Palm Desert City Council - Study Session, January 8, 2026

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[00:04:04] Mayor Tuby: Right. Hello everyone. It is 3:41. Ready to call to order our study session. And study session topic, we have item 2A, receive and file an update on the city's retail business recruitment efforts.
[00:04:28] Vanessa Maker: Good afternoon, Mayor Tuby and members of the City Council. My name is Vanessa Maker with the Economic Development Department, the Economic Development Coordinator, and with me I have Jill Mendoza, who is our Economic Development Manager. Before you is a receive and file update on the city's retail business recruitment efforts over the past two years along with information on the Economic Development team's future initiatives. There we go. In 2023, the City Council identified business retail recruitment as a key goal and directed staff to proactively attract retail businesses. In November of 2023, the city entered into a contract with The Retail Coach to provide a market analysis and recruitment services, including a retail gap analysis, targeted outreach, and representation at the ICSC events. While the partnership increased Palm Desert's visibility and provided valuable market insight, converting interest into executed leases proved challenging. As a result, the Economic Development Department has chosen not to renew the contract and will transition retail recruitment efforts in-house, leveraging and expanding the city staff capacity that we have and the relationships that we currently possess with our business owners and local brokers. There we go. We wanted to share with you just some of the highlights for 2025. Here are a number of the businesses that opened. I'd like to also mention that the two at the bottom, Valoa is now open. They opened in late December, and then Winston Pies is actually scheduled to open in the end of this month. 2026 is just as exciting. These are a few of the businesses that we have scheduled to open. You'll notice that there is a great mix of restaurant, retail, and entertainment. So, we're looking forward to what '26 brings to us. And then here is the retail vacancy rates for the city, the Coachella Valley, El Paseo, the Shops at Palm Desert, and Riverside County. As you'll note, El Paseo's vacancy rate is well below the average, not just for the city, not just for Coachella Valley, but also for Riverside County. We also want to make mention that Palm Desert is also the largest retail hub in the Coachella Valley, which means that we do have more businesses. We do have, obviously, more buildings, and so that's where you'll see a little bit of that increase in that vacancy as a overall. So, here is a brief overview of the retail opportunities that we have in our city. Some of the strategic advantages that Palm Desert has that have been acknowledged through The Retail Coach's report, as you've seen that was attached to this staff report, as well as what we are hearing from our local brokers. Palm Desert continues to be the regional leader in retail sales tax. The city is committed to small business success, as the team is constantly out talking to our businesses and trying to assist them through the process. And then we offer a concierge-style approach from beginning to end, kind of holding their hands, and we continue to have an unmatched luxury cluster on El Paseo, and visitors recognize that Palm Desert continues to be the retail hub in the Coachella Valley. Some of the barriers, you'll note, are the same as we had in the brokers' report that we've heard from our retail. So, we do have large legacy big box formats, and that's due to national tenant closures that unfortunately we don't have any control of, but working with those property owners to minimize and make those units a little smaller. Market perception challenges, which our marketing team continues to address as best as they can, showcasing that Coachella Valley along with Palm Desert is no longer a sleepy town. We are a year-round community and have lots of folks that are constantly visiting 12 months out of the year now, and that the demographic itself has also changed. So staff's current tactics are outlined here. The Economic Development team along with the rest of the team here at Palm Desert continues to build and leverage our strong relationships within our broker community as well as our different stakeholders, wanting to ensure that we stay informed on issues, concerns, and successes throughout the city. And now I'm going to turn this over to Jill to outline what's ahead.
[00:08:57] Jill Mendoza: Thank you, Vanessa, for the update on what the current strategies have been. Moving forward, we're going to focus on an economic retail development strategy that is built around three priorities. First, we're going to create parcel-level data to really understand our retail real estate inventory so we can prioritize sites and respond quickly to prospects. Second, we're going to strengthen our Palm Desert economic development branding and marketing visibility so that we show up competitively with investors, tenant reps, and site selectors. And third, we're focused on improving the experience—sorry, I should advance the slide. Sorry. Okay. And third, we're going to focus on improving the experience for businesses and investors to make it easier to open businesses and expand businesses here in Palm Desert. In addition, we're going to evaluate our
[00:10:01] Staff: existing programs to bring forward any additional strategies that might help support retail recruitment and investment. And by understanding our retail inventory, improving how we present opportunities, and enhance our business support efforts, we'll position Palm Desert to attract high-quality retail and support long-term economic development and resilience. Okay, in Q1. So to bring it to a more specific time frame, we're going to focus on building the foundation from a retail development strategy internally. This will be done by acquiring the right recruitment tools to help understand the market intelligence and data and strengthen our ability to recruit tenants and target our recruitment. We're going to secure branding and marketing support to help develop a strong branding approach that's consistent and will increase investment interest and prospect activity as well as build our credibility with site selectors and retail brokers. In doing so, we're going to then launch a retail brand campaign to actively promote Palm Desert as our retail opportunities and storytelling about the businesses that are here and why businesses should choose Palm Desert with a market-facing engagement campaign that will highlight our retail strengths, our key corridors, redevelopment opportunities, and market fundamentals. And by refining the city's economic development narrative, it will align our messaging to reflect our strengths, our vitality, and our quality of life here. Because as Vanessa mentioned, you know, we really do have unique opportunity to expand upon the market that we have here. We have year-round residents. We have really a younger demographic as well that we maybe have not been known for in the past. And so we're really going to try to hit on those key advantages. And then finally, we're going to be preparing for ICSC, which is the retail recruitment conference in Las Vegas. And we'll be doing that internally, developing a targeted engagement plan for our time at ICSC to ensure that we have a clear strategy and the right marketing materials ready in advance. So this retail strategy is designed to strengthen our position as a competitive, investment-ready market. And in Q1, we're going to focus on establishing the core building blocks, data and recruitment tools, update our branding and marketing materials, and create a targeted outreach plan to have strong market messaging to support proactive recruitment and drive measurable results. So, with that, I will answer any questions that you may have. Here's our timeline. We're really looking to, over the last few weeks, since I started in November, I've done a lot of outreach, met all of our stakeholders, really tried to synthesize the data and understand what the landscape looks like here from a retail perspective. In Q1, acquire the recruitment tools and branding support that we need to develop. In Q2, we're going to update our marketing materials and prepare for ICSC. In May, attend ICSC and really hit upon our storytelling and proactive outreach, and then in Q3, launch our branding campaign and elevate our economic development narrative. So with that, I will answer any questions that you may have.
[00:13:41] Mayor: Okay. Do we have any questions from my colleagues? Karina,
[00:13:48] Karina: Thank you, Mayor. Um, I first off, I'm glad that you're here. I've had conversations with you and have enjoyed your vision for integrating education into the workforce, and I'm excited to see where this will lead. I was wondering if we have any information for the vacancy rates along San Pablo. I know we've talked about that also being an area as we grow and we want to build out that corridor. I know that wasn't the focus, but if that can come at another time. There was a mention of absentee ownership and the problems with it. Is that part of just the lapses in communication when we can't get a hold of them, or what are the other major barriers that that may pose?
[00:14:34] Staff: Yeah. So, absentee ownership is a challenge because they're not on site. They don't see the condition of the building day-to-day. They maybe are in a trust, so they're generating income off the property and they don't necessarily need a tenant in the property, which is hard to believe for most of us that want to activate the ground floor retail. So trying to align the interests is really where that comes in is, you know, reaching out to those owners, having a conversation, letting them know the areas that are priorities for us, and then trying to align our vision and ultimately encouraging them to either reinvest or potentially sell. And we're starting to see a lot of momentum and activity. A couple of properties have sold along El Paseo recently. So we're really hopeful.
[00:15:25] Karina: Thank you. And another question I have is in dealing with the infrastructure and now imagine changes in code with what we're adopting, how many of these opportunities are antiquated to the point that it could be problematic for investment?
[00:15:43] Staff: In from an infrastructure perspective?
[00:15:45] Karina: Yeah, because I know that some of them we're looking at, some of them the buildings are very old, and I've heard from folks that said, 'I was kind of looking at that, but it would take so much work to bring it up to code.' Is that one of the major issues, or is that one in consideration but not substantial?
[00:16:03] Staff: It's definitely a consideration. And really what that comes down to is the level of investment required. So we've had, just recently we had an interested business looking at a property on El Paseo, and the cost was going to be prohibitive for him to bring it up to code and to do the renovations needed. I do believe that we'll be able to find a path forward, especially if we see other development happening around these properties, but it continues to be a challenge from an infrastructure perspective.
[00:16:35] Karina: Perfect. And then my last question would be, what was your storytelling about? How are you currently—I know you're formulating what that would be, but what's your story for Palm Desert? Because we've heard so many times, 'It's not part of our charm. It's not our character. It's not the Palm Desert way.' But what's the story that you feel needs to develop, because you're coming from an outside perspective? So I'm curious to see what that looks like for you.
[00:17:04] Staff: Yeah. I am very surprised by the story. You know, I think from an outside perspective coming in, I did feel like it was a vacation destination and a tourism destination. And certainly our team does a great job of attracting that demographic. But I'm really surprised at the young professionals that are here, the families that are here, the year-round residents that are here. And I think that there's a great opportunity to enhance our services and the retail opportunities to meet that demographic profile. An example is one of the yoga studios I was talking to is really struggling trying to attract people to come in, but yet I see moms pushing strollers down El Paseo every single day. And it's like, okay, how do we bridge that gap? Because there is the right demographic, the right retailer. How do we marry them? So, I think there's really good opportunity for storytelling, and I would love to start telling stories about the amazing businesses that are here, why they chose to be here. We're seeing great sales results. We just met with Chartwell yesterday, and Vuori is doing amazing. They've exceeded their expectations. That's a great story because that will attract additional retailers. And the other story that I'm really excited about is really the local ownership, small-town charm, the family-owned businesses. There's so many stories here of legacy businesses that have been here for a long time, and you know, I think that that is a good blend. We've got a good blend of corporate businesses but then also locally owned businesses, which is a really nice balance. In terms of that, one of the discussions that came up at ICSC was entertainment opportunities, and someone just asked me two days ago about the theater. So, that's one that came to mind in terms of that would be a substantial overhaul that's needed.
[00:19:10] Karina: Yeah. Any opportunity for maybe having another similar experience in the near future?
[00:19:18] Staff: I think there's a lot of entertainment opportunities. In fact, I'll be attending the entertainment experience conference next month in Los Angeles, which will be talking about all of the entertainment concepts that are taking shape right now in the market, the trends that are happening. So, I do believe that there is substantial opportunity for entertainment uses throughout this city, and we have several prospects that we are talking to right now that have an entertainment component. That being said, the mall has an opportunity for significant renovations. So, whether or not the movie theater stays or we re-imagine—
[00:20:00] Speaker: that side of the mall in the future, I think is still to be determined.
[00:20:04] Speaker: I love the entertainment.
[00:20:06] Speaker: Yes, portmanteau, the blending. So that's great. Thank you so much. This is exciting.
[00:20:11] Speaker: My pleasure.
[00:20:12] Speaker: Okay. Anybody else care to ask questions? Councilmember, Mayor Pro Tem?
[00:20:18] Council Member: We have a facade improvement program.
[00:20:20] Speaker: We do.
[00:20:21] Council Member: How's that going?
[00:20:22] Speaker: I'm currently evaluating all of our programs, so I cannot speak to the data just yet. I do have a meeting scheduled next week with our team internally to give me an evaluation of all of our programs, how much has been given to date, whether they're relevant, what we can do to improve the programs. So, I will have to come back to you at another time, but it is on my list of priorities.
[00:20:50] Speaker: Wonderful. Everybody else? Okay, thank you, Miss Mendoza.
[00:20:53] Miss Mendoza: Thank you.
[00:20:54] Speaker: And Miss Mahar, thank you so much, Vanessa. All right, well, we are at 3:57. I guess we have a couple minutes before we actually open the regular session. If anybody wants to take... we got a two-minute break. We can't start ahead of schedule, can we, Israel?
[00:21:08] Speaker: I'll be back in two minutes.
[00:21:10] Speaker: All right. Thank you.
[00:21:11] Speaker: To start early?
[00:21:12] Israel: No.