Palm Desert City Council - Study Session, February 12, 2026

Transcript text

AI transcript text.

[00:00:12] Mayor Trouy: All right.
[00:00:40] Mayor Trouy: Hello everybody. Welcome to the Palm Desert City Council study session, Thursday, February 12th, 2 p.m. Notice is hereby given that the purpose of the study session is to review the items listed on the agenda. No action will be taken. This is a joint meeting of the Palm Desert City Council, successor agency to the Palm Desert Redevelopment Agency, Palm Desert Housing Authority, and Palm Desert Board of Library Trustees. Pursuant to Senate Bill 707, this meeting may be conducted as a hybrid meeting allowing public access via teleconference or in person, and up to two council members may attend remotely. So, there we are. Um, we have a couple topics here. We'll start off with item 2A, Sunline Transit Agency comprehensive operational analysis. And it looks like we have a presenter.
[00:01:40] Mona Babala: Thank you, Mayor Trouy. Council members, I also want to acknowledge our Sunline board member, Karina Kintania. Thank you for having me today. I'm Mona Babala. I am the general manager for Sunline Transit Agency and I'm also a Palm Desert resident. So, I'm glad to be here today. I'm here to talk about our Sunline Rides Re-Imagined initiative and it's really an opportunity for Sunline to reimagine with help from the public our transit system, where the buses go, when they go and so on. But before I jump into the details behind that, I just wanted to, just in case there's someone out there tuning in who needs a little bit more information on Sunline, I just want to share a little bit about the background of the agency. Whoops. So let me go back. All right. So Sunline Transit Agency, we are your public transit provider here in the Coachella Valley. And we've been your public transit provider for over 49 years. So next year we celebrate our 50th anniversary and we're very excited about that. We are made up of all of the nine cities. We're a joint powers authority made up of all of the nine cities within the valley as well as the unincorporated areas of the valley and those areas are represented by Supervisor Perez.
[00:03:03] Mona Babala: Our service area spans from the east in the Salton Sea all the way to San Bernardino. Actually, we carry a lot of kids to Cal State San Bernardino every single day. We have a bus that departs from Indio and hits certain spots along the way and that bus is packed at 5:30 in the morning. We have two buses running on that route and that is a key way for a lot of our kids to get to school every day and altogether that service area is over 1,000 square miles. It's about the size of the state of Rhode Island. So our service area is very vast. We carry about 3 million people every single year. About 15% of them are made up of kids going to and from high school. We carry a lot of kids. They make up again about 15%. And actually about 15% of all of our riders on our system, they board here in Palm Desert. So this is a key spot for a lot of people who use our system. Only above you are Palm Springs and Cathedral City, but collectively the top three cities make up about 60% of our riders.
[00:04:13] Mona Babala: So that's a pretty big footprint that just those three cities make in our system. So transit is very important to your citizens quite frankly. Our annual operating budget is about $50 million. Our capital budget is over a hundred million. So we're a very capital-intensive transit agency. Most transit agencies are as well. We not only provide the Sunbus, and that's probably what everyone's most familiar with, the big buses that say Sunbus on the side, that's our primary mode. However, we also provide complementary paratransit and that means it complements our fixed route service and that service is catered to those who don't have the physical or cognitive abilities to take fixed route. Complementary paratransit operates within three-quarters of a mile of a fixed route. So if there's no fixed route there, which is the case in some places here in the valley, you don't get paratransit, unfortunately. But we're going to revisit that through this process. To fill those gaps where fixed route and paratransit don't operate, we provide our own version of Uber and Lyft. It's called Sunride. So you could book a ride on Sunride using an app or you can make a phone call. Each ride costs $3. In addition to that, we offer a subsidized taxi program for those who are age 60 and over or if you have a qualifying disability. And you can see more information about what other qualifying factors could allow you to take our subsidized or utilize our subsidized taxi program. You can find that on our website which is www.sunline.org.
[00:05:57] Mona Babala: But all of those services combined, that makes up the menu of services that Sunline provides. So we want to make sure we endeavor every single day to meet as many mobility needs throughout the valley as possible. And so I'm going to share a little bit about Sunline Rides Reimagined. Again, it's our opportunity to work with the public to better understand what the strengths and weaknesses are within our system and where people want to go. And so we are still in the beginning process of this entire 18-month process. We started by looking at data. So my staff has been doing a lot of work with our consulting firm to gather data around performance, ridership, where people are, how many people are riding every day, where they're going, what time of day do they want to ride. We look at also cell phone data where there's a lot of people gathering and then we look at how often our transit system serves those areas. So there's a lot of data that we're pouring through right now to better understand what we're doing, again, what we're doing right, and what we need to do better. And we are gathering feedback through a survey process. And so up there on the slide is a QR code. And I encourage everyone, all of you as well as all of the residents of Palm Desert, to click on that QR code with your phone and please fill out our survey. When you go to the online survey, you'll find it in both English and Spanish. And also when you take the survey, you enter into a raffle for gift cards of 50 or 100 dollar increments or dollar amounts. We can also provide paper copies. So, in addition to the online survey, we're also gathering feedback with boots on the ground. So, last week I actually had folks standing at bus stops having our riders complete surveys. We're also doing things like going to senior centers, going to Rotary clubs, going to civic or meetings where people are gathering and we're asking them to complete the surveys for us. So, we've gathered probably about 1,300 surveys already. The survey process will go through the end of February. And once we end the survey process, it doesn't mean public engagement is done. We'll do more public engagement, but at that point, we're going to collect all of the public feedback. We're going to look at all of the data and what we gleaned from that and we're going to start looking at service alternatives. Meaning, you know, where should the big bus go? Where should we, or maybe instead of the big bus, we're looking at, or Sunbus rather, we're looking at Sunride as an option for certain communities. So we want to develop service alternatives. Then we go back out to the public and we ask them, 'Are these service alternatives, do they reflect what you told us through the public feedback process? Did we hear you right?' Once we get that feedback on the service alternatives, we're going to take that information and feed that into service scenarios.
[00:09:09] Mona Babala: And they're going to be two service scenarios that will be taken to the board of directors. And those two service scenarios will reflect two things. One, it'll reflect a transit system that is more focused on building ridership. And in order to do that, what we'd be essentially proposing is to concentrate a lot of the Sunbus service in denser areas where most people live, where most of the retail, the shopping happens, where jobs are located. And the other scenario would be more coverage-based. And coverage-based meaning the Sunbus will go wider into the valley. And as we go wider, and we all know how wide the valley goes, folks won't see the bus as often as they would if we were concentrating the bus in a smaller
[00:10:00] Presenter: ...denser area. So you know that's what the board will be asked to review around May-June time, in the May-June time frame. We are also going to do pop-ups around the community to present the maps that we're going to show to our board of directors to get public feedback on how they feel about the maps. You know, maybe what we're showing isn't exactly what they want to see. Maybe it's a combination of the two, but that's what we want to do is gather that feedback as well. So, there's three rounds of public engagement that we're essentially going to do to make sure that we're hearing the public right. And what we end up in the end is a scenario that serves this valley as well as possible. So once I have the board look at the two scenarios and they take action on that, we're going to develop a final scenario on which all of my service plans between now and probably the next six years—because usually this extensive process only happens about five to six years. My staff, who makes—we make service changes every four months. So we do it three times a year, and that's dictated by our contract with our bus operator union. But the final report, that final scenario, will inform the service changes that we make, coupled with that service scenario. In the final report, we're actually going to include a growth scenario. So we all know that the valley is growing. So what we end up with at the end reflects the needs of the community right now and maybe in the near future. But we all know that as the valley grows, we want to consider other options for making sure that we serve the valley well. That growth scenario will reflect additional options, and as more money flows into the valley, that will give us an opportunity as well to consider other options or expansion. So, in the end, we're going to end up with a final report that will give us a lot of information about how we serve this community using public transit. And so, with that, Mayor Trouy and council members, I'm happy to answer any questions, and I really do appreciate your time today. Thank you.
[00:12:11] Mayor: Do we have any questions? Karina? Uh, Council Member Kintine,
[00:12:16] Council Member Kintine: good afternoon. Thank you for being here. I would just like to ask a question because I know it's not very well known about the Sunrise. What are the geofencing limitations or opportunities? If somebody at College of the Desert takes a ride there, how far can they go?
[00:12:36] Presenter: So, you know, I don't know exactly the distance that the geo—you know, what the boundaries are exactly of the geofence. We could find that online, but I know that College of the Desert is right in the middle of the geofence. We do have a lot of College of the Desert students taking the Sunrise service. So, it is a key form of mobility for them. The way it works is they could only travel within the geofence. And right now, we're looking at ways to expand the geofences to provide more options as well. But we can follow up with the exact boundaries if you like, Council Member Continia.
[00:13:14] Council Member Kintine: Perfect. That was just a reminder that sometimes things happen, and that way students don't have to miss an in-person class if they don't have to, if they're not aware of the services. Thank you.
[00:13:22] Presenter: Absolutely. You're welcome.
[00:13:26] Mayor: Council Member Ornick.
[00:13:29] Council Member Ornick: Thank you very much for the presentation. And I wanted to mention that on Tuesday, you had some of your team at my Rotary Club, and they did a great job with presenting this, and there was a lot of—it really sparked a lot of interest. So thank you very much.
[00:13:45] Presenter: Good. Good. Thank you.
[00:13:49] Mayor: Mayor Prom Predto, any questions?
[00:13:52] Mayor Prom Predto: No.
[00:13:54] Mayor: Terrific. Okay.
[00:13:55] Council Member: Suggest one thing. You might—and I mentioned it to the mayor—I wonder if we might... We have a lot of people who take the bus to the library, and the library might be a great place to get information if you wanted to.
[00:14:08] Presenter: Absolutely. Actually, we think that we may want to do a pop-up there, and so folks can come and look at the different service scenarios and give us feedback as well. Yep, it's a great location.
[00:14:18] Council Member: Thank you.
[00:14:19] Mayor: Terrific. Okay. I appreciate the presentation. Thank you. And you're going to be doing the student art contest again?
[00:14:24] Presenter: Yes, we are.
[00:14:25] Mayor: Awesome. Look forward to that. Thank you.
[00:14:27] Presenter: Thank you.
[00:14:27] Mayor: Appreciate it. Okay, next up we have item 2B to provide direction on future uses of the sheriff's substation. And I'm looking for a staff report.
[00:14:45] Jill Mendoza: Okay. Good afternoon, Mayor and council members. Jill Mendoza, Economic Development Manager, here to talk about the future of the sheriff's substation. Today's agenda, I'll take you through. We're going to just briefly review the site location, current conditions, and current lease rate. We will evaluate future options, look at potential uses, understand the financial impact, and then look at future lease rate projections, and ultimately end up with hopefully some direction from you about what the next step should be. So the site location, as you know, this is located on the Civic Center campus. The sheriff's substation was constructed in 1989 and renovated in 2007 with some HVAC upgrades in 2012. The current lease rate and conditions of the building: it's a 25,000 square foot building, 6,000 of which is comprised in the basement. So the main level is about 19,000 square feet. There is secured parking; there are 43 spaces within the secured area. It has been generally well-maintained with age-related wear. The current lease rate for the sheriff's substation, they are paying $1.87 a square foot, which, when you take the lease revenues minus the operating expenses that the city covers, that leaves us with a net operating income of approximately 374,000. I mention that because we're going to do a little bit deeper analysis later on in the presentation, but that's the current financial implications for this building as it is now. So there are three viable options going forward, and the first of which is to retain the building for city purposes. This would be an estimated cost of renovation around 974,000. This would include comprehensive interior improvements, ADA-related restroom upgrades, and a potential roof replacement or at least an analysis on what would need to happen with the roof. This would allow us to adapt it for future operational or public-serving uses, and really trying to take a long-term look at what we might need, not just today or next year, but the next 10 to 20 years for what the city will need in terms of growth. This would leverage our location here at Civic Center, and the secured parking would increase campus parking availability because we could park our fleet in the secured area. The second option is to renovate it for potential market rate uses. This would come with a higher cost, a base-level renovation of about 1.7 million. And that's just to make it competitive with what other product you would see in the market. This would also include comprehensive interior improvements, making the restrooms ADA compliant, and then again looking at the roof. So very similar to city purposes, but we would see increased costs because we would have potential TI, which would be tenant improvements based on the type of use, and it would also potentially come with a longer time horizon. We would have to look at re-tenanting the building, which would mean that you would have to upgrade the building to get it market-ready. At that point, then you would go out and look for tenants. So there would be some marketing and attraction related to that, which could potentially leave the building vacant for a period of time. And then the third option would be to demolish the building. The estimated cost for that is 1.09 million. Demolition would essentially remove the existing structure and return it to a vacant condition. This would eliminate our maintenance and liability for the building, but it would result in the loss of a viable city-owned facility, and it would defer any future benefit until we could get redevelopment on the site. So, if we just quickly look at the comparison, that table will show you just the three options, the cost range, and the scope of each of the different options. When we think about potential future uses, if we were to use it for city purposes, we could use it for city offices, collaboration space, wellness space, storage, mixed media, and secured fleet parking. We could also consider it as a city emergency operations center, or we could use it for city-approved partners. If we were to look at market rate uses, we would look at office uses, potential medical, and maybe even...
[00:20:01] Staff: ...flex, or which would be considered like co-working space, event space, something that would be more community-oriented in nature.
[00:20:13] Staff: So the financial impact of these options is that we would initially, well, initially when we're looking at this, we're looking at the loss of the sheriff's substation lease revenue, which has gone into our Parkview fund.
[00:20:30] Staff: The Parkview fund covers three different city-owned facilities. So not just the sheriff substation, but there are two other facilities that are included in that fund. And it was intended to be self-sustaining, but now that we'll be losing the revenue from the sheriff substation, that will be a significant amount that we will be losing in December of this year. In fact, it's about 50% of the Parkview revenues. Approximately $570,000 annually was what the sheriff substation lease was.
[00:21:06] Staff: Some of the constraints around the Parkview fund is the current balance is around 5 million, but it can only be used on Civic Center campus. If we were to look at reinvesting that money, we need to maintain 2 million reserves in that fund, and then there's approximately 750,000 that is currently earmarked for capital projects.
[00:21:32] Staff: If you look at the loss of the lease revenue from the sheriff's substation and our existing obligations, ultimately we'll be looking at a net operating loss of approximately 173,500 annually once the sheriff substation is no longer paying their lease rate.
[00:21:53] Staff: So then if we look at the future alternatives for leasing the building, the first line shows what we have currently established with the sheriff substation. So $1.87 a square foot is 570,000 annually. Our expenses from the city side are about 200,000 a year. So again, that gets back to the net operating income that I mentioned at the beginning of the presentation of 375,000.
[00:22:25] Staff: In terms of market rates, I did a high and low projection here, and we worked with local brokers to establish that projection. So on the low end, we could potentially get about $1.75 a square foot, which would be 533,000 annually for lease revenue. But our expenses would likely go down because we would pass along the operating costs to a market rate tenant, where currently we cover some of the sheriff substation costs. We wouldn't do that for a market rate tenant. So our expenses would go down, thus resulting in a higher net operating income if we were to have a market rate tenant. I gave you a range there: $1.75 on the low end, $2.25 on the high end. And it really just depends on the type of user that we would get in. And also, in addition to the type of user, it would also have implications on what type of buildout we would need to do for that specific type of user.
[00:23:28] Staff: So that brings us to asking for your direction today of which of these three options you feel is the best, is in the best interest of the city. So, we can retain the building for city purposes, we can seek a market rate tenant, or we can consider demolition of the building. And we really wanted to give you an opportunity to ask questions or provide some insights. With that, I think again, our next steps is really to get direction from you to confirm your preferred option. Once we get that, then we will do further analysis on whichever option you recommend, including identifying funding, and then we would return back to Council with an implementation plan moving forward. So with that, I'll open it up for questions.
[00:24:29] Mayor: Terrific. Any questions from my colleagues? No questions. Mayor Pro Tem?
[00:24:38] Mayor Pro Tem: Could you talk about the expense difference in the state building, is the ongoing revenues? Uh, um... never mind. I'm sorry, I was misreading that. No, no questions.
[00:24:59] Mayor: Okay. Council Member Kintania, I see you writing furiously.
[00:25:02] Council Member Kintania: Well, I'm a compulsive note-taker. That's more of us taking notes than formulating a question. I'm just looking at that. You said there's a basement, right? So, do we anticipate that there will be unexpected maintenance costs for a basement? Because I don't think, for example, any of the other city properties on the Civic Center campus have a basement. Is that correct?
[00:25:28] Staff: I am not a facilities expert, so I don't actually know all of our buildings intimately, but I don't believe any of them have...
[00:25:35] Council Member Kintania: That's just kind of my natural thoughts. So I was just wondering, do you estimate that there could be an additional prorated cost that we may not be looking at with that? So I'm seeing maybe some experts in the back that have some...
[00:25:50] Council Member Kintania: ...in what the use has been or deterioration we may not be factoring in.
[00:25:55] Staff: Sure. Council Member Kintania, if I could just kind of add on to... We have not seen, and I know Public Works staff is here. There you are. To talk about some of the ongoing maintenance that we've done over the years, we have not seen any significant issues with the basement in terms of its maintenance, so routine issues. Right now, it's currently used for training by the Sheriff's Department, and they have some meeting space, locker room, and actually some workout equipment in there. So, aside from maintaining the elevator, that's a routine thing that we do. We haven't seen any major issues with the basement.
[00:26:35] Staff: I'd also like to add that from a market perspective, the basement would not be included in the square footage that we would be able to obtain for a tenant. So essentially, the market would not include that in the square footage. It's not really usable from a market perspective for a market-rate user. So that would be a big loss of square footage that we could potentially use, but a market-rate tenant would not.
[00:27:06] Mayor: Perfect. All right. Well, I have a few questions. Oh, one more? Yeah, go ahead.
[00:27:09] Council Member Kintania: Follow-up question. So, would the city still be able to retain—is that part of it? If we have tenants there, we would still own and be able to use the basement. Is that correct?
[00:27:19] Staff: We would have to have a lease agreement, and depending on what that negotiation would be, we could potentially retain it. Yes.
[00:27:25] Council Member Kintania: Yeah, because I was just thinking in terms of depending on who could be there. If we're looking at medical buildings or medical offices, if they wanted to put any sort of medical equipment or supplies that could be, you know, flammable, etc. Just brain going in different directions.
[00:27:42] Mayor: All right. I have actually a few questions. In one of the first paragraphs on page—was that six, eight? Sorry. It says there the options range from 615,000 to 1.7 million, but I didn't see of the three anything at 615,000. Was that just an oversight, or another $600,000 option I'm not seeing here?
[00:28:02] Staff: No, there is not. Actually, that was kind of another iteration, I believe, and I think that was if we did nothing to the building, if we just basically did cosmetic improvements and didn't enhance it. But if we were to retain it, I think our discussion with the City Manager was if we were to retain it for city uses, we would want to put it in line with the quality of what we have in the other city facilities. So, we eliminated that low option from the presentation.
[00:28:34] Mayor: Perfect. Okay, good. And that actually was going to be another question. To my mind, and you guys, the staff, may have already considered this, but there's a fourth option, which is do nothing—
[00:28:42] Mayor: —sit on it and see what the market dictates in a year or two rather than making a decision in advance. But I don't know if staff already considered that or looked at that.
[00:28:52] Staff: Certainly, we recognize that in the past there were efforts to see if there was a market-rate tenant out there that would use the space. So we were unsuccessful in previous iterations of this discussion. If you want to preserve it for market purposes and see what's out there, then we would likely want to have that be the option, so at least we can plan for a prospective future use if it's not a public use.
[00:29:15] Mayor: Okay. But sitting on it just bleeds money is what it does, without any... I gotcha.
[00:29:20] Staff: Correct. And we still have to carry the basic maintenance costs associated with just leaving it vacant.
[00:29:25] Mayor: Got it. And then another thing is, I noticed the demolition cost came in over a million. Parkview, I believe, where we're going to put the library, was about a $600,000 demo. Is that right? And I'm just wondering why... It seems like the two buildings are pretty similar in scale. And is it the basement that throws off those numbers, or...
[00:29:43] Staff: It's about...
[00:29:45] Staff: Hi.
[00:29:47] Staff: It's just under... I mean, it's about 800,000, I think, totally out. Yeah.
[00:29:51] Mayor: For Parkview?
[00:29:52] Staff: For... yeah, for the full demolition. Well, we can get a better number for you, too. Get back to you, but Brian about that.
[00:29:56] Mayor: Okay, sounds good. And actually, just...
[00:30:01] Council Member: One thought that crossed my head: we own the public works facility down off of 42nd. Would there be any—is it even possible to consolidate, move public works over there, or is that just out of the question in terms of space? It seems like the public works space currently is pretty well purpose-built, and I don't know if there's any flexibility there.
[00:30:22] Staff: Are you asking moving public works to the corporate yard?
[00:30:25] Council Member: Yeah, and then do something else with that space off of...
[00:30:28] Staff: I'll let Randy speak to—there's several uses there already, but go ahead, Randy.
[00:30:34] Randy (Staff): So it would be difficult, in my opinion, just because we do have a lot of vehicles, we have a lot of large equipment. We use that for storage for cabinets and whatnot. The way the sheriff substation is built now, it wouldn't be conducive to store that type of equipment. The basement does have storage, but that would be more for boxes and things of that nature, as opposed to the larger equipment that we need to store at the corporation yard.
[00:31:03] Council Member: Got it. And one last question. Looking 5 to 10 years out, maybe 15, where we anticipate the city to be built out and our population to grow possibly to 70,000 plus, will there be, or have we looked at, a commensurate growth in our staff, and would we need then to use that? You know, this is potential to just grow the city staff into, in other words, space for... Are we busting out the seams now here at City Hall currently?
[00:31:30] Staff: So, in the last space planning effort, we're pretty tapped out in terms of cubicle space and other areas to add for existing staff. We've actually had to shrink the cubicle specifications to fit folks in here. So, the intention wouldn't be we would fill it up with more staff because we have a bigger facility. If it's a public use, we would look at: is there optimal staffing, staff members that we could relocate over there? Are there community spaces that we could provide, or other types of public benefit spaces?
[00:32:00] Council Member: Got it. So we'd have to move from business class size cubicles to econo class size cubicles.
[00:32:06] Chair: Nobody's looking forward to that. Okay, terrific. Well, that's all I have for questions. If nobody else has any, I guess we can move into discussion and maybe your thoughts on direction, and we'll start with whoever would like to start.
[00:32:16] Chair: Okay. Council Member Nandi.
[00:32:18] Council Member Nandi: Okay. Well, I like the first option to repurpose it for city offices, community outreach, public engagement, future SEAG meetings perhaps, and keep Palm Desert the hub of the valley. It's a finite resource, and I would be against tearing down the building. In terms of getting involved with market rate leases and whatnot, I just believe the best option is to go down the road of repurposing this for city offices.
[00:33:03] Chair: Thank you. Council Member Kintineia.
[00:33:07] Council Member Kintineia: I echo my peer's sentiments. This is valuable. We have it close by. We don't have to worry about expanding further offsite. Even though we know we can do remote operations, it just makes sense to have it here. We have the opportunity. I think that basement is something that we can use, especially with changes that may be coming with—I mean, infinite opportunities. I think it's the wisest move. Additionally, as we mentioned, we don't know what the market will look like in the future. We don't know how often we're going to have to do the tenant improvements. We know the changes in retail have been shrinking the amount of retail space that we can't even get occupied throughout the city. So, with all of that in mind, I say let's keep it.
[00:33:54] Chair: Council Member Hornik.
[00:33:56] Council Member Hornik: Thank you. First, I'm disappointed the sheriffs are leaving. They've been great to have here on site. It has a certain level of comfort. But I guess it's time, and they have found a better way to go about their business, and I certainly respect that. So looking at this, and the only thing we can do in that basement if we do retail—mushroom farmer, I don't know [laughter]—but we look at, we need a place for our citizens on patrol. We could use a good emergency operating center. We're looking at a library; we might even have some of the library ops there. We don't know what's going to come next. Tonight, we're entertaining the thought of an indoor sports complex. Who knows what we need that space for and for operations. If our relationship remains strong with the Chamber of Commerce, maybe that's a better place for the Chamber of Commerce rather than using Entrada. So to take it and use it for anything other than city purposes—and this is the civic center complex—it needs to remain for the city, and I think we will see plenty of good uses for it as we go forward. We look at the huge growth that we have throughout our city, and let's make sure we're able to serve it well, and that building will help us. Thank you.
[00:35:26] Chair: Terrific. Mayor Pro Tem Predetto.
[00:35:29] Mayor Pro Tem Predetto: Due to the proximity to City Hall, I support Option A.
[00:35:34] Chair: All right. Thank you, sir. And I just heard Council Member Hornik mention 'civic center complex.' I think we found our wayfinding sign verbiage.
[00:35:43] Chair: Very nice. One step ahead. Anyway, I actually agree Option A, I think, is the best choice. I love the idea of an EOC there. That actually dovetails nicely with what we're doing with the Cove Commission and talking about having the three studies kind of consolidated here, understanding or assuming, of course, it's up to seismic code and it won't—it'll be available during an emergency. But no, and also the consolidation of parking—terrific, frees up space for park users, big events, etc., etc. That's a win-win for me. So looks like Option A is the winner.
[00:36:13] Staff: Great.
[00:36:13] Chair: Thank you.
[00:36:14] Staff: Thank you very much.
[00:36:15] Chair: Terrific. Okay, we go on to Item 2C: Discussion and direction regarding potential updates to tobacco retailer licensing and smoking regulations, including compliance with California flavored tobacco laws and regulations of kratom. Beg your pardon. All right, Mr. Hurtado.
[00:36:37] Daniel Hurtado (Public Safety Coordinator): Good evening, Mayor and City Council. Daniel Hurtado, Public Safety Coordinator. Tonight, a study session on—as you will, I've heard both, so if it's okay with everyone, I'll just say 'kratom.' That's how I've been saying it. So for this evening, I'll say 'kratom.' And the goal is just to provide some clear background, summarize the public health and enforcement aspects to kratom, and ultimately get Council direction on whether you would like to go with a complete ban or a regulated retail approach.
[00:37:10] Daniel Hurtado (Public Safety Coordinator): So as mentioned, today we're going to try and focus on and understand what kratom is and the product, why concerns are increasing, review some of the state guidance and what local enforcement is seeing, and compare regional actions and trends, discuss Palm Desert policy options, and get Council direction to move forward.
[00:37:32] Daniel Hurtado (Public Safety Coordinator): So what is kratom? Kratom comes from the leaves of the Mitragyna speciosa tree. It's a botanical. It's native to Southeast Asia, including Thailand, Malaysia, and Indonesia. It's been used for centuries in traditional settings. Painting a picture for you on how it was used historically: laborers in the rural, very humid environment, they work all day, and what they would use it is almost as a pick-me-up. They would go to the tree, pull the leaves, chew on it, or go ahead and make teas and brew it and drink it as their morning coffee just to get a pick-me-up for the day, as well as handle some of the pain-relieving options.
[00:38:10] Daniel Hurtado (Public Safety Coordinator): What we're seeing today is products are very different from the traditional use. Some of the common modern forms that we're seeing is concentrated extracts, synthetic or chemically altered compounds, and they come in drinks, shots, flavored products, as well as vape—excuse me. And then the modern products can be much more potent, inconsistent, inconsistently labeled, and marketed similar to energy drinks or supplements.
[00:38:45] Daniel Hurtado (Public Safety Coordinator): So this is to give you an overview of the revenue snapshot we've seen increasing. So in the US, we're seeing around 441 million in kratom sales. This is important to a city because national growth is explaining why products continue to appear across smoke, vape, tobacco, and retail environments. It's becoming more common in our community, and that's why we're seeing a growth in this topic.
[00:39:19] Daniel Hurtado (Public Safety Coordinator): What we're seeing is a growth in these synthetic and high-potency products. Some of the reports show that it can be related to driving impairment incidents, emergency medical responses, as well as adverse health outcomes. These products are often marketed as energy drinks, supplements, or flavored consumables. Just at the top, it almost looks like—if you've seen those—the 5-Hour Energy shots. And going back to the fine line of reading labels, it'll show you that on the servings of those, it's about 30 servings. So if someone was to drink the entire shot, then that's about how much kratom you're getting into your body. So that's what's kind of alerting on this matter.
[00:40:01] Staff: So the two distinctions that I'm putting on here is kratom leaf, as discussed, the dried leaf. It can be powder, capsules, or tea forms. It has a lower potency than extracts, but effects can vary by its dose, and it still presents some documented health and impairment concerns, just not as potent as some of the synthetic or high-potency 7-OH. So 7-OH, or its terminology is 7-hydroxymitragynine, is concentrated or added increased potency. These have faster onset and stronger opioid-like effects. They have a higher risk of impairment, dependency, withdrawal, and overdose. Potency can vary widely by product and batch. So you're not really—you don't get the exact number as to what you're getting in a synthetic or a high-potency product like 7-OH.
[00:40:54] Staff: A study was done by Johns Hopkins University, and we were trying to figure out who's using it, why it's being used, and its side effects. Some of the main reasons people were using it was categorized as pain relief, as mentioned earlier, like an energy pick-me-up, and some people just wanted to try and get high. And some of the side effects that came with it was muscle pain, drowsiness, dry mouth, addiction, insomnia, liver damage, tachycardia, and respiratory depression. And on this, I wanted to bring up Sergeant Deputy Nelson to give you guys a real-world experience that he dealt with with the Sheriff's Department.
[00:41:35] Sergeant Steven Nelson: Good afternoon, Council. Sergeant Steven Nelson. I'm with the Palm Desert Business District team. So I'm going to go through my background real quick. I know I've worked with many of you. A lot of you have done ride-alongs with me. But prior to my assignment, I was actually our DUI enforcement officer for two years. So I dealt with a lot of drug usage, alcohol, driving, things like that. So my expertise—I've gone through many specialized trainings for drug impairment, including I'm a Drug Recognition Expert. It is an internationally recognized expert-level course. It is by far the hardest law enforcement course I've ever gone through. It is a two-week course. They bring in doctors. We have clinical studies. You get trained on clinical terminologies, and we finish with a three-day field certification where we evaluate 12 people who have just used drugs, and we have to accurately describe what they are on, and they test them right then and there. And it is a pass or fail. You either get it right or you go home. And I was fortunate enough to pass. I've done over 5,000 DUI investigations in my 15 years as a deputy sheriff, 12 of which have been in Palm Desert. That includes over 800 specifically for drugs. I've done roughly over 50 Drug Recognition Expert evaluations, which is a clinical test of a subject in a controlled environment. And I've filed over 380 drug and alcohol-related cases to the courts. I've also testified 10 times in court as an expert. So a little bit about my background, just not to flaunt it, but I know my stuff. All right.
[00:43:28] Sergeant Steven Nelson: So the reason that comes into play: October of 2023, I was working patrol, driving down Monterey. I saw a vehicle make a left turn onto Monterey and immediately was driving on the wrong side of the road for about 100 feet. Tried to catch up to it, and then I noticed it was driving, kind of hovering over both lanes of the roadway for another 100 feet before I was able to pull it over. Pulled it over. The driver was a 29-year-old male, local resident, college student, very nice, very respectful, no real criminal history. He was adamant that he had not taken anything, that he was not, you know, had not consumed any alcohol, not consumed any medication or any illicit drugs. I did a field sobriety test on him. It was one of the worst that I've ever experienced. He was not able to basically do simple tasks on a field sobriety test. But what made it more interesting was, obviously, he wasn't on any alcohol because I didn't smell it. But in the drug world, different drugs do different things to your body. Some elevate your pulse, some lower it, dilate your pupils, constrict your pupils, make you do different things. I was noticing with him, I was getting all kinds of whirlwind-type stuff. He had things that just didn't make sense with how we usually see drugs. His pupils were dilated, his pulse was high, but he was very lethargic, which was kind of counter to what we usually see.
[00:45:04] Sergeant Steven Nelson: Breathalyzer was zeros, but based on what I saw, I was confident that he was under the influence of something. I placed him under arrest, took him back to our station, did the full clinical evaluation, kind of doubled down my thoughts. At the time, I believed he was under the influence of a central nervous system stimulant combined with a narcotic analgesic or an opiate. So, I believed he was under multiple drugs. He consented to a blood sample, which was sent to our lab, and I got the results back a couple weeks later, and it said he was on nothing. Our lab, when we do our tests, they test for the 13 most common illegal drugs. But based on my expertise and my confidence, I had them retest it. They went through a 200-drug comprehensive panel, and kratom popped up. And I had no idea what kratom was, just like many of you. Our lab, Biotox Laboratory, which is local, they actually had to send it out to Pennsylvania to get the levels because of how new this drug is to our world. His levels were 137 nanograms per milliliter, which is just kind of numbers to you, but based on our experience, that would suggest that it was either a synthetic or an alkaloid extract. He was convicted through the court. And in doing this, I learned a lot about this drug. And the most scary part about it is how accessible it is. And he truly believed he didn't do anything wrong because he bought this over the counter at a tobacco store, took it because, you know, it alleviated pain or whatever his reason, and, you know, he was driving very, very dangerously and had no idea.
[00:46:52] Sergeant Steven Nelson: I'm not here to pitch any option over one or another. This is just me as an expert witness to it. I called our District Attorney this morning. They said they're having difficulties filing these cases just because the officers aren't really aware of this. So, they get the blood results back that say nothing, and they just kind of end it there. Not a lot of officers have the training I do that can recognize it. I went ahead and called our laboratory this morning. They said they are getting significant increases of kratom in their tests, and now they're having to send so many out to Pennsylvania that they're going to try to start doing it locally to get the actual levels because that's how much more prevalent it is in their labs. So, I'll be here at the end of Daniel's presentation to answer any questions. Again, just firsthand witness of someone who was under the influence of it.
[00:47:49] Staff: So this is why staff is emphasizing 7-OH from an enforcement and risk standpoint. It has a higher concentration and a stronger potency than the leaf-based product. Its predictability, the labeling, the batch strength can vary, and users cannot rely on that. There's product forms that, as we mentioned, come in gummies, shots, drinks, vapes, and resemble supplement or energy products. And then youth appeal, which is flavors, branding, convenience packaging, can increase and access that risk. And then the regulatory target would be focus on high-potency 7-OH, which would align with regional enforcement trends.
[00:48:28] Staff: The State of California—California Department of Public Health advises that kratom and 7-hydroxymitragynine, or 7-OH, are not FDA-approved as food supplements or drugs. It's considered adulterated and misbranded when sold for consumption. They have warned retailers and the public. They've conducted enforcement actions, and they've removed illegal products from the store shelves. The state has identified health risks, but local governments can regulate the retail activity.
[00:48:58] Staff: This just gives a snapshot of some of the regional and local actions. What we've seen so far is that only six states have a complete ban on kratom, which is Alabama, Arkansas, Indiana, Louisiana, Vermont, Wisconsin. In our region, Riverside County has taken action to prohibit synthetic and high-potency products with 7-OH. And outside of the region, we have San Diego, which has a local ordinance prohibiting sales, distribution, and possession. San Diego County, which has treated it as a public nuisance and subject to civil abatement. Orange County has adopted restrictions tied to 7-OH thresholds and age packaging controls, similar to what we have here within Riverside County.
[00:49:41] Staff: At the state level, there isn't one statewide kratom ban by name today. So, California Department of Public Health stated that kratom and 7-OH products are not FDA-approved, and it's up to local governments to decide whether it is allowed, how it's sold, and how youth and public health are protected.
[00:50:01] Staff: AB 1088 proposes adding 70 products under the Sherman Food, Drug, and Cosmetic Law, which prohibits sale under 21, requiring child-resistant packaging, restricting products attractive to children, and limiting 70 levels as a threshold. City staff actually met with a representative from Assembly Member Baines's office, and we talked to them and we proposed having a local approach which would remain workable now but can align in the future if AB 1088 is passed, which would be the age 21 or older packaging and 70 products. So that's if this bill is enacted. We decided that it would be best paired with the tobacco ordinance because kratom is sold in the same retail environments as tobacco products: gas stations, convenience stores, and smoke shops. Many of the concerns are similar, which is youth access, flavored products, and retail marketing. The city already has a framework that includes licensing, inspections, and progressive enforcement. Using that existing structure will help implement without creating a completely separate system just to be tailored to kratom. So with that background, here are some policy options. Option one would be a complete ban, which would prohibit all kratom sales within Palm Desert. It would be the simplest regulatory approach, and it would eliminate local retail access entirely. Some of the considerations would be that this enforcement would rely on prohibition, retailers would lose out on lawful product sales, and purchases may shift to nearby cities or online sales. Option two would be a targeted regulated approach, which would prohibit synthetic and high-potency products, including 70, while allowing natural kratom leaf sales with the safeguards being 21 and older, original manufacturing packaging only, child-resistant packaging, and it would be regulated through the tobacco retailer license and inspections. The purpose is to keep lawful adult access to lower-potency leaf products only, identify where it's sold, target the high-risk products, as well as reduce any black market pressure. With that approach, it would be a balanced public health approach which targets highest-risk products, protects youth through age restriction and retail controls. It would also allow adults who have historically used natural leaf products to continue purchasing them lawfully. It also would avoid criminalizing adults, using existing enforcement systems, and align with county and regional actions. And we built in flexibility to adjust if state law changes. This ordinance would be able to be amended to remain aligned with state actions and legal requirements. If the state decides a complete ban or its alkaloids become a scheduled drug, the state law would preempt local action, and staff would return to City Council with recommended amendments to keep the local framework compliant and enforceable. Tonight, city staff is asking for direction if Council would want to pursue a complete ban on kratom products or a regulated retail approach which would prohibit synthetic high-potency products and allow natural leaf sales with safeguards. Your direction will ultimately guide a final ordinance drafting, legal review, and a public hearing process. And staff would return at the next scheduled Council meeting on February 26, 2026. And with that, I open up the floor for any questions. Thank you.
[00:53:36] Mayor: Okay. Any questions for my colleagues? Good. Council Member Quintanilla.
[00:53:43] Council Member Quintanilla: My question is for Sergeant Nelson. With the individual that you encountered, do you know where this individual purchased the kratom?
[00:53:54] Sergeant Nelson: No, I never got to follow up with him. But based on talking to him, it was apparent he bought it over the counter somewhere.
[00:54:01] Council Member Quintanilla: Thank you.
[00:54:03] Council Member Hornick: Question.
[00:54:04] Mayor: Council Member Hornick.
[00:54:07] Council Member Hornick: Do we see a lot of the kratom on sale throughout the city? Are we aware of it, and the high potency and alkaloid, and... Okay. Thank you.
[00:54:18] Mayor: Mayor Pro Tem, any questions?
[00:54:20] Mayor Pro Tem: No questions.
[00:54:22] Mayor: And I don't have any questions either. We'll open up for discussion. Any thoughts or considerations from the rest of Council?
[00:54:31] Mayor: Okay. Option B to me seems like the best choice to keep it in line with what the county is doing. The feedback I heard from some residents was natural leaf kratom does help and has some benefits. So, I'm perfectly happy to go with Option B.
[00:54:46] Council Member: And I'm aligned with you on that, Mayor.
[00:54:50] Council Member Quintanilla: Option B seems reasonable. I would prefer a total ban, and I think that part of... not only would it be easier to enforce and say we just don't want it, I don't think that we should prioritize a profit of saying, 'Well, we're going to lose on potential revenue,' when estimates are only 0.9 to 1.5% of use of the US population. I spent a big chunk of my afternoon reading through studies, and this one in particular was from the National Library of Medicine, which does get funding from the National Institutes of Health, and there were some very concerning things. And while, yes, the synthetic is dangerous because it has approximately, I think it was 72% potency of the natural leaf, it also has a 13% potency of morphine. So that's just a no-brainer. Yes, let's do the synthetic ban. But I am concerned with the fact that, for example, there is an online vendor in La Quinta, and when you go to their website, all over the place... Well, first thing, if the law says you can't have it marketed to anyone under 21, there's nothing on the website the way that you would go to any liquor manufacturer that says, 'Are you over 21? Are you over 18? Enter your date of birth.' None of that is there from the jump. Additionally, all over the place, it says, 'Not for human consumption, not for oral consumption,' but the primary way that it is consumed is as a tea, or we're seeing as edibles or as a drink. So, I think that's very disingenuous of how are we going to allow products that are going to say 'not intended for human consumption' when we know we're inviting that particular thing. There is no recommended dosage. Just as mentioned, the 5-Hour Energy gives you an estimate: you're consuming this amount of caffeine spread out over this amount. There is nothing that can directly counter an individual that is having such a severe reaction. For example, if the individual that Sergeant Nelson had encountered... there's nothing like Narcan available to snap somebody out of it. And to me, that's another situation, right? We get a kid that thought, 'Well, these don't look like the gummies my mom said not to take, or my grandma's special gummies. These are different. Maybe these aren't as big of a deal.' Because of the lack of information of how this interacts with pharmaceuticals that people depend on for daily existence and their existing quality of life, I think it's very dangerous to create any illusion that we think we know it's safe. There just is not anywhere near enough. I mean, we all know that, yes, there are medicinal benefits to everything. We know that, just as mentioned, the field workers and farm workers in Malaysia and Thailand would use it. So do the people of the Andes; they consume the coca leaf. Tourists that go to Machu Picchu, they use it for altitude sickness, but it's not legal here because we know that there have been studies over time. We are nowhere near that juncture to where we could say we should be okay with it. One of the anecdotes that I was reading is, I think that an individual was... I don't know if you measure it in micrograms or milligrams. This was an individual that on a dosage of five had experienced substantial impairment. And again, if you're making a tea, not sure which one it is, they sell different variations from this particular La Quinta retailer. I think they had like eight or nine varieties on hand. We also don't know... depending on whether you're getting it from East Asia or West Asia, you get different types of potency. Whether it's the green leaf, whether it's the white leaf, there is nothing that says this person grew it at home, this person grew it outside, this person grew it in a place that used to be a toxic dump site. There is no quality control. There are no environmental regulations that, again, leave us under the assumption that this would be safe. We know, for example, that whereas, yes, I wholeheartedly understand that this has been an excellent substitute for people that have been dependent on opioids, we are not discounting that. I don't discount that. But that doesn't mean that having access somewhere else... I just think it doesn't belong in Palm Desert. We often talk about how we want to create a safe environment. I think this is a part of it. I think we don't want anyone driving. That was a very alarming anecdote. One thing is to read it and hear how dangerous it could be, that it could lead to impairment, but that's alarming. You were able to see that individual before...
[01:00:01] Council Member Quintanilla: ...they cause substantial harm to themselves or someone else. It doesn't take a lot before—I mean, I can't fathom. There are six states that have banned it altogether. Why is Palm Desert not considering that? There's a reason that some states have just said, 'We don't want it at all.' There have been studies in mice and rats that have demonstrated addiction and cognitive impairment, particularly with chronic ingestion. That's the other thing: we don't know what's going to happen if people take it over long periods of time. I just think, again, we need to do an entirely different approach to it and say, 'The county may say one thing, I just think we need to have an all-out ban.'
[01:00:51] Mayor: Mayor Pro Tem, any comments?
[01:00:54] Mayor Pro Tem: I support Option B. We need to make it harder to get for kids, and we have an infrastructure in place for inspections.
[01:01:01] Mayor: Terrific. Council Member Harnik.
[01:01:03] Council Member Harnik: Thank you. I do want to make it abundantly clear that certainly the profit motive is not driving the decision for B at all. It has nothing to do with that. But we only have so much control, as we know. They can get it on the internet. They can, you know, go and buy it any place they want and bring it into Palm Desert. This is just a little niche we're putting into the problem. And we know that, but we're making a statement more than anything. We need to keep our eyes and ears open on what's happening with the Assembly Member's bill, what's happening in Sacramento, and we need to have our voice heard up in Sacramento about this issue. In the meantime, let's do what we can to be reasonable or realistic on how well we're going to be able to contain this problem, because we can't stop people from going on their computer and ordering it. And that is prevalent, and we understand that. But let's do the best we can and make sure that we keep our options open, our eyes and ears open, so that we can weigh in when there is an opportunity in Sacramento or even Washington, D.C. on this issue.
[01:02:13] Council Member Quintanilla: Nothing is banning us from saying we ban it entirely right now and having it in the ordinance that as things evolve. This, just like any ordinance, they are living documents that can be changed. I just think the simplest thing is banning it now, and as things evolve, we can come back and say, 'Look, new studies have been done, the FDA has now taken a peek at it, we can evolve.' But I think for now, we just need to say no. Right? Isn't the after-school special 'Just Say No'? I don't think that there's any legitimate and logical reason why we should create any opportunity. Yes, people are going to get it online, but it doesn't mean that we should encourage it. We know that fines are a deterrent; they're not going to ban everything. We know that we don't ban DUIs by making it expensive for people to get their car impounded and court fees and all of that. That doesn't stop DUIs, but the cost of it does inhibit some people from making different choices. So I truly believe, and I implore to your personal morals, ethics of public safety, which we repeatedly preach as one of our main goals, that we ban right now and then evolve as we get more information.
[01:03:25] Mayor: Terrific. Yeah, I'm certainly not in favor of having the Wild West, but I'm definitely an advocate for Option B. Alcohol is legal, THC, CBD. I just would hopefully—I'm a bit of a libertarian. I just would trust adults would use it responsibly. Option B puts us in line with county regs so there's no confusion. So that's—it looks like that seems to be... Want to say it out loud?
[01:03:52] Council Member: Well, you're here for direction. So you've heard from four of us, and I appreciate Council Member Quintanilla's sentiments and opinion, but I believe we've given direction.
[01:04:09] Mayor: Terrific. Okay. Next up, we have Item 2D, which is a presentation regarding a potential indoor sports complex partnership. And I have a feeling I know who's going to give this one, which would be Mr. Scott White. Is that correct?
[01:04:26] Speaker: Mr. Canon.
[01:04:27] Mayor: Oh, terrific. Good surprise. Beg your pardon. I mean, Scott is available for questions.
[01:04:36] Richard Canon: Good afternoon, Mayor and Council. Richard Canon, assistant city manager. The purpose of today's study session is sort of three-fold. One is to present preliminary concepts, or a preliminary indoor sports complex concept, share market context and comparable examples of what these indoor sports complexes are, and then ultimately receive council feedback and direction. So again, this is for discussion only. We're not making any—so the public is aware, we're not requesting any formal action this afternoon. So where we are today: approximately about nine months ago, we began some preliminary discussions with Visit Greater Palm Springs regarding a possibility of an amateur indoor sports facility. They had completed some initial studies, and it did show there was some support for this type of facility within the valley. And so right now, we don't have a formal project scope, partners lined up, or financing. And so really, again, the purpose of today is to introduce the concept and then see if this is something Council would like us to analyze further. So what is an indoor sports complex? And so typically, these are large, multi-use, climate-controlled recreation centers. They support both local leagues and community uses and tournaments, but they also host a number of camps, clinics, national and regional tournaments, as well as special events. Many of them also include the ability for adaptive sports tournaments, so it really runs the gamut. Many of them also include food services. We've seen these, just in our research, as these continue to evolve, they'll incorporate climbing walls, bowling alleys, redemption game areas. So it really serves across the spectrum. We're starting to even see some that have esports, which are the electronic or video game areas established in this. So again, it kind of runs the gamut. There's tournaments for these things all over the country, and it is a fast-growing segment. And so why do cities develop these facilities? Again, looking at expanding youth and recreation opportunities. It attracts regional and national sports tourism. For us, most important, it increases hotel stays and visitor spending, and really functions as an economic development anchor, similar to—you know, where before you see a lot of cities or municipalities targeting just straight retail, now there's different alternatives to really drive that tourism dollar. And then again, looking at balancing that community use with tournament activity. Some of these facilities are open to—they really concentrate on the community during the week, and then on the weekends, they really focus on that tournament traffic. And so, a little bit of the market context. And so again, the amateur sports tourism, it is a fast-growing sector in the United States. Destinations with similar facilities average about just under 70 events annually and almost 3,000 attendees per event. So that's quite a number. And you can even just see from the photos, imagine all of those kids and being a parent with kids that age and attending those tournaments. There's a lot of people. And then looking at sports travel, it's increased 15% from 2019 to 2023. And so again, this is a growing area. And so looking at potential site opportunities, we really started looking at the university neighborhood specific areas as one of those potential areas. As you know, we have the update of the UNSP underway. There's approximately 170 acres of vacant land that we're ultimately seeking to control, former redevelopment land. And so we really looked at that opportunity to evaluate whether this indoor facility could be part of a broader mixed-use concept there, given the size of the land that's available as well as the closeness to both the interstate as well as some of our larger resort hotels and other hotels along I-10. And then really looking at how that can complement our regional park that we have planned for the area, and even the tourism base with Desert Surf just to the south. And in addition to that, we looked at, you know, typically in our summer months when demand is low and some of our hotels wish we had more visitors, given that this is a climate-controlled facility, it provides a potential opportunity to fill that void. And so, as part of the initial feasibility study that Greater Palm Springs conducted, they really looked at what could be supportive. And at that time, as part of that study, there was strong support for an indoor facility, not so much for an outdoor facility. It also showed that there's a strong 30-minute market or 5-hour drive market from our location opportunity to position a new facility with adaptive sports and provide sufficient revenue opportunity to cover operating expenses and...
[01:10:01] Staff: capital costs. And then the estimated annual direct and indirect economic impact is roughly $50 million as a result of this. And so quickly I'll go through two facilities that are currently under construction that we would think would be comparable in this regard. The first is one in Henderson, Nevada, that's on an 18-acre site. Interestingly enough, they share the site with a new concept called Chicken N Pickle, which is a pickleball and chicken restaurant. So, you can play pickleball, eat a chicken sandwich, and have beer. It's very popular. But it also included shared parking. And so, this is one that, you know, didn't have outdoor fields. But as you can see from the amenities inside, they have a number of laser tag, bowling alley, the redemption arcade, mini golf, even axe throwing.
[01:11:05] Staff: The second comparable facility is one that's under construction in Williamsburg, Virginia. This is part of a 63-acre larger concept, slightly larger facility. But you can see where they have an indoor conversion turf system, climbing wall and equipment, tip-and-roll larger bleachers, but also focusing on the meeting and event room space targeting conferences. And so this again is part of a larger concept where they have, I think, an amphitheater and a number of other things planned as part of this.
[01:11:43] Staff: And so just high-level cost considerations. Comparable facilities suggest a capital cost probably in the $80 million range. Again, just order of magnitude. But a lot of that is going to depend on ultimately the size, how it's programmed, site conditions, phasing, and then what type of partnership and financing structure. And so while we don't have any in particular, and really we would look at all avenues, there are a number of public-private partnerships, municipal leases that have already been implemented throughout that we can look at as best practices or even worst practices for that matter, and also potential consideration of a tourism business improvement district.
[01:12:26] Staff: And so what we're asking Council direction on is: one, does Council wish to direct staff to continue exploring this concept, and if so, these are the steps that we would move forward with, again, ultimately coming back to in various stages reporting where we are in this; and then part two of that is, are there any additional factors City Council would like us to evaluate as part of this? And with that, I'd be happy to answer any questions or even turn it over to the folks here from Greater Palm Springs.
[01:12:57] Mayor: Okay. Any questions from my colleagues? Gina?
[01:13:01] Council Member Gina: For Mr. White, do you have any idea what the T-BID contribution would be if we were to move forward and what percentage that would be?
[01:13:12] Mr. White: At 1% for the city of Palm Desert, it would be roughly about $2 million a year it would generate. We think in this particular scenario where it would have benefits to other cities that we would recommend a maybe a multi-city collaboration on a T-BID. So as you go further away from the complex, those that are the payers, the hotels, would pay less. So the closer you are, you pay a higher amount, and the further away you go, you pay a lower amount. So it could be 1% for closer in, and then maybe it's a half a percent or a quarter percent and so forth. So certainly it's a lot more discussions and things we have to have with multiple cities to do that. But then you could raise from $2 million, you could probably get closer to three, maybe even a little bit over $3 million to help offset that. The thought behind this when we originally were talking about this was during COVID. We noticed that our friends in Arizona and Las Vegas were having high occupancies, and the result of that was mainly from outdoor sports events at the time because you couldn't be indoors. So our study originally started with an outdoor sports complex, but realizing that when most of the tournaments are taking place, they're taking place in the summertime. So they're not as conducive for this destination. So the CSNL, who actually did the study, looked at both outdoor and indoor. Indoor was profitable, outdoor was not profitable. Doesn't mean it wasn't beneficial for the community, but we were looking at it from a standpoint of we want to make sure that we're driving hotel nights and economic development revenue for the cities, for the community, for the hotels. I have Clark Albright here. He's the director of sales and marketing at the JW. Obviously, they're very keen and interested in this project as well because they would have close proximity to this particular location and would benefit greatly from this opportunity.
[01:14:48] Council Member Gina: Absolutely. In those summer months combined with Desert Surf. Go ahead if you wanted to comment. Yes.
[01:14:53] Clark Albright: Well, yeah, absolutely. You know, I've had the benefit of being in a number of markets. I spent time in Vegas in my career. I spent time in Phoenix. And this is a market where it's a dramatic fall-off. It's almost a cliff. When you start looking at occupancies from season being the 70s and 80s to literally 30s and 40s from an occupancy standpoint, I think that any project that gives us a reliable demand source is viable. I don't know if it's the ultimate answer, but if you stack it on top of a surf park, you know, expansion to some of our facilities, and reinvestment by our properties, and then having what would be a summer demand generator, we fight tooth and nail just for one point in occupancy during the summer at our building for every 500 rooms. It's hand-to-hand combat at times. So yeah, we want to put our support behind this. And if you had any questions about specifics, and you look at the rate differential too, that's something we'd like to kind of close the gap on because we're in that $400 to $500 range in peak season down to $200 in the off-season. So if we have an ability to shrink our building by putting base business into it, it actually lets us elevate our room rates.
[01:16:18] Mayor: Council Member Horning, you got...
[01:16:22] Council Member Horning: Thank you. What do you estimate our drive market is population? Is it 25 to 30 million? What are we?
[01:16:29] Mr. White: Uh, God, I believe it's higher than that. Colleen has the exact number. I want to say it's closer to 40 million because we include Phoenix and Vegas now. So, when we do summer promotions, we're expanding from Southern California. We did this a number of years ago. We see quite a bit of traffic coming from Arizona, Las Vegas area, and even Northern California.
[01:16:47] Council Member Horning: Oh, okay. Great. When you put the comparable facilities of Henderson and Williamsburg, and they're under construction now...
[01:16:56] Mr. White: There are—I mean, there's lots of facilities. We can get you a lot more opportunities to do comparisons. Those were the two that were picked by staff, I think probably due to comparison of size and so forth. So, there's lots of different variables that are involved. When we were going through this, we were talking about how do we maybe partner with Cal State University San Bernardino or with COD, have kinesiology, have some other, you know, have some classrooms there, some other opportunities as well. So trying to get really creative on how do we utilize that facility. Certainly our drive is to make sure that we're maximizing it for tournaments during the summertime, but we want to make sure it's being used throughout the entire year. So we feel like there's lots of other potential adaptive uses that we can do greater studies on.
[01:17:35] Council Member Horning: Right. I think it would be interesting to know how Henderson and Williamsburg—and both, I can see why you would choose those two cities, but their thought process, how they got to say, 'Okay, we're building this.' That would be good information for us to have. Thank you.
[01:17:57] Council Member: Question.
[01:17:57] Council Member Kintonia: Council Member Kintonia. Um, do you know the approximate population of the two comparable locations? I mean, I know Henderson has the appeal because it's so close to Vegas. We're not that directly close to a major metropolitan city where people can say, 'We're staying here. It's a short little hop over there.'
[01:18:16] Mr. White: I don't know the population off the top of my head, but we can do that research for you.
[01:18:20] Council Member Kintonia: Any rough estimates? Any Google on your phone right now? Just for—I'm sorry to put you on the spot. But I'm just—I think the component here is that this—that the facility that we're proposing or that we're suggesting was done by CSNL, which looked at facilities all over the country and came back and recognized that people are traveling all the time, and they're traveling long distances to go to volleyball tournaments, basketball tournaments, gymnastics, wrestling, you name it. And a lot of these facilities don't have the facilities around them in terms of hotels, restaurants, shopping, all the things to do. And some of them even certainly have an airport as well. So we know this will grow the airport component. So when we talked to the operators of these facilities—and there's several of them out there, KemperSports is one of them, which has the Desert Willow, as you know, and there's other facilities—they all were very, I think, very bullish and very robust about the fact that this facility would do very, very well because it's very enticing. I mean, some of these facilities are in the middle of nowhere. So when they get there, there's nothing to do because they're in their tournaments for maybe a couple hours and they have a half-day break. So they're really looking for things to do. So while you're—while I was doing that, let's see. Population for Henderson and...
[01:19:28] Council Member Kintonia: That makes sense. In that case, now that eliminates that question of the sustaining population. Yeah, that shifts my perspective. Thank you.
[01:19:39] Mr. White: Yeah, Henderson is 359,000 residents. So very similar to the Coachella Valley.
[01:19:43] Council Member Kintonia: Okay, perfect.
[01:19:45] Mayor: And Mayor Pro Tem Predetto, any questions?
[01:19:49] Mayor Pro Tem Predetto: Yeah, the existing projects and the vision for this one, is it to be a privately operated facility including
[01:20:00] Speaker: ...the assumption of risk related to financial loss.
[01:20:07] Speaker: I can't speak to risk, but I can speak to the fact that we feel that an organization, a company that runs these facilities that has experience, would be best suited to do that.
[01:20:19] Speaker: We wouldn't want to run it. We wouldn't recommend the city running it. You'd want to have a facility being run by either like a Keer Sports or sports facilities type organization that understand the market. They see tournaments. There's some of these that are running multiple facilities across the country so they can then cross-sell from destinations in Texas and Florida on the East Coast and the Midwest. We want to make sure you have that collaboration. I think this is a potentially great project not only for tourism, also for the youth in our community in the Coachella Valley. I think that it has a lot of upside to be a great amenity. I do want to make sure though that as we proceed, I think that Palm Desert's the most sensible place to put it due to its location. As we proceed, I'd like to make sure that we're looking—and this is staff looking—for any factors that council would like evaluated. Ideally, in my mind, I think my vision would be for this to be owned and operated by a private operator with the incentive to make a return and not pass the losses on to the taxpayers. However, if it turns out that it makes sense to run it like we do the Desert Willow where we own it and someone else operates it, that's fine. But I definitely want that to be part of the analysis.
[01:21:44] Speaker: Good stuff. Any more questions? Okay. Why don't—Oh, do you have a question? Sorry. Council—
[01:21:49] Council Member: Comment.
[01:21:50] Speaker: Oh, I got—I'll start off with the comments if you don't mind.
[01:21:51] Council Member: No, I agree with Mayor Pro Tem about the local benefit. There had been discussions with some of the soccer groups and with Desert Rec that when there are these tournaments that come from out of the area, sometimes they book months in advance and have a last-minute cancellation, and those fields have already been blocked off and our local youth sports can't utilize them. So that helps alleviate that opportunity. You know, we hear a lot of folks that say, 'You've got the skate park, but it's too hot. When are you going to make it indoors?' We can't make that natural magic wand opportunity, but this is spectacular. We know one of the greatest impacts on tourism is activity-driven tourism. This makes a lot of sense. I concur that the ideal location is right in the middle of the map, which means us. And we've got the largest resort, we've got the largest opportunities that are nearby, close to the freeway. I love that you mentioned how we could incorporate this as an educational component with Cal State and COD having their kinesiology. With such a large space, as mentioned, if it could be flex space. As we mentioned before about retaining ownership of the substation, is how this could also be used for like emergency preparedness drills at a large scale, convention space. You know, there's depending on how much flex space is built into it, this has unlimited potential, and we've got a lot of economic development experts that would make this a win-win-win-win opportunity.
[01:23:32] Speaker: Click. Okay. My thoughts are I'm 100% gung-ho behind this project. There's no doubt. I mean, the timing to me seems perfect. Every time I go to the Parks and Rec Committee meetings there, you know, we have people on that committee who are coaches locally. We have a shortage of soccer fields, football fields, and that's not true just in Palm Desert. That's valley-wide. I hear that from my colleagues all over the valley. So that would help alleviate that. Of course, the infrastructure development that's going on with the fire station. We just adopted a specific plan. Everything seems to be—the power substation, the fire state—everything seems to be lining up perfectly. And also what I think of in terms of both my predecessors and all of us currently have built a desirable city both for tourists and residents. So let's capitalize on that and build this thing and pursue direction here where we continue exploring this concept. Amen.
[01:24:27] Council Member: Okay. Yes, again, 100% supportive. And if we recall at the last study session, we had a presentation on some of the revenue challenges facing our city in the future, and I'm really excited about the potential of moving forward with this indoor sports complex with more to come. So I support the five steps that city staff has presented to us.
[01:24:55] Speaker: And Council Member Hornick.
[01:24:56] Council Member Hornick: Thank you. I look forward to learning more about the possibility this presents to us. Thank you.
[01:25:02] Speaker: Tempered a little bit. Yeah, I got you. And then also I do want to second Mayor Pro Tem's comments regarding the private-public kind of partnership and making sure we're protecting the taxpayers. So there we have it. Thank you.
[01:25:14] Speaker: Thank you very much.
[01:25:15] Speaker: Okay. Well, that looks like it closes up the study session portion of the meeting. We will now go into transition to closed session. And I am going to call to order the closed session of the Palm Desert City Council. Are there any public comments, Mr. City Clerk?
[01:25:34] City Clerk: No public comments.
[01:25:36] Speaker: Okay, then we shall go into closed session.