The Palm Springs City Council meeting on February 27, 2025, focused on approving a significant covenant agreement with the Dunes Hotel, a new participant in the city's hotel incentive program. The council heard a staff report detailing a $7.8 million renovation project at the hotel, located at 390 South Indian Canyon, which includes extensive upgrades such as structural improvements, enhanced IT systems, redesigned guest rooms, and new landscaping.

The Dunes Hotel's renovation involved an investment of approximately $62,000 per room, exceeding the program's requirement of $5,000 per key. This substantial investment is expected to generate significant revenue for the city, with a projected annual increment of $789,000 in Transient Occupancy Tax (TOT) over the next ten years.

During the meeting, council members expressed their support for the project, highlighting its potential to attract convention traffic and enhance the downtown area. The hotel is committed to providing two nights per month for the city's committable rooms program, which is essential for accommodating convention attendees.

The council also discussed the broader impact of the hotel incentive program, noting that it has facilitated the renovation of 295 hotel keys in the past year and a half, totaling over $13.4 million in project expenses. A report on the public benefits of this program is expected to be presented to the council in the coming months.

The public hearing concluded without any comments from the audience, and the council unanimously approved the motion to enter into the covenant agreement with the Dunes Hotel, marking a significant step in the city's efforts to enhance its hospitality offerings and support local economic growth.