2022 Development Agreements - Annual ReportSTUDY SESSION ITEM NO. 1
City of La Quinta
CITY COUNCIL MEETING' November 15, 2022
STAFF REPORT
AGENDA TITLE: RECEIVE AND FILE ANNUAL REPORT OF ACTIVE
DEVELOPMENT AGREEMENTS
RECOMMENDATION
Receive and file annual report of active development agreements.
EXECUTIVE SUMMARY
• The La Quinta Municipal Code requires annual Council review of active
development agreements (DA).
• Six active development agreements were identified; Centre Pointe,
Legacy Villas, Village Park Animal Hospital, Signature at PGA West, Polo
Villas and SilverRock Resort development projects (Attachment 1).
FISCAL IMPACT
Centre Pointe, Legacy Villas and Signature at PGA West are required to pay
mitigation fees as part of their DA's. These developments are either non-
compliant or partially compliant in remitting the fees owed, see
background/analysis below.
1ACKGROUND/ANALYSIS
The periodic review of DAs by Council is required at least every 12 months from
the date the DA was entered into until the expiration of the agreement. Six
active DAs have been identified. Of the six, Village Park Animal Hospital, was
determined to be in full compliance with no further obligations. The Polo Villas
DA was approved in March 2022 to allow for continued short-term rental
operations and since it has not been effective for 12 months it is not scheduled
to be reviewed until next year. The remaining agreements are summarized in
the table below.
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Active Development Agreements
Project
Name
Parties to
Agreement
Project
Description
Effective
Date
Status
Centre Pointe
CP Development
La Quinta, LLC
(original
applicant), La
Quinta Desert
Villas, Dolphin,
Eisenhower
Medical,
Homewood
Suites, Dr.
Sterling, Dr. Hsu,
La Quinta Palms
Retirement
Community,
Applebee's
68-acre mixed -use
development at SEC
of Washington Street
and Miles Avenue
July 17, 2003,
December 18,
2003
(Expires 2053)
Mitigation fees are delinquent.
Casitas Units
(partially constructed)
Applebee's restaurant
(complete)
Homewood Suites by Hilton La
Quinta (complete)
The Palms La Quinta
retirement community
(complete)
Eisenhower Medical Center
(complete)
2nd sit-down restaurant
(vacant, never constructed)
Pioneer Park (complete)
Legacy Villas
Centex Homes
280 residential units
at NWC of Coachella
and Eisenhower
November 20,
2003
(Expires 2053)
Mitigation fees are delinquent.
Payments are being made.
Signature
(PGA West)
Crown Pointe
Partners, LLC
(original
applicant), WPG
LQ, LLC
264 condo/townhome
units at PGA West,
consist of Villas,
Haciendas, and
Estates
August 18,
2008
(Expires 2058)
Mitigation fees on 1st sales are
being paid.
Development is under
construction
SilverRock
Resort
SilverRock
Development
Company, LLC
SilverRock Resort
including luxury
hotel, lifestyle hotel,
luxury branded
residential, shared
services and
conference center,
and mixed -use
village.
November 18,
2014
(Expires 2044)
Amendment 4 approved
October 5, 2021
The Centre Pointe, Legacy Villas and Signature developments are within a
Tourist Commercial District, which is intended for and permits land uses that
include specialized commercial tourist -oriented uses and resort activity that
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generate transient occupancy tax (TOT) revenue. DAs were executed for these
projects for a per unit payment to the City based on performance measures for
the collection of TOT revenue.
Centre Pointe
The Centre Pointe development includes approximately 68 acres at the
southeast corner of Washington Street and Miles Avenue, and is currently
comprised of Homewood Suites, La Quinta Desert Villas (40 residential
condominium units), Applebee's, Eisenhower Health Center, and The Palms at
La Quinta senior community. The north portion of Centre Pointe is within a
Tourist Commercial District (CT).
In December 2003, a Disposition and Development Agreement (DDA) with the
La Quinta Redevelopment Agency was adopted since this was, at the time,
redevelopment property that was sold to the developer. A DA with the City of
La Quinta was also adopted. The DA and DDA included provisions for the
construction of the mixed -use development, including 132 residential "Casitas,"
which under subsequent amendments was increased to 164 units. These units
are subject to payment of one-time and annual mitigation fees to the City.
Annual fees may be eliminated if the City receives $546,131 minimum annual
TOT generated from the hotel and units, subject to annual Consumer Price
Index (CPI) increase, for three consecutive years (Attachment 2). With the
annual CPI increase, the minimum annual TOT threshold is now $670,606. To
date, 56 of the proposed 164 units have been constructed; 16 of which were
never occupied and 40 are currently used as residential condominiums that
restrict short term rental use. These are presently known as La Quinta Desert
Villas.
The City has invoiced the La Quinta Desert Villas Homeowners Association
(HOA) for these annual mitigation fees since 2016 as the minimum TOT
revenue is not being generated. The HOA is the only party being billed since
these are the only units that have been issued Certificates of Occupancy. The
HOA made payments on 2016-2019 fees; however, it is not current on the
payment of their fees for Fiscal Years (FY) 2019/20, 2020/21 and 2021/22 and
was invoiced in August for a total due of $21,355.99.
Additional requirements of the DDA include schedules of performance for
certain pieces of the development. Currently, the second restaurant parcel and
the remainder of the Casitas development (108 units) have not been
constructed per their performance schedules and therefore are not in
compliance with the DDA.
A notice of default is being prepared to address these issues.
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Legacy Villas
The Legacy Villas development is located west of Eisenhower Drive at Coachella
Drive, north of the La Quinta Hotel. This development consists of 280
residential for sale units that if the owner chooses to rent them, may only be
rented as short-term rentals. The rentals are required to be registered in a
rental pool and report their TOT to the City on a regular basis. The units are
also required to pay mitigation fees. This DA allows for a reduction of the fee
amount from $1,000 per unit to $500 per unit if a threshold of $500,000 of TOT
is collected for three consecutive operating years, subject to annual CPI
increase. The DA also allows for the mitigation fees to be eliminated when
$1,000,000 of TOT is collected for three consecutive operating years. Neither
threshold has been met to date and the units are still responsible for mitigation
fees. An invoice was sent in August for a total due of $978,201.48 for
remaining fees for FY2019/20, 2020/21 and 2021/22. Payments totaling
$809,807.73 have been recently made, leaving an outstanding balance of
$168,393.75. Staff is in contact with the HOA representative to collect the
balance. A summary of the DA is provided as Attachment 3.
Signature at PGA West
The Signature development consists of 230 resort residential units that are also
subject to TOT mitigation payments. These payments are to be collected at the
time of sale, transfer or conveyance of each unit, upon first sale and resales. A
summary of this DA is provided as Attachment 4. The Signature community is
currently under construction to build out the remaining units and has completed
12 condos with two models and 45 single family units with six models. Forty-
five condos and 55 single family units are currently under construction. Ninety-
two units have been sold to date. The development is paying mitigation fees for
the first sale of units, but not all individual owners have paid fees upon resales.
During fiscal year 2021/22, the City collected $230,198 in mitigation fees
including $225,248 for first sales and $4,950 for one resale. A letter is being
sent to the HOA regarding the collection of resales.
SilverRock
Agreements in place for SilverRock consist of a DA and a Purchase, Sale and
Development Agreement (PSDA) which were entered into in November 2014
(Attachment 5). The PSDA was amended in November 2018 to modify the
development schedule, clarify requirements for selling planning areas 7, 8 and
9, identify phasing plan for master site infrastructure improvements, update
project budgets and define ownership structures for the SilverRock
Development Company (SDC). A notice of default was issued in 2021 resulting
in an amendment to the PSDA, which modified the development schedule,
however, recently three milestone dates have been missed for completing the
framing of the luxury hotel guest rooms, starting lifestyle hotel vertical
construction and the completion of the permanent golf clubhouse. Staff is in
communication with the developer regarding both the financial incentive
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reduction penalties for missing milestones and the ongoing schedule impacts
due to a recent developer -initiated construction workforce reduction.
Prepared by: Cheri Flores, Planning Manager
Approved by: Danny Castro, Design and Development Director
Attachments: 1. Map of developments with active development agreements
2. Centre Pointe Development Agreement Summary
3. Legacy Villas Development Agreement Summary
4. Signature Development Agreement Summary
5. SilverRock Resort Development Agreement Summary
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SIGNATURE
Development Agreement Project Locations
September 2022
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ATTACHMENT 2
Center Pointe Development Agreement (DA2003-0006)
Project Description: 134 room hotel, 136 condo/casita units, residential development
of 54 detached homes, 14 market rate homes, 2 restaurants, medical office, surgical
facility, 132 suite retirement community, 72 suite assisted living, and a 32-bed
memory care facility.
Applicant: Center Pointe Development LQ, LLC
Case No.: Development Agreement 2003-006, Ord 385, 409, 423, 455 and 504 (4
amendments)
Disposition and Development Agreement (7 amendments)
Related Case: Specific Plan 2001-055, EA 2001-436, 2011-617
Effective Dates: December 18, 2003, Expires December 18, 2053 (50 YEARS)
Key Points of the Agreement:
• Developer to construct 134 guest room hotel, 136 condo/casitas units, 13
courtyard cluster villas, 54-unit residential development, 14 market rate homes,
40 affordable homes, two restaurants, medical office/ surgical facility, 26
sanctuary villas.
• Development of a Casitas HOA
• Developer constructs a neighborhood park.
• Contribution towards landscape improvements
• Payment of Mitigation fees
o One-time mitigation fee
■ Casitas: $1,500 for each unit with payment due upon the first
close of escrow
■ Sanctuary Villas: $2,150 for each unit with payment due upon the
first close of escrow
o Annual mitigation fees:
• Casitas and Sanctuary Villas: $150 for each unit sold to a
purchaser to be paid each July 1. Fee shall not be required for any
operative year in which the City has received transient occupancy
taxes derived from the Suites Hotel parcel, casitas parcel, and
sanctuary villas parcel which equals or exceeds $546,131 for the
applicable operative year
o If City received minimal annual TOT ($546,131) in each of three
consecutive operative years, the Casitas and Sanctuary Villas HOA's
obligation to pay the annual mitigation fee shall be terminated.
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• Public Facilities Fee: 5% of rental amount if rented for a period of time over 30
days
• Sanctuary Villas later removed from the development plan (DA Amendment 2)
• DA Amendment 4 replaced the development of single-family residential homes
with a senior living facility, The Palms, consisting of 132 retirement suites, four
single -story duplex cottages, 72 assisted living suites, and 32 beds for memory
care.
To view the documentation for the CP Development La Quinta LLC Disposition and
Development and Development Agreements please use the following web address:
https://laglaserweb.laquintaca.gov/WebLink/DocView.aspx?id=20723&searchid=ad833
b3f-2b17-433c-967f-d86170883192&dbid=1&repo=CityofLaQuinta
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ATTACHMENT 3
LEGACY VILLAS DA TERMS (DA 2003-007)
Project description: 280-unit Residential Resort on 44.61 Acres
Applicant:
Case No.:
Related Case:
Centex Homes
Development Agreement 2003-007, Ordinance 389
Specific Plan 2003-065, Site Development Permit 2003-778,
Environmental Assessment 2003-478, Tentative Tract Map 31379
Effective Dates: Development Agreement is considered effective on December 12,
2003, and expires December 11, 2053 (50 YEARS).
Key Points of the Agreement:
• A one-time mitigation fee of $2,500 per unit constructed in the project due on or
before the date the building permit is issued for each unit.
• Annual mitigation fee which is collected by the HOA at $1,000 per year per unit that
has been sold to an owner. The HOA then forwards to the City of La Quinta.
• The Annual mitigation fee is reduced from $1,000 to $500 per year if the City
receives TOT from rental units in the project that exceeds $500,000 for three
consecutive years during the term of the Development Agreement and can be
totally eliminated if the City has received TOT from rental units in the Project in
excess of $1,000,000 for any three consecutive operating years during the life of
the Development Agreement.
• Any rentals are subject to TOT.
• Rental Tracking System by HOA.
To view the Centex Homes Development Agreement please use the following web
address:
https://laglaserweb.laquintaca.gov/WebLink/DocView.aspx?id=20844&searchid=1d9b36a
a-5311-452b-ae5d-314022a50780&dbid=1&repo=CityofLaQu inta
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ATTACHMENT 4
EDENROCK (SIGNATURE) DA TERMS (DA2006-011)
Project Description: 264 condo/townhome units (83 Courtyard Homes, duplexes, 79
Manor Homes, triplexes, and 102 Village Homes, sixplexes) on 41.95 acres.
Applicant: Crowne Pointe Partners, LLC
Case No.: Development Agreement 2006-011, Ordinance 457, 533
Related Case: SP 83-002, Amendment No. 6, GPA 2006-107, ZC 2006-127,
Tentative Tract Map 33226, SDP 2006-852
Effective Dates:
• August 18, 2008, and expires August 18, 2058 (50 YEARS)
• Assignment and Assumption Agreement entered into March 24, 2014, assigned
to RREF-CWC LaQ, LLC
• Amendment 1 entered into on March 8, 2016
Purpose: Development Agreement entered into for purposes of payment to City a
per unit upfront payment for potential loss of anticipated general fund revenues from
"Transient Occupancy Tax" as a result of the use of the site for a residential resort
instead of a traditional tourist commercial use such as a 1,000-room resort hotel,
conference center and 100,000 square feet of resort retail.
Key points of the Agreement:
• Compliance with Conditions of Approval
• Recordation of Covenants, Conditions and Restrictions (CC&Rs)
• Payment to the City for each unit 0.75% of the developer's full sale price of
the unit upon close of escrow, inclusive of all developer -installed options and
upgrades, with the amount of such sales price verified by the City.
• Owners required to pay transfer payment to the City in the amount of 0.55%
upon sale, transfer or conveyance of owner's unit (Recorded in CC&R's)
• Payment of Fair Share Improvements as identified in mitigation measures
11.0-3 and 11.0-4 of the project EIR.
To view the Signature Development Agreement and Amendment, please use the
following web links:
Development Agreement:
ORD 457 DA Eden Rock at PGA West - Crowne Pointe Partners, LLC
(laquintaca.gov)
Amendment 1:
ORD 533 RREF II-CWC LaQ, LLC - Signature at PGA West - Amendment to DA
(laquintaca.gov)
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ATTACHMENT 5
SILVERROCK DA TERMS (DA 2014-1001)
Project description: Development of a resort development as follows:
Area
Project Components
Acres
Units
PA 1
Modification of existing Golf Course
173
PA 2
Montage Luxury hotel with spa and fitness center
(170,000 sq. ft)
17
140
PA 3
Montage Luxury branded residential homes
14
35
PA 4
Shared service/conference facility
7.5
PA 5
Pendry Lifestyle hotel (170,000 sq. ft.)
10.5
200
PA 6
Pendry Lifestyle branded residential development
10
66
PA 7
Mixed -Use Village Area 1
10.5
150
PA 8
Resort Residential Village
22.5
160
PA 9
Mixed Use Village Area II (80 units)
15
80
PA 10A-1
Golf Course and Clubhouse
51.5
25
PA 10A-2
Residential
13.5
46
PA 10A-3
Residential
5
23
PA 10B-1
Golf Course
62
40
PA 10B-2
Residential
5.5
19
PA 10B-3
Residential
4.5
20
PA 10B-4
Residential
7
34
PA 10B-5
Residential
5.5
22
PA 10B-6
Residential
5.5
24
PA 11
Public Park
22
PA 12
Arroyo, Trails, Canal & Streets
53.5
Total
525
1084
Applicant: SilverRock Development Company, LLC
Case No.: Development Agreement 2014-1001, Ordinance 520
Related Cases: SDP 2016-0005, SDP 2016-0009
Effective Dates:
• Development Agreement approved on November 18, 2014
• Purchase Sale and Development Agreement (PSDA) entered into on
November 19, 2014, and expires November 19, 2044 (30 YEARS).
• Amendment 1 to the PSDA was entered into on October 29, 2015
• Amendment 2 to the PSDA was entered into on April 18, 2017
• Amendment 3 to the PSDA was entered into on November 28, 2018
• Amendment 4 to the PSDA was approved October 5, 2021
Purpose (Amendment 4 of PSDA): Modifies the development schedule;
decreases the amount of Transient Occupancy Tax (TOT) receipts available by 5%
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for the 15-year term when calculating any rebate for continuous operation of the
hotels, once opened, under TOT Covenant Agreements; identifies additional project
milestones; increases the purchase price on "Future Resort Property" (Option
Property) for missing milestones; and requires hotel operator to manage all resort
residential short-term vacation rentals.
Key points of the Agreement:
• Establishment of a vested right to execute and fulfill the development program
in accordance with the SilverRock Resort Specific Plan and applicable zoning
regulations.
• Development impact fees are to be paid in accordance with those fees in force
and effect as of the effective date of the Agreement.
• Any non -city development fees, such as the CVMSHCP or TUMF fees, will be
collected at the rate in effect at the standard time of collection.
• Developer is responsible for executing development in accordance with identified
development program.
• Developer acknowledges responsibility for CEQA mitigation monitoring.
• The Agreement is to be reviewed at least annually in order to ensure compliance
with provisions.
• Use the Ahmanson House as temporary clubhouse, in lieu of constructing a
temporary clubhouse, until the permanent clubhouse is operational.
• Master Site Infrastructure Improvements Phasing Plan amended.
To view the SilverRock DA, please use the following web address:
https://lacilaserweb.laquintaca.gov/WebLink/DocView.aspx?id=44821&searchid=c9
a0a048-c544-4863-b159-5d2cd849d669&dbid = l&repo=CityofLaQuinta
To view Amendment #4 to the PSDA, please use the following web address, page
147:
https://www.laquintaca.gov/home/showpublisheddocument/45845
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