Palm Desert approves $5.6 million advance and CFD to fund Cook Street substation with IID partnership
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Summary
The City Council approved advancing $5.6 million in former RDA bond proceeds and entering a reservation agreement with the Imperial Irrigation District and partners to build a $42.6 million Cook Street substation, with cost recovery through a CFD and IID contributing roughly 18% of the project cost.
Palm Desert’s City Council voted unanimously Jan. 8 to advance $5.6 million to support construction of a Cook Street energy substation intended to serve undeveloped parcels in the city’s North Sphere and spur economic development.
Staff told the council the substation’s all-in cost is about $42.6 million. Under the partnership agreement presented by staff, Imperial Irrigation District (IID) will contribute approximately 18% of the cost (the agreement allows up to 20%). The city will advance $5.6 million from former redevelopment (RDA) bond proceeds and place a Community Facilities District (CFD) on the affected undeveloped parcels so parcel owners can reimburse the city either upfront or over a 20- or 30-year financing schedule.
City staff said the approach was designed to reduce the upfront infrastructure burden on developers and enable entitlement processes that currently require "will-serve" letters. The staff presentation estimated long-term fiscal benefits: consultant estimates projected $1.3 million to $2.0 million in combined annual general-fund revenue from new development once parcels are built out.
During council questions, members asked whether the city could retain or meter any unneeded capacity, and whether the city might pursue batteries or solar to mitigate demand; staff said metering and follow-up verification of actual usage would be part of ongoing discussions with partners and parcel owners. Resident Brett Green, an energy-industry engineer who spoke in public comment, argued it is poor policy to shift infrastructure costs onto cities and developers and questioned the calculation of IID’s share; the council and staff acknowledged the concerns but emphasized the partnership as a pragmatic solution to unblock long-standing development constraints.
Mike Rover of the Berger Foundation noted the foundation owns the proposed site and supports moving the project forward. After council discussion and a motion, the council approved the funding and reservation agreement (motion passed 5-0).
The agreement calls for IID to serve as lead on environmental review (CEQA/SEQA sequencing referenced in staff materials) and includes provisions allowing other partners or public entities to purchase available capacity if a party withdraws. Staff said ordering of long-lead items (transformers, etc.) would begin and construction was planned to start in 2027 with the substation coming online in 2028.
The city will pursue CFD formation and continue coordination with IID, parcel owners and partner agencies as the project moves into detailed design and procurement.
