.000%
Misc Revenue
0.00
23.25
(23.25)
0.000%
Sale of land
0.00
0.00
0.00
0.000%
Transfers In
0.00
0.00
0.00
0.000%
TOTAL CAPITAL IMPROVEMENT
36,000.00
32.070.33
3,929.67
89.080%
007
2
LA DUINTA REDEVELOPMENT AGENCY
07/Ot/2003-04/30/2009
REMAINING
EXPENDITURE SUMMARY
BUDGET
EXPENDITURES
ENCUMBERED
BUDGET
PROJECT AREA NO. I
LOW/MODERATE TAX FUND:
'
PERSONNEL
1,100.00
0.00
Bw
1,100.00
SERVICES
337,86900
249,979.98
Bw
87,889.02
BUILDING HORIZONS
Bw
0.00
0.00
Bw
LO RENTAL PROGRAM
275,000.00
171,662.88
0.00
103,337.12
2n0 TRUST DEED PROGRAM
0.00
0.00
0.00
0.00
BUILDING HORIZONS
0.00
0.00
0.00
BOB
LAND ACQUISITION
4,371,453,00
4,130,708,50
0,00
240,744.50
LOW MOD HOUSING PROJECTS
0.00
2.64
0,00
(2,64)
FORECLOSURE
450,000.00
191,191.04
0.00
258,80895
REIMBURSEMENT TO GEN FUND
706,271.00
5BB,560.90
0.00
117.710,10
TRANSFERS OUT
4,4"479 DO
4,44451953
0.00
(d0.53)
TOTAL LOW/MOD TAX
.!B 3
DEBT SERVICE FUND:
SERVICES
563.900,00
488.328.40
0,00
75,571.60
BOND PRINCIPAL
2,960,000.W
2,960,000.W
Bw
0.00
BONDINTEREST
7,330,189.D0
7.330.188.26
0.00
0,74
INTEREST CITY ADVANCE
1,020,000.00
850,000.00
DOB
170,000.00
PASS THROUGH PAYMENTS
24,4/Q949.00
11.826,327.46
0.00
12,590,621.54
ERAF SHIFT
4,BW,587.00
Bw
0.00
4,850,687.00
TRANSFERS OUT
8968396.00
898639582
0.00
0,18
TOTAL DEBT SERVICE
CAPITAL IMPROVEMENT FUND:
PERSONNEL
1,100,00
0.00
0.D0
1,100JK!
SERVICES
935,215.00
602,485.31
0.00
332,729.69
LAND ACQUISITION
000
0.00
0.00
0.00
ASSESSMENT DISTRICT
0.00
0,00
Bw
0.00
ADVERTISING -ECONOMIC DEV
0,00
0,00
0.00
0.00
ECONOMIC DEVELOPMENT
0.00
0.00
0.00
0,00
BOND ISSUANCE COSTS
000
0.00
Bw
000
CAPITAL -BUILDING
9,000.00
0,00
0.00
9,000.00
REIMBURSEMENT TO GEN FUND
2 1,883.00
245,738.70
0.00
49,146,30
TRANSFERS OUT
59521815.00
241783014'
0.00
569434W,59
TOTAL CAPITAL IMPROVEMENT
LA QUINTA REDEVELOPMENT AGENCY
07/0112008-ON30/2009
REMAINING
EXPENDITURE SUMMARY
BUDGET
EXPENDITURES
ENCUMBERED
BUDGET
PROJECT AREA NO. 2:
LOW/MODERATE TAX FUND:
PERSONNEL
700.00
0,00
0.00
7W0 W
SERVICES
621,676. DO
416,467.%
0.00
205,208,04
2ND TRUST DEEDS
0.00
0.00
0.00
0.00
LOW MOD HOUSING PROJECTS
Bw
2,306]8
0.00
(2,306.78)
FORECLOSURE ACQUISITION
100,000.00
0.00
0.00
100,000.00
VISTA DUNES PARK
50,000.00
Bw
0.00
50000.00
LAND ACQUISITION
0.00
(888.00)
0.00
888.00
REIMBURSEMENT TO GEN FUND
360,604.00
300,504.10
0.00
60.099.90
TRANSFERS OUT
4.780.742.00
1.798.594,86
0.00
2.952,147A2
TOTAL LOWIMOD TAX
2OO4 LOW/MODERATE BOND FUND
HOUSING PROGRAMS
3,052,800,00
1,993.000,00
000
1,059,BW.W
LAND
0.00
OBO
0.00
0.00
TRANSFERS OUT
12390202,00
9509959.50
0.00
2880242.SO
TOTAL LOW/MOD BOND10
DEBT SERWCE FUND:
SERVICES
250,525.W
252,905.60
0.00
(12,381.60)
BOND PRINCIPAL
115,D00.00
115,000,00
0.00
0.00
BONDINTEREST
305AS4.00
305.183.75
0,00
025
INTEREST CITY ADVANCE
1.856,528.00
1,380,440.00
0.00
276.088,00
PASS THROUGH PAYMENTS
19,153,261W
9,515,98938
0.00
9,637,273.62
TRANSFERS OUT
1 953 598 DO
1953597.94
0,00
0D8
TOTAL DEBT SERVICE
CAPITAL IMPROVEMENT FUND:
PERSONNEL
700.00
0.00
0.00
700.00
SERVICES
368,760.00
189,645 71
0.00
179,114.29
CAPITAL
0.00
0.D0
0,00
0.00
ECONOMIC DEVELOPMENT ACTIVITY
0.00
0.00
0.00
0,00
REIMBURSEMENT TO GEN FUND
60,741.00
50,618,W
0.00
10.12270
TRANSFERS OUT
399896.00
329495.33
0W
70400.17
TOTAL CAPITAL IMPROVEMENT0.00
008
3
L01 Q
F 5
COUNCIL/RDA MEETING DATE: June 16, 2009
ITEM TITLE: Approval of Amended
for Legal Services with Rutan & Tucker, LLP
RECOMMENDATION:
AGENDA CATEGORY:
Agreement BUSINESS SESSION: _
CONSENT CALENDAR:
STUDY SESSION:
Please see same item under City Council agenda.
Respectfully submitted,
M. Katherine Jenson, Agency Counal
PUBLIC HEARING:
Approved for submission by:
Thomas P. Genovese, Executive Director
1 009
W'4f 4 sepQwwrr,
COUNCIL/RDA MEETING DATE: June 16, 2009
ITEM TITLE: Approval of a Resolution Adopting the
Investment Policy of the Redevelopment Agency
for Fiscal Year 2009/2010
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
Adopt a Resolution of the Redevelopment Agency approving the Investment Policy
of the City of La Quinta for Fiscal Year 2009/2010.
SEE CITY COUNCIL STAFF REPORT
-WV$,q 010
Resolution No. 2009-
Investment Policy
Adopted: June 16, 2009
Page 4 of 8
RESOLUTION NO. RA 2009-
A RESOLUTION OF THE LA QUINTA REDEVELOPMENT
AGENCY OF THE CITY OF LA QUINTA APPROVING AND
ADOPTING THE AMENDED INVESTMENT POLICY FOR
FISCAL YEAR 2009/2010
WHEREAS, the general purpose of the Investment Policy is to provide the rules
and standards users must follow in investing funds of the City of La Quinta; and
WHEREAS, the primary objectives, in order of priority, of the City of La Quinta's
investment activity shall be:
Safety of principal is the foremost objective of the investment program.
Investments of the City of La Quinta shall be undertaken in a manner that seeks
to ensure the preservation of capital in the overall portfolio.
The investment portfolio shall remain sufficiently liquid to meet all operating
requirements that may be reasonably anticipated.
The investment portfolio shall be designed with the objective of attaining a
market rate of return or yield throughout budgetary and economic cycles, taking
into account the investment risk constraints and liquidity needs.
WHEREAS, authority to manage the City of La Quinta's investment portfolio is
derived from the City Ordinance. Management responsibility for the investment
program is delegated to the City Treasurer, who shall establish and implement written
procedures for the operation of the City's investment program consistent with the
Investment Policy for Fiscal Year 2009/2010; and
WHEREAS, the Investment Policy will be adopted before the end of June of
each year and amended as considered necessary; and
NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City
of La Quinta to adopt the Fiscal Year Investment Policy (Exhibit A).
011
Resolution No. 2009-
Investment Policy
Adopted: June 16, 2009
Page 5 of 8
PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta
Redevelopment Agency, held on this day of
2009 by the following vote, to wit:
AYES:
NOES:
ABSTAIN:
ABSENT:
TOM KIRK, Chair
La Quinta Redevelopment Agency
ATTEST:
VERONICA J. MONTECINO, CIVIC, Agency Secretary
La Quinta Redevelopment Agency
(SEAL)
APPROVED AS TO FORM:
M. KATHERINE JENSON, Agency Counsel
La Quinta Redevelopment Agency
%%,*0, 012
Resolution No. 2009-
Investment Policy
Adopted: June 16, 2009
Page 6 of
Attachment A
'"" 0 013
Twy� 44Q"
COUNCIL/RDA MEETING DATE: June 16, 2009
ITEM TITLE. Consideration of a 2009 La Quinta Market
Study
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
Discuss, evaluate, and provide direction to staff regarding a 2009 La Quinta Market
Study.
FISCAL IMPLICATIONS:
Funds have been allocated in the Fiscal Year 2008-2009 budget as follows: $40,000
in account number 405-9001-702.32-21 and $40,000 in account number 406-9002-
702.32-21. The funds will be carried over into the Fiscal Year 2009-2010 budget.
BACKGROUND AND OVERVIEW:
On December 16, 2008, the Agency Board discussed issuing a Request for Proposals
for a La Quinta Market Study. At that time, the Agency Board decided not to proceed
as it would be difficult to predict future trends given current economic conditions. The
Agency Board directed staff to bring the item back in six months.
Since 1996, the City has reviewed and adopted an annual Economic Development
Plan, which contains guidelines and initiatives for the City's and Redevelopment
Agency's economic development efforts. The Economic Plan's policies include
commissioning a Market Study in order to assess market conditions, demand, and
development opportunities. In order to keep the data current, and to adequately
evaluate current and future trends, the Market Study has been updated every three
years. The last Market Study was completed in 2006 (Attachment 1), and focused on
the Highway 1 1 1 Corridor, the Village, SilverRock Resort, and the Sphere of Influence
'•»•0,: 014
area. There is benefit in updating the Market Study so the City can provide current
information to help with business retention and attraction efforts.
On December 16, 2008, the Agency Board reviewed a draft Request for Proposals
(Attachment 2) for a 2009 Market Study. The intent of the 2009 Market Study is to
focus on several key areas, including Highway 111; The Village; City -Wide Hotel
Analysis; and Housing Trends, with an emphasis on future retail trends and how to
best position the City to target the next generation of consumers; strategies to help
the Village become more viable; an analysis of future hotel trends and demand; and an
analysis of future housing trends'and opportunities. However, given the economic
conditions at the time, the Agency Board did not approve the RFP, and directed staff
to bring the item back in six months.
At this time, staff is looking for Agency Board feedback and direction. The Agency
Board could opt to proceed with an RFP, providing staff with suggested topics and
areas to cover in the Market Study. Staff would amend the RFP based on Agency
Board input, and bring it back for approval.
Alternatively, the Agency Board could approve the attached RFP for distribution to
qualified consultants. If this direction is taken, the Agency Board would also need to
approve a Selection Committee. The City Manager intends to appoint a Selection
Committee consisting of the following members:
Doug Evans — Assistant City Manager — Development Services
Les Johnson — Planning Director
Debbie Powell — Economic Development Project Manager
Frank Spevacek — Rosenow Spevacek Group
If the City Council wishes to appoint a different Selection Committee, the Committee
would be subject to the Brown Act unless the Committee consists solely of two
council members. If the City Council were to also appoint Agency Staff and/or RSG
representatives to the committee, the committee would not qualify as an ad -hoc
committee and would therefore be subject to the Brown Act.
Because the economy has not improved during the past six months, the Agency Board
may want to consider reserving the budgeted Market Study funds and commission one
or more market studies as they relate to specific commercial development
opportunities or proposals that may occur during the next fiscal year. If the Agency
Board chooses that option, then staff would bring back revised RFP(s) for approval.
Or, the Agency Board could choose to not proceed with a Market Study, and revisit
the issue at a future time.
»..v 015
FINDINGS AND ALTERNATIVES:
The alternatives available to the Agency Board include:
1. Provide direction and input for a Request for Proposals for 2009 La Quinta
Market Study; or
2. Authorize staff to distribute the attached Request for Proposals; or
3. Provide staff with alternative direction.
Respectfully submitted,
Assistant City`Manager — Development Services
Approved for submission by:
ZXXv�,�� / )�,Ze-
Thomas P. Genovese, Executive Director
Attachments: 1 . 2006 Market Study
2. Draft Request for Proposals
«.,_ 016
ATTACHMENT 1
E �\
14
OVERVIEW ANALYSIS OF
MARKET ORPORTUNITIES'
CITY OF LA QUINTA,"CALIFORNIA
PREPARED FOR
THE CITY OF LA QUINTA
APRIL'2096
ERAPROJECT NO:' 16469
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(. .a A,fie(gz, CA :4J024 . _...
311 4-0 9SII15 FAX 310 At9 iL G' v{ev x, c tit as<e, Ezti;i
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INTRODUCTION
The City of La Quinta is in the process of updating its 2006-2007 Economic
Development Plan which sets forth objectives, strategies, and initiatives in order to shape
future City development and ensure adequate services and facilities for City residents and
visitors.
The identification and analysis of market opportunities and constraints is an integral
part of the Economic Development Plan. Economics Research Associates (ERA) was
retained by the City to assist in evaluating a range of economic and real estate market issues
which will help shape the plan in the near- and mid-term. In addition to providing an
analysis of socioeconomic and demographic forces which will influence development
intensity and patterns in the City and other parts of the Coachella Valley, ERA's analysis
focuses on market conditions and development opportunities relative to four specific project
areas:
• Highway I I I Commercial Corridor
• Downtown Village
• SilverRock Resort
• Sphere of Influence Annexation
Each of these areas is addressed in the summary of findings with documentation and analysis
contained in the full report.
Economics Research Associates City of La Quinen
ERA No. 16469 Page 1
'Aai J 018
SUMMARY OF FINDINGS
Key findings and conclusions regarding market opportunities relative to the targeted
project areas within the City of La Quinta are summarized below.
Demographics
• The Coachella Valley year-round population has expanded significantly since
1990 at a rate of about 3.6 percent compared with overall state population growth
of 1.3 percent per year over the same period. Permanent population in the City of
La Quinta has increased more rapidly over this period as well. Between 1990 and
2000, permanent population increased in the City by over 12,000 (7.8% annual
rate); another 12,000 population has been added since 2000 (8.8% annual rate).
La Quinta's share of total Coachella Valley population has increased from 4.8
percent in 1990 to 7.4 percent in 2000, and 9.2 percent presently.
Coachella
La Quinta East Valley Valley
Population
1990
11,200
114,300
230,500
2000
23,700
164,700
318,100
2005
36,100
204,300
391,600
2010
45,000
276,000
478,500
2020
54,000
403,000
645,500
Average Annual Growth
1990-2000
1,250
5,040
8,760
2000-2005
2,480
7,920
14,700
2005-2010
1,780
14,340
17,380
2010-2020
1,900
12,700
16,500
Average Annual Growth Rate
1990-2000
7.8%
3.7%
3.3%
2000-2005
8.8%
4.4%
4.2%
2005-2010
4.5%
6.2%
4.1%
2010-2020
3.6%
3.9%
3.0%
• For purposes of this study, the "East Valley" consists of the region generally
extending east of Highway 74 to Coachella, and includes all of the City of La
Quinta, Indio, Coachella, Indian Wells, portions of Palm Desert, and
unincorporated zones. Residential and visitor activity in this area provides market
support for many businesses and services in the City of La Quinta. Substantial
growth has occurred and is expected to continue in this area. Population in the
Economics Research Associates City of La Quinta
ERA No. 16469 Page 2
■»r M 9
defined East Valley increased from 164,700 in 2000 to 204,300 presently, such
that the area has accounted for approximately 55 percent of the total growth in the
Coachella Valley over the past five years.
• Permanent population in the Coachella Valley is projected to continue to increase
at a 4.1 percent average annual rate over the next five years, slowing to about 3.0
percent between 2010 and 2020. The East Valley area population, which includes
the City of La Quinta potential annexation area, is forecast to increase from
204,300 in 2005 to 276,000 in 2010, and 403,000 by 2020. The average growth
of about 13,000 population per year will represent 80 percent percent of the total
valley's growth over the next 15 years.
• La Quinta's population growth will largely depend on annexation actions.
Assuming extensive annexation of unincorporated County property lying
southeast of the City would result in population increasing from 36,100 currently
to 114,000 by 2020 and 160,500 at buildout.
City
of La Quinta Population
Existing
Annexation
Year
Boundaries
Area
Total
2005
36,100
6,000
42,100
2010
45,000
15,000
60,000
2020
54,000
60,000
114,000
Buildout
60,600
99,900
160,500
• The Coachella Valley and La Quinta also have large seasonal population. During
the prime season of January -April, peak seasonal population has grown at a much
more modest rate.
Coachella
Year
La Quinta
East Valley
Valley
1994
8,700
46,800
103,500
2000
11,300
57,200
117,200
2004
13,900
64,500
127,900
2010
17,000
77,000
145,700
2020
21,700
98,500
177,600
Growth of seasonal population is expected to increase at a more modest pace than
permanent population. While the aging baby boom generation will continue to
create demand for second home product, this growth in the Coachella Valley is
Economies Research Associates City of La Quinta
ERA No. 16469 Page 3
eM.a u .. 020
partially offset by conversion of pre -retirement second homes to primary residents
by retiring households.
• In general, the Coachella Valley and City of La Quinta resident age profile
reflects a somewhat older population compared with the statewide distribution:
Age Cohort
Percentage Distribution
Coachella
La Quinta Valley California
Under 19
31%
27%
30%
19-54
46%
48%
50%
55-64
10%
9%
9%
Over65
13%
16%
11%
Total
100%
100%
100%
Median Age
36.4
37.3
33.8
• La Quinta permanent residents are more affluent, while east Coachella Valley
residents in general are slightly less so that statewide norms:
Annual
Household Distribution
Household Income
La Quinta
East Valley
California
Under$25,000
18%
28%
21%
$ 25,000- 49,999
27%
30%
24%
$ 50,000- 99,999
34%
27%
31%
$100,000-149,999
11%
8%
14%
$150,000-199,999
4%
3%
5%
Over $200,000
6%
4%
5%
Total
100%
100%
100%
Median Household Income
$61,480
$47,924
$54,300
• Residential units authorized by building permits in La Quinta since 1990 are as
follows:
Average
Annual Units
Permitted
Period
Single
Multiple
Total
1991-1995
395
---
395
1990-2000
1,059
78
1,137
2001-2005
1,070
174
1,244
The building permit activity is consistent with population growth. About 70
percent of the new units developed over the past five years serve as primary
residences.
Economics Research Associates City of La Quinca
ERA No. 16469 Page 4
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• La Quinta retail sales activity has soared with the increase in commercial
inventory within the City:
La Quinta Retail Sales
(millions)
Current Constant
Year Dollars 2005 Dollars'
2001 $297.9 $322.4
2002 327.8 355.6
2003 389.4 413.7
2004 510.9 527.1
2005 669.3 669.3
Current dollars adjusted to 2005 dollars applying
U.S. Consumer Price Index — all urban consumers.
SilverRock Resort
Golf Course
The first 18-hole SilverRock championship golf course is now in its second year of
operation. Course performance in its first year was reasonably favorable in light of some
delays in opening resulting largely from unusually heavy winter rain and course drainage
problems, which have since been rectified. Golf play in the first quarter of 2006 has been at
or slightly above budget, with expectations that the course will generate about 35,000 rounds
for the 2005-2006 fiscal year. At this level, the course will approach, although remain
somewhat below the operating breakeven point by about $500,000 per year.
Based on the current operating structure and policies, the course will reach operating
breakeven at about 40,000 annual rounds, or about 5,000 more than 2005-2006 play. It is
expected that play in fiscal 2006-2007 will total about 38,000 rounds, such that modest
subsidies will continue to be required, with breakeven not reached until the initial
complement of overnight accommodations at SilverRock is on-line.
Annual resident play in 2005-2006 will total approximately 11,000 rounds, or about
30 percent of total play. This level of resident play is consistent with pre -development
planning projections (ERA original estimates based on 12,000 resident rounds). Residents
are offered discounted play at $55 per round compared with peak season rates of $145
Economics Research Associates City of La Quinta
ERA No. 16469 Page 5
weekdays and $160 weekends, but residents cannot book tee times more than three days in
advance. Elimination of the resident discount rate would increase the average greens fee, but
the higher rate would result in reduced play such that the net financial benefits would be
nominally positive.
The course has been operating from the temporary Ahmanson House clubhouse.
While this clubhouse clearly is suboptimal in terms of size, location, and content, it has
satisfactorily accommodated golfers' needs until a permanent clubhouse is constructed.
Plans for the resort element have progressed with expectations that a DDA between
the City and developer, Lowe Enterprises, will be finalized by mid-2006. The plan
effectively has evolved into a three-phase program:
Phase I — Dos Bone
• 162 condominium hotel units (210 keys)
• Meeting and conference facilities (10,000 square feet)
• Restaurant (8,000 square feet)
• Spa (8,000 square feet)
Phase II — Resort/Second Hotel
• 90 core hotel rooms (resort owned)
• 180 condominium hotel units (200 keys)
• Meeting and conference space (20,000 square feet)
• Condominium hotel/fractionals — 90 units (91 keys)
• Retail complex (75,000 square feet)
Phase HI — Resort Casitas
• Overnight accommodations (150-200 keys)
Phase I
• The first phase of overnight accommodations will be developed and marketed as a
condominium hotel. The unit design, features, and market orientation is
consistent with very high participation in a rental program. Within the context of
Securities and Exchanges Commission regulations regarding real estate
"securities," a transient occupancy in -lieu fee should ensure City tax receipts with
Economics Research Associates City of La Quinta
ERA No. 16469 Page 6
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the condominium hotel product. Based on the present planning, first occupancy is
scheduled to occur in fall of 2008.
• The first phase of accommodations (162 units — 210 keys) should generate about
8,000 annual rounds of golf at SilverRock, assuming 70 percent annual occupancy
and a .15 golf -to -room -night generation ratio. The existing 18-hole golf course
has sufficient capacity to accommodate these additional rounds.
• In addition to the golf course, a freestanding dinner house restaurant (250-300
seats), a 10,000-square-foot complement of group conference/meeting rooms, and
an 8,000-square-foot spa are proposed. The mix and sizing of these facilities
appears appropriate for the first phase overnight accommodations.
• Depending on market conditions, sales strategies, and various other factors, it is
likely that the 160 Phase I units may require a two-year absorption period. This
could affect somewhat the timing of the Phase II resort hotel.
• Construction of the permanent clubhouse — a 16,000-square-foot facility,
excluding cart storage — is scheduled concurrently with the first phase resort
element. One perspective is that this timing would signal the strong commitment
of the City to prospective Phase I unit buyers. Development of the clubhouse also
would benefit the golf course through enhancing the overall golf experience.
• The alternative to developing the clubhouse in Phase I is to defer its construction
so as to open concurrently with Phase II, at the same time the resort hotel and
second golf course open. While the additional expenses related to operating a
permanent clubhouse should be recovered through additional net operating
revenues, delaying the clubhouse opening would postpone the need for the
extensive capital commitment related to the permanent clubhouse. Moreover, the
cost of operating the Ahmanson House, once the permanent clubhouse is opened,
will become an added burden.
• The second phase of overnight accommodations will represent the largest
concentration of resort facilities at SilverRock including overnight
accommodations with about 380 keys. These keys will consist of a small
conventional resort -owned core of about 90 hotel rooms, 180 condominium hotel
units (200 keys), and a lower density 90-unit casita product (91 keys) which could
be marketed as whole ownership condominium hotel units or an interval
ownership product such as fractional interests.
Economics Research Associates CTry ofla Qulnra
ERA No. 16469 Page 7
N-..; . 024
• Development of the second 18-hole golf course would be concurrent with Phase II
overnight accommodations. This timing is appropriate as the additional capacity
will be needed when the additional room inventory is available for occupancy.
Depending on the final mix of product, the 380 keys should generate 10,000 to
15,000 additional rounds of golf annually at SilverRock.
• At present, the SilverRock developer anticipates the start of Phase II will trail
Phase I by about 6 to 12 months. The timing of Phase II will, in large part, be
determined by the pace of absorption in Phase I. If absorption of Phase I occurs
at 80 to 100 units per year (two-year absorption period), Phase II may be delayed
by 18 to 24 months. However, the core of 90 resort -owned conventional hotel
rooms in Phase II could be initiated prior to completion of Phase I, with the
condominium hotel sales effort coordinated with Phase I performance.
• Consideration has been given to development of a golf training center/academy
on the north end of the golf practice range. The primary benefit accruing to
SilverRock from the presence of a training center/academy is image enhancement
and national exposure in the marketplace, both which should indirectly benefit the
golf course and the resort operations. The development is not substantially
dependent on the resort for market support nor will it directly generate a large
number of room -nights. As such, the timing of development of a training
center/academy should be influenced by available opportunities and their related
economic terms, and not necessarily limited to the timing of other elements of the
project.
• A retail/entertainment center on a seven -acre site directly south of the resort hotel
is to be developed as part of Phase II. The preliminary development program
calls for about 55,000 square feet of leasable floor area on the ground floor, and
20,000 square feet on the second level.
• Based on the number of keys and type and mix of product in Phases I and II, the
experience at similar resort projects suggests that SilverRock onsite overnight
visitor demand will support about 25,000 square feet of retail at the project (about
40 square feet per key), or about 45 percent of the ground floor retail.
• The balance of support for the retail center will derive from residents and visitors
in La Quinta and other East Valley communities. The overall size of the center
(55,000 square feet of ground floor retail) is probably the minimum scale
Economics Research Associates Oty of La Quinta
ERA No. 16469 Page 8
025
necessary to create a destination, but it is doubtful that, in this location, the center
would be of much greater size. Nonetheless, flexibility to accommodate
expansion by 20,000 to 25,000 square feet would appear reasonable and
appropriate.
• Restaurants will serve as the anchor tenants for the center, and probably should
account for 50 to 60 percent of the ground floor space (4-5 restaurants). The
second level would likely be occupied by office tenants or other non -retail
tenants. A small number of second level rental apartments would be supportable
to the extent that demand for second level space is deficient.
• The success of a retail center will require relatively intense programming in order
to create a destination. The ambiance created by the linear lake and boardwalk
feature, architectural theming, and entertainment programminglevents at the
center should be sufficient to market the space to tenants.
• Design and theming will be critically important. A village atmosphere with a
pedestrian orientation is necessary, as is linking the development to the water.
The need to anchor the center with strong food and beverage tenants cannot be
overstated.
• It also will be important to establish an entity which is funded from tenant sales
and the onsite hotels (including condo hotels) to market the retail. An annual
budget in the range of $300,000 or more should be anticipated. An ongoing
financial/marketing commitment to ensure the viability of the retail complex
beyond the real estate sales period is necessary as this will improve hotel rental
which in turn produces transient occupancy tax revenue. In addition to tenant and
transient occupancy assessments, a small real estate transfer fee (new and resale)
could represent a partial funding mechanism for marketing funds.
• The experience of similar resort -oriented retail suggests that it may be necessary
to provide economic assistance in the early phase of tenant leasing. This
assistance could be in the form of free rent for an extended period, larger than
normal tenant improvement allowances, and rent relief until threshold tenant sales
levels are achieved.
• Restaurant construction allowances of $150 per square foot (tenant funds all
improvements) with annual rents per square foot of $24 triple -net, and retail shop
rents of $30 triple -net with $20 to $30 tenant improvement allowances appear
Economics Research Associates City of La Quinla
ERA No. 16469 Page 9
�». .. 026
supportable. Overall, sales volumes of $350 to $400 per square foot per year are
expected.
• Phase III development at SilverRock is largely and purposely undefined at
present. It involves the approximate 10 acres south of the retail village, and will
likely accommodate additional overnight facilities. The type of product and
market orientation will be heavily influenced by the experience gained in the
Phase I and lI development.
Highway 111 Commercial Corridor
• Within the City of La Quinta, the Highway I I I corridor generally extends from
Washington Street to Jefferson Street, and serves as the primary commercial retail
core area serving City residents/visitors and others located in the eastern
Coachella Valley.
• The Highway I I I corridor, extending from just west of Washington Street on the
west to Jefferson Street on the east, is about 2.0 miles in length. Property depth
ranges from about 500 to 1,200 feet on the north side and from 700 to 2,500 feet
on the south side of Highway 111. The corridor contains approximately 470 acres
of developable property, 185 acres on the north and about 285 acres on the south
side of the highway, most of which has been developed.
• As of March 2006, the level of commercial development in the corridor totals
about 2.7 million square feet, including about 500,000 square feet under
construction.
Gross Leasable Area
(thousands of square feet)
Office/
Institutional/
Retail Other Total
Existing
1,935
265
2,200
Under Construction
475
25
500
Total
2,410
290
2,700
• Over the past three years, approximately 1.2 million square feet of commercial
development has been added to the Highway III corridor, increasing the
inventory from 1.5 million in 2003 to 2.7 million square feet of gross leasable
area currently. Most of this expansion relates to the opening or under
Economics Research Associates City of La Quinm
ERA No. 16469 Page 10
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construction big box and general merchandise tenants including Target, Wal-
Mart, Sam's Club, Costco, and other sub -regional tenants. This inventory
expansion, by any measure, has been extraordinary.
• The rapid development of the La Quinta Highway I I I corridor is manifest in
retail sales activity within the City, which has increased 72 percent over the past
two years:
Taxable
Retail Sales
Year
(millions)
2003
$389.4
2004
510.9
2005
669.3
• In addition to the 500,000 square feet under construction, the capacity of the
corridor, based on available remaining undeveloped parcels, is estimated as
follows:
Gross
Leasable Area
Land Area
(thousands of
(acres)
square feet)
Vacant Parcels
40
350
Existing Auto Dealerships
10
150
Other Vacant Auto Center
35
500
Total
85
1,000
• As noted, the capacity is indicated based on development of only vacant parcels
as well as a broader scenario which would involve relocation and redevelopment
of existing auto -related uses. Clearly, the FARs on undeveloped properties could
be increased depending on the types of uses and, in particular, the degree of
structured versus surface parking. Under the most aggressive scenario, assuming
redevelopment of existing auto -related uses, the Highway II I corridor can
accommodate an additional 1.0 million square feet of development. Maintaining
all of the auto -related uses would reduce this future capacity to about 350,000
square feet.
• East of Jefferson Street, within the City of Indio, there are extensive opportunities
to develop commercial uses. This stretch of highway has numerous large-scale
vacant properties. Between Jefferson Street and Monroe Street, there are
Economics Research Associates City of La Quinta
ERA No. 16469 Page 11
'N. J 028
approximately 200 acres of developable vacant property and substantial under -
improved properties which will ultimately be redeveloped. This Indio Highway
III corridor can accommodate in excess of three million square feet of future
development at typical commercial floor area ratios.
• Retail rental rates for anchor tenants currently are in the $14 to $18 per square
foot per year range, triple -net, while smaller tenant space rents range more widely
from $20 to $27 per square foot per year, triple -net, averaging about $22.00 in
anchored centers. These rents generally support land values of $12 to $15 per
square foot based on typical retail FARs of .2 to .25. Land sales of larger sites
have transacted in this range, with smaller sites commanding much higher prices
depending on their locational characteristics.
• In general, the commercial development market has been very efficient and fluid
in initiating and completing significant levels of project development. Within the
past several years, several key objectives were achieved in the corridor:
— The inventory of commercial space has nearly doubled since 2003 from 1.5
million to 2.7 million square feet.
— The eastern end of the corridor has been successfully anchored with the new
300,000-square-foot Costco/Komar Desert Center and other development.
— The corridor has emerged as a major sub -regional center serving the east
Coachella Valley. Numerous big -box and other key national retail tenants
have been attracted to the corridor, fulfilling most of the retail needs of the
area.
• Based on projected population growth in La Quinta's East Valley Service Area,
projected to average 10,000 to 12,000 per year over the next 15 years, another 4.5
million square feet of commercial retail leasable area will be required, or about
300,000 square feet per year. As noted above, La Quinta's Highway I I I corridor
has the capacity to accommodate only a small fraction of this development, with
much of the future development likely to be funneled to the stretch of Highway
I I I between Jefferson and Monroe in Indio.
• There appear to be two areas where City economic development participation
may be necessary and effective — retention of existing auto uses and development
of an entertainment -oriented center.
• The La Quinta auto center located on the south side of Highway III between
Adams Street and Auto Center Drive currently has two dealerships, with the
Economics Research Associates City of La Quinta
ERA No. 16469 Page 12
029
original plans for the center to host as many as nine dealerships. The two existing
dealerships occupy about 10 acres with about 1,200 feet of prime Highway I I I
frontage. Remaining vacant parcels designated for auto dealerships, located south
of the existing dealerships, total about 35 acres.
• As the East Valley has grown, and will continue to grow, viable dealerships need
to expand in order to maintain their market share and satisfy manufacturer
performance mandates. Both Torre Nissan and Champion Cadillac have
expansion requirements. While considering the option to relocate, the Nissan
dealership, which has been successful at the existing location, has expressed a
preference to remain on Highway 111.
• Because of very high gross taxable sales volume, the sales tax generation of auto
dealerships is extremely beneficial to the City. A typical dealership will generate
three to five times as much sales tax as traditional retail uses occupying the same
property. Thus, it is appropriate for the City to provide assistance in facilitating
the retention and/or expansion of the existing dealerships, or in securing new
dealerships.
• While assistance with the retaining dealerships is warranted, the City remains
vulnerable to auto dealership relocation. The City needs to be prepared to address
potential relocation issues, and potential redevelopment of portions of the Auto
Center property with retail/commercial office development.
• The Coachella Valley currently has a total of 87 movie screens contained in nine
theatres, yielding an overall ratio of about 4,600 permanent population per screen,
about one-half the norm. Even considering the market support derived from
seasonal residents and area visitors, the overall Coachella Valley market is
significantly over -supplied.
• The East Valley, however, appears to be under -served, with only the eight -screen
Indio Metro 8 located east of the Century 15 at The River at Rancho Mirage in
Rancho Mirage and the 10-screen Cinemas Palme d'Or in Palm Desert, both more
than five miles west of Washington Street. The River at Rancho Mirage, a 12-
screen state-of-the-art theatre complex, has been extremely successful with gross
annual ticket sales substantially above the industry average of $260,000 per
screen. All of the other theatre complexes in the Coachella Valley, however,
operate at a small fraction of the industry average per screen. The Indio Metro 8,
Economics Research Associates City of La Quinia
ERA No. 16469 Page 13
1600.0 0 3 0
for example, historically has generated just over one-half the industry average
ticket sales revenue per screen.
• The present state of the motion picture and theatre industry is very fragile. The
strong performance of motion picture exhibitors in the 1990s resulted in an
extraordinary expansion of the number of movie screens. Between 1995 and
2000, when U.S. theatre admissions increased 12 percent, the number of cinema
screens increased by more than 35 percent. This over -building, combined with
modest increases in demand, created extreme financial hardship for the industry's
exhibitors, resulting in a series of bankruptcies, theatre closings, and industry
consolidation.
• Exacerbating the industry's problems has been stagnant growth in theatre
attendance. Between 1998 and 2005, theatre attendance has remained relatively
unchanged at about 1.5 billion ticket sales. Numerous factors for this stagnant
growth are cited, including claims of atypical poor feature film product, high
ticket pricing and increased competition from home theatre, interactive cable
networks, and access to first run movies via satellite or cable systems.
• There also are issues dealing with the film distribution and revenue sharing
between the distributors and exhibitors. With limited quality product, competing
entertainment mediums, and sharp declines in per screen attendance, exhibitors
have been attempting to restructure revenue sharing with the distributors, with
uncertain results at this time.
• The movie theatre industry is highly competitive, particularly in the licensing of
films and selecting new theatre sites. Factors influencing film licensing include
seating capacity, theatre location and quality, projection and sound equipment
quality, licensing terms, and the exhibitor's willingness and ability to promote the
films.
• While licensing and theatre attendance is affected by numerous variables,
probably the most misunderstood, yet most important, factor is "film zones." A
film zone is simply a geographic area determined by both the various film
distribution companies and theatre operators (exhibition companies). Generally,
studios only release copies of a film to a single exhibitor within a zone.
Depending on demographic characteristics of a given area and the locations of all
exhibitors in the area, theatres will either have a captive zone or a split zone. In
Economics Research Associates City of La Quinta
ERA No. 16469 Page 14
inn.•_ 031
captive, or free, zones, the studio and the exhibitor are free to negotiate the terms
of exhibit each film and, if terms are agreed upon, the exhibitor will rent the film.
In a split zone, the studio will alternate between the exhibitors within the zone.
Although this system is designed to give each exhibitor an equal share of
revenues from any given studio, the success of each film and the capacity of the
exhibitors within the market often leads to a less than even split in annual
revenues when two exhibitors share a zone.
• The cost of development, given the new stadium seating design and digital
production technology also has increased markedly, such that state-of-the-art
theatres turnkey costs, excluding land, total about $1.2 to $1.4 million per screen
($300 to $400 per square foot). The rate of development of new movie theatres
has declined sharply in the past five years. Nonetheless, some new development
is occurring, although exhibitors are being very cautious and selective.
• Despite the overall over -supply and industry difficulties, one new multi-plex
movie theatre complex (16 screens) is supportable in the east Coachella Valley at
this time, with a second not supportable for at least five and perhaps 10 years.
The La Quinta Highway III corridor is an extremely attractive location. A
proposed 18-screen theatre was announced at Monroe and 42"d Street in Indio as
part of a proposed 97-acre large-scale regional commercial center in mid-2005. It
is unclear whether this project will move forward in the near term.
• Assuming the theatre complex in Indio does not proceed in a timely manner, an
opportunity would be available in La Quinta. Such a project would most likely
require substantial financial assistance. Theatres have very high parking ratios
which often undermine the economics of movie theatre development. Thus,
economic assistance most often occurs in the form of parking development. In
cases where parking can be shared with other users, like office development, the
cost is reduced.
• The Highway I I I corridor would be more conducive to a mixed -use `lifestyle"
movie theatre environment, with restaurants, coffee houses, bookstore, athletic
club, health food store, wellness/spa center, and other entertainment -oriented
tenants. Developers of movie -anchored complexes generally desire 15 to 20 acres
or more, for such development, depending on the size of the project and the
parking configuration. A 16-screen theatre would require at least 750 parking
spaces.
Economics Research Associates City of La Quinta
ERA No. 16469 Page 15
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La Ouinta Commercial Village
• The La Quinta Commercial Village (the Village) is a designated commercial zone
with gross land area of about 120 acres. Within this area, there are 45 individual
legal parcels with a combined 55 to 60 acres of undeveloped, vacant land.
• The original platting of the property comprising the Village is very problematic as
most of the individual parcels are very small making it difficult to develop
projects of any scale. Moreover, ownership is very fragmented with about 40
individual owners controlling the 45 vacant parcels.
• The most significant commercial project developed in the last several years is Old
Town. The first phase 55,000-square-foot two -level retail complex opened in
2003 and is fully leased. A 65,000-square-foot second phase is under
construction. The performance of the center, anchored by three restaurants,
reportedly is mixed.
• The downtown area historically has provided convenience shopping and services
for local residents. Old Town has attempted to create a more destination -oriented
retail experience with mixed success.
• Asking rents in the Village for well -located retail space reportedly are in the $20
per square foot (NNN) range for restaurants and $24 for smaller tenant shop
space, and office space leases for $20 to $22 per square foot per year on a gross
basis. Rents at this level, given typical .2 to .25 retail FARs, support $12 to $15
per square foot land values. At higher FARs (.4-.5), land values in the $20 range
are supportable.
• The limited land transactions involving sizable parcels suitable for commercial
development have occurred at $10 to $12 per square foot, with current
transactions being negotiated at $15 to $20 per square foot. The smaller .5- to
1.0-acre sites in downtown La Quints have sold at significantly higher values of
$40 per square foot or more, and asking prices of more than double this are being
quoted in the marketplace.
• The Village commercial area faces numerous challenges including, although not
limited to, the following:
— Downtown La Quinta has a relatively small market area with only 8,800
population within a one- and 26,000 within a five -mile radius, or about 1,000
Economics Research Associates City of La Quinta
ERA No..16469 Page 16
-,.� 033
population per square mile. This population density compares with typical
suburban densities of 3,000 to 4,000 population per square mile.
— Access is not particularly convenient. Vehicle traffic counts are very low and
Washington Street serves to some degree as a barrier.
— The land ownership patterns make land assemblage an expensive and difficult
process.
— The land cost "basis" for many property owners is relatively high at $40+ per
square foot, and asking prices for various parcels have been quoted in the
$100 per square foot range. While these prices may be justifiable to some
investors under atypical circumstances, they are far above levels necessary to
support traditional commercial development in this area.
— Convenient parking is somewhat limited. Structured parking would mitigate
the problem, but land values are well below the level needed to justify the cost
of such parking, typically considered in the $30 per square foot range.
— For the most part, national retailers have rejected downtown La Quinta as a
location for new sites in favor of the Highway 111 corridor.
• Given the challenges to creating the scale, synergies, and diversification necessary
to establish a viable retail or commercial destination, it may be appropriate to
radically shift the planning strategy for the Village commercial area. A
development program which allows for and encourages residential development
at moderate density, say up to 16 to 20 units per acre, while consolidating the
commercial core area, appears much more desirable from a market perspective.
Two-story wood frame construction over sub -grade parking would be consistent
with these residential densities.
• A strategy which intensifies residential development opportunities would be
beneficial in terms of creating a viable, although much smaller, commercial core,
motivating development of vacant parcels in the area without as much public
intervention, creating higher land values, and enhancing the overall quality and
sustainability of development in the area.
• A successful pedestrian -oriented village environment seemingly can only be
achieved through inclusion of this moderate -density residential product. Not only
do densities at 16 to 20 units per acre provide the scale necessary in producing
meaningful commercial support levels, the limited land availability and high cost
of remaining undeveloped sites requires increased densities to achieve reasonable
economics.
Economics Research Associates City of La Quinta
ERA No. 16469 Page 17
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Annexation
• The City of La Quinta's General Plan planning area includes existing areas within
the City as well as a substantial area east of the City's current boundaries in
unincorporated Riverside County. Specifically, this unincorporated area totals
about 9,500 acres generally lying between Monroe Street and Harrison Street,
south of Avenue 52. This 9,500-acre unincorporated area is under consideration
of annexation into the City of La Quinta.
• Most of the proposed annexation area, which currently has minimal development,
is designated in the General Plan as low density residential yielding
approximately four units per acre. At this density, buildout population in the
annexation area would likely total nearly 100,000, mostly representing
incremental population. Buildout of undeveloped areas remaining within the
existing City boundaries would total less than 25,000.
• Development dominated by low -density residential uses in the area under
consideration for annexation would create a challenging fiscal situation for the
City. The ability to balance City revenues with service costs would be
exacerbated by the property tax revenue distribution dictated by the designation of
most of this are as a Riverside County Redevelopment Zone.
• The two most prominent sources of revenue for the City currently are sales tax
and transient occupancy tax. The land use plan should incorporate the potential to
accommodate these uses within the annexation area, to the extent that there are
market opportunities upon which to capitalize.
• The potential to capture sales tax and transient occupancy tax are linked to the
demand for retail goods and visitor accommodations, respectively.
• East Valley permanent population growth is projected to increase from 204,300
presently to 403,000 by 2020. Most of this growth, estimated at about 175,000,
will occur east of Washington Street, including the proposed La Quinta
annexation area (annexation area population projected to reach 60,000 by 2020,
and nearly 100,000 at buildout).
• Based on the anticipated growth, demographic considerations, and other factors
such as second home and visitor activity, incremental demand for approximately
Econonucs Research Associates my ojLa Quinta
ERA No. 16469 Page 18
»•,� . 035
5.1 to 6.6 million square feet of commercial development will be generated by
development in this area over the next 15-year period:
Gross Leasable Area
(thousands of sq.ft.)
Local Serving
Supermarket/Grocery
600-
800
Convenience Goods
350-
450
Other Retail/Services
400-
500
Subtotal
1,350-1,750
Sub -Regional
General Merchandise/Discount Stores/Jr. Dept. Stores
600-
750
Super Drug
200-
250
Home Furnishings, Building, Materials
600-
800
Eating and Drinking
450-
550
Other Retail/Services
350-
450
Subtotal
2,200-2,800
Regional
Super Discount/Department Stores
600- 800
Ancillary Apparel/Specialty
300- 400
Automotive/Boats, Other Transportation
550- 650
Tourist Specialty
150- 200
Subtotal
1,600-2,050
Total
5,150-6,600
• Support for local -serving commercial development generated by annexation area
population over the next 15 years will total about 500,000 to 600,000 square feet
of gross leasable floor area by full buildout. All of the commercial space should
be located within the annexation area, requiring about 55 to 65 acres of
commercial land area.
• There is little likelihood that a site within the annexation area would satisfy the
location criteria for development of regional -serving commercial uses.
Insufficient population in the typical catchment areas, access, and development
densities will preclude any center in the annexation area from attracting the
needed anchors for regional commercial development. These uses logically will
be located along Interstate 10 and California Highway 86, south of I-10.
• Many of the same factors will constrain sub -regional commercial development in
the annexation area. Most of the sub -regional demand will be satisfied initially by
centers along Indio's Highway III corridor and the I-10 corridor, between
Jefferson and Jackson streets. As the area develops, sites within the Highway 86
Economics Research Associates City of La Quinta
ERA No. 16469 Page 19
'~• •cll . 0 3 6
corridor south of Avenue 48 in Coachella and other areas south will be well
positioned to attract sub -regional commercial development.
• Depending on development patterns, the highway network, and real estate
economics, there appears to be an opportunity to create a sub -regional center of
400,000 to 500,000 leasable square feet in the vicinity of Airport Boulevard and
Harrison Street.
• The fiscal benefits of visitor accommodations are unmatched by retail or any
other land use. A simple rule -of -thumb is one hotel room generates the equivalent
of 1,500 square feet of retail development in local tax revenue. The locational
criteria for destination hotel development — specifically resorts — does not include
the need for excellent regional access or to be within dense population areas.
Rather, destinations require attractive sites where natural or man-made features
are located. Emphasis on creating a resort environment within the annexation
area as a vehicle for fiscal revenue generation appears to have greater merit than
attracting major commercial concentrations.
Economics Research Associates City of La Quinta
ERA No. 16469 Page 20
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ATTACHMENT 2
REQUEST FOR PROPOSALS
CITY OF LA QUINTA
MARKET STUDY SERVICES
INTRODUCTION
About the City of La Quinta
Located in Southern California's magnificent Coachella Valley, the City of La Quinta is a
blend of beauty, charm, and pleasure. It is home to the nationally -acclaimed Arnold Palmer Classic
Course at SilverRock— a home course of the Bob Hope Chrysler Classic— and over 20 other
exceptional golf courses including the famous PGA West. In 2010, La Quinta will be the hub for
the Bob Hope Chrysler Classic, with four of its golf courses in the rotation.
The City of La Quinta embraces art, culture, and its rich history offering the La Quinta Arts
Festival, a variety of stunning public art, and a newly expanded museum. It offers enjoyable options
such as movies in the park, scenic bike and hiking trails as well as a charming, pedestrian -friendly
downtown La Quinta Village. The historic La Quinta Resort & Club is the largest in the Coachella
Valley and is supported by other recently -opened hospitality venues. And as one of the fastest
growing cities in California in the 1990s, La Quinta continues to grow and hosts a wide range of
quality amenities including the best in shopping and dining.
With a current population of 43,778, La Quinta's early residential boom is now being
complemented by balance of commercial growth and infrastructure improvements. La Quinta's
retail sales have tripled since 2000 and increased 50% since 2004. Projections for 2008 point to retail
sales in the neighborhood of $800 million, given La Quinta's strong retail, population, and housing
base.
Background on Economic Development Efforts
Since 1996, the City of La Quinta has annually adopted and implemented a strategic
Economic Development Plan to guide efforts that identify, attract, and encourage development of
new retail, resort, recreational, and residential uses to the City. The Economic Development Plan
serves as a framework for maintaining the quality of life in the City, and includes a market study,
which is updated every three years, that specifically focuses on market conditions and development
opportunities within the City s main commercial corridors and sphere of influence.
The most recent market study was prepared in 2006, OwrdewAadyis qf'Market Cppama itie,
and is included in the Fiscal Year 2008-2009 Economic Development Plan. (Both documents are
available on the Crty's website, www.la-quinta.c, ) The 2006 market study specifically focuses on
market conditions and development opportunities along Highway 111 and within the La Quinta
Village and SilverRock Resort. Today, the City and Redevelopment Agency desire to update the
market study, focusing on future trends and opportunities specific to the Hghway 111 Corridor, the
City/Agency-owned SilverRock Resort, the historic "Village" area, and housing (both market rate
'-Y.l' 038
and affordable). The updated market study will serve as a framework to reevaluate and adjust the
City's economic development initiatives.
SCOPE OF SERVICES
The selected market study consultant will be expected to compile relevant statistics from local and
regional sources; interview real estate professionals, major landowners and developers, local
businesses and the Chamber of Commerce; and consult with La Quinta's Planning Department.
The market study update should incorporate the following key components:
1) DEMOGRAPHIC FORECAST: Update socioeconomic trends forecast, using 2008 as
baseline and extending to the year 2020. The forecast should project future growth in
population, age distribution, household size, permanent nonagricultural employment by industry,
tourism, and lodging demand for La Quinta, the Coachella Valley, and Riverside County.
2) HIGHWAY 111: La Quinta's Highway 111 commercial corridor has seen tremendous growth
and success. This corridor includes national big box retailers, restaurants, and auto dealerships.
However, several retail centers are upwards of 20 years old. The City wishes to understand what
uses and businesses are vulnerable to market and demographic changes; what uses/businesses
would be viable in the future; and what uses/businesses the City should target for the next
generation of consumers.
3) LA QUINTA VILLAGE: The Village is La Quinta's historic district. The City's senior center,
library, museum, and city -hall are located in the Village. A mixed -use office/retail development
(Old Town) was built several years ago, and there are several restaurants, small retailers, office,
hotel, and residential uses in the area. However, the area is still challenged by a lack of
patronage, as well as diverse land ownership of relatively small parcels. The City is looking for
ways to energize this area, the types of businesses the area could support, strategies to help the
businesses remain viable, and how existing and future residential development can be
successfully incorporated to create synergy in the Village.
4) CITY-WIDE HOTEL ANALYSIS: The Redevelopment Agency's master -planned resort
development, SilverRock Resort, had anticipated a condo -hotel within its existing Arnold Palmer
Classic Golf Course, as well as a resort hotel and related casitas and/or timeshare development.
However, the current economic climate has impacted the timing of these amenities. The City
wants to understand the future trends for hotels, and how the City can best capitalize on them.
Can the City achieve the number of hotels anticipated in its General Plan?
5) DELIVERABLES: The market consultant shall prepare and submit to City staff five (5) copies
of the screencheck market study, consisting of a narrative analysis and summary of the market
conclusions and support tables and charts, for staff review. Upon completion of the work
effort, the consultant shall submit ten (10) bound originals of the final study, plus an electronic
pdf version that can be emailed and posted to the City's website.
2 '"M.r 039
7) SCHEDULE: The market studycontract is expected to be awarded on (date to be determine),
with an anticipated completion date of (to be determined).
MARKET STUDY CONSULTANT EXPERTISE AND PROPOSAL FORMAT
Interested firm are encouraged to keep their proposals brief (20 pages maximum) and
relevant to the specific Scope of Services outlined above. All proposals should include the
following:
1) Cover letter with name, address, phone number, and e-mail address of Consultant's contact
person; identify capacity this person has to manage and execute this effort.
2) Description of overall knowledge of the Cityof La Quirua.
3) Background on the firm and its experience in preparing comprehensive market studies,
especially for cities and public agencies. Of particular interest are engagements involving
clients located in the Coachella Valley and communities that have characteristics similar to
La Quinta.
4) A narrative that presents the services a fine would provide detailing the approach,
methodology, deliverables, and client meetings to be provided.
5) Identification of the personnel to be assigned to this engagement (including names,
addresses, current phone numbers, and e-mail addresses) and a resume of related experience,
how many years this team has worked together, and a list of projects this team has
completed or is currently working on.
6) Identification of any and all sub -consultants to be assigned to this engagement (including
names, addresses, current phone numbers, and e-mail addresses) and a resume of related
experience, how long the sub -consultant has worked with Consultant, and how many
projects the sub -consultant has completed for Consultant or is currently working on with
Consultant. [The City's contract with the selected firm will include a "Prohibition Against
Subcontracting or Assignment" clause that will prohibit Consultant from contracting with
any other entity to perform in whole or in part the services required.]
7) At least three (3) public and private references for projects of similar nature to this
engagement.
8) Proof of financial soundness: financial statements, a balance sheet, and two years of federal
tax returns. For confidentiality purposes, this information should be mailed separately to:
Frank Spevacek, Rosenow Spevacek Group, Inc., 309 West 4th Street, Santa Ana CA
92701-4502.
9) A summary of the professional liability and errors and omissions insurance coverage the firm
maintains. (Please see attached Professional Services Agreement for insurance
3 040
requirements.) In your narrative, please address any potential issues your firm would have
with the Professional Services Agreement.
10) Interested firms should submit nine (9) copies of their proposals.
11) SUBMITTED IN A SEPARATE SEALED ENVELOPE, a not -to -exceed cost for the items listed
in the Scope of Services (including itemization of hourly rates of all assigned personnel,
requested reimbursable expenses, and charges for any meetings not included in the not -to -
exceed cost proposal).
SELECTION PROCESS
Proposals will be reviewed by Consultant Selection Committee. The Committee will rank
the consultants based upon the materials submitted within the proposal. The Committee may
choose to interview two or more closely ranked firms. Interviews for the most qualified marketing
firms will be scheduled during the week of July 20, 2009.
The Agencywill open contract negotiations with the top -ranked firm The successful
consultant will be expected to enter into the attached Professional Services Agreement.
CITY RIGHTS AND OPTIONS
This solicitation does not commit the City of La Quinta to award a contract, to pay any cost
incurred with preparation of the proposal, or to procure or contract for services or supplies. The
City reserves the right to accept or reject any or all submittals received in response to this request, to
negotiate with any qualified source, or cancel in whole or part this process if it is in the best interest
of the City to do so. Subsequent to negotiations, prospective consultants may be required to submit
revisions to their proposals. All proposals should note that any contract pursuant to this solicitation
is dependent upon the recommendation of the City staff and the approval of the City Council.
The City reserves the right to postpone selection for its own convenience, to withdraw this
Request for Proposals at anytime, and to reject any and all submittals without indicating any reason
for such rejection. As a function of the Request for Proposals process, the City reserves the right to
remedy any technical errors in the response to the Request for Proposals and modify the published
Scope of Services. The City reserves the right to request that specific personnel with specific
expertise be added to the team, if the City determines that specific expertise is lacking in the project
team. Proposals and other information will not be returned.
The City reserves the right to abandon the Request for Proposals process and/or change its
procurement process for the contract at anytime if it is determined that abandonment and/or
change would be in the City s best interest. In the event of an abandonment or change, the City will
not be liable to any consultant for any costs or damage arising out of its response to the Request for
Proposals.
4
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SCHEDULE, SUBMITTAL, AND CONTACT INFORMATION
The tentative schedule is as follows:
Issue Request for Proposals
tbd
Proposal Due
tbd
Oral Interviews
tbd
Recommendation to Agency Board
tbd
Start Project
tbd
Interested firms should submit nine (9) copies of their proposals no later than 5:00 p.m. on
(date to be determined).. Submittals should be directed to:
Douglas R. Ewns
Assistant City Manager- Development Sersices
City of La Quinta
P.O. Box 1504
La Quinta, CA 92247-1504
All questions regarding this RFP may be directed to Debbie Powell, Economic
Development Project Manager, at dVowe1Wla-quinta.g-% or (760) 777-7073.
CITY OF LA QUINTA
June 16, 2009
5
REQUEST FOR PROPOSALS
MARKET STUDY SERVICES