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Palm Springs staff outline convention center renovation, propose 1% hotel assessment for a Tourism Improvement District
Summary
City staff and Visit Greater Palm Springs presented a plan to renovate the Palm Springs Convention Center and create a Tourism Improvement District (TID) that would levy a 1% self-assessment on hotel room revenue; staff estimates the project could raise millions in visitor spending and generate $4–4.1 million annually for the TID if businesses approve.
City staff and Visit Greater Palm Springs presented a multi-phase plan to renovate the Palm Springs Convention Center and to form a Tourism Improvement District (TID) that would levy a 1% self-assessment on hotel room revenue to support debt service and ongoing capital reserves.
At a Feb. 19 meeting of the Measure J Oversight Commission, Chris (city staff) said the consultant study modeled three scenarios: a do-nothing baseline, a midterm package of facility improvements and a full build-out that includes an east-side expansion. "Annual attendee direct spend right now is somewhere in the vicinity of the $43,000,000 mark," Chris said, adding that the improvements-only scenario would raise that figure to about $57,200,000 and a full project could increase it to about $66,600,000.
Those scenarios drive projected tax revenue changes as well: staff estimated current Measure J-related economic impact at roughly $4–5 million annually and said the full project could increase annual tax revenue by about $2.6 million. To fund debt service and a capital-reserve maintenance plan, the proposed TID would impose a 1% assessment on hotel room revenue only; restaurants and food-and-beverage receipts were explicitly excluded. "It is just hotel room assessments," Chris said.
Staff said the TID formation will require a petition drive led by hotel and short-term rental operators; the legal threshold is 50% of revenue from eligible businesses, not 50% of individual businesses. There is no formal time limit for collecting the required signatures, staff said, and collection enforcement would follow the city's existing transient-occupancy-tax (TOT) audit procedures.
Carolina Viasca, vice president of sales for Visit Greater Palm Springs, told commissioners the convention center already drives substantial downtown demand and cited large accounts the destination seeks to retain and expand. "We book over 260,000 room nights into the destination alone," she said, and noted that marquee clients such as Esri and Apple have raised issues with the facility's condition.
Staff said phase 1—described as about 30 facility improvement projects including kitchen and roof work—remains under cost study, with an estimated debt issuance range of "could be 40 to $60,000,000." Commissioners pressed whether the TID plus Measure J revenues would cover debt service; staff replied the intent is for a combination of Measure J and TID revenue to do so, and that final financial modeling will be returned to the commission when numbers are firmer.
Next steps outlined by staff include the petition drive, city-council consideration of a resolution of intent to form the district, public hearings, and a future request for the Measure J commission's recommendation on whether to authorize paying debt service from Measure J to support the project.
