The Virgin Hotel project in downtown Palm Springs has officially been postponed, the city announced Thursday evening.
City leaders cited that the change in plans was spawned by the impacts of COVID-19 on the hospitality industry. They added that Grit Development and Virgin Hotel developers "specifically and mutually agreed to replace this existing hotel plans on that site with the residential project."
"I’m glad to see housing going downtown and that we have something built there instead of just a vacant lot," Palm Springs Mayor, Geoff Kors said.
The 69-foot, 142-room hotel has been in the works since September 2015 and it was planned to be located just north of the Kimpton Rowan Hotel. The project has faced numerous delays, mostly brought about by the arrest of developers John Wessman and Richard Meaney and then Palm Springs Mayor Steve Pougnet.
Meaney and Wessman are accused of paying Pougnet $375,000 worth of bribes for favorable votes in 2012 and 2014 relating to projects of the two developers.
The project has been in the works for nearly 5 years, but with little progress made.
"Seeing something that’s going to get built that’s going to provide 62 units of housing I think will really help activate downtown," Mayor Kors said.
The proposed site would be 6 stories high, have 62 units, and span across 82,577 square feet.
"Its gone through architectural review, it will matriculate through the planning commission and up to city council of course. I would anticipate the entitlement process could be done by early next year," Palm Springs City Manager, David Ready said.
Ready sees it as a positive that will help generate revenue from property taxes. If the hotel would have been built, Ready said the city wouldn't be generating what it normally does from tourist dollars right away due to an incentivized program the Virgin Hotel project was a part of.
"If the hotel would have went there it would have been a 75% rebate of the hotel tax, so for the first 20 years we would have received less from the hotel tax," said Ready.
Some nearby businesses that were anticipating the hotel are in agreement with residents living closer instead.
"Having a location where they could just have a place to live and relax and enjoy the shop would actually be a good impact on us and other shops and restaurants in the area," Find Your Feet supervisor, Kimberly Cook said.
Chandler's salon sits adjacent to the park. Stylist Brandi Eubank said she would rather see tourists that a hotel attracts.
"I think we’d have more resource and more income as far as having the hotel guests," Eubanks said.
The project continues to go through the application process. A finish date was not immediately released for the project.