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Council approves hotel covenant for Dunes Hotel after staff presentation on $7.8 million renovation
Summary
Council opened and closed a public hearing and approved a covenant under the city’s hotel operations incentive program for the Dunes Hotel, a 27‑room renovation totaling $7.8 million; staff said the hotel exceeded the $5,000 per‑key minimum and will be reimbursed under program rules.
The Palm Springs City Council approved a covenant with the Dunes Hotel on Feb. 27 under the city’s hotel operations incentive program, concluding a public hearing after a staff presentation.
A staff member told council the Dunes Hotel at 390 South Indian Canyon underwent a 27‑room full renovation with $7,800,000 in improvements that included structural, plumbing, guest‑room redesign, pool and spa work and exterior landscaping. The program requires eligible hotels to invest more than $5,000 per key; staff said the Dunes met that test at about $62,000 per key. Under the program the incremental TOT (transient occupancy tax) would be reimbursed over 10 years or until the project cost has been repaid, whichever comes first. Staff also said the property committed to provide two city‑committable nights per month Monday–Thursday as available.
Councilmember questions focused on program performance and whether other hotels have participated; staff said the program has produced substantial private investment (staff cited nearly 295 keys renovated totaling over $13.4 million in project expense during the speaker’s tenure) and that an update on the program’s public benefits would be brought to council.
The staff presentation contained a corrected slide noting a mislabeled hotel name in an earlier draft; staff said the dollar figures in the council packet were accurate. No public speakers addressed the item and council moved to approve the covenant (motion by Councilmember Garner, seconded by Councilmember Bernstein). The mayor announced the motion carried.
