2022-03-01 Polo Villas DA 2021-0003 - PH2 Introduce Ord 599 CC Staff ReportCity of La Quinta
CITY COUNCIL MEETING: March 1, 2022
STAFF REPORT
PUBLIC HEARING ITEM NO. 2
AGENDA TITLE. CONTINUED FROM FEBRUARY 15, 2022:
INTRODUCE FOR FIRST READING AN ORDINANCE APPROVING A
DEVELOPMENT AGREEMENT FOR POLO VILLAS RESIDENCES. CEQA:
THE PROJECT IS CONSISTENT WITH PREVIOUSLY ADOPTED
ENVIRONMENTAL ASSESSMENTS 2005-537 AND 2010-608. LOCATION:
WEST OF MADISON STREET BETWEEN AVENUES 50 AND 52
RECOMMENDATION
1. Make a finding, included in Ordinance No. , that adopting this
ordinance is consistent with the previously adopted Mitigated Negative
Declarations, EA2005-537 and EA2010-608 for Tracts 33085 and
36279.
2. Move to take up Ordinance No. by title and number only and waive
further reading.
3. Move to introduce at first reading, Ordinance No. to approve a
development agreement for Polo Villas Residences.
EXECUTIVE SUMMAR)
• Tract 33085 was approved by City Council December 5, 2017, for seven
(7) units, south of Beth Circle, and Tract 36279 was approved by City
Council March 17, 2015, for 11 units, north of Beth Circle (Attachment
1). Mitigated Negative Declarations (MND) were also adopted for each
Tract.
• Tract 36279 was built in 2015/2016 and the 11 units each currently
have active Short -Term Vacation Rental (STVR) permits since
September 2016. Tract 33085 has not yet been built.
• The applicant is proposing a development agreement to continue the
short-term rental of the existing 11 units and allow seven units (not yet
built) to be rented short-term.
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• The Planning Commission at its regular meeting of January 25, 2022,
voted to recommend City Council approve the development agreement.
FISCAL IMPAC'i
The project is estimated to generate revenue primarily through property
taxes, development impact fees (DIF), property taxes in -lieu of vehicle license
fees and transient occupancy tax (TOT). The following projections are included
in the Fiscal Impact Study prepared by the applicant (Attachment 2).
Estimated Fiscal Impact at Build -out
Recurring Revenues
Property Tax
$23,263
Property Tax in lieu of VLF
$7,731
Transient Occupancy Tax
$831,183
Off -site Sales Tax
$43,849
Other revenues
$36,140
Total Recurring Revenues
$942,166
Recurring Expenditures
(i.e., Police, Fire, City staff)
$131,577
Net Fiscal Surplus
$810,589
The additional costs incurred to the City as a result of the project are less than
the additional revenues generated; therefore, resulting in a net positive fiscal
impact.
BACKGROUND/ANALYSIS
The Polo Villas residential development is comprised of 18 units within two (2)
tract maps numbered 33085 and 36279 (Attachment 1). The tentative tract
map for Tract 33085 was approved and an MND was adopted for seven (7)
units on December 6, 2005. The final tract map was approved and recorded
in December 2017. The tentative tract map for Tract 36279 was approved and
an MND was adopted for 11 units on August 2, 2011. The final tract map was
approved in March 2015 and recorded in April 2015. Of the 18 units, 11 have
been built and each currently have active STVR permits since 2016.
In May 2021, Council adopted an ordinance that places a permanent ban on
issuance of new STVR permits, with the exception of units within the Village
and Tourist Commercial zones and developments subject to a development
agreement (DA) that stipulate short-term rental is allowed, among other
specified exceptions. Those with current active STVR permits may continue
to operate as STVRs, but a STVR permit is not transferable and expires when
an owner sells their property to a new owner. In this case, the applicant
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(GTGF, LLC) has a purchase and sale agreement to buy the 18 properties from
the current owner (Desert Polo Land Company, LLC) and wishes to enter into
a DA with the City to allow STVRs to continue to operate. Government Code
Section 65864 and the La Quinta Municipal Code (LQMC) Section 9.250.020
allow applicants to enter into DAs with the City.
Development Agreement Terms
The terms of the draft DA (Exhibit A) are summarized below:
• The project shall be constructed in accordance with project approvals
and shall consist of a residential single-family development specifically
developed and available for use as primary residences, secondary
residences, and/or short-term vacation rental residences, with the
following components:
o Annual permitting fees to be consistent with the City's fee
program;
o Any rental or occupancy of 30 nights or less to be subject to the
City's then -current transient occupancy tax for short-term
vacation rentals;
o Rental or occupancy agreements, and material renter or occupant
information, shall be retained for a minimum of three (3) years
(or other retention period as may be approved by City policy or
code) by the applicant or their authorized management company
for the short-term vacation rentals at the site;
o Occupancy in any residence, including residences used as short-
term vacation rentals, shall be capped at two (2) persons per
bedroom, plus no more than four (4) additional occupants; and
o Each of the residences shall allow for transient occupancy, 30 days
or less.
• A performance schedule for construction of the seven (7) units on the
south side of the project.
• The term of the DA shall be for 50 years.
• The DA shall be reviewed on an annual basis.
Findings
Council is required to make the following findings on the DA per LQMC Section
9.250.020.
• Consistency with the objectives, policies, general land uses, and
programs specified in the General Plan and any applicable specific plan
as follows:
o Policy LU-6.3: Support and encourage the expansion of the resort
industry as a key component of the City's economic base.
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o Policy LU-3.1: Encourage the preservation of neighborhood
character and assure a consistent and compatible land use
pattern.
o Goal ED-1: A balanced and varied economic base serving both the
City's residents and the region.
o Goal ED-2: The continued growth of the tourism and resort
industries in the City.
o The properties are available and must be used for residential
purposes which is consistent with the land use pattern in the area.
The properties would also be able to be used for short-term
vacation rental residences thus contributing to the economic base
and tourism industry of the City.
• Compatibility with the uses authorized in and the regulations prescribed
for the land use district in which the real property is located:
o The properties are available and must be used for residential
purposes, and may be the residents' primary residence or
secondary residences, and/or may be used for short-term
vacation rental residences, which residential use is consistent with
the permissible uses of the land use district the property is located
in. This is appropriate for the area given the proximity to
surrounding residential areas and polo fields to the east of
Madison Street.
• Conformity with the public necessity, public convenience, general
welfare and good land use practices:
o The properties may be used as residences which is consistent with
the surrounding area.
• Will not be detrimental to the health, safety and general welfare:
o The properties may be used as residences which is consistent with
the surrounding area.
• Will not adversely affect the orderly development of property or the
preservation of property values:
o The DA facilitates development of high -quality homes and extends
residential development along Madison Street in the project area.
• Will have a positive fiscal impact on the City:
o The fiscal study prepared for the DA shows a positive fiscal impact
on the City from revenues gained through payment of certain
development impact fees for undeveloped units, increased
property taxes and transient occupancy taxes when units are
rented on a short-term basis (Attachment 2).
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AGENCY AND PUBLIC REVIEW
Public Agency Review
This request was sent to all applicable City departments and all applicable
comments have been adequately addressed.
Public Notice
This project was advertised in The Desert Sun newspaper on February 4, 2022,
and on February 12, 2022. The hearing notice was also mailed on February
12, 2022, to residents and occupants within a 500 ft. radius of the project
site. No written comments have been received as of the date of this writing.
Any written comments received will be handed out at the City Council meeting.
Planning Commission Review
At its regular meeting of January 25, 2022, the Planning Commission voted to
recommend Council approve the proposed development agreement
(Attachment 3 - Planning Commission Minutes of January 25, 2022). To view
the video recording of the meeting, please follow the provided link: La Quinta,
CA : Planning Commission Meeting - 1/25/2022 (12milesout.com)
ENVIRONMENTAL REVIEW
The Design and Development Department has determined that the proposed
project is consistent with MND EA2005-537 adopted by City Council on
December 6, 2005, by Resolution No. 2005-097 and MND EA2010-608
adopted on August 2, 2011, by Resolution No. 2011-073, in that the properties
are available and must be used for residential purposes as primary or
secondary residences or short-term rental residences.
Prepared by: Cheri Flores, Planning Manager
Approved by: Danny Castro, Design and Development Director
Attachments: 1. Vicinity Map
2. Fiscal Impact Study
3. Planning Commission Minutes from January 25, 2022
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ATTACHMENT 1
tai Otilifra
City of La Quinta
Planning Division
Design and Development Department
January 2022
T 1N3WHDVllV
ATTACHMENT 2
FISCAL IMPACT ANALYSIS
FOR
POLO VILLAS
January 2022
Prepared By:
1 DPFG 1
DEVELOPMENT PLANNING & FINANCING GROUP
247
681
Fiscal Impact Analysis
January 2022 Polo Villas
Table of Contents
Page
Contents
1.0 Purpose of Fiscal Impact Analysis 3
2.0 Project Description 3
3.0 FIA Limiting Conditions 3
4.0 General Sources of Information and Methodology Used in FIA 4
5.0 FIA Summary and Conclusions 5
6.0 FIA Recurring Revenues 6
6.1 Property Tax 6
6.2 Property Transfer Tax 7
6.3 Property Tax In -Lieu of Vehicle License Fees ("VLF") 7
6.4 Transient Occupancy Tax (TOT) 7
6.5 Offsite Sales Tax 7
6.6 Other Revenues 8
7.0 FIA Recurring Costs 8
7.1 General Administration 8
7.2 Police 9
7.3 Fire 9
7.4 Community Resources 9
7.5 Public Works 9
7.6 Design & Development 9
7.7 Fiscal Services 9
8.0 Impact Fees 10
9.0 Glossary of Defined Terms and Acronyms 10
Appendices:
Appendix A — Project Aerial
Appendix B — Fiscal Impact Analysis Tables
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1.0 Purpose of Fiscal Impact Analysis
This Fiscal Impact Analysis ("FIA") has been prepared to determine the estimated fiscal
impacts on the City of La Quinta ("City") in connection with the proposed development
of the Polo Villas project ("Project"), an 18 single family unit, short-term rental,
development with 11 existing dwelling units and an additional 7 lots proposed for
development of single family units similar to the existing 11 dwelling units. The reader
should be aware that the FIA contains estimates or projections of the Project's future
revenue and cost impacts on the City and actual fiscal results may vary from estimates
because events and circumstances may occur in a manner that is different than projected
in the FIA. The primary purpose of this FIA is to estimate the Project's net fiscal impact
on the City's General Fund upon build -out.
2.0 Project Description
Polo Villas is a short-term rental development consisting of 18 homes, generating an
estimated population equivalent of 140 visitors. Development has already been completed
on 11 of the single family dwelling units with an additional 7 units proposed for
development. The lots on the site total approximately 10.28 acres of land. The project is
located at the corner of Madison Street and Vista Bonita Trail within the City of La Quinta.
3.0 FIA Limiting Conditions
The FIA is subject to the following limiting conditions:
• The FIA contains an analysis of recurring revenues and costs to the City from
development of the Project. The FIA is based on estimates, assumptions, and other
information developed from DPFG's research and experience.
• The sources of information and basis of the estimates are stated herein. While we
believe the sources of information are reliable, DPFG does not express an opinion or
any other form of assurance on the accuracy of such information.
• The analysis of recurring revenues and cost impacts to the City contained in the FIA is
not considered to be a "financial forecast" or a "financial projection" as technically
defined by the American Institute of Certified Public Accountants. The word
"projection" used within this report relates to broad expectations of future events or
market conditions.
• Since the analyses contained herein are based on estimates and assumptions which are
inherently subject to uncertainty and variation depending on evolving events, DPFG
cannot represent that results will definitely be achieved. Some assumptions inevitably
will not materialize and unanticipated events and circumstances may occur; therefore,
the actual results achieved may vary from the projections.
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4.0 General Sources of Information and Methodology Used in FIA
The FIA was prepared to estimate the allocable revenue and cost impacts to the City's
general fund ("General Fund") as a result of the Project's development and operation as
short-term rental units. The FIA uses a combination of case study methods and multiplier
methods to estimate Project impacts.
When projecting fiscal impacts using a multiplier method, the FIA determines per
capita/employee impacts by applying the appropriate multiplier to the Project's land use
assumptions. The Per Capita -and -Employee -Multiplier Method involves dividing a cost
or revenue figure by the number of residents and 50% of all employees working in the
City, and then multiplying that number by the number of residents projected for the Project
at buildout. This method assumes that recurring costs and revenues will result from the
Project at the same rates that currently prevail within the City, with each employee
counted as one-half of a resident to reflect the relative significance of employees (i.e. non-
residential land uses) in generating City public services costs or City revenues. The
multipliers were calculated using data from the City of La Quinta Approved Operating
Budget for Fiscal Year 2020-2021 ("Budget"). Where appropriate, City Budget data is
adjusted to account for expected marginal increases when the nature of the cost or revenue
item contains a fixed component that is not anticipated to change based on population
growth from the Project. All cost and revenue factors are projected in 2021 dollars, and
are not adjusted for inflation, based on the assumption that the relative impacts of inflation
in future years will be offsetting.
Information used in preparing the FIA was obtained from the following sources: (1) City
of La Quinta Adopted Budget for Fiscal Year 2021-2022; (2) Avantstay ("Client"); (3)
California Employment Development Department (employment information); (4)
Riverside Auditor -Controller's Office (Fiscal Year 2021-2022 share of the basic tax
information and assessments); (5) U.S. Census Bureau (population data); (6) U.S. Bureau
of Labor Statistics (household expenditure data and persons per household); and (7)
Riverside Market View published by CBRE (Market Data).
The FIA Appendix is organized as follows:
Appendix
Table
Description
B
1
Fiscal Impact Analysis Summaries
B
2
Population and Employment Data
B
3
Land Use and Assessed Value Assumptions
B
4
Post-ERAF Share of the Basic Tax Calculation
B
5
Property Taxes In -Lieu of VLF
B
6
Transient Occupancy Taxes
B
7
Off -Site Sales Tax Revenue
B
8
Other Recurring Revenues
B
9
Property Taxes In -Lieu of VLF
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The following table shows the key demographic and property tax assumptions for both
scenarios used in the FIA:
Demographic Summary
Ell Estimated Project Residents
•
Average Beds per Unit
Average Persons per Bed
Total Anticipated Guests per Unit
Total Units at Buildout
Total Anticipated Guests
Average Annual Occupancy Rate
Total Anticipated Average Annual Persons Generated
(Persons Per Household E.uivalent
5.2 (a)
2 (b)
10.4
18
187
65% (b)
122
City ' roject
Population / Visitors
37,558 (c)
122
Employees
19,400 (d)
-
Residents + 50% Employees
47,258
122
Footnotes:
(a) Estimate of 5.2 beds per unit per anticipated land use.
(b) Average of 2 persons per bed and 65% occupancy rate per Client and existing
development data estimates.
(c) Per the United States 2020 Census Total Population for the City of La Quinta.
(d) Based upon the California Employment Development Department total
employment values for the City of La Quinta dated 11/19/2021.
5.0 FIA Summary and Conclusions
The FIA examines the financial impact the Project will have at buildout on the General
Fund. The Project will generate additional revenue for the General Fund primarily through
increased property taxes, property taxes in -lieu of vehicle license fees, and transient
occupancy taxes. The additional costs incurred to the General Fund as a result of the
Project are less than the additional revenues generated, and consist primarily of police and
fire services. The Project's direct impact to the General Fund at buildout is summarized in
the following chart:
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Polo Villas Fiscal Impact Summary
$1,066.600
$9Oo,4OO
s800:000
$700,O00
$6OO-00
$SOO,OOO
$4QO,oOO
S200,00
$100,OOO
$942_166
$131,577
Polo Villas
S810,589
o Total Recurring Revenue
$942,166
o Total Recurring Expenditures
$131,577
u Net Fiscal Surplus (Deficit)
$810,589
As seen in the chart, the Project is anticipated to generate a $810,589 surplus to the City
on an annual basis, once the Project is fully developed.
6.0 FIA Recurring Revenues
6.1 Property Tax
In addition to other ad valorem charges imposed by various local agencies, land owners in
the State of California ("State") are required to pay annual property taxes of 1 % on the
assessed value of their property pursuant to Proposition 13. Each City in California is
divided into tax rate areas ("TRA"). After the basic 1 % property tax is collected by the
County, the tax is allocated to various local agencies based on each agency's share of the
basic tax within the property's applicable TRA. The Project is subject to TRA's 020-056
and 020-160. Per the Riverside County Auditor -Controller, the City will receive a weighted
average of 6.4620% of the base 1 % ad -valorem tax. The breakdown of lots and estimated
assessed value by TRA is detailed in Appendix B, Table 4. In total, the Project is
anticipated to generate the following per year in property taxes for each scenario.
Total
Total Assessed Value from Table 2
Base 1%Ad-Valorem Tax
1.00%
$ 36,000,000
$ 360,000
Cityy Share
6.4620%
$ 23,263
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6.2 Property Transfer Tax
The City receives property transfer tax revenue as new or existing property is sold and
ownership is transferred. In accordance with California Revenue and Taxation Code
Section 11911, a City may levy a transfer tax at the rate of $0.55 for each $1,000 of assessed
value. The FIA assumes a residential turnover rate of 10.00% of total assessed value per
year (i.e., properties change ownership every 10 years on average) and a commercial
turnover rate of 5.00% of the total assessed value per year (i.e. properties change ownership
every 20 years on average). To be conservative, this analysis does not assume that the
property will be sold in the near future.
6.3 Property Tax In -Lieu of Vehicle License Fees ("VLF")
In May 2004, Governor Schwarzenegger proposed a swap of City and City VLF revenue
for additional property tax share as part of a budget agreement between the State and local
governments. The swap was included in the 2004 budget package. Under this legislation,
property tax in -lieu of VLF is allocated to Cities and Counties pursuant to a complex
formula involving each agencies relative share of assessed value. The property tax in -lieu
of VLF revenue that will be generated by the Project can be estimated by determining the
(i) percentage growth in the total assessed value of the City attributable to the Project, and
multiplying by (ii) the property tax in -lieu of VLF revenue of $4,615,000 expected to be
received by the City in fiscal year 2021/22 per the City Budget. Based on these calculations,
the Project is anticipated to generate an additional $7,731 annually in property tax in -lieu
of VLF revenue (reference Appendix B, Table 5).
6.4 Transient Occupancy Tax (TOT)
The transient occupancy tax (hotel, motel, campground or bed tax) is authorized under
State Revenue and Taxation Code Section 7280, as an additional source of non -property
tax revenue to local government. Per City of La Quinta, the City levies a transient
occupancy tax at a rate of 10.00% of hotel or other lodging stays of less than 30 days.
Based on information provided by the client regarding the actual gross rental revenue
generated by the existing development, we've estimated the average yearly gross rental
revenue increase based on the additional proposed lots. Based on the forgoing, we have
projected transient occupancy tax. Accordingly, the FIA projects annual transient
occupancy tax revenue of $831,183, as calculated in Appendix B, Table 8.
6.5 Offsite Sales Tax
Under the California Sales and Use Tax Law, the sale of tangible personal property is
subject to sales or use tax unless exempt or otherwise excluded. When the sales tax applies,
the use tax does not apply and the opposite is also true. The sales tax is imposed on all
retailers for the privilege of selling tangible personal property in the State and is measured
by the retailer's gross receipts.
Currently, there is a 7.25% statewide sales and use tax base rate that is collected by the
State Board of Equalization. The State government receives 6.25% of the 7.25% and local
governments receive the remaining 1.00% which is transferred to the local government's
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general fund. The City has also approved Measure G in 2016 which was approved by voters
and results in an additional 1.00% sales tax.
The City will receive sales tax revenue from taxable purchases made within the City limits
by the Project's visitors. Applying the methodology outlined in Appendix B Table 7 the
Project is anticipated to generate $43,849 in residential off -site sales tax.
1
Spending by Residents:
6
Single Family Short Term Rental
Total I
Estimated Spending per Week per Person (a)
$ 2,100
$ 255,528
Estimated Annual Spending
$ 13,287,456
Less: Vacancy (b)
20%
(2,657,491)
Less: Estimated Annual spending on Lodging and Non Taxable Sales (c)
47%
(6,245,104)
Total Anticipated Annual taxable spending
$ 4,384,860
Total Spending anticipated outside City (d)
50%
$ (2,192,430)
Total Taxable Spending within City of La Quinta
$ 2,192,430
Annual Sales Taxes to City
1.00%
$ 21,924
Annual Measure G Sales Taxes to City
1.00%
$ 21,924
Total Annual Sales Tax to City
2.00%
$ 43,849
Footnotes:
(a) Estimate based on average anticipated spending of $300 per person per day ($2,100 per week) based on data
from Visit California and the 2017 Report on the Economic Impact of Tourism in the Greater Palm Springs Area.
Total estimated spending represents spending for all 140 anticipated guests per week at buildout.
(b) Estiamted vacancy represents DPFG's estimate based on location relative to other establishments in the market
(c) Per data from Visit California and the 2017 Report on the Economic Impact of Tourism in the Greater Palm
Springs Area average visitor spending.
(d) Represents anticipated taxable spending outside the City.
6.6 Other Revenues
The City receives various other revenues analyzed under the FIA. These include (i)
franchise fees, (ii) charges for services, and (iii) Franchise Fees, among other recurring
revenues. These revenues have been estimated using the appropriate multiplier against the
City budgeted revenues for each respective revenue category. Accordingly, total annual
"other" revenues are anticipated to be $36,140 at buildout, as seen in Appendix B, Table
8.
7.0 FIA Recurring Costs
7.1 General Administration
General Government Administration services cost includes City Council, City Manager,
City Attorney, City Clerk, and Human Resources. The FIA assumes an estimated 50%
marginal increase for these costs as they do not have a 1:1 relationship with population
growth (i.e., majority of costs are fixed, not variable). Accordingly, using a Per Capita &
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50% Employee Multiplier, General Administration costs are anticipated to be
approximately $5,666 at buildout, as shown in Appendix B, Table 9.
7.2 Police
The Police department will be responsible for providing protection services to the Project.
To estimate the Project's impact on police service costs, the FIA uses a Per Capita & 50%
Employee Multiplier of approximately $350.51. Based on this multiplier, total annual
police service costs for the Project are estimated to be approximately $45,973 at buildout,
as shown in Appendix B, Table 9.
7.3 Fire
The La Quinta Fire Department provides fire protection and emergency medical services
to the City of La Quinta. To estimate the Project's impact on fire service costs the FIA uses
a Per Capita & 50% Employee Multiplier of approximately $150.39. Based on this
multiplier, total annual fire service costs are estimated to be approximately $19,725 at
buildout, as shown in Table 9.
7.4 Community Resources
The Community Services cost category includes services related to Community Resources
Administration, Wellness Center Operations, Recreation Programs/Special Events, as well
as Code Compliance/Animal Control. Using a Per Capita Multiplier, total Community
Services costs are anticipated to be approximately $6,556 at buildout, as shown in
Appendix B, Table 9.
7.5 Public Works
The Public Works cost category include services related to Parks Maintenance, Public
Buildings, Public Works Administration, Development Services, Streets, as well as
Engineering Services. Using a Per Capita Multiplier, total Public Works costs are
anticipated to be approximately $14,666 at buildout, as shown in Appendix B, Table 9.
7.6 Design & Development
The Design & Development cost category include services related to Design &
Development Administration, Planning, Building, and The Hub. Using a Per Capita
Multiplier, total Public Works costs are anticipated to be approximately $8,344 at buildout,
as shown in Appendix B, Table 9.
7.7 Fiscal Services
The Fiscal Services cost category includes services related to the collection and investment
of City monies, accounting, budgeting, and financial reporting. Using a Per Capita
Multiplier, total Public Works costs are anticipated to be approximately $30,646 at
buildout, as shown in Appendix B, Table 9.
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8.0 Impact Fees
The additional 7 lots proposed for dwelling units within the Project will be subject to
development impact fees collected by the City and are a one-time revenue event. The City
fees are collected to fund park and recreation, community and cultural center, library, civic
center, maintenance facilities, fire protection and transportation improvements. The City
will also collect fees for TUMF and MSHCP which will be passed through to Coachella
Valley Association of Governments and Coachella Valley Conservation Commission,
respectively. The total development impact fees to be paid to the City are anticipated to be
approximately $91,966 at buildout, as shown in Appendix B, Table 10.
9.0 Glossary of Defined Terms and Acronyms
Budget
City of La Quinta Adopted FY 2021/2022 Budget
City
City of La Quinta
Client
Avantstay
DPFG
Development Planning & Financing Group
FIA
Fiscal Impact Analysis
General Fund
City of La Quinta General Fund
Project
Polo Villas
State
State of California
TRA
Tax Rate Area
VLF
Vehicle License Fees
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Appendix A
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Appendix B
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Table 1 - Polo Villa
Fiscal Impact Analysis Summary
FISCAL IMPACT
Recurring Revenues:
Property Tax
Property Tax in -lieu of VLF
Transient Occupancy Tax
Off -site Sales Tax
Other Revenues
Total Recurring Revenue
$ 23,263 Table 4
7,731 Table 5
831,183 Table 6
43,849 Table 7
36,140 Table 8
$ 942,166
Recurring Expenditures:
City Council $ 389 Table 9
City Manager 1,385 Table 9
Marketing & Community Relations 1,707 Table 9
City Attorney 896 Table 9
City Clerk 805 Table 9
Human Resources 484 Table 9
Police 45,973 Table 9
Fire 19,725 Table 9
Community Resources Adminsitration Totals 1,310 Table 9
Wellness Center Operations 969 Table 9
Recreation Programs & Special Events Table 2,339 Table 9
Code Compliance/Animal Control Totals 1,939 Table 9
Parks Maintenance 6,517 Table 9
Public Buildings 3,402 Table 9
Public Works Administration 953 Table 9
Public Works Development Services 555 Table 9
Streets 1,279 Table 9
Engineering Services 1,961 Table 9
Design & Development Adminsitration Total: 1,690 Table 9
Planning 1,747 Table 9
Building 2,368 Table 9
The Hub 2,539 Table 9
Finance 3,718 Table 9
Central Services 26,928 Table 9
Total Recurring Expenditures
$ 131,577
Net Fiscal Surplus (Deficit) $ 810,589
261
Table 2 - Polo Villas
Population and Employment Data
Estimated Project Residents
Average Beds per Unit
Average Persons per Bed
Total Anticipated Guests per Unit
Total Units at Buildout
Total Anticipated Guests
Average Annual Occupancy Rate
Total Anticipated Average Annual Persons Generated
(Persons Per Household Equivalent)
5.2 (a)
2 (b)
10.4
18
187
65% (b)
122
City
Project
Population / Visitors
37,558 (c)
122
Employees
19,400 (d)
-
Residents + 50% Employees
47,258
122
Footnotes:
(a) Estimate of 5.2 beds per unit per anticipated land use.
(b) Average of 2 persons per bed and 65% occupancy rate per Client and existing
development data estimates.
(c) Per the United States 2020 Census Total Population for the City of La Quinta.
(d) Based upon the California Employment Development Department total
employment values for the City of La Quinta dated 11/19/2021.
262
Table 3 - Polo Villas
Land Use and Assessed Value Assumptions
Residential Developed Lots
Lot
Total Residential
Assessed Value (a)
Lot 1 - APN 777-500-001
$
2,000,000
Lot 2 - APN 777-500-002
2,000,000
Lot 3 - APN 777-500-003
2,000,000
Lot 4 - APN 777-500-004
2,000,000
Lot 5 - APN 777-500-005
2,000,000
Lot 6 - APN 777-500-006
2,000,000
Lot 7 - APN 777-500-007
2,000,000
Lot 8 - APN 777-500-008
2,000,000
Lot 9 - APN 777-500-009
2,000,000
Lot 10 - APN 777-500-010
2,000,000
Lot 11 - APN 777-500-011
2,000,000
Residential Subtotal/Avg.
$
22,000,000
Residential Undeveloped Lots (b)
Average of Assessed Value of Developed Lots
$
2,000,000
Residential Subtotal for Remaining 7 Lots
$
14,000,000
Total Project Assessed Value
$
36,000,000
Footnotes:
(a) Assessed value per anticipated purchase price of $22,000,000 for existing lots.
(b) Remaining 7 lots to be developed are estimated to have an assessed value equal to the
average assessed value of the existing lots.
263
Table 4 - Polo Villas
Post-ERAF Share of the Basic Tax Calculation
Agency
020-056
020-160
Wtd. Avg. of
TRAs (a), (b)
General Fund
County Free Library
County Structure Fire Protection
City of La Quinta
Coachella Valley Unified School District
Desert Community College
Riv. Co. Office of Education
Riv. Co. County Regional Park and Open Sp
Coachella Valley Public Cemetary
CV Mosquito and Vector Control
Coachella Valley Rec and Park
CV Water District State WTR Proj
Coachella Valley Resource Conser
CVWD Imp Dist 1 DS
CVWD Storm Water Unit
ERAF Fund
Total
Project Acres (c)
% of Total
9.78120003%
1.33136960%
5.44245812%
6.46308231 %
43.22091200%
6.97569300%
3.79513600%
0.32203427%
0.21306183%
0.90593538%
1.09680918%
2.53626300%
0.03251600%
1.18350300%
3.21070500%
13.48932128%
100.000000%
9.78214642%
1.33136960%
5.44245812%
6.46147051 %
43.22091200%
6.97569300%
3.79513600%
0.32203427%
0.21306183%
0.90593538%
1.09680918%
2.53626300%
0.03251600%
1.18350300%
3.21070500%
13.48998669%
100.000000%
9.781837094%
1.331369600%
5.442458120%
6.461997324%
43.220912000%
6.975693000%
3.795136000%
0.322034270%
0.213061830%
0.905935380%
1.096809180%
2.536263000%
0.032516000%
1.183503000%
3.210705000%
13.489769202%
100.0000%
3.36
32.68%
6.92
67.32%
Total City General Fund
10.28
100.00%
6.4620%
Total
Total Assessed Value from Table 2
Base 1% Ad -Valorem Tax
1.00%
$ 36,000,000
$ 360,000
City Share
6.4620%
$ 23,263
Footnotes:
Source: Fiscal Year 2020-21 Share of the Basic Tax per Riverside County Auditor -Controller's Office, Property Tax
Division.
(a) The weighted average of TRAs was calculated by the distribution of acreage among the TRAs within the
Project.
(b) Shares of the basic tax that are received by the City for each TRA are highlighted in bold print.
(c) Data per LandVision.
264
Table 5 - Polo Villas
Property Taxes In -Lieu of VLF
FY 2021/22 In -Lieu VLF Allocation to City (a)
$ 4,615,000
2020/21 City Assessed Value (b)
14,364,884,152
Total Project Assessed Value per Table 3
36,000,000
Less: Existing Assessed Value (c)
(11,936,724)
Net (New) Assessed Value
$ 24,063,276
AV Growth from Project
0.168%
Annual City Property Taxes In Lieu of VLF
$ 7,731
Footnotes:
(a) Per City of La Quinta Fiscal Year 2021/22 Adopted Budget.
(b) Per Riverside County Assessor's Office 2020/21 Assessment Roll.
(c) Current assessed value based on APN's 777-500-001, 777-500-002, 777-500-
003, 777-500-004, 777-500-005, 777-500-006, 777-500-007, 777-500-008, 777-
500-009, 777-500-010, 777-500-011, 777-500-016, 777-500-017, 777-500-018,
777-500-019, 777-500-020, 777-500-021, 777-500-022.
265
Table 6 - Polo Villas
Transient Occupancy Taxes
Existing Residential Development (a)
Plan Type
No. of Units
Annual Rent
Annual Rent Per Unit
5-Bed Units
6-Bed Units
6
5
$
2,635,163
2,444,289
$ 439,194
488,858
Total
11
$
5,079,452
$ 461,768
Proposed Residential Development (b)
Plan Type
No. of Units
Anticipated Annual Rent
Annual Rent Per Unit
To be Determined
7
$ 3,232,379
$ 461,768
Total
7
$ 3,232,379
$ 461,768
Total Anticipated Annual Rental Revenues
$
8,311,831
$
461,768
Annual City Short-term Rental TOT (c)
10.00%
$
831,183
$
46,177
Footnotes:
(a) Existing Residential Development plan type, number of units, and anticipated gross
rental revenue per Client.
(b) Proposed residential development for remaining 7 lots is anticipated to be the weighted average of the
existing lots annual rent per unit.
(c) Transient occupancy tax rate per City of La Quinta Adopted Budget.
266
Table 7 - Polo Villas
Off -Site Sales Tax Revenue
Spending by Residents:
Single Family Short Term Rental
Total
Estimated Spending per Week per Person (a)
$ 2,100
$ 255,528
Estimated Annual Spending
$ 13,287,456
Less: Vacancy (b)
20%
(2,657,491)
Less: Estimated Annual spending on Lodging and Non Taxable Sales (c)
47%
(6,245,104)
Total Anticipated Annual taxable spending
$ 4,384,860
Total Spending anticipated outside City (d)
50%
$ (2,192,430)
Total Taxable Spending within City of La Quinta
$ 2,192,430
Annual Sales Taxes to City
1.00%
$ 21,924
Annual Measure G Sales Taxes to City
1.00%
$ 21,924
Total Annual Sales Tax to City
2.00%
$ 43,849
Footnotes:
(a) Estimate based on average anticipated spending of $300 per person per day ($2,100 per week) based on data from
Visit California and the 2017 Report on the Economic Impact of Tourism in the Greater Palm Springs Area. Total
estimated spending represents spending for all 140 anticipated guests per week at buildout.
(b) Estiamted vacancy represents DPFG's estimate based on location relative to other establishments in the market
(c) Per data from Visit California and the 2017 Report on the Economic Impact of Tourism in the Greater Palm
Springs Area average visitor spending.
(d) Represents anticipated taxable spending outside the City.
267
Table 8 - Polo Villas
Other Recurring Revenues
Revenue Category A
City FY 2021/2022
Adopted Budget (a)
Adjustment Adjusted Budget
Multiplier
Factor
Project
Equivalent
Persons
Project
Revenues
Tax Revenues
Property Tax Revenue
$ 2,605,000
100% $ 2,605,000
Case Study
-
-
$ -
No -Low City Property Tax
4,706,000
100% 4,706,000
Case Study
-
-
-
RPTTF Pass Through
1,616,000
100% 1,616,000
Per Capita & 50% Employee
34
122
4,161
State Sales Tax
10,000,000
100% 10,000,000
Case Study
-
-
-
Measure G Sales Tax
11,500,000
100% 11,500,000
Case Study
-
-
-
Document Transfer Tax
750,000
100% 750,000
Case Study
-
-
-
TOT - Hotels
5,000,000
100% 5,000,000
Case Study
-
-
-
TOT - Short Term Vac. Rentals
3,000,000
100% 3,000,000
Case Study
-
-
-
TOT - Bed and Breakfast
90,000
100% 90,000
Case Study
-
-
-
TOT - Resort Fees
250,000
100% 250,000
Case Study
-
-
-
Franchise Taxes - Burrtec
785,000
100% 785,000
Per Capita & 50% Employee
17
122
2,021
SoCa1 Gas Franchise
140,000
100% 140,000
Per Capita & 50% Employee
3
122
360
Cable Television Franchise Fee
650,000
100% 650,000
Per Capita & 50% Employee
14
122
1,674
Communications Franchise Fees
250,000
100% 250,000
Per Capita & 50% Employee
5
122
644
Property Tax In Lieu of VLF
4,615,000
100% 4,615,000
Case Study
-
-
-
Total Tax Revenues
$ 45,957,000
$ 45,957,000
$ 8,860
Licenses & Permits
$ 2,252,000
$ 2,252,000
N/A
-
-
$ -
Intergovernmental
8,251,100
8,251,100
Per Capita & 50% Employee
175
122
$ 21,245
Charges for Services
876,010
876,010
Per Capita & 50% Employee
19
122
$ 2,256
Fines, Forfeitures & Abatements
294,000
294,000
Per Capita & 50% Employee
6
122
$ 757
Use of Money & Property
545,000
545,000
Per Capita & 50% Employee
12
122
$ 1,403
Miscellaenous
629,100
629,100
Per Capita & 50% Employee
13
122
$ 1,620
Transfers In
-
-
Per Capita & 50% Employee
-
122
$ -
Total
$ 58,804,210
$ 58,804,210
$ 36,140
Footnotes:
(a) Based on revenue allocations per the City of La Quinta Fiscal Year 2021-22 Adopted Budget pages 33-35.
268
Table 9 - Polo Villas
Recurring Expenditures
Expenditure Category i
City FY 2021/2022
Adopted Budget (a)
Adjusted
Adjustment Budget
Multiplier I
Factor
Project
Equivalent
Persons
Project Cost
City Council
$ 302,200
50% $ 151,100
Per Capita & 50% Employee
$ 3.20
122
$ 389
City Manager
1,076,000
50% 538,000
Per Capita & 50% Employee
11.38
122
1,385
Marketing & Community Relations
1,325,900
50% 662,950
Per Capita & 50% Employee
14.03
122
1,707
City Attorney
696,000
50% 348,000
Per Capita & 50% Employee
7.36
122
896
City Clerk
625,200
50% 312,600
Per Capita & 50% Employee
6.61
122
805
Human Resources
376,000
50% 188,000
Per Capita & 50% Employee
3.98
122
484
Police
17,855,100
100% 17,855,100
Per Capita & 50% Employee
377.82
122
45,973
Fire
7,660,800
100% 7,660,800
Per Capita & 50% Employee
162.11
122
19,725
Community Resources Adminsitration Totals
808,500
50% 404,250
Per Capita
10.76
122
1,310
Wellness Center Operations
597,900
50% 298,950
Per Capita
7.96
122
969
Recreation Programs & Special Events Table
908,300
100% 908,300
Per Capita & 50% Employee
19.22
122
2,339
Code Compliance/Animal Control Totals
1,506,320
50% 753,160
Per Capita & 50% Employee
15.94
122
1,939
Parks Maintenance
2,530,900
100% 2,530,900
Per Capita & 50% Employee
53.55
122
6,517
Public Buildings
1,321,200
100% 1,321,200
Per Capita & 50% Employee
27.96
122
3,402
Public Works Administration
739,900
50% 369,950
Per Capita & 50% Employee
7.83
122
953
Public Works Development Services
431,200
50% 215,600
Per Capita & 50% Employee
4.56
122
555
Streets
496,600
100% 496,600
Per Capita & 50% Employee
10.51
122
1,279
Engineering Services
761,800
100% 761,800
Per Capita & 50% Employee
16.12
122
1,961
Design & Development Adminsitration Totals
656,200
100% 656,200
Per Capita & 50% Employee
13.89
122
1,690
Planning
678,600
100% 678,600
Per Capita & 50% Employee
14.36
122
1,747
Building
919,800
100% 919,800
Per Capita & 50% Employee
19.46
122
2,368
The Hub
986,000
100% 986,000
Per Capita & 50% Employee
20.86
122
2,539
Finance
1,444,100
100% 1,444,100
Per Capita & 50% Employee
30.56
122
3,718
Central Services
10,458,206
100% 10,458,206
Per Capita & 50% Employee
221.30
122
26,928
Total
$ 55,162,726
$ 50,920,166
$ 131,577
Footnotes:
(a) Based on expenditure allocations by department per the City of La Quinta Fiscal Year 2021-22 Adopted Budget page 24.
269
Table 10 - Polo Villa
Development Impact Fee Budget
Estimate of Total Project Development Impact Fees
Unit of Measure Fee Quantity
Total Fees
City of La Quinta
Park Improvements
(a)
Per Unit
$ 2,106
7
$ 14,742
Community/Culture
(a)
Per Unit
956
7
6,692
Library
(a)
Per Unit
397
7
2,779
Civic Center
(a)
Per Unit
1,230
7
8,610
Maintenance Facilities
(a)
Per Unit
313
7
2,191
Fire
(a)
Per Unit
369
7
2,583
Transportation
(a)
Per Unit
4,009
7
28,063
CVAG TUMF
(b)
Per Meter
2,358
7
16,506
Multi Species Plan Fees
(c)
Per Meter
1,400
7
9,800
Total Estimated Development Impact Fees:
$ 91,966
Per Unit:
$ 13,138
Footnotes:
(a) Represents the impact fees applicable to the proposed project per the City of La Quinta ("City") Development Impact Fee Study
dated September 23, 2019 effective for permit applications received on or after July 1, 2020.
(b) Represents the currently collected Coachella Valley Association of Governments ("CVAG") TUMF rate per unit, effective January
1, 2022. Typically the TUMF rate is adjusted every July, however, this year the increase was in effect in January and the next
increase is anticipated in July 2022.
(c) Represents the currently collected Multi Species Plan Fees "MSHCP") by the Coachella Valley Conservation Commission effective
July 1, 2021. The MSHCP fee increases annually with the next increase anticipated for July 2022.
270
Planning Commission Meeting - January 22, 2022
Public Hearing Item No. 2
Development Agreement DA2021-0003 - Polo Villas
ATTACHMENT 3
2. ADOPT A RESOLUTION RECOMMENDING APPROVAL OF A
DEVELOPMENT AGREEMENT FOR POLO VILLAS. CEQA: THE
PROJECT IS CONSISTENT WITH PREVIOUSLY ADOPTED
ENVIRONMENTAL ASSESSMENTS 2005-537 AND 2010-608.
LOCATION: WEST OF MADISON STREET BETWEEN AVENUES 50
AND 52
DECLARATIONS REGARDING COMMISSION PUBLIC CONTACT - None.
Planning Manager Flores presented the staff report which is on file in the
Design and Development Department.
Staff answered questions regarding the principal uses of the current and
proposed homes; current guidelines for approving Development Agreements
(DA) that allow for exemptions to the Municipal Code that prohibits new Short -
Term Vacation Rental (STVR) permit issuance and DA provisions for such
issuance; Code compliance and violation history of the development's existing
STVRs; noticing procedures and efficacy for this Public Hearing; public
feedback or comment received to date; number of permanent or long-term
residents within the noticing area; the transferability of STVR permits if DA is
approved; the Polo Estates policies on STVR permits; current and prospective
ownership of the units within the development.
CHAIRPERSON NIETO DECLARED THE PUBLIC HEARING OPEN AT 6:19 P.M.
PUBLIC SPEAKER: Alena Callimanis, La Quinta - opposed the project due to
language of the Public Hearing Notice; DA's inconsistency with the City's
current code which restricts issuance of STVR permits.
PUBLIC SPEAKER: Applicant, Fiona Quinn, Vice President of Legal Affairs for
Avantstay - answered questions regarding Avantstay's primary interest in the
property for STVR use; Code compliance and violation history of the properties
existing units and the Applicant's existing STVR properties outside of the
development; primary use of residential properties surrounding the
development; internal and third party on -site security and property rental
management; the ability to rent the units as long-term rentals. Co -Applicant
Sean Breuner, CEO of Avantstay, provided a brief overview of the current
development's primary uses; the positive fiscal impact this community will
have on the City due to projected Transient Occupancy Tax receipts; the
company's history of successful management of STVR properties with minimal
code violations; the intent of the company to provide a high -end, luxury
experience with value added services to include private chef services and fully
stocked amenities offered at a premium price; the added on -site 24 security;
PLANNING COMMISSION MINUTES
PUBLIC HEARING ITEM NO. 2
Page 1 of 3 January 11, 2022
271
Planning Commission Meeting - January 22, 2022
Public Hearing Item No. 2
Development Agreement DA2021-0003 - Polo Villas
the consistency with the existing property uses and proximity to the site of
the festivals; the property's ability to insulate STVR issues from outside
residences due to the layout of the development as well as internally controlled
trash and noise levels; traffic and festival access agreements with Golden
Voice to minimize STVR tenant impact on public access in the festival areas.
CHAIRPERSON NIETO DECLARED THE PUBLIC HEARING CLOSED AT 6:31 P.M.
The Commission discussion followed regarding noticing language and
procedures; consistency with existing units and inconsistency with the City's
Municipal Code as it relates to STVR permits; history of Code compliance and
violations within the existing community and of the prospective owners;
possibility of approval setting a precedence for other developers; DA negating
the work of the STVR Ad -Hoc Committee and City Council to limit STVR
permits; standard 50-year Development Agreement terms; the importance of
Transient Occupancy Tax and the benefits to the City; appropriateness of
STVR for this particular area and for clusters of STVR limiting exposure to
long-term residences; the Commission's ability to evaluate Agreements that
include STVR provisions on a case -by -case basis; DA provisions requiring
specific compliance measures be met; the intent of the original development
of the Polo Villas and other possible uses given its proximity to the festivals
site.
Due to technical difficulties, Commissioner Proctor left the meeting during his
comments at 6:44 P.M. and returned at 6:45 P.M. for the duration of the
meeting. This did not result in the loss of a quorum during this time, and he
was allowed the floor to complete his comments prior to a motion being made.
MOTION - A motion was made and seconded by Chairperson
Nieto/Commissioner Currie to adopt Planning Commission Resolution 2022-
004 recommending City Council approval of Development Agreement
(DA2021-0003) and find the project consistent with the previously adopted
Mitigated Negative Declarations EA2005-537 and EA2010-608, as
recommended:
A RESOLUTION OF THE PLANNING COMMISSION OF THE
CITY OF LA QUINTA, CALIFORNIA, RECOMMENDING
APPROVAL TO THE CITY COUNCIL OF A DEVELOPMENT
AGREEMENT BY AND BETWEEN THE CITY OF LA QUINTA
AND GTGF, LLC RELATING TO POLO VILLAS RESIDENCES
AND A FINDING THAT THE PROJECT IS CONSISTENT WITH
ENVIRONMENTAL ASSESSMENTS 2005-537 AND 2010-608
CASE NUMBERS: DEVELOPMENT AGREEMENT 2021-0003
APPLICANT: GTGF, LLC
PLANNING COMMISSION MINUTES
PUBLIC HEARING ITEM NO. 2
Page 2 of 3 January 11, 2022
272
Planning Commission Meeting - January 22, 2022
Public Hearing Item No. 2
Development Agreement DA2021-0003 - Polo Villas
AYES: Commissioners Currie, Hassett, McCune, and Chairperson Nieto NOES:
Commissioners Caldwell, Proctor, and Tyerman ABSENT: None. ABSTAIN:
None. Motion passed by majority vote.
PLANNING COMMISSION MINUTES
PUBLIC HEARING ITEM NO. 2
Page 3 of 3 January 11, 2022
273
274