Council adopts revised hotel operations incentive ordinance to streamline awards and tighten delinquencies
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Summary
Council voted to adopt a restructured hotel operations incentive ordinance (new chapter 5.27), requiring projects to start construction within 12 months and finish within 30 months of agreement, adding graduated remedies for TOT delinquencies and a revised revenue split intended to benefit convention‑oriented hotels.
The City Council reintroduced and adopted an ordinance on Feb. 11 adding Chapter 5.27 to the Palm Springs Municipal Code to restructure the city's hotel operations incentive program. The revised ordinance requires a participating project to begin construction within 12 months of the agreement and obtain a certificate of occupancy within 30 months.
City Attorney Ballenger explained the ordinance adds a graduated set of remedies for operators who fall behind on transient occupancy tax (TOT) remittances; under the proposed structure operators receive sequential notices tied to monthly remittance cycles and may be removed from the program if they remain delinquent. Council members debated shortening the effective delinquency timeline; staff said the ordinance provides a notice framework (four notices based on monthly remittances) and council directed staff that a 60‑ to 90‑day practical trigger could be considered for administrative termination while preserving discretion for extenuating circumstances.
The ordinance also incorporates a 90/10 split of collected occupancy tax increment into tier 1 for the first five years to help ensure convention hotels can participate under appropriate thresholds. Councilmember Bernstein moved the reintroduction/adoption and Councilmember DeHart seconded; the motion passed.
City staff said the ordinance will be implemented administratively through the city manager's office and that council will review extreme or unusual cases if needed. No criminal penalties are included; staff said other remedies and administrative citations remain available.
