Luxury development project approved in La Quinta for $420M
La Quinta City Council is moving forward with a luxury development plan that includes a five-star hotel. Council members approved the long-awaited agreement for the SilverRock public golf course at Tuesday night’s meeting.
The SilverRock Development company and the city have agreed upon terms for the $420 million project that includes luxury and lifestyle hotels with branded luxury and lifestyle residential, a conference and shared services facility, a mixed-use village, resort residential village, renovation of the existing Ahmanson Ranch House, construction of a permanent golf clubhouse, and associated road and utility infrastructure, according to a city release.
“This creates the framework to transform SilverRock into the unique destination resort that the city council envisioned,” said City Manager Frank Spevacek. “The city is looking forward to working closely with the developer toward a successful venture for all.”
City officials anticipate the project to break ground in 2016.
The development agreement requires the city to invest an estimated $20.1 million in transient occupancy tax (TOT) revenue rebate to SilverRock Development Company, according to officials. The rebate is limited to TOT generated from the luxury and lifestyle hotels and only during the first 15 years of the respective hotel operation.
The rebate is paid only if these hotels do not achieve an annual eleven percent return on cost during the 15-year period. After 15 years, TOT revenue sharing will end and the city will receive the full amount.
Over the same 15-year period, city officials project La Quinta will receive $52.9 million in fee and tax revenue. Here’s the breakdown:
$5,200,000 in development impact fee revenue
$38,700,000 of TOT revenue (after the $20,100,000 TOT revenue rebate)
$6,000,000 of sales tax revenue
$3,000,000 of property tax revenue
La Quinta, through its now-defunct Redevelopment Agency, bought the 525 acres in 2002 with the intention of improving the land via development to grow the city’s tax base and address public facility and infrastructure deficiencies.
The city negotiated with the SilverRock Development Company over the past 18 months to ensure the project creates long-term revenue for the city, maintains the level of golf play for residents, and provides for new recreational opportunities for the community, according to Spevacek.
