Palm Springs Council approves Orchid Tree Hotel Covenant with New Church 2 LLC

Palm Springs City Council has taken significant steps to enhance community services and economic development during its recent meeting on April 23, 2025. The council approved a comprehensive budget plan for the Community Development Block Grant (CDBG) for fiscal years 2025 and 2026, allocating nearly $292,982 to public facilities and rehabilitation programs. This funding will support ongoing owner-occupied rehabilitation efforts, ensuring that residents have access to essential housing improvements.

In addition to the budget approval, the council also updated the guidelines for the owner-occupied home rehabilitation program, streamlining processes to better serve the community. These decisions reflect the city’s commitment to improving living conditions for its residents and addressing housing needs effectively.

A major highlight of the meeting was the approval of a hotel operations agreement for the Orchid Tree Hotel project. This initiative, which has been in development since 2015, aims to transform a historic site into a luxury boutique hotel featuring 72 guest rooms and the restoration of historic bungalows. The agreement includes a framework of incentives for the developer, allowing for a rebate of 75% of the hotel’s transient occupancy tax for up to 30 years or until $50 million is reimbursed, whichever comes first. This project is expected to generate significant economic benefits, including an estimated $26.5 million in sales tax and the creation of approximately 70 new jobs with an annual payroll of around $1.5 million.

The council's decisions are poised to enhance Palm Springs' reputation as a premier tourist destination while preserving its architectural heritage. As the city moves forward with these initiatives, residents can anticipate improved housing options and a boost in local economic activity.