Developer revives
Cathedral City hotel
plan

Written by

Colin Atagi

The Desert Sun

6:27 AM, May. 16, 2011|

Just off one of the busiest roads in the valley lie 18 acres of dusty, vacant property, surrounded by a chain-link fence to keep trespassers out.

By now, the lot two blocks east of City Hall edging south off East Palm Canyon Drive was to have been transformed into an upscale hotel, the kind that draws
businesspeople and affluent travelers who don't mind spending more for thickly padded mattresses and attentive service.

But a series of obstacles, including delays related to a proposed golf course and the crush of the recession, scuttled the plans,
which have been discussed since the late 1990s.

Now, a Los Angeles-based developer is moving aggressively to revive the downtown hotel idea and says he is ready to spend as
much as $125 million on the project.

While city officials say they're excited about the possibilities, they're also cautious.  They've been through negotiations with
various developers over the years, only to see all the plans turn to dust.

City officials last month gave Los Angeles-based Sonnenblick Development 120 days to complete a feasibility study.

The company's chairman says it's done — three months ahead of schedule.

“Now we're just working on getting our approvals from Cathedral City to build,” developer Robert Sonnenblick said.

Sonnenblick said the project no longer includes development of nearby land for an 18-hole golf course.

It's also not going to be a Sheraton hotel, a name that's been attached to the project for years.

“It will not be a Sheraton; you can quote me on that,” he said. “We're going a full level higher than Sheraton.”

He wouldn't mention names, only that he was meeting with three “major national hotel brands.”

The proposed 300,000-square-foot hotel could have about 330 rooms and be four stories tall. Earlier plans called for six floors, he said.

There would also be 50,000 square feet for meeting and conference rooms and ballrooms, as well as spas and a garden for weddings.

He wants to bring his plans to city leaders this summer for approval; officials say it's too early to say if they will move forward with the designs.


According to Mayor Kathy DeRosa, the developer “has given council a level of confidence that he can make the hotel happen.”

But how the project will be financed
remains a question.

Sonnenblick said he'll look for money once the plans and permits have been approved.

But City Councilman Greg Pettis said Sonnenblick already “has everything a bank would want to see to loan the money.”

If the plans move forward, it will be a positive step for a project that has been more than a decade in the making.

If they don't, city officials may continue to endure the often-asked question: When is the Sheraton coming?

“They've been talking about it for years,” said Crystal Lamden, who lives in a northern part of the Cathedral City Cove just west of the hotel site.

“I'm not sure I want to hear construction noise outside my window, but at least do it
or don't.

“At least it's better than an empty lot.”

‘Nothing clicked'

The process hasn't been easy for city leaders ever since they began meeting with developers in 2000.

“Nothing really clicked,” City Councilman Greg Pettis said, adding that about four developers were interviewed over the years.

The project moved forward in 2001 when officials announced the Sheraton brand name would be attached to it.

The development agreement expired several times, and the city continued to extend the relationship with the Sheraton.

As part of its redevelopment plan to
revitalize downtown, the city bought about 60 parcels in 2002 and relocated about 140 people from the building site, which
once included homes, a night club and Italian restaurant.

About five years ago, the city formed its own nonprofit organization, the City Urban
Revitalization Corporation, to sell revenue bonds to build the hotel and to contract with a management company to operate it.

But the economy imploded, financing dried up and nearly $12 million in redevelopment agency money was taken by the state to help close a budget shortfall.


The plans were also snarled by delays in permitting the construction of the golf course, which previous developers said
was integral to the hotel.

$1M in tax revenue

With the economy recovering, city leaders say they are determined to bring the new hotel to Cathedral City.

“A major hotel with conference facilities has long been the focal point of our downtown

development as a destination point to bring people into the downtown to patronize and support other commercial development,”
DeRosa said. “That focus continues.”

The hotel is expected to raise at least $1 million annually in tax revenue and increase business for the nearby Mary Pickford and
Desert IMAX theatres, which would reduce the city's subsidies of those operations.

But which businesses benefit will depend on who stays at the hotel, said Palm Springs Convention Center and Bureau of Tourism Executive Director James Canfield.

“It all comes back to having the overall destination and environment that's going to
appeal to the clientele you're going to have at the property,” he said. “It's just a matter of kind of matching your audiences.”

Canfield agreed, though, that a hotel is a “key component” to establishing a destination site and that it could attract people who are not only interested in visiting Cathedral City, but the entire Coachella Valley.

Nick Molloy, manager of the Roger Dunn Golf Shops, said he thinks a hotel would benefit the area, especially if it has a golf
course. His store is at 69-048 Highway 111, a short walk from the hotel site.

“It won't hurt a bit,” he said. “If you're looking to revitalize the area, a resort would be one way to do it.”

But not if its development costs the city money, Molloy said.

“The big thing is, how much the city would have to put into it,” he said. “It's not the best use of dollars.”

If Sonnenblick officially comes on board as the developer, the city will sell the property to him, Pettis said.

The price of the land and the terms would have to be negotiated.

Sonnenblick said he will look for funding when and if the city accepts his proposals, he said.

James Folmer
The Desert Sun

6:50 AM, May. 16, 2011|

Greg Pettis is a councilman in Cathedral
City and chairman of the Riverside County
Transportation Commission (RCTC).

Born and raised in Duarte, Pettis has lived
in Cathedral City since 1979. After nearly
15 years in the hospitality industry, Pettis
was elected to the City Council in 1994.

Pettis is managing director of the Institute
for Environmental Sustainability at the Cal
State San Bernardino campus in Palm
Desert and a Realtor with Coldwell Bank.
Pettis also has served as the executive
director of the Palm Springs Youth Center,
president of Cathedral City's Rotary Club
and Desert Business Association and board
member of United Cerebral Palsy of the
Desert and the Coachella Valley Mountains
Conservancy.

Pettis received a bachelor of arts degree
from Azusa Pacific University in 1977 and a
MBA from the University of Phoenix. He
lives in the Cove neighborhood.

question: As chairman of the Riverside
County Transportation Commission, you are
leading the campaign to launch daily
Amtrak service from the Coachella Valley to
Los Angeles in 18 months and two daily
trains in 36 months. What's your level of
confidence that this will happen?

ANSWER: I feel very good that this can be
accomplished. Amtrak has made it clear to
the Coachella Valley Association of
Governments and RCTC that they want the
initial daily service to take place. This will
not cost any public or private subsidy to
take place — only successful negotiations
with Union Pacific Railroad that Amtrak is
already having. All studies that have been
done to date have shown that this would be
a major economic driver for the valley,
both in tourism but also in providing access
to the job markets in Los Angeles and
Orange counties to our residents.

The probability of the second daily train
becomes more realistic now that Indio has
resolved the lawsuit over their
transportation center. I would encourage

the cities with a potential of a permanent
station (Palm Springs, Rancho Mirage and
Indio) to begin to look at what the
requirements are for renovation of existing facilities

and new construction and what the
financing for those improvements might be.


The City Council voted Wednesday night to
spend $100,000 to help the Ice Castle o
pen. For a city wrestling with its budget, is
this appropriate use of taxpayer money?

This is a loan only, not a gift. I think it is
important to make that distinction. Also, it
is a market rate loan, meaning the city will
be charging interest on the loan and at a
rate higher than we get with our current
investments. Additionally, the Desert Ice
Castle building has been put up as
collateral with no other debt against it. That
is significant protection for our residents.Normally,

I would say that this type of loan
would not be what any city should do.
However, Cathedral City has participated in
financial arrangements over the years with
two other business ventures that have been
highly successful, Big League Dreams and
the Cathedral City Auto Center.

The Auto Center provides the vast majority
of our sales tax revenue and is the largest
employer in the city. Big League Dreams
provides needed recreational opportunities
for young and old alike, is a tourist
destination and has been the catalyst for
other businesses to come to town.

Desert Ice Castle is owned by a very
successful man, Anthony Liu, who will bring

a top-of-the-line recreation and training
facility to the valley. Our families will be the
long-term beneficiary of this and if
Cathedral City is nothing else, it is about
families.

The city is negotiating for a hotel next to
the civic center. We're told it won't have the
golf course that was originally planned but
it will have a spa, casitas by the pool and
will cater to weddings. We're also told it
won't be a Sheraton. Do the plans meet
your expectations?

At this point it will still be a Sheraton flag.
The city has a contract with Starwood for
the Sheraton name. That is not to say that
there may not be a change prior to
construction and opening but it is still
envisioned as a Sheraton.

The developer that the city and our
Redevelopment Agency has contracted
with, Bob Sonnenblick, has an established
track record of building high-end hotel
properties. One nearby is the Lowes Hotel
in Santa Monica. It is simply stunning.

This hotel will have meeting space as well
as the spa, casita, etc., that you m
entioned. Weddings will certainly be
there, but also union conventions, service
organization conferences and more.

Mayor DeRosa and I sit on the council
subcommittee reviewing this project and a
re very pleased with the work that Mr.
Sonnenblick has done and look forward to
the day we can break ground.

You have voted for funding of several
events — $10,000 for the duathlon,
$10,000 for the grand opening of the Ice
Castle plus $8,000 to have the city logo on

the ice, and $20,000 for the Independent
Music Summit. Will these turn out to be
worthwhile city investments?

The Cathedral City General Fund budget
has about $100,000 for marketing
purposes. Some years we do not spend it
and other years there are worthwhile
projects that come forward. This is one of
those years.

While I disagreed with the Council majority
and voted against the logo under the ice, I
did agree with the other decisions. We do
not have major golf tournaments like the
Hope or large tennis events as they do
down valley, but we do have events and
activities that can help in promoting the
name of Cathedral City. The one's
mentioned do that.

The duathlon is an established event that
has been on hiatus and is coming back.
Thousands have attended in the past and
we are encouraged with the planning so

far. Desert Ice Castle will be a major draw
from throughout the valley and Inland
Empire and the Independent Music Summit
has the potential to be a major attraction
for those in the music industry that are
behind the scenes; producers, writers,
agents, etc.

We have also participated for the first time
in the valley's Restaurant Week.

Cathedral City may not be as flush as some
of our eastern neighbors but we are proud
of what occurs in our community and want
to make sure everyone knows!

The city added a penny to its sales tax last
June. Will this balance the budget this year
or do you anticipate more layoffs and
reductions of services?

The budget will not be balanced this year.
The sales tax increase certainly is helping
keep from falling further back, but the
State of California continues to find ways to
slice away at money that should be spent
here on local services and we are still

feeling the bite of the national recession.

Home sales are beginning to inch up and
our commercial vacancy rate is falling. We
are very encouraged that we will see the
next 18 months be a period of growth
helping us achieve stability again.

I think that is true of every city in the valley.
We are not out of the woods yet, but
certainly can see the end of the forest.

Statehouse Insider: Lawmakers tackle soda tax this week

Written by

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The Desert Sun

Would you be willing to pay a little more for your next soda to help local schools battle childhood obesity?

That's the question being asked by state lawmakers, who this week will consider a bill that taxes distributors of sodas and other sweetened beverages $0.01 cent per fluid ounce.

The tax could generate $1.7 billion annually for the cash-strapped state, according to a study by the California Center for Public Health Advocacy, which supports the idea.

That estimate includes nearly $96 million a year for Riverside County — roughly $233 per student — for programs that encourage healthy food selections and active lifestyles.

“Our residents are going to benefit,” said Cathedral City Councilman Greg Pettis, who is part of a regional effort that promotes healthier communities.

“It's a way of highlighting the nutritional issues as well as creating a funding source to take care of our challenges with the budget cuts. “

The so-called soda tax has been considered before. In 2010, a Senate bill to create such a program died in committee.

The version now under consideration is Assembly Bill 669, authored by Democratic Assemblyman Bill Monning.

The bill will be heard on the Assembly Revenue and Taxation on Monday.

But don't expect it to get support from Assemblyman Brian Nestande.

“You're singling out a particular industry,” said Nestande, a Palm Desert Republican who sits on the committee.

“Taxes should be fair and equitable, not singling out a particular industry or problem.”

Making a case

The heads of the Howard Jarvis Taxpayers Association and the National Federation of Independent Business will be in Palm Desert Monday.

Their goal: Rally opposition to Senate Bill 653.

The bill, authored by Senate President pro Tempore Darrell Steinberg, would give county supervisors the authority to raise taxes on everything from personal and corporation income to vehicle licenses and alcoholic beverages.

Such tax hikes would still have to meet the appropriate voter approval requirements.

The bill will have a committee hearing on May 4, though some have speculated the legislation is way to pressure Republicans to compromise on Gov. Jerry Brown's budget plan.

Hopes high for train service despite setback

Slow approval process sinks Mother's Day special run from L.A.

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The Desert Sun

The plan by Coachella Valley leaders to run an Amtrak passenger train from Los Angeles to the Coachella Valley over Mother's Day weekend has been sidetracked.

Tom Kirk, executive director of the Coachella Valley Association of Governments, and Wesley Ahlgren, operations director of Coachella Valley Economic Partnership, said the event isn't going to happen because they don't have the $32,000 to pay for a train demonstration and they don't have the time to sell the event.

Ahlgren said the two agencies and the Palm Springs Desert Resort Communities Convention and Visitors Authority will still try to run one or more demonstration trains in the fall and tie it to a major valley event.

Cathedral City Councilman Greg Pettis, who chairs the Riverside County Transportation Commission, said the delay shouldn't be seen as a lack of commitment to creating a passenger rail corridor through the Coachella Valley.

“We had to have the infrastructure in place and tickets available to sell the packages for the train and hotels,'' he said, and Amtrak was not able to procure final approvals from the Union Pacific Railroad for the demonstration train until mid-March.

“There were too many unknowns: The last thing we wanted was to do was to run a special train and have it not be a complete success,” Pettis said.

Robert Manning, president of the Palm Springs-based Southwest Rail Passenger Association, said he and officials of public agencies are convinced the future is bright for commuter rail.

Two months ago, the Riverside County Transportation Commission approved a resolution that backed Amtrak's federally funded efforts to make Palm Springs a daily stop on the Sunset Limited passenger route between Los Angeles and New Orleans.

It is Pettis' goal to have Amtrak service expansion within 18 months, and the railroad has hired a consultant to work with Union Pacific on a realistic plan to upgrade the rails for daily passenger service.

“They're asking for $700 million in improvements for the route from San Antonio through L.A.,'' Pettis said. “There are some things that need to be upgraded, but it's our view that 99 percent of this is deferred maintenance Union Pacific is trying to push off on Amtrak.”

Lobbying in Washington

Meanwhile, the RTC has designated a lobbyist in Washington to build a coalition of cities along the Union Pacific route to push for service.

“We're all in the same predicament,'' Pettis said. “And we all want this.”

There are also talks to bring a second daily train to the valley, Pettis said.

That route would originate on the Burlington Northern Santa Fe Railroad line. Departing from Union Station in Los Angeles, it would take riders to Fullerton and Riverside, cutting into the Union Pacific tracks near Loma Linda.

From there, the train would head east to Palm Springs — with possible, yet-to-be-built stops in Rancho Mirage and Indio.

Manning said that passenger rail route, projected to cost $2 million-per-year to operate, would allow 400 people or more to travel to destinations in the Los Angeles and southern California market.

Pettis said his goal is to see the second daily train into Riverside and Orange County within 36 months.

“Our tourism industry will benefit from having regular, sustainable rail traffic,'' Pettis said. “And our valley residents would, too. If we could go into Riverside and Anaheim consistently, people here could commute to go to work. It would add to the richness of our social and cultural life. It would help the region boom.”

Councilman Paul Marchand abstained from voting.

The Cathedral City Council moved to tackle the obesity crisis head on today by signing on as a charter member of adopting a resolution in support of the Healthy Eating Active Living Cities Campaign (HEAL), a statewide campaign aimed at introducing changes in city policies and environments to reduce local obesity and physical inactivity rates and related costs.

“We want to be sure that our residents and our staff have the opportunity to make healthy life choices and that there are resources in our community to fight the growing problem of obesity and other health issues,” said Cathedral City Council Member Greg Pettis.”

“As development ordinances are updated and when new development is proposed, the tenants of the HEAL resolution will be incorporated in hopes that over time we can create a healthier environment for residents of the community,” Cathedral City Community Development Director Andy Hall said.

The City Council of Cathedral City announced its support for the California Green Builder Program, directing city staff to incorporate Green Builder resource-efficient construction practices.

Under the ordinance introduced by Councilmember Greg Pettis, Cathedral City has set an April 1, 2008 timeline to develop a city-wide program that recommends construction techniques, a landscape ordinance and construction waste recycling methods for all home builders.

Additionally, the ordinance will provide promotional materials to help homebuilders and home owners meet the goals of the California Green Builder Program by reducing water usage and emissions of carbon dioxide.