Palm Springs discuss potential deal with Grit Development at city council meeting
The Palm Springs city council discussed a potential settlement deal with Grit Development Wednesday night which would also allow the development company to move forward with additional phases of the downtown project.
It all stems from the criminal trial against developers John Wessman and Richard Meaney, and former Mayor Steve Pougnet stemming from allegations of bribery and favoritism on downtown development projects.
The city council went into details with the proposed settlement from Grit Development:
Palm Springs would get $12,630,000 from the clawback & disgorgement liability (If there is a conviction)
— Amendment — Reimbursement agreement: $30,000
— Downtown Park Site: $5,300,000
— Rowan Hotel: $1,200,000
— Downtown PS Project Change Order Improvements For Downtown Park and Garage: $3,000,000
— Disgorgement Remedy — Dakota Project: $3,100,000
In the Proposed Settlement with Grit, the city would receive parcels of land back at $30,000,000. As part of the agreement, Grit Development would:
– Donate Crescendo Property (41.6 Acres): $6,000,000
– Donate Boulders Property (31.4 acres): $14,660,000
– Reimburse purchase of Downtown Park: $5,130,000
– Donate Block G (.45 acres): $5,000,000
– Construct a new city library on Block G: $1,200,000
The proposed settlement does not take into account the transient occupancy tax for the properties. According to staff reports, the City would continue to receive net TOT revenue estimated at $18.2 million over the 30-year term of the 75% TOT rebate program. Grit Development also offered the city a labor agreement which would hire more local residents
Council members were mostly in favor of the agreement during the discussion, citing fears of losing the Kimpton Rowan Hotel and the downtown project. The city’s legal expert also noted that if one of the defendants (he specified Wessman) were to be convicted, but died before he could appeal the ruling, the conviction would be abated and the city would get nothing.
“It’s hit or miss what you can get from a judge or jury. It could be $5 million, it could be nothing. It could be a number we don’t know, and it’s not predictable and that’s why 99 percent of civil cases settle,” Council member Christy Holstege said during the meeting.
No decision was made, as this was only for the public to hear what’s going on and to get there opinion on it. The City says it will continue to negotiate with Grit, however, Mayor Moon did say he would prefer a decision be made before December 4, when some council members’ terms end.
