Valley developer threatens to shut down new DHS plaza over fees

“I invested 3.5 million over three years to develop this property,” said Palm Desert real estate developer Suresh Shah.

Shah claims he rescued the unfinished property Mission Lakes Market Place in Desert Hot Springs and poured millions into renovating it.

He’s ready to open his first business there next Monday, a Five Star Gym & Fitness, but says he can’t because the city is asking for more than a quarter of a million dollars in developmental impact fees.

“I did more than $259,000 worth of work and they’re still asking me to pay another $259,000,” Shah said.

Tuesday night, Shah asked the city council to waive the fees. It was a discussion that lasted nearly two hours. The vote was eventually postponed until Thursday because the council members couldn’t agree.

“The man has done enough and all we need to do is just waive those fees so he can create jobs for Desert Hot Springs,” said Mayor Adam Sanchez.

“it sounds like he has the money to pay it and he just doesn’t want to,” said Councilman Scott Matas.

But Shah told us he doesn’t have any money left to put into this project. He added the Market Place would generate a million dollars in tax revenue each year for the financially struggling city. He said if the city is willing to lose that over $250,000, he’s ready to jump ship.

“I’m going to close it down and the 30 people I have hired in the fitness club, they will be laid off,” Shah said.

Some say Shah has a credibility problem.

Right now, he’s appealing a sexual harrassment judgement for a case out of Yucca Valley. He pleaded guilty to insurance fraud in 2003. And the state medical board shows he’s a former physician whose license was revoked multiple times.

Mayor Sanchez says Shah’s background isn’t on trial.

“I don’t want to look at what their past history is. We’ve invested, he’s invested and he needs to be treated fairly.”

Meanwhile, some are questioning whether political contributions will end up being the deciding factor in this issue. Shah has donated to Councilman McKee and Mayor Sanchez.

“My question to the city leaders is why are we waiving any fees when we’re in financial crisis? Whether you’re getting election contributions or not, lead the city,” said Desert Hot Springs resident Jim Perry.

The city council will take the issue up again Thursday night in a special meeting at 6 p.m.

Depending on how that vote goes, the first business at the Market Place, Five Star Gym & Fitness is set to open next Monday.