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Palm Springs City Council split on Virgin Hotel development plans

While all Palm Springs City Council members say they want the new Virgin hotel in the city, two members would like more time to discuss something called a 1090 violation.

Rights to a 1090 violation give the city of Palm Springs the opportunity to take back any deals that may have been made in a corrupt way.

“A 1090, in my mind, is a punishment to the people involved. I don’t see that applying here,” said Council member Chris Mills, during the council meeting Wednesday night.

“Without the public testifying is incredibly wrong, not transparent and the wrong way to go,” Council member Geoff Kors responded.

Read: Plans for the proposed Virgin Hotel approved

Council members Kors and J.R. Roberts are voting against the rest of City Council on a new plan agreement for the development.

The two said they were caught off guard to learn that some project benefits are now set to go to John Wessman.

Wessman, a developer, along with fellow developer Richard Meaney and former Palm Springs Mayor Steve Pougnet are facing charges in connection with allegations of bribery and conspiracy.

Check out our ‘Scandal at City Hall’ interactive timeline

The new plan pushes development forward while also removing an original option to revoke TOT, or transient occupancy tax, benefits if Wessman is found guilty.

“There would be no feasible way for the city of Palm Springs to seek to recover the potential share of TOT through a court proceeding that is a right that today, under the existing agreements, we would have that capacity,” said Palm Springs City Attorney Edward Kotkin.

Roberts calls that a red flag.

“What concerns me most is this wasn’t necessary. This was a situation that we found out that day could have been fixed. We could’ve moved the hotel forward and at the same time, held on to our 1090 benefit, Roberts said. “Considering the indictment and what happened last year. We shouldn’t be giving away any of our rights under that indictment.”

Palm Springs Mayor Robert Moon voted in favor of the new plan.

“There would be no reason for a 1090 claw back. You tell me, why on a project that Wessman has nothing to do with and a previous council has nothing to do with, we should have any desire to pull back money from our investment on a project that hasn’t even started yet, that we approved. It just makes no sense,” Moon said.

Mayor Moon showed KESQ / CBS Local 2’s Lauren Coronado an email he had exchanged between Grit developers that stated that Wessman no longer wished to be part of the project.

Roberts argues the Virgin Hotel was the AC Marriot before it became the Virgin Hotel. The TOT benefit, which Roberts said was approved under Pougnet.

Moon also asked to move the second reading, which could approve the project, to a vote before the new council takes over.

Newly elected Council member, Lisa Middleton, is standing on the sidelines, hoping to have her voice heard.

“I think this is an important matter moving forward and it’s being resolved in a lame-duck session of the City Council,” Middleton said. “I believe the City Council should not hold lame-duck sessions unless the city has emergency needs or ministerial and this is neither. This is something that could have waited for December and should have.”

Moon said if the hotel isn’t approved to be built now, it won’t be built at all, and the city will lose revenue.

The next City Council meeting is billed for Wednesday, November 29. The new City Council will be sworn in on December 6.

KESQ News Team


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