Desert Fashion Plaza Public Presentation

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Powerpoint on the Desert Fashion Plaza as of March, 2011.

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Desert Fashion Plaza Public Presentation

  1. 1. City of Palm Springs <br />Desert Fashion Plaza <br />Community Presentation<br />March 23, 2011<br />
  2. 2. DeBartolo History<br />The mall was never fully leased.<br />I. Magnin and Silverwood’s were closed in the late 1980’s, leaving Saks as the only anchor.<br />Other quality retailers failed or moved.<br />DeBartolo supported a successful local initiative to allow a card room at the property in 1995. <br />The mall went into foreclosure in late 1996.<br />
  3. 3. Foreclosure/AZ Partners Purchase <br />Total defaulted loans were $51,698,096. <br />South Plaza was $30,562,591.<br />North Plaza was $21,135,505. <br />The Hyatt Hotel was not included in the default or the sale.<br />AZ Partners paid $13,500,000 total. <br />Paid $8,100,000 for the South Plaza.<br />Paid $5,400,000 for the North Plaza. <br />Sale closed on March 27, 1998. <br />AZ hoped to start redevelopment mid-1998. <br />
  4. 4. AZ Partners’ Proposed Project<br />Plans were to expand the mall to over 350,000 sq. ft. and remove the roof. AZ Partners’ plan was a $35-million expansion. <br />Main entrance to be open air plaza with outdoor dining, shops and gathering places.<br />Plans included a 3,000-seat cinema and a 2,400-seat live theatre. Metropolitan Theaters agreed to go into the I. Magnin space.<br />Idea was to be more visible to traffic and compatible with the village atmosphere.<br />Project renamed The Promenade. <br />
  5. 5. Tenants Depart under AZ Partners<br />Some retailers, such as Iris and Neil's, had second stores in Palm Desert. <br />Ann Taylor moved to The Gardens on El Paseo. <br />La Mariposa and Aristokatz reopened in Plaza Mercado on Palm Canyon Drive.<br />
  6. 6. AZ Replaced by Excel Legacy<br />In 1999 Excel Legacy Corp. terminated AZ Partners and announced its own $64-million renovation of the Fashion Plaza. Excel was already 96% owner/lender of the project.<br />Mall would be renamed to Desert Walk.<br />They would raze much of the center to make way for the new development.<br />
  7. 7. Excel Legacy<br />New development partner was MBK Southern California Ltd.<br />New tenants would include a two-story multiplex theater, food court, gourmet market, restaurants and various specialty shops. <br />Work was expected to begin in 2000 and be completed in 2001.<br />
  8. 8. Excel Legacy<br />In 2000 Excel decided to sell the mall instead of developing it.<br />Their asking price was $25 million.<br />There were a number of parties that looked at the mall but the price was not warranted.<br />Wessman Development acquired the mall in late 2001.<br />
  9. 9. Partnership with Wessman<br />Original plan was Spanish-Mediterranean with Plaza Mercado Architect.<br />Saks announced before escrow closed that it was closing the store.<br />
  10. 10. Partnership with Wessman<br />Theaters were critical to the proposed lifestyle center.<br />Signature Theaters bought, renovated the Courtyard Theaters, crowding out other operators.<br />Market needed to evolve for tenants to locate if the project had restaurants and entertainment.<br />
  11. 11. Retail/Entertainment Competition<br />In 2001 The River opened in Rancho Mirage, offering an entertainment option to residents and visitors in a master-planned environment, complete with a Borders and a 12-screen cineplex, which became the highest-grossing cinema in the desert. The opening of a Cheesecake Factory in early 2005 further enhanced the dining and entertainment options at the center.<br />
  12. 12. Partnership with Wessman<br />Council Subcommittee worked with Wessman.<br />City did demographic and movie theater market analysis.<br />City participated in tenant meetings and structured financial assistance package.<br />In 2003, City did major streetscape/parking improvements. <br />
  13. 13. Demographic “Matches” <br />Good Demographic Matches based on income, age and lifestyle:<br />Avenue<br />Pottery Barn<br />Tommy Bahama<br />Ann Taylor<br />The Gap<br />Bad Demographic Matches based on income, age and lifestyle:<br />Crate & Barrel<br />Williams-Sonoma<br />Restoration Hardware<br />Sur La Table<br />Z Gallerie<br />
  14. 14. Shopping Center Conferences<br />
  15. 15. Earlier Wessman Proposals<br />Residential component with some condos and townhomes. <br />Focus was a central plaza for events such as concerts and art fairs. <br />New street would be opened up between Palm Canyon Drive and Museum Drive; the street could be closed for events. <br />Bank of America building, I. Magnin store and some of the "back" retail space would be demolished. <br />
  16. 16. Early Wessman Plans<br />
  17. 17. Early Wessman Plans<br />Plan featured streets through the project, multi-story buildings<br />Height and density were concerns<br />Photo: Wessman Development<br />
  18. 18. Other Factors/Projects<br />City undertook Downtown Urban Design Plan, which included downtown design guidelines, in 2005.<br />A citizen referendum that could have limited heights downtown was proposed in 2005. <br />In 2005, Cirque Dreams proposed a “temporary” theatre at the back of the site to stage cirque-style performances.<br />
  19. 19. Downtown Urban Design Plan<br />
  20. 20. Downtown Urban Design Plan<br />Plan received lots of community input including charettes.<br />Provided design and development guidance for the downtown core.<br />
  21. 21. Downtown Urban Design Plan<br />Articulated a need for greater east-west linkages in downtown.<br />Proposed design guidelines for the development of new projects.<br />Reaffirmed existing height limits in downtown, except for the three catalyst projects (Fashion Plaza, Port Lawrence, Ramon/Palm Canyon) which had a 60’ limit.<br />
  22. 22. Cirque Dreams<br />
  23. 23. Cirque Dreams opened late 2005<br />Photo: Palm Springs Chamber of Commerce, Dick Taylor Productions<br />
  24. 24. Cirque Dreams closed in late 2006<br />
  25. 25. Palm Grove - Submitted April 2007<br />14 separate buildings, 20-74 feet high<br />65 to 75 new stores and restaurants, plus a gym, a pharmacy and hundreds of condos. <br />Museum Way and Belardo cut through project. <br />Featured a 2-acre palm grove, open space with a stage and smaller restaurants. <br />Plans included the layout of the buildings. Contemporary architecture, submitted after site plan approved by City Council.<br />
  26. 26. Museum Market Plaza - April, 2008<br />Buildings could reach 79 feet. <br />Also included a central public plaza with condos, offices, retail and entertainment. <br />Up to 955 condos, 400,000 square feet of retail and up to 620 hotel rooms, in a formula that traded retail square footage for hotel rooms or condos.<br />If there were 620 hotel rooms, there would be fewer condos and retail square footage. <br />The plan gave the developer the flexibility to build what the market could bear.<br />
  27. 27. Specific Plan Process<br />Specific Plan process commenced in 2008 and concluded with the adoption of the Specific Plan in December 2009.<br />The Specific Plan includes a road through the mall and through the Town & Country Center.<br />
  28. 28. Specific Plan – Community Outreach<br />
  29. 29. Specific Plan (SP)<br />Intended to give developers the flexibility to propose a wide variety of land uses and accommodate them in an orderly manner.<br />Accommodated both a “demo and build” approach and the remodel of the mall.<br />Determined the street configuration for the Specific Plan area.<br />
  30. 30. Specific Plan<br />Allowed uses included retail and entertainment, hotel, and residential.<br />Specific Plan also allowed for open space and public gathering spaces.<br />
  31. 31. SP “Renovation Plan”<br />Wessman Development<br />
  32. 32. SP Approved Blocks and Streets<br />
  33. 33. Conceptual Architecture – Remodel Plan<br />
  34. 34. January-June, 2010<br />Specific Plan was approved by the City in December, 2009.<br />City Council directed staff to negotiate an Owner Participation Agreement with Wessman. Negotiations occurred from January through June, 2010.<br />
  35. 35. Council Action – Sept. 22, 2010<br />City Council approved undertaking appraisal of the property.<br />Council established a schedule for community input – “visioning” – and the technical details of making an offer to purchase the property.<br />
  36. 36. How could the City pay for acquisition and renovation?<br />Through an agreement with another developer such as a Disposition and Development Agreement; or<br />Through a tax assessment created by a vote of the people.<br />
  37. 37. Vote of the People<br />A special election could be held to ask voters approve a tax increase to raise revenue for the Project. Examples include:<br />Sales Tax<br />Utility Users Tax<br />Parcel Tax (flat, equal assessment against all properties)<br />Ad Valorem taxes (property tax assessed proportionately against the value of property)<br />
  38. 38. Example: Sales Tax Increase<br />Goal was to provide for the purchase and development of the Desert Fashion Plaza property. The City could issue bonds to raise the funds, which could be paid for by an increase in the Sales Tax. Any proposed Sales Tax would be less than 1 cent.<br />The increase could either be ¾ cent or ½ cent, with the term increased to raise a larger amount. <br />
  39. 39. Council Actions –December 2010<br />Directed Attorney to make offer to purchase<br />Called for public workshops in January and February<br />Ballot Measure would need to be placed on the ballot by the first Council meeting in March<br />Special election would have been held on June 7<br />
  40. 40. January 2011<br />Offer made to Wessman on purchase<br />Counter offers received and negotiation meeting held<br />City hired MIG, Inc. to conduct community design workshops to determine community “vision”<br />First workshop held – 200 people attended<br />
  41. 41. February 2011<br />Second and third MIG Community Design workshops held – final meeting was the largest of the three<br />Council Subcommittee meets with Wessman, recommends new partnership approach<br />Wessman amends site plan to incorporate input from Community Design workshops<br />City, Wessman begin negotiating on Development Agreement, Project Financing Agreement<br />
  42. 42. Community Design Process<br />
  43. 43. Community Conceptual Plan<br />
  44. 44. Elements of Community Plan<br />East-West connection between Palm Canyon Drive and the Museum, as well as Belardo Road connection<br />Open space plaza along Museum Drive<br />Movie theaters could move “into” the northern part of the mall<br />Hyatt could get a ballroom<br />Museum expansion sites on either side of roadway, across from Museum<br />New or remodeled retail space along Palm Canyon<br />
  45. 45. Elements of Wessman Plan<br />East-West connection between Indian Canyon Drive and the Museum<br />Movie theaters moved “into” the northern part of the mall<br />Hyatt would get a 10,000 s.f. ballroom<br />I. Magnin building would be used for fitness center, entertainment use<br />Museum expansion sites on either side of roadway, across from Museum<br />New open space at the corner (Bank of America)<br />
  46. 46. Wessman New Conceptual Plan<br />
  47. 47. Evolution of Wessman Plans<br />
  48. 48. March 2011<br />Council held Study Session to receive recommended plan from MIG and discuss Wessman plan<br />Draft site plan selected and will begin moving forward through entitlement process<br />Negotiation meetings continue with Subcommittee, staff and Wessman<br />First look by Planning Commission on March 23<br />
  49. 49. April 2011<br />Financial Analysis of project to occur<br />Development Agreement drafted and prepared for Planning Commission<br />Project Financing Agreement drafted<br />Ballot language, tax calculations prepared<br />
  50. 50. May 2011<br />Planning Commission Public Hearing on Development Agreement<br />Project Financing Agreement finalized<br />
  51. 51. June 2011<br />Development Agreement, Project Financing Agreement finalized<br />Ballot language, tax calculations finalized, ready for adoption<br />
  52. 52. Why Public Funding?<br />The project has always had a gap, from the original AZ Partners deal, the Excel Legacy deal, and earlier Wessman deals<br />It would have a gap even if the City didn’t require any additional design features<br />Gap is due to the difference in cost between rebuilding the center (or tearing down and building new) and the capitalized value of the property based on future rents<br />It costs more to build than it will be worth<br />
  53. 53. How Much Public Funding?<br />The exact amount will be determined based on costing the final design and projecting future rents<br />
  54. 54. How Would Funding Be Structured?<br />Deal still being negotiated but City could acquire fully improved public streets, the future museum expansion parcels and most or all of the project parking<br />One outcome could be permanent free parking at the site<br />Another outcome would be City’s ability to assist the Museum in expanding their facilities at the site<br />

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