Agenda packet — Coachella City Council, October 7, 2026 (part 2 of 11)

RESOLUTION NO. PC2026-27

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF

COACHELLA, CALIFORNIA, RECOMMENDING THAT THE CITY
COUNCIL ADOPT AN ORDINANCE AMENDING CHAPTER 17.28 OF

TITLE XVII OF THE COACHELLA MUNICIPAL CODE TO ALLOW

SINGLE-FAMILY RESIDENTIAL USES IN CONJUNCTION WITH A

RESORT USE AS A CONDITIONAL USE WITHIN THE (R-C)

REGIONAL COMMERCIAL ZONE AND DETERMINE, PURSUANT TO
STATE CEQA GUIDELINES SECTION 15183, THAT NO FURTHER
ENVIRONMENTAL REVIEW IS REQUIRED.

17.28 of Title XVII of the Coachella Municipal Code to allow single-family residential uses in conjunction with a resort use as a conditional use within the Regional Commercial (R-C) Zone; and
WHEREAS, the Project site has a zoning designation of (R-C) Regional Commercial and a General Plan land use designation of Regional Retail District, which allows a residential density of 10 to 15 dwelling units per acre and a floor area ratio of 0.35 to 2.0. The Project proposes a residential density of approximately 14.4 dwelling units per acre and a floor area ratio of approximately 0.65, consistent with the development density and intensity established by the General Plan; and,
WHEREAS, Zoning Ordinance Amendment No. 26-02 would establish the land use 226
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approval pathway necessary to consider the single-family residential component of the Project, which remains subject to separate approval of Conditional Use Permit No. 407 and all other applicable project approvals and conditions; and WHEREAS, Public Resources Code section 21083.3 and State CEQA Guidelines section 15183 provide that a project consistent with the development density established by an existing general plan for which an EIR was certified does not require additional environmental review except as necessary to examine whether the project would result in project-specific significant effects peculiar to the project or its site; and WHEREAS, the City, as lead agency under the CEQA, prepared a Modified Initial Study/Section 15183 Checklist for the Project (the “15183 Checklist”) to determine whether further environmental review of the Project is required; and WHEREAS, the 15183 Checklist concludes that the Project would not result in any environmental effects that (1) are peculiar to the Project or the parcel on which the Project would be located; (2) were not analyzed as significant effects in the certified General Plan EIR; (3) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (4) are previously identified significant effects that, as a result of substantial new information not known when the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR.

The 15183 Checklist further concludes that the potential environmental effects associated with the Project are within the scope of the impacts analyzed in the General Plan EIR and that all feasible mitigation measures from the General Plan EIR applicable to the Project, together with applicable uniformly applied development policies and standards, have been incorporated into or otherwise apply to the Project; and WHEREAS, a notice of a public hearing to consider Tentative Tract Map No. 39330, Zoning Ordinance Amendment No. 26-02, Zoning Ordinance Amendment No. 26- 03, Conditional Use Permit No. 396, Conditional Use Permit No. 407, Architectural Review No. 25-07, and Development Agreement No. 25-01 was issued in accordance with Coachella Municipal Code Section 16.12.110, 17.72.010J, 17.74.010G, 17.80.010E, and

17.100.060 inclusive of the publication on September 17, 2026, of a legal public hearing notice which was published in the Desert Sun, the City’s newspaper of record and mailing of a public hearing notice to a certified list of property owners within 300 feet of the subject properties on September 17, 2026; and,
WHEREAS, on October 7, 2026, the Planning Commission held a duly noticed public hearing to consider the application for the Project during which evidence, both written and oral, including the staff report and supporting documents, was presented at said hearing; and,
WHEREAS, after said public hearing, the Planning Commission recommended that the City Council approve this Ordinance.

NOW THEREFORE, THE PLANNING COMMISSION OF THE CITY OF
COACHELLA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:
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SECTION 1. Incorporation of Recitals. The Planning Commission hereby specifically finds that all of the facts set forth in the recitals of this Resolution are true and correct and are incorporated into this Resolution by reference and constitute a material part of this Resolution.

SECTION 2. CEQA. The Planning Commission has reviewed and considered the previously certified Coachella General Plan Update 2035 EIR (SCH No. 2009021007), the 15183 Checklist and supporting technical studies prepared for the Project, the staff report, all written and oral comments received, and the entire administrative record. Based on substantial evidence in the record, the Planning Commission recommends that the City Council make the following determinations:
1) The 15183 Checklist was prepared in compliance with CEQA and the State CEQA Guidelines and reflects the City’s independent judgment and analysis. 2) The Project is consistent with the City’s General Plan Update 2035 for which an EIR was certified.
3) The Project would not result in any environmental effects that: (a) are peculiar to the Project or the parcel on which the Project would be located; (b) were not analyzed as significant effects in the certified General Plan EIR; (c) are potentially significant offsite or cumulative impacts that were not discussed in the General Plan EIR; or (d) are previously identified significant effects that, as a result of substantial new information not known at the time the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR. 4) All potential environmental effects associated with the Project are within the scope of the impacts analyzed in the General Plan EIR, and all feasible mitigation measures from the General Plan EIR applicable to the Project, together with applicable uniformly applied development policies and standards, have been incorporated into or otherwise apply to the Project.
5) The Project is exempt from further environmental review pursuant to Public Resources Code section 21083.3 and State CEQA Guidelines section 15183.

SECTION 3. Recommendation to City Council. Based on the entire record before the Planning Commission, all written and oral evidence presented to the Planning Commission, and the findings made in the staff report and this Resolution, the Planning Commission of the City of Coachella hereby recommends that the City Council adopt Ordinance No. _____ entitled: “AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COACHELLA, CALIFORNIA, AMENDING CHAPTER 17.28 TO TITLE XVII OF

THE COACHELLA MUNICIPAL CODE TO ALLOW SINGLE-FAMILY RESIDENTIAL

USES IN CONJUNCTION WITH A RESORT USE AS A CONDITIONAL USE WITHIN THE (R-C) REGIONAL COMMERCIAL ZONE.” which is attached hereto as Attachment “A” and incorporated herein by reference.

SECTION 4. Findings. The Planning Commission finds that the amendments to the Coachella Municipal Code (Zoning) proposed by the above referenced ordinance are consistent with, advances, and implements the goals and policies of the City of Coachella General Plan, including but not limited to the following:

1. The amendment is consistent with and implements the General Plan’s purposes, 228
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objectives, and land use provisions.

The General Plan’s Regional Retail District designation allows residential uses at a density of 10 to 15 dwelling units per acre, with residential uses supporting the district’s commercial environment. The existing Regional Commercial (R-C) zoning provisions accommodate multi-family residential uses subject to a Conditional Use Permit but do not expressly provide a corresponding approval pathway for single-family residential uses.

This difference prompted the proposed amendment, which would allow single-family residential uses in conjunction with a resort, subject to a Conditional Use Permit. The amendment brings the zoning code into closer alignment with the residential uses contemplated by the General Plan while preserving the commercial purpose of the R-C zone.

For the COVA project, the amendment would provide a land use approval pathway for single-family units intended to accommodate fractional ownership within an integrated resort development. The ownership arrangement does not replace the requirement to demonstrate compliance with applicable density requirements, General Plan policies, and project approval conditions.

2. The amendment is justified by public necessity and convenience.

The amendment establishes a defined approval process for single-family residential uses associated with resort development. It responds to the difference between the General Plan’s broader allowance for residential uses and the zoning code’s existing conditional allowance for multi-family residential uses.

Requiring a Conditional Use Permit for single-family residential uses provides comparable discretionary review of both residential building types. Applicants may propose a residential configuration suited to an integrated resort, while the City retains the ability to evaluate whether the proposed uses are appropriate for the site and consistent with applicable policies and standards.

The amendment therefore serves public necessity and convenience by providing regulatory clarity and a consistent review mechanism for residential uses within the R-C zone.

3. The amendment promotes the general welfare.

The amendment balances flexibility for resort development with the preservation of land for regional-serving commercial activities. Requiring single-family residential uses to occur in conjunction with a resort limits the proposed allowance to integrated resort developments rather than establishing a general allowance for independent single-family subdivisions throughout the R-C zone.

The Conditional Use Permit process allows the City to evaluate whether the residential component supports the resort and maintains the development’s commercial function. 229
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Review also addresses compatibility, circulation, parking, infrastructure, noise, lighting, and other relevant development and operational characteristics.

This approach promotes the general welfare by accommodating residential uses contemplated by the General Plan while retaining commercial development opportunities and review of potential conflicts with surrounding properties.

4. The amendment constitutes good zoning practice.

The amendment establishes a conditional approval pathway for single-family residential uses that is comparable to the existing Conditional Use Permit requirement for multi-family residential uses. This approach allows consideration of different residential building types while maintaining discretionary review.

Limiting the allowance to single-family residential uses in conjunction with a resort preserves the R-C zone’s primary commercial purpose and reduces the potential for commercial properties to be developed as independent single-family subdivisions under this amendment. Each proposal must demonstrate an integrated relationship between its residential and resort components and satisfy the applicable Conditional Use Permit findings.

Accordingly, the amendment provides flexibility and regulatory clarity while protecting the intended function of the commercial zone.

SECTION 5. Certification. The Secretary shall certify to the adoption of this Resolution.

SECTION 6. Location and Custodian of Records. The documents and materials that constitute the record of proceedings on which these findings are based are located at Coachella Civic Center. The Development Services Director is the custodian of the record of proceedings.

SECTION 7. Execution of Resolution. The Chairperson shall sign this Resolution and the Planning Commission Secretary shall attest and certify to the passage and adoption thereof.

SECTION 8. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Resolution. The Planning Commission of the City of Coachella hereby declares that it would have adopted this Resolution and each section, subsection, sentence, clause, phrase, or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional.
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PASSED APPROVED and ADOPTED this 7
th day of October 2026.

AYES:

NOES:

ABSENT:

ABSTAIN:
__________________________________
Eva Lara, Chairperson
City of Coachella
ATTEST:
___________________________________
Kendra Reif
Planning Commission Secretary
APPROVED AS TO FORM:
___________________________________
Best Best & Krieger
City Attorney

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City of Coachella
Ordinance No. ____

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80237.00870\45194242.1
ORDINANCE NO. ___

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COACHELLA, CALIFORNIA, AMENDING CHAPTER 17.28 TO TITLE XVII OF THE

COACHELLA MUNICIPAL CODE TO ALLOW SINGLE-FAMILY

RESIDENTIAL USES IN CONJUNCTION WITH A RESORT USE AS A
CONDITIONAL USE WITHIN THE (R-C) REGIONAL COMMERCIAL ZONE.

WHEREAS, pursuant to the authority granted to the City of Coachella (“City”) by Article XI, Section 7 of the California Constitution, the City has the police power to regulate the use of land and property within the City in a manner designed to promote public convenience and general prosperity, as well as public health, welfare, and safety; and, WHEREAS, adoption and enforcement of comprehensive zoning regulations and other land use regulations lies within the City’s police power; and, WHEREAS, on July 7, 2025, Relevant Coachella Owner, LLC (“Applicant”), submitted an application for a Tentative Tract Map, Architectural Review, Conditional Use Permit, Environmental Assessment, and Development Agreement for the proposed “COVA” project, consisting of hotel, resort, residential, commercial and public beach club use on approximately 87 acres comprising four contiguous parcels (APNs 780-040-001, 780-040-003, 780-060-001, and 780-060-002) located south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”); and WHEREAS, in late 2026, the applicant submitted an application for a Zoning Ordinance Amendment for the proposal to allow single-family residential uses within the Regional Commercial Zone regulated by Chapter 17.28 of Title XVII of the Coachella Municipal Code; and, WHEREAS, Zoning Ordinance Amendment No. 26-02 proposes an Ordinance, attached hereto as Attachment “A” and incorporated herein by reference, amending Chapter 17.28 of Title XVII of the Coachella Municipal Code to allow single-family residential uses in conjunction with a resort use as a conditional use within the Regional Commercial (R-C) Zone; and WHEREAS, the Project site has a zoning designation of (R-C) Regional Commercial and a General Plan land use designation of Regional Retail District, which allows a residential density of 10 to 15 dwelling units per acre and a floor area ratio of 0.35 to 2.0. The Project proposes a residential density of approximately 14.4 dwelling units per acre and a floor area ratio of approximately 0.65, consistent with the development density and intensity established by the General Plan; and, WHEREAS, Zoning Ordinance Amendment No. 26-02 would establish the land use approval pathway necessary to consider the single-family residential component of the Project, which remains subject to separate approval of Conditional Use Permit No. 407 and all other applicable project approvals and conditions; and
WHEREAS, Public Resources Code section 21083.3 and State CEQA Guidelines section 15183 provide that a project consistent with the development density established by an existing 232
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general plan for which an EIR was certified does not require additional environmental review except as necessary to examine whether the project would result in project-specific significant effects peculiar to the project or its site; and
WHEREAS, the City, as lead agency under the CEQA, prepared a Modified Initial Study/Section 15183 Checklist for the Project (the “15183 Checklist”) to determine whether further environmental review of the Project is required; and
WHEREAS, the 15183 Checklist concludes that the Project would not result in any environmental effects that (1) are peculiar to the Project or the parcel on which the Project would be located; (2) were not analyzed as significant effects in the certified General Plan EIR; (3) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (4) are previously identified significant effects that, as a result of substantial new information not known when the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR. The 15183 Checklist further concludes that the potential environmental effects associated with the Project are within the scope of the impacts analyzed in the General Plan EIR and that all feasible mitigation measures from the General Plan EIR applicable to the Project, together with applicable uniformly applied development policies and standards, have been incorporated into or otherwise apply to the Project; and WHEREAS, a notice of a public hearing to consider Tentative Tract Map No. 39330, Zoning Ordinance Amendment No. 26-02, Zoning Ordinance Amendment No. 26-03, Conditional Use Permit No. 396, Conditional Use Permit No. 407, Architectural Review No. 25-07, and Development Agreement No. 25-01 was issued in accordance with Coachella Municipal Code Section 16.12.110, 17.72.010J, 17.74.010G, 17.80.010E, and 17.100.060 inclusive of the publication on September 17, 2026, of a legal public hearing notice which was published in the Desert Sun, the City’s newspaper of record and mailing of a public hearing notice to a certified list of property owners within 300 feet of the subject properties on September 17, 2026; and, WHEREAS, on October 7, 2026, the Planning Commission held a duly noticed public hearing to consider the application for the Project during which evidence, both written and oral, including the staff report and supporting documents, was presented at said hearing; and, WHEREAS, after said public hearing, the Planning Commission recommended that the City Council approve this Ordinance.

WHEREAS, on _____ the City Council held a duly noticed public hearing to review the ordinance at which time during the hearing members of the public were given an opportunity to testify regarding the Project; and

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COACHELLA DOES ORDAIN AS FOLLOWS:

SECTION 1. INCORPORATION OF RECITALS. The City Council hereby finds that all of the foregoing recitals presented herewith are true and correct and are hereby incorporated and adopted as findings of the City Council.

SECTION 2. Amendment to Coachella Municipal Code Title 17, Zoning, is hereby amended as identified 233
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Ordinance No. ____

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in Exhibit A.

SECTION 3. GENERAL PLAN CONSISTENCY FINDINGS
The City Council hereby finds that this Ordinance is consistent with, advances, and implements the goals and policies of the City of Coachella General Plan, including but not limited to the following:

1. The amendment is consistent with and implements the General Plan’s purposes, objectives, and land use provisions.

The existing Regional Commercial (R-C) zoning provisions accommodate multi-family residential uses subject to a Conditional Use Permit but do not expressly provide a corresponding approval pathway for single-family residential uses.

For the COVA project, the amendment would provide a land use approval pathway for singlefamily units intended to accommodate fractional ownership within an integrated resort development. The ownership arrangement does not replace the requirement to demonstrate compliance with applicable density requirements, General Plan policies, and project approval conditions.

2. The amendment is justified by public necessity and convenience.

The amendment therefore serves public necessity and convenience by providing regulatory clarity and a consistent review mechanism for residential uses within the R-C zone.

3. The amendment promotes the general welfare.

City of Coachella
Ordinance No. ____

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80237.00870\45194242.1
than establishing a general allowance for independent single-family subdivisions throughout the RC zone.

The Conditional Use Permit process allows the City to evaluate whether the residential component supports the resort and maintains the development’s commercial function. Review also addresses compatibility, circulation, parking, infrastructure, noise, lighting, and other relevant development and operational characteristics.

4. The amendment constitutes good zoning practice.

The amendment establishes a conditional approval pathway for single-family residential uses that is comparable to the existing Conditional Use Permit requirement for multi-family residential uses.

This approach allows consideration of different residential building types while maintaining discretionary review.

The amendment authorizes a land use category rather than independently approving fractional ownership arrangements, short-term rental operations, or a particular development. Those matters remain subject to applicable regulations and project approvals. Accordingly, the amendment provides flexibility and regulatory clarity while protecting the intended function of the commercial zone.

City of Coachella
Ordinance No. ____

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80237.00870\45194242.1
effects in the certified General Plan EIR; (c) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (d) are previously identified significant effects that, as a result of substantial new information not known at the time the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR.
4) All potential environmental effects associated with the Project are within the scope of the impacts analyzed in the General Plan EIR, and all feasible mitigation measures from the General Plan EIR applicable to the Project, together with applicable uniformly applied development policies and standards, have been incorporated into or otherwise apply to the Project.
5) The Project is exempt from further environmental review pursuant to Public Resources Code section 21083.3 and State CEQA Guidelines section 15183.

SECTION 5. Certification. The City Clerk shall certify to the adoption of this Ordinance.

SECTION 7. Execution of the Ordinance. The Mayor shall sign this Ordinance and the City Clerk shall attest and certify to the passage and adoption thereof.

SECTION 8. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council of the City of Coachella hereby declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase, or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional.

I hereby certify that the foregoing Ordinance was PASSED, APPROVED AND ADOPTED by the City Council of the City of Coachella on the XXth day of XX, 2026.

DR. FRANK FIGUEROA
MAYOR
ATTEST:
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ANGELA M. ZEPEDA

CITY CLERK
APPROVED AS TO FORM:

RYAN GUIBOA

CITY ATTORNEY
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STATE OF CALIFORNIA

COUNTY OF RIVERSIDE

CITY OF COACHELLA
)
) ss.
)
I HEREBY CERTIFY that the foregoing Ordinance No. ___ was duly adopted by the City Council of the City of Coachella at a regular meeting thereof, held on this XXth day of XX 2026 by the following vote of Council:

AYES:

NOES:

ABSENT:

ABSTAIN:
___________________________________
Delia Granados
Deputy City Clerk
238
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Title 17 - ZONING
Chapter 17.28 R-C REGIONAL COMMERCIAL ZONE
Coachella, California, Code of Ordinances Created: 2026-04-28 13:05:38 [EST] (Supp. No. 30)

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Chapter 17.28 R-C REGIONAL COMMERCIAL ZONE1

17.28.010 Intent and purpose.

This zone is intended to provide for and encourage a wide range of shopping and entertainment in a variety of urban and suburban formats. These include regional shopping centers, mixed destination centers or similar uses. The uses allowed in this zone will cater to regional clientele and provide a unique amenity to all residents of the Coachella Valley and an important revenue source for the City. Implementing the Regional Retail land use designation in the General Plan, the primary purpose of the zone is to provide for commercial opportunities, with residential uses supporting the retail environment.
(Ord. No. 1204, § 3(Exh. A.1), 7-26-23)

17.28.020 Permitted uses.

The following uses are permitted in the R-C (Regional Commercial) zone, subject to all provisions of this chapter:

A. Primary Uses.

1. All retail establishments including big box retail (> thirty-five thousand (35,000) square feet).

2. Automobile rental.

3. Hotel.

4. Motel.

5. Resort.

6. Restaurants.

7. Private swimming pools.

8. Public Utility Facilities (City-Initiated).

B. All uses permitted by Section 17.26.020 in Chapter 17.26 C-G (General Commercial).

C. Accessory Uses. The following buildings, structures, and uses are permitted when clearly incidental and accessory to primary permitted use:

1. Dwelling, where used by a proprietor, manager, or custodian of a use permitted within this zone.

2. Ice vending machines, of three-ton capacity or less subject to all other provisions of this zone.

Such machines shall be located so as not to interfere with the movement of traffic on the site. 1Editor's note(s)—Ord. No. 1204, § 3(Exh. A.1), adopted July 26, 2023, repealed the former Ch. 17.28, §§

17.28.010—17.28.030, and enacted a new Ch. 17.28 as set out herein. The former Ch. 17.28 pertained to C-T Tourist Commercial Zone and derived from Prior code §§ 046.01—046.03; Ord. No. 1088, § 3, adopted Dec. 14, 2016.
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D. Conditional Uses. The following uses may be permitted the R-C (Regional Commercial) zone subject to obtaining a conditional use permit as specified in Section 17.74.010.

1. Amusement center or theme park.

2. Automotive repair garage as an accessory to automobile service station.

3. Automobile service station.

4. Bars and Cocktail lounges.

5. Billiard parlor.

6. Bowling alley.

7. Bus terminals, depots, and similar transit facilities.

8. Car washes as part of a multi-tenant retail center.

9. Commercial Parking Lot.

10. Drive-in or walk-up or other fast-food service establishments.

11. Exhibition hall, conference center, theater, amphitheater, auditorium.

12. Golf courses, driving ranges.

13. Hospital Uses.

14. Liquor sales, subject to Section 17.74.015;

15. Medical offices.

16. Microbreweries and taproom.

17. Mini-storage warehouse as an accessory to a permitted use.

18. Multiple-family residential (five plus units).

19. New and used automobile sales and recreational vehicle sales.

20. Recreational vehicle storage as an accessory to a permitted use.

21. Restaurants with liquor sales.

22. Skating rinks.

23. Special event establishments.

24. Sports Complex.

25. Theater, including drive-in.

26. Single-family residential uses in conjunction with a resort use. (Ord. No. 1204, § 3(Exh. A.1), 7-26-23)

17.28.030 Property development standards.

The following standards of development shall apply in the R-C (Regional Commercial) zone:

A. Residential Density and Non-Residential Intensity.

1. Minimum Density. Ten (10) dwelling units/acre, when residential uses are provided. 240
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2. Maximum Density. Fifteen (15) dwelling units/acre.

3. Maximum Non-Residential FAR. 2.0.

B. Residential uses shall follow the development standards in Section 17.14.030 for multi-family uses and the City of Coachella Multifamily Objective Design Standards.

C. Lot Requirements.

1. Minimum Lot Size. The minimum lot size shall be twenty thousand (20,000) square feet for commercial uses.

2. Minimum Lot Width. None.

3. Minimum Lot Depth. None.

4. Maximum Lot Coverage. None.

D. Yard Requirement.

1. Front Yard. Each lot or building site shall have a front yard of at least fifteen (15) feet in depth, except where one or both adjoining zones are residential, in which case the required yard shall be increased to equal the average of the required front yards of the adjoining zones.

2. Side Yard. There shall be no side yard requirement except where a R-C (Regional Commercial) zone adjoins a street or a residential zone, in which case there shall be a side yard of not less than ten (10) feet on the side or sides adjoining said street or residential zones. In the case of a reversed corner lot, the side yard adjoining the street shall be not less than the required front yard of the adjoining key lot to the rear.

3. Rear Yard. There shall be no rear yard requirement except where the R-C (Regional Commercial) zone adjoins a residential zone, in which case there shall be a rear yard of not less than ten (10) feet adjoining that residential zone. This shall not apply where there exists a public alley separating the two zones.

4. Permitted Encroachments in Required Yards.
a. The yards required in subsections 1—3 of this section may be used as part of an automobile parking area, provided however that a minimum three-foot wide screen planting strip shall be maintained adjacent to the planned highway right-of-way line. b. Swimming pools provided as an accessory use to a hotel or motel may encroach into the rear two-thirds of the required front yard.

5. All landscape areas shall be maintained consistent with approved landscape plans. Landscape modifications shall be approved by the planning director and referred to the planning commission for review at the director's discretion.

E. Height Limits.

1. The maximum height of any building located within one hundred fifty (150) feet of any S-N or GN zone, or any agricultural zone, shall be one story or twenty (20) feet, whichever is less.

Vehicular rights-of-way shall be included in calculating the distance.

2. The maximum height of all other buildings shall be two stories or thirty-five (35) feet, whichever is less, except that hotels shall have a maximum height of eighty-five (85) feet.

3. Rooftop mechanical equipment shall be screened by a parapet wall or other architectural features. Any rooftop screening elements shall be architecturally consistent and well integrated with overall building architecture.
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F. Landscape Setback. The minimum perimeter landscape setback for residential or hotel projects without frontage of buildings along perimeter street shall equal at minimum ten (10) feet at any point and have an average perimeter landscape setback of twenty (20) feet for the entire frontage. Equestrian and agricultural themed improvements including equestrian rail fencing, agrarian lighting, agrarian signage, 10-foot-wide decomposed granite multi-purpose trail and date palms planted twenty (20) feet on center shall be installed along Avenue 52, Van Buren Street, and Calhoun Street.

G. Energy Efficient Design and Heat Island Reduction Strategies. New development shall submit an energy efficient design and heat island reduction plan that incorporates heat island reduction strategies such as light-colored cool roofs, light-colored paving, permeable paving, substantial shade tree coverage, shade structures and shaded asphalt paving. Energy efficient building and site design strategies shall be incorporated such as appropriate solar orientation, thermal mass, use of natural daylight and ventilation, and shading. Shade tree plantings in surface parking areas shall be installed to provide shade over fifty (50) percent of the parking area within ten (10) years. Solar photovoltaic shade structures or shade structures with cool roofing materials shall be permitted in whole or in part in lieu of shade tree plantings.

H. Distance Between Buildings. No requirements, except that buildings not actually adjoining shall be determined through site plan review.

I. Off-Street Parking and Loading. Off-street parking and loading facilities shall be provided in accordance with the provisions of Section 17.54.010.

J. Screening. Where the R-C zone abuts upon a residential zone, there shall be provided screening not less than six feet, or more than eight feet in height on the zone boundary line. Said screening shall be reduced to forty-two (42) inches in height within a required yard adjacent to a street or highway.

K. Other Property Development Standards.

1. All uses shall be conducted entirely within a completely enclosed building, except for off-street parking and loading facilities, those outdoor uses permitted by Section 17.28.020(A)(7), and certain uses permitted subject to a conditional use permit by Section 17.28.020(D).

2. No building or structure having exterior walls of sheet metal shall be erected in this zone.

L. Architectural Review. All development in the R-C (Regional Commercial) zone, is subject to architectural review as set forth in Section 17.72.010 of this title.

M. All new single-family residential development shall be designed pursuant to the design standards included in Chapter 17.19 (Supplemental Standards for Single-Family Residential). (Ord. No. 1204, § 3(Exh. A.1), 7-26-23; Ord. No. 1220, § 2(Exh. A), 2-26-25) 242
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RESOLUTION NO. PC2026-28

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF

COACHELLA, CALIFORNIA, RECOMMENDING THAT THE CITY
COUNCIL ADOPT AN ORDINANCE AMENDING CHAPTER 5.80 OF

TITLE V OF THE COACHELLA MUNICIPAL CODE TO MODIFY THE

SHORT-TERM RENTAL ORDINANCE AND DETERMINE, PURSUANT
TO STATE CEQA GUIDELINES SECTION 15183, THAT NO FURTHER ENVIRONMENTAL REVIEW IS REQUIRED.

WHEREAS, pursuant to the authority granted to the City of Coachella (“City”) by Article XI, Section 7 of the California Constitution, the City has the police power to regulate the use of land and property within the City in a manner designed to promote public convenience and general prosperity, as well as public health, welfare, and safety; and, WHEREAS, adoption and enforcement of comprehensive zoning regulations and other land use regulations lies within the City’s police power; and, WHEREAS, on July 7, 2025, Relevant Coachella Owner, LLC (“Applicant”), submitted an application for a Tentative Tract Map, Architectural Review, Conditional Use Permit, Environmental Assessment, and Development Agreement for the proposed “COVA” project, consisting of hotel, resort, residential, commercial and public beach club use on approximately 87 acres comprising four contiguous parcels (APNs 780-040-001, 780-040-003, 780-060-001, and 780-060-002) located south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”); and WHEREAS, in late 2026, the Applicant submitted an application for Zoning Ordinance Amendment No. 26-03 to amend Chapter 5.80 of Title V of the Coachella Municipal Code relating to the regulation of short-term vacation rentals; and WHEREAS, Zoning Ordinance Amendment No. 26-03 proposes an Ordinance, attached hereto as Attachment “A” and incorporated herein by reference, amending Chapter 5.80 of Title V of the Coachella Municipal Code to provide exceptions for qualifying projects with approved development agreements to the short-term vacation rental permit limit per owner and the percentage limit on units permitted for short-term rental use, together with such additional modifications as may be expressly authorized by the amended ordinance and an approved development agreement; and WHEREAS, Zoning Ordinance Amendment No. 26-03 establishes a regulatory mechanism through which qualifying projects with approved development agreements may receive specified exceptions or modifications to otherwise applicable provisions of Chapter 5.80, but does not independently approve short-term vacation rental operations or exempt a project from requirements of Chapter 5.80 that are not expressly modified pursuant to the Ordinance and an approved development agreement; and WHEREAS, the Project site has a zoning designation of (R-C) Regional Commercial and a General Plan land use designation of Regional Retail District, which allows a residential density of 10 to 15 dwelling units per acre and a floor area ratio of

0.35 to 2.0. The Project proposes a residential density of approximately 14.4 dwelling 243
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units per acre and a floor area ratio of approximately 0.65, consistent with the development density and intensity established by the General Plan; and, WHEREAS, Public Resources Code section 21083.3 and State CEQA Guidelines section 15183 provide that a project consistent with the development density established by an existing general plan for which an EIR was certified does not require additional environmental review except as necessary to examine whether the project would result in project-specific significant effects peculiar to the project or its site; and WHEREAS, the City, as lead agency under the CEQA, prepared a Modified Initial Study/Section 15183 Checklist for the Project (the “15183 Checklist”), to determine whether further environmental review of the Project is required; and WHEREAS, the 15183 Checklist concludes that the Project would not result in any environmental effects that (1) are peculiar to the Project or the parcel on which the Project would be located; (2) were not analyzed as significant effects in the certified General Plan EIR; (3) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (4) are previously identified significant effects that, as a result of substantial new information not known when the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR. The 15183 Checklist further concludes that the potential environmental effects associated with the Project are within the scope of the impacts analyzed in the General Plan EIR and that all feasible mitigation measures from the General Plan EIR applicable to the Project, together with applicable uniformly applied development policies and standards, have been incorporated into or otherwise apply to the Project; and WHEREAS, a notice of a public hearing to consider Tentative Tract Map No. 39330, Zoning Ordinance Amendment No. 26-02, Zoning Ordinance Amendment No. 26-03, Conditional Use Permit No. 396, Conditional Use Permit No. 407, Architectural Review No. 25-07, and Development Agreement No. 25-01 was issued in accordance with Coachella Municipal Code Section 16.12.110, 17.72.010J, 17.74.010G, 17.80.010E, and 17.100.060 inclusive of the publication on September 17, 2026, of a legal public hearing notice which was published in the Desert Sun, the City’s newspaper of record and mailing of a public hearing notice to a certified list of property owners within 300 feet of the subject properties on September 17, 2026; and, WHEREAS, on October 7, 2026, the Planning Commission held a duly noticed public hearing to consider the application for the Project during which evidence, both written and oral, including the staff report and supporting documents, was presented at said hearing; and, WHEREAS, after said public hearing, the Planning Commission recommended that the City Council approve this Ordinance.

NOW THEREFORE, THE PLANNING COMMISSION OF THE CITY OF COACHELLA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 2. CEQA. The Planning Commission has reviewed and considered the previously certified Coachella General Plan Update 2035 EIR (SCH No. 2009021007), the 15183 244
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Checklist and supporting technical studies prepared for the Project, the staff report, all written and oral comments received, and the entire administrative record. Based on substantial evidence in the record, the Planning Commission recommends that the City Council make the following determinations:
1) The 15183 Checklist was prepared in compliance with CEQA and the State CEQA Guidelines and reflects the City’s independent judgment and analysis. 2) The Project is consistent with the City’s General Plan Update 2035 for which an EIR was certified.
3) The Project would not result in any environmental effects that: (a) are peculiar to the Project or the parcel on which the Project would be located; (b) were not analyzed as significant effects in the certified General Plan EIR; (c) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (d) are previously identified significant effects that, as a result of substantial new information not known at the time the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR.
4) All potential environmental effects associated with the Project are within the scope of the impacts analyzed in the General Plan EIR, and all feasible mitigation measures from the General Plan EIR applicable to the Project, together with applicable uniformly applied development policies and standards, have been incorporated into or otherwise apply to the Project.
5) The Project is exempt from further environmental review pursuant to Public Resources Code section 21083.3 and State CEQA Guidelines section 15183.

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COACHELLA, CALIFORNIA, AMENDING CHAPTER 5.80 TO TITLE V OF THE COACHELLA MUNICIPAL CODE TO MODIFY THE SHORT-TERM RENTAL ORDINANCE” which is attached hereto as Attachment “A” and incorporated herein by reference.

SECTION 4. Findings. The Planning Commission finds that the amendments to the Coachella Municipal Code (Business Licenses and Regulations) proposed by the above referenced ordinance are consistent with, advances, and implements the goals and policies of the City of Coachella General Plan, including but not limited to the following:

1. The amendment is consistent with and supports the General Plan’s purposes and objectives.

The amendment provides flexibility to accommodate integrated hospitality developments containing residential accommodations, resort amenities, dining, recreation, and entertainment. For the COVA project, this flexibility would support the proposed relationship between residential ownership, including fractional ownership, and short-term rental operations within the resort.

Land Use and Community Character Element Policy 13.4, Diverse Tax Base, calls for a fiscally sound City supported by a sustainable and diversified tax base and user fees, including property tax, sales tax, transient occupancy tax, utilities user tax, and fees 245
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supporting the cost of services. The amendment supports this policy by accommodating visitor-serving developments that may contribute to applicable City tax revenues.

The amendment also supports Policy 13.3, Efficient Growth, by allowing the City to evaluate potential revenues alongside infrastructure obligations, public service demands, and community compatibility through the development agreement and accompanying project approvals.

2. The amendment is justified by public necessity and convenience.

Chapter 5.80 establishes limits on permit ownership and the concentration of short-term vacation rentals. These limitations regulate vacation rental activity within residential areas but may constrain integrated hospitality developments where short-term accommodations are an intended component of the approved development.

The amendment establishes a defined mechanism for accommodating these developments through approved development agreements. It allows the City to coordinate applicable rental provisions with the project’s ownership structure, operating arrangements, and development obligations.

This approach provides regulatory clarity for applicants, property owners, operators, and City staff while retaining City Council review of the development agreement and the project-specific provisions governing rental operations.

3. The amendment promotes the general welfare.

The amendment allows the City to address short-term rental operations in conjunction with negotiated development obligations and enforceable project requirements. Development agreements and accompanying approvals can address management responsibilities, complaint response, security, parking, noise, infrastructure, and applicable tax reporting and payment obligations.

The justification for exceptions must address the characteristics of the qualifying development and how its operating framework protects surrounding properties and community interests. Requirements of Chapter 5.80 that are not lawfully modified remain applicable.

Accordingly, the amendment provides flexibility for qualifying developments while retaining mechanisms to address public health, safety, neighborhood compatibility, and the demands placed on City services.

4. The amendment constitutes good regulatory practice.

The amendment establishes an express framework for coordinating Chapter 5.80 with Cityapproved development agreements. It clarifies the availability of exceptions to permit ownership and concentration limits and provides a documented basis for administering project-specific requirements.
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Each development agreement must clearly identify the property and operations it covers, together with any additional authorized modifications and applicable obligations. The amendment does not independently approve a development, establish compliance with zoning requirements, or authorize rental operations without the applicable permits and project approvals.

This approach accommodates coordinated hospitality developments while maintaining a clear distinction between the exceptions authorized by the ordinance and additional provisions expressly established through a development agreement.

SECTION 5. Certification. The Secretary shall certify to the adoption of this Resolution.

SECTION 7. Execution of Resolution. The Chairperson shall sign this Resolution and the Planning Commission Secretary shall attest and certify to the passage and adoption thereof.

SECTION 8. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Resolution. The Planning Commission of the City of Coachella hereby declares that it would have adopted this Resolution and each section, subsection, sentence, clause, phrase, or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional.
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PASSED APPROVED and ADOPTED this 7
th day of October 2026.

AYES:

NOES:

ABSENT:

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City of Coachella
Ordinance No. ____

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80237.00870\45194242.1
ORDINANCE NO. ___

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COACHELLA, CALIFORNIA, AMENDING CHAPTER 5.80 TO TITLE V OF THE COACHELLA

MUNICIPAL CODE TO MODIFY THE SHORT-TERM RENTAL ORDINANCE WHEREAS, pursuant to the authority granted to the City of Coachella (“City”) by Article XI, Section 7 of the California Constitution, the City has the police power to regulate the use of land and property within the City in a manner designed to promote public convenience and general prosperity, as well as public health, welfare, and safety; and,
WHEREAS, adoption and enforcement of comprehensive zoning regulations and other land use regulations lies within the City’s police power; and,
WHEREAS, on July 7, 2025, Relevant Coachella Owner, LLC (“Applicant”), submitted an application for a Tentative Tract Map, Architectural Review, Conditional Use Permit, Environmental Assessment, and Development Agreement for the proposed “COVA” project, consisting of hotel, resort, residential, commercial and public beach club use on approximately 87 acres comprising four contiguous parcels (APNs 780-040-001, 780-040-003, 780-060-001, and 780-060-002) located south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”); and WHEREAS, in late 2026, the Applicant submitted an application for Zoning Ordinance Amendment No. 26-03 to amend Chapter 5.80 of Title V of the Coachella Municipal Code relating to the regulation of short-term vacation rentals; and WHEREAS, Zoning Ordinance Amendment No. 26-03 proposes an Ordinance, attached hereto as Attachment “A” and incorporated herein by reference, amending Chapter 5.80 of Title V of the Coachella Municipal Code to provide exceptions for qualifying projects with approved development agreements to the short-term vacation rental permit limit per owner and the percentage limit on units permitted for short-term rental use, together with such additional modifications as may be expressly authorized by the amended ordinance and an approved development agreement; and
WHEREAS, Zoning Ordinance Amendment No. 26-03 establishes a regulatory mechanism through which qualifying projects with approved development agreements may receive specified exceptions or modifications to otherwise applicable provisions of Chapter 5.80, but does not independently approve short-term vacation rental operations or exempt a project from requirements of Chapter 5.80 that are not expressly modified pursuant to the Ordinance and an approved development agreement; and
WHEREAS, the Project site has a zoning designation of (R-C) Regional Commercial and a General Plan land use designation of Regional Retail District, which allows a residential density of 10 to 15 dwelling units per acre and a floor area ratio of 0.35 to 2.0. The Project proposes a residential density of approximately 14.4 dwelling units per acre and a floor area ratio of approximately 0.65, consistent with the development density and intensity established by the 249
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General Plan; and,
WHEREAS, Public Resources Code section 21083.3 and State CEQA Guidelines section 15183 provide that a project consistent with the development density established by an existing general plan for which an EIR was certified does not require additional environmental review except as necessary to examine whether the project would result in project-specific significant effects peculiar to the project or its site; and
WHEREAS, the City, as lead agency under the CEQA, prepared a Modified Initial Study/Section 15183 Checklist for the Project (the “15183 Checklist”), to determine whether further environmental review of the Project is required; and WHEREAS, the 15183 Checklist concludes that the Project would not result in any environmental effects that (1) are peculiar to the Project or the parcel on which the Project would be located; (2) were not analyzed as significant effects in the certified General Plan EIR; (3) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (4) are previously identified significant effects that, as a result of substantial new information not known when the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR.

The 15183 Checklist further concludes that the potential environmental effects associated with the Project are within the scope of the impacts analyzed in the General Plan EIR and that all feasible mitigation measures from the General Plan EIR applicable to the Project, together with applicable uniformly applied development policies and standards, have been incorporated into or otherwise apply to the Project; and WHEREAS, a notice of a public hearing to consider Tentative Tract Map No. 39330, Zoning Ordinance Amendment No. 26-02, Zoning Ordinance Amendment No. 26-03, Conditional Use Permit No. 396, Conditional Use Permit No. 407, Architectural Review No. 25-07, and Development Agreement No. 25-01 was issued in accordance with Coachella Municipal Code Section 16.12.110, 17.72.010J,

17.74.010G, 17.80.010E, and 17.100.060 inclusive of the publication on September 17, 2026, of a legal public hearing notice which was published in the Desert Sun, the City’s newspaper of record and mailing of a public hearing notice to a certified list of property owners within 300 feet of the subject properties on September 17, 2026; and,
WHEREAS, on October 7, 2026, the Planning Commission held a duly noticed public hearing to consider the application for the Project during which evidence, both written and oral, including the staff report and supporting documents, was presented at said hearing; and, WHEREAS, after said public hearing, the Planning Commission recommended that the City Council approve this Ordinance.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COACHELLA DOES ORDAIN AS FOLLOWS:

City of Coachella
Ordinance No. ____

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SECTION 2. Amendment to Municipal Code Title 5, Business Licenses and Regulations, is hereby amended as identified in Exhibit A.

1. The amendment is consistent with and supports the General Plan’s purposes and objectives.

The amendment supports this policy by accommodating visitor-serving developments that may contribute to applicable City tax revenues.

2. The amendment is justified by public necessity and convenience.

3. The amendment promotes the general welfare.

City of Coachella
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response, security, parking, noise, infrastructure, and applicable tax reporting and payment obligations.

The justification for exceptions must address the characteristics of the qualifying development and how its operating framework protects surrounding properties and community interests.

Requirements of Chapter 5.80 that are not lawfully modified remain applicable.

4. The amendment constitutes good regulatory practice.

SECTION 4. CEQA. The City Council has reviewed and considered the previously certified Coachella General Plan Update 2035 EIR (SCH No. 2009021007), the 15183 Checklist and supporting technical studies prepared for the Project, the staff report, all written and oral comments received, and the entire administrative record. Based on substantial evidence in the record, the City Council makes the following determinations:
1) The 15183 Checklist was prepared in compliance with CEQA and the State CEQA Guidelines and reflects the City’s independent judgment and analysis.
2) The Project is consistent with the City’s General Plan Update 2035 for which an EIR was certified. 3) The Project would not result in any environmental effects that: (a) are peculiar to the Project or the parcel on which the Project would be located; (b) were not analyzed as significant effects in the certified General Plan EIR; (c) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (d) are previously identified significant effects that, as a result of substantial new information not known at the time the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR. 4) All potential environmental effects associated with the Project are within the scope of the impacts analyzed in the General Plan EIR, and all feasible mitigation measures from the General Plan EIR applicable to the Project, together with applicable uniformly applied development policies and standards, have been incorporated into or otherwise apply to the Project. 252
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5) The Project is exempt from further environmental review pursuant to Public Resources Code section 21083.3 and State CEQA Guidelines section 15183.

SECTION 5. Certification. The City Clerk shall certify to the adoption of this Ordinance.

SECTION 7. Execution of Ordinance. The Mayor shall sign this Ordinance and the City Clerk shall attest and certify to the passage and adoption thereof.

I hereby certify that the foregoing Ordinance was PASSED, APPROVED AND ADOPTED by the City Council of the City of Coachella on the XXth day of XX, 2026.

DR. FRANK FIGUEROA
MAYOR
ATTEST:

ANGELA M. ZEPEDA

CITY CLERK
APPROVED AS TO FORM:

RYAN GUIBOA

CITY ATTORNEY
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STATE OF CALIFORNIA

COUNTY OF RIVERSIDE

AYES:

NOES:

ABSENT:

ABSTAIN:
___________________________________
Delia Granados
Deputy City Clerk
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Title 5 - BUSINESS LICENSES AND REGULATIONS
Chapter 5.80 REGULATION OF SHORT-TERM VACATION RENTALS
Coachella, California, Code of Ordinances Created: 2026-04-28 13:05:09 [EST] (Supp. No. 30)

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Chapter 5.80 REGULATION OF SHORT-TERM VACATION RENTALS

5.80.005 Purpose.

A. The purpose of this chapter is to establish regulations for the use of privately owned residential dwelling units as short-term vacation rentals to minimize secondary impacts of such uses on surrounding residential neighborhoods and to ensure the collection and payment of transient occupancy taxes.

B. This chapter is not intended to provide any owner of residential property with the right or privilege to violate any private conditions, covenants and restrictions applicable to the owner's property that may prohibit the use of such owner's residential property for short-term rental purposes as defined in this chapter. (Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.010 Definitions.

The definitions set forth in this section shall govern the meaning and construction of the words and phrases used in this chapter, except where the context of such words and phrases clearly indicates a different meaning or construction.
"Agent" means a person or entity, who does not hold any interest in the property and who has authority to act on behalf of the owner pursuant to Section 5.80.040. "Annual permit" means an annual permit issued by the city to allow an owner to rent a short-term vacation rental pursuant to the regulations contained in this chapter. An annual permit shall have a term of one year from issuance and then must be renewed as provided herein.
"Bedroom" shall mean a room within a short-term vacation rental designed primarily for sleeping purposes that meets the definition of the applicable California Building, Housing and related codes currently adopted by the city.
"Good neighbor guidelines" means a document or documents prepared by the city that summarizes the general rules of conduct, consideration, and respect, including, without limitation, provisions of this Code and other applicable laws, rules or regulations pertaining to the use and occupancy of short-term vacation rentals. "Hosting platform" or "hosting site" means a person or entity who participates in leasing short-term vacation rentals by collecting or receiving a fee, directly or indirectly through an agent or intermediary, for conducting a booking transaction using any medium of facilitation. Examples include, but are not limited to, VRBO.com, Airbnb.com, homestay.com and other internet and non-internet based services that facilitate bookings for a fee. "Owner of a short-term vacation rental" or "owner" shall mean the person(s) or entity(ies) that hold(s) record legal and or equitable title to the subject short-term vacation rental. "Responsible party" means the lessee of a short-term vacation rental property, as set forth in any rental oral or written contract.
"Seasonal permit" means a limited-time permit issued by the city to allow an owner to rent a short-term vacation rental at the owner's primary residence pursuant to the regulations contained in this chapter. A seasonal permit shall have a limited term from March 1 to June 1 in any year and shall not allow renting of the subject short-term vacation rental during any other time of year. A seasonal permit then must be renewed as provided herein to be used during the limited-time period in a subsequent year. 255
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"Short-term vacation rental" shall mean a "dwelling unit" in a residential property as defined by the city's zoning ordinance, or any portion thereof, that is rented by the owner to another party for a period of not more than thirty (30) consecutive days in exchange for any form of monetary or non-monetary consideration such as but not limited to trade, fee, swap or any other means lieu of cash payments. A hotel or motel room, porch, canopy, tent, "pop-up," or other structure that is not a "dwelling unit," shall not constitute a short-term vacation rental. (Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.020 Administration.

The provisions of this chapter shall be administered by the finance director or such other city employee as may be designated by the city manager, hereinafter referred to as the "permit administrator." In order to facilitate orderly administration of this chapter, the permit administrator shall have the authority to make interpretations and to promulgate administrative regulations consistent with the provisions of this chapter for the purpose of interpreting, clarifying, carrying out, furthering and enforcing the requirements and provision of this chapter. A copy of such administration regulations shall be on file in the office of the city clerk. (Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.030 Permit requirement.

A. No owner of a short-term vacation rental shall rent, offer to rent, or advertise for rent the short-term vacation rental to another person without a valid and active annual or seasonal permit approved and issued in the manner provided for by this chapter. Annual permits shall have a term of one year from issuance and shall be required to be renewed on an annual basis in order to remain valid and active. Seasonal permits shall have a limited term from March 1 to June 1 of the year of issuance. Permits are non-transferrable. The permit shall be conspicuously posted inside the short-term vacation rental and, as set forth in Section

5.80.050, the city permit number shall be included on all advertisements or solicitations for the short-term vacation rental, including, but not limited to hosting sites, websites, social media postings, emails, and print advertisements.

B. No person shall rent, offer to rent, or advertise for rent a balcony, patio, porch, canopy, tent or other outdoor area of a short-term vacation rental property ("outdoor area") if such rental does not occur in connection with the rental of the residence or dwelling unit, or indoor portion thereof, to which the outdoor area is attached.

C. No owner may hold more than five permits of any kind at any one time, except that an owner holding more than five permits as of April 1, 2025, may renew those permits unless they have been revoked or not renewed. This limit shall apply collectively to any corporation, partnership, limited liability company or business entity holding a permit as an owner under this chapter and to any other corporation, partnership, limited liability company or business entity which is established by, owned by, controlled by, or otherwise affiliated with the permit holder. For example, if a corporation that holds five legal permits under this chapter forms another business entity, that new business entity may not obtain a permit under this chapter due to the collective limit already being reached.

D. The city many not issue annual permits to more than twenty (20) percent of the residential dwelling units located within any neighborhood of the city.

1. For purposes of this subsection, a "neighborhood" shall be that area identified in a final recorded subdivision map as being in that neighborhood. If there is no final recorded subdivision map for a particular neighborhood, it shall be defined as the area identified in the official neighborhood map of the city.
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2. If annual permits have already been issued to more than twenty (20) percent of the residential dwelling units located within a particular neighborhood, the city shall issue no further annual permits for short-term vacation rentals in that neighborhood until sufficient annual permits have expired or have been revoked to reduce the total of issued annual permits below this twenty (20) percent limit.

3. This limit shall not apply to the issuance of seasonal permits, provided the owner otherwise meets the applicable requirements of this chapter.

E. No person shall rent, offer to rent, or advertise for rent a dwelling unit, or any portion thereof, as a shortterm vacation rental to any partnership, corporation, limited liability company, commercial enterprise, or similar entity.

F. No person who has rented a short-term vacation rental shall sublease such dwelling unit, or any portion thereof, to any other person or entity.

G. No person shall charge an admission fee or request or require a donation for entrance into any short-term vacation rental, independent of the lawful charges and fees for renting the short-term vacation rental.

F. Development projects with an approved development agreement shall be exempt from the limitations in subsection C and D above limiting the number of units that can be owned by one owner and limiting the percent of units that can be permitted for short-term rentals. (Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.040 Authorized agent or representative.

A. An owner may authorize an agent to comply with the requirements of this chapter on behalf of the owner.

B. The owner shall give prior written notice to the city of any grant of such authority, including the identity and contact information for the agent. The owner shall promptly give the city written notice of any change to any such grant of authority.

C. Notwithstanding subsection (A), the owner of the short-term vacation rental is responsible for compliance with the provisions of this chapter and the owner shall not be relieved from any personal responsibility and/or personal liability for non-compliance with any applicable law, rule or regulation pertaining to the use and occupancy of the subject short-term vacation rental, regardless of whether such non-compliance was committed by the owner's agent, a responsible party, or the occupants of the owner's short-term vacation rental or their guests. Failure of an agent to comply with this chapter shall be deemed non-compliance by the owner.
(Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.050 Advertising shall include permit number.

A. No person shall offer to rent or advertise for rent a short-term vacation rental without including in the offer or advertisement (whether the advertisement is via website, hosting sites, social media posting, e-mail, print media, radio and/or television) the city permit number applicable to the property. If the offer to rent or advertisement contains different sizes of type or fonts, the permit number shall be printed in the same size type as the large type used in the main body of the offer or advertisement. In the case of audio-only advertising, the city permit number shall be read as part of the advertising.

B. Any person advertising or causing the advertisement of a short-term vacation rental that contains information regarding the maximum overnight occupancy of the short-term vacation rental, shall advertise only the overnight maximum occupancy limit as set forth in the permit issued pursuant to this chapter. 257
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(Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.060 Short-term vacation rental permit applications.

A. The owner or the owner's agent shall submit an application for a new or renewed short-term vacation rental permit required by this chapter in a form required by the city and shall contain the following information and/or documents:

1. The name, address, and telephone number of the owner of the subject short-term vacation rental.

2. The name, address, and telephone number of the owner's agent for the subject short-term vacation rental, if any.

3. The type of permit sought (annual or seasonal).

4. The address of the proposed short-term vacation rental unit.

5. The number of bedrooms in the short-term vacation rental unit.

6. A nuisance response plan containing the information required by this chapter.

7. A copy of owner's transient occupancy registration certificate and city business license.

8. An agreement in a form approved by the city and signed by the owner, whereby the owner agrees to hold harmless and indemnify the city for any actual or alleged liability arising out of conduct occurring at or rental of a short-term vacation rental.

9. An insurance certificate or other written proof of not less than one million dollars ($1,000,000.00) comprehensive general liability insurance coverage in compliance with subsection [5.80.100](R) herein, to insure against claims or injuries to persons or damages to property which may arise from or in connection with conduct occurring at or rental of a short-term vacation rental.

10. Such other information as the permit administrator deems reasonably necessary to administer this chapter.

B. Application Fee.The permit application and renewal applications shall be accompanied by an application fee in the amount established by resolution of the city council. The renewal fee shall be paid before a permit may be approved and before the short-term vacation rental may be subsequently rented.The fee shall be non-refundable and shall be sufficient to allow for comprehensive and complete enforcement of the regulations in this chapter.

C. If an owner submits a renewal application with the city prior to the permit's expiration date, the permit shall remain valid until the city renders a decision on the permit renewal. Any renewal of an annual permit shall have a term of one year following the date of expiration of the prior permit. Any renewal of a seasonal permit shall have a term from March 1 through June 1 for the upcoming year. If an owner seeking renewal of a permit fails to provide all required application information to the city within thirty (30) days following written demand by the city, the application for renewal shall be closed out, no permit renewal shall be issued, and the owner shall be required to submit a new application and fee to the city to seek a new permit.

D. Change in Ownership. Upon a change of property ownership, the permit shall automatically expire and the successor owner or successor owner's agent shall submit an application for a new permit, which must be obtained prior to continuing to rent the subject property as a short-term vacation rental. A change in ownership of a business entity that owns a short-term vacation rental property which is subject to property tax reassessment constitutes a change of ownership for the purposes of this provision and results in the expiration of the permit. Notwithstanding the above, a change of short-term vacation rental ownership between family members or among spouses, including as a result of death or divorce or transfer to a personal or family trust, shall not result in expiration of a permit. "Family members" shall mean spouses, as 258
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well as biological or adopted children, parents, brothers/sisters, grandparents, grandchildren, uncles, aunts, nephews or nieces of the owner. An owner shall notify the city in writing of any change in ownership, whether or not resulting in expiration of the permit, not later than fourteen (14) days after the change. (Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.070 Content of nuisance response plans.

A. Each nuisance response plan accompanying an application for a permit required by this chapter shall contain the following information and otherwise be in a form required by the permit administrator.

1. The mailing address and telephone number of the owner or owners of the residential dwelling unit to be used as a short-term vacation rental pursuant to the permit;

2. The name, address and telephone number of the local contact person or persons who will be available in person and by telephone twnety-four (24) hours per day, and who will be responsible for responding to or causing a prompt response to a phone call by code enforcement within fifteen (15) minutes and within forty-five (45) minutes in person at the rental location to a nuisance or other complaint arising out of the occupancy, condition, operation or use of the short-term rental(s) by responsible parties, occupants, and/or their guests and for undertaking remedial action to resolve any such nuisance or other complaint or correct a violation.

B. The manner of assuring timely corrective action to remedy the conditions that caused the nuisance or other complaint. For the purposes of this chapter, "timely corrective action" shall include, at a minimum, a telephone call to the responsible party within fifteen (15) minutes of being informed by the city of the nuisance or other complaint.
(Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.080 Amendment of response plans.

At any time following the issuance of a permit required by this chapter, the owner of the short-term vacation rental being operated pursuant to such permit may change the content of the nuisance response plan by filing an amended response plan with the permit administrator. Such amended response plan shall contain all of the information and be in the form required by Section 5.80.070 of this chapter, and shall be accompanied by an amended response plan fee, if any, in an amount established by the resolution of the city council to recover the costs of review and enforcement of the nuisance response plan. (Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.090 Permit approval and issuance.

A. Upon receipt of an application for a permit required by this chapter, the permit administrator will review the application and supporting documents, and will approve and issue a permit to the owner of the property or properties that are the subject(s) of the application that authorizes the use and occupancy of such property as a short-term vacation rental if the permit administrator finds that the required application fee has been paid, the nuisance response plan submitted with the application conforms to the requirements of this chapter and the short-term vacation rental complies with the provisions of Section 5.80.100 of this chapter.

Any permit issued shall contain on its face its annual or seasonal status and the overnight maximum occupancy limit as determined by Section 5.80.100 of this chapter. 259
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B. An application may be denied if the applicant has had a prior short-term vacation rental application for the same unit revoked within the past twelve (12) calendar months. An application for a new or renewed permit may also be denied if the owner has any unpaid city taxes or fines outstanding that the owner is responsible for, if all administrative appeals have been exhausted, unless the owner has entered into an agreement with the city for payment of said taxes or fines that allows renewal of a permit. (Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.100 Operational requirements and performance standards established.

A. Each owner, and each responsible party or occupant of a short-term vacation rental, shall at all times comply with or cause compliance with the operational and performance standards applicable to short-term vacation rentals they own, lease or occupy, as established by this section.

B. The owner and agent shall ensure that the short-term vacation rental complies with all applicable codes regarding fire, building and safety, and all other relevant laws and ordinances.

C. The owner shall require the responsible party to be an adult twenty-one (21) years of age or older. The responsible party shall provide a telephone number to the owner and shall be accessible to the owner by telephone at all times.

D. Prior to occupancy, the owner or agent shall obtain the name, address, and driver's license number or a copy of the passport of the responsible party. The owner or agent shall also provide to the responsible party a copy of the city's good neighbor guidelines. The responsible party is legally responsible for compliance of all occupants of the short-term vacation rental or their guests with all provisions of this chapter and/or the Coachella Municipal Code. This information shall be readily available upon request of any police officer or employee of the city authorized to enforce this chapter or state law.

E. The owner shall limit overnight occupancy of the short-term vacation rental to the following:

1. The maximum number of overnight occupants shall not exceed two persons per bedroom plus two additional persons. The number of bedrooms in a short-term vacation rental shall be verified by the permit administrator using county assessor and/or city building records, prior to the issuance of a permit.

2. Notwithstanding the above, the city may permit increased overnight occupancy greater than the limits above for single family residential lots that are at least one-half acre in area. An owner whose lot meets this criterion may apply to the city for increased overnight occupancy greater than the limits set forth above. The permit administrator may request an interior and/or exterior site visit in order to verify the facts stated in the application and/or may request additional written or photographic documentation from the owner to support the application for increased overnight occupancy. The owner shall be present during any site visit. The permit administrator may allow the increased overnight occupancy if he or she determines that it will not cause undue negative effects or otherwise be detrimental to the surrounding neighborhood. The permit administrator may impose reasonable time limits and conditions of approval for the increased overnight occupancy. The permit administrator's determination on an application for increased overnight occupancy shall be final. No hearing shall be required or conducted. The permit administrator shall be afforded broad discretion with respect to applications for increased overnight occupancy.

F. During the hours of 10:00 p.m. through 8:00 a.m. of the following day, the short-term vacation rental shall not exceed the overnight maximum occupancy limit, except as allowed by the permit administrator pursuant to subsection (E) above.
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G. Parking. One vehicle per bedroom shall be permitted for the rented premises with a total maximum of four vehicles on any rented premises. All vehicles of occupants of the short-term residential rental shall be parked only in an approved driveway or garage on the premises. For purposes of this chapter, a "vehicle" shall include passenger cars, trucks, towing trailers, boats and off-road vehicles. Notwithstanding the above, the permit administrator may allow for additional parking on the rented premises beyond these limits as part of an application for increased overnight occupancy under subsection (E) above.

H. Trash and refuse shall not be left stored within public view, except in proper containers for the purpose of collection by the city's authorized waste hauler on scheduled trash collection days. The owner of the shortterm vacation rental shall provide sufficient trash collection containers and service to meet the demand of the occupants. No trash container shall be placed in or adjacent to a street or public right-of-way for collection service more than twenty-four (24) hours prior to the normal collection time. Containers shall be removed from, within or adjacent to the street or right-of-way within twenty-four (24) hours after collection.

I. A short-term vacation rental may be rented pursuant to either an oral or written agreement between the owner and the responsible party.

1. Each written rental agreement for a short-term vacation rental shall include the following terms, notifications and disclosures, which shall also be posted in a conspicuous location inside the unit; a. The name, age, address of the responsible party along with a copy of the responsible party's government issued identification.
b. The maximum number of overnight occupants that are permitted pursuant to the overnight maximum occupancy limit set forth in the permit.
c. A list containing the names of all guests that will occupy the short-term vacation rental provided to the owner by the responsible party, including a list of their vehicles by make and model and license plate numbers.
d. An acknowledgment and agreement of the responsible party that he or she is legally responsible for compliance of all occupants of the short-term vacation rental and their guests with all provisions of this chapter and/or the Coachella Municipal Code. e. Notification, acknowledgement and agreement of the responsible party that failure to comply with the maximum overnight occupancy limit and/or operational requirements in the provisions of Section 5.80.100 and the subsequent refusal to comply with the instructions of the owner, agent and/or local contact person in order to remedy such violations, shall subject the responsible party and his/her guests and/or other occupants to an immediate order to vacate the short-term vacation rental by the owner or local contact person in accordance with the provisions contained within the rental agreement.
f. The trash pick-up day and applicable rules and regulations pertaining to leaving or storing trash or refuse on the exterior of the property.
g. Notification that the responsible party and/or occupant(s) may be cited or fined by the city and/or immediately evicted by the owner or agent pursuant to state law, in addition to any other remedies available at law, for creating a disturbance or for violating any provisions of this chapter.
h. Notification that failure to conform to the overnight occupancy requirements of the short-term vacation rental is a violation of this chapter.
i. Notification that amplified sound, including radios, televisions and other electronic devices are subject to the city's noise ordinance as set forth in Coachella Municipal Code Chapter 7.04. 261
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j. A notification about the prohibition on illegal loud parties, along with notification of the city' s right to recover the costs of special enforcement needed to address certain loud parties under the circumstances described in Coachella Municipal Code Sections 7.05.010 through 7.05.060. k. A notification about the requirement that the occupant(s) participate in neighborhood quiet hours by avoiding parties and loud social events between the hours of 10:00 p.m. and 8:00 a.m. unless otherwise allowed by the permit administrator under subsection [5.80.100](E) of this chapter.
l. The name of the owner, agent, or local contact person, of the short-term vacation rental, and a telephone number at which each may be reached at all times. m. A copy of the good neighbor guidelines which may from time to time be prepared and amended by the permit administrator. These guidelines may include location specific information, such as local speed limits.
n. Notification that the property is part of the city of Coachella's short-term vacation rental program.
o. A copy of this chapter of the Coachella Municipal Code, as it may be amended from time to time.

2. The written rental agreement and documentation of compliance with this subsection (I) shall be maintained by the owner and/or agent for a period of three years and be made readily available upon request of the permit administrator or any police officer or employee of the city authorized to enforce this chapter or state law.

J. During the rental term of each short-term vacation rental, the owner, agent or local contact person shall be available by phone and in-person twenty-four (24) hours per day, seven days per week for the purpose of: (i) responding to the city and to the responsible party by telephone within fifteen (15) minutes of complaints regarding the occupancy, condition, operation or use of the short-term vacation rental; (ii) responding inperson within forty-five (45) minutes to any additional or successive complaints regarding the occupancy, condition, operation or use short-term vacation rental; and (iii) taking action to resolve any complaint and/or correct any violation as set forth in subsection (K) of this Section 5.80.100.

K. Upon receipt of a nuisance complaint or such other complaint or upon notification that any occupant and/or guest of the short-term vacation rental has created unreasonable noise or disturbances, engaged in disorderly conduct, or committed violations of this chapter, the Coachella Municipal Code or any state law, the owner, agent or the local contact person shall promptly respond to such complaint and take corrective action to remedy the complaint and prevent a recurrence of such conduct by those occupants or guests. For purposes of this paragraph, "promptly respond" shall mean a response by telephone to the responsible party within fifteen (15) minutes of the complaint whereby the responsible party is advised of the nature of the complaint and a correction of any violation is made and a physical presence at the premises of the shortterm vacation rental within forty-five (45) minutes to any unresolved, additional or successive complaints regarding the occupancy, condition, operation or use short-term vacation rental whereby the responsible party or other occupant is advised of the nature of the complaint and a correction of any violation is made. If the nature of the violation involves an action that would take more than an hour, "promptly respond" shall mean notifying the permit administrator of the nature of the complaint and thereafter diligently pursuing to completion the correction of the violation. Failure of the owner, agent or the local contact person to promptly respond and/or to take timely corrective action regarding the occupancy, condition, operation, or use of the short-term vacation rental shall be a violation of this chapter and shall be grounds for the imposition of penalties as set forth in this chapter and/or revocation or suspension of the permit. An owner, agent or local contact person is not required or authorized to act as a peace officer or to intervene in situations that pose a risk to personal safety. The owner, agent or the local contact person shall keep and maintain a written log or other record of the nature of the complaint or violation and the date, and time of each complaint, disturbance, response and the corrective action taken. Such written log or record shall be 262
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readily available upon request of the city, including the permit administrator, and any police officer or employee of the city authorized to enforce this chapter or state law and shall be retained for a minimum of three years.

L. The owner, agent and/or local contact person shall order the responsible party and his/her guests and/or other occupants to immediately vacate the short-term vacation rental if the responsible party and/or guests or other occupants fail to comply with the maximum overnight occupancy limit and/or violate the provisions of this chapter and subsequently refuse to comply with the instructions of the owner, agent and/or local contact person in order to remedy or correct the violation.

M. The owner shall keep written records documenting compliance with all elements of the performance standards and the approved nuisance response plan. Such records shall be retained for a minimum of three years and shall be available during regular business hours upon request of the city, including the permit administrator, and any police officer or employee of the city authorized to enforce this chapter or state law.

N. The short-term vacation rental use shall not involve the use of commercial vehicles for the delivery of materials to and from the premises beyond those commercial vehicles normally associated with residential uses nor storage of delivered materials beyond those items which would normally be associated with a residential use of property.

O. The operational requirements and performance standards may be modified by the permit administrator upon request of the owner or agent based upon site specific circumstances for the purpose of allowing reasonable accommodation of a short-term vacation rental occupant as may be required by state or federal disability laws. All requests must be in writing and shall identify how the strict application of the standard conditions creates an unreasonable hardship to an occupant such that, if the requirement is not modified, reasonable use of the property for a short-term vacation rental by an occupant would not be allowed. Any hardships identified must relate to physical constraints to the subject site and shall not be self-induced or economic. Any modifications of the standard conditions shall not further exacerbate an already existing problem.

P. The permit administrator shall have the authority to impose additional conditions on the use of any given short-term vacation rental unit to ensure that any potential secondary effects unique to the subject vacation rental unit are avoided or adequately mitigated.

Q. No radio receiver, musical instrument, phonograph, loudspeaker, sound amplifier, or other any machine or device for the producing or reproducing of any sound may be operated on the vacation rental property unless it is in compliance with the city's noise ordinance.

R. The owner shall, at the owner's expense, procure and maintain, for the duration of any permit, comprehensive general liability insurance with a limit of no less than one million dollars ($1,000,000.00) per occurrence to insure against claims for injuries to persons or damages to property which may arise from or in connection with rental or operation of a short-term vacation rental. Such insurance shall be at least as broad as the latest version of Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001).

S. No accessory dwelling unit (ADU) may be rented as a short-term vacation rental in the city. (Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.105 Payment of transient occupancy taxes.

A. The owner and/or the agent is responsible for collecting and remitting transient occupancy tax to the city and shall comply with all provisions of Section 4.28.030 et. seq. of the Municipal Code concerning transient 263
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occupancy taxes, including, but not limited to, submission of a return in accordance with Chapter 4.28, which shall be filed even if the vacation rental unit was not rented during each such reporting period.

B. Beginning April 1, 2025, hosting platforms shall be responsible for collecting all applicable transient occupancy taxes and remitting the same to the city. The hosting platform shall be considered an agent of the owner/host for purposes of transient occupancy tax collections and remittance pursuant to Chapter 4.28.

C. Owners and/or agents shall be responsible for submitting transient occupancy tax forms reporting nightly stays and gross receipts even if a hosting platform is remitting the taxes due on their behalf.

D. Permittees making two or more late submittals in a 12-month period shall not have their permit renewed upon expiration.

E. Owners shall provide all transient occupancy tax-related documents to the city within five business days of the city's written request, as more particularly set forth in Section 5.80.150. If any documents are not in the possession of an owner but are in the possession of an agent, the owner shall promptly request said documents from the agent within three business days of the city's written request and the documents shall be provided to the city within five business days thereafter.

F. Timely payment of applicable transient occupancy taxes for a short-term vacation rental shall not excuse an owner's noncompliance with any other provisions of this chapter and the city may impose fines or take other action as set forth in this chapter to address said noncompliance. (Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.110 Terminating the use of a property as short-term rental.

Where the owner of property used and occupied as a short-term vacation rental pursuant to a permit approved and issued in the manner provided for by this chapter determines to terminate such use and restore the property either to an owner-occupied residence or a long-term rental, the property owner shall promptly cause a notice of such determination/termination to be filed with the permit administrator. Once such notice is received by the city, the property shall not again be leased, offered for lease or otherwise occupied as a short-term vacation rental until a new permit is obtained by the owner.
(Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.120 Violations.

A. It is unlawful and a violation of this chapter for any person or entity owning, renting, leasing, occupying or having charge, control or possession of any real or improved property within the City of Coachella to cause, permit, maintain or allow any violation of this chapter to exist thereon. Any person who violates any provision of this chapter is guilty of a misdemeanor. Such violation is punishable as set forth in Section 1.08 of this Code. Each and every day, or portion thereof, that a violation of this chapter exists constitutes a separate and distinct violation.

B. Alternatively, this chapter may be enforced through the issuance of an administrative citation in accordance with Chapter 1.08 of this Code, except that the fine for each separate violation shall be as follows: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000.00) for the first citation; (2) an administrative fine an amount not to exceed two thousand dollars ($2,000.00) for a second citation issued for the same offense within a 12-month period of the date of the first offense; and (3) an administrative fine in an amount not to exceed three thousand dollars ($3,000.00) for a third and any subsequent citation issued for the same offense within a 12-month period of the date of the first offense. Each and every day such a violation exists shall constitute a separate and distinct violation of this chapter. 264
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C. Notwithstanding subsection (B) of this Section 5.80.120, operating a short-term vacation rental without a valid permit shall be subject to an administrative fine in the following amounts: (1) an administrative fine in an amount not to exceed one thousand five hundred dollars ($1,500.00) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000.00) for a second citation issued for the same offense within a 12-month period of the date of the first offense; and (3) an administrative fine in an amount not to exceed five thousand dollars ($5,000.00) for a third and any subsequent citation issued for the same offense within a 12-month period of the date of the first offense.

Each and every day such a violation exists shall constitute a separate and distinct violation of this chapter.

D. In addition to the foregoing, a violation of any provision of this chapter shall constitute a public nuisance and shall be subject to abatement by the city by means of a civil action or administrative abatement pursuant to Chapter 3.10 of this Code, and each day such condition continues it shall be regarded as a new and separate offense.

E. This remedies provided for in this section are in addition to, and not in lieu of, all other legal remedies, criminal or civil, which may be pursued by the city to address any violation of this chapter. (Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.130 Permit suspension, modification or revocation.

A. In addition to any other remedy provided by this chapter, a permit issued pursuant to this chapter may be suspended, modified or revoked for any violations of this chapter, for violation of any other law on the premises of the short-term vacation rental, or for the maintenance of such other conditions as may be shown to be injurious to the public health and safety or if the applicant made any false, misleading or fraudulent statement of a material fact in the application for permit, or any report or record required to be filed pursuant to this chapter.

B. Prior to suspension, modification or revocation of a permit, a hearing shall be held thereon by the permit administrator or a hearing officer designated by the permit administrator. The permittee shall be notified in writing of the grounds for suspension, modification or revocation of the permit at least ten (10) days prior to the scheduled hearing. The decision of the permit administrator or hearing officer shall be rendered within five days of the hearing. The decision shall be in writing, and shall set forth the findings and reasons for the decision. The decision of the permit administrator or hearing officer is final. (Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.140 Hosting platforms.

A. Subject to applicable laws, hosting platforms shall, upon written request by the city, promptly disclose to the city each short-term vacation rental located in the city that they list, the host ID, listing ID, and names of the persons responsible for each such listing, the address of each such listing, the length of stay for each such listing, and the price paid for each stay.

B. A hosting platform shall promptly remove any listing upon receipt of a take-down notice from the city indicating that a listing violates applicable legal requirements.

C. A hosting platform is responsible for collecting and remitting transient occupancy taxes on behalf of their hosts in accordance with this Code, either directly to the city or through the owner/agent.

D. A hosting platform shall require all hosts to include a valid permit number in a designated field dedicated to the license number.
(Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25) 265
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5.80.150 Records and inspection.

Each owner or agent shall provide access to each short-term vacation rental and any records related to the use and occupancy of the short-term vacation rental to the city manager or his designee at any time during normal business hours, for the purpose of inspection or audit to determine that the objective and conditions of this chapter are being fulfilled.
(Ord. No. 1105, § 2, 5-10-17; Ord. No. 1221, § 1, 2-26-25; Ord. No. 1222, § 1, 3-12-25)

5.80.160 Requirements not exclusive.

The requirements of this chapter shall be in addition to any license, permit or fee required under any other provision of the Coachella Municipal Code. The issuance of any permit pursuant to this chapter shall not relieve any person of the obligation to comply with all other provisions of the Coachella Municipal Code pertaining to the use and occupancy of the short-term vacation rental or the property on which it is located. (Ord. No. 1105, § 2, 5-10-17)
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RESOLUTION NO. PC2026-29

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF

COACHELLA RECOMMENDING THAT THE CITY COUNCIL
CONDITIONALLY APPROVE CONDITIONAL USE PERMIT NO. 396

TO APPROVE THE PROPOSED BARS, COCKTAIL LOUNGES,

LIQUOR SALES, AND SPECIAL EVENT ESTABLISHMENT USES, FOR THE “COVA” PROJECT PROPOSING THE DEVELOPMENT OF A

HOTEL, RESORT, RESIDENTIAL, AND COMMERCIAL PUBLIC
BEACH CLUB LOCATED ON APPROXIMATELY 87 ACRES ON FOUR
CONTIGUOUS PARCELS (APNS 780-040-001, 780-040-003, 780-060-001, AND 780-060-002) SOUTH OF AVENUE 52, WEST OF VAN BUREN

STREET AND EAST OF CALHOUN STREET, AND DETERMINE,
PURSUANT TO STATE CEQA GUIDELINES SECTION 15183, THAT
NO FURTHER ENVIRONMENTAL REVIEW IS REQUIRED.

APPLICANT: RELEVANT COACHELLA OWNER, LLC
WHEREAS, on April 22, 2015, the City approved Resolution No. 2015-03 certifying the Program Environmental Impact Report (“EIR”) (SCH #2009021007) for the City of Coachella General Plan Update 2035 (“General Plan”) and Climate Action Plan; adopting environmental findings, a mitigation monitoring and reporting program, and a statement of overriding considerations; and approving the General Plan and Climate Action Plan pursuant to the California Environmental Quality Act, herein incorporated by reference; and
WHEREAS, on July 7, 2025, Relevant Coachella Owner, LLC (“Applicant”), submitted an application for a Tentative Tract Map, Architectural Review, Conditional Use Permit, Environmental Assessment, and Development Agreement for the proposed “COVA” project, consisting of hotel, resort, residential, commercial and public beach club uses on approximately 87 acres comprising four contiguous parcels (APNs 780-040-001, 780-040-003, 780-060-001, and 780-060-002) located south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”); and WHEREAS, the Applicant subsequently submitted applications for Zoning Ordinance Amendment Nos. 26-02 and 26-03 as related entitlements for the Project; and WHEREAS, the Project site has a zoning designation of (R-C) Regional Commercial and a General Plan 2035 land use designation of Regional Retail District, which allows a residential density of 10 to 15 dwelling units per acre and a floor area ratio of 0.35 to 2.0. The Project proposes a residential density of approximately 14.4 dwelling units per acre and a floor area ratio of approximately 0.65, consistent with the development density and intensity established by the General Plan; and, WHEREAS, Conditional Use Permit No. 396 proposes to authorize bars and cocktail lounges, liquor sales, and special event establishment uses in conjunction with the COVA Project, including special event activities within designated areas of the private267 Item 2.
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sector hotel and resort, including the event barn and outdoor DJ island, as well as the public-sector beach club; and
WHEREAS, the proposed Project is consistent with and intended to implement the vision of the Coachella Municipal Code and the General Plan pertaining to land use patterns, building and site design, and public right-of-way improvements; and, WHEREAS, Public Resources Code section 21083.3 and State CEQA Guidelines section 15183 provide that a project consistent with the development density established by an existing general plan for which an EIR was certified does not require additional environmental review except as necessary to examine whether the project would result in project-specific significant effects peculiar to the project or its site; and WHEREAS, the City, as lead agency under the CEQA, prepared a Modified Initial Study/Section 15183 Checklist for the Project (the “15183 Checklist”), to determine whether further environmental review of the Project is required; and WHEREAS, the 15183 Checklist concludes that the Project would not result in any environmental effects that (1) are peculiar to the Project or the parcel on which the Project would be located; (2) were not analyzed as significant effects in the certified General Plan EIR; (3) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (4) are previously identified significant effects that, as a result of substantial new information not known when the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR.

17.100.060 inclusive of the publication on September 17, 2026, of a legal public hearing notice which was published in the Desert Sun, the City’s newspaper of record and mailing of a public hearing notice to a certified list of property owners within 300 feet of the subject properties on September 17, 2026; and,
WHEREAS, on October 7, 2026, the Planning Commission held a duly noticed public hearing to consider the application for the Project during which evidence, both written and oral, including the staff report and supporting documents, was presented at said hearing; and,
WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.
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NOW, THEREFORE, BE IT RESOLVED, THE PLANNING COMMISSION OF

THE CITY OF COACHELLA, CALIFORNIA DOES HEREBY FIND
DETERMINE AND RESOLVE AS FOLLOWS:

SECTION 2. Compliance with California Environmental Quality Act. The Planning Commission has reviewed and considered the previously certified Coachella General Plan Update 2035 EIR (SCH No. 2009021007), the 15183 Checklist and supporting technical studies prepared for the Project, the staff report, all written and oral comments received, and the entire administrative record. Based on substantial evidence in the record, the Planning Commission recommends that the City Council make the following determinations:
1) The 15183 Checklist was prepared in compliance with CEQA and the State CEQA Guidelines and reflects the City’s independent judgment and analysis. 2) The Project is consistent with the City’s General Plan Update 2035 for which an EIR was certified.
3) The Project would not result in any environmental effects that: (a) are peculiar to the Project or the parcel on which the Project would be located; (b) were not analyzed as significant effects in the certified General Plan EIR; (c) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (d) are previously identified significant effects that, as a result of substantial new information not known at the time the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR.
4) All potential environmental effects associated with the Project are within the scope of the impacts analyzed in the General Plan EIR, and all feasible mitigation measures from the General Plan EIR applicable to the Project, together with applicable uniformly applied development policies and standards, have been incorporated into or otherwise apply to the Project.
5) The Project is exempt from further environmental review pursuant to Public Resources Code section 21083.3 and State CEQA Guidelines section 15183.

The applicable mitigation measures adopted in connection with the General Plan Update 2035 (GPU) EIR shall remain applicable to the Project and shall be incorporated into the Project’s mitigation monitoring and reporting requirements.

SECTION 3. Conditional Use Permit Findings. Based upon the evidence presented at the hearing, including the staff report and written and verbal testimony, which are all incorporated herein by reference, the Planning commission finds that:
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1. The proposed use will be in harmony with and in accordance with the objectives of the General Plan.

The proposed bars and cocktail lounges, liquor sales, and special event establishment are consistent with and supportive of the Regional Retail District land use designation applicable to the Project site. The proposed uses are components of the larger COVA resort development and are intended to provide dining, beverage, recreation, entertainment, and visitor-serving amenities in conjunction with the Project's hotel, resort, residential, restaurant, and other commercial uses.

The bars and cocktail lounges and associated liquor sales will complement the hospitality and visitor-serving functions of the Project, while the special event establishment will serve as a principal recreational and visitor-serving amenity within the overall resort. These uses support the development of the Project as an integrated destination rather than as a conventional residential development and are consistent with General Plan objectives encouraging commercial, hospitality, recreational, and visitor-serving development and a diversified local economy.

2. The proposed use will be compatible with the existing or intended character of the general vicinity and will not change its essential character.

The proposed bars and cocktail lounges, liquor sales, and special event establishment have been incorporated into the comprehensive design of the COVA resort development and are compatible with the intended hospitality, commercial, recreational, and entertainment character of the Project.

The proposed special event establishments serve an integral recreational and visitor-serving component of the resort rather than as an independent use unrelated to the overall development. Similarly, the bars and cocktail lounges and liquor sales are intended to operate in conjunction with the Project's hospitality, restaurant, recreational, and visitor-serving uses.

The Project's site planning and prescribed conditions of approval provide mechanisms to address potential operational effects associated with these uses, including noise, lighting, security, parking, circulation, hours of operation, alcohol service, and fire and life safety.

Alcohol sales and service will also remain subject to applicable requirements of the California Department of Alcoholic Beverage Control.

With implementation of the conditions of approval and compliance with applicable City and State requirements, the proposed uses will be located, designed, constructed, operated, and maintained in a manner compatible with the intended character of the Project and surrounding area and will not change the essential character of the area.

3. Consideration has been given to scale, bulk, coverage, density, public facilities, utilities, neighborhood character, traffic generation, street capacity, and other relevant impacts.

The scale, bulk, coverage, and intensity of the proposed bars and cocktail lounges, liquor sales, and special event establishments have been considered as part of the overall COVA 270
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development and the associated Architectural Review, Tentative Tract Map, Conditional Use Permits, and other Project entitlements.

The special event establishments and food-and-beverage uses are integrated into the overall Project site plan and will be served by the Project's proposed vehicular and pedestrian circulation systems, parking facilities, utilities, water and sewer facilities, drainage improvements, emergency access, landscaping, lighting, and other infrastructure.

The Project is subject to conditions of approval requiring the construction of necessary infrastructure and compliance with applicable requirements of the City and other responsible agencies. Potential effects associated with traffic, parking, noise, lighting, alcohol service, security, and operation of the proposed uses are addressed through the Project design, applicable Municipal Code requirements, and prescribed conditions of approval.

4. Any potentially hazardous or disturbing characteristics are justified by the common public interest as a benefit to the community as a whole.

The proposed bars and cocktail lounges, liquor sales, and special event establishments may have the potential to generate operational effects associated with noise, alcohol consumption, security, lighting, parking, traffic, and hours of operation. However, the proposed uses are located within and have been designed as integral components of the larger COVA resort development rather than as stand-alone uses. The proposed Project is consistent with the land use framework established by the City of Coachella General Plan and evaluated in the certified General Plan Environmental Impact Report. The General Plan EIR evaluated and contemplated the potential environmental effects associated with development of the Project area consistent with the General Plan, including potential noise impacts associated with the types and intensity of development anticipated for the area.

Potential operational impacts associated with the proposed uses have been further addressed through the Project design, applicable provisions of the Coachella Municipal Code, applicable requirements of the California Department of Alcoholic Beverage Control, and the conditions of approval imposed on Conditional Use Permit No. 396 and the Project as a whole. These requirements provide mechanisms to address noise, security, lighting, parking, circulation, alcohol service, and other operational considerations and to ensure that the uses operate in a manner compatible with surrounding and reasonably anticipated uses.

The proposed bars and cocktail lounges, liquor sales, and special event establishments will provide dining, recreational, entertainment, hospitality, and visitor-serving amenities that support the intended function of the COVA development as an integrated resort destination.

The special event establishments will provide a recreational and visitor-serving amenity, while the bars, cocktail lounges, and associated liquor sales will complement the Project's restaurant, hospitality, recreational, and commercial components.

5. Vehicular approaches are designed to reasonably minimize interference with traffic on surrounding public streets or roads.
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Vehicular access to the proposed bars and cocktail lounges, liquor sales, and special event establishments will occur through the access and internal circulation system designed for the overall COVA development. The proposed conditional uses will not rely upon separate uncontrolled access points directly serving the individual uses from surrounding public streets.

The Project provides coordinated vehicular access from the surrounding roadway network and an internal circulation system designed to distribute vehicles among the resort, residential, commercial, recreational, and visitor-serving components of the development.

Parking and pedestrian circulation serving the proposed uses are similarly incorporated into the overall Project design.

The Project is subject to conditions of approval requiring compliance with applicable City engineering, circulation, access, fire, and public safety requirements. As designed and conditioned, vehicular approaches serving the proposed conditional uses will provide reasonable access while minimizing interference with traffic on surrounding public streets.

SECTION 4. Location and Custodian of Records. The documents and materials that constitute the record of proceedings on which these findings are based are located at Coachella Civic Center. The Community Development Director is the custodian of the record of proceedings.

SECTION 5. Execution of Resolution. The Planning Commission Chairperson shall sign this Resolution and the Planning Commission Secretary shall attest and certify to the passage and adoption thereof.

SECTION 6. Recommendation to City Council. Based on the foregoing recitals and findings, and the written and oral comments, facts, and evidence presented, the City of Coachella Planning Commission recommends that the City Council conditionally approve Conditional Use Permit No. 396 to authorize bars and cocktail lounges, liquor sales, and special event establishment uses, including special event activities within the designated event barn, outdoor DJ island, and public event areas, for the “COVA” Project located on approximately 87 acres on four contiguous parcels (APNs 780-040-001, 780-040-003, 780- 060-001, and 780-060-002) south of Avenue 52, west of Van Buren Street, and east of Calhoun Street (“Project”), subject to the Conditions of Approval set forth in Exhibit “A” of this Resolution.

SECTION 7. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Resolution. The Planning Commission of the City of Coachella hereby declares that it would have adopted this Resolution and each section, subsection, sentence, clause, phrase, or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional.
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PASSED APPROVED and ADOPTED this 7
th day of October 2026.

AYES:

NOES:

ABSENT:

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Resolution No. PC2026-29 EXHIBIT A
Exhibit A – Resolution No. PC2026-29
CONDITIONS OF APPROVAL FOR CONDITIONAL USE PERMIT NO. 396 General Conditions

1. Conditional Use Permit No. 396 is approved for the “COVA” project proposing the development of a hotel, resort, residential, and commercial public beach club located on approximately 87 acres on four contiguous parcels (APNs 780-040-001, 780-040-003, 780- 060-001, and 780-060-002) south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”), and determine, pursuant to State CEQA Guidelines Section 15183, that no further environmental review is required.

2. The applicant shall defend, indemnify and hold harmless the City of Coachella, its officials, officers, employees, and agents from and against any claim, action, or proceeding against the City, its officials, officers, employees or agents to attack, set aside, void or annul any project approval or condition of approval of the city concerning this project, including but not limited to any approval or condition of approval or mitigation measure imposed by the City Council or Planning Commission. The City shall promptly notify the applicant of any claim, action, or proceeding concerning the project and the City shall cooperate fully in the defense of the matter.

The City reserves the right, at its own option, to choose its own attorney to represent the City, its officials, officers, employees and agents in the defense of the City Attorney, within five days of the effective date of this approval.

3. The applicant shall comply with all requirements and conditions of approval as included in Tentative Tract Map No. 39330, Zoning Ordinance Amendment No. 26-02, Zoning Ordinance Amendment No. 26-03, Conditional Use Permit No. 396, Conditional Use Permit No. 407, Architectural Review No. 25-07, and Development Agreement No. 25-01, and any modifications or extensions thereof, as listed in those Resolutions for each respective approval. 274
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RESOLUTION NO. PC2026-30

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF

COACHELLA RECOMMENDING THAT THE CITY COUNCIL
CONDITIONALLY APPROVE CONDITIONAL USE PERMIT NO. 407

TO APPROVE THE PROPOSED SINGLE-FAMILY RESIDENTIAL
USES IN CONJUNCTION WITH A RESORT USE, FOR THE “COVA”

PROJECT PROPOSING THE DEVELOPMENT OF A HOTEL, RESORT,

RESIDENTIAL, AND COMMERCIAL PUBLIC BEACH CLUB
LOCATED ON APPROXIMATELY 87 ACRES ON FOUR CONTIGUOUS
PARCELS (APNS 780-040-001, 780-040-003, 780-060-001, AND 780-060- 002) SOUTH OF AVENUE 52, WEST OF VAN BUREN STREET AND

EAST OF CALHOUN STREET, AND DETERMINE, PURSUANT TO
STATE CEQA GUIDELINES SECTION 15183, THAT NO FURTHER
ENVIRONMENTAL REVIEW IS REQUIRED. APPLICANT:

RELEVANT COACHELLA OWNER, LLC
WHEREAS, on April 22, 2015, the City approved Resolution No. 2015-03 certifying the Program Environmental Impact Report (“EIR”) (SCH #2009021007) for the City of Coachella General Plan Update 2035 (“General Plan”) and Climate Action Plan; adopting environmental findings, a mitigation monitoring and reporting program, and a statement of overriding considerations; and approving the General Plan and Climate Action Plan pursuant to the California Environmental Quality Act, herein incorporated by reference; and
WHEREAS, on July 7, 2025, Relevant Coachella Owner, LLC (“Applicant”), submitted an application for a Tentative Tract Map, Architectural Review, Conditional Use Permit, Environmental Assessment, and Development Agreement for the proposed “COVA” project, consisting of hotel, resort, residential, commercial and public beach club uses on approximately 87 acres comprising four contiguous parcels (APNs 780-040-001, 780-040-003, 780-060-001, and 780-060-002) located south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”); and WHEREAS, Conditional Use Permit No. 407 proposes to authorize 162 singlefamily residential units in conjunction with the COVA resort, including estate lots, zero lot line lots, bungalow condominiums, and VIP suites, as part of the integrated resort development; and
WHEREAS, the Applicant subsequently submitted an application for Zoning Ordinance Amendment No. 26-02 to amend Chapter 17.28 of Title XVII of the Coachella Municipal Code to allow single-family residential uses in conjunction with a resort use as a conditional use within the Regional Commercial (R-C) Zone; and WHEREAS, implementation of the single-family residential uses proposed under Conditional Use Permit No. 407 is contingent upon City Council adoption and effectiveness of Zoning Ordinance Amendment No. 26-02; and
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WHEREAS, the Project site has a zoning designation of (R-C) Regional Commercial and a General Plan 2035 land use designation of Regional Retail District, which allows a residential density of 10 to 15 dwelling units per acre and a floor area ratio of 0.35 to 2.0. The Project proposes a residential density of approximately 14.4 dwelling units per acre and a floor area ratio of approximately 0.65, consistent with the development density and intensity established by the General Plan; and, WHEREAS, the proposed Project is consistent with and intended to implement the vision of the Coachella Municipal Code and the General Plan pertaining to land use patterns, building and site design, and public right-of-way improvements; and, WHEREAS, Public Resources Code section 21083.3 and State CEQA Guidelines section 15183 provide that a project consistent with the development density established by an existing general plan for which an EIR was certified does not require additional environmental review except as necessary to examine whether the project would result in project-specific significant effects peculiar to the project or its site; and WHEREAS, the City, as lead agency under the CEQA, prepared a Modified Initial Study/Section 15183 Checklist for the Project (the “15183 Checklist”) to determine whether further environmental review of the Project is required; and WHEREAS, the 15183 Checklist concludes that the Project would not result in any environmental effects that (1) are peculiar to the Project or the parcel on which the Project would be located; (2) were not analyzed as significant effects in the certified General Plan EIR; (3) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (4) are previously identified significant effects that, as a result of substantial new information not known when the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR.

17.100.060 inclusive of the publication on September 17, 2026, of a legal public hearing notice which was published in the Desert Sun, the City’s newspaper of record and mailing of a public hearing notice to a certified list of property owners within 300 feet of the subject properties on September 17, 2026; and,
WHEREAS, on October 7, 2026, the Planning Commission held a duly noticed public hearing to consider the application for the Project during which evidence, both 276
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written and oral, including the staff report and supporting documents, was presented at said hearing; and,
WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.

NOW, THEREFORE, BE IT RESOLVED, THE PLANNING COMMISSION OF

THE CITY OF COACHELLA, CALIFORNIA DOES HEREBY FIND
DETERMINE AND RESOLVE AS FOLLOWS:

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1. The proposed use will be in harmony with and in accordance with the objectives of the General Plan.

The General Plan’s Regional Retail District designation accommodates residential uses supporting a regional-serving commercial environment. The proposed single-family residential component would be integrated with the COVA resort’s lodging, recreational amenities, dining, and other commercial facilities rather than developed as an independent residential subdivision.

The overall residential component includes 162 single-family residential units and 240 condominium cottages, totaling 402 units within approximately 28 residential acres.

Commercial acreage is excluded from this calculation. The resulting density is approximately

14.4 dwelling units per acre, within the General Plan’s Regional Retail District range of 10 to 15 dwelling units per acre.

The integrated development supports Policy 7.8’s mix of regional-serving uses and Policy

7.10’s encouragement of resort development, subject to the applicable compatibility and connectivity requirements. It also supports Subarea 3’s objectives for coordinated commercial development and appropriate transitions to surrounding properties.

Authorization of the single-family use is contingent upon adoption and effectiveness of Zoning Ordinance Amendment No. 26-02.

2. The proposed use will be compatible with the existing or intended character of the general vicinity and will not change its essential character.

The single-family units would be developed in conjunction with the resort and would share its circulation system, recreational amenities, infrastructure, and coordinated development framework. This relationship maintains the residential component’s connection to the intended commercial function of the Regional Commercial zone.

Architecture, landscaping, setbacks, perimeter improvements, and applicable operating requirements address compatibility within the development and with surrounding properties.

The relationship between residential accommodations and nearby entertainment activities must also be addressed through the project’s noise analysis and approved design and operating controls.

The CUP shall require the single-family component to remain integrated with the resort as authorized by the approved plans and conditions. As conditioned, the use will be compatible with the intended character of the area.

3. Consideration has been given to scale, bulk, coverage, density, public facilities, utilities, neighborhood character, traffic generation, street capacity, and other relevant impacts.
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The single-family component is evaluated together with the overall resort development through the tentative map, architectural review, environmental analysis, and infrastructure and circulation review. The overall residential density of approximately 14.4 dwelling units per acre falls within the applicable General Plan range.

The proposed project is compatible with the network and connectivity guidelines of the Regional Retail District general plan designation. The proposed project provides a block length of approximately 600 feet on Calhoun Street, 2,543 feet on Avenue 52, and 1,880 feet on Van Buren Street. In total the block length is approximately 5,023 feet. Although the project has a long block size and perimeter, the project is conditioned to construct 6-foot sidewalks, bicycle paths and multi-use paths along the entire project frontage along Calhoun Street, Avenue 52, and Van Buren Street. The project common area includes a separated sidewalk design that includes a 4-foot curb adjacent landscape buffer, 6-foot sidewalk, equestrian fence, 10-foot d.g. equestrian trail, and additional landscaping that provides a total 30-foot landscape and sidewalk common area along the entire project frontage along Calhoun Street, Avenue 52, and Van Buren Street.

The Calhoun and Van Buren Street common areas are characterized by two rows of palm trees, while Avenue 52 features a combination of palm trees and shade trees. The project includes decorative landscape lighting throughout the common areas, including tree uplighting, palm-ring lighting, and entry sign illumination. The Van Buren Street median includes tree uplighting and light poles. The common areas feature a desert native inspired landscape design incorporating drought-tolerant plant species, along with decorative gravel and boulders of varying sizes. The proposed project will also reintegrate the existing date palms on the site into the new development design. The proposed project will provide a stucco face block wall design for fencing visible from perimeter streets with a decorative cap.

Overall, these common area improvements help offset the longer block lengths by providing enhanced pedestrian connectivity, landscaping, and lighting that contribute to visual interest and enhance the overall design of the common areas along Calhoun Street, Avenue 52, and Van Buren Street.

The project’s public area does provide network connectivity access points within every 400 to 500 feet as envisioned by the general plan network and connectivity guidelines. The project’s public area does not provide “Virtual Blocks” due to the smaller size of the area.

The project’s private area does not provide network connectivity access points at 400- to 500- foot intervals. However, the perimeter common-area design and internal street network provide a high-quality circulation system that helps offset the greater spacing between network connectivity access points. The project’s private area does not provide “Virtual Blocks”, as the internal private street network is designed to serve the hotel, residential, and resort uses. The project design provides direct and convenient access to project amenities, and guests and residents are anticipated to navigate the site primarily by walking and golf carts, as evidenced by the 193 golf cart parking spaces planned for the project. Overall, the design of the project internal street network provides a design that serves the specific hotel, residential, resort, and commercial uses of the project. As a result, the project is consistent 279
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with the network and connectivity guidelines of the Regional Retail District general plan designation.

The proposed project is compatible with the street design guidelines of the Regional Retail District general plan designation. As indicated above, internal private street network is designed to serve the hotel, residential, and resort uses. The project design provides direct and convenient access to project amenities, and guests and residents are anticipated to navigate the site primarily by walking and golf carts, as evidenced by the 193 golf cart parking spaces planned for the project. Overall, the design of the project internal street network provides a design that serves the specific hotel, residential, resort, and commercial uses of the project. The project internal street design provides substantial palm tree cover along internal streets that are in line with the private area resort, hotel, and residential use. As a result, the project is consistent with the street design guidelines of the Regional Retail District general plan designation.

The proposed project is compatible with the parks and open space guidelines of the Regional Retail District general plan designation. The project public area provides an open space lagoon and water features that serves as an on-site resort amenity for the residents and guests of the public area.

The proposed project is compatible with the urban form guidelines of the Regional Retail District general plan designation. The buildings throughout the project are designed to be high quality and compatible with the retail, lodging, entertainment, and residential uses envisioned by the General Plan. The private-sector architectural design reflects a contemporary modern style, with building heights limited to a maximum of four stories for the proposed hotel uses. The public beach club incorporates a distinctive agave flowerinspired design and a waterfall feature, providing unique architectural features that contributes to the overall visual identity and character of the development. The development is designed for the comfort and wayfinding of shoppers within the Regional Retail District, as the distinctive agave flower-inspired design and waterfall feature of the public sector projects a unique and compelling image from the adjoining streets to entice passersby to visit the District. The ground-floor shopfronts are generally located near the sidewalk, creating an active and pedestrian-oriented frontage along the public right-of-way. While some shopfronts incorporate service functions facing the street, these elements do not detract from the development’s architectural character or views from the public right-of-way. Parking for the project is integrated into the overall site design, and provided via private streets. Drainage improvements for the project are required to comply with city engineering conditions of approval to ensure adequate stormwater flow and drainage throughout the site. The project is also required to incorporate drought-tolerant landscaping consistent with city requirements.

As a result, the project is consistent with the urban form guidelines of the Regional Retail District.

As a result, the proposed use will be located, designed, constructed, operated and maintained so as to be compatible with the existing or intended character of the general vicinity and shall not change the essential character of the same area.
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The required water, sewer, drainage, fire protection, and circulation improvements must accommodate the residential units together with the commercial and resort uses.

The project’s identified parking deficiencies must be resolved through an approved and implemented parking arrangement serving the affected uses.

4. Any potentially hazardous or disturbing characteristics are justified by the common public interest as a benefit to the community as a whole.

The single-family use provides a residential accommodation type within an integrated resort development while retaining commercial activities and amenities. The CUP framework allows this residential building type to be considered through discretionary review comparable to that required for multi-family residential uses.

The proposed use may accommodate fractional ownership, but ownership arrangements do not replace land use, safety, or operating requirements. Any short-term rental operations remain subject to applicable regulations, authorized development agreement provisions, and project conditions.

Potential conflicts involving residential occupancy, resort entertainment, vehicle activity, and property management must be addressed through approved design and operating requirements. As conditioned, the use supports the community interest in coordinated resort development while maintaining compatibility and protecting surrounding properties.

5. Vehicular approaches are designed to reasonably minimize interference with traffic on surrounding public streets or roads.

The private resort component is served by an entrance on Avenue 52 and two access points on Van Buren Street, including the proposed back-of-house access. Internal circulation connects the residential accommodations with resort amenities and supporting facilities.

Required engineering and Fire Department review addresses driveway design, internal circulation, emergency access, and required improvements. Residential parking, guest arrivals, service activities, and passenger pickup must be accommodated within the approved circulation and parking framework.

Subject to the supporting traffic analysis and implementation of the approved improvements, the vehicular approaches will reasonably minimize interference with surrounding streets.

SECTION 5. Execution of Resolution. The Planning Commission Chairperson shall sign this Resolution and the Planning Commission Secretary shall attest and certify to the passage and adoption thereof.
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SECTION 6. Recommendation to City Council. Based on the foregoing recitals and findings above, and the written and oral comments, facts and evidence presented, the City of Coachella Planning Commission recommends the City Council to conditionally approve Conditional Use Permit No. 407 for the “COVA” project proposing the development of a hotel, resort, residential, and commercial public beach club located on approximately 87 acres on four contiguous parcels (APNs 780-040-001, 780-040-003, 780-060-001, and 780- 060-002) south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”). The applicant shall demonstrate compliance with ALL Conditions of Approval, as set forth in Exhibit “A” of this Resolution. Failure to demonstrate compliance with these conditions of approval may result in the delay of the Proposed Use or the rescinding of the City of Coachella’s conditional approval. Where the term “Applicant” is used in any condition of approval, this term shall also apply to the Property Owner, any developer, or any successor in the interest of the Applicant. It is the Applicant’s or Applicant’s successor in interest responsibility to fully comply with the conditions of approval unless subsequently modified in accordance with the City’s required processes and procedures.

PASSED APPROVED and ADOPTED this 7
th day of October 2026.

AYES:

NOES:

ABSENT:

ABSTAIN:
__________________________________
Eva Lara, Chairperson
City of Coachella
ATTEST:
___________________________________
Kendra Reif
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Planning Commission Secretary
APPROVED AS TO FORM:
___________________________________
Best Best & Krieger
City Attorney
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Resolution No. PC2026-30 EXHIBIT A
Exhibit A – Resolution No. PC2026-30
CONDITIONS OF APPROVAL FOR CONDITIONAL USE PERMIT NO. 407 General Conditions

1. Conditional Use Permit No. 407 is approved for the “COVA” project proposing the development of a hotel, resort, residential, and commercial public beach club located on approximately 87 acres on four contiguous parcels (APNs 780-040-001, 780-040-003, 780- 060-001, and 780-060-002) south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”), and determine, pursuant to State CEQA Guidelines Section 15183, that no further environmental review is required.

3. The applicant shall comply with all requirements and conditions of approval as included in Tentative Tract Map No. 39330, Zoning Ordinance Amendment No. 26-02, Zoning Ordinance Amendment No. 26-03, Conditional Use Permit No. 396, Conditional Use Permit No. 407, Architectural Review No. 25-07, and Development Agreement No. 25-01, and any modifications or extensions thereof, as listed in those Resolutions for each respective approval. 284
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RESOLUTION NO. PC2026-31

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF

COACHELLA RECOMMENDING THAT THE CITY COUNCIL
CONDITIONALLY APPROVE ARCHITECTURAL REVIEW NO. 25-07

TO APPROVE THE SITE PLAN, ARCHITECTURE, ASSOCIATED
STRUCTURES AND IMPROVEMENTS FOR THE “COVA” PROJECT

PROPOSING THE DEVELOPMENT OF A HOTEL, RESORT,

EAST OF CALHOUN STREET, AND DETERMINE, PURSUANT TO
STATE CEQA GUIDELINES SECTION 15183, THAT NO FURTHER
ENVIRONMENTAL REVIEW IS REQUIRED. APPLICANT:

RELEVANT COACHELLA OWNER, LLC
WHEREAS, on April 22, 2015, the City approved Resolution No. 2015-03 certifying the Program Environmental Impact Report (“EIR”) (SCH #2009021007) for the City of Coachella General Plan Update 2035 (“General Plan”) and Climate Action Plan; adopting environmental findings, a mitigation monitoring and reporting program, and a statement of overriding considerations; and approving the General Plan and Climate Action Plan pursuant to the California Environmental Quality Act, herein incorporated by reference; and
WHEREAS, on July 7, 2025, Relevant Coachella Owner, LLC (“Applicant”), submitted an application for a Tentative Tract Map, Architectural Review, Conditional Use Permit, Environmental Assessment, and Development Agreement for the proposed “COVA” project, consisting of hotel, resort, residential, commercial and public beach club uses on approximately 87 acres comprising four contiguous parcels (APNs 780-040-001, 780-040-003, 780-060-001, and 780-060-002) located south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”); and WHEREAS, Architectural Review No. 25-07 proposes approval of the site plan, architecture, landscaping, associated structures, and site improvements for the COVA Project, including the commercial, lodging, resort, residential, recreational, and publicly accessible beach club components of the Project; and
WHEREAS, the Applicant subsequently submitted applications for Zoning Ordinance Amendment Nos. 26-02 and 26-03 as related entitlements for the Project; and WHEREAS, the Project site has a zoning designation of (R-C) Regional Commercial and a General Plan 2035 land use designation of Regional Retail District, which allows a residential density of 10 to 15 dwelling units per acre and a floor area ratio of 0.35 to 2.0. The Project proposes a residential density of approximately 14.4 dwelling units per acre and a floor area ratio of approximately 0.65, consistent with the development 285
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density and intensity established by the General Plan; and, WHEREAS, the proposed Project is consistent with and intended to implement the vision of the Coachella Municipal Code and the General Plan pertaining to land use patterns, building and site design, and public right-of-way improvements; and, WHEREAS, Public Resources Code section 21083.3 and State CEQA Guidelines section 15183 provide that a project consistent with the development density established by an existing general plan for which an EIR was certified does not require additional environmental review except as necessary to examine whether the project would result in project-specific significant effects peculiar to the project or its site; and WHEREAS, the City, as lead agency under the CEQA, prepared a Modified Initial Study/Section 15183 Checklist for the Project (the “15183 Checklist”) to determine whether further environmental review of the Project is required; and WHEREAS, the 15183 Checklist concludes that the Project would not result in any environmental effects that (1) are peculiar to the Project or the parcel on which the Project would be located; (2) were not analyzed as significant effects in the certified General Plan EIR; (3) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (4) are previously identified significant effects that, as a result of substantial new information not known when the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR.

17.100.060 inclusive of the publication on September 17, 2026, of a legal public hearing notice which was published in the Desert Sun, the City’s newspaper of record and mailing of a public hearing notice to a certified list of property owners within 300 feet of the subject properties on September 17, 2026; and,
WHEREAS, on October 7, 2026, the Planning Commission held a duly noticed public hearing to consider the application for the Project during which evidence, both written and oral, including the staff report and supporting documents, was presented at said hearing; and,
WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.
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NOW, THEREFORE, BE IT RESOLVED, THE PLANNING COMMISSION OF

THE CITY OF COACHELLA, CALIFORNIA DOES HEREBY FIND
DETERMINE AND RESOLVE AS FOLLOWS:

SECTION 3. Architectural Review Findings. Based upon the evidence presented at the hearing, including the staff report and written and verbal testimony, which are all incorporated herein by reference, the Planning Commission finds that:

1. The proposed project is consistent with the General Plan. 287
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The approximately 87-acre project site is designated Regional Retail District in the City of Coachella General Plan and is located within Subarea 3 – Van Buren Corridor. The project integrates hotel and resort accommodations, residential units, a publicly accessible commercial beach club, restaurants, entertainment uses, and recreational amenities. This combination supports the designation’s intended mix of commercial, lodging, entertainment, and supporting residential development.

For purposes of the residential density calculation, all 402 units are included within approximately 28 acres allocated to residential development, resulting in approximately

14.4 dwelling units per acre. The commercial components are excluded from this residential acreage calculation. The resulting residential density falls within the General Plan range of 10 to 15 dwelling units per acre. The public sector uses have a combined FAR of approximately 0.65, which is consistent with the Regional Retail standard of 0.35 to 2.0.

The project meets the intent and purpose, intended physical character, allowed land uses, and development intensity allowed in the Regional Retail District general plan designation.

The project is compatible with the design standards for network connectivity, street design, parks and open space, and urban form guidelines of the Regional Retail District general plan designation.

The project supports the Subarea 3 direction for regional commercial destinations that coexist with surrounding neighborhoods. Its proposed landscaped frontage improvements along Avenue 52, Calhoun Street, and Van Buren Street include separated sidewalks, landscaping, and an equestrian trail. The Van Buren Corridor is at a key location between Indio, Coachella, and La Quinta and much of the land through the corridor is still available for quality development, providing Coachella with a great opportunity to create a strong neighborhood center and regional shopping district. The Van Buren Corridor will transform into a major sub-regional retail destination that will provide a wide variety of goods and services for Coachella residents, as well as neighboring communities. The large format, regional-serving retail will be built in a fashion so it coexists with existing and future neighborhood development in and around the Van Buren Corridor. The new commercial development will promote walkability with a mix of appropriately scaled buildings fronting the streets and large, block scale buildings throughout. These improvements enhance the project’s interface with surrounding streets and contribute to the corridor’s intended pedestrian environment.

Together, the integrated land uses, compliant residential density, architectural treatment, frontage improvements, and documented circulation design support consistency with the applicable General Plan designation and Subarea 3 policies.

2. The proposed project complies with zoning regulations.

The project site is zoned Regional Commercial (R-C). The Project is subject to the Zoning Ordinance of the City of Coachella which includes Chapter 17.28 R-C Regional Commercial Zone and Chapter 17.19 Supplemental Standards for Single-Family Residential of the Coachella Municipal Code (CMC). The project proposes a hotel, resort, residential, and commercial public beach club is consistent with the permitted uses of the R-C zone, including Hotel, Resort, Restaurant, and Private Swimming Pool uses. The project requires 288
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approval of a Conditional Use Permit (CUP) to allow bars and cocktail lounges, liquor sales, and a special event establishment. The project requires approval of a CUP to allow single-family residential uses in conjunction with resort uses on the project site. The project includes a Zoning Ordinance Amendment to establish single-family residential uses in conjunction with resort uses as a conditionally permitted use in the R-C zone. The project proposes a mixed-use development, consisting of a total of 402 units on approximately 28 acres (14.4 du/ac), which is consistent with the R-C zoning residential density range of 10 to 15 dwelling units per acre. The project is compliant with Chapter 17.28 R-C Regional Commercial Zone and Chapter 17.19 Supplemental Standards for Single Family Residential of the CMC, except for certain development standards that comply with the standards allowed pursuant to the project Development Agreement in accordance with Chapter 17.100 – Development Agreements of the CMC.

The project is compliant with the residential density requirements, supplemental standards for single-family residential, yard requirements, landscape setback requirements, Energy Efficient Design and Heat Island Reduction Strategies, distance between building requirements, off-street parking and loading requirements, screening requirements, other property development standards, and architectural review standards as required by Chapter

17.28 – R-C Regional Commercial Zone. The project height requirements will be allowed flexible standards pursuant to the project Development Agreement in accordance with Chapter 17.100 – Development Agreements of the CMC.

The proposed single-family residential component requires adoption and effectiveness of Zoning Ordinance Amendment No. 26-02 to establish single-family residential uses in conjunction with a resort as a conditionally permitted use within the R-C zone, together with approval of Conditional Use Permit No. 407. Implementation of the single-family residential component shall be contingent upon those approvals.

3. The proposed project is consistent with the City’s design guidelines.

The project provides a coordinated architectural and landscape design for the commercial, residential, and lodging components within both the publicly accessible and private resort areas. The contemporary architectural character, complementary materials, earth-tone colors, and coordinated landscape treatments establish a cohesive development while distinguishing the buildings according to their functions.

Within the publicly accessible component, the agave-inspired beach club provides an architectural focal point complemented by the restaurants, supporting commercial facilities, lodging and residential buildings, and recreational amenities. Coordinated building placement, pedestrian connections, landscaping, and screening of service areas support compatibility among these uses.

Within the private resort component, the residential and lodging buildings incorporate complementary façade treatments, wood siding, dark metal-framed windows, and metal roofing. These features establish a consistent architectural character throughout the resort.

Incorporation of existing date palms and drought-tolerant landscaping further integrates the public and private components with the surrounding desert environment. 289
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Each commercial, lodging, and residential building shall comply with the City’s applicable design requirements for its approved use and building type, including applicable singlefamily residential supplemental standards and multifamily objective design standards where applicable. Final plans shall demonstrate compliance with required building articulation, entry treatments, materials, screening, privacy, lighting, and pedestrian access provisions.

Implementation of the single-family residential component remains contingent upon adoption and effectiveness of Zoning Ordinance Amendment No. 26-02 and approval of Conditional Use Permit No. 407.

The project is required to comply with the Supplemental Standards for Single-Family Residential, as required by the Regional Commercial zone. The project is compliant with the access and connectivity, street and pathway landscaping, parking, service and utilities, refuse and recycling, architectural variability, façade modulation and articulation, window trim and recess, building entries, building roofs, colors and materials, transitions and privacy, and accessory structures standards for single-family residential of the Coachella Municipal Code (CMC). As a result, the project is in compliance with the city’s design guidelines.

Based on these design features and subject to the applicable approvals and conditions of approval, the commercial and residential components within both the publicly accessible and private resort areas are consistent with the City’s applicable design guidelines.

4. The proposed development will not be detrimental to public health, safety, or welfare, or materially injurious to nearby properties and improvements.

The project’s site design separates public commercial access from private resort access and includes a separate back-of-house entrance. This arrangement provides a basis for managing visitor, resident, employee, service, and emergency circulation.

The approved plans and conditions shall require accessible pedestrian routes, safe crossings where pedestrian routes intersect vehicular circulation, required emergency access, and compliance with applicable building and fire requirements. Parking and loading shall comply with applicable requirements or an expressly authorized alternative supported by the required analysis.

Exterior lighting shall be designed and directed to control glare and light spill onto adjoining properties and public streets. Refuse areas, loading areas, mechanical equipment, and utility facilities shall receive appropriate screening. Required grading, drainage, utility, and geotechnical improvements shall be incorporated into the final construction plans.

Special event and alcohol-related operations remain subject to their respective CUP requirements, including applicable controls addressing noise, attendance, hours, security, and parking. With implementation of these design requirements and operational conditions, the development will protect public health, safety, and welfare and avoid material injury to surrounding properties.
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Furthermore, the project is consistent with the analysis performed for the GPU EIR. Further, the GPU EIR adequately anticipated and described the impacts of the project, identified applicable mitigation measures necessary to reduce project specific impacts, and the project implements these mitigation measures (see Table 1.0-1, Impacts Overview Matrix, of the GPU EIR for complete list of GPU Mitigation Measures).

A comprehensive environmental evaluation has been completed for the project as documented in the attached §15183 Exemption Checklist. This evaluation concludes that the project qualifies for an exemption from additional environmental review because it is consistent with the development density and use characteristics established by the City General Plan, as analyzed by the City GPU EIR (SCH #2009021007), and all required findings can be made.

In accordance with CEQA Guidelines §15183, the project qualifies for an exemption because the following findings can be made:

1. The project is consistent with the development density established by existing zoning, community plan or general plan policies for which an EIR was certified.

The project is located within the City’s General Plan Regional Retail District, and Regional Commercial (R-C) zoning designation. Regional Retail Districts and R-C zones allow 10 – 15 dwelling units per acre and a floor area ratio (FAR) of 0.35 – 2.0. The project would be consistent with the Regional Retail District land use designation identified for the site in the GPU. Similarly, the project would be consistent with the Regional Commercial (R-C) zoning designation for the site in the Zoning Map once the application to amend the City’s Zoning Code is approved, as discussed above. The project proposes 14.4 dwelling units per acre and 0.65 FAR, which is consistent with the Regional Retail Districts and R-C zone.

2. There are no project specific effects which are peculiar to the project or its site, and which the GPU EIR failed to analyze as significant effects.

The subject property currently operates as a combination of an active date palm grove and grape vines that have been allowed to go fallow. The site is surrounded by agricultural uses, vacant land, and scattered residential properties. Currently, the subject property operates similarly to the surrounding uses. The project proposes to develop a hospitality project with resort, residential, and recreational uses. The project is consistent with the City’s Regional Retail District land use designation and Regional Commercial zoning designation. The project does not propose project-specific effects which are peculiar to the project or its site.

The project site does not contain any unique or peculiar environmental features that would result in environmental effects beyond those previously identified and analyzed.

In addition, as explained further in the §15183 Exemption Checklist below, all project impacts were adequately analyzed by the GPU EIR. Applicable mitigation measures specified within the GPU EIR have been applied to the project. 291
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3. There are no potentially significant off-site and/or cumulative impacts which the GPU EIR failed to evaluate.

Preparation of the §15183 Exemption Checklist did not identify any significant off-site and/or cumulative impacts which the GPU EIR failed to evaluate.

4. There is no substantial new information which results in more severe impacts than anticipated by the GPU EIR.

As explained in the §15183 Exemption Checklist below, no new information has been identified which would result in a determination of a more severe impact than what had been anticipated by the GPU EIR.

5. The project will undertake feasible mitigation measures specified in the GPU EIR.

As explained in the §15183 Exemption Checklist below, the project will undertake feasible mitigation measures specified in the GPU EIR. These GPU EIR mitigation measures will be undertaken through project design, compliance with regulations and ordinances, or through the project’s conditions of approval.

5. The project is compatible with the existing or intended character of the surrounding area and will not change its essential character.

The project’s integrated commercial, resort, entertainment, and residential components are compatible with the intended Regional Retail District character of the Van Buren Corridor.

The publicly accessible commercial component preserves the site’s role as a regional destination, while the residential component is integrated with the resort.

The coordinated architectural materials and colors, distinctive beach club design, landscaped frontages, and decorative perimeter walls establish a consistent visual character.

Required setbacks, building placement, landscape buffers, screening, and privacy treatments shall provide transitions between the project and nearby residential properties.

Compatibility also depends on the approved building heights, pedestrian connections, lighting controls, service-area treatment, and operational restrictions. These requirements shall be maintained throughout the life of the project. With these measures, the development will be compatible with the area’s existing residential context and intended regional commercial character without changing its essential character.

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SECTION 5. Execution of Resolution. The Planning Commission Chairperson shall sign this Resolution and the Planning Commission Secretary shall attest and certify to the passage and adoption thereof.

SECTION 6. Recommendation to City Council. Based on the foregoing recitals and findings above, and the written and oral comments, facts and evidence presented, the City of Coachella Planning Commission recommends the City Council to conditionally approve Architectural Review No. 25-07 for the “COVA” project proposing the development of a hotel, resort, residential, and commercial public beach club located on approximately 87 acres on four contiguous parcels (APNs 780-040-001, 780-040-003, 780-060-001, and 780- 060-002) south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”). The applicant shall demonstrate compliance with ALL Conditions of Approval, as set forth in Exhibit “A” of this Resolution. Failure to demonstrate compliance with these conditions of approval may result in the delay of the Proposed Use or the rescinding of the City of Coachella’s conditional approval. Where the term “Applicant” is used in any condition of approval, this term shall also apply to the Property Owner, any developer, or any successor in the interest of the Applicant. It is the Applicant’s or Applicant’s successor in interest responsibility to fully comply with the conditions of approval unless subsequently modified in accordance with the City’s required processes and procedures.

PASSED APPROVED and ADOPTED this 7
th day of October 2026.

AYES:

NOES:

ABSENT:

ABSTAIN:
__________________________________
Eva Lara, Chairperson
City of Coachella
ATTEST:
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___________________________________
Kendra Reif
Planning Commission Secretary
APPROVED AS TO FORM:
___________________________________
Best Best & Krieger
City Attorney

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Resolution No. PC2026-31 EXHIBIT A
Exhibit A – Resolution No. PC2026-31
CONDITIONS OF APPROVAL FOR ARCHITECTURAL REVIEW NO. 25-07 General Conditions

1. Architectural Review No. 25-07 is approved for the “COVA” project proposing the development of a hotel, resort, residential, and commercial public beach club located on approximately 87 acres on four contiguous parcels (APNs 780-040-001, 780-040-003, 780- 060-001, and 780-060-002) south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”), and determine, pursuant to State CEQA Guidelines Section 15183, that no further environmental review is required.

3. The applicant shall comply with all requirements and conditions of approval as included in Tentative Tract Map No. 39330, Zoning Ordinance Amendment No. 26-02, Zoning Ordinance Amendment No. 26-03, Conditional Use Permit No. 396, Conditional Use Permit No. 407, Architectural Review No. 25-07, and Development Agreement No. 25-01, and any modifications or extensions thereof, as listed in those Resolutions for each respective approval. 295
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RESOLUTION NO. PC2026-32

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF

COACHELLA RECOMMENDING THAT THE CITY COUNCIL ADOPT
AN ORDINANCE APPROVING DEVELOPMENT AGREEMENT NO.
25-01 FOR THE “COVA” PROJECT PROPOSING THE

DEVELOPMENT OF A HOTEL, RESORT, RESIDENTIAL, AND

COMMERCIAL PUBLIC BEACH CLUB LOCATED ON
APPROXIMATELY 87 ACRES ON FOUR CONTIGUOUS PARCELS
(APNS 780-040-001, 780-040-003, 780-060-001, AND 780-060-002) SOUTH OF AVENUE 52, WEST OF VAN BUREN STREET AND EAST OF

CALHOUN STREET, AND DETERMINE, PURSUANT TO STATE CEQA
GUIDELINES SECTION 15183, THAT NO FURTHER
ENVIRONMENTAL REVIEW IS REQUIRED. APPLICANT:

RELEVANT COACHELLA OWNER, LLC
WHEREAS, on April 22, 2015, the City approved Resolution No. 2015-03 certifying the program environmental impact report (“EIR”) (SCH #2009021007) for the City of Coachella General Plan Update 2035 (“General Plan”) and Climate Action Plan; adopting environmental findings, a mitigation monitoring and reporting program, and a statement of overriding considerations; and approving the general plan and climate action plan pursuant to the California Environmental Quality Act, herein incorporated by reference; and
WHEREAS, on July 7, 2025, Relevant Coachella Owner, LLC (“Applicant”), submitted an application for a Tentative Tract Map, Architectural Review, Conditional Use Permit, Environmental Assessment, and Development Agreement for the proposed “COVA” project, consisting of a hotel, resort, residential, commercial and public beach club uses on approximately 87 acres comprising four contiguous parcels (APNs 780-040- 001, 780-040-003, 780-060-001, and 780-060-002) located south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”); and WHEREAS, Development Agreement No. 25-01 establishes the terms governing the development and operation of the COVA Project, including vested development rights, infrastructure obligations, development fees, fiscal incentives, community benefits, and continuing operational and maintenance obligations, and provides for a 50-year term with a 20-year period for Project buildout; and
WHEREAS, the Applicant subsequently submitted applications for Zoning Ordinance Amendment Nos. 26-02 and 26-03 as related entitlements for the Project; and WHEREAS, the Project site has a zoning designation of (R-C) Regional Commercial and a General Plan 2035 land use designation of Regional Retail District, which allows a residential density of 10 to 15 dwelling units per acre and a floor area ratio of 0.35 to 2.0. The Project proposes a residential density of approximately 14.4 dwelling units per acre and a floor area ratio of approximately 0.65, consistent with the development 296
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17.100.060 inclusive of the publication on September 17, 2026, of a legal public hearing notice which was published in the Desert Sun, the City’s newspaper of record and mailing of a public hearing notice to a certified list of property owners within 300 feet of the subject properties on September 17, 2026; and,
WHEREAS, on October 7, 2026, the Planning Commission held a duly noticed public hearing to consider the application for the Project during which evidence, both written and oral, including the staff report and supporting documents, was presented at said hearing; and,
WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.
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NOW, THEREFORE, BE IT RESOLVED, THE PLANNING COMMISSION OF

THE CITY OF COACHELLA, CALIFORNIA DOES HEREBY FIND
DETERMINE AND RESOLVE AS FOLLOWS:

SECTION 2. Compliance with California Environmental Quality Act. The Planning Commission has reviewed and considered the previously certified Coachella General Plan Update 2035 EIR (SCH #2009021007), 15183 Checklist and supporting technical studies prepared for the Project, the staff report, all written and oral comments received, and the entire administrative record. Based on substantial evidence in the record, the Planning Commission recommends that the City Council make the following determinations:
1) The 15183 Checklist was prepared in compliance with CEQA and the State CEQA Guidelines and reflects the City’s independent judgment and analysis. 2) The Project is consistent with the City’s General Plan Update 2035 for which an EIR was certified.
3) The Project would not result in any environmental effects that: (a) are peculiar to the Project or the parcel on which the Project would be located; (b) were not analyzed as significant effects in the certified General Plan EIR; (c) are potentially significant off-site or cumulative impacts that were not discussed in the General Plan EIR; or (d) are previously identified significant effects that, as a result of substantial new information not known at the time the General Plan EIR was certified, are determined to have a more severe adverse impact than discussed in the General Plan EIR.
4) All potential environmental effects associated with the Project are within the scope of the impacts analyzed in the General Plan EIR, and all feasible mitigation measures from the General Plan EIR applicable to the Project, together with applicable uniformly applied development policies and standards, have been incorporated into or otherwise apply to the Project.
5) The Project is exempt from further environmental review pursuant to Public Resources Code section 21083.3 and State CEQA Guidelines section 15183.

SECTION 3. Development Agreement Findings. Based upon the evidence presented at the hearing, including the staff report and written and verbal testimony, which are all incorporated herein by reference, the Planning Commission finds that:

A. Is consistent with the objectives, policies, general land uses and programs specified in the general plan and any applicable specific plan;
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The approximately 87-acre project site is designated Regional Retail District and is located within Subarea 3 – Van Buren Corridor. The Development Agreement establishes a framework for implementing an integrated hotel, resort, residential, dining, entertainment, and recreational development. The publicly accessible Commercial Beach Club Sector provides commercial and recreational opportunities for residents and visitors, while the Private Resort Sector combines lodging and supporting residential accommodations with shared resort amenities.

For General Plan density purposes, all 402 units are included within approximately 28 acres allocated to residential development, resulting in approximately 14.4 dwelling units per acre. Commercial acreage is excluded from this residential density calculation. The proposed density falls within the applicable range of 10 to 15 dwelling units per acre.

The agreement supports the Regional Retail District’s destination-oriented mix of uses and Subarea 3’s direction for commercial development that is compatible with surrounding neighborhoods. Its obligations for public improvements and frontage landscape maintenance support implementation of the project’s approved site design. The project’s pedestrian connections, external connectivity, commercial intensity, and transitions to adjacent development are addressed through the General Plan consistency analysis and required project improvements.

Together with the related project approvals and documented General Plan consistency analysis, the agreement implements the applicable land use and community character objectives. No specific plan applies to the project site.

B. Is compatible with the uses authorized in and the regulations prescribed for the land use district in which the real property is located;
The project site is zoned Regional Commercial (R-C). The proposed hotel and resort use, beach club, restaurants, and supporting amenities are compatible with the commercial and hospitality uses authorized within the district, subject to applicable development standards and required permits. Special event and alcohol-related uses are subject to Conditional Use Permit No. 396 and any additional required approvals.

The single-family residential component requires adoption and effectiveness of Zoning Ordinance Amendment No. 26-02 and approval of Conditional Use Permit No. 407. These approvals would authorize single-family residential uses in conjunction with the resort while retaining the site’s integrated commercial and hospitality function.

The agreement establishes development rights by reference to the approved project and applicable regulations. Any departure from otherwise applicable development standards shall be specifically identified and lawfully authorized in the final approvals. Short-term rental treatment shall conform to the adopted provisions of Zoning Ordinance Amendment No. 26-03 and the express operational requirements of the final agreement. 299
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With effectiveness of the required amendments and permits, and incorporation of the authorized development standards, the agreement is compatible with the uses and regulations applicable to the R-C district.

C. Is in conformity with the public necessity, public convenience, general welfare and good land use practices;
The agreement coordinates development of the project with the provision of infrastructure and facilities necessary to serve its approved uses. Section 3.8.1 of the Development Agreement requires the developer to design, engineer, and construct required public improvements and generally complete improvements serving each phase before issuance of the first certificate of occupancy within that phase, unless an earlier deadline applies.

The agreement also requires water and sewer extensions, participation in necessary electrical infrastructure, and construction or funding of a portion of off-site sewer main upsizing serving other planned housing developments. Section 4.6 of the Development Agreement requires maintenance of enhanced landscaping along the project’s public street frontages.

The publicly accessible beach club, restaurants, and entertainment facilities would expand recreational and commercial opportunities. Development and operation would also create construction and permanent employment opportunities.

The agreement’s infrastructure obligations, phased implementation framework, and compliance review provisions support coordinated development and delivery of the identified public benefits. Together with the related project approvals and conditions, these provisions conform to public convenience, general welfare, and good land use practices.

D. Will be detrimental to the health, safety and general welfare; The agreement requires development in accordance with the project approvals and applicable requirements. Section 2.3 of the Development Agreement preserves application of the California Building Standards Code and applicable construction codes. Section 2.4 of the Development Agreement retains City authority to address dangerous or hazardous conditions, subject to the procedures established in the agreement.

Required improvements and conditions address emergency access, fire protection, grading, drainage, geotechnical conditions, utility service, pedestrian safety, and parking. Special event and alcohol-related operations remain subject to applicable permit requirements and approved controls governing noise, attendance, hours, security, and circulation.

The agreement’s environmental provisions require compliance with CEQA, including additional review where legally required for subsequent approvals. Applicable mitigation measures and essential health and safety conditions shall remain enforceable under the final agreement.
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With implementation of these requirements and safeguards, the agreement will not be detrimental to public health, safety, or general welfare.

E. Will adversely affect the orderly development of property or the preservation of property values;
The agreement provides a coordinated framework for the project’s land uses, infrastructure, phasing, and continuing operational responsibilities. Required public improvements serving each phase must be completed in accordance with the agreement and project approvals, supporting orderly development and avoiding occupancy before necessary improvements are available.

The approved architectural design, landscape treatments, setbacks, screening, lighting controls, and operational conditions provide transitions between the project and surrounding properties. The developer’s obligation to maintain enhanced frontage landscaping contributes to the continuing appearance of the development along Avenue 52, Calhoun Street, and Van Buren Street.

Annual compliance review and applicable enforcement procedures provide mechanisms for monitoring performance of agreement obligations. Continuing resort management, maintenance, and operational requirements shall be established in the final agreement and related approvals for the applicable properties and successors.

These provisions support orderly development and maintenance of the site while protecting surrounding properties from incompatible physical and operational effects. Accordingly, the agreement will not adversely affect orderly development or preservation of property values.

F. Will have a positive fiscal impact on the city.

The project would generate potential City revenues through taxable lodging, commercial activity, property taxes, and applicable fees. Section 4.5 of the Development Agreement proposes a rebate of 50 percent of eligible transient occupancy tax revenue exceeding the applicable annual retention threshold for the first 15 years following resort opening at Phase 1 buildout, subject to a cumulative rebate cap of $25 million.

The City would retain the first $1 million of actual annual TOT collections at Phase 1 buildout of 167 units, the first $1.5 million upon Phase 2 completion at 273 units, and the first $2 million at full buildout of 402 units. These thresholds establish priority retention of actual collections and do not constitute guaranteed developer payments. The developer is not obligated to cover a shortfall. The City would retain all project TOT after the incentive period expires or the rebate cap is reached, subject to applicable tax requirements.

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SECTION 5. Execution of Resolution. The Planning Commission Chairperson shall sign this Resolution and the Planning Commission Secretary shall attest and certify to the passage and adoption thereof.

SECTION 6. Recommendation to City Council. Based on the foregoing recitals and findings above, and the written and oral comments, facts and evidence presented, the City of Coachella Planning Commission recommends that the City Council adopt an ordinance approving Development Agreement No. 25-01 for the “COVA” project proposing the development of a hotel, resort, residential, and commercial public beach club located on approximately 87 acres on four contiguous parcels (APNs 780-040-001, 780-040-003, 780- 060-001, and 780-060-002) south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”). The applicant shall demonstrate compliance with ALL Conditions of Approval, as set forth in Exhibit “A” and Development Agreement in Exhibit “B” of this Resolution. Failure to demonstrate compliance with these conditions of approval may result in the delay of the Proposed Use or the rescinding of the City of Coachella’s conditional approval. Where the term “Applicant” is used in any condition of approval, this term shall also apply to the Property Owner, any developer, or any successor in the interest of the Applicant. It is the Applicant’s or Applicant’s successor in interest responsibility to fully comply with the conditions of approval unless subsequently modified in accordance with the City’s required processes and procedures.

PASSED, APPROVED, and ADOPTED this 7
th day of October 2026.

AYES:

NOES:

ABSENT:

ABSTAIN:
__________________________________
Eva Lara, Chairperson
City of Coachella
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ATTEST:
___________________________________
Kendra Reif
Planning Commission Secretary
APPROVED AS TO FORM:
___________________________________
Best Best & Krieger
City Attorney

303
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Resolution No. PC2026-32 EXHIBIT A
Exhibit A – Resolution No. PC2026-32
CONDITIONS OF APPROVAL FOR DEVELOPMENT AGREEMENT NO. 25-01 General Conditions

1. Development Agreement No. 25-01 is approved for the “COVA” project proposing the development of a hotel, resort, residential, and commercial public beach club located on approximately 87 acres on four contiguous parcels (APNs 780-040-001, 780-040-003, 780- 060-001, and 780-060-002) south of Avenue 52, west of Van Buren Street and east of Calhoun Street (“Project”), and determine, pursuant to State CEQA Guidelines Section 15183, that no further environmental review is required.

DEVELOPMENT AGREEMENT

BETWEEN

THE CITY OF COACHELLA
AND

RELEVANT COACHELLA OWNER, LLC
THIS DEVELOPMENT AGREEMENT (“Agreement”) dated for reference purposes only as of ___________, 2026, and effective as of the Effective Date, is by and between the City of Coachella, a California municipal corporation (“City”), and Relevant Coachella Owner, LLC, a Delaware limited liability company (“Developer”) pursuant to the authority of Sections 65864 et seq. of the California Government Code. City and Developer are also sometimes referred to individually as a “Party” and together as the “Parties.” An index of all capitalized defined terms is included at the end of this document.

RECITALS
This Agreement is entered upon the basis of the following facts, understandings and intentions of City and Developer.

A. In order to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic costs and risk of development, the Legislature of the State of California enacted Section 65864 et seq. of the Government Code (the “Development Agreement Statute”), which authorizes the City and a developer having a legal or equitable interest in real property to enter into a binding development agreement, establishing certain development rights in the property.

B. Developer is the owner of that certain real property located in the City of Coachella, County of Riverside, California and legally described on Exhibit A attached hereto and incorporated herein (the “Property” or “Project Site”). The rights and obligations of Developer under this Agreement shall attach to all property currently owned by Developer, as described on Exhibit A, upon recordation of this Agreement. The Project Site is located south of Avenue 52, west of Van Buren Street, and east of Calhoun Street, in the southwestern portion of the City, and is comprised of four contiguous parcels totaling approximately 87 acres in size. The Assessor’s Parcel Numbers (APNs) for the Project Site are 780-040-001, 780-040-003, 780-060-001, and 780-060-002.

C. Developer intends to develop the Property with a hospitality-oriented, mixed-use resort community known as “COVA”, consisting of a Private Resort Sector and a Commercial Beach Club Sector, including up to 402 total units comprised of 240 condo cottages and 162 singlefamily residential units, a recreational lagoon and associated water features, resort amenities, and a public-facing beach club, restaurant, and sports bar, as well as associated infrastructure, roadways, landscaping, parking, and signage (the “Project”) as depicted in Exhibit B. The Project is more fully described in, and subject to, (i) this Agreement, (ii) the amendment of the City’s Zoning Code to allow single-family residential uses within the Regional Commercial (RC) zone, approved by the City Council on ______________ by Resolution No. _____________, (iii) the CEQA Guideline 15183 consistency determination/exemption checklist prepared for the Project 305
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(the “CEQA Compliance Documentation”), approved by the City Council on ____________ by City Council Resolution No. _______________, (iv) Tentative Tract Map No. 39330, (v) the Conditional Use Permit, Architectural Review, and Entertainment Permit approved or to be approved by the City Council for the Project, (vi) any future discretionary or ministerial approvals and/or permits issued for the Project (collectively, the “Project Site Development Permits”), and (vii) the conditions of approval associated with each and all of the foregoing approvals (collectively, the “Conditions of Approval”) as depicted in Exhibit H. The documents, permits, approvals, and conditions described in the foregoing clauses (i) through (vii) are collectively referenced herein as the “Project Approvals” or “Entitlements.” D. In connection with the Project Approvals, Developer has also applied for (i) an amendment to the City’s Short-Term Rental Ordinance (Coachella Municipal Code Chapter 5.80) to exempt projects with an approved development agreement from the provisions of that ordinance limiting the number of units that may be owned by a single owner and limiting the percentage of units that may be permitted for short-term rental use, as well as any other provisions of that ordinance specifically modified by this Agreement, and (ii) confirmation that the Private Resort Sector shall be treated as a First Class Hotel under the City’s Municipal Code, rather than as a residential project, for purposes of short-term vacation rental (“STVR”) regulation (collectively, the “STVR Ordinance Amendment”).

E. The complexity, magnitude and long-range nature of the Project would be difficult for Developer to undertake if the City had not determined, through this Development Agreement, to inject a sufficient degree of certainty in the land use regulatory process to justify the substantial financial investment associated with development of the Project. As a result of the execution of this Agreement, both Parties can be assured that the Project can proceed without disruption caused by a change in planning and development policies and requirements, which assurance will thereby reduce the actual or perceived risk of planning, financing, and proceeding with construction of the Project.

F. For the reasons recited herein, City and Developer have determined that the Project is a development for which this Development Agreement is appropriate. This Development Agreement will eliminate or reduce uncertainty regarding Project Approvals, thereby encouraging planning for, investment in, and commitment to the use and development of the Property.

Development of the Project will in turn provide substantial employment, transient occupancy tax, and sales tax benefits, as well as other public benefits, thereby achieving the goals and purposes for which the Development Agreement Statute was enacted.

G. The City Council has determined that this Agreement is consistent with the City’s General Plan, including the goals and objectives thereof, including the Regional Retail District land use designation applicable to the Project Site, subject to applicable mitigation measures and regulatory requirements as depicted in Exhibit G, in accordance with the CEQA Compliance Documentation.

H. All actions taken by the City in connection with approving this Agreement have been duly taken in accordance with all applicable legal requirements, including the California Environmental Quality Act (Public Resources Code Section 21000, et seq.) (“CEQA”), and all other requirements for notice, public hearings, findings, votes and procedural matters. In 306
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connection therewith, the City Council has found and determined that this Agreement is consistent with and part of the Project Approvals and that the Project qualifies for a consistency exemption under CEQA Guideline 15183, and that all potentially significant environmental effects of the Project Approvals, as well as feasible measures to mitigate those effects to the maximum extent feasible, have been analyzed and disclosed as set forth in the CEQA Compliance Documentation.

I. On ____________, 2026, the City Council adopted its Ordinance No.___ approving this Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals of fact and the mutual covenants and promises set forth herein, the City and Developer hereby agree as follows:
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AGREEMENT
ARTICLE 1

GENERAL PROVISIONS

1.1 Incorporation of Preamble, Recitals, and Exhibits. The preamble paragraph, Recitals, Exhibits, and any Appendices, and all defined terms contained therein, are hereby incorporated into this Agreement by this reference as if set forth in full.

1.2 Definitions. The capitalized terms used in this Agreement shall have the meanings set forth in Appendix I attached hereto and otherwise as defined in the body of this Agreement.

1.3 Term.

1.3.1 Effective Date. This Agreement shall become effective upon the later of (i) the effective date of Ordinance No. ________ approving this Agreement, or (ii) the expiration of the period for challenging the ordinance or this Agreement under CEQA, or, if timely challenged, the date such challenge is finally resolved in favor of the validity of this Agreement (the “Effective Date”). Notwithstanding the foregoing or any provision of this Agreement to the contrary, if after all appeals or time to appeal have been exhausted, a court of competent jurisdiction enters a final judgment or issuance of a final order directed to the City to set aside, withdraw, or abrogate the approval of this Agreement, then this Agreement shall be deemed to have no force or effect upon either Party.

1.3.2 Term of Agreement. The term of this Agreement shall commence upon the Effective Date and shall continue in full force and effect thereafter for a period of fifty (50) years (the “Term”), unless earlier terminated as provided elsewhere in this Agreement or extended by mutual written agreement of the Parties. The Parties acknowledge that the extended Term is warranted in light of the operational characteristics of the Project’s transient occupancy tax and sales tax generating uses, and to permit the resort and residential uses contemplated by the Project within the Property’s existing commercial zoning designation. Notwithstanding the foregoing, the provisions of this Agreement governing the buildout, construction, and phasing of the Project (including the obligations set forth in Article 3) shall be limited to a period of twenty (20) years from the Effective Date (the “Buildout Period”), but all other rights and obligations of the Parties under this Agreement, including the Vested Elements and the Community Benefits, shall continue for the balance of the Term.

ARTICLE 2

APPLICABLE LAW

2.1 Applicable Rules. Except as otherwise expressly provided in this Agreement, during the Term, the Project Approvals, including any future applications for discretionary or ministerial approvals and/or permits necessary or convenient for implementation of the Project (collectively, “Subsequent Approvals”) shall be processed, considered, reviewed, and acted upon in accordance with the rules, regulations, ordinances, and officially adopted policies of the City in full force and effect as of the Effective Date of this Agreement (collectively, the 308
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“Applicable Rules”). The Applicable Rules include the City’s confirmation that the singlefamily residential units within the Project constitute an allowed use on the Property and that the STVR Ordinance Amendment applies to the Project as described in Recital D.

2.2 Future Changes to Applicable Rules.

2.2.1 To the extent any changes in the Applicable Rules, or any provisions of future general plans, specific plans, zoning ordinances, or other rules, regulations, ordinances or policies (whether adopted by means of ordinance, initiative, referenda, resolution, policy, order, moratorium, or other means) of the City (collectively, “Future Changes to the Applicable Rules”) are not in conflict with the Vested Elements (as defined in Section 3.2 below), such Future Changes to the Applicable Rules shall be applicable to the Project.

2.2.2 Future Changes to the Applicable Rules shall be deemed to be in “conflict” with the Vested Elements if any one of the following would occur:

2.2.2.1 Alter or change any land use, including permitted or conditional uses, of the Project Site from that permitted under this Agreement and the Applicable Rules, including the permitted use of the Private Resort Sector for short-term vacation rentals as a First Class Hotel use.

2.2.2.2 Limit or reduce the height or bulk of the Project, or any portion thereof, or otherwise require any reduction in the height or bulk of individual proposed buildings or other improvements from that permitted under this Agreement and the Applicable Rules.

2.2.2.3 Limit or reduce the density or intensity of the Project, or any portion thereof, or otherwise require any reduction in the square footage, number of proposed units or buildings, parking or loading spaces, or other improvements from that permitted under this Agreement and the Applicable Rules.

2.2.2.4 Except as otherwise provided in this Agreement, in any manner unreasonably control, delay, or limit the rate, timing, phasing, or sequencing of the approval, development, or construction of all or part of the Project.

2.2.2.5 Increase any Development Fees, except as expressly permitted by this Agreement.

2.2.2.6 Except as otherwise provided in this Agreement, materially increase (by an amount greater than 15%) the cost of performance of, or preclude compliance with, any provision of the Project Approvals.

2.2.2.7 Conflict with or materially increase the obligations of Developer under this Agreement.

2.2.2.8 Adversely affect in any material respect the rights of Developer under this Agreement, including Developer’s vested right to operate short-term vacation rentals as described in Section 3.2.
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2.2.2.9 Except as otherwise provided in this Agreement, limit or restrict the availability of public utilities, services, infrastructure, or facilities (for example, without limitation, water rights, water connection or sewage capacity rights, sewer connections, electrical service, etc.) to the Project.

2.2.2.10 Except as expressly provided herein, impose limits or controls in the rate, timing, phasing, or sequencing of development of the Project beyond those existing on the Effective Date.

2.2.2.11 Limit or control the location of buildings, structures, grading, or other improvements of the Project inconsistently with or more restrictively than limitations included in the Project Approvals.

2.2.2.12 Apply to the Project any Future Changes to the Applicable Rules otherwise allowed by this Agreement that are not uniformly applied to all substantially similar types of development projects and project sites under the City’s jurisdiction.

2.2.2.13 Require the issuance of additional permits or approvals by the City other than those required by the Applicable Rules.

2.2.2.14 Establish, enact, increase, or impose against the Project or Property any fees, assessments, or other monetary obligations other than those specifically permitted by this Agreement; provided, however, that the foregoing shall not prevent or limit the imposition or collection of any generally applicable real or personal property taxes, transient occupancy taxes, or any generally applicable sales, use, excise taxes, or business license fees with respect to any commercial uses within the Project.

2.2.2.15 Impose against the Project any condition, dedication, or other exaction not specifically authorized by the Project Approvals, the Applicable Rules, or this Agreement.

2.2.2.16 Subject to Section 2.7, limit the processing of applications and approvals of Subsequent Approvals, including without limitation Future Changes to the Applicable Rules that require additional processing of such applications and approvals of Subsequent Approvals.

2.2.3 To the extent that Future Changes to the Applicable Rules conflict with the Vested Elements, they shall not apply to the Project and the Vested Elements shall apply to the Project, except as provided in this Section 2.2.3 and in Sections 2.3 through 2.6, inclusive. A Future Change in the Applicable Rules that conflicts with the Vested Elements shall nonetheless apply to the Property and the Project if, and only if (i) consented to in writing by Developer in its sole and absolute discretion; (ii) it is determined by the City, and evidenced through express findings supported by substantial evidence, that the change or provision is reasonably required in order to prevent a condition dangerous to the public health or safety as set forth in Section 2.4 below; (iii) required by changes in State or Federal law as set forth in Section 2.5 below; (iv) it consists of changes in, or new fees permitted by, Section 4.2.3.2; (v) it consists of revisions to, or new Uniform Code Regulations to the extent permitted by Section 2.3 below; or (vi) it is otherwise 310
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expressly permitted by this Agreement. In the event of any of the foregoing, the applicable Future Change to the Applicable Rules shall be deemed to be a part of the Applicable Rules.

2.2.4 Pursuant to Section 65865.4 of the Development Agreement Statute, unless this Agreement is terminated by mutual agreement of the Parties as provided for under Section

8.1, or terminated pursuant to Section 8.2, either Party may enforce this Agreement notwithstanding any Future Changes to the Applicable Rules.

2.3 Applicability of Uniform Code Regulations. Notwithstanding any provision herein to the contrary, nothing in this Agreement shall preclude the City from applying to the Project any provisions, requirements, rules, or regulations applicable across the City’s jurisdiction that are contained at any time during the Term in the California Building Standards Code, as amended by the City in accordance with the California Health and Safety Code, including requirements of the applicable Building Code, Administrative Code, Energy Code, Residential Code, Mechanical Code, Electrical Code, Plumbing Code, Fire Code, or other applicable construction codes (collectively, “Uniform Code Regulations”).

2.4 Public Health and Safety Exception. The City shall exercise its discretion under this Agreement and the Applicable Rules in a manner which is consistent with the public health, safety, and welfare. Notwithstanding any provision in this Agreement to the contrary, and in addition to application to the Project of Uniform Code Regulations, City shall retain, at all times, its authority to take any legally valid action necessary to protect persons or property from dangerous or hazardous conditions which create a threat to the public health or safety, including, without limitation, authority to condition or deny a permit, approval, or agreement or other entitlement or to change or adopt any new regulations applicable to the Project so long as such condition or denial or new law (i) is limited solely to addressing a specific and identifiable issue in each case required to protect the physical health and safety of the public, and (ii) is based on written findings by City and transmitted to Developer, specifically identifying, based on objective and quantifiable evidence in the official record, the precise nature and extent of the dangerous or hazardous conditions requiring such condition or denial or change in the Applicable Rules, why there are no reasonable alternatives to the imposition of such condition or denial or changes in the law, and how such condition or denial or new law would alleviate the dangerous or hazardous condition (“Public Health and Safety Exception”). Developer retains the right to dispute any City reliance on the Public Health and Safety Exception.

2.5 Changes in State or Federal Laws. In accordance with Government Code Section 65869.5, in the event that state or federal laws or regulations enacted after the Effective Date (“State or Federal Law”) prevent or preclude compliance with one or more provisions of this Agreement, the Parties shall meet in good faith for a period not exceeding sixty (60) days (unless such period is extended by mutual written consent of the Parties) to determine the feasibility of any modification or suspension of this Agreement that may be necessary to comply with such State or Federal Law, to determine the effect such modification or suspension would have on the purposes and intent of this Agreement and the Vested Elements, and to prepare such modification. Following the meeting between the Parties, the provisions of this Development Agreement may, to the extent feasible, and upon mutual agreement of the Parties, be modified or suspended, but only to the minimum extent necessary to comply with such State or Federal Law. In such an event, this Development Agreement together with any required modifications 311
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shall continue in full force and effect. In the event that the State or Federal Law operates to frustrate materially and irremediably (a) the Vested Elements, or (b) the City’s right to receive the community benefits as set forth in this Agreement, Developer, in the event of item (a), or the City, in the event of item (b), may terminate this Agreement. In addition, Developer shall have the right to challenge (by any method, including litigation), at its sole cost, the State or Federal Law preventing compliance with, or performance of, the terms of this Development Agreement and, in the event that such challenge is successful, this Development Agreement shall remain unmodified and in full force and effect, unless the Parties mutually agree otherwise, except that if the Term of this Development Agreement would otherwise terminate during the period of any such challenge and Developer has not commenced with the development of the Project in accordance with this Development Agreement as a result of such challenge, the Term shall be extended for the period of any such challenge. If Developer raises such a challenge, then City agrees, upon Developer’s written request and at Developer’s sole cost and expense, to cooperate with Developer concerning Developer’s challenge, which cooperation shall be subject to the provisions of Section 6.2; provided, however, that City shall not have any obligation to commence, prosecute, or defend any litigation with respect to any such challenge.

2.6 CEQA. Nothing in this Agreement shall be deemed to limit the City’s ability to comply or compel Developer compliance with CEQA, including the CEQA Compliance Documentation and any applicable General Plan mitigation measures or other uniformly applied development policies and standards identified therein (collectively, “GPU Mitigation Measures”).

2.7 Subsequent Approvals.

2.7.1 Processing of Subsequent Approvals. To develop the Project as contemplated in this Agreement, the Project will require land use approvals, entitlements, development permits, and use and/or construction approvals other than the Initial Approvals, which may include, without limitation: final subdivision and condominium maps, conditional and administrative use permits, entertainment permits, plot plans, street abandonments, design plan approvals, certificates of compliance, demolition permits, improvement agreements, infrastructure agreements, grading permits, building permits, right of way permits, site plans, sewer and water connection permits, certificates of occupancy, parcel and condominium maps, encroachment permits, ABC license approvals related to the Commercial Beach Club Sector, and amendments thereto and to the Project Approvals (collectively, “Subsequent Approvals”). City, provided Developer submits all legally required material, reports, and requisite data in order to deem any subsequent approvals complete, will accept, make completeness determinations, and process, promptly and diligently to completion, all applications for Subsequent Approvals in accordance with Applicable Rules and the terms of this Agreement. At such time as any Subsequent Approval is approved by the City, then such Subsequent Approval shall become subject to all the terms and conditions of this Development Agreement applicable to Project Approvals and shall be treated as a “Project Approval” under this Development Agreement.

2.7.2 Scope of Review of Subsequent Approvals. By approving the Initial Approvals and this Agreement, City has made a final policy decision that the Project is in the best interests of the public health, safety, and general welfare. Accordingly, City shall not use its authority in considering any application for a discretionary Subsequent Approval to change the 312
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policy decisions reflected by the Initial Approvals or otherwise to prevent or delay development of the Project as set forth in the Initial Approvals. Instead, the Subsequent Approvals shall be deemed to be tools to implement those final policy decisions. The scope of the review of applications for Subsequent Approvals shall be limited to a review of substantial conformity with the Vested Elements as set forth and subject to Section 3.2 (and except as otherwise provided by Sections 2.2 through 2.6, inclusive, and other Applicable Rules). Where such conformity/compliance exists, City shall not deny an application for a Subsequent Approval. This paragraph includes, without limitation, the Entertainment Permit and any ABC-related approvals for the Commercial Beach Club Sector described in Section 4.6.

2.7.3 Conditions of Subsequent Approvals.
(a) City shall have the right to impose reasonable conditions upon Subsequent Approvals including, without limitation, normal and customary dedications for rights of way or easements for public access, utilities, water, sewers, and drainage necessary for the Project; provided, however, such conditions and dedications shall not be inconsistent with the Applicable Rules, nor inconsistent with the development of the Project as contemplated by this Agreement except to the extent required by the Applicable Rules. Developer may protest any conditions, dedications, or fees while continuing to develop the Property. In the event of a protest by Developer, the City retains the right to pause any Subsequent Approval processes until the protest is resolved, to ensure that the Project proceeds in a manner consistent with the City's interests and regulations, but the City shall not withhold or delay any permit or other approval for any aspect of the Project not directly subject to the Subsequent Approval that is the subject of the protest.
(b) Conditions imposed on Subsequent Approvals may only require dedications or reservations for, or construction or funding of, Public Improvements beyond those already included or referenced in the Initial Approvals, the Mitigation Measures (except to the extent required by CEQA in connection with any Subsequent Approvals) or Section 3.8.1, in the event of a Public Health and Safety Exception, as defined in Section 2.4 of this Agreement. In addition, any and all conditions imposed on Subsequent Approvals for the Project must comply with Section 4.2 (Payment of Fees and Costs).

2.8 Regulatory Agency Approvals. The Parties acknowledge and agree that, in addition to the Initial Approvals and any Subsequent Approvals, the Project, including the provision of some of the community benefits, may require Developer to obtain approvals or clearances from various Regulatory Agencies, other third-party public agencies and utilities (collectively, the “Third-Party Agency Approvals”). Without limitation, the Third-Party Agency Approvals may include approvals or clearances from the Coachella Water Authority, the Imperial Irrigation District (“IID”), the Regional Water Quality Control Board (“RWQCB”), the State Water Resources Control Board (“SWRCB”), the South Coast Air Quality Management District (“SCAQMD”), and the California Department of Alcoholic Beverage Control with respect to the Commercial Beach Club Sector. Developer agrees to use diligent and commercially reasonable efforts to procure the Third-Party Agency Approvals. If requested by Developer, the City shall cooperate with Developer, at Developer’s sole cost, in Developer’s efforts to obtain the Third-Party Agency Approvals. If after using all reasonable efforts, Developer is unable to obtain any Third-Party Agency Approval needed in order for Developer 313
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to develop the Project or meet its obligations under this Agreement, including providing the public benefits described in this Agreement, such inability shall constitute a Permitted Delay subject to the provisions of Section 11.6.

2.9 Changes to Development Agreement Statute. This Agreement has been entered into in reliance upon the provisions of the Development Agreement Statute as those provisions existed at the Effective Date. No amendment or addition to those provisions, which would materially affect the interpretation or enforceability of this Agreement, shall be applicable to this Agreement unless such amendment or addition is specifically required by the California Legislature, or is mandated by a court of competent jurisdiction. In the event of the application of such a change in the Development Agreement Statute, the Parties shall meet in good faith to determine the feasibility of any modification or suspension of this Agreement that may be necessary to comply with such change in law and to determine the effect such modification or suspension would have on the purposes and intent of this Agreement and the Vested Elements.

Following the meeting between the Parties, the provisions of this Agreement may, to the extent feasible and upon mutual agreement of the Parties, be modified or suspended but only to the minimum extent necessary to comply with such change in law. If such amendment or change is permissive rather than mandatory, this Agreement shall not be affected by the same unless the Parties mutually agree in writing to amend this Agreement to permit such applicability.

ARTICLE 3

DEVELOPMENT OF THE PROJECT

3.1 Development Rights. Developer shall have a vested right to develop the Project on the Property, in accordance with the Vested Elements.

3.2 Vested Elements. The overall design, development, construction, and use of the Project and all improvements in connection therewith, including without limitation, permitted uses of the Property (including the Private Resort Sector and Commercial Beach Club Sector uses described in Section 4.6, and the right to operate short-term vacation rentals as described in Recital D and the STVR Ordinance Amendment), the maximum density of development, the intensity of use, the maximum height and size of the proposed buildings, provisions for reservation or dedication of land for public purposes, the conditions, terms, restrictions, and requirements for subsequent discretionary actions, the provisions for and financing for Public Improvements, and the other terms and conditions of development applicable to the Property are as set forth in the Project Approvals, and are hereby vested in Developer, subject to, and as provided in, the provisions of this Development Agreement (the “Vested Elements”). The intent of this Section 3.2 is to cause all development rights which may be required to develop the Project in accordance with this Agreement and the Project Approvals to be deemed to be “vested rights” as that term is defined under California law applicable to the development of land or property and the right of a public agency to regulate or control such development of land or property. City hereby agrees to be bound with respect to the Vested Elements, subject to Developer’s full and timely compliance with the terms and conditions of this Agreement, the Project Approvals, and all Applicable Rules. By stating that the terms and conditions of this Agreement and the Project Approvals control the overall design, development and construction of the Project, this Agreement is consistent with the requirements of California Government Code Section 65865.2 (requiring a development agreement to state permitted uses of the 314
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property, the density or intensity of use, the maximum height and size of proposed buildings and provisions for reservation or dedication of land for public purposes). Notwithstanding the preceding provisions of this Section 3.2 or any other provision in this Agreement to the contrary, in the event of any conflict between the terms and conditions of any Project Approvals (including Developer’s rights and obligations thereunder) other than as provided in the body of this Agreement, including without limitation any Subsequent Approvals, and the terms and conditions of this Agreement (including Developer’s rights and obligations hereunder), the terms and conditions of this Agreement shall control. For the avoidance of doubt, in the event of any conflict between the body of this Agreement and the Conditions of Approval or GPU Mitigation Measures attached as exhibits hereto, the terms and conditions set forth int eh body of this Agreement shall control.

3.3 Life of Subdivision Maps and Other Project Approvals.

3.3.1 Life of Subdivision Maps. The terms (lifespan) of Tentative Tract Map No. 39330 and any other Subdivision Maps approved by the City for the Project shall be automatically extended such that such maps remain in effect for a period of time coterminous with the Term of this Agreement, or such longer period as may be permitted under state law.

3.3.2 Life of Other Project Approvals. The term of all other Project Approvals, including all implementing approvals, conditional use permits (“CUPs”), architectural review approvals, and the Entertainment Permit, shall be automatically extended such that the Project Approvals remain in effect for the same term as the Term of this Agreement, with the exception of construction permit approvals, which shall be valid for the period of time identified within the applicable California Building Standards Code.

3.3.3 Termination of Agreement. In the event that this Agreement is terminated prior to the expiration of the Term of the Agreement for any reason other than a Developer Event of Default, the term of any Subdivision Map approved by the City for the Project or any other Project Approval, as well as the vesting period for any vesting Subdivision Map approved as a Project Approval, shall be the term otherwise applicable to such approval in accordance with the California Subdivision Map Act, which term shall commence to run on the date that such termination of this Agreement takes effect. In the event of any termination of this Agreement for a Developer Event of Default, the provisions of Section 8.2.3 shall govern with respect to the term of the Project Approvals.

3.4 Compliance with CEQA. The Parties acknowledge that the City has determined, pursuant to Section 15183 of the CEQA Guidelines, that the environmental effects of the Project have been adequately addressed by the environmental review previously conducted for the applicable General Plan and the CEQA Compliance Documentation prepared for the Project, except to the extent that further environmental review is expressly required pursuant to CEQA Guidelines Section 15183. The CEQA Compliance Documentation addresses the potential environmental effects of the Project as described in the Initial Approvals and identifies the GPU Mitigation Measures, if any, applicable to the Project. In considering any Subsequent Approval, the City shall rely upon the CEQA Compliance Documentation and the environmental review previously conducted for the applicable General Plan to the fullest extent permitted by CEQA, including CEQA Guidelines Section 15183. The City shall not require preparation of a 315
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new initial study, negative declaration, environmental impact report, or other environmental document, repeat environmental analysis previously conducted, or impose additional mitigation measures with respect to environmental effects previously analyzed and adequately addressed, except to the extent expressly required by CEQA. Nothing in this Agreement shall limit the City's authority to conduct such additional environmental review or impose such additional mitigation measures in connection with a Subsequent Approval as are required by CEQA, including where changes to the Project or other circumstances result in environmental effects for which additional environmental review is required pursuant to CEQA Guidelines Section 15183 or other applicable provisions of CEQA. Any such additional environmental review and mitigation shall be limited to the environmental effects for which additional review or mitigation is required by CEQA and shall not include reconsideration of environmental effects previously analyzed and adequately addressed to the extent CEQA precludes or does not require such reconsideration.

3.5 Compliance with Project Approvals. In developing the Project, Developer shall at all times comply with the Project Approvals and Applicable Rules, and Developer further agrees that all improvements required to be constructed by Developer for the Project (including all onsite improvements and offsite improvements) shall be constructed in accordance with this Agreement, the Project Approvals, and Applicable Law.

3.6 Development Timing.

3.6.1 Pardee Finding. Development of the Project Site is permitted to occur in phases as described and contemplated in Exhibit C (“Construction Phasing”). The Parties wish to avoid the result of Pardee Construction Co. v. City of Camarillo, 37 Cal.3d 465 (1984), where the failure of the parties there to expressly provide for the timing of development resulted in the court’s determination that a later-adopted initiative restricting the timing of development prevailed over the parties’ agreement. Accordingly, the Parties acknowledge and agree that Developer shall have the right, subject to the provisions of the Project Approvals and the requirements of Sections

4.1 and 4.2 of this Agreement, to develop the Project at such time and in such phases as Developer deems appropriate in the exercise of its subjective business judgment, subject to the Buildout Period described in Section 1.3.2.

3.7 Final Subdivision and Condominium Maps. Developer may from time to time file applications for Subsequent Approvals of final subdivision and condominium maps (including phased final maps) with respect to some or all of the Project Site in accordance with the provisions of the Subdivision Map Act.

3.8 Provision and Financing of Public Improvements.

3.8.1 Construction and Dedication. Subject to the other provisions of this Agreement, Developer shall be responsible for the design, engineering, and construction of all roadways, sidewalks, drainage, sewer, water, storm drain, and electrical distribution improvements, and all other infrastructure and improvements for the Project, including any onsite improvements or offsite improvements, that may or are to be dedicated or otherwise made available for public use pursuant to this Agreement or the Project Approvals (“Public Improvements”). The Public Improvements to be constructed by Developer are further identified in Exhibit C. Except as set forth in this Section 3.8.1 or otherwise agreed to in writing by the 316
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City, in its reasonable discretion, all Public Improvements necessary to serve any particular phase of the Project shall be completed prior to the City’s issuance of the first Certificate of Occupancy for any development within that phase or any earlier date specified in the Project Approvals.

3.8.2 Energy Infrastructure. The Parties shall cooperate in good faith to facilitate the delivery of adequate electrical service to the Project Site, the details of which remain to be determined but may include the construction of a new IID substation on or off the Project Site, new distribution facilities extending from an area substation, and/or the incorporation of on-site alternative energy facilities, including solar generation and battery storage systems. Developer shall pay its fair share of the cost of any new or upgraded electrical infrastructure required to serve the Project, and the Parties shall reasonably cooperate in good faith in pursuing a cost-sharing and/or reimbursement arrangement with IID or other third parties to the extent either Party advances or funds costs for such infrastructure in excess of that Party’s fair share of total costs. In the event the City adopts or applies a fee to fund electrical infrastructure, Developer shall be entitled to credit against any such fee for all amounts spent by Developer on publicly owned electrical infrastructure.

3.8.3 Developer shall maintain and be liable for all Public Improvements until formally accepted by City, or when finally accepted by another authority if another authority has jurisdiction over the Public Improvements, and/or when finally accepted by a public utility if a public utility has jurisdiction over the Public Improvements. Upon completion of required Public Improvements hereunder in conformance with the approved plans, Developer shall offer for dedication to City, from time to time as such Public Improvements are completed, those Public Improvements for which the Project Approvals require such offer of dedication, and City shall promptly accept from Developer such completed Public Improvements in accordance with Applicable Rules (the “Dedicated Public Improvements”). Developer may offer dedication of Dedicated Public Improvements in phases and City shall not refuse to accept such phased dedications or refuse phased releases of bonds or other security so long as all other conditions and requirements for acceptance have been satisfied by Developer, and subject to any such conditions to the Project Approvals pertaining to maintenance of the Public Improvements following acceptance. Upon Developer’s request, and at Developer’s sole cost, City shall reasonably cooperate with Developer (a) to locate any new easements required for the Project so as to minimize interference with development of the Project, and (b) in Developer’s efforts to relocate or remove easements to facilitate development of the Project, provided that such cooperation does not entail any financial or legal liability for the City.

3.8.4 Financing. Except as otherwise expressly provided in this Agreement or negotiated with the City, Developer shall fund all Public Improvements for the Project by means of its own funds and any other means of financing, subject to approval by the City, as generally described in this Section 3.8.4 (the “Financing Plan”). The City agrees to use best efforts to reasonably cooperate with Developer in the formation of a Mello-Roos Community Facilities District (“CFD”) or other assessment district or other financing mechanism, as deemed appropriate by Developer to help implement the Financing Plan, provided that such cooperation does not entail any financial or legal liability for the City, including but not limited to entering into Joint Community Facilities Agreements (“JCFAs”) with the Coachella Water Authority, IID, and/or other public agencies to fund public facilities, including capital facilities fees and development impact fees of the City and any participating agency (each, a “Financing Mechanism”) that 317
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Developer in its sole discretion may elect to initiate related to the Project as and when so requested by Developer, provided that such Financing Mechanisms shall be subject to the following:

3.8.4.1 Developer shall, without need for a written request from the City, advance amounts necessary to pay all actual costs and expenses of City to evaluate and structure any Financing Mechanism, to the end that City will not be obligated to pay any costs related to the formation or implementation of any Financing Mechanism. Developer shall pay all costs of formation and administration of any CFD formed pursuant to this Section.

3.8.4.2 Any Financing Mechanism will provide for the reimbursement to Developer of any advances by Developer described in Section 3.8.4.1, and any other costs incurred by Developer that are related to the Financing Mechanism, such as the costs of legal counsel, special tax consultants, engineers, etc. Developer agrees to promptly submit to City a detailed accounting of all such other costs incurred by Developer, along with supporting documentation, at such time as Developer makes application for reimbursement.

3.8.4.3 City shall, without limiting its discretion, consult with Developer prior to engaging any consultant (including bond counsel, underwriters, appraisers, market absorption analysts, financial advisors, special tax consultants, assessment engineers, and other consultants deemed necessary to accomplish any financing). However, City retains the sole right to make the final selection of any such consultants.

3.8.4.4 Developer shall submit to City Developer’s phasing plan for any Public Improvements to be financed, including the priority and financing needs, as well as proposed improvement areas and/or tax zones. City shall act as the lead agency in forming the Financing Mechanism, with one or more Improvement Areas and/or Tax Zones, and will use available proceeds of any public financing in accordance with such priorities, and as otherwise provided in this Agreement. Any Financing Mechanism may fund capital facilities and development impact fees of the City and any participating agency, and any other public improvements owned and maintained by a public agency.

3.8.4.5 City and Developer will determine, following consultation with any other participating public agencies, the means by which any Public Improvements may be acquired by City or other public agency, as applicable.

3.8.4.6 In addition, any financing may include amounts necessary to discharge any assessment, special tax, or other liens on the Property.

3.8.4.7 Any public financing shall be secured solely by assessments or special taxes levied within the respective district, proceeds of the bonds issued that are placed in a bond fund, reserve fund, or other such fund for the financing and investment earnings thereon.

3.8.4.8 The payment of actual initial and annual administrative costs of City to be incurred in connection with any Financing Mechanism shall be adequately assured, through the inclusion in any assessment or special tax methodology of appropriate provision for such costs as estimated by City, to the end that City shall not be called upon to provide for any initial or annual administrative costs related to any Financing Mechanism. 318
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3.8.4.9 The bond term of any Financing Mechanism shall not exceed thirty-five (35) years, and bonds may be issued in one or more series; the maximum effective tax rate shall not exceed two percent (2.00%), and special taxes shall be authorized to escalate by two percent (2.00%) annually. The first CFD formed pursuant to this Section may be formed no earlier than the time of recording of the first Final Map for the Project.

3.8.4.10 The status of Entitlement applications and fee deposits as of the Effective Date is summarized in Exhibit D (Summary of Entitlement Applications and Fee Deposits).

ARTICLE 4

OBLIGATIONS OF DEVELOPER

4.1 Energy and Utility Infrastructure Cooperation.

4.1.1 Cooperation in Facilitating Electrical Service. The Parties shall reasonably cooperate in good faith in facilitating adequate electrical service to the Project, as described in Section 3.8.2. Developer shall connect the Project to existing water, sewer, gas, and electrical facilities serving the Project Site and shall construct all onsite and offsite utility extensions required to serve the Project, as identified in the applicable Project Approvals.

4.1.2 Water and Sewer Connections. Developer shall extend public water and sewer lines to the Project Site from the nearest existing mains, including the extension of approximately 2,760 feet of 12-inch public water lines and approximately 174 feet of 12-inch public sewer lines, as more particularly described in the Project Approvals, and shall construct all interior public and private utility lines necessary to serve the Project.

4.2 Payment of Fees and Costs.

4.2.1 General. All fees, exactions, dedications, reservations, or other impositions to which the Project would be subject, but for this Development Agreement, are referred to in this Development Agreement either as “Administrative Fees” or “Development Fees”. Developer shall timely pay or perform, as applicable, all Administrative Fees and Development Fees applicable to the Project or the Project Site in accordance with the terms of this Agreement.

4.2.2 Administrative Fees. As used in this Agreement, “Administrative Fees” means fees charged by the City, on a City-wide basis in effect at the time to cover the costs of City’s review of applications for any permit or other approval or review or inspection by City.

Administrative Fees are not Development Fees. Applications for Subsequent Approvals shall be charged, and Developer shall timely pay to the City, Administrative Fees to allow City to recover its actual and reasonable costs of processing Subsequent Approvals. Administrative Fees shall be paid in accordance with the City’s ordinances or requirements, as applicable, and the provisions of this Section. Without limiting the foregoing, Developer shall reimburse City or pay directly all reasonable and actual costs relating to the hiring of consultants and the performing of studies as may be necessary to review or process any applications for Project Approvals or perform any related environmental review and City shall provide Developer with detailed invoices relating thereto as part of any reimbursement request. Prior to engaging the services of any such consultant, or authorizing the expenditure of any funds for such consultant, the City shall consult with 319
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Developer in an effort to mutually agree to terms regarding (i) the scope of work to be performed, (ii) the projected costs associated with the work, and (iii) the particular consultant that would be engaged to perform the work.

4.2.3 Development Impact Fees (“DIF”).
(a) Definition. As used in this Agreement, “Development Fees” or “DIF” means all fees, contributions, exactions, dedications, reservations, or impositions, other than taxes or assessments, whether established for or imposed upon the Project individually or as part of a class of projects, that are imposed by City on the Project in connection with any Project Approval for any purpose, including, without limitation, defraying all or a portion of the cost of public services and/or facilities construction, improvement, operation, and maintenance attributable to the burden created by the Project. Development Fees do not include: (a) any Administrative Fee; (b) any GPU Mitigation Measure (unless the Mitigation Measure consists of payment of a Development Fee); (c) any Community Benefit to be provided by Developer hereunder; (d) taxes or special assessments, including the Transient Occupancy Tax described in Section 4.5; (e) any utility connection fees in effect from time to time generally applicable on a City-wide basis to similar land uses as the Project; or (f) any fees, taxes, assessments, or impositions imposed by other entities that the City collects on behalf of such other entities, all of which shall be due and payable by Developer as and when due in accordance with applicable law. (b) Applicability, Freeze, and Payment. No Development
Fees shall be applicable to the Project except as provided in this Agreement. The Project shall be subject only to the Development Fees as set forth in Exhibit E (“Existing Development Fees”), except as otherwise expressly permitted by this Section 4.2.3.2. There shall be no increase in the amounts of the Existing Development Fees, and no new categories of Development Fees shall apply to the Project, for a period of fifteen (15) years from the Effective Date of this Agreement (the “DIF Freeze Period”), subject to a reasonable automatic annual inflation adjustment tied to the Construction Cost Index. Following expiration of the DIF Freeze Period, Development Fees shall be paid at the amounts then in effect at the time of payment. Developer shall pay all applicable Development Fees at the time of issuance of the certificate of occupancy for the applicable unit or structure.
(c) Fee Credits. Developer shall receive Development
Impact Fee offsets and credits (“Fee Credits”) for all Public Improvements constructed by Developer that are included in the City’s capital improvement plans and/or any fee studies supporting the City’s adopted Development Fees, in the amounts set forth in Exhibit E, or as may be subsequently agreed to in writing by the Parties.

4.3 Hold Harmless and Indemnification of City. To the fullest extent permitted by law, Developer shall defend with counsel of Developer’s choosing, subject to approval by City, and hold harmless the City and its elected and other officials, officers, agents, and employees (“Indemnified Parties”) from and against any third party Claims brought against the Indemnified Parties: (a) to attack, set aside, void, or annul this Agreement; or (b) resulting or arising from death or injury to any person or for any damage to or loss of property resulting directly or indirectly from Developer’s performance of this Agreement, except to the extent such Claims for death, injury, damage, or loss are ultimately determined by a court to be the result of 320
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the gross negligence or willful misconduct of the City. In the event a third-party Claim is commenced against the City, City shall give prompt notice of same to Developer, which notice shall be a condition of Developer’s obligations under this Section 4.3. If Developer is required to defend the City as set forth above, Developer shall be entitled to select legal counsel to defend the City, subject to the City's approval, at Developer’s cost. In the event of a court order issued as a result of a successful legal challenge as described in item (a) above, the City shall, to the extent permitted by law or court order, in good faith seek to comply with the court order in such a manner as will maintain the integrity of the Project Approvals and avoid or minimize to the greatest extent possible (i) any impact to the development of the Project as provided for in, and contemplated by, the Vested Elements, or (ii) any conflict with the Vested Elements or frustration of the intent or purpose of the Vested Elements.

4.4 Payment of Prevailing Wages.

4.4.1 Developer acknowledges that the City has made no representation, express or implied, to Developer or any person associated with Developer regarding whether or not laborers employed relative to the construction and installation of improvements on the Property, if any, must be paid the prevailing per diem wage rate for their labor classification, as determined by the State of California, pursuant to California Labor Code Sections 1720, et seq. Developer agrees with the City that Developer shall assume the responsibility and be solely responsible for determining whether or not laborers employed relative to any construction of capital improvements on the Property or for the Development must be paid the prevailing per diem wage rate for their labor classification, as determined by the State of California, pursuant to California Labor Code Sections 1720, et seq.

4.4.2 If Civil Code sections 9550 et seq. require contractors to procure a payment bond for the improvements on the Property, then the Developer shall ensure that its contractors deliver the required bond.

4.4.3 Developer, on behalf of itself, its successors, and assigns, waives and releases the City from any right of action that may be available to any of them pursuant to California Labor Code Sections 1726 and 1781. Developer acknowledges the protections of California Civil Code Section 1542 relative to the waiver and release contained in this Section 4.4, which reads as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR

OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR

HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF

KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

BY INITIALING BELOW, DEVELOPER KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542

SOLELY IN CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 4.4:
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Developer’s Initials
Developer’s Initials

4.4.4 Developer shall defend with counsel reasonably acceptable to the City, indemnify and hold harmless City and its elected officials, officers, employees, agents and contractors from any and all liability, costs, claims, damages, fines, penalties and expense, including costs of litigation and attorneys’ fees, arising out of or in any way connected with Developer’s construction of the facilities and improvements described in this Agreement, and Developer shall indemnify, defend with counsel reasonably acceptable to the City and hold harmless the City against any claims pursuant to California Labor Code Section 1781 arising from this Agreement or the construction or installation of any improvements on the Property or for the Development, in accordance with the terms of this Section 4.4.

4.5 Transient Occupancy Tax Rebate.

4.5.1 Purpose. The Project is designed as a resort community that is anticipated to generate substantial transient occupancy tax (“TOT”) and sales tax revenue for the City. In consideration of Developer’s substantial investment in the Project’s resort infrastructure and amenities, and consistent with the City’s Hotel Operations Incentive Plan, City agrees to rebate a portion of the TOT generated by the Project as set forth in this Section 4.5.

4.5.2 Rebate Percentages. Subject to the Annual Minimum Payments described in Section 4.5.3 and the Rebate Cap described in Section 4.5.4, City shall rebate fifty percent (50%) of the TOT generated by the Project during the first fifteen (15) years following the opening of the resort at buildout of Phase 1 of the Project.

4.5.3 Annual Minimum Payments to City. Notwithstanding Section 4.5.2, City shall receive the first TOT revenue generated by the Project each year, before any rebate to Developer, until the City has received the following annual minimum amounts: (i) beginning upon opening of the resort at buildout of Phase 1 of the Project (167 total units), the first $1,000,000 in TOT revenue in that year; (ii) upon completion of Phase 2 (273 total units), the first $1,500,000 in TOT revenue in that year; and (iii) upon buildout of the resort (402 total units), the first $2,000,000 in TOT revenue in that year (collectively, the “Annual Minimum Payments”). Only TOT revenue in excess of the applicable Annual Minimum Payment for that year is subject to rebate under Section 4.5.2.

4.5.4 Lifetime Cap. The cumulative TOT rebated to Developer under this Section

4.5 over the life of this Agreement shall not exceed the total sum of Twenty-Five Million Dollars ($25,000,000.00) (the “Rebate Cap”). Once the Rebate Cap has been reached, City shall retain one hundred percent (100%) of TOT generated by the Project for the remainder of the Term. 322
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4.5.5 No PILOT. This Section 4.5 does not constitute a payment in lieu of taxes and does not obligate Developer to make up any shortfall between actual TOT collected and the Annual Minimum Payments.

4.5.6 Reporting. Developer shall provide the City with such periodic reporting of TOT collections, short-term rental activity, and ADI documentation as the City may reasonably request to administer this Section 4.5.

4.6 Provision of Community Benefits. Developer will provide the development of an underutilized agricultural site into a destination resort community generating substantial new employment opportunities, transient occupancy tax revenue, and sales tax revenue for the City, thereby supporting the City’s long-term fiscal and economic stability. In connection with the Project, Developer is providing the following benefits to the City and area residents (collectively, “Community Benefits”):

4.6.1 Fiscal Benefits. The Project is projected to generate substantial TOT and sales tax revenue, supporting the City’s General Fund and long-term economic stability.

4.6.2 Public Infrastructure Improvements. Developer shall construct public infrastructure improvements to streets, sidewalks, utilities, and other public facilities serving the Project, and shall fund or construct a portion of the off-site sewer main upsizing needed to serve other planned housing developments in the City, as further described in Exhibit C.

4.6.3 Enhanced Landscaping. Developer shall maintain enhanced landscaping on all public street frontages of the Project, as described in the Project Approvals.

4.6.4 Employment. The Project will provide well-paying construction jobs for local labor, as well as permanent jobs ranging from entry-level to managerial positions in connection with the operation of the resort, beach club, restaurant, and sports bar.

4.6.5 No Affordable Housing Obligation. Developer shall not be conditioned to construct or provide any affordable housing units in connection with the Project.

4.7 Scope of Development; Private Resort Sector and Commercial Beach Club Sector. The Project is a mixed-use development comprised of two principal components:

4.7.1 Private Resort Sector. The Private Resort Sector shall consist of up to 240 condo hotel cottages and 162 single-family residential units, consisting of a combination of estate lots, zero lot line lots, bungalow condominiums, and VIP suites, that will operate collectively as a first-class resort operation, together with a recreational lagoon, pool/spa, courts, and other recreational amenities, and restaurant, bar, and clubhouse facilities. Units within the Private Resort Sector may be sold under a fractional ownership, timeshare, second-home, or other applicable model, with fee-simple deeded fractional interests to be managed and maintained by Developer or a licensed property management company. All units within the Private Resort Sector shall be available for TOT-generating short-term vacation rentals, centrally managed by an owners’ association, club, and/or licensed property management company. Consistent with Recital D, this portion of the Project shall be treated as a First Class Hotel under the City’s Municipal Code, rather than as a residential project, and shall be exempt from the short-term vacation rental provisions of 323
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Coachella Municipal Code Chapter 5.80, subject to the reporting, operational, and TOT payment requirements set forth in this Agreement.

4.7.2 Commercial Beach Club Sector. The Commercial Beach Club Sector shall consist of a recreational lagoon and associated commercial beach club amenities, including a beach club, restaurant, and sports bar, and associated entertainment venues, that will be available to owners and resort guests as well as to the general public through reservation or event access. The parties agree that Developer shall be entitled to have live music and extended hours of operation for the Commercial Beach Club Sector's restaurant and entertainment uses to accommodate latenight operations, subject to compliance with applicable Alcoholic Beverage Control permit requirements and the Entertainment Permit.

4.8 Developer Representations and Warranties. Developer represents, warrants, and covenants to the City, as of the Effective Date and thereafter during the Term, as follows:

4.8.1 Authority. Developer is a California limited liability company duly organized and validly existing, and is authorized to own property and do business in the State of California. Developer has the capacity and full right, power, and lawful authority to own its property and perform the terms and covenants of this Agreement, and the execution, delivery, and performance of this Agreement by Developer has been fully authorized by all requisite action on the part of Developer. The person(s) executing this Agreement on behalf of Developer has all requisite power, right, and authority to do so and to bind Developer to this Agreement.

4.8.2 Valid Binding Agreement. This Agreement and all other documents and instruments which have been executed and delivered by or on behalf of Developer pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered constitute legal, valid, and binding obligations of Developer, enforceable against Developer in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, arrangement, and other laws affecting creditors’ rights, or by application of equitable principles. Developer has no knowledge of any inability to perform its obligations under this Agreement. The execution and delivery of this Agreement by Developer have been duly and validly authorized by all necessary action. No consent, authorization, or approval of, or other action by, and no notice to or filing with any governmental authority, regulatory body, or any other person is required for the execution, delivery, and performance by Developer of this Agreement or any of the terms and covenants herein or therein.

4.8.3 No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant, or other term hereof or thereof, will conflict with or result in a breach of or default under any agreement to which Developer is a party or will result in the creation or imposition of any lien upon any assets or property of Developer, other than liens established in accordance with this Agreement.

4.8.4 Pending Proceedings. Developer has no knowledge of any default under any law or regulation or under any order of any court, arbitrator, board, commission or agency, 324
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and there are no known claims, actions, suits, or proceeding pending or, to the knowledge of Developer, threatened against or affecting Developer, at law or in equity, before any court, arbitrator, board, commission, or agency which might, if determined adversely to Developer, materially affect Developer’s ability to perform its obligations under this Agreement.

ARTICLE 5

OBLIGATIONS OF CITY

5.1 Cooperation on Energy Infrastructure. City shall reasonably cooperate in good faith and support Developer’s efforts to secure adequate electrical service to the Project, including cooperating with Developer’s efforts to enter into a cost-sharing and reimbursement agreement with IID as described in Section 3.8.2. If City adopts or collects a surcharge or other fee or financing mechanism to fund electrical infrastructure within the City, the infrastructure costs incurred by Developer for the Project in excess of Developer’s fair-share shall be given the highest priority (at least on par with any other electrical infrastructure) in receiving City funding contribution or reimbursement from the proceeds of such surcharge, fee, or other financing mechanism, which shall be in addition to fee credits for all amounts spent by Developer on publicly owned electrical infrastructure.

5.2 Water and Sewer Service. City shall cooperate and facilitate Developer’s connection of the Project to water and sewer service from the Coachella Water Authority, and shall reasonably cooperate with Developer to ensure that, prior to issuance of the first building permit for the Project, adequate means and methods for providing water and sewer service to the Project are in place.

5.3 Processing During Third-Party Litigation. The filing of any third-party lawsuit(s) against the City or Developer relating to this Agreement, the Project Approvals, or other development issues affecting the Project or the Project Site, shall not delay or stop the development, processing, or construction of the Project or the issuance of Subsequent Approvals unless the third party obtains an injunction or other court order preventing the activity.

5.4 Expedited Processing. The Parties agree that Developer must be able to proceed rapidly with the development of the Property and, accordingly, that expedited City review of Subsequent Approvals, including but not limited to improvement plans, final maps, modifications to Project Approvals, building permits and construction inspections, is essential to the successful completion of the Project. Accordingly, to the extent that the applications and submittals are in conformity with the Project Approvals, Applicable Rules, and this Agreement, and adequate funding exists therefor, City agrees to provide adequate City resources to diligently accept, review, and take action on all subsequent applications and submittals made to City by Developer in furtherance of the Project. Similarly, to the extent that adequate funding exists therefor, City shall provide adequate City resources to promptly review and approve improvement plans, conduct construction inspections, and accept completed public facilities.

Developer agrees to reimburse the City for all costs associated with providing expedited services, above and beyond those costs covered by the City’s Processing Fees. In the event City does not have adequate resources, City shall authorize the use of “contract labor” for inspection and plan review purposes, which shall be reimbursed by Developer, pursuant to a mutually agreeable reimbursement agreement that also specifies any fee credit to Developer to avoid Developer 325
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paying more than once for the same plan check, inspection, or other City service. City shall consult with Developer concerning the selection of the most knowledgeable, efficient and available “contract labor” for purposes of providing inspection and plan review duties for the City and the Project; provided, however, that City shall retain the exclusive right to select any “contract labor” it deems suitable.

5.5 Exemption from Future Ordinances That Would Limit the Project. Except as otherwise expressly provided in this Agreement, City agrees that the Project shall be exempt from any future ordinances that would limit construction on the Project Site or the uses proposed for the Project as set forth in the Project Approvals.

ARTICLE 6

MUTUAL OBLIGATIONS

6.1 Notice of Completion or Revocation. Upon the Parties’ completion of performance or revocation of this Agreement, a written statement acknowledging such completion or revocation, signed by the appropriate agents of City and Developer, shall be recorded in the Office of the Recorder of the County of Riverside, California.

6.2 Estoppel. Each Party hereto shall provide, upon the request of the other Party and within thirty (30) days of such request, a signed estoppel certificate in a reasonable form for the benefit of third parties.

6.3 Good Faith and Fair Dealing. The Parties shall cooperate with each other and act in good faith in complying with the provisions of this Agreement. In their course of performance under this Agreement, the Parties shall cooperate and shall undertake such actions as may be reasonably necessary and appropriate to implement the Project as contemplated by this Agreement.

6.4 Other Necessary Acts. Each Party shall execute, acknowledge, and deliver to the other all further instruments and documents and shall take such further actions as may be reasonably necessary to carry out this Agreement in order to provide and secure to each Party the full and complete enjoyment of its rights and privileges hereunder.

6.5 Compliance with Financing Plan. Developer shall at all times comply with applicable provisions of the Financing Plan and Developer and City shall each at all times comply with their respective obligations under applicable provisions of the Financing Mechanism.

ARTICLE 7
ANNUAL REVIEW OF DEVELOPER’S COMPLIANCE

7.1 Procedure. The annual review required by Government Code Section 65865.1 shall be conducted for the purposes and in the manner stated in those laws as further provided herein (“Annual Review”). As part of each Annual Review, Developer must demonstrate good faith compliance with the provisions of the Development Agreement. Not more than sixty (60) days and not less than forty-five (45) days prior to the Annual Review Date, City shall provide Developer with written notice for Developer to provide a letter to the City containing substantial 326
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evidence to show compliance with this Agreement. Within sixty (60) days after Developer submits its letter, City shall review the information submitted by Developer and all other available evidence on Developer’s compliance with this Agreement. All such other available evidence shall, upon receipt by the City, be made available as soon as possible to Developer.

City shall notify Developer in writing whether Developer has complied with the terms of this Agreement. If the City finds that Developer has not complied with the provisions of the Development Agreement, City may issue a finding of noncompliance. City’s finding of compliance or noncompliance may be appealed to the City Council within ten (10) days after the issuance of such finding, and upon the filing of such an appeal, the City shall schedule a City Council hearing in accordance with the City’s Municipal Code. The issuance of a finding of compliance or finding of noncompliance by the City and the expiration of the appeal period without appeal, or the confirmation of the issuance of the finding on such appeal, will conclude the review for the applicable period and such determination will be final, subject only to judicial review. In the absence of the City notice required above, to commence the annual review process, Developer shall be deemed to be in good faith compliance with the provisions of this Development Agreement until such annual review is subsequently completed.

7.1.1 Annual Review Costs. In accordance with Government Code Section 65865.1, Developer shall reimburse City for the actual and reasonable costs incurred in conducting each Annual Review, provided that: (a) City shall provide Developer with a written invoice identifying the Annual Review costs incurred; (b) reimbursable costs shall be limited to those directly related to the Annual Review process; (c) the total cost for any single Annual Review shall not exceed $2,500.00, unless otherwise agreed to in writing by the Parties; and (d) Developer shall have the right to dispute any Annual Review costs it believes to be unreasonable, in which case the Parties shall meet and confer in accordance with Section 10.2 of this Agreement to resolve any such dispute. City shall make reasonable efforts to minimize Annual Review costs.

7.2 Noncompliance and Cure. If City finds that Developer is not in compliance, City must specify in writing to the Developer the respects in which the Developer has failed to comply, and must set forth terms of compliance and specify a reasonable time for the Developer to meet the terms of compliance. Unless alleged noncompliance is an immediate threat to public health and safety, City shall grant a cure period of at least sixty (60) days and shall extend the sixty (60) day period if Developer is proceeding in good faith to cure the noncompliance and additional time is reasonably needed for Developer to prosecute such cure to completion. If Developer does not comply with any terms of compliance within the prescribed time limits, this Agreement will be subject to termination or modification by the City as applicable. Developer shall have the right to appeal any determination of non-compliance, and upon any unsuccessful appeal to the City Council, to seek judicial review.

7.3 Effect on Permitted Transferees. If Developer has transferred a portion of the Project to a Permitted Transferee (other than a Developer Affiliate) pursuant to Article 9 of this Agreement, then the Annual Review shall be conducted separately with respect to each such Permitted Transferee. If such Annual Review results in a final determination that such Permitted Transferee has not complied with this Agreement, such determination and any resulting termination or modification of this Agreement by the City shall be effective only as to the Permitted Transferee to whom the determination is made and the portions of the Project Site in which such Permitted Transferee has an interest. Such Permitted Transferee shall have the right 327
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to appeal the City’s determination of non-compliance, as described above. Such a termination or modification shall have no effect on Developer or any other Permitted Transferees which have an ownership interest in the Property, and which are in compliance with this Agreement.

ARTICLE 8
AMENDMENT; TERMINATION

8.1 Amendment or Termination of Agreement. This Agreement may be amended from time to time or canceled in whole or in part by mutual consent of both Parties in writing in accordance with the provisions of the Development Agreement Statute. Review and approval of an amendment to this Agreement shall be strictly limited to consideration of only those provisions to be added or modified. All amendments to this Agreement shall automatically become part of the Project Approvals. Notwithstanding the foregoing, no Insubstantial Modification or Operating Memorandum approved pursuant to Section 8.3, or the approval of a Subsequent Approval pursuant to Section 2.7, shall require an amendment to this Agreement.

Upon approval, any such amendment shall be deemed to be incorporated automatically into the Project and the Vested Elements under this Agreement (subject to any conditions set forth in the amendment or Subsequent Approval).

8.2 Expiration; Termination.

8.3 Expiration of Term. Except as otherwise expressly provided in this Agreement, this Agreement shall be deemed terminated and of no further effect upon the expiration of the Term of this Agreement as set forth in Section 1.3; provided however, that such expiration shall not affect any right, duty, or expiration date arising from the Project Approvals (other than this Agreement) and, provided further that such expiration shall not relieve or release Developer from any obligation or liability for any Developer Event of Default arising prior to such expiration.

As to any specific lot or unit containing a residential dwelling within the Project, this Agreement shall terminate as to such lot or unit upon the issuance by the City of a certificate of occupancy for the dwelling and the close of escrow of the initial sale of that dwelling, if applicable.

8.3.1 Survival of Obligations. Upon the expiration or termination of this Agreement as provided herein, neither Party shall have any further right or obligation with respect to the Property under this Agreement except with respect to any obligation that is specifically set forth as surviving the expiration or termination of this Agreement.

8.3.2 Termination by City. Notwithstanding any other provision of this Agreement, City shall not have the right to terminate this Agreement with respect to all or any portion of the Property before the expiration of the Term unless the City complies with all termination procedures set forth in the Development Agreement Statute and there is an alleged Developer Event of Default and such Developer Event of Default is not cured pursuant to Article 7 or Article 10 and Developer has first been afforded an opportunity to be heard regarding the alleged default before the City Council, and this Agreement is terminated only with respect to that portion of the Property to which the default applies. In the event of such termination by the City, the Project Approvals with respect to such portion of the Property shall automatically terminate and be of no further force or effect notwithstanding any provision to the contrary in the Project Approvals.
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8.4 Insubstantial Modifications and Operating Memoranda. The Parties acknowledge that refinements and further development of the Project may demonstrate that minor changes are appropriate with respect to the details of the Project development and the performance of the parties under this Agreement. The parties desire to retain a certain degree of flexibility with respect to the details of the Project development and with respect to those items covered in general terms under this Agreement, and thus desire to provide a streamlined method of approving insubstantial modifications to, or clarifications of the Parties’ responsibilities and obligations under this Agreement. Therefore, any minor modification or clarification to this Agreement which does not materially modify (i) the Term of this Agreement; (ii) permitted uses of the Project Site, (iii) maximum density or intensity of use within the Project, except as specifically allowed in the Project Approvals, (iv) provisions for the reservation or dedication of land, (v) conditions, terms, restrictions or requirements for subsequent discretionary actions, or (vi) monetary obligations of Developer (hereinafter an “Insubstantial Modification”), and that can be processed under CEQA as exempt from CEQA, or with the preparation of an addendum to the CEQA Compliance Documentation, shall not require a public hearing or City Council approval prior to the parties executing a modification to this Agreement. By way of example only, changes to the mix of unit types and allowed uses within the conceptual site plan that do not exceed the total unit count or square footage allowed on the Project site and do not materially increase the trip generation or VMT caused by the Project are anticipated to constitute Insubstantial Modifications. Either Party may propose an Insubstantial Modification, consent to which shall not be unreasonably withheld, conditioned, or delayed by the other Party. Upon receiving a written request from the Developer for a modification to this Agreement, the City Manager or a designated representative will evaluate the request. The evaluation will consider:
(1) whether the requested modification falls under the definition of an “Insubstantial Modification”; (2) whether the requested modification aligns with Applicable Rules (excluding that portion of this Agreement sought to be modified); and (3) whether the requested modification aligns with the objectives of this Agreement. The City Manager will not unreasonably withhold a decision, but will also ensure the City's interests are adequately protected. If the City Manager or designee determines that the requested modification is an “Insubstantial Modification” that is consistent with Applicable Rules and tends to promote the goals of this Agreement, the proposed modification will be approved by the City as an Insubstantial Modification, and a written modification will be executed by the Parties and attached to this Agreement as an operating memorandum (“Operating Memorandum”).

Neither an Operating Memorandum nor an Insubstantial Modification shall be deemed an “amendment” to this Agreement under Government Code Section 65858.

8.5 Amendments to Project Approvals. Notwithstanding any other provision of this Agreement, Developer may seek and City may review and grant amendments or modifications to the Project Approvals (including the Subsequent Approvals) subject to the following (except that the procedures for amendment of this Agreement are set forth in Section

8.1). Project Approvals (except for this Agreement) may be amended or modified from time to time, but only at the written request of Developer (at the City’s discretion, subject to the terms of this Agreement) or with the written consent of Developer (at its sole discretion) and in accordance with Section 3.4 and relevant provisions of the City Municipal Code. All amendments to the Project Approvals shall automatically become part of the Project Approvals.

The permitted uses of the Property, the intensity of use, the maximum height and size of the proposed buildings, provisions for reservation or dedication of land for public purposes, the 329
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conditions, terms, restrictions and requirements for subsequent discretionary actions, the provisions for Public Improvements and financing of Public Improvements, and the other terms and conditions of development as set forth in all such amendments shall automatically become Vested Elements pursuant to this Agreement (subject to any conditions set forth in the amendments) without requiring an amendment to this Agreement. Amendments to the Project Approvals shall be governed by the Project Approvals and the Applicable Rules, subject to Section 3.4. City shall not request, process, or consent to any amendment to the Project Approvals that would affect the Property or the Project without Developer’s prior written consent.

ARTICLE 9
TRANSFER AND ASSIGNMENT; RELEASE; RIGHTS OF MORTGAGEES;

CONSTRUCTIVE NOTICE

9.1 Right to Assign. Provided that there does not then exist a Developer Event of Default, Developer shall have the right at any time during the Term, subject to the provisions of this Section 9.1, to sell, mortgage, hypothecate, assign, or transfer all or a portion of its rights, duties, and obligations arising under this Agreement (each, a “Transfer”) to any person, partnership, joint venture, firm, or corporation (each, a “Transferee”). No Transfer shall be permitted unless made pursuant to a sale, assignment, or other transfer of all or a portion of Developer’s interest in the Property. Notwithstanding any other provision of this Agreement to the contrary, each of the following Transfers are permitted and shall not require City consent under this Section 9.1:

9.1.1 Any Transfer for financing purposes to secure the funds necessary for construction and/or permanent financing of the Project;

9.1.2 An assignment of this Agreement to a parent or subsidiary of Developer or a company under common ownership with Developer (“Developer Affiliate”); provided such Developer Affiliate executes and delivers to the City a recordable Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit F and otherwise reasonably acceptable to City (“Assignment and Assumption Agreement”); or

9.1.3 Dedications and grants of easements and rights of way required in accordance with the Project Approvals.

Any and all other Transfers hereunder, other than the sale, lease, or fractional conveyance of a residential unit, condo cottage, or commercial space within the Project to an end purchaser, tenant, or fractional owner in the ordinary course of business, shall require the prior written consent of the City, which consent shall not be unreasonably withheld or delayed. City’s withholding of consent shall be deemed reasonable if, in light of the proposed Transferee’s experience, reputation and financial resources, such Transferee would not, in City’s reasonable determination, be able to perform the obligations proposed to be assumed by such Transferee. Such determination made by the City will be appealable to the City Council and subject to judicial review. If City consents to any such Transfer, the Transferee shall, in addition to any other conditions upon such consent, execute and deliver to City an Assignment and Assumption Agreement. Any Transfer consented to by City, or permitted without City’s consent pursuant to this Section 9.1, is herein referred to as 330
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a “Permitted Transfer” and the Transferee of a Permitted Transfer is herein referred to as a “Permitted Transferee.”

9.2 Release upon Permitted Transfer. Effective upon any Permitted Transfer pursuant to Section 9.1, except for a Permitted Transfer to a Developer Affiliate pursuant to Section 9.1.2, Developer shall be released from its obligations under this Agreement with respect to the Property, or portion thereof so transferred, only after the City's written confirmation of successful transfer of obligations to the Transferee. Thereafter, a default under this Agreement by Developer shall not be considered or acted upon by City as a default by the Permitted Transferee and shall not affect the Permitted Transferee’s rights or obligations hereunder.

Likewise, a default by a Permitted Transferee shall not be considered or acted upon by the City as a default by Developer and shall not affect Developer’s retained rights and obligations hereunder. The City is entitled to enforce each and every such obligation assumed by the Permitted Transferee directly against the Permitted Transferee as if the Permitted Transferee were an original signatory to this Agreement with respect to such obligation. A Permitted Transfer to a Developer Affiliate shall not relieve or release Developer from any of its obligations hereunder unless otherwise specifically agreed to in writing by the City in its sole discretion, which shall not be unreasonably withheld. Notwithstanding the foregoing provisions of this Section or any other provision of this Agreement to the contrary, a Permitted Transfer shall not relieve or release Developer from: (a) any indemnity obligations of Developer hereunder arising or accruing from any events occurring prior to the Permitted Transfer; or (b) any liability of Developer for any Developer Event of Default occurring prior to the Permitted Transfer unless otherwise specifically agreed to in writing by City, in its sole discretion, which shall not be unreasonably withheld.

9.3 Rights of Mortgagees; Not Obligated to Construct; Right to Cure Default.

9.3.1 Mortgagee Protection. This Agreement shall not prevent or limit Developer in any manner, at Developer’s sole discretion, from encumbering the Property or any portion thereof or any improvement thereon by any mortgage, deed of trust, or other security device securing financing with respect to the Property (“Mortgage”). This Agreement shall be superior and senior to any lien placed upon the Property or any portion thereof after the date of recording this Agreement, including the lien of any Mortgage. Notwithstanding the foregoing, no breach hereof shall defeat, render invalid, diminish, or impair the lien of any Mortgage made in good faith and for value, but all of the terms and conditions contained in this Agreement shall be binding upon and effective against and inure to the benefit of any person or entity, including any deed of trust beneficiary or mortgagee (“Mortgagee”) who acquires title to the Property, or any portion thereof, by foreclosure, trustee’s sale, deed in lieu of foreclosure, or otherwise.

9.3.2 Mortgagee Not Obligated. Notwithstanding the provisions of Section 9.3.1, no Mortgagee (including a Mortgagee who obtains title to Developer’s interest in the Property or the Project or any portion thereof as a result of foreclosure proceedings or transfer in lieu of foreclosure) shall in any way be obligated by the provisions of this Agreement to construct or complete the Project, unless the Mortgagee expressly assumes such obligation by written notice to City or by written agreement with City. Nothing in this Agreement shall be deemed to construe, permit, or authorize any such Mortgagee to devote the Property or the Project or any portion thereof to any uses or to construct any improvements thereon other than those uses or 331
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improvements provided for or authorized by this Agreement, or by the Project Approvals and Applicable Rules, and only to the extent Mortgagee complies with the terms of this Agreement and executes and delivers to the City, in a form and with terms reasonably acceptable to City, an assumption agreement of Developer’s obligations hereunder.

9.3.3 Notice of Default to Mortgagee, Right of Mortgagee to Cure. If City timely receives a notice from a Mortgagee requesting a copy of any Notice of Default given to Developer hereunder and specifying the address for service thereof, then City shall deliver to such Mortgagee, concurrently with service thereon to Developer, any notice given to Developer with respect to any claim by the City that Developer has committed a default, and if the City makes a determination of noncompliance hereunder, City shall likewise serve notice of such noncompliance on such Mortgagee concurrently with service thereof on Developer. If Developer does not cure or remedy the claimed default within the applicable cure period set forth in this Agreement, then City shall provide notice of such (“Developer Non-Cure Notice”) to each Mortgagee who has previously made a written request to the City therefore. Each such Mortgagee shall (insofar as the rights of the City are concerned) have the right, at its option, to cure or remedy or commence to cure or remedy any such default within (a) fifteen (15) days (with respect to monetary defaults only) after receipt of the Developer Non-Cure Notice, or (b) sixty (60) days (with respect to non-monetary defaults), after receipt of the Developer Non-Cure Notice unless a further extension of time to cure is granted in writing by City. In case of a default which is not susceptible of being cured by such Mortgagee (including a bankruptcy of Developer), such Event of Default does not have to be cured.

If a Mortgagee is required to obtain possession of the Property (or a portion thereof) in order to cure or remedy any claimed Event of Default, the time to cure shall be tolled so long as the Mortgagee is attempting in good faith to obtain possession, including by appointment of a receiver or foreclosure, and the Mortgagee shall be deemed to have timely cured or remedied the claimed Event of Default, provided the Mortgagee commences the proceedings necessary to obtain possession within sixty (60) days after receipt of the Developer Non-Cure Notice, diligently pursues such proceedings to completion, and after obtaining possession diligently completes such cure or remedy.

9.4 Constructive Notice. Every person or entity who now or hereafter owns or acquires any right, title, or interest in or to any portion of the Project or the Project Site and undertakes any development activities at the Project Site is, and shall be, constructively deemed to have consented and agreed to, and is obligated by, all of the terms and conditions of this Agreement, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Project or the Project Site.

ARTICLE 10
ENFORCEMENT OF AGREEMENT; REMEDIES FOR DEFAULT; DISPUTE

RESOLUTION

10.1 Events of Default. Subject to any extensions of time by mutual consent of the Parties, in writing, and subject to the provisions of Section 11.6 regarding Permitted Delays and a Mortgagee’s right to cure pursuant to Section 9.3, any failure by either Party (a “Defaulting Party”) to perform any material term or provision of this Agreement shall constitute an event of default by the Defaulting Party (“Event of Default”) (i) if such Defaulting Party does not cure such failure within sixty (60) days (such sixty (60) day period is not in addition to any sixty (60) 332
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day cure period under Section 7.2, if Section 7.2 is applicable) following written notice of default from the other Party (“Notice of Default”), where such failure is of a nature that can be cured within such sixty (60) day period, or (ii) if such failure is not of a nature which can be cured within such sixty (60) day period, the Defaulting Party does not within such sixty (60) day period commence efforts to cure such failure, or thereafter does not within a reasonable time prosecute to completion such cure. Any Notice of Default given hereunder shall specify in detail the nature of the failures in performance that the noticing Party claims constitutes the Event of Default, all facts constituting substantial evidence of such failure, and the manner in which such failure may be satisfactorily cured in accordance with the terms and conditions of this Agreement. During the time periods herein specified for cure of a failure of performance, the Defaulting Party shall not be considered to be in default for purposes of (a) termination of this Agreement, (b) institution of legal proceedings with respect thereto, or (c) issuance of any Subsequent Approval with respect to the Project. The waiver by either Party of any Event of Default under this Agreement shall not operate as a waiver of any subsequent breach of the same or any other provision of this Agreement.

10.2 Emergency Working Group Meeting. Notwithstanding any other provision in this Agreement, neither Developer nor City shall commence any legal action, or willfully engage in any other act or omission inconsistent with the terms of this Agreement, including but not limited to withholding or delaying prompt issuance of any ministerial Subsequent Approvals by City, (collectively, a “Self-Help Remedy”), without first initiating, and participating in good faith in, an “Emergency Working Group Meeting” pursuant to the terms of this Section. Upon receipt of any Notice of Default, or upon the existence of any dispute or disagreement between the Parties arising out of or relating to this Agreement and/or the Project, any party may initiate an Emergency Working Group Meeting to address and seek to resolve the dispute or disagreement by giving written notice to the other Party setting forth the nature of the issue in dispute and the desire to hold an immediate Emergency Working Group Meeting. The Meeting shall be held within ten (10) business days of the written notice, unless extended by mutual written agreement of the Parties. The Emergency Working Group shall consist of the following members: (1) the City Manager; (2) the City Planning Director; (3) City Public Works Director; (4) City Building Official; (5) City Attorney; (6) Developer’s President, Vice President or Managing Member; (7) Developer’s project manager or other employee appointed by Developer; (8) Developer’s legal counsel; and (9) at Developer’s election, up to two other representatives of Developer, if Developer owns any interest in the Property at the time of the dispute. Nothing herein shall be construed to extend the time period for this Emergency Working Group Meeting obligation beyond the sixty (60) day cure period referred to in Section 10.1 (even if the sixty (60) day cure period itself is extended pursuant to Section 10.1(ii)) unless the Parties agree otherwise in writing.

10.3 Remedies and Termination. If, after notice, Emergency Working Group Meeting, and expiration of the cure periods and procedures set forth in Sections 10.1 and 10.2 (subject to the provisions of Section 10.2), the alleged Event of Default is not cured, the nonDefaulting Party, at its option, may institute legal proceedings pursuant to Section 10.4 and/or terminate this Agreement pursuant to Section 8.2.3 or Section 10.4.2 (as applicable). In the event that this Agreement is terminated pursuant to Section 8.2.3 or Section 10.4.2 and litigation is instituted that results in a final decision that such termination was improper, then this Agreement shall immediately be reinstated as though it had never been terminated. 333
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10.4 Legal Action by Parties.

10.4.1 Remedies. Either Party may, in addition to any other rights or remedies, institute legal action to cure, correct, or remedy any Event of Default, enforce any covenant or agreement herein, enjoin any threatened or attempted violation thereof, enforce by specific performance the obligations and rights of the Parties hereto, or obtain any remedies consistent with the purpose of this Development Agreement. Without limiting the foregoing, in the event of a Developer Event of Default (that is not timely cured in accordance with Section 10.1), City may cease and terminate all processing of any applications for Subsequent Approvals to the extent otherwise permitted by Applicable Law. All remedies shall be cumulative and not exclusive of one another, and the exercise of any one or more of these remedies shall not constitute a waiver or election with respect to any other available remedy.

10.4.2 Limited Damages. Except as expressly set forth in this Section 10.4.2, neither Party shall be liable in damages for any default under this Agreement, it being expressly understood and agreed that, except as set forth below, the sole legal remedy available to either Party for a breach or violation of this Development Agreement by the other Party shall be an action in mandamus, specific performance, or other injunctive or declaratory relief to enforce the provisions of this Agreement by the other Party or to terminate this Agreement. This limitation on damages shall not preclude actions by a Party to enforce payments of monies or the performance of obligations requiring an obligation of money from the other Party pursuant to any of the following: (a) to make any payment due under any indemnity in this Agreement; (b) to advance or reimburse monies required under this Agreement; or (c) to pay attorneys’ fees and costs as set forth in Section 10.5 or when required by an arbitrator or a court with jurisdiction. In no event shall either Party be liable hereunder for any consequential, special, or punitive damages.

Notwithstanding anything to the contrary contained in this Agreement, in no event shall: (i) any partner, officer, director, member, shareholder, employee, affiliate, manager, representative, or agent of Developer be personally liable for any breach of this Agreement by Developer or for any amount which may become due to the City under the terms of this Agreement; or (ii) any board, commission, department, member, commissioner, officer, agent, or employee of the City be personally liable for any breach of this Agreement by City or for any amount which may become due to Developer under the terms of this Agreement.

10.5 Attorneys’ Fees. Should any legal action be brought by either Party against the other for default under this Agreement or to enforce or interpret any provision hereof, the Party prevailing in such action shall be entitled to recover against the non-prevailing Party its reasonable attorneys’ fees and costs incurred in such action. The provisions of this Section 10.5 shall survive the expiration or termination of this Agreement.

10.6 Nexus/Reasonable Relationship Challenges. Developer consents to, and waives any rights it may have now or in the future to challenge the legal validity of, the conditions or requirements set forth in this Agreement including, without limitation, any claim that they constitute an abuse of the police power, violate substantive due process, deny equal protection of the laws, effect a taking of property without payment of just compensation, or impose an unlawful tax. Developer reserves the right, however, to challenge in court any future fee, exaction, or other Applicable Rules that would, in Developer's opinion, conflict with 334
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Applicable Law (including this Agreement) or reduce the development rights provided by this Agreement.

10.7 No Waiver. No waiver of any provision of this Agreement shall be binding unless executed in writing by the Party making the waiver. No waiver of any provision of this Agreement shall be deemed to constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver unless the written waiver so specifies. Except as otherwise expressly provided in this Agreement, any failure or delay by a Party in asserting any of its rights or remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, nor shall it deprive any such Party of its right to institute and maintain any actions or proceedings that it may deem necessary to protect, assert, or enforce any such rights or remedies.

ARTICLE 11

MISCELLANEOUS PROVISIONS

11.1 Entire Agreement. This Agreement, including the preamble paragraph, Recitals, and Exhibits constitute the entire understanding and agreement between the Parties with respect to the subject matter of this Agreement.

11.2 Binding Covenants; Run With the Land. All of the provisions, agreements, rights, powers, standards, terms, covenants, and obligations contained in this Agreement shall be binding upon the Parties and their respective successors (by merger, reorganization, consolidation, or otherwise) and assigns, devisees, administrators, representatives, lessees, and all of the persons or entities acquiring the Property or any portion thereof, or any interest therein, whether by operation of law or in any manner whatsoever, and shall inure to the benefit of the Parties and their respective successors (by merger, consolidation, or otherwise) and assigns. All of the provisions of this Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land pursuant to applicable law, including but not limited to, Section 1468 of the Civil Code of the State of California.

11.3 Applicable Law and Venue. This Agreement has been executed and delivered in and shall be interpreted, construed, and enforced in accordance with the laws of the State of California, without reference to any of its conflict of laws principles. All rights and obligations of the Parties under this Agreement are to be performed in the County of Riverside. The exclusive venue for any disputes or legal actions hereunder or arising out of or in connection with this Agreement shall be the Superior Court of California in and for the County of Riverside and all Parties waive their respective rights to change venue pursuant to Section 394 of the Code of Civil Procedure.

11.4 Construction of Agreement. The Parties have mutually negotiated the terms and conditions of this Agreement and its terms and provisions have been reviewed and revised by legal counsel for both City and Developer. Accordingly, no presumption or rule that ambiguities shall be construed against the drafting Party shall apply to the interpretation or enforcement of this Agreement. Language in this Agreement shall be construed as a whole and in accordance with its true meaning. As used herein: (a) the singular shall include the plural (and vice versa) and the masculine or neuter gender shall include the feminine gender (and vice 335
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versa) where the context so requires; (b) locative adverbs such as “herein,” “hereto,” “hereof,” and “hereunder” shall refer to this Agreement in its entirety and not to any specific section or paragraph; (c) the terms “include,” “including,” and similar terms shall be construed as though followed immediately by the phrase “but not limited to;” (d) “shall” and “must” are mandatory and “may” is permissive; and (e) “or” is not necessarily exclusive. Each reference in this Agreement to this Agreement shall be deemed to refer to this Agreement as amended from time to time pursuant to the provisions of this Agreement, as applicable, whether or not the particular reference refers to such possible amendment.

11.5 Project Is a Private Undertaking; No Joint Venture or Partnership. The development proposed to be undertaken by Developer on the Project Site is a private development, except for that portion to be devoted to Public Improvements to be constructed by Developer. Developer is not a state or governmental actor with respect to any activity conducted by the Developer hereunder. City has no interest in, responsibility for, or duty to third persons concerning any of said improvements. Nothing in this Agreement, in any actions or negotiations leading to this Agreement, in any acts or omissions under this Agreement, or otherwise is intended to or does establish the City and Developer as partners, co-venturers, or principal and agent with one another.

11.6 Force Majeure. Subject to the limitations set forth below, performance by any Party of its obligations hereunder shall be excused and the required date for performance thereof shall be extended day for day during any period of “Permitted Delay” as hereinafter defined, subject, however, to the requirement that Developer must promptly communicate with the City concerning the delay and provide reasonable documentation of Developer’s good faith efforts to diligently pursue performance as required under this Agreement. For purposes hereof, Permitted Delay shall mean delay beyond the reasonable control and without the fault of the Party claiming the delay (and despite the good faith efforts of such Party) first arising after the Effective Date (except for item (xii) below) including, but not limited to: (i) acts of God; (ii) civil commotion; (iii) riots; (iv) strikes, picketing, or other labor disputes; (v) shortages of materials or supplies; (vi) damage to work in progress by reason of fire, floods, earthquake, or other casualties; (vii) an Event of Default of the other Party; (viii) restrictions imposed or mandated by any regulatory authorities, utility providers, or other public agencies, or delays in obtaining any Third-Party Agency Approvals; (ix) enactment of conflicting state or federal laws or regulations, (x) judicial decisions or similar legal incapacity to perform, (xi) epidemics and pandemics, including COVID 19-induced restrictions on the ability of any Party to perform its obligations of this Agreement; (xii) litigation brought by a third party attacking the validity of this Agreement; and (xiii) delays caused by the City.

11.7 Recordation. Pursuant to Section 65868.5 of the Development Agreement Statute the City shall cause this Agreement to be recorded with the Riverside County Recorder within ten (10) days after execution of the Agreement or any amendment thereto, with costs to be borne by Developer.

11.8 Signature in Counterparts. This Agreement may be executed in duplicate counterpart originals, each of which is deemed to be an original, and all of which when taken together shall constitute one and the same instrument.
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11.9 Computation of Time; Time of the Essence. All references in this Agreement to “days” shall mean calendar days unless expressly referred to as “business days.” The time in which any act is to be done under this Agreement is computed by excluding the first day, and including the last day, unless the last day is a Saturday, Sunday, or holiday, and then that day is also excluded. If the day for performance of any obligation under this Agreement is a Saturday, Sunday, or holiday, then the time for performance of that obligation shall be extended to the first following day that is not a Saturday, Sunday, or holiday under the laws of California.

11.10 Notices. Any notice, demand, or other communication required to be given by Developer or City pursuant to this Agreement shall be in writing and shall be sufficiently given if (a) addressed as set forth below and (b) delivered in one of the following ways, and shall be deemed to have been delivered or received (i) three (3) days after the date when deposited in the United States registered or certified mail, return receipt requested, with postage prepaid (except in the event of a postal disruption, by strike or otherwise, in the United States), (ii) when personally delivered, (iii) when sent by electronic means, provided receipt was promptly confirmed in writing by another means of notice allowed in this Section 11.10 within one (1) business day, or (iv) one business day after the date deposited with a nationally recognized courier service (e.g., Federal Express) for next day delivery. The current principal office addresses and email addresses of the City and Developer are as follows:

To City: City of Coachella
53990 Enterprise Way
Coachella, CA 92236
Attn: [___]
E-mail: [___]
With a copy to: [City Attorney’s office / outside counsel] Attn: [___]
E-mail: [___]
To Developer: Relevant Coachella Owner, LLC
[Address]
Attention: [___]
E-mail: [___]
With a copy to: [___]
[Address]
E-mail: [___]
Either Party to this Agreement may at any time, upon written notice delivered via certified mail or email to the other Party, designate any other person or address in substitution of the person and address to which such notice or communication shall be given.

If failure to respond to a specified notice, request, demand, or other communication within a specified period would result in a deemed approval, a conclusive presumption, a prohibition against further action or protest, or other adverse result specifically provided under this Agreement, the notice, request, demand, or other communication shall state clearly and unambiguously on the 337
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first page, with reference to the applicable provisions of this Agreement, that failure to respond in a timely manner could have a specified adverse result.

11.11 No Third Party Beneficiaries. This Agreement and all provisions hereof is made and entered into for the sole protection and benefit of City, Developer, and their successors and assigns. No other person shall have right of action based upon any provision in this Agreement.

11.12 Conflict of Interest. No member, official, or employee of City shall make any decision relating to this Agreement which affects his or her personal interest or the interest of any corporation, partnership, or association in which he or she is directly or indirectly interested.

11.13 Severability. If any term, provision, covenant, or condition of this Agreement or its application to any Party or circumstance is held by a court of competent jurisdiction to be invalid, void, or unenforceable to any extent, the remaining provisions of this Agreement or the application of the term, provision, condition, or covenant to persons or circumstances other than those as to whom or which it is invalid or unenforceable, shall not be affected and shall continue in full force and effect to the fullest extent permitted by law, unless enforcement of the remaining portions of the Agreement would be unreasonable or grossly inequitable under all the circumstances or would frustrate the purposes of this Agreement.

11.14 Further City Actions. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent, request, waiver, or other action by the City is required or permitted under this Agreement, such action may be given, made, or taken by the Designee. The Designee is authorized to execute and deliver, on behalf of the City and to take any action necessary or desirable to effectuate the provisions and intent of this Agreement.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.

DEVELOPER:

RELEVANT COACHELLA OWNER, LLC,
a Delaware limited liability company
By:________________________________
Name: Grant King
Title: Managing Partner
CITY:

CITY OF COACHELLA, a California
municipal corporation
By:_________________________________
Name:

Title:
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ATTEST:
________________________
Name
City Clerk

APPROVED AS TO FORM
[LAW FIRM]
________________________
Name
City Attorney
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Exhibit A
Legal Description Of Property
Certain real property consisting of approximately 87 acres located in the City of Coachella, County of Riverside, California, legally described on Exhibit A attached to the Development Agreement, comprised of four contiguous parcels (APNs 780-040-001, 780-040-003, 780-060- 001, and 780-060-002) generally located south of Avenue 52, west of Van Buren Street, and east of Calhoun Street.
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Exhibit B
Project Description
The proposed Project would include the development of a hospitality-oriented, mixed-use resort community on approximately 87 acres in the southwestern portion of the City of Coachella, currently comprised of date palm and grape agricultural fields, an irrigation pond, and approximately three dilapidated agricultural support structures. The Project consists of a Private Resort Sector and a Commercial Beach Club Sector organized around a central 9.4-acre recreational lagoon. Below is a summary of the Project components:
 The Private Resort Sector consists of 240 condo cottages (of which up to 120 will be owned by a single entity and operated as short-term rentals by a hotel operator) and 162 single-family residential units comprised of estate lots, zero lot line lots, bungalow condominiums, and VIP suites, totaling up to 402 units on approximately 28 acres.  On-site resort amenities include recreational courts, a spa/pool, the lagoon and water features, a bar and entertainment venue, a library, and a restaurant, for the use of guests and owners of the Private Resort Sector.
 The Commercial Beach Club Sector is situated on approximately six acres in the northwest corner of the Project Site and consists of an 11,950-square-foot beach club, a 28,800-square-foot beach club lounging area, a 7,690-square-foot restaurant, a 6,048- square-foot sports bar, an 11,907-square-foot back-of-house area, and a 103,297-squarefoot parking garage, available to owners and resort guests as well as the general public through reservation or event access.
 A 2.5-acre lake situated in the southern portion of the Project Site will act as a stormwater detention basin. A 0.4-acre lagoon is proposed within the Commercial Beach Club Sector.
 Development of the Project will also include landscaping, street improvements, drive aisles, and parking, with 951 parking spaces and 193 cart spaces proposed on-site.

Access will be provided from two access points on Avenue 52, two access points on Calhoun Street, and one or more access points on Van Buren Street.  Utility connections to the Coachella Water Authority water and sewer mains, Southern California Gas Company natural gas facilities, and IID electrical facilities are proposed as part of Project implementation, together with on-site solar generation and battery storage systems.
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Exhibit C
Construction Phasing And Public Improvements
The Project Site is proposed to be developed in four phases:
 Phase 1 will include the water features, the Commercial Beach Club Sector, and the resort uses of the Private Resort Sector and occupies the majority of the Project Site.  Phase 2 will develop the residential uses south of the lagoon and surrounding the proposed lakes.
 Phase 3 will include the residential estate lots south of Phase 2.  Phase 4 will develop the residential estate lots south and west of Phases 2 and 3.

For purposes of the Transient Occupancy Tax rebate structure described in Section 4.5, Phase 1 buildout corresponds to 167 total units, Phase 2 completion corresponds to 273 total units, and full buildout corresponds to 402 total units.

Public Improvements to be constructed by Developer include roadway, sewer, water, storm drain, and electrical distribution improvements serving the Project, together with a portion of the off-site sewer main upsizing needed to serve other planned housing developments in the City, as more particularly described in the Project Approvals.
[Detailed phasing table and public improvement specifications to be attached.] 342
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Exhibit D
Summary of Entitlement Applications and Fee Deposits
Application Description Date Submitted City File # Notes Zoning Code
Amendment
Amend Regional
Commercial (RC)
zone to allow singlefamily residential use [___]
[___]
Tentative Tract Map
No. 39330
Subdivision of the
Project Site into
residential,
condominium, public
beach club, back-ofhouse, amenity, street,
and open space lots [___]
# TTM 39330
Conditional Use
Permit
Resort, beach club,
restaurant, and sports
bar uses [___]
[___]
Architectural Review
Project architecture
and site design [___]
[___]
Development
Agreement [___]
[___]
[Note: an Entertainment Permit and other implementing approvals will be sought following the initial Project Approvals, per Section 2.7.] 343
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Exhibit E
Existing Development Fees and Credits
[Existing Development Impact Fee schedule applicable to the Project as of the Effective Date, and Fee Credits available to Developer under Section 4.2.3.3, to be attached.] Notes: Project subject to applicable regional and City-wide impact fees in effect at time of payment, subject to the fifteen (15) year DIF Freeze Period described in Section 4.2.3.2. 344
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Exhibit F
Form: Assignment And Assumption Agreement
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REQUESTED BY
AND WHEN RECORDED MAIL TO:

Exempt From Recording Fee Pursuant to Government Code § 27383

ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (“Assignment”) is entered into this ____ day of ____, 20__ by and between [DEVELOPER ENTITY], a [California ___] (“Assignor”) and ____________________________________, a ____________________________________ (“Assignee”) with reference to the following:

RECITALS
A. Assignor is the owner in fee simple of certain real property located in the City of Coachella, California, and legally described on Exhibit A attached hereto and incorporated herein by this reference (the “Property” or “Site”).

B. On _______________________ the Assignor and the City of Coachella, a California municipal corporation and charter city (“City”) entered into that certain Development Agreement, which was recorded against the [Site or Development Property] in the Official Records of the County of Riverside on __________________, as Instrument No. ______________________ (the “Development Agreement”).

C. Pursuant to the terms of the Development Agreement, the Site was to be used for a hospitality-oriented mixed-use resort development known as COVA (the “Project”).

D. Assignor now desires to transfer the Site to Assignee, and concurrently therewith, to transfer to Assignee all of Assignor’s rights and responsibilities under the Project Agreements [to the extent that such rights and responsibilities relate to the Site].

NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Assignor hereby assigns to Assignee all of Assignor’s rights and responsibilities under the terms of the Development Agreement, [but only to the extent that such rights and responsibilities arise from the ownership of the Project and/or Site] from 346
Item 2.
and after the “Effective Date” (as that term is defined in Section 4 below) of this Assignment (collectively, the “Assigned Rights and Obligations”).

2. Assignee hereby accepts the foregoing assignment of the Assigned Rights and Obligations, and agrees to be bound by the terms of the Development Agreement [to the extent that such terms affect or are affected by ownership of the Site].

3. The parties hereto acknowledge and agree that Assignee shall not be responsible for any of the obligations of the Development Agreement which arise from ownership of any portion of the Site and which arise prior to the Effective Date hereof. As such, a default by Assignor under the Development Agreement prior to the Effective Date hereof (“Assignor’s Default”) shall not be deemed a default by Assignee, and Assignor shall indemnify, defend and hold harmless Assignee from any and all losses, claims or liability, including without limitation reasonable attorneys’ fees and costs, arising from an Assignor’s Default. A default by Assignee under the Development Agreement with respect to the Site after the Effective Date hereof (“Assignee’s Default”) shall not be deemed a default by Assignor, and Assignee shall indemnify, defend and hold harmless Assignor from any and all losses, claims or liability, including without limitation reasonable attorneys’ fees and costs, arising from an Assignee’s Default.

4. This Assignment shall be deemed effective upon the last of the following events to occur: (a) conveyance of the Site to Assignee as evidenced by the recording of the grant deed therefor in the Official Records of the County of Riverside, California, and (b) the written consent to this Assignment by the City with respect to the Assigned Obligations arising under the Project Agreements (herein referred to as the “Effective Date”).

5. Except as otherwise described in paragraph 4 above, the parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented.

6. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles.

7. This Assignment may be signed in counterparts which, when signed by both parties hereto, shall constitute a binding agreement.

WHEREFORE, the parties hereto have executed this Assignment on the date first written above.
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“ASSIGNOR”
[DEVELOPER ENTITY],
a [California ___],
By:________________________________
Its: ________________________________
“ASSIGNEE”
________________________
By:___________________________
Its: _____________________________
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CONSENT
By execution below, the City hereby consents to the foregoing assignment.

CITY OF COACHELLA, a California municipal
corporation
By: ___________________________
Its: City Manager
ATTEST:
___________________________
City Clerk
APPROVED AS TO FORM:
[LAW FIRM]
___________________________
City Attorney
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Exhibit G
(General Plan Update EIR Mitigation Measures and Uniformly Applicable Development Policies and Standards)
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Exhibit H
(Conditions of Approval)
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APPENDIX I

1. DEFINED TERMS.
a. Administrative Fees. Fees charged by the City, on a City-wide basis in effect at the time of payment to cover the costs of City’s review of applications for any permit or other approval or review or inspection by City.
b. Agreement. This Development Agreement between the City of Coachella and [DEVELOPER ENTITY].
c. Annual Minimum Payments. The annual minimum amounts of TOT revenue to be received by City before any TOT rebate to Developer, as described in Section 4.5.3 of the Agreement.
d. Annual Review. Annual review as required by Government Code Section 65865.1 and further described in Article 7 of this Agreement.
e. Applicable Rules. The rules, regulations, ordinances, and officially adopted policies of the City in full force and effect as of the Effective Date of this Agreement. f. Assignment and Assumption Agreement. A duly executed agreement between Developer and a Permitted Transferee whereby the Developer assigns and the Permitted Transferee assumes all of Developer’s rights and obligations under this Agreement as to that portion of the Project Site or Property transferred to that Permitted Transferee pursuant to the provisions of Article 9 of this Agreement. g. Buildout Period. The twenty (20) year period from the Effective Date within which the Project is to be constructed, as described in Section 1.3.2 of the Agreement. h. CEQA. California Environmental Quality Act (Public Resources Code Section 21000, et seq.)
i. CEQA Compliance Documentation. The CEQA Guideline 15183 consistency determination/exemption checklist prepared for the Project, as approved by the City Council as described in Recital C.
j. CFD. Mello-Roos Community Facilities District.
k. City. The City of Coachella.
l. Commercial Beach Club Sector. The public-facing beach club, restaurant, sports bar, and associated entertainment amenities described in Section 4.6.2 of the Agreement. m. Community Benefits. The extraordinary benefits provided by Developer to City and its residents, as more specifically described in Section 4.5 [Community Benefits] of this Agreement.
n. Conditions of Approval. The conditions of approval imposed by the City on the Project Site Development Permits, as identified in Recital C of the Agreement. o. Construction Cost Index. The Construction Cost Index published monthly by the Engineering News-Record (ENR) to track changes in the cost of construction over time, to the extent incorporated into the City’s Existing Development Fees. p. Construction Phasing. Development of the Project Site is permitted to occur in phases as described and contemplated in Exhibit C.
q. Dedicated Public Improvements. Those Public Improvements constructed by or on behalf of Developer that have been accepted by City in accordance with the Applicable Rules.
r. Defaulting Party. Party who fails to perform any material term or provision of this Agreement as more fully described in Section 10.1 of the Agreement. 352
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s. Developer. [DEVELOPER ENTITY], a [California ___].
t. Developer Affiliate. A parent or subsidiary of Developer or a company under common ownership with Developer.
u. Developer Event of Default. Any failure by Developer to perform any material term or provision of this Agreement that is not cured within 60 days following written notice of default from City (or such further time as may be reasonably required to cure), as more fully described in Article 10 of this Agreement.
v. Development Agreement Statute. Sections 65864 et seq. of the Government Code. w. Development Fees or DIF. All fees, contributions, exactions, dedications, reservations, or impositions, other than taxes or assessments, whether established for or imposed upon the Project individually or as part of a class of projects, that are imposed by City on the Project in connection with any Project Approval for any purpose, including, without limitation, defraying all or a portion of the cost of public services and/or facilities construction, improvement, operation, and maintenance attributable to the burden created by the Project.
x. DIF Freeze Period. The fifteen (15) year period from the Effective Date during which the Existing Development Fees are frozen, subject to inflation adjustment, as described in Section 4.2.3.2 of the Agreement.
y. Effective Date. The later to occur of (i) the effective date of Ordinance No. ____ approving this Agreement, or (ii) the expiration of the CEQA challenge period, or, if timely challenged, the date such challenge is finally resolved in favor of the validity of this Agreement.
z. Event of Default. Any failure by either Party to perform any material term or provision of this Agreement that is not cured within 60 days following written notice of default from the other Party (or such further time as may be reasonably required to cure), as more fully described in Article 10 of this Agreement.
aa. Existing Development Fees. The Development Fees applicable to the Project as set forth on Exhibit E.
bb. Fee Credits. The Development Impact Fee offsets and credits applicable to the Project as set forth on Exhibit E and described in Section 4.2.3.3 of the Agreement. cc. Financing Mechanism. A Mello-Roos Community Facilities District or other financing district used to fund public facilities.
dd. Future Changes to the Applicable Rules. Any changes in the Applicable Rules, or any provisions of future general plans, specific plans, zoning ordinances, or other rules, regulations, ordinances or policies (whether adopted by means of ordinance, initiative, referenda, resolution, policy, order, moratorium, or other means) occurring after the Effective Date.
ee. IID. Imperial Irrigation District.
ff. Indemnified Parties. The City and its elected and other officials, officers, agents, and employees.
gg. Insubstantial Modification. Any minor modification or clarification to this Agreement which does not materially modify (i) the Term of this Agreement; (ii) permitted uses of the Project Site, (iii) maximum density or intensity of use within the Project, except as specifically allowed in the Project Approvals, (iv) provisions for the reservation or dedication of land, (v) conditions, terms, restrictions or requirements for subsequent discretionary actions, or (vi) monetary obligations of Developer. 353
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hh. GPU Mitigation Measures. Mitigation measures and uniformly applied development policies and standards identified in the CEQA Compliance Documentation. ii. Mortgage. Any mortgage, deed of trust, or other security device securing financing with respect to the Property.
jj. Mortgagee. Any deed of trust beneficiary, mortgagee or other secured party who acquires title to the Property, or any portion thereof, by foreclosure, trustee’s sale, or deed in lieu of foreclosure.
kk. Notice of Default. Written notice to a Party asserting that Party’s failure to perform a material term of the Agreement.
ll. Operating Memorandum. Written modification executed by Parties approved by City Manager or designee as an Insubstantial Modification.
mm. Party or Parties. City of Coachella and [DEVELOPER ENTITY]. nn. Permitted Delay. Delay beyond the reasonable control and without the fault of the Party claiming the delay (and despite the good faith efforts of such Party) first arising after the Effective Date (except for item (xii) below) including, but not limited to: (i) acts of God; (ii) civil commotion; (iii) riots; (iv) strikes, picketing, or other labor disputes; (v) shortages of materials or supplies; (vi) damage to work in progress by reason of fire, floods, earthquake, or other casualties; (vii) an Event of Default of the other Party; (viii) restrictions imposed or mandated by any regulatory authorities, utility providers, or other public agencies, or delays in obtaining any Third-Party Agency Approvals; (ix) enactment of conflicting state or federal laws or regulations, (x) judicial decisions or similar legal incapacity to perform, (xi) epidemics and pandemics, including COVID 19-induced restrictions on the ability of any Party to perform its obligations of this Agreement; (xii) litigation brought by a third party attacking the validity of this Agreement; and (xiii) delays caused by the City. oo. Permitted Transfer. Any Transfer consented to by City or permitted without City’s consent under Section 9.1 of the Agreement.
pp. Permitted Transferee. Transferee of a Permitted Transfer. qq. Private Resort Sector. The condo cottages, single-family residential units, and associated resort amenities described in Section 4.6.1 of the Agreement. rr. Project. Development of the Property with a hospitality-oriented, mixed-use resort community, including the Private Resort Sector and the Commercial Beach Club Sector, together with associated infrastructure, roadways, landscaping, parking, and signage.
ss. Project Approvals. (i) This Agreement, (ii) the amendment of the City’s Zoning Code to allow single-family residential uses within the Regional Commercial (RC) zone, approved by the City Council on ______________ by Resolution No. _____________, (iii) the CEQA Compliance Documentation approved by the City Council on ____________ by City Council Resolution No. _______________, (iv) Tentative Tract Map No. 39330, (v) the Conditional Use Permit, Architectural Review, and Entertainment Permit approved or to be approved by the City Council for the Project, (vi) any future discretionary or ministerial approvals and/or permits issued for the Project (collectively, the “Project Site Development Permits”), and (vii) the conditions of approval associated with each and all of the foregoing approvals. tt. Project Site Development Permits. Any future discretionary or ministerial approvals and/or permits issued for the Project.
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uu. Property or Project Site. Certain real property consisting of approximately 87 acres located in the City of Coachella, County of Riverside, California, legally described on Exhibit A attached to the Development Agreement and generally located south of Avenue 52, west of Van Buren Street, and east of Calhoun Street. vv. Public Health and Safety Exception. City’s authority to take any legally valid action necessary to protect persons or property from dangerous or hazardous conditions which create a threat to the public health or safety, including, without limitation, authority to condition or deny a permit, approval, or agreement or other entitlement or to change or adopt any new regulations applicable to the Project so long as such condition or denial or new law (i) is limited solely to addressing a specific and identifiable issue in each case required to protect the physical health and safety of the public, and (ii) is based on written findings by City and transmitted to Developer, specifically identifying, based on objective and quantifiable evidence in the official record, the precise nature and extent of the dangerous or hazardous conditions requiring such condition or denial or change in the Applicable Rules, why there are no reasonable alternatives to the imposition of such condition or denial or changes in the law, and how such condition or denial or new law would alleviate the dangerous or hazardous condition. ww. Public Improvements. All roadways, sidewalks, drainage, sewer, water, storm drain, and electrical distribution improvements, and all other infrastructure and improvements for the Project, including any onsite improvements or offsite improvements, that may or are to be dedicated or otherwise made available for public use pursuant to this Agreement or the Project Approvals.
xx. State or Federal Law. A state or federal law or regulation enacted after the Effective Date.
yy. STVR Ordinance Amendment. The amendment to Coachella Municipal Code Chapter 5.80 and related confirmation that the Private Resort Sector is a First Class Hotel use, as described in Recital D of the Agreement.
zz. Subsequent Approvals. Any future applications for discretionary or ministerial approvals and/or permits necessary or convenient for implementation of the Project, which may include, without limitation: final subdivision and condominium maps, conditional and administrative use permits, entertainment permits, plot plans, street abandonments, design plan approvals, certificates of compliance, demolition permits, improvement agreements, infrastructure agreements, grading permits, building permits, right of way permits, site plans, sewer and water connection permits, certificates of occupancy, parcel and condominium maps, encroachment permits, ABC license approvals, and amendments thereto and to the Project Approvals. aaa. Term. The fifty (50) year term of this Agreement, as may be extended or terminated, as described in Section 1.3.2 of the Agreement.
bbb. Third-Party Agency Approvals. Required approvals or clearances from various Regulatory Agencies, other third-party public agencies and utilities. ccc. TOT. Transient occupancy tax.
ddd. Transfer. Any sale, mortgage, hypothecation, assignment or transfer all or a portion of Developer’s rights, duties, and obligations arising under this Agreement. eee. Transferee. Any person, partnership, joint venture, firm, or corporation who is receiving all or a portion of Developer’s rights, duties, and obligations arising under this Agreement pursuant to a Transfer.
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fff. Uniform Code Regulations. California Building Standards Code, as amended by the City in accordance with the California Health and Safety Code, including requirements of the applicable Building Code, Administrative Code, Energy Code, Residential Code, Mechanical Code, Electrical Code, Plumbing Code, Fire Code, or other applicable construction codes.
ggg. Vested Elements. The overall design, development, construction, and use of the Project and all improvements in connection therewith, including without limitation, permitted uses of the Property, the maximum density of development, the intensity of use, the maximum height and size of the proposed buildings, provisions for reservation or dedication of land for public purposes, the conditions, terms, restrictions, and requirements for subsequent discretionary actions, the provisions for and financing for public improvements, and the other terms and conditions of development applicable to the Property as set forth in the Project Approvals.
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December 12, 2025
Adrian Moreno, Associate Planner
City of Coachella, Planning Division
53990 Enterprise Way
Coachella, CA 92236
Subject: Energy Efficient Design & Heat Island Reduc�on Plan for TTM 39330, CUP 396, EA 25-03-COVA Dear Adrian,
This leter provides the requested Energy Efficient Design and Heat Island Reduc�on Plan pursuant to the City of Coachella Municipal Code and summarizes the Project’s consistency with the City of Coachella Climate Ac�on Plan (CAP) Development Review Checklist, based on the informa�on evaluated in the Project’s CEQA analysis and incorporated into the Project design.

1. Energy Efficient Design and Heat Island Reduc�on Plan (CMC) Per the City’s Municipal Code, new development shall submit an energy efficient design and heat island reduc�on plan incorpora�ng strategies such as light-colored cool roofs, light-colored paving, permeable paving, substan�al shade tree coverage, shade structures, and shaded asphalt paving, and shall incorporate energy-efficient building and site design strategies including appropriate solar orienta�on, thermal mass, use of natural daylight and ven�la�on, and shading.

Project Overview
The approximately 86-acre Project proposes development of 165 single-family units, 244 condo hotel units, recrea�onal ameni�es, approximately 12 acres of water features, and associated improvements (including pedestrian sidewalks, paved aisles, parking spaces, and landscaping).

A. Heat Island Reduc�on Strategies
The Project will incorporate the following heat island reduc�on strategies through the final architectural, civil, and landscape plans:
• Cool roofs: Use of light-colored cool roofing materials consistent with current energy code requirements and project specifica�ons.
• Hardscape treatments: Use of light-colored paving and shaded asphalt paving where feasible, and incorpora�on of permeable paving in appropriate loca�ons as reflected in the civil and landscape plans.
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• Shade coverage: Provision of substan�al shade tree coverage and shade structures (including shade structures with cool roofing materials and/or solar photovoltaic shade structures) within pedestrian areas and parking areas to reduce surface temperatures and improve comfort.

B. Energy-Efficient Building and Site Design Strategies Consistent with the Municipal Code and the Project’s CEQA Energy analysis, the Project will incorporate:
• Appropriate solar orienta�on in site planning and building design to maximize energy efficiency and reduce solar heat gain;
• Building design strategies suppor�ng thermal performance (including thermal mass and envelope performance, as applicable);
• Natural dayligh�ng and ven�la�on strategies where feasible; and • Shading through architectural features and landscape design.

C. Parking Lot Shade Requirement
The Municipal Code requires that shade tree plan�ngs in surface parking areas be installed to provide shade over fi�y (50) percent of the parking area within ten (10) years. The Project will comply by providing shade through a combina�on of:
• The Landscape Plan has been designed to place enough trees adjacent to sidewalks to provide shading of project sidewalks within 5 years of Project opera�on • Solar photovoltaic shade structures and/or shade structures with cool roofing materials, which are permited in whole or in part in lieu of shade tree plan�ngs.

2. CEQA Energy Commitments Suppor�ng the Plan
The CEQA Energy analysis concludes the Project is not an�cipated to use an unnecessary or wasteful amount of energy and will comply with applicable State and local regula�ons to conserve energy and reduce greenhouse gas emissions. Key Project commitments include:
• Compliance with Title 20 (Appliance Efficiency Standards) and Title 24 Building Energy Efficiency Standards and CALGreen Building Standards Code;
• Use of energy-efficient appliances and high-efficiency ligh�ng; • Covered parking stalls with PV solar facili�es;
• Receipt of a will-serve leter from IID and construc�on of a new on-site substa�on to provide electrical power to the Project site;
• Incorpora�on of solar genera�on and batery storage systems to help offset electricity demand from the regional grid;
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• On-site solar systems that will provide 50 percent of electricity for single-family homes, condos/townhomes, movie theaters, and restaurants; and
• Full electrifica�on of all residen�al buildings (single-family homes and condos/townhomes), elimina�ng natural gas use for those buildings.

The CEQA analysis further concludes the Project would not obstruct applicable State or local plans for renewable energy or energy efficiency and would be consistent with the State’s climate direc�on (including the 2022 CARB Scoping Plan pathway toward carbon neutrality by 2045).

3. City of Coachella CAP – Development Review Checklist Consistency (Summary) The City of Coachella CAP recommends GHG emissions targets consistent with State reduc�on targets and includes a development review checklist to determine compliance and eligibility for streamlining.

Compliance with the CAP is determined based on checklist responses, and a “No” response to an applicable Project Design Feature requires project adjustment or an alterna�ve compliance path.

Based on the Project’s design features, CEQA commitments, and applicable regulatory requirements, the Project is consistent with the CAP Development Review Checklist items provided, including (summary highlights):
• Recycling: Designated recycling and trash service consistent with SB 939 requirements. • General Plan Consistency / Subarea Character / Urban Form: Land uses allowed under the General Plan designa�on and consistent with the Regional Retail District vision and intent. • Urban Forest: Landscape plan designed consistent with City guidelines requiring shade trees at approximately one tree per 50 feet along street frontages, open space frontages, and public walkways.
• Construc�on Emissions: Construc�on emissions reduc�on measures (including limi�ng idling beyond regulatory requirements and use of electric/hybrid equipment where feasible) consistent with the iden�fied Project Design Features.
• Recycled Content / CD&D Waste: Construc�on recycling/diversion and reuse commitments consistent with applicable State law and Municipal Code requirements (including AB 341 and CALGreen).
• Energy Efficiency / Passive Solar Design / Solar Orienta�on: Project commitments to exceed Title 24 and incorporate passive solar design and orienta�on strategies consistent with CAP checklist standards.
• Shaded Public Spaces / Urban Heat Island: Shading provided through trees and/or shade structures to meet shading targets for public spaces and reduce heat island effects, supported by cool roof/cool pavement strategies and shade trees.
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• Solar Energy: On-site PV systems providing 50% electricity for iden�fied land uses consistent with the CAP checklist development standard (through implementa�on of MM GHG-2, as cited in the CEQA analysis).
• Pedestrian Connec�vity / Complete Streets Elements: Internal pedestrian pathways linking uses and connec�ng to surrounding streets/sidewalk networks; traffic calming and low-speed private road design.
• EV Infrastructure / Ligh�ng: Compliance with current Title 24 requirements for EV charging and energy-efficient LED ligh�ng for streets and parking lots. • Water / Stormwater / LID / Purple Pipe / Greywater Readiness: Low-impact design stormwater strategies and water efficiency commitments consistent with CAP checklist development standards and applicable regula�ons.

4. Conclusion
The enclosed informa�on provides the City-requested Energy Efficient Design and Heat Island Reduc�on Plan and demonstrates the Project’s consistency with the City’s CAP development review checklist standards as summarized above. The Project will implement these strategies through final construc�on documents and applicable permit condi�ons.

Please let me know if any addi�onal informa�on is needed.

Thank you,
Nicole Vann
Planner/Project Manager
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PUBLIC BEACH CLUB LAGOON RESORT CORE SPORTS CENTER BACK OF HOUSE LAKE LAKE LAGOON EVENT LAWN MARKET CHECK-IN RETAIL FITNESS YOGA BAR STAGE BEACH BEACH SPECIALTY DINING EVENT BARN PICKLEBALL COURTS PICKLEBALL COURTS SPORTS CLUB KID'S LAGOON BEACH VOLLEYBALL BEACH BEACH LAP POOL DJ ISLAND LAGOON POOL KITCHEN / ELECTRIC / STORAGE / MECHANICAL / TRASH SPORTS BARBEACH CLUB CANTINA HOTEL ARRIVAL OUTFITTERS LOBBY / LIBRARY / BAR COFFEE SHOP SPA CHECK-IN VILLAGE GREEN SPA GARDEN SURF MACHINE ROCK ISLAND TENNIS COURTS BASKETBALL COURT PADEL PADEL KIDS CLUB DROP-OFF PLAY AREA AMPHITHEATER LAWN F & B F & B 52ND AVENUE

VAN BUREN STREET
CALHOUN STREET ACCESS RAMP TO BASEMENT SERVICE AREA HAMMERHEAD TURN-AROUND FOR FIRE VEHICLE ZIPLINE PEDESTRIAN & CART BRIDGE (TYP.) GATEHOUSE PARKING GARAGE (2-STORY) RAMP ACCESS TO BASEMENT PARKING BASEMENT FOOTPRINT DINING CABANAS CARPORTS (TYP.) CARPORTS (TYP.) PRIMARY GATED ENTRY RESIDENT ONLY ACCESS HAMMERHEAD TURN-AROUND FOR FIRE VEHICLE HOUSEKEEPING RIGHT-IN / RIGHT-OUT SERVICE ACCESS SECONDARY GATED ACCESS PROP. EQUESTRIAN PATH PROP. LANDSCAPE EASEMENT PROP. EQUESTRIAN PATH PROP. LANDSCAPE EASEMENT PROP. EQUESTRIAN PATH PROP. LANDSCAPE EASEMENT COMMON ACCESS & EMERGENCY VEHICLE EASEMENT (TYP.) COMMON ACCESS & EMERGENCY VEHICLE EASEMENT (TYP.) RESIDENT ONLY ACCESS RESIDENT ONLY ACCESS BEACH CLUB VIP VILLAS (5) (ON TOP OF 2-STORY PARKING GARAGE PUBLIC BEACH CLUB ENTRY COMMON ACCESS & EMERGENCY VEHICLE EASEMENT (TYP.) PUBLIC BEACH CLUB ENTRY RETAINING WALLS (2-STORY) PROP. LIFT STATION 1361.31' 1382.66' EX. 12" PVC SEWER MAIN A B C C B BB A EX. 12" PVC WATER MAIN EX. 12" PVC WATER MAIN 120' (ULTIMATE R/W) 22' 11' 11' PROP. BARRIER CURB 5' VAN BUREN STREET CL (MAJOR ARTERIAL WITH ENHANCED BICYCLE FACILITIES) (PER CITY OF COACHELLA GENERAL PLAN) PROP. RAISED MEDIAN SECTION C-C 39' R/W ULTIMATE 11' PROP. BARRIER CURB PROP. BIKE 10' LANDSCAPE 6' SIDEWALK PROP. CURB & GUTTER4' LANE PARKWAY 5' 39' (FUTURE BY OTHERS) FUT. BIKE 10' FUT. LANDSCAPE 6' FUT. 4' LANE PARKWAY SIDEWALK FUTURE CURB & GUTTER 30' 50' R/WEX. R/WEX. (PUBLIC ROAD) SCALE: 1" = 15' BOUNDARY PROP. PROJECT & PROP. R/W 20' ADDITIONAL LANDSCAPE PARKWAY 10' EQUESTRIAN TRAIL 11' 12' PROP. TRAVEL LANE PROP. TRAVEL LANE PROP. TRAVEL LANE 12' 11' 11' FUT. TRAVEL LANE FUT. TRAVEL LANE FUT. TRAVEL LANE 94' (ULTIMATE R/W) 16' 8' 8' 5' AVENUE 52 PROP. PAINTED MEDIAN SECTION B-B 29' R/W ULTIMATE PROP. BIKE 10' 6' PROP. CURB & GUTTER 4' LANE 12' PROP. TRAVEL LANE 12' PROP. TRAVEL LANE 5' 29' (FUTURE BY OTHERS) FUT. BIKE 10' FUT. LANDSCAPE 6' FUT. 4' LANE 12' FUT. TRAVEL LANE 12' FUT. TRAVEL LANE PARKWAY SIDEWALK CL LANDSCAPE PARKWAY FUTURE CURB & GUTTER SIDEWALK 30' R/WEX. 30' R/WEX. (PRIMARY ARTERIAL WITH ENHANCED BICYCLE FACILITIES) (PER CITY OF COACHELLA GENERAL PLAN) (PUBLIC ROAD) SCALE: 1" = 15' BOUNDARY PROP. PROJECT & PROP. R/W 20' ADDITIONAL LANDSCAPE PARKWAY 10' EQUESTRIAN TRAIL 10' ESMT. EX. ESMT. EX. C.V.W.D. BOR IRRIGATION 90' (ULTIMATE R/W) 12' 6' 6' 5' CALHOUN STREET PROP. PAINTED SECTION A-A 29' R/W ULTIMATE PROP. BIKE 10' 6' PROP. CURB & GUTTER 4' LANE 12' PROP. TRAVEL LANE 12' PROP. TRAVEL LANE 5' 29' (FUTURE BY OTHERS) FUT. BIKE 10' FUT. LANDSCAPE 6' FUT. 4' LANE 12' FUT. TRAVEL LANE 12' FUT. TRAVEL LANE PARKWAY SIDEWALK CL BOUNDARY PROP. PROJECT LANDSCAPE PARKWAY FUTURE CURB & GUTTER SIDEWALK 30' R/WEX. 30' ESMT. R/W & (COLLECTOR WITH ENHANCED BICYCLE FACILITIES) (PER CITY OF COACHELLA GENERAL PLAN) (PUBLIC ROAD) SCALE: 1" = 15' MEDIAN & PROP. R/W 20' ADDITIONAL LANDSCAPE PARKWAY EQUESTRIAN TRAIL 10' 10' ESMT. EX. C.V.W.D. BOR IRRIGATION EX. 34200 Bob Hope Drive, Rancho Mirage, CA 92270 760.320.9811 msaconsultinginc.com MSA CONSULTING, INC. > PLANNING > CIVIL ENGINEERING > LAND SURVEYING PUBLIC IMPROVEMENTS EXHIBIT COVA SEPTEMBER 24, 2026 STREET IMPROVEMENTS QUANTITIES LEGEND PUBLIC ACCESS OPEN SPACE PUBLIC ACCESS EQUESTRIAN TRAIL MEDIAN PUBLIC ACCESS SIDEWALK EXISTING CWA WATER MAIN PROPOSED CWA WATER IMPROVEMENTS PROPOSED CWA SEWER IMPROVEMENTS EXISTING CWA SEWER MAIN SYMBOL DESCRIPTION L.F. AREA ±5,204 -----±18,101 ±196 - ±203,685 ±61,994 ±46,285 ±33,030 ±33,095 ---- R:\2811\Acad\Exhibits\Public Improvements\2811 Public Improvements Exhibit.dwg, 9/24/2026 2:23:00 PM, dgallerani, MSA Consulting, Inc. 362
Item 2.
442.39
TP-LP
442.66
TP-HP
442.39
TP-LP
442.66
TP-HP
442.39
TP-LP
442.66
TP-HP
442.39
TP-LP
442.66
TP-HP
440.66
TP-GB
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.62
TP-HP
440.39
TP-LP
440.66
TP-GB
(449.06)
TP
448.19
FL
448.83
TP-HP
443.61
TP
440.64
TP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP 440.66
TP-GB
442.25
TP
445.05
TP
452.66
TP-GB
447.66
TP-GB
454.18
TP
454.37
TP
454.29
TP
452.66
TP-GB
451.85
TP
447.57
TP
440.65
TP
440.66
TP-GB
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.62
TP-HP
440.39
TP-LP
440.49
TP
440.66
TP-HP
440.00
TP
439.17
(440.27) TP
FL
442.87
TP
442.18
TP
(443.28) TP
458.66
TP
458.75
TP
459.26 TP-HP
440.66
TP-GB
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
443.91
TP-GB
444.06
TP-GB
447.86
TP-HP
447.86
TP-HP
441.96
TP
443.86
TP
443.71
TP
440.66
TP
442.66
TP-GB
446.66
TP-GB
452.66
TP-GB
444.41
TP
440.39
TP-LP
440.66
440.39 TP-HP
TP-LP
440.66
TP-HP
440.39
TP-LP
440.39
TP
440.66
TP-HP
440.39 TP-LP
440.66
TP-HP
440.66
TP-HP
440.39
TP-LP
440.57
TP-HP
440.39
TP-LP
440.39
TP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.44
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.48
TP-LP
440.66
440.39 TP-HP
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.42
TP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
440.66 TP-LP
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.50
TP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.60
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP
440.93
TP-GB
447.56
TP-HP
447.68
TP
(447.55) TP
446.74
FL
448.79
TP
449.91
TP-HP
449.40
TP
449.02
TP-LP
451.58
TP-HP
447.01
TP 444.99
TP
(448.92)
TP
448.04
FL
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP 440.63 TP-HP
440.39
TP-LP
440.66
TP-HP 440.39 TP-LP
440.66
TP-HP
440.39
TP-LP
440.66 TP-HP
TP-LP 440.39
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66 TP-HP
TP440.54
440.39
TP-LP440.66 TP-HP
440.39
TP-LP
440.66
TP-HP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.49
TP-HP
440.66
TP-HP
440.39
TP-LP
440.66
TP
440.39
TP-LP
440.66
TP
440.39
TP-LP
440.66
TP
440.39
TP-LP
440.66
TP-HP
439.89
TP
440.66 TP-HP
440.50
TP-LP
440.66
TP-HP
TP-LP
440.39
440.39
TP-LP
TP-LP
440.39
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39
TP-LP
440.66
TP-HP
440.39 TP-LP
440.66
TP-HP
440.39 TP-LP
440.66
TP-HP
446.66
TP-HP
446.34
TP-LP
446.66
TP-HP
446.66
TP-HP
446.39
TP-LP
446.66
TP-HP
TP-LP 446.39
446.49
TP-HP
452.51
TP-LP
452.66
TP-HP
452.39
TP-LP
452.66
TP-HP
452.39
TP-LP
452.66
TP-HP
452.39
TP-LP
454.20
TP
453.66
TP
452.66
TP-GB
450.66
TP-GB
450.07
TP
449.66
TP-GB
447.66TP-GB
447.39
TP-LP
454.66
TP-HP
TP-LP454.47
454.47
TP-LP
TP-HP 454.66
454.54
TP-LP
454.66
TP-HP
AVENUE 52

VAN BUREN STREET

CALHOUN STREET
780-060-003
EX. ZONING:

LIGHT AGRICULTURE (A-1-20)
EX. GENERAL PLAN:

AGRICULTURE
780-040-002
EX. ZONING:

LIGHT AGRICULTURE (A-1-20)
EX. GENERAL PLAN:

RURAL COMMUNITY - ESTATE DENSITY RESIDENTIAL

CITY OF COACHELLA

COUNTY OF RIVERSIDE
780-060-004
EX. ZONING:

LIGHT AGRICULTURE (A-1-20)
EX. GENERAL PLAN:

AGRICULTURE
779-360-008
EX. ZONING:

REGIONAL COMMERCIAL (R-C)
EX. GENERAL PLAN:

REGIONAL RETAIL DISTRICT
779-360-009
EX. ZONING:

REGIONAL COMMERCIAL (R-C)
EX. GENERAL PLAN:

REGIONAL RETAIL DISTRICT
779-360-002
EX. ZONING:

REGIONAL COMMERCIAL (R-C)
EX. GENERAL PLAN:

REGIONAL RETAIL DISTRICT
779-360-003
EX. ZONING:

REGIONAL COMMERCIAL
(R-C)
EX. GENERAL PLAN:

REGIONAL RETAIL DISTRICT
779-360-004
EX. ZONING:

REGIONAL

COMMERCIAL (R-C)
EX. GENERAL PLAN:

REGIONAL RETAIL DISTRICT
779-360-005
EX. ZONING:

REGIONAL

COMMERCIAL (R-C)
EX. GENERAL PLAN:

REGIONAL RETAIL DISTRICT
779-360-006
EX. ZONING:

REGIONAL COMMERCIAL
(R-C)
EX. GENERAL PLAN:

REGIONAL RETAIL

DISTRICT
768-070-001
EX. ZONING:

REGIONAL

COMMERCIAL
(R-C)
EX. GENERAL
PLAN:

REGIONAL

RETAIL DISTRICT
PE 444.0 PE 444.0
PE 444.0
PE 444.0 PE 444.0
PE 444.0 PE 444.0 PE 444.0 PE 444.0 PE 444.0
PE 442.0
PE 442.0 PE 442.0
LAGOON
WSE 440.0
BOT 430.0
LAGOON
WSE 440.0
BOT 430.0
LAGOON
WSE 440.0
BOT 430.0
LAGOON
WSE 440.0
BOT 430.0
LAGOON
WSE 440.0
BOT 430.0
POND
MAXIMUM WSE 439.5
NORMAL WSE 434.2
BOT 430.0
POND
MAXIMUM WSE 439.5
NORMAL WSE 434.2
BOT 430.0
LAGOON
WSE 440.0
BOT 430.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0 PE 442.0 PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 448.0
PE 452.0
PE 452.0
PE 452.0
PE 452.0
PE 444.0
PE 444.0
PE 444.0
PE 444.0 PE 444.0
PE 442.0
PE 442.0
PE 442.0 PE 442.0 PE 442.0
PE 442.0
PE 442.0
PE 442.0 PE 442.0 PE 442.0 PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0 PE 442.0
PE 442.0
PE 442.0
440.52
TP
440.57
TP
446.66
TP-GB
454.66
TP-HP
454.66
TP-GB
440.41
TP-LP
457.66
TP-GB
459.09
TP-GB
457.66
TP-GB
PE 446.0 PE 448.0
PE 446.0
PE 448.0
PE 448.0 PE 448.0
PE 448.0
PE 448.0
PE 450.0 PE 454.0
PE 454.0 PE 454.0
PE 454.0
PE 456.0
PE 456.0
PE 456.0
PE 456.0
PE 456.0
FS 449.0
FS 452.0
FS 456.0
FS 456.0
FS 454.0
FS 454.0
FS 454.0
PE 454.0
PE 455.0
PE 452.0
PE 452.0
PE 451.0
PE 449.0
PE 459.0
PE 460.0
PE 454.0
PE 454.0 PE 452.0
PE 448.0
PE 448.0
PE 444.0
\pxt2;PE 450.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 443.0
PE 443.0 PE 443.0
PE 443.0
PE 443.0
PE 443.0
PE 443.0
PE 443.0
PE 443.0
PE 443.0 PE 443.0
PE 443.0 PE 443.0
PE 443.0 PE 443.0
PE 443.0 PE 443.0
PE 443.0 PE 443.0
PE 443.0 PE 443.0
PE 443.0 PE 443.0
PE 443.0
PE 443.0
PE 443.0
PE 443.0
PE 443.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0 PE 442.0
PE 442.0
PE 442.0 PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0 PE 442.0
PE 442.0
PE 444.0
PE 444.0
PE 444.0
PE 444.0
PE 444.0
PE 443.0
PE 443.0
PE 443.0 PE 443.0 PE 443.0 PE 444.0 PE 444.0 PE 445.0 PE 445.0 PE 445.0 PE 444.0 PE 444.0 PE 443.0 PE 443.0 PE 443.0 PE 443.0 PE 442.0
PE 446.0
PE 446.0
PE 446.0
PE 446.0
PE 442.0
PE 442.0 PE 442.0
PE 442.0 PE 442.0
PE 442.0 PE 442.0
PE 442.0
PE 442.0
PE 442.0 PE 442.0
PE 442.0 PE 442.0 PE 442.0
PE 442.0
PE 442.0
PE 442.0 PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0 PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 443.0
PE 442.0
PE 442.0
PE 445.0
PE 445.0
PE 445.0
PE 445.0
PE 445.0
PE 445.0
PE 445.0
PE 445.0
PE 462.0 PE 462.0
PE 462.0 PE 462.0
PE 462.0
PE 461.5
PE 461.5
PE 462.0
PE 448.0
PE 448.0
PE 448.0 PE 448.0
PE 462.0 PE 448.0 459.37
TP
459.76
TP
FS 448.0
FS 448.0 FS 442.0
FS 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
PE 442.0
FS 462.0
PE 442.0
PE 448.0
PE 450.0
FS 444.0
FS 444.0
FS 442.0
FS 446.0
PE 448.0
FS 452.0
FS 452.0
FS 444.0
(448.25) TP
447.44
FL

1.0%

0.5%

0.5% 0.5%

0.5% 0.5% 6.6%

2.4%

1.3%

0.5%

1.2%

2.9%

0.5% 0.5%

0.5% 0.5% 0.5%

5.5%

0.5%

5.2%

2.2%

0.5%

4.4%

0.5%

3.1%0.9%

1.3%

1.1%

1.9%

0.5%

0.5% 0.5%

0.5%

6.6%

9.5%

0.5%

11.4%

1.5%

9.4%
440.66
TP-GB

5.0%

8.4%

5.2% 3.4%

3.3%

3.2%

1.6%

0.5%

1.5%

1.2%

0.5%

2.8%

0.5%

2.0%

0.5%

2.0% 3.6% 2.4% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5%

0.5%

0.6% 0.6%

0.6%

2.0% 0.5%

0.5% 0.5%

1.5%

2.2%

0.5%

0.7%

0.5%

0.5% 0.5% 0.5% 0.5% 0.5% 0.5%

0.5%

0.5% 0.5%

0.5%

0.5% 0.5%

0.5%

0.5% 0.5% 0.5%

0.5%

0.5% 0.5% 0.5%

0.5%

0.5% 0.5% 0.5%

0.5%

0.5% 0.5% 0.5%

0.5%

0.5% 0.5% 0.6%

0.5%

0.5% 0.5%

0.5%

0.5% 0.5% 0.5%

0.5%

0.5% 0.5%

0.5% 0.5% 0.5%

0.5% 0.5% 0.5% 0.5%

0.5%

0.5% 0.5%0.5%

0.5% 0.5%

0.5%

0.5% 0.5% 0.5%

0.5%

0.7%

0.5%

0.5%
(445)
(445)
(445)
(445)
(445)
(445)
(445)
(445)
(445)
(446)
(447)
(447) (448)
(449)
(448)
(449) (449)
(448)
(449)
(449)
(449)
(447)
(448)
(449)
(450)
(449)
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(451)
(450)
(448)
(448)
(449)
(448)
(449)
(448)
(448)
(447)
(448)
(448)
(449)
(450)
(448)(447)
(447)
(448)
(447)
(447)
(447)
(446)
(445)
(446)
(445)
(446)
(446)
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(446)
(446)
(445)
(445)
(445)
(446)
(446)
(447)
(448)
(448)
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(445)
(444)
(443)
(443) (443)
(443)
(443)
(442) (440)
(441)
(441)
(441)
(442)
(442)
(441)
(441)
(440)
(441)
(440)
(441)
(442)
(442)
(442)
(444)
(443)
(443)
(443)
(443)
(443)
(443) (442) (443) (441)
(440)
(441)
(440)
(439)
(438)
(437)
(437)
(436)
(436)
(435) (435)
(436)
(436)
(437)
(437)
(436)
(437)
(439)
(439)
(440)
(439)
(442)
(442)
(442)
(442)
(442)
(441)
(442) (443)
(444)
(443)
(443)
(445)
(444)
(445)
(445)
(446)
(446)
(447)
(449) (450)
(448)
(447)
(447)
(447)
(446)
(445)
(444)
(444)
(444)
(443)
(445)
(445)
(446)
(445)
(448)
(450)
(449)
(448)
(450)
(449)
(446)
(450)
(448)
(448)
(449)
(450)
(450)
(447) (446) (445) (443)
(442)
(439)
(439)
(438)
(438)
(438)
(438) (437)
(437)
(435)
(434)
(435)
(436)
(437)
(438)
LAGOON
WSE 440.0
BOT 438.0
440
435
430
430
435
440
440
435
430
430
435
440 432
430
435
440
430
435
440
430
435
440
434
434
440
435
430
430
435
440
439
438
440
435
430
440
435
430
440
435
430
430
435
440
430
435
440
440
435
430
430
435
440
430
435
440
440
435
430
440
435
430
430
435
440
430
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440
440
435
430
440
435
430
431
430
435
440
440
335
330
440
335
330
330
335
440
440.39
TP-LP
440.66
TP-HP
440.66
TP-HP
440.39
TP-LP
440.39
TP-LP
440.49
TP-HP

0.5% 0.5% 0.5% 0.5%

0.5% 0.5%

0.5%
447.04
TP-LP
446.61
TP
444.59
TP
443.56
TP

1.6%

1.6% 1.6%

0.5%
0' 120'
SCALE 1"=60'
60' 180' 240'
SAW
JAD

DESIGN BY DRAWN BY

CHECK BY
SAW
EXHIBIT DATE:

PROJECT NAME: COVA
MAP NUMBER: TENTATIVE TRACT MAP NO. 39330
PLAN: PRELIMINARY GRADING EXHIBIT
JUNE 2026
MSA CONSULTING, INC.

Civil Engineering Land Surveying Landscape Architecture Planning Environmental Services Dry Utility Coordination GIS 34200 Bob Hope Drive Rancho Mirage, CA 92270 | 760.320.9811 | MSAConsultinginc.com %%UESTIMATED EARTHWORK QUANTITIES

RAW QUANTITIES
SUBSIDENCE 12,534 13,866
RAW ADJUSTED 362,142 244,921
SHRINKAGE 43,221
EXPORT
TOTAL EARTHWORK 630,762 630,762
SUBTOTAL 630,762 604,166
374,676 231,055

CUT (CY) FILL (CY)
OVER EXCAVATION 268,620 268,620
OVER EXCAVATION SHRINKAGE 47,404
26,596
{EARTHWORK FACTORS:

THE FOLLOWING FACTORS WERE USED IN THE PREPARATION OF
THE EARTHWORK ANALYSIS:

SHRINKAGE:15%.

SUBSIDENCE:0.20'
OVER-EX. :4'}
%%USECTION A-A
%%USOUTHERN PROPERTY LINE
N.T.S.

A
A
A
A
R:\2811\Acad\Gradingreliminary\2811 Preliminary Grading Exhibit.dwg, 6/3/2026 1:31:59 PM, swieborg, MSA Consulting, Inc. 363
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364
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Item 2.

MARKET STUDY
Proposed COVA Coachella
83857 52ND AVENUE

COACHELLA, CALIFORNIA
SUBMITTED TO:PR OPOSED
Mr. Grant King
Relevant Coachella Owner, LLC
1605 North Cahuenga Boulevard
Los Angeles, California 90028
+1 (323) 466-1400
PREPARED BY:

HVS Consulting & Valuation
7561 SW 175 Street
Miami, Florida 33157
+1 (305) 525-8702
November-2025 367
Item 2.

November 14, 2025
Mr. Grant King
Relevant Coachella Owner, LLC
1605 North Cahuenga Boulevard
Los Angeles, California 90028
Re: Proposed COVA Coachella
Coachella, California
HVS Reference: 2025020823
Dear Mr. King:

Pursuant to your request, we herewith submit our market study pertaining to the above-captioned property. We have inspected the real estate and analyzed the market conditions in the Coachella Valley, California, area. We have studied the proposed project, and the results of our fieldwork and analysis are presented in this report. We have also reviewed the proposed improvements for this site.

We hereby certify that we have no undisclosed interest in the property, and our employment and compensation are not contingent upon our findings. This study is subject to the comments made throughout this report and to all assumptions and limiting conditions set forth herein.

Sincerely,
HVS Consulting & Valuation

DRAFT DOCUMENT
Gary L. Johnson, Senior Vice President - Shared Ownership Consulting
[email protected], +1 (305) 525-8702

HVS MIAMI
7561 SW 175 Street
Miami, Florida 33157
+1 (305) 525-8702
+1 (516) 742-3059 FAX
www.hvs.com
Superior results through unrivaled
hospitality intelligence. Everywhere.
368
Item 2.

Table of Contents

SECTION TITLE PAGE

1. Executive Summary 4

2. Description of the Site and Neighborhood 12

3. Description of the Proposed Improvements 25

4. Market Area Analysis 42

5. Hotel Supply and Demand Analysis 63

6. Projection of Hotel Occupancy and Average Rate 99

7. Projection of Hotel Income and Expense 108

8. Residential Prices and Sales Pace 130

9. Co-Ownership Interest Share Prices and Sales Pace 150

10. Club Membership Program 166

11. Statement of Assumptions and Limiting Conditions 169 Addenda
Qualifications
369
Item 2.

November-2025 Executive Summary
Proposed COVA Coachella – Coachella, California 4

1. Executive Summary
The subject of the market study is a site measuring 3,713,926 square feet (85.26 acres) that is planned to be improved with a phased luxury-level, wellness focused mixed- use project featuring residential, hotel, club, and co-ownership components; the hotel and residences are anticipated to be associated with a to-be-determined brand. The preliminary brands under consideration include Auberge, Rosewood, One and Only, One Hotels, and Montage. We assume the brand will be one of the preliminary brands or a similar brand within the luxury hotel tier.

The property, which is expected to open on March 1, 2030 (Phase 1), will feature 402 rentable units, inclusive of the following components which will participate within in a rental program.
• 240-room Condo-Hotel Townhomes featuring one-bedroom units • 51 three and four-bedroom whole ownership Villas
• 39 four and five-bedroom whole ownership Residences
• 6 eight-bedroom whole ownership Estates
• 5 whole ownership Sky Villas
The concept of the proposed subject property will be focused on wellness, and is designed to be the premier destination for wellness in the Coachella Valley, featured wellness focused facilities such as an on-site longevity clinic, two-story fitness center, luxury spa, immersive outdoor onsen, 25-meter lap pool, and an island dedicated to yoga and meditation. In addition, the resort will feature a ten-acre swimmable lagoon in the center of the site which will offer sandy beaches, nine food & beverage outlets, sports center, surf machine, club membership program, beach club and live music venue, library, event spaces, outdoor amphitheater, kid’s club, kid’s pool, splash pad, and working barn. The property will also contain ample parking capacity and all necessary back-of-the-house space.

The illustrated master plan for the proposed COVA Coachella is illustrated on the following page.

Subject of the
Market Study
370
Item 2.

November-2025 Executive Summary
Proposed COVA Coachella – Coachella, California 5
FIGURE 1-1 ILLISTRATED MASTER PLAN FOR THE PROPOSED COVA COACHELLA 371
Item 2.

November-2025 Executive Summary
Proposed COVA Coachella – Coachella, California 6

RENDERING OF THE PROJECT
The subject site’s location is 83857 52nd Avenue, Coachella, California 92236.

A summary of pertinent projections for the property’s hotel, whole ownership, coownership, and members club components, are presented in the following tables,

FORECASTS OF HOTEL OCCUPANCY, AVERAGE RATE, AND REVPAR
Year
2030/31 61 % $1,702.20 10.0 % $1,531.98 -7.3 $934.51 —
2031/32 65 1,753.26 0.0 1,753.26 14.4 1,139.62 21.9
2032/33 69 1,805.86 0.0 1,805.86 3.0 1,246.05 9.3
2033/34 69 1,860.04 0.0 1,860.04 3.0 1,283.43 3.0
RevPAR %
Occupancy Change
Average Rate
Before Discount Discount
Average Rate
After Discount RevPAR
ADR %
Change
Summary of Pertinent
Projections
372
Item 2.

November-2025 Executive Summary
Proposed COVA Coachella – Coachella, California 7

FORECAST OF HOTEL REVENUE AND EXPENSE CONCLUSION
Year Total % Change Total % Change Total % Change
Projected 2030/31 $134,487,000 — $56,470,000 — 42.0 % $38,235,000 — 28.4 % 2031/32 180,615,000 34.3 % 94,507,000 67.4 % 52.3 61,613,000 61.1 % 34.1 2032/33 215,355,000 19.2 114,630,000 21.3 53.2 66,036,000 7.2 30.7 2033/34 226,624,000 5.2 121,319,000 5.8 53.5 61,747,000 (6.5) 27.2 2034/35 233,423,000 3.0 124,959,000 3.0 53.5 55,920,000 (9.4) 24.0 Total Revenue Gross Operating Profit House
Profit
Ratio
EBITDA Less Replacement Reserve
As a % of
Ttl Rev

WHOLE OWNERSHIP SALES PROJECTION
Units Total SF Avg. Sales Sales
Sold Sold Price per SF Volume
2028/30 A
56 96,808 $1,300 $125,851,000
2030/31 B
41 82,052 1,365 112,001,400
2031/32 C
52 118,819 1,433 170,297,222
2032/33 D
54 136,521 1,505 205,452,044
2033/34 E
45 91,130 1,580 143,999,324
2034/35 F
41 84,786 1,659 140,673,541
289 610,116 $1,472 $898,274,529
F - 25 condo hotel units, 6 residences, and 10 Villas
A - Pre-sales, 45 condo hotel units, 4 residences, 2 Sky Villas, and 5 Villas B - 30 condo hotel units, 7 residences, 1 Sky Villa, and 3 Villas C - 30 condo hotel units, 1 Estate, 8 residences, 2 Sky Villas, and 11 Villas D - 30 condo hotel units, 5 Estates, 8 residences, and 11 Villas E - 28 condo hotel units, 6 residences, and 11 Villas
373
Item 2.

November-2025 Executive Summary
Proposed COVA Coachella – Coachella, California 8

CO-OWNERSHIP INTEREST SALES PROJECTION
1/8th 1/4th 1/8th 1/4th Total
Shares Shares Share Share Sales
Sold Sold Price Price Volume
2028/30 * 20 15 $634,000 $1,267,500 $31,692,500
2030/31 35 22 665,700 1,330,875 52,578,750
2031/32 43 22 698,985 1,397,419 60,799,568
2032/33 50 21 733,934 1,467,290 67,509,796
2033/34 50 20 770,631 1,540,654 69,344,632
2034/35 50 20 809,163 1,617,687 72,811,863
248 120 $11,920 $2,956,143 $354,737,108
* Pre-sales, March 1, 2028 through February 28, 2030

MEMBERSHIP CLUB SALES PROJECTION
Membership 2030/31 2031/32 2032/33 2033/34 2034/35
New Members 1,000 1,050 100 100 100
Members Turnover (5%) (50) (100) (100) (100)
Total Members 1,000 2,000 2,000 2,000 2,000
Membership - Initiation Rate $250 $258 $265 $273 $281
Membership - Annual Rate $2,500 $2,575 $2,652 $2,732 $2,814 Membership - Initiation Fees $250,000 $270,375 $26,523 $27,318 $28,138 Membership - Annual Dues $2,500,000 $5,150,000 $5,304,500 $5,463,635 $5,627,544 Total Membership Revenue $2,750,000 $5,420,375 $5,331,023 $5,490,953 $5,655,682 Less Membership Expense (5%) $137,500 $271,019 $266,551 $274,548 $282,784 Net Membership Revenue $2,612,500 $5,149,356 $5,064,471 $5,216,406 $5,372,898 374
Item 2.

November-2025 Executive Summary
Proposed COVA Coachella – Coachella, California 9
The date of the report is November 11, 2025. The subject site was inspected by Gary L. Johnson on October 13, 2025. The first phase of the property is expected to open on March 1, 2030. The additional phases of the resort are anticipated to open on December 1, 2030, November 1, 2031, and September 1, 2032.

The phasing plan is illustrated in the following bullet points.

Phase 1 – Opening March 1, 2030
• 208 Condo-Hotel Units
• 12 Residences
• 9 Villas
• 6 Co-Ownership Villas
• 5 Sky Villas
Phase 2 – Opening December 1, 2030
• 55 Co-Ownership Villas
• 42 Villas (Whole Ownership)
• 32 Condo-Hotel Units
• 4 Estates
Phase 3 – Opening November 1, 2031
• 14 Residences
Phase 4 – September 1, 2032
• 13 Residences
• 2 Estates
The current owner of the subject site is Relevant Coachella Owner, LLC; the parent company of this owning entity is Relevant Partners, which is based in Hollywood, California. Relevant Partners is a vertically integrated real estate company specializing in highly branded, hospitality-centric residential development and investment. The partners have combined over 80 years of developing and financing projects, have raised over three billion for US real estate and private equity across over 30 projects, and have a network of over 600 limited partners across eight projects.

Pertinent Dates
Ownership of the
Subject Site
375
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November-2025 Executive Summary
Proposed COVA Coachella – Coachella, California 10
Details pertaining to management terms were not yet determined at the time of this report; however, we assume that the proposed hotel will be managed by a professional hotel-operating company, with fees deducted at rates consistent with current market standards. Our projections reflect a total management fee of 3.0% of total revenues.

The preliminary brands under consideration include Auberge, Rosewood, One and Only, One Hotels, and Montage. Although a specific franchise affiliation and/or brand has yet to be finalized, based upon a review of several published franchise fees for brands that fall within the recommended product tier. The proposed hotel will reportedly be managed by the brand throughout the forecast period; as such, it will not be subject to franchise fees.

The subject whole ownership and co-ownership components are anticipated to be privately owned by third parties but will be required to participate in a rental program to be marketed for hotel use. Terms of the agreement were not yet determined at the time of this report. Based on our conversation with the developer, we have assumed the revenue generated by the rental program will be split between the unit owners and property ownership (50.0%/50.0%) after a 12.0% service charge.

The methodology used to develop this study is based on the market research and valuation techniques set forth in the textbooks authored by Hospitality Valuation Services for the American Institute of Real Estate Appraisers and the Appraisal Institute, entitled The Valuation of Hotels and Motels,1Hotels, Motels and Restaurants:

Valuations and Market Studies,2 The Computerized Income Approach to Hotel/Motel Market Studies and Valuations,3 Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and Valuations,4 and Hotels and Motels – Valuations and Market Studies.5
1 Stephen Rushmore, The Valuation of Hotels and Motels. (Chicago: American Institute of Real Estate Appraisers, 1978).
2 Stephen Rushmore, Hotels, Motels and Restaurants: Valuations and Market Studies. (Chicago: American Institute of Real Estate Appraisers, 1983). 3 Stephen Rushmore, The Computerized Income Approach to Hotel/Motel Market Studies and Valuations. (Chicago: American Institute of Real Estate Appraisers, 1990). 4 Stephen Rushmore, Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and Valuations (Chicago: Appraisal Institute, 1992).
5 Stephen Rushmore and Erich Baum, Hotels and Motels – Valuations and Market Studies. (Chicago: Appraisal Institute, 2001).

Management and
Franchise Assumptions
Scope of Work
376
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November-2025 Executive Summary
Proposed COVA Coachella – Coachella, California 11

1. All information was collected and analyzed by the staff of HVS Consulting & Valuation. Information was supplied by the client and/or the property’s development team.

2. The subject site has been evaluated from the viewpoint of its physical utility for the future operation of a mixed-use resort, as well as access, visibility, and other relevant factors.

3. The subject property's proposed improvements have been reviewed for their expected quality of construction, design, and layout efficiency.

4. The surrounding economic environment, on both an area and neighborhood level, has been reviewed to identify specific hostelry-related economic and demographic trends that may have an impact on future demand for hotels, co-ownership, and whole ownership.

5. Dividing the market for hotel accommodations into individual segments defines specific market characteristics for the types of travelers expected to utilize the area's hotels. The factors investigated include purpose of visit, average length of stay, facilities and amenities required, seasonality, daily demand fluctuations, and price sensitivity.

6. An analysis of existing and proposed competition provides an indication of the current accommodated demand, along with market penetration and the degree of competitiveness.

7. Documentation for an occupancy and ADR projection is derived utilizing the build-up approach based on an analysis of lodging activity.

8. Comparable whole ownership sales from Coachella Valley, as well as other comparable markets, were researched and reviewed to determine the appropriate market-based price points that could reasonably be achieved for the subject whole ownership components.

9. Review of reasonable commissions and closing costs, inclusive of administrative and general expenses, marketing, legal and other expenses were deducted to arrive at the forecast net sale proceeds for the proposed subject whole ownership components.

10. A detailed projection of income and expense made in accordance with the Uniform System of Accounts for the Lodging Industry (USALI) sets forth the anticipated economic benefits of the subject property's hotel component. 377
Item 2.

November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 12

2. Description of the Site and Neighborhood
The suitability of the land for the operation of a mixed-use property is an important consideration affecting the economic viability of a property and its ultimate marketability. Factors such as size, topography, access, visibility, and the availability of utilities have a direct impact on the desirability of a particular site.

The subject site is located in an affluent neighborhood on the west site of Coachella, in the southwest quadrant of the intersection formed by Van Buren Street and 52nd Avenue. The subject site is proximate to the renowned Madison Club, The Hideaway Golf Club, and the Coachella Music Festival grounds. This site is in the city of Coachella, California.

LOCATION MAP
378
Item 2.

November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 13
The subject site comprises three contiguous parcels, which collectively measure approximately 85.26 acres, or 3,713,926 square feet. Identification of the subject parcel’s is illustrated in the following table.

FIGURE 2-1 IDENTIFICATION OF THE SUBJECT PARCELS
Property ID # Square Feet Acres
780040003 2,862,328 65.71
780060002 428,630 9.84
780060001 422,968 9.71
Total 3,713,926 85.26
The parcel's adjacent uses are set forth in the following table.

FIGURE 2-2 SUBJECT PARCEL'S ADJACENT USES
Direction
North 52nd Avenue
East Van Buren Street
South Agriculture
West Calhoun Street, Agriculture
Adjacent Use
The topography of the site is generally flat and its shape should permit efficient use of the site for the buildings and other improvements, as well as ingress and egress.

Upon completion of all construction efforts, the subject site will not contain any significant portion of undeveloped land that could be sold, entitled, and developed for alternate use. It is expected that the site will be developed fully with building and site improvements, thus contributing to the overall profitability of the resort.

Physical Characteristics
Topography and
Site Utility
379
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November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 14
RIVERSIDE COUNTY ASSESSOR’S MAP - PARCEL ID #78004003
380
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November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 15
RIVERSIDE COUNTY ASSESSOR’S MAP – PARCEL ID #780060002 AND #780060001 780060002 780060001
381
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November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 16

AERIAL VIEW OF SUBJECT SITE
382
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November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 17
VIEW OF SUBJECT SITE, AS OF OCTOBER 13, 2025

VIEW FROM SITE TO THE NORTHEAST VIEW FROM SITE TO THE NORTHWEST 383
Item 2.

November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 18
It is important to analyze the site with respect to regional and local transportation routes and demand generators, including ease of access. The subject site is readily accessible to a variety of local and county roads, as well as state and interstate highways.

MAP OF REGIONAL ACCESS ROUTES
Primary regional access through the area is provided by east/west Interstate 10, which extends to such cities as Phoenix, Arizona, to the east and the Los Angeles metro area to the west. North/south State Highway 111 is another major route, which provides local access to the desert cities of Palm Springs, Cathedral City, Palm Desert, Indian Wells, La Quinta, and Indio, and generally parallels Interstate 10 roughly five miles southwest of the interstate. State Highways 62, 74, and 86 also extend from Interstate 10 in this region and provide access to smaller communities in this part of the state.

Primary vehicular access to the subject site is provided by 52nd Avenue. Access is also be available from Van Buren Street. The subject site is located near a busy intersection and is relatively simple to locate from Interstate 10, which is the Access and Visibility
384
Item 2.

November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 19
nearest major highway. The proposed subject property is anticipated to have adequate signage at the street. Overall, the subject site benefits from good accessibility, and the proposed resort is expected to enjoy good visibility from within its local neighborhood.

The proposed subject property will be served by Palm Springs International Airport, which is located approximately 18 miles to the northwest of the subject site.

MAP OF AIRPORT ACCESS ROUTES
Airport Access
385
Item 2.

November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 20
The neighborhood that surrounds the subject site is generally defined by 48th Avenue to the north, Harrison Street to the east, Airport Boulevard to the south, and Jefferson Street to the west. The neighborhood is characterized by luxury residential area, golf courses, and agricultural area, primarily citrus fruit and date palms. Some specific entities in the area include the Coachella and Stagecoach Music Festival grounds, Madison Club, Hideaway Club, and Zenyara Luxury Resort Villas.

Prominent golf courses in the vicinity include the Mountain View Country Club, PGA West, and The Quarry at La Quinta.

AERIAL MAP OF NEIGHBORHOOD
In general, this neighborhood is in the stable stage of its life cycle. Recent notable changes in the greater neighborhood include the planned development of a 2,200- acre master planned La Entrada community in Coachella. La Entrada is an approved plan that will include 7,800 master planned residential units in several distinct villages linked by over 550 acres of open space. Plans also include over 1.5 million square feet of retail and mixed use space, along with over 175 acres of sports/entertainment uses at a planned freeway interchange located at Avenue 50 Neighborhood
Subject Site
386
Item 2.

November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 21
and Interstate 10. The project’s freeway interchange at Interstate 10 is expected to commence construction in late 2017 and open in early 2019.

Another significant development in the market is the construction of the Montage project in La Quinta; however, after numerous delays that put the developer, SilverRock Development Company in breach of contract with the city, the developer defaulted on the project and filed for bankruptcy on August 5, 2024. A motion to sell the raw and partially improved land to Turnbridge Equities was filed by the debtors on August 15, 2015. On October 21, 2025, a bankruptcy judge granted a motion for the sale to Turnbridge Equities allow the property to enter into escrow. The La Quinta City Council approved a reinstated and amended development agreement for the project under the new ownership, which is outlined as follows:
• One luxury hotel with approximately 154 guestrooms.
• 55,000-square-foot banquet/shared use facilities.
• 445 residences to include 29 branded residences north of the hotel with a private clubhouse, 70 condos and 293 homes east of the hotel, which can be short-term vacation rentals from which the city would receive TOT. • 40,000-square-foot commercial area.
• 17,000-square-foot public golf clubhouse which will be moved closer to the entrance off of Avenue 52 and other public amenities for easier public access.
• 20,000-square-foot residential amenities building.

It is rumored but not yet confirmed that the project will be affiliated with Four Seasons Hotels and Resorts.

Overall, the supportive nature of the development in the immediate area is considered appropriate for and conducive to the operation of a fractional ownership resort.
387
Item 2.

November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 22
The subject site is located near the area's primary generators of lodging demand. A sample of these demand generators is reflected on the following map, including respective distances from and drive times to the subject site. Overall, the subject site is well situated with respect to demand generators.

ACCESS TO DEMAND GENERATORS AND ATTRACTIONS
Proximity to Local
Demand Generators
and Attractions
388
Item 2.

November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 23
The subject site is assumed to be served by all necessary utilities.

According to the Federal Emergency Management Agency, the subject site is located in flood zone X.

FIGURE 2-3 COPY OF FLOOD MAP AND COVER
Utilities
Flood Zone
389
Item 2.

November-2025 Description of the Site and Neighborhood
Proposed COVA Coachella – Coachella, California 24
The flood zone definition for the Zone X designation is as follows: the flood insurance rate zone that corresponds to areas outside the 100-year floodplains, areas of 100-year sheet flow flooding where average depths are less than 1 foot, areas of 100-year steam flooding where the contributing drainage area is less than 1 square mile, or areas protected from the 100-year flood by levees. No Base Flood elevations or depths are shown within this zone.

According to the local planning office, the subject property is zoned as follows: R-C - Regional Commercial. Additional details pertaining to the proposed subject property’s zoning regulations are summarized in the following table.

FIGURE 2-4 ZONING
Municipality Governing Zoning City of Coachella
Current Zoning Regional Commercial
Current Use Agricultural
Is Current Use Permitted? Yes
Is Change in Zoning Likely? No
Permitted Uses Retail, Lodging, Entertainment, and Residential Legally Non-Conforming Not Applicable
According to the local planning office website, the subject project is currently under review for approval.

We assume that all necessary permits and approvals will be secured (including the appropriate liquor license as applicable) and that the subject property will be constructed in accordance with local zoning ordinances, building codes, and all other applicable regulations. Our zoning analysis should be verified before any physical changes are made to the site.

We have analyzed the issues of size, topography, access, visibility, and the availability of utilities. The subject site is favorably located near affluent residential developments and supporting amenities. In general, the site should be well suited for future hotel, residential, and co-ownership use, with acceptable access, visibility, and topography for an effective operation.

Zoning
Conclusion
390
Item 2.

November-2025 Description of the Proposed Improvements
Proposed COVA Coachella – Coachella, California 25

3. Description of the Proposed Improvements
The Proposed COVA Coachella will be a phased luxury-level, wellness focused mixed- use project featuring residential, hotel, membership club, and co-ownership components; the hotel and residences are anticipated to be associated with a to-bedetermined brand. The preliminary brands under consideration include Auberge, Rosewood, One and Only, One Hotels, and Montage. We assume the brand will be one of the preliminary brands or a similar brand within the luxury hotel tier.

The property, which is expected to open on March 1, 2030 (Phase 1), will feature 402 rentable units, inclusive of the following components, which will participate within in a rental program.
• 240-room Condo-Hotel Townhomes featuring one-bedroom units • 51 three and four-bedroom whole ownership Villas
• 39 four and five-bedroom whole ownership Residences
• 6 eight-bedroom whole ownership Estates
• 5 whole ownership Sky Villas
The first phase of the property is expected to open on March 1, 2030. The additional phases of the resort are anticipated to open on December 1, 2030, November 1, 2031 and September 1, 2032. Further details regarding the phased developments is provided later in this narrative,
The concept of the proposed subject property will be focused on wellness, and is designed to be the premier destination for wellness in the Coachella Valley, featured wellness focused facilities such as an on-site longevity clinic, two-story fitness center, luxury spa, immersive outdoor onsen, 25-meter lap pool, and an island dedicated to yoga and meditation. In addition, the resort will feature a ten-acre swimmable lagoon in the center of the site which will offer sandy beaches, eleven food & beverage outlets, sports center, surf machine, club membership program, beach club and live music venue, library, event spaces, outdoor amphitheater, kid’s club, kid’s pool, splash pad, and working barn. The property will also contain ample parking capacity and all necessary back-of-the-house space.

The illustrated master plan for the proposed COVA Coachella is illustrated on the following page.

Project Overview
391
Item 2.

November-2025 Description of the Proposed Improvements
Proposed COVA Coachella – Coachella, California 26
FIGURE 3-1 ILLISTRATED MASTER PLAN FOR THE PROPOSED COVA COACHELLA 392
Item 2.

November-2025 Description of the Proposed Improvements
Proposed COVA Coachella – Coachella, California 27
Based on information provided by the proposed subject hotel’s development representatives, the following table summarizes the facilities that are expected to be available at the proposed subject property.

FIGURE 3-2 PROPOSED FACILITIES SUMMARY
Residential Unit Configuration
Condo Hotel Units 240
Villas - Whole Ownership 51
Villas - Co-Ownership 61
Residences 39
Estates 6
Sky Villas 5
Total 402
Food & Beverage Facilities
Cova Bistro 181
Asador 153
Cova Island TBD
Lobby Bar + Rooftop Bar 195-260
Coffee by Cova TBD
Vino Vinile 168
La Fleur 500
Cova Coastal 318
Cova Beach Club 258
Amenities & Services
Ten-Acre Swimable Lagoon Beaches
Sports Center Fitness Center
Surf Machine Live Music Venue
Library Working Barn
Longevity Clinic Full-Service Spa
Lap Pool Oxygen Onsen
Event Spaces Outdoor Amphitheater
Membership Club Working Barn
Kid's Club Kid's Pool/Splash Pad
Number of Units
Seating Capacity
Summary of the
Facilities
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The phasing plan is illustrated in the following table.

FIGURE 3-2 PHASING PLAN
Phase 1 Phase 2 Phase 3 Phase 4 Total
One-Bedroom Condo-Hotel Units 208 32 240
Villas - Whole Ownership 9 42 51
Villas - Co-Ownership 6 55 61
Residences 12 14 13 39
Estates 4 2 6
Sky Villas 5 5
The proposed subject property’s food and beverage operation is anticipated to be an important component of the resort. The food and beverage program is strategically designed to operate as one cohesive system, establishing the property as a culinary hub for the entire region. With six distinct outlets for the hotel and residences and three for the Beach Club, the programming is deliberately balanced to prevent self-cannibalization. The planned cuisines – American, Mexican, Seafood, Mediterranean, Italian, and Tropical – ensure a broad appeal with over-saturation.

This multi-outlet approach is a deliberate strategy to attract the high-end local population. The program is designed to serve as a wellness and social anchor, seamlessly transitioning from daytime leisure at the pool, lagoon, or beach to vibrant evening experiences, Furthermore, the entire program is built to be an event-connected value, with operational models and design features that can scale to meet the needs of peak-season festivals and events.

Cova Bistro
Cova Bistro will be the hotel’s main restaurant and will be open for three meals a day. The concept will be a refined wine country bistro offering a seasonal menu from breakfast to dinner, with a focus on expertly prepared dishes and an international wine program. The culinary experience will be elevated by an in-house pastry chef, creative cocktails, and special services like tableside fish de-boning.

Vino Vinile
The concept for Vino Vinile will be an exclusive, intimate bar at the hotel that will combine a high-end beverage and light food program with a curated, intentional vinyl listening experience to foster social connection. The atmosphere will be designed for a multi-sensory indulgence, making music a central part of the experience.

Food and Beverage
Facilities
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COVA BISTRO AND VINO VINILE
Vino Vinile
Cova Bistro
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Asador
Asador will be a Spanish-themed restaurant, where guests can embark on a culinary journey to the Iberian Peninsula, savoring traditional dishes prepared with an authentic Asador grill and enjoying large, communal platters of food. The refined yet relaxed ambiance, extensive Spanish win list, and charcuteria boards is designed to create an immersive dining experience to feel like a castle veranda overlooking the coast.

ASADOR
Cova Island
The concept for Cova Island is to offer a relaxed, tiki-style escape on a private island, featuring cocktails, wines, and simple fresh food like ahi bowls and conch fritters. 396
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Lobby Bar + Rooftop Bar
This two-story bar located at the hotel will be a social hub that will transition from a coffee bar in the morning to a sophisticated evening lounge and will feature views from the second-floor windows.

LOBBY BAR + ROOFTOP BAR
Coffee by Cova
In collaboration with the hotel’s main restaurant (Cova Bistro), Coffee by Cova will offer a selection of artisanal, seasonal pastries and coffee. 397
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La Fleur
La Fleur will be the main bar and architectural centerpiece of the COVA Beach Club, offering a sophisticated, indoor-outdoor atmosphere and panoramic views from its second-floor location. Its cocktail program will feature large-format drinks for sharing and a signature menu of floral and botanical-infused concoctions, complimenting the space’s vibrant energy.

LA FLEUR
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RENDERING OF LA FLEUR
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Cova Coastal
Located within the COVA Beach Club, the Coca Coastal oyster bar will offer a refined coastal dining experience with complimentary entertainment. Cova Coastal will feature fresh raw bar selections, seafood towers, and classic dishes, and operational ability to serve large crowds.

Cova Cantina
The concept for Cova Cantina will be a vibrant cantina offering an upscale, streetfood-inspired dining experience, featuring crafted tacos and other Mexican fare, along with a bar boasting over 300 tequilas and an assortment of margaritas.

COVA CANTINA
The COVA Beach club layout is illustrated in the following rendering. 400
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COVA BEACH CLUB LAYOUT
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The following renderings provide the reader will views of the proposed resort’s selected facilities and amenities.

HOTEL ARRIVAL VIEW
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LOBBY BAR VIEW

SPORTS COURT VIEW
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PUBLIC BEACH CLUB – SKY VILLA VIEW
PUBLIC BEACH CLUB – NIGHT CLUB VIEW 1
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PUBLIC BEACH CLUB – NIGHT CLUB VIEW 2

CLUBHOUSE LAGOON
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RESIDENCE LAGOON VIEW

ESTATE LAGOON VIEW
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VILLAS LAGOON VIEW
We assume that the resort buildings will be built according to all pertinent codes and brand standards. Moreover, we assume its construction will not create any environmental hazards (such as mold) and that the property will fully comply with the Americans with Disabilities Act.

Our analysis assumes that, after its opening, the hotel will require ongoing upgrades and periodic renovations in order to maintain its competitive level in this market and to remain compliant with brand standards. These costs should be adequately funded by the forecasted reserve for replacement, as long as a successful, ongoing preventive-maintenance program is employed by hotel staff.

The construction budget for the Proposed COVA Coachella, as provided by the project developer, is preliminarily estimated to be $858,000,000. A detailed construction budget was not available at the time of this report.

ADA and
Environmental
Capital Expenditures
Construction Budget
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4. Market Area Analysis
The economic vitality of the market area and neighborhood surrounding the subject site is an important consideration in forecasting lodging demand and future income potential. Economic and demographic trends that reflect the amount of visitation provide a basis from which to project lodging demand. The purpose of the market area analysis is to review available economic and demographic data to determine whether the local market will undergo economic growth, stabilize, or decline. In addition to predicting the direction of the economy, the rate of change must be quantified. These trends are then correlated based on their propensity to reflect variations in lodging demand, with the objective of forecasting the amount of growth or decline in visitation by individual market segment (e.g., commercial, meeting and group, and leisure).

The local market and economy are influenced by national trends; thus, consideration of these trends is an important premise to this market-area analysis.

The U.S. economy was severely affected by the COVID-19 pandemic, as illustrated in the following discussion. The onset of the pandemic resulted in decreased business activity, causing widespread economic hardships, including higher levels of unemployment. The depth and duration of this impact was influenced by the course of the pandemic and the nature and extent of restrictions on business and travel activity; the period of greatest impact was 2020. The shift of work locations from office environments to home offices also limited corporate transient and group travel. By all measures, the national economy had recovered from this downturn by year-end 2024, having recorded notable growth, while some select markets and sectors had experienced slower growth and were continuing to recover as of early 2025.

Gross domestic product (GDP) is a key measure of a country’s economic health and trends. Research has also identified a high degree of correlation between GDP and lodging demand. For the eight quarters leading up to 2020, GDP quarterly growth ranged between 0.9% and 3.8%, reflecting moderate economic expansion. The impact of the pandemic was considerable in 2020. As shutdowns halted major components of the U.S. economy from mid-March through May, GDP contracted by an annualized rate of 31.2% in Q2 2020, the largest such decline in U.S. history.

While shocking, this GDP decline was offset by a significant rebound in economic activity in Q3 2020, greatly moderating the overall impact for the year. The U.S. economy grew by 33.8% on an annualized basis in the third quarter, followed by more modest gains in the five quarters that followed through the end of 2021, with GDP having surpassed the pre-pandemic peak by Q1 2021. A pullback during the National Economic
Overview
408
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first half of 2022 was driven by the trade deficit and decreases in government spending and inventory investment, although the decline was offset by gains during the second half of the year.

FIGURE 4-1 UNITED STATES GDP GROWTH RATE

2.4 3.2 2.8 1.9
-5.1
-31.2

33.8 4.5 6.3 6.7 2.3 6.9
-1.6-0.6

3.2 2.6 2.2 2.1 4.9 3.4 1.6 3.0 3.1 2.4
-0.5

3.8 $18
$20
$22
$24
$26
$28
$30
$32
-40
-30
-20
-10
0 10
20 30
40 2019 2020 2021 2022 2023 2024 2025
GDP (Trillions)
Annualized % Change
Sources: tradingeconomics.com, Bureau of Economic Analysis Annualized % Change GDP (Trillions)
The positive trend continued through 2023 and 2024, registering 2.5% and 2.4% increases for the year, respectively. GDP then declined slightly (-0.5%) and bounced back by 3.8% in the first two quarters of 2025, respectively. According to the July 30, 2025, report from the Bureau of Economic Analysis, "The increase in real GDP in the second quarter primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP, and an increase in consumer spending. These movements were partly offset by decreases in investment and exports." Within the hotel sector, 2025 was expected to bring a more active deal environment given this recent stability in growth; however, a pullback in international travel to the United States and the uncertainty surrounding what effect the tariffs would have on prices, trade, employment, and domestic travel prompted some buyers to retreat. As such, transaction activity has been relatively muted thus far in 2025. We will be closely monitoring how these changes impact employment, hotel demand, ADRs, transaction activity and, ultimately, hotel values.

The Wall Street Journal (WSJ) publishes an economic forecasting survey each quarter. Per the latest survey (July 2025), economists were newly optimistic that the United States would avoid a recession, reporting an average 33.0% probability that the country would experience a recession during the next twelve months (22.0% and 45.0% were the average probability levels for the same question in January 2025 and April 2025, respectively). Chad Moutray, chief economist at the 409
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National Restaurant Association, was quoted, “Despite numerous headwinds, the U.S. economy is proving stubbornly resilient. Consumers are continuing to spend, but the mood has clearly shifted from bold to careful.” Key averages from the latest release are illustrated in the following table.

FIGURE 4-2 GDP, CPI, AND UNEMPLOYMENT PREDICTIONS
Real GDP, Quarterly Annualized Growth Rate
2nd Quarter 2024 1.60
3rd Quarter 2024 1.35
4th Quarter 2024 1.47
1st Quarter 2025 1.77
Real GDP, Year-Over-Year Growth Rate
2024 1.72
2025 1.90
2026 2.01
CPI, Year-Over-Year Change
June 2024 3.11
December 2024 2.73
June 2025 2.32
December 2025 2.29
Unemployment, Annual Level
June 2024 3.89
December 2024 4.11
June 2025 4.17
December 2025 4.17
Source: Wall Street Journal Economic Forecasting Survey, April 2024
Driven by supply-chain disruptions and pent-up consumer demand, prices for most goods and services increased substantially in the wake of the pandemic; the CPI increased by 7.0% in 2021 and 6.5% in 2022. The Fed addressed inflation through successive interest-rate hikes (seven in 2022, and another four in 2023), and the pace of inflation decelerated, falling to the low 3.0% range by the end of 2023. While inflation increased to 3.5% by March 2024, it has since illustrated a slow and gradual decline, registering a relatively low 2.4% as of September 2024. In September, the Fed cut the federal funds rate for the first time since the COVID-19 pandemic, acknowledging the positive economic data and lower inflation in recent months, and two additional cuts followed in November and December. Prior to the September 2024 meeting, the target rate was between 5.25% and 5.5%. As of mid410 Item 2.

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year 2025, it stood between 4.25% and 4.5%. On September 17, 2025, the Fed cut interest rates by a quarter percentage point, to a range of 4.0% to 4.25% (its first reduction of 2025), and projected two more cuts later this year. "Job gains have slowed," Fed officials said in a statement released following the meeting, "and the unemployment rate has edged up," noting that unemployment still remains relatively low.

The successive increases in GDP, lower inflation levels, cuts to the Fed rate in 2024, and strong job growth through Q1 2025 painted a positive picture of the U.S. economy. However, the first week of April 2025 sparked a notable change for this picture with the announcement of significant tariffs. As the year has progressed, many have been revised downward; these revisions, combined with the continued resiliency of the U.S. economy and gains in employment, have bolstered markets.

Over time, expectations emerged that a recession in the near term was less likely, compared to the sentiment in March/April. Nevertheless, it remains unclear how the new policies of the current administration will ultimately impact the economy and the hotel sector.

Per the WSJ survey, unemployment levels are anticipated to remain relatively stable, hovering near the 4.4% mark. In the July 2025 survey, economists were asked what effect the current administration's preferences regarding interest rates would have under the next Fed chairman. Roughly 36.0% of respondents said that interest rates would be lower than otherwise based on the administration's influence, with 57.0% responding that no influence or change would occur based on this factor. Accordingly, economists surveyed expect the Fed funds rate to end 2025 at just under 4.0% and moderate downward by 70 basis points by the end of 2026.

Moreover, inflation is anticipated to remain somewhat elevated, at just over 3.0% by December 2025, followed by a decline, falling to roughly 2.6% by the end of 2026.

Within the hospitality industry, labor availability and costs remain a concern for hotel operators, although these issues have diminished somewhat since the height of the pandemic. Inflation benefited the industry by supporting strong ADR growth in most markets but also resulted in increased expenses, which put pressure on profitability. Inflation moderated significantly and was approaching the Fed’s target of 2.0% as of mid-year 2025, which was considered a positive factor; however, the impact of the newly announced tariffs in July 2025 may reverse this trend of inflation. We continue to closely monitor how these policy changes are affecting the U.S. lodging market and the local market analyzed within this report, as explained in the following chapter.

In preparing this report, we have considered the impact of these factors on the lodging and investment markets to the best of our ability. However, our analysis 411
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only considers what is known at the time of the effective date of the report, and there is a high degree of uncertainty currently influencing the market and the economy.

The market area for a lodging facility is the geographical region where the sources of demand and the competitive supply are located. The subject site is located in the city of Coachella, the county of Riverside, and the state of California. The Coachella Valley extends for approximately 45 miles in Riverside County and comprises the following nine cities: Palm Springs, Rancho Mirage, Palm Desert, La Quinta, Indio, Indian Wells, Desert Hot Springs, Coachella, and Cathedral City. The popular resort community of Palm Springs sits at the northwest end of the Valley. Palm Springs is often described as a small city with the cultural amenities of an urban area, featuring eclectic boutiques, mid-century-inspired furniture and home décor stores, dining, and recreational opportunities. Typically, the population nearly doubles during the winter months with part-time residents from colder climates who own second homes in the area due to its warmer temperatures. Tourism is typically the major industry in this area, with a variety of attractions and special events drawing significant numbers of leisure travelers.

The subject property’s market area can be defined by its Combined Statistical Area (CSA): Los Angeles-Long Beach, CA. The CSA represents adjacent metropolitan and micropolitan statistical areas that have a moderate degree of employment interchange. Micropolitan statistical areas represent urban areas in the United States based around a core city or town with a population of 10,000 to 49,999; the MSA requires the presence of a core city of at least 50,000 people and a total population of at least 100,000 (75,000 in New England). The following exhibit illustrates the market area.

Market Area Definition
412
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MAP OF MARKET AREA
A primary source of economic and demographic statistics used in this analysis is the Complete Economic and Demographic Data Source published by Woods & Poole Economics, Inc.—a well-regarded forecasting service based in Washington, D.C.

Using a database containing more than 900 variables for each county in the nation, Woods & Poole employs a sophisticated regional model to forecast economic and demographic trends. Historical statistics are based on census data and information published by the Bureau of Economic Analysis. Projections are formulated by Woods & Poole, and all dollar amounts have been adjusted for inflation, thus reflecting real change.

These data are summarized in the following table.

Economic and
Demographic Review
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FIGURE 4-3 ECONOMIC AND DEMOGRAPHIC DATA SUMMARY
Avg. Annual Compounded Chg.
2010 2020 2024 2029 2010-20 2010-24 2024-29
Resident Population (Thousands)
Riverside County 2,200.2 2,423.0 2,535.4 2,755.3 1.0 % 1.0 % 1.7 % Riverside-San Bernardino-Ontario, CA MSA 4,241.1 4,606.4 4,753.5 5,083.8 0.8 0.8 1.4 Los Angeles-Long Beach, CA CSA 17,906.4 18,628.3 18,444.1 19,061.1 0.4 0.2 0.7 State of California 37,322.9 39,503.2 39,259.5 40,701.2 0.6 0.4 0.7 United States 309,382.3 331,526.9 337,214.9 348,565.1 0.7 0.6 0.7 Per-Capita Personal Income*
Riverside County $34,214 $46,125 $45,867 $48,913 3.0 2.1 1.3 Riverside-San Bernardino-Ontario, CA MSA 33,397 45,084 45,511 48,490 3.0 2.2 1.3 Los Angeles-Long Beach, CA CSA 45,239 60,996 63,550 68,348 3.0 2.5 1.5 State of California 47,658 66,955 69,861 74,871 3.5 2.8 1.4 United States 44,807 56,530 59,191 63,789 2.4 2.0 1.5
W&P Wealth Index
Riverside County 79.1 81.1 78.1 77.7 0.3 (0.1) (0.1)
Riverside-San Bernardino-Ontario, CA MSA 76.6 78.7 76.9 76.2 0.3 0.0 (0.2) Los Angeles-Long Beach, CA CSA 101.3 105.5 106.2 105.9 0.4 0.3 (0.0) State of California 106.3 115.3 116.1 115.5 0.8 0.6 (0.1) United States 100.0 100.0 100.0 100.0 0.0 0.0 0.0
Food and Beverage Sales (Millions)*
Riverside County $2,842 $3,712 $4,930 $5,841 2.7 4.0 3.5 Riverside-San Bernardino-Ontario, CA MSA 5,423 6,858 8,970 10,395 2.4 3.7 3.0 Los Angeles-Long Beach, CA CSA 31,735 40,575 50,520 56,632 2.5 3.4 2.3 State of California 65,211 83,734 104,641 117,800 2.5 3.4 2.4 United States 502,827 611,998 777,882 881,337 2.0 3.2 2.5 Total Retail Sales (Millions)*
Riverside County $27,838 $37,707 $45,617 $52,685 3.1 3.6 2.9 Riverside-San Bernardino-Ontario, CA MSA 53,905 75,245 89,693 101,877 3.4 3.7 2.6 Los Angeles-Long Beach, CA CSA 257,633 332,363 380,224 417,308 2.6 2.8 1.9 State of California 539,665 705,532 807,598 889,442 2.7 2.9 1.9 United States 4,638,710 5,826,739 6,781,526 7,456,593 2.3 2.7 1.9 * Inflation Adjusted
Source: Woods & Poole Economics, Inc.
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The U.S. population grew at an average annual compounded rate of 0.6% from 2010 through 2024. The county’s population has increased at a quicker pace than the nation’s population; the average annual growth rate of 1.0% between 2010 and 2024 reflects a gradually expanding area. Per-capita personal income increased modestly, at 2.1% on average annually for the county between 2010 and 2024. Local wealth indexes have remained stable in recent years, registering a low 78.1 level for the county in 2024.

Food and beverage sales totaled $4,930 million in the county in 2024, versus $2,842 million in 2010. This reflects a 4.0% average annual change. The pace of growth is anticipated to be 3.5% through 2029. The retail sales sector demonstrated an annual increase of 3.6% from 2010 to 2024. An increase of 2.9% average annual change is expected in county retail sales through 2029.

The characteristics of an area's workforce provide an indication of the type and amount of transient visitation likely to be generated by local businesses. Sectors such as finance, insurance, and real estate (FIRE); wholesale trade; and services produce a considerable number of visitors who are not particularly rate sensitive.

The government sector often generates transient room nights, but per-diem reimbursement allowances often limit the accommodations selection to budget and mid-priced lodging facilities. Contributions from manufacturing, construction, transportation, communications, and public utilities (TCPU) employers can also be important, depending on the company type.

The following table sets forth the county workforce distribution by business sector in 2010, 2020, and 2024, as well as a forecast for 2029.

Workforce
Characteristics
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FIGURE 4-4 HISTORICAL AND PROJECTED EMPLOYMENT (000S)
Avg. Annual Compounded Chg.

Percent Percent Percent Percent
Industry 2010 of Total 2020 of Total 2024 of Total 2029 of Total Farm 7.5 0.9 % 8.0 0.7 % 7.0 0.6 % 6.6 0.5 % 0.6 % (3.2) % (1.1) % Forestry, Fishing, Related Activities And Other 7.6 0.9 6.6 0.6 6.7 0.5 6.5 0.5 (1.3) 0.4 (0.7) Mining 2.0 0.2 1.8 0.2 1.7 0.1 1.7 0.1 (0.9) (1.7) (0.2) Utilities 1.8 0.2 1.8 0.2 1.9 0.2 1.9 0.1 0.1 1.3 0.2
Construction 55.7 6.9 93.3 8.7 100.8 8.1 104.4 7.6 5.3 2.0 0.7 Manufacturing 41.8 5.2 48.9 4.5 51.0 4.1 51.2 3.7 1.6 1.1 0.0 Total Trade 124.7 15.5 145.8 13.5 161.7 13.0 168.6 12.2 1.6 2.6 0.8 Wholesale Trade 24.8 3.1 31.2 2.9 35.8 2.9 38.7 2.8 2.3 3.5 1.6 Retail Trade 99.9 12.4 114.6 10.6 126.0 10.1 130.0 9.4 1.4 2.4 0.6 Transportation And Warehousing 26.5 3.3 92.9 8.6 118.6 9.5 129.9 9.4 13.4 6.3 1.8 Information 13.0 1.6 8.2 0.8 10.0 0.8 10.4 0.8 (4.5) 5.3 0.7 Finance And Insurance 31.1 3.9 41.3 3.8 50.7 4.1 54.8 4.0 2.9 5.3 1.6 Real Estate And Rental And Lease 45.3 5.6 51.5 4.8 67.1 5.4 80.6 5.8 1.3 6.8 3.7 Total Services 323.5 40.1 443.8 41.2 531.0 42.6 617.2 44.8 3.2 4.6 3.1 Professional And Technical Services 40.5 5.0 50.7 4.7 57.7 4.6 62.6 4.5 2.3 3.3 1.6 Management Of Companies And Enterprises 3.4 0.4 4.2 0.4 4.7 0.4 4.6 0.3 2.2 2.7 (0.6) Administrative And Waste Services 59.0 7.3 80.5 7.5 92.5 7.4 110.2 8.0 3.2 3.5 3.6 Educational Services 10.6 1.3 13.7 1.3 16.8 1.3 20.5 1.5 2.6 5.1 4.1 Health Care And Social Assistance 71.7 8.9 126.1 11.7 148.7 11.9 180.9 13.1 5.8 4.2 4.0 Arts, Entertainment, And Recreation 18.9 2.3 20.2 1.9 25.1 2.0 28.1 2.0 0.7 5.6 2.3 Accommodation And Food Services 64.1 7.9 77.2 7.2 104.5 8.4 121.2 8.8 1.9 7.8 3.0 Other Services, Except Public Administration 55.3 6.9 71.1 6.6 81.1 6.5 89.2 6.5 2.5 3.4 1.9 Total Government 126.5 15.7 132.5 12.3 138.4 11.1 145.1 10.5 0.5 1.1 1.0 Federal Civilian Government 7.7 1.0 7.8 0.7 7.7 0.6 8.0 0.6 0.2 (0.3) 0.7 Federal Military 3.7 0.5 4.0 0.4 3.9 0.3 3.9 0.3 0.8 (0.4) (0.2) State And Local Government 115.2 14.3 120.7 11.2 126.7 10.2 133.3 9.7 0.5 1.2 1.0 TOTAL 807.0 100.0 % 1,076.3 100.0 % 1,246.7 100.0 % 1,378.9 100.0 % 2.9 % 3.7 % 2.0 % MSA 1,638.8 — 2,150.1 — 2,472.3 — 2,692.6 — 2.8 % 3.6 % 1.7 % U.S. 172,901.7 — 195,286.6 — 218,894.3 — 232,833.6 — 1.2 2.9 1.2 Source: Woods & Poole Economics, Inc.
2010-2020 2020-2024 2024-2029
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The preceding data illustrate the long-term employment trends in this market, including the recent impact of the pandemic and the subsequent recovery. Forecasts developed by Woods & Poole Economics, Inc. anticipate that total employment in the county will change by 2.0% on average annually through 2029. The trend is above the forecast rate of change for the United States as a whole during the same period.

The following table illustrates historical and projected employment, households, population, and average household income data, as provided by REIS for the overall San Bernardino/Riverside market, inclusive of the Coachella Valley. 417
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FIGURE 4-5 HISTORICAL & PROJECTED EMPLOYMENT, HOUSEHOLDS, POPULATION, AND HOUSEHOLD INCOME STATISTICS Year
2012 1,196,200 — 321,217 — 153,147 — 1,341,160 — 4,330,360 — $107,135 — 2013 1,250,600 4.5 % 331,040 3.1 % 158,899 3.8 % 1,354,610 1.0 % 4,362,510 0.7 % 107,029 (0.1) % 2014 1,315,230 5.2 348,440 5.3 165,870 4.4 1,366,030 0.8 4,401,520 0.9 111,891 4.5 2015 1,381,700 5.1 363,776 4.4 172,962 4.3 1,377,620 0.8 4,441,060 0.9 117,018 4.6 2016 1,417,630 2.6 363,619 (0.0) 174,215 0.7 1,392,230 1.1 4,486,670 1.0 121,799 4.1 2017 1,475,570 4.1 374,215 2.9 177,311 1.8 1,404,350 0.9 4,530,840 1.0 124,827 2.5 2018 1,520,270 3.0 382,381 2.2 181,874 2.6 1,418,990 1.0 4,562,170 0.7 130,153 4.3 2019 1,578,230 3.8 396,614 3.7 184,010 1.2 1,432,690 1.0 4,590,390 0.6 136,650 5.0 2020 1,517,630 (3.8) 372,601 (6.1) 172,881 (6.0) 1,437,170 0.3 4,627,560 0.8 151,110 10.6 2021 1,620,630 6.8 397,207 6.6 180,503 4.4 1,473,760 2.5 4,661,810 0.7 155,338 2.8 2022 1,663,970 2.7 403,067 1.5 183,766 1.8 1,493,140 1.3 4,689,340 0.6 160,662 3.4 2023 1,693,070 1.7 407,163 1.0 181,379 (1.3) 1,507,930 1.0 4,722,160 0.7 165,936 3.3 2024 1,707,230 0.8 410,842 0.9 178,620 (1.5) 1,534,780 1.8 4,778,040 1.2 175,101 5.5 Forecasts
2025 1,718,860 0.7 % 414,179 0.8 % 179,756 0.6 % 1,553,030 1.2 % 4,814,480 0.8 % 182,533 4.2 % 2026 1,720,570 0.1 415,102 0.2 179,789 0.0 1,564,390 0.7 4,832,220 0.4 190,366 4.3 2027 1,726,920 0.4 417,841 0.7 180,111 0.2 1,572,620 0.5 4,842,160 0.2 197,904 4.0 2028 1,735,680 0.5 421,146 0.8 180,290 0.1 1,580,250 0.5 4,848,050 0.1 205,252 3.7 2029 1,746,890 0.6 424,964 0.9 180,467 0.1 1,589,670 0.6 4,857,780 0.2 213,095 3.8 Average Annual Compound Change
2012 - 2024 3.0 % 2.1 % 1.3 % 1.1 % 0.8 % 4.2 %
Forecast 2025 - 2029 0.4 % 0.6 % 0.1 % 0.6 % 0.2 % 3.9 % Household
Avg. Income % Chg
Source: REIS Report, 1st Quarter, 2025
Households % Chg Population
Industrial
% Chg Employment % Chg % Chg
Office
Employment
Total
Employment % Chg
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For the San Bernardino/Riverside market, of the roughly 1,700,000 persons employed, 24% are categorized as office employees, while 10% are categorized as industrial employees. Total employment is expected to expand by 0.7% in 2025, while office employment is forecast to expand by 0.8% in 2025.

The number of households is forecast to expand by 0.6% on average annually between 2025 and 2029. Population is forecast to expand during this same period, at an average annual compounded rate of 0.2%. Household average income is forecast to grow by 3.9% on average annually from 2025 through 2029.

The following table reflects radial demographic trends for our market area measured by three points of distance from the subject site.

Radial Demographic
Snapshot
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FIGURE 4-6 DEMOGRAPHICS BY RADIUS
Population
2030 Projection 9,268 65,372 129,656
2025 Estimate 9,123 64,812 128,328
2020 Census 8,840 63,712 125,741
Percent Change: 2025 to 2030 1.6% 0.9% 1.0%
Percent Change: 2020 to 2025 3.2% 1.7% 2.1%
Households
2030 Projection 2,217 17,728 38,990
2025 Estimate 2,175 17,454 38,266
2020 Census 2,097 16,906 36,984
Percent Change: 2025 to 2030 1.9% 1.6% 1.9%
Percent Change: 2020 to 2025 3.7% 3.2% 3.5%
Income
2025 Est. Average Household Income $74,992 $82,056 $97,373 2025 Est. Median Household Income 54,345 60,995 68,499
2025 Est. Civ. Employed Pop 16+ by Occupation
Architecture/Engineering 1 186 436
Arts/Design/Entertainment/Sports/Media 12 394 737
Building/Grounds Cleaning/Maintenance 567 3,333 5,589
Business/Financial Operations 67 569 1,384
Community/Social Services 50 290 853
Computer/Mathematical 6 52 319
Construction/Extraction 295 2,785 4,888
Education/Training/Library 111 762 1,888
Farming/Fishing/Forestry 169 1,572 1,978
Food Preparation/Serving Related 307 1,921 4,208
Healthcare Practitioner/Technician 64 759 1,655
Healthcare Support 177 1,271 2,686
Installation/Maintenance/Repair 285 1,666 3,092
Legal 3 77 272
Life/Physical/Social Science 5 52 289
Management 325 1,978 4,340
Office/Administrative Support 488 2,570 5,204
Production 169 865 1,907
Protective Services 30 504 1,152
Sales/Related 478 3,603 6,562
Personal Care/Service 60 995 2,223
Transportation/Material Moving 400 2,906 5,031

0.00 - 1.00 miles 0.00 - 3.00 miles 0.00 - 5.00 miles
Source: Environics Analytics
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This source reports a population of 128,328 and 38,266 households within a fivemile radius of the subject site. The average household income within this radius is reported at $97,373, while the median is $68,499.

The following table presents historical unemployment rates for the proposed subject hotel’s market area.

FIGURE 4-7 UNEMPLOYMENT STATISTICS
Year
2015 6.7 % 6.2 % 5.3 %
2016 6.2 5.5 4.9
2017 5.4 4.8 4.4
2018 4.5 4.3 3.9
2019 4.3 4.1 3.7
2020 10.2 10.1 8.1
2021 7.4 7.3 5.4
2022 4.3 4.3 3.6
2023 4.8 4.7 3.6
2024 5.3 5.3 4.0
Recent Month - Jul
2024 6.0 % 5.9 % 4.2 %
2025 6.5 6.1 4.2
County State U.S.

Source: U.S. Bureau of Labor Statistics
Prior to the pandemic, U.S. unemployment levels were firmly below the 4.6% level recorded in 2006 and 2007, the peak years of the economic cycle prior to the Great Recession. The national unemployment rate during the months leading up to the COVID-19 pandemic were in the 3.5%–3.7% range, reflecting a trend of stability and strength. However, in April 2020, after the onset of the pandemic, unemployment rose to 14.7%, while employment dropped by 20.7 million. Steady gains in employment have generally been registered since that time; however, job gains have fluctuated in recent months. The national unemployment rate was 4.3% in August 2025; approximately 79,000 and 22,000 new jobs were registered in July and August, respectively, following a contraction of about 13,000 jobs in June. In August, gains in healthcare employment were partially offset by losses in federal government jobs and in mining, quarrying, and oil and gas (O&G) extraction employment.

Unemployment
Statistics
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Locally, the unemployment rate was 5.3% in 2024; for this same area in 2025, the most recent month’s unemployment rate was registered at 6.5%, versus 6.0% for the same month in 2024. As illustrated in the table, unemployment declined in 2016, and this positive trend generally continued through 2019. Economic development officials noted that local employment remained strong within the tourism and healthcare sectors. However, unemployment data for 2020 illustrate a sharp increase given the effects of the COVID-19 pandemic and related global economic crisis, which resulted in temporary closures of area resorts and attractions.

Unemployment declined in 2021 and 2022 as the economy began to rebound, and the most recent comparative period shows where the local market stands in 2025 relative to the same month of 2024. The increase in the year-to-date period can be attributed to the slowdown in retail trade due to the inflationary environment.

Providing additional context for understanding the nature of the regional economy, the following table presents a list of the major employers in the proposed subject property’s market.

FIGURE 4-8 MAJOR EMPLOYERS
Number of
Rank Employer Employees
1 Palm Springs Unified School District 2,716
2 Desert Regional Medical Center 2,591
3 Agua Caliente Casino Palm Springs 621
4 City of Palm Springs 515
5 Walmart Supercenter 378
6 California Nursing and Rehabilitation Center 257
7 Margaritaville Resort Palm Springs 251
8 The Home Depot 222
9 Palm Springs Health Care and Rehabiliation Center 156 10 Lowe's Home Improvement 134
Source: City of Palm Springs, CAFR 2024
Tourism has been the cornerstone of the local economy for some time, and this sector has realized notable growth during the last decade, as a younger generation is discovering the Coachella Valley and as certain submarkets are being revitalized.

The popularity of special events and festivals, such as the Coachella Valley Music & Arts Festival, has been intensifying over the years, as well. The $250-million, 10,000-seat Coachella Valley Arena in Palm Desert opened in December 2022; it hosts the Seattle Kraken's American Hockey League team, as well as entertainment Major Business and
Industry
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events throughout the year. In October 2021, Los Angeles-based concert promoter Goldenvoice assumed operation of the Empire Polo Club in Indio, which allowed it to continue to host festivals, such as the Coachella Valley Music Festival, and to open up the facility to a broader spectrum of special events and private functions. In nearby Rancho Mirage, a 600-acre Disney-themed residential community known as Cotino broke ground in 2022, and the first residents are expected to arrive in the fall of 2025. The Agua Caliente Cultural Plaza opened in 2023, featuring a 48,000- square-foot museum. Despite the COVID-19 pandemic, the Coachella Valley has emerged as one of the top drive-to destinations in California given its proximity to three metropolitan areas, the attractiveness of the sprawling resort layouts, and the abundance of outdoor activities. In 2024, according to the Greater Palm Springs Tourism Authority, 14.5 million visitors spent $7.4 billion in the Greater Palm Springs economy, with year-over-year increases of 1.0% and 1.1%, respectively.

Visitor activity generated a total economic impact of $9.1 billion.

A convention center serves as a gauge of visitation trends to a particular market.

Convention centers also generate significant levels of demand for area hotels and serve as a focal point for community activity. Typically, hotels within the closest proximity to a convention center—up to three miles away—will benefit the most.

Hotels serving as headquarters for an event benefit the most by way of premium rates and hosting related banquet events. During the largest of conventions, peripheral hotels may benefit from compression within the city as a whole.

The Palm Springs Convention Center (PSCC) contains a total of 261,000 square feet of new rentable space, which includes 120,000 square feet of exhibit space divisible into five sections, 21 breakout rooms of various sizes, and an 18,000-square-foot lobby with panoramic mountain views. Following a $32.3 million expansion, the Center reopened in the fall of 2005 as a new state-of-the-art facility, offering a twelve-bay loading dock, outdoor function space, and high-speed Internet access.

The Center is proximate to downtown hotels and restaurants and is located only a few minutes’ drive from the Palm Springs International Airport. The other major meeting venue in the Coachella Valley region is the Desert Springs JW Marriott Resort & Spa in Palm Desert. The resort features 210,000 square feet of indoor and outdoor meeting space, 833 guestrooms, and 51 suites. This facility is considered one of the area’s premier meeting destinations.

Convention Activity
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PALM SPRINGS CONVENTION CENTER
The following table illustrates recent usage statistics for this facility.

FIGURE 4-9 CONVENTION CENTER STATISTICS
Year
2016 105 — 141,824 —
2017 110 4.8 % 130,592 (7.9) %
2018 102 (7.3) 120,437 (7.8)
2019 120 17.6 135,375 12.4
2020 37 (69.2) 61,059 (54.9)
2021 54 45.9 43,835 (28.2)
2022 88 63.0 129,794 196.1
2023 102 15.9 72,651 (44.0)
Conventions Change Delegates Change
Source: Palm Springs Convention Center
Number of Percent Number of Percent
The year-end 2024 statistics were not available at the time of this report. 424
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Airport passenger counts are important indicators of lodging demand. Depending on the type of service provided by a particular airfield, a sizable percentage of arriving passengers may require hotel accommodations. Trends showing changes in passenger counts also reflect local business activity and the overall economic health of the area.

Palm Springs International Airport (PSP), a public airport offering commercial airline service in Riverside County, serves a population of over 500,000 permanent residents in the Coachella Valley. The airport covers 940 acres, featuring two runways and one single terminal. PSP is highly seasonal, in that many flights do not operate during the summer. Major commercial airlines provide nonstop service to/from cities such as Dallas, Denver, Los Angeles, Phoenix, San Francisco, and Seattle, among others. Due to the increased passenger traffic, the City plans to spend approximately $100 million on airport infrastructure projects, including a remodel of the ticketing hall and construction of a new baggage-handling system. The baggage system was added in 2021, and the airport recently completed a $5.7- million renovation and expansion of the baggage handling area in 2023.

Additionally, expansions to TSA checkpoints and restrooms, as well as new carpeting throughout the airport, are planned as part of the Airport Master Plan approved in 2015, which is slated for completion by 2026. Other long-term plans include expansions or additions of terminals and a new rental-car center; however, timelines for these projects have yet to be set.

The following table illustrates recent operating statistics for the Palm Springs International Airport, which is the primary airport facility serving the proposed subject property’s submarket.

Airport Traffic
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FIGURE 4-10 AIRPORT STATISTICS - PALM SPRINGS INTERNATIONAL

AIRPORT
Year
2015 1,888,657 — —
2016 1,998,206 5.8 % 5.8 %
2017 2,100,072 5.1 5.4
2018 2,327,018 10.8 7.2
2019 2,563,955 10.2 7.9
2020 1,252,094 (51.2) (7.9)
2021 2,092,943 67.2 1.7
2022 2,981,844 42.5 6.7
2023 3,237,325 8.6 7.0
2024 3,230,914 (0.2) 6.1
Year-to-date, Jul
2024 2,065,467 — #DIV/0!
2025 2,155,547 4.4 % —
*Annual average compounded percentage change from the previous year **Annual average compounded percentage change from first year of data Change**
Passenger
Traffic Change*
Percent Percent
Source: Palm Springs International Airport
This facility recorded 3,230,914 passengers in 2024. The change in passenger traffic between 2023 and 2024 was -0.2%. The average annual change during the period shown was 6.1%. Data from 2020 illustrate a significant decline given the impact of the COVID-19 pandemic and the travel restrictions that were implemented.

However, the 2021 data show a substantial rebound in passenger traffic, a trend that continued through 2022 and 2023 when passenger volume surpassed the level achieved in 2019, driven largely by Palm Springs' popularity as a leisure destination.

This positive trend continued in the year-to-date 2024 period, albeit at a slower pace.

The subject market benefits from a variety of tourism and leisure attractions in the area. Tourism in the Coachella Valley is strongest from January through April, when the area enjoys cooler desert temperatures but a warmer climate than most other cities; the weather is especially welcoming to those visiting from the northern regions. The area is popular as a resort, golf, and tennis destination. Other leisure demand generators include Downtown Palm Springs, Fantasy Springs Resort Casino, and Agua Caliente Casino. Special events also play a role during key Tourist Attractions
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weekends, with major events usually occurring in March or April. Over three weekends, Indio's Empire Polo Club hosts the world-renowned Coachella Valley Music & Arts Festival, as well as the Stagecoach Country Music Festival. Although the festivals were canceled in 2020 and 2021 due to COVID-19 precautions within Riverside County, the valley's events were back in full swing beginning in 2022.

Other key events that take place in the Coachella Valley include the BNP Paribas Open tennis championships, which were held in March 2023, and Palm Springs International Film Festival, which was held in January 2023. Now that conditions are beginning to normalize, no major changes related to these attributes of the market are expected over the long term.

EMPIRE POLO CLUB
This section discussed a wide variety of economic indicators for the market area.

The Coachella Valley market area has experienced an economic rebound following the impacts of the COVID-19 pandemic. As noted previously, the local economy is primarily led by the tourism industry and the popularity of special events in the region. Tourism rebounded in the summer of 2021 and strengthened through yearto-date 2025 given the area's location within driving distance of the Los Angeles and San Diego metropolitan areas. Thus, the near-term market outlook is overall Conclusion
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positive given the return of special events, the area's reputation as one of the nation's premier leisure destinations.
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5. Hotel Supply and Demand Analysis
In the lodging industry, price varies directly, but not proportionately, with demand and inversely, but not proportionately, with supply. Supply is measured by the number of guestrooms available, and demand is measured by the number of rooms occupied; the net effect of supply and demand toward equilibrium results in a prevailing price, or average daily rate (ADR). The purpose of this section is to investigate current supply and demand trends, as indicated by the current competitive market, and to set forth a basis for the projection of future supply and demand growth.

The subject site is located in the greater Coachella Valley lodging market. The proposed subject hotel is expected to compete with five hotels on a primary level based on their location in the subject market. We have considered an additional nine hotels located in comparable markets that were selected as benchmarks because they reflect similar characteristics as the proposed subject property.

A hotel’s local lodging market is most directly affected by the supply and demand trends within the immediate area. However, individual markets are also influenced by conditions in the national lodging market. We have reviewed national lodging trends to provide a context for the forecast of the supply and demand for the proposed subject hotel’s competitive set.

STR is an independent research firm that compiles data on the lodging industry, and this information is routinely used by typical hotel buyers. The following STR diagram presents annual hotel occupancy, ADR, and rooms revenue per available room (RevPAR) data since 1989. RevPAR is calculated by multiplying occupancy by ADR and provides an indication of how well rooms revenue is being maximized.

Definition of Subject
Hotel Market
National Trends
Overview
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FIGURE 5-1 NATIONAL OCCUPANCY, ADR, AND REVPAR TRENDS

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%
$0
$20
$40
$60
$80
$100
$120
$140
$160 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: STR
RevPAR Average Rate Occupancy
The preceding chart illustrates the impact of the recessions of the early 1990s, 2000s, the financial crisis of 2008/09, and the 2020/21 pandemic on the U.S. lodging industry. In each case, the downturn caused lodging demand to drop, resulting in an occupancy decline. The aggregate ADR also fell, as hoteliers used price as a marketing tool to attract demand and support occupancy levels. As occupancy recovered, ADR growth resumed, although the ADR recovery lagged somewhat behind occupancy levels, as price discounts contributed to the initial recovery of demand. Following the financial crisis of the Great Recession, occupancy fell by over eight points, and ADR declined by 5.9%, resulting in an 18.3% decrease in RevPAR. The market recovered steadily thereafter, with occupancy surpassing the 65.0% mark in 2015, and ADR also consistently growing, albeit at a decelerating pace.
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FIGURE 5-2 NATIONAL OCCUPANCY AND ADR TRENDS
2023 2024 2023 2024
United States 66.0 % 57.5 % 62.6 % 63.0 % 63.0 % $131.23 $124.96 $149.24 $156.00 $158.67 $86.64 $71.88 $93.39 $98.22 $99.94 Region
New England 64.7 % 55.5 % 63.4 % 63.3 % 64.1 % $161.08 $155.80 $179.29 $190.86 $195.48 $104.25 $86.54 $113.78 $120.86 $125.36 Middle Atlantic 69.0 55.2 62.6 65.0 66.3 166.27 144.08 179.82 192.15 200.48 114.81 79.56 112.48 124.96 132.92 South Atlantic 67.5 59.8 64.7 64.5 64.9 128.41 130.45 152.61 156.33 157.87 86.68 77.95 98.70 100.89 102.51 E. North Central 61.1 52.3 57.2 57.5 57.9 112.64 105.25 123.33 129.12 133.91 68.82 55.09 70.52 74.26 77.48 E. South Central 62.4 59.5 61.0 61.0 59.1 103.58 104.70 119.73 126.05 127.25 64.61 62.30 73.04 76.88 75.17 W. North Central 58.3 51.0 55.3 56.1 55.7 99.28 97.34 109.00 115.04 118.30 57.88 49.68 60.27 64.51 65.89 W. South Central 62.6 58.1 59.9 60.2 60.2 101.84 95.75 112.13 116.19 119.69 63.77 55.64 67.20 69.92 72.09 Mountain 66.9 59.3 66.3 67.2 66.1 121.89 125.74 153.87 166.61 169.15 81.54 74.59 101.94 111.97 111.85 Pacific 73.6 60.2 66.9 66.6 66.7 171.40 157.79 190.58 196.22 194.67 126.16 95.00 127.42 130.67 129.89 Class
Luxury 70.9 % 52.5 % 65.3 % 66.0 % 66.7 % $304.11 $322.00 $376.48 $384.66 $387.74 $215.73 $168.95 $245.93 $153.96 $258.56 Upper-Upscale 72.6 50.0 63.4 67.1 67.6 188.24 175.05 213.96 221.11 223.88 136.67 87.49 135.70 148.29 151.46 Upscale 71.5 59.3 66.8 68.7 69.1 143.60 132.34 156.30 163.81 166.20 102.68 78.42 104.39 112.53 114.80 Upper-Midscale 67.5 61.2 65.7 65.8 65.7 115.91 114.14 128.53 133.40 135.01 78.20 69.83 84.50 87.73 88.68 Midscale 59.5 56.8 59.7 58.7 58.4 95.82 98.83 100.19 101.41 101.85 57.03 56.10 59.83 59.57 59.46 Economy 59.4 58.7 56.4 54.3 53.5 75.50 76.14 77.65 79.32 78.90 44.83 44.72 43.80 43.04 42.24 Location
Urban 73.2 % 51.8 % 63.3 % 66.4 % 67.5 % $183.20 $152.81 $196.47 $207.36 $213.04 $134.12 $79.12 $124.44 $137.66 $143.84 Suburban 66.7 59.9 63.8 63.4 63.6 111.26 104.93 126.13 126.32 127.97 74.24 62.90 80.45 80.06 81.34 Airport 73.7 60.3 67.9 69.5 69.4 119.22 104.82 126.57 134.50 135.87 87.85 63.18 85.91 93.43 94.36 Interstate 57.9 57.8 58.5 57.7 57.1 87.86 92.22 100.90 106.58 108.69 50.85 53.31 59.04 61.54 62.01 Resort 70.0 57.7 66.8 68.6 67.8 182.74 209.77 236.76 238.86 239.05 127.85 121.06 158.20 163.82 162.10 Small Town 57.8 56.7 57.5 55.8 55.4 107.26 116.96 124.72 133.63 136.86 61.98 66.34 71.72 74.63 75.86 Chain Scale
Luxury 73.8 % 48.0 % 63.1 % 65.8 % 67.7 % $343.02 $383.48 $435.46 $427.97 $426.43 $253.17 $184.12 $274.64 $281.53 $288.49 Upper-Upscale 73.9 48.7 63.9 67.7 68.5 189.25 176.66 215.96 223.19 226.90 139.80 86.11 138.05 151.12 155.53 Upscale 72.6 59.6 67.4 69.2 69.5 142.38 128.62 155.28 161.85 164.20 103.32 76.68 104.58 112.00 114.20 Upper-Midscale 67.5 61.6 65.8 66.1 66.0 112.80 111.14 127.56 132.16 133.95 76.14 68.47 83.93 87.34 88.44 Midscale 58.1 56.5 60.1 59.0 58.7 86.61 89.48 95.19 95.94 96.69 50.30 50.59 57.18 56.65 56.77 Economy 58.7 59.7 57.2 55.0 54.4 63.70 66.88 72.24 72.69 72.12 37.36 39.90 41.34 40.00 39.26 Independents 63.5 56.9 60.0 59.2 58.6 133.08 137.44 155.20 162.24 163.39 84.44 78.24 93.05 96.00 95.81 2019 2021 2022 2023 2024 2019 2021 2022 2021 2022
Occupancy Average Rate
Source: Year-End STR Lodging Reviews
RevPAR
2019
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FIGURE 5-3 RECENT NATIONAL OCCUPANCY AND ADR TRENDS
United States 64.0 % 63.4 % (0.9) % $159.07 $160.48 0.9 % $101.84 $101.79 0.0 % 0.7 % (0.2) % Region
New England 65.2 % 63.9 % (1.9) % $198.12 $199.33 0.6 % $129.11 $127.44 (1.3) % 0.5 % (1.4) % Middle Atlantic 66.5 66.6 0.2 191.80 198.08 3.3 127.61 131.99 3.4 0.6 0.7 South Atlantic 65.2 65.0 (0.4) 158.91 162.08 2.0 103.62 105.28 1.6 0.8 0.4 E. North Central 59.2 59.9 1.2 134.71 135.90 0.9 79.73 81.38 2.1 0.8 2.0 E. South Central 60.2 59.4 (1.3) 127.57 126.54 (0.8) 76.75 75.14 (2.1) 2.2 0.9 W. North Central 57.1 57.1 0.0 119.53 120.87 1.1 68.31 69.06 1.1 0.1 0.1 W. South Central 61.2 59.4 (3.0) 119.13 120.01 0.7 72.93 71.24 (2.3) 0.8 2.2 Mountain 68.3 66.0 (3.4) 172.31 168.36 (2.3) 117.70 111.04 (5.7) 0.4 (3.0) Pacific 68.1 68.1 0.0 197.14 198.45 0.7 134.29 135.23 0.7 0.4 0.5 Class
Luxury 68.1 % 68.1 % 0.0 % $383.15 $394.34 2.9 % $261.07 $268.57 2.9 % 2.5 % 2.5 % Upper-Upscale 68.7 68.1 (0.7) 223.07 225.52 1.1 153.15 153.68 0.3 0.7 (0.1) Upscale 70.1 69.6 (0.8) 166.79 166.00 (0.5) 116.95 115.47 (1.3) 1.3 0.4 Upper-Midscale 66.9 66.1 (1.2) 136.14 135.84 (0.2) 91.02 89.74 (1.4) 1.7 0.5 Midscale 59.4 58.8 (0.9) 102.46 101.36 (1.1) 60.87 59.64 (2.0) 0.2 (0.7) Economy 54.3 53.5 (1.6) 79.53 78.36 (1.5) 43.22 41.90 (3.1) (0.9) (2.5) Location
Urban 68.3 % 67.9 % (0.5) % $208.74 $212.74 1.9 % $142.53 $144.52 1.4 % 1.2 % 0.7 % Suburban 64.4 63.8 (1.0) 128.79 129.21 0.3 83.00 82.43 (0.7) 0.9 (0.2) Airport 70.5 69.5 (1.4) 136.88 136.34 (0.4) 96.51 94.79 (1.8) 0.5 (0.9) Interstate 58.0 57.8 (0.4) 109.24 110.02 0.7 63.40 63.58 0.3 0.8 0.4 Resort 69.4 68.0 (2.0) 241.27 243.57 1.0 167.48 165.68 (1.1) (0.1) (2.1) Small Town 56.7 56.4 (0.4) 139.51 141.45 1.4 79.04 79.80 1.0 0.6 0.1 Chain Scale
Luxury 68.3 % 68.3 % 0.0 % $415.04 $435.41 4.9 % $283.47 $297.26 4.9 % 4.7 % 4.7 % Upper-Upscale 69.6 69.2 (0.6) 226.21 228.62 1.1 157.50 158.30 0.5 1.9 1.3 Upscale 70.6 70.0 (0.8) 164.52 164.51 0.0 116.10 115.11 (0.8) 1.4 0.6 Upper-Midscale 67.2 66.5 (1.1) 135.03 135.09 0.1 90.77 89.81 (1.0) 1.7 0.6 Midscale 59.7 59.4 (0.6) 97.62 97.39 (0.2) 58.33 57.85 (0.8) 2.6 2.0 Economy 55.1 54.4 (1.3) 72.49 71.69 (1.1) 39.96 39.03 (2.3) (0.7) (2.0) Independents 59.8 58.9 (1.5) 165.05 165.41 0.2 98.70 97.45 (1.3) (1.4) (2.8) Source: STR - September 2025 Lodging Review
Rms.
2025 2025 Avail.
%
Change
%
Change
%
Change
Occupancy - YTD September Average Rate - YTD September RevPAR - YTD September Percent Change Rms.
2024 2025 2024 2024 Sold
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The following graph illustrates the performance of the U.S. lodging industry from 2019 through year-to-date 2025, expressed as a percentage of 2019 levels of occupancy, ADR and RevPAR, demonstrating the pace and pattern of the recovery.

FIGURE 5-4 NATIONAL PERFORMANCE COMPARED TO 2019 LEVELS 0%
20%
40%
60%
80%
100%
120%
140%
US Occ US ADR US RevPAR
2019 2021 2022 2023 2024 YTD 2025
A lodging market’s performance is influenced by changes in supply and demand levels. The following graph illustrates the percentage change in these two metrics for the U.S. lodging industry as a whole since 2003, as reported by STR. 433
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FIGURE 5-5 HISTORICAL CHANGES IN SUPPLY AND DEMAND – U.S. LODGING INDUSTRY -40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
% Change in Supply % Change in Demand
Average Demand Growth: 2003-2024: 1.5%
Source: STR
Excluding fluctuations due to the Great Recession in 2008/09 and the pandemic from 2020 to 2022, supply growth ranged between 0.4% to 2.0%, averaging 1.1% in these years. The pace of supply growth slowed significantly in the two to three years following the downturns in 2001/02, 2008/09, and 2020/21, reflecting the decline in new project-starts during these periods. As the market moved out of these cycles, supply growth accelerated. The impact of the pandemic caused a decline in supply, as hotels temporarily suspended operations or closed, in many cases for conversion to alternate use. The reopening of the temporarily closed properties caused an artificial spike in supply growth. Supply growth in 2023 through early 2025 reflects the high cost of construction, as well as the limited availability of financing for new construction. Thus, the pace of supply growth is expected to remain muted through 2026.

The changes in demand, as measured by the number of occupied rooms, display similar patterns. The years following the noted recessionary periods reflect relatively strong growth, as the market recovered from these downturns. Excluding the years of downturn and recovery, demand growth ranged from 1.0% to 4.6%. 434
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STRis an independent research firm that compiles and publishes data on the lodging industry, routinely used by typical hotel buyers. HVS has ordered and analyzed an STR Trend Report of historical supply and demand data for a group of hotels considered applicable to this analysis for the proposed subject hotels. This information is presented in the following table, along with the market-wide occupancy, ADR, and RevPAR.

In response to the travel restrictions and the decline in demand associated with the COVID-19 pandemic, numerous hotels in markets across the nation temporarily suspended operations. During these suspensions, hotels were typically closed to the public, with the majority of staff furloughed, although key management and maintenance staff were retained to preserve the property and prepare for reopening. We note that ten hotels In the defined competitive set temporarily suspended operations because of the COVID-19 pandemic; however, all have since reopened. It is important to note that we have adjusted STR data to reflect the total available rooms in the market and true occupancy, regardless of suspended operations at competitive hotels.

The second chart presents the monthly data for 2020 through the year-to-date 2025 period, illustrating the fluctuations in occupancy and ADR. The impact of the pandemic and the timing and pace of the subsequent recovery are reflected in the data.

Historical Supply and
Demand Data
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FIGURE 5-6 HISTORICAL SUPPLY AND DEMAND TRENDS
Year
Average Daily
Room Count
Available
Room Nights Change
Occupied
Room Nights Change Occupancy
Average
Rate Change RevPAR Change
2017 3,633 1,325,970 — 835,658 — 63.0 % $335.91 — $211.70 — 2018 3,726 1,359,856 2.6 % 830,218 (0.7) % 61.1 355.23 5.8 % 216.87 2.4 % 2019 3,794 1,384,878 1.8 847,478 2.1 61.2 363.01 2.2 222.15 2.4 2020 2,587 944,433 (31.8) 359,670 (57.6) 38.1 431.04 18.7 164.15 (26.1) 2021 3,867 1,411,531 49.5 610,580 69.8 43.3 496.33 15.1 214.69 30.8 2022 3,964 1,446,682 2.5 824,261 35.0 57.0 535.83 8.0 305.29 42.2 2023 3,987 1,455,177 0.6 846,856 2.7 58.2 529.02 (1.3) 307.87 0.8 2024 3,987 1,455,087 (0.0) 821,104 (3.0) 56.4 540.38 2.1 304.94 (1.0) Year-to-Date Through May
2024 3,965 598,659 — 365,560 — 61.1 $602.27 — $367.76 — 2025 3,927 593,048 (0.9) % 414,208 13.3 % 69.8 606.36 0.7 % 423.51 15.2 % Average Annual Compounded Change:
2017 – 2019 2.2 % 0.7 % 4.0 % 2.4 %
2017 – 2024 1.3 (0.3) 7.0 5.4
Competitive
Hotels Included in Sample Class Status
Hotel Jerome, Auberge Resorts Collection Luxury Class Secondary 99 Dec 2012 Jan 1900 La Quinta Resort & Club, Curio Collection by Hilton Upper Upscale Class Primary 783 Nov 2021 Jun 1926 Parker Palm Springs Luxury Class Primary 144 Feb 2021 Jun 1959 Grand Hyatt Indian Wells Resort & Spa Luxury Class Primary 531 Sep 2024 Dec 1986 JW Marriott Desert Springs Resort & Spa Luxury Class Primary 884 Sep 2020 Feb 1987 The Ritz-Carlton Rancho Mirage Luxury Class Primary 252 Aug 2020 Mar 1988 The Little Nell Luxury Class Secondary 92 Jun 2020 Jan 1990 Goldener Hirsch, Auberge Resorts Collection Luxury Class Secondary 66 Dec 2020 Dec 1990 The St. Regis Aspen Resort Luxury Class Secondary 179 Jun 2020 Oct 1992 Carneros Resort and Spa, an SLH Hotel Luxury Class Secondary 100 Nov 2003 Nov 2003 The Meritage Resort and Spa Luxury Class Secondary 467 Jul 2006 Jul 2006 Madeline Hotel & Residences, Auberge Resorts Collection Luxury Class Secondary 137 Jun 2020 Feb 2009 Andaz Napa Luxury Class Secondary 141 Jun 2020 Jul 2009 Stanly Ranch, Auberge Resorts Collection, Napa Valley Luxury Class Secondary 135 Apr 2022 Apr 2022 Total 4,010
Year Year
Affiliated Opened
Source: STR
Number
of Rooms
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FIGURE 5-7 HISTORICAL SUPPLY AND DEMAND TRENDS (MONTHLY) Month
January 65.0 % $391.75 15.0 % $504.84 44.3 % $605.28 57.9 % $573.24 53.7 % $583.85 65.1 % $599.47 February 73.8 434.77 32.5 467.82 66.2 638.69 70.9 619.57 63.4 663.99 71.7 653.20 March 27.2 424.67 45.2 536.29 77.0 648.76 74.5 668.49 70.0 712.67 75.6 704.64 April 0.0 N/A 45.7 435.65 66.1 575.39 64.1 570.80 62.0 566.36 69.7 579.49 May 0.0 N/A 39.2 426.01 56.6 452.44 57.0 441.52 56.4 454.19 66.9 470.33 June 21.6 496.53 45.3 444.40 54.4 456.41 61.2 435.48 54.7 460.20 — — July 42.4 642.70 49.5 534.52 53.4 509.31 52.0 499.83 50.6 505.43 — — August 35.3 527.30 41.9 520.19 46.0 486.47 46.3 477.57 48.2 522.17 — — September 29.4 410.28 46.1 510.97 56.9 484.38 52.6 483.94 50.7 477.06 — — October 32.6 352.53 56.2 473.27 56.0 457.97 58.7 454.27 58.2 438.11 — — November 28.7 368.30 52.9 435.72 55.9 425.17 53.4 413.16 55.0 411.91 — — December 18.3 553.27 48.3 649.58 52.6 645.89 50.9 637.04 54.9 623.25 — — Annual Averages 38.1 % $431.04 43.3 % $496.33 57.0 % $535.83 58.2 % $529.02 56.4 % $540.38 — — Year-to-Date 54.7 % $415.44 35.7 % $471.11 61.9 % $587.63 64.8 % $581.45 61.1 % $602.27 69.8 % $606.36 January 4.1 pts -3.9 % -50.0 pts 28.9 % 29.3 pts 19.9 % 13.6 pts -5.3 % -4.2 pts 1.9 % 11.4 pts 2.7 % February 4.6 5.2 -41.3 7.6 33.7 36.5 4.6 -3.0 -7.5 7.2 8.4 -1.6 March -54.0 -6.0 18.0 26.3 31.8 21.0 -2.5 3.0 -4.5 6.6 5.7 -1.1 April -66.9 — 45.7 — 20.4 32.1 -2.0 -0.8 -2.1 -0.8 7.7 2.3 May -64.2 — 39.2 — 17.4 6.2 0.4 -2.4 -0.5 2.9 10.5 3.6
June -37.0 62.6 23.7 -10.5 9.1 2.7 6.8 -4.6 -6.5 5.7 — — July -14.7 93.2 7.2 -16.8 3.8 -4.7 -1.3 -1.9 -1.4 1.1 — — August -15.4 54.2 6.6 -1.3 4.1 -6.5 0.3 -1.8 1.9 9.3 — — September -25.9 30.4 16.6 24.5 10.8 -5.2 -4.3 -0.1 -1.9 -1.4 — — October -26.4 13.9 23.5 34.2 -0.2 -3.2 2.7 -0.8 -0.5 -3.6 — — November -27.6 22.7 24.2 18.3 3.0 -2.4 -2.4 -2.8 1.5 -0.3 — — December -37.3 32.2 30.0 17.4 4.3 -0.6 -1.7 -1.4 4.0 -2.2 — — Annual Change -23.1 pts 18.7 % 5.2 pts 15.1 % 13.7 pts 8.0 % 1.2 pts -1.3 % -1.8 pts 2.1 % — — Year-to-Date -13.8 4.0 % -19.0 13.4 % 26.3 24.7 2.9 -1.1 -3.7 3.6 8.8 pts 0.7 % 2025
2020
Occupancy ADR Occupancy ADR Occupancy
Occupancy ADR Occupancy ADR ADR
Source: STR
2023 2024 2025
ADR Occupancy ADR Occupancy ADR Occupancy ADR
2021 2022
Occupancy
Change from 2020
Prior Year
2021 2022 2023 2024
ADR Occupancy ADR Occupancy ADR Occupancy 437
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FIGURE 5-8 HISTORICAL SUPPLY AND DEMAND TRENDS (STR)

0.0 10.0

20.0 30.0

40.0 50.0

60.0 70.0
0 200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2017 2018 2019 2020 2021 2022 2023 2024
Occupancy (%)
Room Nights
Available Room Nights Occupied Room Nights Occupancy
It is important to note some limitations of the STR data. Hotels are occasionally added to or removed from the sample; furthermore, not every property reports data in a consistent and timely manner. These factors can influence the overall quality of the information by skewing the results, and these inconsistencies may also cause the STR data to differ from the results of our competitive survey. Nonetheless, STR data provide the best indication of aggregate growth or decline in existing supply and demand; thus, these trends have been considered in our analysis. Opening dates, as available, are presented for each reporting hotel on the previous table.

The STR data for the competitive set reflect a market-wide occupancy level of 2024 in 56.4%, which compares to 58.2% for 2023. The STR data for the competitive set reflect a market-wide ADR level of $540.38 in 2024, which compares to $529.02 for 2023. These occupancy and ADR trends resulted in a RevPAR level of $304.94 in 2024.

The following table illustrates the monthly occupancy, ADR, and RevPAR for the competitive set measured as a percentage of 2019 levels. 438
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FIGURE 5-9 OCCUPANCY, ADR, AND REVPAR AS A PERCENTAGE OF 2019 LEVELS January 72.7 % 148.5 % 108.0 % 95.1 % 140.6 % 133.7 % 88.3 % 143.2 % 126.4 % 107.0 % 147.1 % 157.3 % February 95.7 154.6 147.9 102.4 150.0 153.5 91.5 160.7 147.1 103.6 158.1 163.8 March 94.8 143.6 136.2 91.8 148.0 135.8 86.2 157.8 135.9 93.2 156.0 145.3 April 98.8 143.0 141.2 95.8 141.8 135.8 92.6 140.7 130.4 104.1 144.0 149.9 May 88.2 147.2 129.8 88.8 143.7 127.6 87.9 147.8 129.9 104.3 153.0 159.6 June 92.9 149.4 138.8 104.4 142.6 148.9 93.3 150.7 140.6 — — — July 93.6 153.1 143.2 91.2 150.2 137.0 88.8 151.9 134.9 — — — August 90.7 142.3 129.0 91.2 139.7 127.4 95.0 152.7 145.1 — — — September 102.8 153.9 158.3 95.0 153.8 146.1 91.7 151.6 139.0 — — — October 94.9 147.9 140.4 99.4 146.7 145.9 98.7 141.5 139.6 — — — November 99.4 141.7 140.8 95.0 137.7 130.8 97.8 137.2 134.2 — — — December 94.5 154.3 145.8 91.5 152.2 139.2 98.7 148.9 147.0 — — — Annual Averages 93.1 % 147.6 % 137.4 % 95.1 % 145.7 % 138.6 % 92.2 % 148.9 % 137.3 % — — — Year-to-Date 90.4 147.1 133.0 94.6 145.5 137.7 89.1 150.7 134.4 102.0 % 151.8 % 154.8 % Source: STR
2023 2024 2025
Occupancy ADR RevPAR Occupancy ADR RevPAR Occupancy ADR RevPAR 2022
Occupancy ADR RevPAR
The market’s seasonal trends are presented in the following table.

FIGURE 5-10 SEASONALITY
2018 2019 2020 2021 2022 2023 2024 2025
High Season - February, March, April
Occupancy 75.7 % 72.6 % 49.3 % 41.4 % 69.9 % 69.8 % 65.2 % 72.4 % Average Rate $415.89 $424.88 $431.84 $481.91 $621.87 $622.66 $651.52 $648.01 RevPAR 315.04 308.54 212.99 199.44 434.67 434.92 424.96 469.15 Shoulder Season - January, May, October, November, December Occupancy 57.8 % 59.2 % 36.1 % 42.4 % 53.1 % 55.6 % 55.7 % — % Average Rate $347.47 $348.49 $399.36 $498.46 $512.15 $503.25 $501.68 — RevPAR 200.89 206.23 144.26 211.34 271.88 279.77 279.21 — Low Season - June, July, August, September
Occupancy 54.7 % 55.4 % 31.7 % 45.7 % 52.6 % 53.0 % 51.0 % — % Average Rate $306.13 $323.33 $497.91 $503.38 $484.16 $472.73 $490.60 — RevPAR 167.51 179.11 157.75 230.00 254.76 250.31 250.39 — Source: STR
The illustrated occupancy and ADR patterns reflect important seasonal characteristics. We have reviewed these trends in developing our forthcoming forecast of market-wide demand and average rate. The peak season for Coachella Valley typically extends from late January through April. In particular, the strongest months are March and April; during that time, the number of special events throughout the Coachella Valley usually spikes, drawing thousands of travelers to Seasonality
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the area. The months of May and the fall months represent shoulder periods but still attract significant levels of visitation given the favorable climate. The hot summer months and the cooler December through early January period are considered the area’s off-season. During the off-season, weekend occupancies can still remain high; however, as hotel operators typically offer significant rate discounts and group incentives to attract travelers. We note that seasonality dynamics in this market have somewhat shifted in the wake of the COVID-19 pandemic as increased lifestyle flexibility, such as the ability to work from home, has resulted in demand during non-traditional periods.

A review of the trends in occupancy and ADR by day of the week provides some insight into the impact that the current economic conditions have had on the competitive lodging market. The data, as provided by STR, are illustrated in the following tables.

Patterns of Demand
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FIGURE 5-11 OCCUPANCY BY DAY OF WEEK (TRAILING 12 MONTHS) Month Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total Month Jun - 24 42.3 % 45.9 % 46.2 % 48.2 % 55.8 % 69.0 % 73.7 % 54.7 % Jul - 24 40.6 38.5 40.4 48.2 58.9 65.7 68.4 50.6
Aug - 24 37.9 37.1 37.5 36.6 46.0 62.8 70.7 48.2
Sep - 24 48.3 43.7 40.8 46.6 52.6 60.4 65.4 50.7
Oct - 24 47.5 56.3 58.0 53.6 54.2 67.4 72.6 58.2
Nov - 24 43.5 45.5 49.1 55.8 57.6 64.4 64.3 55.0
Dec - 24 46.8 50.1 53.5 49.0 54.3 61.9 72.6 54.9
Jan - 25 56.1 59.7 61.5 64.8 65.1 72.3 74.9 65.1
Feb - 25 62.2 69.0 75.2 70.9 70.4 75.5 79.0 71.7
Mar - 25 63.9 68.2 74.1 76.1 80.4 83.9 85.1 75.6
Apr - 25 64.3 60.2 65.0 68.1 72.2 78.4 81.1 69.7
May - 25 57.7 56.6 66.2 66.4 64.5 72.0 80.9 66.9
Average 50.8 % 52.4 % 55.4 % 57.1 % 60.7 % 69.3 % 74.1 % 60.0 % Source: STR
FIGURE 5-12 ADR BY DAY OF WEEK (TRAILING 12 MONTHS)
Month Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total Month Jun - 24 $463.04 $438.69 $431.79 $426.36 $448.11 $496.37 $481.45 $460.20 Jul - 24 478.73 487.33 483.00 504.35 510.02 539.73 514.65 505.43 Aug - 24 497.04 493.19 503.34 490.04 560.14 536.23 529.24 522.17 Sep - 24 470.97 438.93 446.98 439.30 481.81 521.55 515.28 477.06 Oct - 24 417.56 395.70 380.07 398.49 452.02 510.25 498.96 438.11 Nov - 24 369.01 333.43 354.80 393.73 442.86 472.67 444.07 411.91 Dec - 24 660.96 654.88 645.25 519.24 583.25 645.45 626.51 623.25 Jan - 25 581.36 509.40 510.67 610.65 632.52 653.86 644.04 599.47 Feb - 25 691.61 598.95 553.58 572.21 661.11 753.73 734.66 653.20 Mar - 25 673.44 641.43 660.74 672.62 716.81 778.51 764.73 704.64 Apr - 25 656.08 452.11 442.30 449.69 556.71 756.80 735.96 579.49 May - 25 495.16 399.27 411.59 426.51 447.09 515.30 541.66 470.33 Average $553.79 $501.00 $492.31 $500.40 $548.65 $602.91 $590.51 $545.79 Source: STR
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FIGURE 5-13 OCCUPANCY AND ADR BY DAY OF WEEK (TRAILING 12 MONTHS) $400.00
$450.00
$500.00
$550.00
$600.00
$650.00

40.0 45.0

50.0 55.0

60.0 65.0

70.0 75.0

80.0 Sunday Monday Tuesday Wednesday Thursday Friday Saturday Occupancy (%)
Occupancy ADR
442
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FIGURE 5-14 OCCUPANCY, ADR, AND REVPAR BY DAY OF WEEK (MULTIPLE YEARS) Occupancy (%)
Jun 22 - May 23 49.3 % 50.2 % 54.5 % 56.5 % 59.2 % 66.7 % 71.0 % 58.2 % Jun 23 - May 24 48.7 47.5 51.8 53.9 57.3 65.9 71.3 56.6 Jun 24 - May 25 50.8 52.4 55.4 57.1 60.7 69.3 74.1 60.0 Change (Occupancy Points)
FY 23 - FY 24 (0.7) (2.7) (2.7) (2.6) (1.9) (0.8) 0.3 (1.5) FY 24 - FY 25 2.2 4.9 3.6 3.2 3.4 3.4 2.8 3.4
ADR ($)
Jun 22 - May 23 $548.39 $484.03 $469.28 $479.71 $534.91 $598.45 $594.43 $534.48 Jun 23 - May 24 554.76 500.02 479.28 493.32 528.64 587.11 582.54 536.73 Jun 24 - May 25 553.79 501.00 492.31 500.40 548.65 602.91 590.51 545.79 Change (Dollars)
FY 23 - FY 24 $6.36 $15.99 $10.01 $13.61 ($6.27) ($11.34) ($11.88) $2.25 FY 24 - FY 25 (0.97) 0.98 13.03 7.08 20.01 15.80 7.96 9.07 Change (Percent)
FY 23 - FY 24 1.2 % 3.3 % 2.1 % 2.8 % (1.2) % (1.9) % (2.0) % 0.4 % FY 24 - FY 25 (0.2) 0.2 2.7 1.4 3.8 2.7 1.4 1.7
RevPAR ($)
Jun 22 - May 23 $270.62 $242.88 $255.96 $270.91 $316.46 $399.36 $421.78 $311.04 Jun 23 - May 24 270.06 237.28 248.39 266.01 302.71 387.06 415.11 304.04 Jun 24 - May 25 281.53 262.30 272.92 285.61 332.98 417.98 437.44 327.50 Change (Dollars)
FY 23 - FY 24 ($0.56) ($5.60) ($7.57) ($4.90) ($13.75) ($12.30) ($6.67) ($7.00) FY 24 - FY 25 11.48 25.02 24.53 19.60 30.27 30.92 22.33 23.46 Change (Percent)
FY 23 - FY 24 (0.2) % (2.3) % (3.0) % (1.8) % (4.3) % (3.1) % (1.6) % (2.3) % FY 24 - FY 25 4.2 10.5 9.9 7.4 10.0 8.0 5.4 7.7
Saturday Total Year
Friday
Wednesday Friday
Sunday Monday Tuesday Thursday Saturday Total Year
Sunday Monday Tuesday Thursday
Wednesday
Source: STR
Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total Year Demand typically spikes in the Coachella Valley market on Friday and Saturday nights, primarily due to the leisure focus in the area. Demand levels typically drop off considerably on Monday, Tuesday, and Wednesday nights, Our research revealed that demand has increased on Thursday and Monday nights during and after the 443
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pandemic as travelers extend their trips due to the more flexible working schedules in a remote working environment.

Based on an evaluation of the occupancy, rate structure, market orientation, chain affiliation, location, facilities, amenities, reputation, and quality of each area hotel, as well as the comments of management representatives, we have identified properties that are expected to be competitive with the Proposed COVA Coachella.

The following table summarizes the important operating characteristics of the future primary competitors and the aggregate secondary competitors. This information was compiled from personal interviews, inspections, online resources, and our in-house database of operating and hotel facility data. In cases where exact operating data for an individual property (or properties) were not available, we have used these resources, as well as the STR data, to estimate positioning within the market.

SUPPLY
Primary Competition
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FIGURE 5-15 LOCATIONALLY RELEVANT COMPETITORS – OPERATING PERFORMANCE Est. Segmentation Estimated 2023 Estimated 2024
Property Occ. RevPAR RevPAR
Occupancy
Penetration
Yield
Penetration
Grand Hyatt Indian Wells
Resort & Villas 531 55 % 45 % 530 45 - 50 % $325 - $350 $160 - $170 531 50 - 55 % $325 - $350 $170 - $180 90 - 95 % 60 - 65 % JW Marriott Desert Springs
Resort
884 55 45 884 60 - 65 300 - 325 190 - 200 884 60 - 65 300 - 325 190 - 200 110 - 120 65 - 70 La Quinta Resort & Club, Curio
Collection by Hilton 783 60 40 783 55 - 60 375 - 400 220 - 230 783 50 - 55 375 - 400 200 - 210 90 - 95 70 - 75 Parker Palm Springs 144 80 20 144 45 - 50 675 - 700 325 - 350 144 45 - 50 675 - 700 325 - 350 80 - 85 110 - 120 Ritz-Carlton Rancho Mirage 252 70 30 244 55 - 60 550 - 575 300 - 325 252 55 - 60 575 - 600 325 - 350 100 - 110 110 - 120 Sub-Totals/Averages 2,594 59 % 41 % 2,585 58.6 % $376.75 $220.65 2,594 56.2 % $384.36 $216 100 % 76.7 % Secondary Competitors 1,416 62 % 38 % 998 57.3 % $784.65 $449.76 998 57.0 % $792.98 $452 101 % 160.5 % Totals/Averages 4,010 60 % 40 % 3,583 58.2 % $488.60 $284.46 3,592 56.4 % $499.05 $281 100 % 100.0 % * Specific occupancy and average rate data were utilized in our analysis, but are presented in ranges in the above table for the purposes of confidentiality.

TransientMeeting and Group
Average Rate
Weighted
Annual
Room
Count
Number of
Rooms Average Rate Occ.

Weighted
Annual
Room
Count
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FIGURE 5-16 LOCATIONALLY RELEVANT COMPETITORS – FACILITY PROFILES Property
Number of
Rooms
Year
Opened
Approx. Miles
To Subject
Property Food and Beverage Outlets
Indoor
Meeting
Space (SF)
Meeting Space
per Room Facilities & Amenities
Grand Hyatt Indian Wells Resort & Villas 531 1986 6.6 38,453 72.4 44600 Indian Wells Lane
JW Marriott Desert Springs Resort 884 1987 9.5 58,126 65.8 74855 Country Club Drive
La Quinta Resort & Club, Curio Collection by Hilton 783 1926 5.8 43,600 55.7 49-499 Eisenhower Drive
Parker Palm Springs 144 2003 17.3 7,013 48.7
4200 East Palm Canyon Drive
Ritz-Carlton Rancho Mirage 252 1988 14.4 15,048 59.7
68900 Frank Sinatra Drive
Business Center; Guest Laundry Area; Concierge; Retail Outlet/Boutique; Room Service; Gift Shop; Full-Service Spa; Indoor Swimming Pool; Outdoor Swimming Pool; Tennis Court(s); Fitness Center; Indoor Whirlpool; Sauna State Fare; The Edge Steakhouse;
Pool Bar; Lobby Lounge;
Business Center; Gift Shop; Full-Service Spa; Outdoor Swimming Pool; Fitness Center; Outdoor Whirlpool
Business Center; Guest Laundry Area; Gift Shop; Full-Service Spa; Outdoor Swimming Pool; Tennis Court(s); Fitness Center; Indoor Whirlpool; Water Park; Waterslide(s); Lazy River
Fisherman's Landing; Mikado
Japanese Steakhouse; Rockwood
Grill; T&T Innovation Kitchen; Lobby
Business Center; Guest Laundry Area; Concierge; Retail Outlet/Boutique; Room Service; Gift Shop; Golf Course(s); Full-Service Spa; Outdoor Swimming Pool; Tennis Court(s); Indoor Whirlpool; Game Room; Sauna
Adobe Grill; Centre Court Cafe;
Morgan's in The Desert; Twenty6;
The Marketplace
Business Center; Retail Outlet/Boutique; Full-Service Spa; Outdoor Swimming Pool; Tennis Court(s); Fitness Center; Outdoor Whirlpool; Putting Green Tia Carmen; Carmocha; Vista Square
Kitchen; The WELL
Norma's; Mister Parker's; Mini Bar;
Counter Reformation
446
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The following map illustrates the locations of the proposed subject property and its future competitors.

MAP OF COMPETITION IN COACHELLA VALLEY, CALIFORNIA
447
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MAP OF COMPETITION IN NAPA, CALIFORNIA
448
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November-2025 Hotel Supply and Demand Analysis
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MAP OF COMPETITION IN COLORADO AND UTAH
449
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November-2025 Hotel Supply and Demand Analysis
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COMPETITOR #1 - GRAND HYATT INDIAN WELLS RESORT & VILLAS FIGURE 5-17 ESTIMATED HISTORICAL OPERATING STATISTICS
Year
Est. 2019 530 55 - 60 % $220 - $230 $130 - $140 90 - 95 % 60 - 65 % Est. 2021 530 40 - 45 325 - 350 130 - 140 95 - 100 65 - 70 Est. 2022 530 60 - 65 325 - 350 200 - 210 100 - 110 70 - 75 Est. 2023 530 45 - 50 325 - 350 160 - 170 85 - 90 55 - 60 Est. 2024 531 50 - 55 325 - 350 170 - 180 90 - 95 60 - 65 Wtd. Annual
Room Count Occupancy RevPAR
Occupancy
Penetration
Yield
Average Rate Penetration
The Grand Hyatt Indian Wells Resort & Spa features a new waterpark with dueling slides, a lazy river, and a splash pad, as well as additional pools, five food and beverage outlets, a full-service spa and fitness center, and tennis facilities. This hotel benefits from its family friendly recreational amenities, recent renovations, and location near the Indian Wells Tennis Garden. Following its most recent sale in 2022, the hotel completed an extensive $50 million ($94,700 per room) renovation and was rebranded as a Grand Hyatt. Overall, the property was reported to be in very good condition. Its location is similar to that of the Proposed COVA Coachella.

Grand Hyatt Indian
Wells Resort & Villas
44600 Indian Wells
Lane
Indian Wells, CA
450
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November-2025 Hotel Supply and Demand Analysis
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COMPETITOR #2 - JW MARRIOTT DESERT SPRINGS RESORT
FIGURE 5-18 ESTIMATED HISTORICAL OPERATING STATISTICS
Year
Est. 2019 884 55 - 60 % $220 - $230 $130 - $140 90 - 95 % 60 - 65 % Est. 2021 884 35 - 40 180 - 190 65 - 70 85 - 90 30 - 35 Est. 2022 884 60 - 65 300 - 325 180 - 190 100 - 110 60 - 65 Est. 2023 884 60 - 65 300 - 325 190 - 200 110 - 120 65 - 70 Est. 2024 884 60 - 65 300 - 325 190 - 200 110 - 120 65 - 70 Wtd. Annual
Room Count Occupancy RevPAR
Occupancy
Average Rate Penetration
Yield
Penetration
The JW Marriott Desert Springs Resort, which opened in 1987, features 884 rooms, four restaurants, three bars, a poolside bar, and a coffee shop, 58,126 square feet of meeting space, five outdoor pools, two outdoor whirlpools, two 18-hole golf courses, 20 tennis courts, a fitness center, a full-service spa, an entertainment zone, a business center, a rental car center, and leased retail outlets. This hotels benefits from its extensive meeting and recreational facilities. Overall, the property was reported to be in very good condition. Its location is similar to that of the Proposed COVA Coachella.

JW Marriott Desert
Springs Resort
74855 Country Club
Drive
Palm Desert, CA
451
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November-2025 Hotel Supply and Demand Analysis
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COMPETITOR #3 - LA QUINTA RESORT & CLUB, CURIO COLLECTION BY HILTON FIGURE 5-19 ESTIMATED HISTORICAL OPERATING STATISTICS
This historic
Year
Est. 2019 785 60 - 65 % $290 - $300 $180 - $190 100 - 110 % 85 - 90 % Est. 2021 783 40 - 45 350 - 375 160 - 170 100 - 110 80 - 85 Est. 2022 785 55 - 60 400 - 425 220 - 230 90 - 95 75 - 80 Est. 2023 783 55 - 60 375 - 400 220 - 230 100 - 110 75 - 80 Est. 2024 783 50 - 55 375 - 400 200 - 210 90 - 95 70 - 75 Occupancy
Penetration
Wtd. Annual
Room Count Occupancy Average Rate
Yield
RevPAR Penetration
This historic property opened in 1926 with 51 casitas and limited hotel facilities and quickly became a popular getaway for Hollywood stars, The La Quinta Resort is located among high-end residential developments and private golf clubs, thereby providing a sense of seclusion relative to the more developed Coachella Valley cities such as Palm Desert, Indian Wells, and Rancho Mirage. In November 2021, the resort was rebranded from Waldorf Astoria to Hilton’s Curio Collection. The property is currently undergoing a multi=phase $70 million ($89,400 per room) guestroom renovation, which is expected to be completed by 2029. Overall, the property was reported to be in good condition. Its location is similar to that of the Proposed COVA Coachella.

La Quinta Resort &
Club, Curio Collection
by Hilton
49-499 Eisenhower
Drive
La Quinta, CA
452
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November-2025 Hotel Supply and Demand Analysis
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COMPETITOR #4 - PARKER PALM SPRINGS
FIGURE 5-20 ESTIMATED HISTORICAL OPERATING STATISTICS
Year
Est. 2019 144 60 - 65 % $400 - $425 $250 - $260 100 - 110 % 120 - 130 % Est. 2021 144 35 - 40 675 - 700 260 - 270 85 - 90 130 - 140 Est. 2022 144 50 - 55 700 - 725 350 - 375 85 - 90 120 - 130 Est. 2023 144 45 - 50 675 - 700 325 - 350 80 - 85 110 - 120 Est. 2024 144 45 - 50 675 - 700 325 - 350 80 - 85 110 - 120 Wtd. Annual
Room Count Occupancy RevPAR
Occupancy
Average Rate Penetration
Yield
Penetration
This hotel is known for its unique décor, manicured gardens, and popular food and beverage outlets. The hotel is decorated by renowned interior designer Jonathan Adler. The property’s interior grounds are maintained exclusively for hotel guests, which adds to its luxury allure. The hotel’s expansive spa was renovated in early 2019, and the hotel also offers a private residence and large villas; these larger rooms increase the overall average rate of this property. Overall, the property was reported to be in good condition. Its location is similar to that of the Proposed COVA Coachella.

Parker Palm Springs
4200 East Palm Canyon
Drive
Palm Springs, CA
453
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November-2025 Hotel Supply and Demand Analysis
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COMPETITOR #5 - RITZ-CARLTON RANCHO MIRAGE
FIGURE 5-21 ESTIMATED HISTORICAL OPERATING STATISTICS
Year
Est. 2019 244 70 - 75 % $375 - $400 $280 - $290 110 - 120 % 130 - 140 % Est. 2021 244 45 - 50 650 - 675 300 - 325 100 - 110 150 - 160 Est. 2022 244 60 - 65 575 - 600 350 - 375 100 - 110 120 - 130 Est. 2023 244 55 - 60 550 - 575 300 - 325 95 - 100 110 - 120 Est. 2024 252 55 - 60 575 - 600 325 - 350 100 - 110 110 - 120 Wtd. Annual
Room Count Occupancy Average Rate RevPAR
Yield
Penetration
Occupancy
Penetration
The property was closed in 2006 for a property-wide renovation, but the project was delayed given the Great Recession and the subsequent default of the previous owner; the hotel reopened in 2014 after a change in ownership and an extensive renovation. The Ritz-Carlton Rancho Mirage is the largest luxury property on the west end of the Coachella Valley and offers sweeping views owing to its mountainside configuration. The hotel benefits from a favorable reputation for attentive service and a very high standard for its food and beverage operation.

Overall, the property was reported to be in good condition. Its location is similar to that of the Proposed COVA Coachella.

Ritz-Carlton Rancho
Mirage
68900 Frank Sinatra
Drive
Rancho Mirage, CA
454
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We have also reviewed other hotels in separate markets for properties that share similar characteristics with the Proposed COVA Coachella as additional benchmarks, which were weighted on a secondary basis. The room count of each secondary competitor has been weighted based on its assumed degree of similarity with the proposed subject hotel. The following table sets forth the pertinent operating characteristics of the secondary competitors.

Secondary
Competitors
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FIGURE 5-22 SECONDARY COMPETITORS – OPERATING PERFORMANCE Est. Segmentation Estimated 2023 Estimated 2024
Property
Number of
Rooms Occ. Average Rate RevPAR Occ. Average Rate RevPAR Andaz Napa 141 85 % 15 % 75 % 106 65 - 70 % $400 - $425 $280 - $290 106 65 - 70 % $375 - $400 $260 - $270 Carneros Resort & Spa 100 75 25 75 75 45 - 50 875 - 900 400 - 425 75 45 - 50 925 - 950 450 - 475 Goldener Hirsch, Auberge
Resorts Collection 66 90 10 65 43 45 - 50 1,225 - 1,250 600 - 625 43 50 - 55 1,300 - 1,325 650 - 675 Hotel Jerome An Auberge
Resort
99 80 20 65 64 55 - 60 975 - 1,000 575 - 600 64 55 - 60 975 - 1,000 525 - 550 Little Nell Hotel 92 70 30 60 55 65 - 70 1,500 - 2,000 1,250 - 1,275 55 65 - 70 1,500 - 2,000 1,150 - 1,175 Madeline Hotel &
Residences, Auberge
Resorts Collection
137 75 25 65 89 35 - 40 1,125 - 1,150 450 - 475 89 35 - 40 1,075 - 1,100 425 - 450 Meritage Resort at Napa 467 40 60 75 350 55 - 60 350 - 375 210 - 220 350 55 - 60 350 - 375 210 - 220 St. Regis Aspen 179 65 35 60 107 60 - 65 1,000 - 1,025 650 - 675 107 60 - 65 1,150 - 1,175 700 - 725 Stanly Ranch Napa Auberge
Resorts Collection 135 60 40 80 108 45 - 50 1,200 - 1,225 600 - 625 108 50 - 55 1,175 - 1,200 650 - 675 Totals/Averages 1,416 62 % 38 % 70 % 998 57.3 % $784.65 $449.76 998 57.0 % $792.98 $451.80 * Specific occupancy and average rate data was utilized in our analysis, but is presented in ranges in the above table for the purposes of confidentiality.

Total
Competitive
Level
Weighted
Annual
Room
Count
Weighted
Annual
Room Transient
Meeting and GroupCount
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It is important to consider any new hotels that may have an impact on the proposed subject hotel’s operating performance. Potentially competitive hotels that have recently opened, are under construction, or that may be in the early development stages are noted below. The list is categorized by the principal submarkets within the city.

FIGURE 5-23 POTENTIALLY COMPETITIVE HOTEL DEVELOPMENT ACTIVITY Proposed Hotel Name Hotel Product Tier Development Stage Proposed Hotel 0 Coachella Valley, California
Former Montage (rumored Four Seasons), La Quinta 154 Luxury Speculative Thompson Palm Springs, Palm Springs 168 Luxury Recently Opened Orchard Tree, an Auberge Resort, Palm Springs 64 Luxury Development on Hold Napa Area, California
Calistoga Hills, a Rosewood Resort, Calistoga 110 Luxury Site Work Underway Six Senses Napa, Pope Valley 95 Luxury Early Development French Laundry Hotel, Yountville TBD Luxury Development on Hold Utah
Grand Hyatt Deer Valley, Park City 387 Luxury Recently Opened Ameyalli Resort, Midway 80 Luxury Under Construction
Spirit Mountain Resort, Orderville 40 Luxury Site Work Underway Estimated
Number of
Rooms
Of the hotels listed in the preceding table, we have identified the following new supply that is expected to have some degree of competitive interaction with the proposed subject hotel based on location, anticipated market orientation and price point, and/or operating profile.

Supply Changes
457
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FIGURE 5-24 NEW SUPPLY
Total
Proposed Property
Number
of Rooms
Competitive
Level
Estimated Opening
Date Development Stage
Proposed COVA Coachella 222 100 % 222 March 1, 2030 Early Development Former Montage (rumored Four Seasons), La Quinta 154 50 77 January 1, 2028 Speculative Totals/Averages 376 299
Weighted
Room
Count
The former Montage project in La Quinta was originally planned to be developed with a Montage Hotel and Residences; however, after numerous delays that put the developer, SilverRock Development Company in breach of contract with the city, the developer defaulted on the project and filed for bankruptcy on August 5, 2024. A motion to sell the raw and partially improved land to Turnbridge Equities was filed by the debtors on August 15, 2015. On October 21, 2025, a bankruptcy judge granted a motion for the sale to Turnbridge Equities allow the property to enter into escrow. The La Quinta City Council approved a reinstated and amended development agreement for the project under the new ownership, which is outlined as follows:
• One luxury hotel with approximately 154 guestrooms.
• 55,000-square-foot banquet/shared use facilities.
• 445 residences to include 29 branded residences north of the hotel with a private clubhouse, 70 condos and 293 homes east of the hotel, which can be short-term vacation rentals from which the city would receive TOT. • 40,000-square-foot commercial area.
• 17,000-square-foot public golf clubhouse which will be moved closer to the entrance off of Avenue 52 and other public amenities for easier public access.
• 20,000-square-foot residential amenities building.

It is rumored but not yet confirmed that the project will be affiliated with Four Seasons Hotels and Resorts. Given the uncertainty of this project going forward, it has been weighted secondarily competitive in our analysis. 458
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The subject units that will be available for rental will be developed in phases. It is important to note that the developer plans to retain ownership of 52 condo-hotel units that we assume will be developed in the first phase. All remaining units, exclusive of 61 units which will be sold for co-ownership use, will be sold to third parties who will be required to participate in a rental program. Based on the discussions with the developer, owner usage will range from 21 to 30 days. We have assumed an average of 25 days for owner usage in our analysis. To account for owner usage, we have reflected the average annual number of units that will be available for rental, as illustrated in the following table. Note that the rental availability factor is calculated by 340 annual rental days divided by 365 days (equals 93.15%).

FIGURE 5-25 SUBJECT UNIT CALCULATION
Rental Available
Total Availability Units
Phase Units Factor for Rental Rounded
Phase 1 - Developer Owned Units 52 100.00% 52.00 52
Phase 1 - Third-Party Owned Units 182 93.15% 169.53 170 Phase 1 - Total Units 234 222
Phase 2 - Third-Party Owned Units 78 93.15% 72.66 73
Phase 3 - Third-Party Owned Units 14 93.15% 13.04 13
Phase 4 - Third-Party Owned Units 15 93.15% 13.97 14
Total 341 322
The 222 units in Phase 1 are included in new supply in our analysis. The remaining phases are included as expansions in our analysis.

November-2025 Hotel Supply and Demand Analysis
Proposed COVA Coachella – Coachella, California 94
While we have taken reasonable steps to investigate proposed hotel projects and their status, due to the nature of real estate development, it is impossible to determine with certainty every hotel that will be opened in the future or what their marketing strategies and effect on the market will be. Depending on the outcome of current and future projects, the operating potential of the proposed subject hotel may be affected. Future improvement in market conditions will raise the risk of increased competition. Our forthcoming forecast of stabilized occupancy and ADR is intended to reflect such risk.

We have identified various properties that are expected to be competitive to some degree with the proposed subject hotel. We have also investigated potential increases in competitive supply. The Proposed COVA Coachella should enter a dynamic market of varying product types and price points. Next, we will present our forecast for demand change, using the historical supply data presented as a starting point.

The following table presents the most recent trends for the subject hotel market as tracked by HVS. These data pertain to the competitors discussed previously in this section; performance results are estimated, rounded for the competition, and weighted if there are secondary competitors present. In this respect, the information in the table differs from the previously presented STR data and is consistent with the supply-and-demand analysis developed for this report.

FIGURE 5-26 HISTORICAL MARKET TRENDS
Year
Est. 2019 783,915 — 1,273,576 — 61.6 % $338.74 — $208.50 — Est. 2020 361,963 (53.8) % 1,273,576 0.0 % 28.4 397.96 17.5 % 113.10 (45.8) % Est. 2021 545,327 50.7 1,273,576 0.0 42.8 458.08 15.1 196.14 73.4 Est. 2022 766,899 40.6 1,298,769 2.0 59.0 489.25 6.8 288.89 47.3 Est. 2023 761,375 (0.7) 1,307,759 0.7 58.2 488.60 (0.1) 284.46 (1.5) Est. 2024 739,373 (2.9) 1,311,044 0.3 56.4 499.05 2.1 281.44 (1.1) Avg. Annual Compounded
Chg., Est. 2019-Est. 2024: (1.2) % 0.6 % 8.1 % 6.2 %
% Change
Market
% Change Occupancy Market ADR
Room Nights
Available % Change % Change
Market
RevPAR
Accommodated
Room Nights
Although not shown in the preceding table, as a point of comparison, the year-todate 2025 STR trend data indicates a market occupancy level of 69.8% versus 61.1% for the same period of time in 2024. Moreover, ADR registered $606.36 for the yearto-date 2025 period, reflecting a change of 0.7 % when compared with the ADR for the same period of time in 2024.

Supply Conclusion
DEMAND
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For the purpose of demand analysis, the overall market is divided into individual segments based on the nature of travel. Based on our fieldwork, area analysis, and knowledge of the local lodging market, we estimate the 2024 distribution of accommodated-room-night demand as follows.

FIGURE 5-27 BASE-YEAR ACCOMMODATED-ROOM-NIGHT DEMAND
Market Segment
Transient 442,141 60 %
Meeting and Group 297,232 40
Total 739,373 100 %
2024 Marketwide
Accommodated
Demand
Percentage
of Total
In the base year, the market’s demand mix comprised transient demand, with this segment representing roughly 60% of the accommodated room nights in this Coachella submarket. The meeting and group segment comprised 40% of the total.

Using the distribution of accommodated hotel demand as a starting point, we will analyze the characteristics of each market segment in an effort to determine future trends in room-night demand.

Transient demand consists of individuals and families spending time in an area or passing through en route to other destinations; this segment represents travelers that are not associated with a group or room-night contract. Travel purposes include business, sightseeing, recreation, or visiting friends and relatives. Transient demand also includes room nights booked through Internet sites such as Expedia, Hotels.com, and Priceline; however, this demand may include group and convention attendees who use these channels to take advantage of any discounts that may be available on these sites. In resort destinations, transient demand is strongest Friday and Saturday nights, and all week during holiday periods and the summer months.

In urban and suburban destinations, transient demand is typically strongest on Tuesday, Wednesday, and Thursday nights. The typical length of stay ranges from one to four days, depending on the destination and travel purpose. The rate of double occupancy typically ranges from 1.0 to 3.0 people per room, with higher double occupancy occurring in resort destinations. Price sensitivity tends to vary with product type. All-suite properties with inclusive food and beverage or luxury Demand Analysis
Using Market
Segmentation
Transient Segment
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destination properties tend to drive strong transient room rates, with discounted rates offered at older or value-oriented hotels with limited amenities. For destination locations, future transient demand is related to the overall economic health of the primary source cities for visitation; the overall economic health of the surrounding neighborhood is considered for urban and suburban locations.

The San Diego, Orange County, and Los Angeles metropolitan markets have consistently been the primary feeder markets for transient demand in the Coachella Valley, as visitors to the area typically travel by car. The area is also popular among Canadians and northern U.S. residents who typically visit the area during the winter months because of the warmer climate. Transient visitation to the Coachella Valley traditionally slows in the summer months given the extreme desert heat; however, summer demand has risen in recent years with the growth of day-club and musicevent marketing. However, transient demand declined significantly in 2020 and early 2021 because of the COVID-19 pandemic. A notable rebound commenced in the spring of 2021 once restrictions had been lifted, with transient demand increasing through 2022 due to strong demand for drive-to destinations, such as Coachella Valley. Demand in this segment declined in 2023 as domestic leisure demand moderated following the easing of international travel restrictions. We expect transient demand to increase in 2025, which is supported by the year-to-date data in the STR report. Despite the headwinds impacting the hotel performance in general in 2025, performance strength remains in high-end chain scales (luxury tier), especially in the leisure transient segment, with international markets making up for the decline in travelers from the U.S. and Canada. Thereafter, moderate growth is forecast through the stabilized year, which should be supported by strengthening economic conditions, increase airlifts, and given the relatively recent opening of the Acrisure Arena.

The meeting-and-group market includes meetings, seminars, conventions, trade association shows, and similar gatherings of ten or more people. Peak convention demand typically occurs in the spring and fall. Although there are numerous classifications within the meeting-and-group segment, the primary categories considered in this analysis are corporate groups, associations, and SMERFE (social, military, ethnic, religious, fraternal, and educational) groups. Corporate groups typically meet during the business week, most commonly in the spring and fall months. These groups tend to be the most profitable for hotels, as they typically pay higher rates and usually generate ancillary revenues including food and beverage and/or banquet revenue. SMERFE groups are typically price-sensitive and tend to meet on weekends and during the summer months or holiday season, when greater discounts are usually available; these groups generate limited ancillary revenues.

Association demand is generally divided on a geographical basis, with national, regional, and state associations representing the most common sources.

Professional associations and/or those supported by members' employers often Meeting and Group
Segment
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meet on weekdays, while other associations prefer to hold events on weekends. The profile and revenue potential of associations varies depending on the group and the purpose of the meeting or event.

The Coachella Valley competes with San Diego, coastal Orange County, Arizona cities (such as Phoenix, Scottsdale, and Tucson), and Las Vegas for group business.

Increased airlift at Palm Springs International Airport and the general improvement in local hotel product have resulted in a significant strengthening of group business overall. Corporate retreats, social events, and SMERFE-related groups have increased along the growing popularity of the Coachella Valley. However, meeting and group demand was nearly non-existent in 2020 given the implications associated with the COVID-19 pandemic. Groups slowly returned to the market in late 2021, with more groups returning in 2022 through 2024. Moderate growth in the meeting and group segment is forecast through the stabilized year. The opening of subject property should induce demand given its brand-new high quality event facilities.

The purpose of segmenting the lodging market is to define each major type of demand, identify customer characteristics, and estimate future growth trends.

Starting with an analysis of the local area, two segments were defined as representing the proposed subject hotel’s lodging market. Various types of economic and demographic data were then evaluated to determine their propensity to reflect changes in hotel demand. Based on this procedure, we forecast the following average annual compounded market-segment growth rates.

FIGURE 5-28 AVERAGE ANNUAL COMPOUNDED MARKET-SEGMENT GROWTH RATES Annual Growth Rate
Market Segment
Transient 2.0 % 2.0 % 2.0 % 1.0 % 1.0 % 1.0 % 1.0 % 1.0 % 1.0 % 0.0 % Meeting and Group 3.0 3.0 3.0 2.0 1.0 1.0 1.0 1.0 1.0 0.0 Base Demand Growth 2.4 % 2.4 % 2.4 % 1.4 % 1.0 % 1.0 % 1.0 % 1.0 % 1.0 % 0.0 % 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Based upon a review of the market dynamics in the proposed subject hotel’s competitive environment, we have forecast growth rates for each market segment.

Using the calculated potential demand for the market, we have determined marketwide accommodated demand based on the inherent limitations of demand fluctuations and other factors in the market area.

Base Demand Growth
Rates
Accommodated
Demand and Marketwide Occupancy
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The following table details our projection of lodging demand growth for the subject market, including the total number of occupied room nights and any residual unaccommodated demand in the market.

FIGURE 5-29 FORECAST OF MARKET OCCUPANCY
442,141 450,984 460,003 469,203 473,896 478,634 483,421 488,255 493,138 498,069 Growth Rate 2.0 % 2.0 % 2.0 % 1.0 % 1.0 % 1.0 % 1.0 % 1.0 % 1.0 % 297,232 306,149 315,333 324,793 331,289 334,602 337,948 341,327 344,741 348,188

3.0 % 3.0 % 3.0 % 2.0 % 1.0 % 1.0 % 1.0 % 1.0 % 1.0 %
Total Demand 739,373 757,133 775,337 793,997 805,185 813,236 821,369 829,583 837,878 846,257 less: Residual Demand 0 680 2,274 5,075 4,250 5,539 842 228 461 1,195 Total Accommodated Demand 739,373 756,453 773,062 788,922 800,935 807,697 820,527 829,355 837,417 845,062 Overall Demand Growth (2.9) % 2.3 % 2.2 % 2.1 % 1.5 % 0.8 % 1.6 % 1.1 % 1.0 % 0.9 % Market Mix

59.8 % 59.6 % 59.3 % 59.1 % 58.9 % 58.9 % 58.9 % 58.9 % 58.9 % 58.9 %

40.2 40.4 40.7 40.9 41.1 41.1 41.1 41.1 41.1 41.1
3,592 3,592 3,592 3,592 3,592 3,592 3,586 3,517 3,501 3,492 Proposed COVA Coachella 1 192 297 313 322
Former Montage (rumored Four Seasons), La Quinta 2 77 77 77 77 77 77 Change to Existing Hotels
Proposed COVA Coachella A 6 73 73 73
Proposed COVA Coachella B 2 13 13
Proposed COVA Coachella C 5 14
Available Room Nights per Year 1,311,044 1,311,044 1,311,044 1,311,044 1,339,149 1,339,149 1,409,344 1,447,617 1,453,277 1,456,679 Nights per Year 365 365 365 365 365 365 365 365 365 365 Total Supply 3,592 3,592 3,592 3,592 3,669 3,669 3,861 3,966 3,982 3,991 Rooms Supply Growth 0.0 % 0.0 % 0.0 % 2.1 % 0.0 % 5.2 % 2.7 % 0.4 % 0.2 % Marketwide Occupancy 56.4 % 57.7 % 59.0 % 60.2 % 59.8 % 60.3 % 58.2 % 57.3 % 57.6 % 58.0 % 1 Opening in March 2030 of the 100% competitive, 222-room Proposed COVA Coachella 2 Opening in January 2028 of the 50% competitive, 154-room Former Montage (rumored Four Seasons), La Quinta A
Change of room count in December 2030 of the 100% competitive, Proposed COVA Coachella B
Change of room count in November 2031 of the 100% competitive, Proposed COVA Coachella C
Change of room count in September 2032 of the 100% competitive, Proposed COVA Coachella Existing Hotel Supply
Proposed Hotels
Totals
Transient
Meeting and Group
Total Demand
Growth Rate
2030 2031 2032 2033
Total Demand
Meeting and Group
Transient
2024 2025 2026 2027 2028 2029
The defined competitive market of hotels experienced a sharp occupancy decline in 2020 and early 2021 because of the severe downturn in travel associated with the COVID-19 pandemic. Year-to-date trends in 2025 reflect that improvement is occurring in the luxury tier. Projected growth through the stabilized year should be supported by the ongoing return of group events, the improved airlift, and the continued return of growth in the popularity of Coachella Valley as a resort destination.
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6. Projection of Hotel Occupancy and Average Rate
Along with average rate results, the occupancy levels achieved by a hotel are the foundation of the property's financial performance. Most of a lodging facility's other revenue sources (such as food and beverage, other operated departments, and miscellaneous income) are driven by the number of guests, and many expense levels also vary with occupancy. To a certain degree, occupancy attainment can be manipulated by management. For example, hotel operators may choose to lower rates in an effort to maximize occupancy. Our forecasts reflect the operating strategy that we believe would be implemented by a typical, professional hotel management team to achieve an optimal mix of occupancy and average rate.

The proposed subject hotel's forecasted market share and occupancy levels are based upon its anticipated competitive position within the market, as quantified by its penetration rate. The penetration rate is the ratio of a hotel's market share to its fair share.

In the following table, the penetration rates attained by the primary competitors and the aggregate secondary competitors are set forth for each segment for the base year.

FIGURE 6-1 HISTORICAL PENETRATION RATES
Property
Grand Hyatt Indian Wells Resort & Villas 84 % 102 % 91 % JW Marriott Desert Springs Resort 103 126 112
La Quinta Resort & Club, Curio Collection by Hilton 94 93 93 Parker Palm Springs 114 42 85
Ritz-Carlton Rancho Mirage 118 75 101
Secondary Competition 104 96 101
Transient Overall
Meeting and
Group
The Ritz-Carlton Rancho Mirage achieved the highest penetration rate within the transient segment. The highest penetration rate in the meeting and group segment was achieved by the JW Marriott Desert Springs Resort.

Penetration Rate
Analysis
Base-Year Penetration
Rates by Market
Segment
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Because the supply and demand balance for the competitive market is dynamic, there is a circular relationship between the penetration factors of each hotel in the market. The performance of individual new hotels has a direct effect upon the aggregate performance of the market and, consequently, upon the calculated penetration factor for each hotel in each market segment. The same is true when the performance of existing hotels changes, either positively (following a refurbishment, for example) or negatively (when a poorly maintained or marketed hotel loses market share).

A hotel’s penetration factor is calculated as its achieved market share of demand divided by its fair share of demand. Thus, if one hotel’s penetration performance increases, thereby increasing its achieved market share, this leaves less demand available in the market for the other hotels to capture, and the penetration performance of one or more of those other hotels consequently declines (other things remaining equal). This type of market share adjustment takes place every time there is a change in supply or a change in the relative penetration performance of one or more hotels in the competitive market. Our projections of penetration, demand capture, and occupancy performance for the proposed subject hotel account for these types of adjustments to market share within the defined competitive market.

The proposed subject hotel's occupancy forecast is set forth as follows, with the adjusted projected penetration rates used as a basis for calculating the amount of captured market demand.

Forecast of Subject
Property’s Occupancy
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FIGURE 6-2 FORECAST OF SUBJECT PROPERTY'S OCCUPANCY
Market Segment
Transient
Demand 483,421 488,255 493,138 498,069 498,069
Market Share 5.4 % 8.9 % 9.6 % 9.9 % 9.9 %
Capture 26,327 43,241 47,445 49,170 49,170
Penetration 109 % 118 % 123 % 123 % 123 %
Meeting and Group
Demand 337,948 341,327 344,741 348,188 348,188
Market Share 4.7 % 7.9 % 8.9 % 9.2 % 9.2 %
Capture 16,046 26,798 30,810 31,937 31,937
Penetration 95 % 105 % 114 % 114 % 114 %
Total Room Nights Captured 42,373 70,039 78,254 81,106 81,106 Available Room Nights 70,195 108,468 114,114 117,530 117,530 Subject Occupancy 60 % 65 % 69 % 69 % 69 %
Market-wide Available Room Nights 1,409,344 1,447,617 1,453,277 1,456,679 1,456,679 Fair Share 5 % 7 % 8 % 8 % 8 %
Market-wide Occupied Room Nights 820,527 829,355 837,417 845,062 845,062 Market Share 5 % 8 % 9 % 10 % 10 %
Market-wide Occupancy 58 % 57 % 58 % 58 % 58 %
Total Penetration 104 % 113 % 119 % 119 % 119 %
2030 2031 2032 2033 2034
The proposed subject hotel’s transient penetration level is positioned at an abovemarket-average level, supported by its anticipated lifestyle hotel product focused on wellness in a highly amenitized resort setting. Furthermore, the proposed subject property should benefit from its planned luxury brand affiliation, Auberge, Rosewood, One and Only, One Hotels, Montage or similar, and its unique location with proximity to numerous private golf clubs, high-end residential developments, and special event venues. The proposed subject hotel’s penetration in the meeting and group segment is also positioned at an above-market-average level given its planned offering of resort amenities and outdoor venues, which should allow it to become a popular destination for incentive groups, executive level meetings, and social events such as weddings.

These positioned segment penetration rates result in the following market segmentation forecast.
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FIGURE 6-3 MARKET SEGMENTATION FORECAST – SUBJECT PROPERTY Transient 62 % 62 % 61 % 61 % 61 %
Meeting and Group 38 38 39 39 39
Total 100 % 100 % 100 % 100 % 100 %
2030 2031 2032 2033 2034
Based on our analysis of the proposed subject hotel and market area, we have selected a stabilized occupancy level of 69%. The stabilized occupancy is intended to reflect the anticipated results of the property over its remaining economic life given all changes in the life cycle of the hotel. Thus, the stabilized occupancy excludes from consideration any abnormal relationship between supply and demand, as well as any nonrecurring conditions that may result in unusually high or low occupancies. Although the proposed subject hotel may operate at occupancies above this stabilized level, we believe it equally possible for new competition and temporary economic downturns to force the occupancy below this selected point of stability.

One of the most important considerations in estimating the potential performance of a lodging facility is a supportable forecast of its attainable average rate (ADR), which is more formally defined as the average rate per occupied room; ADR can be calculated by dividing the total rooms revenue achieved during a specified period by the number of rooms sold during the same period. The projected ADR and the anticipated occupancy percentage are used to forecast rooms revenue, which in turn provides the basis for estimating most other income and expense categories.

Although the ADR analysis presented here follows the occupancy projection, these two statistics are highly correlated; in reality, one cannot project occupancy without making specific assumptions regarding ADR. This relationship is best illustrated by revenue per available room (RevPAR), which reflects a property's ability to maximize rooms revenue. The following table summarizes the historical ADR and RevPAR levels of the proposed subject hotel’s future primary competitors.

Average Rate Analysis
Competitive Position
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FIGURE 6-4 BASE-YEAR ADR AND REVPAR OF THE COMPETITORS
Property
Grand Hyatt Indian Wells Resort & Villas $325 - $350 65 - 70 % 50 - 55 % 90 - 95 % $170 - $180 60 - 65 % JW Marriott Desert Springs Resort 300 - 325 60 - 65 60 - 65 110 - 120 190 - 200 65 - 70 La Quinta Resort & Club, Curio Collection
by Hilton 375 - 400 75 - 80 50 - 55 90 - 95 200 - 210 70 - 75 Parker Palm Springs 675 - 700 130 - 140 45 - 50 80 - 85 325 - 350 110 - 120 Ritz-Carlton Rancho Mirage 575 - 600 110 - 120 55 - 60 100 - 110 325 - 350 110 - 120 Average - Primary Competitors $384.36 77.0 % 56.2 % 99.6 % $215.90 76.7 % Average - Secondary Competitors 792.98 158.9 57.0 101.0 451.80 160.5 Overall Average $499.05 100.0 % 56.4 % 100.0 % $281.44 100.0 % .

Subject As If Stabilized (In 2024 Dollars) $1,497.30 300.0 % 67.1 % 119.0 % $1,004.47 356.9 % Estimated 2024
Average Room
Rate
Average Room
Rate Penetration
Rooms Revenue
Per Available
Room (RevPAR)
RevPAR
Occupancy Penetration
Occupancy
Penetration
The Parker Palm Springs achieved the highest estimated average rate in the local competitive set, by a significant margin, because of their luxury product offering, popularity with-end clientele, and resort-style amenities.

It is important for the reader to understand that the average rate projection is inclusive of all units that will be included in the subject rental program, which will include the condo-hotel, villas, residences, sky villas, and estates. We have selected the rate position of $670, in base-year dollars (2024), for the proposed subject property’s condo hotel rooms. We have positioned the condo-hotel room’s ADR in the 2024 base year in consideration of its wellness-focused wellness facilities, new facility, large room units which will average 1,248 square feet, and its location. The ADR positioning of the villas, residences, sky villas, and estates was estimated based on considerations of the size of the units, and review of price premiums of similar units at selected Auberge and Four Seasons affiliated branded residences. The following table illustrates that the overall rate position, inclusive of the condo-hotel, villas, residences, sky villas, and estates is $1,490, in base-year dollars (2024). 469
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FIGURE 6-5 BASE-YEAR ADR POSITIONING BY UNIT TYPE
Implied Base Implied Implied
Unit Total Rentable Stabilized Year Occupied Rooms
Types Units Units Occupancy ADR Rooms Revenue
Condo Hotel 240 228 70% $670 58,254 $39,030,180
Villas 51 47 68% 3,150 11,665 36,746,010
Residences 39 36 66% 3,450 8,672 29,919,780
Sky Villas 5 5 50% 4,050 913 3,695,625
Estates 6 6 62% 8,150 1,358 11,066,070
Totals 341 322 69% $1,490 80,862 $120,457,665
The following table presents the ADR forecast for the market and the proposed subject hotel on a calendar-year basis, as well as the resulting ADR penetration level.

The proposed subject hotel’s projected ADR (as if stabilized) is then fiscalized to correspond with the hotel’s anticipated date of opening for each forecast year.

FIGURE 6-6 ADR FORECAST – LOCAL MARKET AND PROPOSED SUBJECT PROPERTY Calendar Year 2024 2025 2026 2027 2028 2029 2030 2031 2032 Market ADR $499.05 $501.54 $506.56 $516.69 $532.19 $548.15 $564.60 $581.54 $598.98 Projected Market ADR Growth Rate 0.5% 1.0% 2.0% 3.0% 3.0% 3.0% 3.0% 3.0% Proposed Subject Property ADR (As-If Stabilized) $1,490.00 $1,497.45 $1,512.42 $1,550.24 $1,596.74 $1,644.64 $1,693.98 $1,744.80 $1,797.15 ADR Growth Rate 0.5% 1.0% 2.5% 3.0% 3.0% 3.0% 3.0% 3.0% Proposed Subject Stabilized ADR Penetration 299% 299% 299% 300% 300% 300% 300% 300% 300% Fiscal Year 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 Proposed Subject Property Average Rate $1,557.75 $1,604.49 $1,652.62 $1,702.20 $1,753.26 $1,805.86 Opening Discount 0.0% 0.0% 0.0% 10.0% 0.0% 0.0%
Average Rate After Discount $1,557.75 $1,604.49 $1,652.62 $1,531.98 $1,753.26 $1,805.86 Real Average Rate Growth — 3.0% 3.0% -7.3% 14.4% 3.0%
Market ADR $519.19 $534.77 $550.81 $567.34 $584.36 $601.89 Proposed Subject ADR Penetration (After Discount) 300% 300% 300% 270% 300% 300% ADR Expressed in Base-Year Dollars Deflated @ Inflation Rate $1,418.56 $1,418.56 $1,418.56 $1,276.70 $1,418.56 $1,418.56 Historical
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Market-wide rates generally trended up through 2022, with significant gains realized between 2020 and 2022 due to strong demand for resort destinations during the pandemic. Average rates corrected marginally in 2023 due to a pullback in domestic leisure transient demand and an increase in lower-rated meeting and group demand. As forecast, the competitive market’s modest ADR forecast for 2025 reflect recent year-to-date trends. Thereafter, we expect rates to continue to increase through the stabilized year in consideration of strengthening economic conditions, increased airlift, and continued growth in the popularity of Coachella Valley as a resort destination.

The proposed subject hotel’s ADR penetration level is forecast to reach approximately 300% by the stabilized period, consistent with our stabilized ADR positioning which is inclusive of all the product which will participate in the rental program. Based on our review of the proposed improvements and the anticipated profile of the hotel product and its operation, it is our opinion that the ADR penetration level should be achieved with appropriate management and marketing.

The proposed hotel’s positioned stabilized ADR is projected to increase at the same rate as the overall market’s ADR, prior to consideration of any ADR discounting during the hotel’s ramp-up period.

The following table sets forth our forecast of the proposed subject hotel’s occupancy, ADR, and RevPAR, with corresponding penetration levels, for the first projection year through the stabilized year of operation. The competitive market’s historical and projected occupancy, ADR, and RevPAR levels are presented for comparison.
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FIGURE 6-7 COMPARISON OF HISTORICAL AND PROJECTED OCCUPANCY, ADR, AND REVPAR – PROPOSED SUBJECT PROPERTY AND LOCAL MARKET 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Proposed COVA Coachella
Occupancy — — — — — 60.4 % 64.6 % 68.6 % 69.0 % 69.0 %
Change in Points — — — — — — 4.2 4.0 0.4 0.0
Occupancy Penetration — — — — — 103.7 % 112.7 % 119.0 % 119.0 % 119.0 % Average Rate $1,490.00 $1,497.45 $1,512.42 $1,550.24 $1,596.74 $1,644.64 $1,693.98 $1,744.80 $1,797.15 $1,851.06 $1,906.59 Change — 1.0 % 2.5 % 3.0 % 3.0 % 3.0 % 3.0 % 3.0 % 3.0 % 3.0 % Average Rate Penetration 298.6 % 298.6 % 300.0 % 300.0 % 300.0 % 300.0 % 300.0 % 300.0 % 300.0 % 300.0 % RevPAR — — — — — $1,022.57 $1,126.64 $1,232.40 $1,277.40 $1,315.72 Change — — — — — — 10.2 % 9.4 % 3.7 % 3.0 %
RevPAR Penetration — — — — — 311.1 % 338.2 % 357.1 % 356.9 % 356.9 % 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Competitive Set
Occupancy 61.6 % 38.3 % 42.8 % 59.0 % 58.2 % 56.4 % 57.7 % 59.0 % 60.2 % 59.8 % 60.3 % 58.2 % 57.3 % 57.6 % 58.0 % 58.0 % Change in Points — (23.2) 4.5 16.2 (0.8) (1.8) 1.3 1.3 1.2 (0.4) 0.5 (2.1) (0.9) 0.3 0.4 0.0 Average Rate $338.74 $397.96 $458.08 $489.25 $488.60 $499.05 $501.54 $506.56 $516.69 $532.19 $548.15 $564.60 $581.54 $598.98 $616.95 $635.46 Change — 17.5 % 15.1 % 6.8 % (0.1) % 2.1 % 0.5 % 1.0 % 2.0 % 3.0 % 3.0 % 3.0 % 3.0 % 3.0 % 3.0 % 3.0 % RevPAR $208.50 $152.52 $196.14 $288.89 $284.46 $281.44 $289.38 $298.69 $310.92 $318.30 $330.61 $328.71 $333.17 $345.15 $357.91 $368.65 Change — (26.8) % 28.6 % 47.3 % (1.5) % (1.1) % 2.8 % 3.2 % 4.1 % 2.4 % 3.9 % (0.6) % 1.4 % 3.6 % 3.7 % 3.0 % Calendar Year Projections Prior to Rate Discounting
Historical Projected
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A discount of 10% has been applied to the stabilized room rates projected for the first two years of operation, as would be expected for a new property of this type as it builds its reputation and becomes established in the market. Note that our forecast of income and expense, which follows later in this report, assumes an underlying inflation rate of 3.0%.

The following occupancies and average rates will be used to project the proposed subject hotel’s rooms revenue; this forecast reflects years beginning on March 1, 2030, which correspond with our financial projections.

FIGURE 6-8 FORECASTS OF OCCUPANCY, AVERAGE RATE, AND REVPAR Year
2030/31 61 % $1,702.20 10.0 % $1,531.98 -7.3 $934.51 —
2031/32 65 1,753.26 0.0 1,753.26 14.4 1,139.62 21.9
2032/33 69 1,805.86 0.0 1,805.86 3.0 1,246.05 9.3
2033/34 69 1,860.04 0.0 1,860.04 3.0 1,283.43 3.0
RevPAR %
Occupancy Change
Average Rate
Before Discount Discount
Average Rate
After Discount RevPAR
ADR %
Change
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Proposed COVA Coachella – Coachella, California 108

7. Projection of Hotel Income and Expense
In this chapter of our report, we have compiled a forecast of income and expense for the proposed subject hotel. This forecast is based on the facilities program set forth previously, as well as the occupancy and ADR forecast discussed previously.

The forecast of income and expense is expressed in current dollars for each year.

The stabilized year is intended to reflect the anticipated operating results of the property over its remaining economic life given any or all applicable stages of buildup, plateau, and decline in the life cycle of the hotel. Thus, income and expense estimates from the stabilized year forward exclude from consideration any abnormal relationship between supply and demand, as well as any nonrecurring conditions that may result in unusual revenues or expenses. The ten-year period reflects the typical holding period of large real estate assets such as hotels. In addition, the ten-year period provides for the stabilization of income streams and comparison of yields with alternate types of real estate. The forecasted income streams reflect the future benefits of owning specific rights in income-producing real estate.

In order to project future income and expense for the proposed subject hotel, we have included a sample of individual comparable operating statements from our database of hotel statistics. All financial data are presented according to the three most common measures of industry performance: ratio to sales (RTS), amounts per available room (PAR), and amounts per occupied room night (POR). These historical income and expense statements will be used as benchmarks in our forthcoming forecast of income and expense. The proposed subject hotel’s stabilized statement of income and expense, deflated to 2024 dollars, is also presented.

Comparable Operating
Statements
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FIGURE 7-1 COMPARABLE OPERATING STATEMENTS: RATIO TO SALES Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Subject
Year: 2021/22 2019 2019 2019 2023 2024
Number of Rooms: 120 to 160 90 to 110 210 to 270 690 to 860 420 to 520 318 Occupied Rooms: 27,012 24,408 64,390 175,835 100,992 80,088 Days Open: 365 365 365 365 365 365
Occupancy: 54% 67% 72% 62% 59% 69%
Average Rate: $722 $805 $395 $289 $355 $1,419
RevPAR: $390 $538 $286 $179 $210 $979

REVENUE
Rooms 65.0 % 51.7 % 50.1 % 46.6 % 44.9 % 65.7 %
Food 24.3 37.1 29.0 26.3 35.6 27.9
Beverage 0.0 0.0 9.4 8.9 7.1 0.0
Food & Beverage 24.3 37.1 38.5 35.2 42.7 27.9
Other Operated Departments 9.4 5.9 9.2 17.2 10.9 5.9
Miscellaneous Income 1.3 5.3 2.2 1.0 1.5 0.5
Total 100.0 100.0 100.0 100.0 100.0 100.0
DEPARTMENTAL EXPENSES*
Rooms 21.7 29.4 26.1 25.4 26.5 26.2
Food & Beverage 84.0 77.2 75.4 58.4 69.8 71.0
Other Operated Departments 44.7 88.6 60.7 71.9 39.5 42.6 Total 38.7 49.0 47.7 44.7 46.0 39.5
DEPARTMENTAL INCOME 61.3 51.0 52.3 55.3 54.0 60.5

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 8.7 8.3 8.6 7.5 7.1 2.5
Info. and Telecom. Systems 1.3 1.2 1.3 0.9 1.6 0.4
Marketing 4.5 5.7 6.8 6.5 9.1 2.1
Franchise Fee 1.8 0.0 0.0 2.0 0.0 0.0
Property Operations & Maintenance 2.2 4.8 4.8 4.7 4.2 1.3 Utilities 1.6 3.6 2.7 2.0 2.7 0.7
Total 20.1 23.6 24.2 23.7 24.8 7.0
GROSS OPERATING PROFIT 41.2 27.4 28.1 31.6 29.2 53.5
Management Fee 2.0 1.0 2.9 3.1 3.0 3.0
INCOME BEFORE NON-OPER. INC. & EXP. 39.2 26.4 25.2 28.5 26.2 50.5 * Departmental expense ratios are expressed as a percentage of departmental revenues Stabilized $
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FIGURE 7-2 COMPARABLE OPERATING STATEMENTS: AMOUNTS PER AVAILABLE ROOM Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Subject
Year: 2021/22 2019 2019 2019 2023 2024
Number of Rooms: 120 to 160 90 to 110 210 to 270 690 to 860 420 to 520 318 Occupied Rooms: 27,012 24,408 64,390 175,835 100,992 80,088 Days Open: 365 365 365 365 365 365
Occupancy: 54% 67% 72% 62% 59% 69%
Average Rate: $722 $805 $395 $289 $355 $1,419
RevPAR: $390 $538 $286 $179 $210 $979

REVENUE
Rooms $142,383 $196,387 $104,211 $65,495 $76,668 $357,264 Food 53,138 140,836 60,315 36,891 60,850 151,394
Beverage 0 0 19,619 12,522 12,055 0
Food & Beverage 53,138 140,836 79,935 49,413 72,906 151,394 Other Operated Departments 20,515 22,289 19,042 24,135 18,553 31,869 Miscellaneous Income 2,862 20,214 4,632 1,471 2,564 2,979 Total 218,897 379,725 207,819 140,514 170,691 543,507

DEPARTMENTAL EXPENSES
Rooms 30,944 57,717 27,229 16,620 20,293 93,617
Food & Beverage 44,634 108,781 60,251 28,865 50,880 107,490 Other Operated Departments 9,171 19,743 11,553 17,355 7,331 13,567 Total 84,749 186,242 99,033 62,840 78,504 214,674
DEPARTMENTAL INCOME 134,148 193,484 108,786 77,674 92,188 328,833

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 19,125 31,551 17,838 10,584 12,153 13,805 Info. and Telecom. Systems 2,751 4,543 2,655 1,291 2,686 2,330 Marketing 9,844 21,666 14,199 9,118 15,564 11,216
Franchise Fee 3,976 0 0 2,810 0 0
Property Operations & Maintenance 4,874 18,381 9,895 6,635 7,187 6,816 Utilities 3,476 13,571 5,711 2,876 4,672 3,710
Total 44,048 89,712 50,299 33,314 42,262 37,876
GROSS OPERATING PROFIT 90,100 103,772 58,487 44,360 49,926 290,957 Management Fee 4,381 3,706 6,034 4,370 5,133 16,305
INCOME BEFORE NON-OPER. INC. & EXP. 85,719 100,066 52,453 39,990 44,792 274,652 Stabilized $
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FIGURE 7-3 COMPARABLE OPERATING STATEMENTS: AMOUNTS PER OCCUPIED ROOM Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Subject
Year: 2021/22 2019 2019 2019 2023 2024
Number of Rooms: 120 to 160 90 to 110 210 to 270 690 to 860 420 to 520 318 Occupied Rooms: 27,012 24,408 64,390 175,835 100,992 80,088 Days Open: 365 365 365 365 365 365
Occupancy: 54% 67% 72% 62% 59% 69%
Average Rate: $722 $805 $395 $289 $355 $1,419
RevPAR: $390 $538 $286 $179 $210 $979

REVENUE
Rooms $722.14 $804.60 $394.90 $289.42 $354.52 $1,418.56 Food 269.50 577.01 228.56 163.02 281.38 601.13
Beverage 0.00 0.00 74.35 55.34 55.75 0.00
Food & Beverage 269.50 577.01 302.91 218.35 337.13 601.13 Other Operated Departments 104.05 91.32 72.16 106.65 85.79 126.54 Miscellaneous Income 14.51 82.82 17.55 6.50 11.86 11.83 Total 1,110.20 1,555.74 787.51 620.92 789.30 2,158.06

DEPARTMENTAL EXPENSES
Rooms 156.94 236.47 103.18 73.44 93.84 371.72
Food & Beverage 226.37 445.68 228.32 127.55 235.28 426.80 Other Operated Departments 46.52 80.89 43.78 76.69 33.90 53.87 Total 429.83 763.03 375.28 277.68 363.01 852.39
DEPARTMENTAL INCOME 680.37 792.71 412.23 343.23 426.29 1,305.67

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 97.00 129.26 67.60 46.77 56.20 54.81 Info. and Telecom. Systems 13.95 18.61 10.06 5.70 12.42 9.25 Marketing 49.93 88.77 53.81 40.29 71.97 44.54
Franchise Fee 20.17 0.00 0.00 12.42 0.00 0.00
Property Operations & Maintenance 24.72 75.31 37.50 29.32 33.23 27.06 Utilities 17.63 55.60 21.64 12.71 21.61 14.73
Total 223.40 367.55 190.60 147.21 195.43 150.39
GROSS OPERATING PROFIT 456.97 425.16 221.63 196.02 230.86 1,155.28 Management Fee 22.22 15.18 22.87 19.31 23.73 64.74
INCOME BEFORE NON-OPER. INC. & EXP. 434.75 409.97 198.77 176.71 207.13 1,090.54 Stabilized $
The departmental income of the comparable properties ranged from 51.0% to

61.3% of total revenue. Our forecast anticipates that the proposed subject hotel’s departmental income will stabilize at 60.7%. The comparable properties achieved a gross operating profit (GOP) ranging from 27.4% to 41.2% of total revenue. It is important to note the primary consideration was given to the ratio of sales given the subject property’s higher rates for the larger unit types participating in the rental program, relative to the comparable properties. We will refer to the comparable operating data in our discussion of each line item, which follows later in this section of the report.
477
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 112
HVS uses a fixed and variable component model to project a lodging facility's revenue and expense levels. This model is based on the premise that hotel revenues and expenses have one component that is fixed and another that varies directly with occupancy and facility usage. A projection can be made by taking a known level of revenue or expense and calculating its fixed and variable components. The fixed component is then increased in tandem with the underlying rate of inflation, while the variable component is adjusted for a specific measure of volume such as total revenue.

The actual forecast is derived by adjusting each year’s revenue and expense by the amount fixed (the fixed expense multiplied by the inflated base-year amount) plus the variable amount (the variable expense multiplied by the inflated base-year amount) multiplied by the ratio of the projection year’s occupancy to the base-year occupancy (in the case of departmental revenue and expense) or the ratio of the projection year’s revenue to the base year’s revenue (in the case of undistributed operating expenses). Fixed expenses remain fixed, increasing only with inflation.

Our discussion of the revenue and expense forecast in this report is based upon the output derived from the fixed and variable model. This forecast of revenue and expense is accomplished through a systematic approach, following the format of the Uniform System of Accounts for the Lodging Industry (USALI). Each category of revenue and expense is estimated separately and combined at the end in the final statement of income and expense.

In consideration of the trends in the Consumer Price Index (CPI), inflation factors that directly influence lodging properties, projections set forth by economists surveyed, and the Federal Reserve’s target inflation rate, we have applied a 3.0% underlying inflation rate in our analysis.

This annual rate of growth is applied to income and expenses after the stabilized year to reflect the longer-term expectation of asset appreciation by typical investors. This position is based on interviews with numerous market participants indicating a distinction in the expectations of near-term cost inflation (e.g., related to labor and supplies) versus long-term income growth that drives appreciation.

Any exceptions to the application of the assumed underlying inflation and EBITDA Less Replacement Reserve growth rates are discussed in our write-ups of individual income and expense items.

Fixed and Variable
Component Analysis
Inflation and
Appreciation
Assumptions
478
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 113
Based on an analysis that will be detailed throughout this section, we have formulated a revenue-and-expense forecast through the fifth projection year, including amounts per available room and per occupied room, as illustrated in the following table. The second table illustrates our ten-year forecast of income and expense, presented with a lesser degree of detail. The forecasts pertain to years that begin on March 1, 2030, expressed in inflated dollars for each year (figures in the forecast year columns have been divided by 1,000 and reflect thousands of dollars).

Forecast of Revenue
and Expense
479
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 114
FIGURE 7-4 DETAILED FORECAST OF INCOME AND EXPENSE
2030/31 Begins March 2031/32 2032/33 Stabilized 2034/35 Number of Rooms: 239 295 311 318 318
Occupancy: 61% 65% 69% 69% 69%
Average Rate: $1,531.98 $1,753.26 $1,805.86 $1,860.04 $1,915.84 RevPAR: $934.51 $1,139.62 $1,246.04 $1,283.43 $1,321.93 Days Open: 365 365 365 365 365
Occupied Rooms: 53,213 %Gross PAR POR 69,989 %Gross PAR POR 78,325 %Gross PAR POR 80,088 %Gross PAR POR 80,088 %Gross PAR POR

OPERATING REVENUE
Rooms $81,522 60.6 % $341,095 $1,531.98 $122,709 67.9 % $415,962 $1,753.26 $141,445 65.7 % $454,806 $1,805.86 $148,967 65.7 % $468,451 $1,860.04 $153,436 65.7 % $482,504 $1,915.84 Food & Beverage 41,622 30.9 174,149 782.17 44,966 24.9 152,428 642.48 59,939 27.8 192,729 765.25 63,126 27.9 198,511 788.21 65,020 27.9 204,466 811.86 Other Operated Departments 5,620 4.2 23,515 105.61 6,317 3.5 21,415 90.26 6,778 3.1 21,793 86.53 7,040 3.1 22,138 87.90 7,251 3.1 22,802 90.54 Spa - Treatment Cabanas 2,946 2.2 12,327 55.37 3,501 1.9 11,868 50.02 3,845 1.8 12,363 49.09 4,012 1.8 12,617 50.10 4,133 1.8 12,996 51.60 Resort Fees 1,785 1.3 7,470 33.55 2,007 1.1 6,802 28.67 2,153 1.0 6,922 27.49 2,236 1.0 7,032 27.92 2,303 1.0 7,243 28.76 Miscellaneous Income 992 0.7 4,150 18.64 1,115 0.6 3,779 15.93 1,196 0.6 3,846 15.27 1,242 0.5 3,907 15.51 1,280 0.5 4,024 15.98 Total Operating Revenues 134,487 100.0 562,706 2,527.31 180,615 100.0 612,255 2,580.63 215,355 100.0 692,460 2,749.49 226,624 100.0 712,655 2,829.68 233,423 100.0 734,035 2,914.57 DEPARTMENTAL EXPENSES *
Rooms 29,867 36.6 124,967 561.27 34,528 28.1 117,043 493.33 37,491 26.5 120,549 478.65 39,035 26.2 122,752 487.40 40,206 26.2 126,434 502.02 Food & Beverage 30,800 74.0 128,871 578.80 32,376 72.0 109,748 462.59 42,556 71.0 136,838 543.33 44,820 71.0 140,943 559.63 46,164 71.0 145,171 576.42 Other Operated Departments 2,481 44.1 10,382 46.63 2,625 41.6 8,898 37.51 2,739 40.4 8,808 34.97 2,829 40.2 8,897 35.33 2,914 40.2 9,164 36.38 Spa - Treatment Cabanas 2,413 81.9 10,095 45.34 2,598 74.2 8,806 37.12 2,733 71.1 8,789 34.90 2,828 70.5 8,893 35.31 2,913 70.5 9,160 36.37 Total Expenses 65,561 48.7 274,314 1,232.04 72,126 39.9 244,496 1,030.54 85,520 39.7 274,983 1,091.85 89,512 39.5 281,484 1,117.66 92,197 39.5 289,928 1,151.19 DEPARTMENTAL INCOME 68,926 51.3 288,392 1,295.27 108,489 60.1 367,759 1,550.09 129,835 60.3 417,477 1,657.64 137,112 60.5 431,171 1,712.02 141,226 60.5 444,106 1,763.38

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 4,540 3.4 18,994 85.31 5,096 2.8 17,275 72.81 5,542 2.6 17,819 70.75 5,756 2.5 18,101 71.87 5,929 2.5 18,644 74.03 Info & Telecom Systems 766 0.6 3,205 14.40 860 0.5 2,915 12.29 935 0.4 3,007 11.94 971 0.4 3,054 12.13 1,000 0.4 3,146 12.49 Marketing 3,688 2.7 15,433 69.31 4,141 2.3 14,036 59.16 4,503 2.1 14,478 57.49 4,677 2.1 14,707 58.40 4,817 2.1 15,148 60.15 Prop. Operations & Maint. 2,241 1.7 9,378 42.12 2,516 1.4 8,529 35.95 2,736 1.3 8,798 34.93 2,842 1.3 8,937 35.49 2,927 1.3 9,205 36.55 Utilities 1,220 0.9 5,105 22.93 1,370 0.8 4,643 19.57 1,489 0.7 4,789 19.01 1,547 0.7 4,865 19.32 1,593 0.7 5,011 19.89 Total Expenses 12,455 9.3 52,115 234.07 13,982 7.8 47,398 199.78 15,205 7.1 48,891 194.13 15,793 7.0 49,664 197.20 16,267 7.0 51,154 203.11 GROSS OPERATING PROFIT 56,470 42.0 236,277 1,061.20 94,507 52.3 320,361 1,350.31 114,630 53.2 368,585 1,463.51 121,319 53.5 381,507 1,514.82 124,959 53.5 392,953 1,560.26 Management Fee 4,035 3.0 16,881 75.82 5,418 3.0 18,368 77.42 6,461 3.0 20,774 82.48 6,799 3.0 21,380 84.89 7,003 3.0 22,021 87.44 INCOME BEFORE NON-OPR. INC. & EXP. 52,436 39.0 219,396 985.38 89,088 49.3 301,993 1,272.89 108,169 50.2 347,811 1,381.03 114,521 50.5 360,128 1,429.93 117,956 50.5 370,932 1,472.83

NON-OPERATING INCOME & EXPENSE
Property Taxes 3,239 2.4 13,553 60.87 2,719 1.5 9,218 38.85 2,115 1.0 6,800 27.00 1,525 0.7 4,796 19.04 992 0.4 3,119 12.39 Insurance 453 0.3 1,895 8.51 466 0.3 1,581 6.66 480 0.2 1,545 6.13 495 0.2 1,556 6.18 510 0.2 1,603 6.36 RMP Revenue Distrubution 7,819 5.8 32,714 146.93 18,871 10.4 63,968 269.62 30,923 14.4 99,432 394.81 41,689 18.4 131,096 520.53 51,197 21.9 160,998 639.26 Total Expenses 11,511 8.5 48,162 216.31 22,056 12.2 74,768 315.14 33,519 15.6 107,777 427.94 43,709 19.3 137,448 545.76 52,699 22.5 165,720 658.01 EBITDA 40,925 30.5 171,234 769.07 67,032 37.1 227,226 957.75 74,651 34.6 240,034 953.08 70,812 31.2 222,679 884.17 65,257 28.0 205,212 814.82 Reserve for Replacement 2,690 2.0 11,254 50.55 5,418 3.0 18,368 77.42 8,614 4.0 27,698 109.98 9,065 4.0 28,506 113.19 9,337 4.0 29,361 116.58 EBITDA LESS RESERVE $38,235 28.4 % $159,980 $718.53 $61,613 34.1 % $208,858 $880.33 $66,036 30.7 % $212,336 $843.10 $61,747 27.2 % $194,173 $770.99 $55,920 24.0 % $175,850 $698.23 *Departmental expenses are expressed as a percentage of departmental revenues. 480
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 115
FIGURE 7-5 TEN-YEAR FORECAST OF INCOME AND EXPENSE
2030/31 2031/32 2032/33 2033/34 2034/35 2035/36 2036/37 2037/38 2038/39 2039/40 Number of Rooms: 239 295 311 318 318 318 318 318 318 318 Occupied Rooms: 53,213 69,989 78,325 80,088 80,088 80,088 80,088 80,088 80,088 80,088 Occupancy: 61% 65% 69% 69% 69% 69% 69% 69% 69% 69%
Average Rate: $1,531.98 % of $1,753.26 % of $1,805.86 % of $1,860.04 % of $1,915.84 % of $1,973.31 % of $2,032.51 % of $2,093.49 % of $2,156.29 % of $2,220.98 RevPAR: $934.51 Gross $1,139.62 Gross $1,246.04 Gross $1,283.43 Gross $1,321.93 Gross $1,361.59 Gross $1,402.43 Gross $1,444.51 Gross $1,487.84 Gross $1,532.48

OPERATING REVENUE
Rooms $81,522 60.6 % $122,709 67.9 % $141,445 65.7 % $148,967 65.7 % $153,436 65.7 % $158,039 65.7 % $162,781 65.7 % $167,664 65.7 % $172,694 65.7 % $177,875 65.7 % Food & Beverage 41,622 30.9 44,966 24.9 59,939 27.8 63,126 27.9 65,020 27.9 66,971 27.9 68,980 27.9 71,049 27.9 73,181 27.9 75,376 27.9 Other Operated Departments 5,620 4.2 6,317 3.5 6,778 3.1 7,040 3.1 7,251 3.1 7,469 3.1 7,693 3.1 7,923 3.1 8,161 3.1 8,406 3.1 Spa - Treatment Cabanas 2,946 2.2 3,501 1.9 3,845 1.8 4,012 1.8 4,133 1.8 4,257 1.8 4,384 1.8 4,516 1.8 4,651 1.8 4,791 1.8 Resort Fees 1,785 1.3 2,007 1.1 2,153 1.0 2,236 1.0 2,303 1.0 2,372 1.0 2,444 1.0 2,517 1.0 2,592 1.0 2,670 1.0 Miscellaneous Income 992 0.7 1,115 0.6 1,196 0.6 1,242 0.5 1,280 0.5 1,318 0.5 1,358 0.5 1,398 0.5 1,440 0.5 1,483 0.5 Total Operating Revenues 134,487 100.0 180,615 100.0 215,355 100.0 226,624 100.0 233,423 100.0 240,426 100.0 247,639 100.0 255,068 100.0 262,720 100.0 270,601 100.0 DEPARTMENTAL EXPENSES *
Rooms 29,867 36.6 34,528 28.1 37,491 26.5 39,035 26.2 40,206 26.2 41,412 26.2 42,655 26.2 43,934 26.2 45,252 26.2 46,610 26.2 Food & Beverage 30,800 74.0 32,376 72.0 42,556 71.0 44,820 71.0 46,164 71.0 47,549 71.0 48,976 71.0 50,445 71.0 51,958 71.0 53,517 71.0 Other Operated Departments 2,481 44.1 2,625 41.6 2,739 40.4 2,829 40.2 2,914 40.2 3,001 40.2 3,091 40.2 3,184 40.2 3,280 40.2 3,378 40.2 Spa - Treatment Cabanas 2,413 81.9 2,598 74.2 2,733 71.1 2,828 70.5 2,913 70.5 3,000 70.5 3,090 70.5 3,183 70.5 3,278 70.5 3,377 70.5 Total Expenses 65,561 48.7 72,126 39.9 85,520 39.7 89,512 39.5 92,197 39.5 94,963 39.5 97,812 39.5 100,746 39.5 103,769 39.5 106,882 39.5 DEPARTMENTAL INCOME 68,926 51.3 108,489 60.1 129,835 60.3 137,112 60.5 141,226 60.5 145,463 60.5 149,827 60.5 154,321 60.5 158,951 60.5 163,719 60.5

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 4,540 3.4 5,096 2.8 5,542 2.6 5,756 2.5 5,929 2.5 6,107 2.5 6,290 2.5 6,478 2.5 6,673 2.5 6,873 2.5 Info & Telecom Systems 766 0.6 860 0.5 935 0.4 971 0.4 1,000 0.4 1,030 0.4 1,061 0.4 1,093 0.4 1,126 0.4 1,160 0.4 Marketing 3,688 2.7 4,141 2.3 4,503 2.1 4,677 2.1 4,817 2.1 4,962 2.1 5,110 2.1 5,264 2.1 5,422 2.1 5,584 2.1 Prop. Operations & Maint. 2,241 1.7 2,516 1.4 2,736 1.3 2,842 1.3 2,927 1.3 3,015 1.3 3,106 1.3 3,199 1.3 3,295 1.3 3,394 1.3 Utilities 1,220 0.9 1,370 0.8 1,489 0.7 1,547 0.7 1,593 0.7 1,641 0.7 1,690 0.7 1,741 0.7 1,793 0.7 1,847 0.7 Total Expenses 12,455 9.3 13,982 7.8 15,205 7.1 15,793 7.0 16,267 7.0 16,755 7.0 17,258 7.0 17,775 7.0 18,309 7.0 18,858 7.0 GROSS OPERATING PROFIT 56,470 42.0 94,507 52.3 114,630 53.2 121,319 53.5 124,959 53.5 128,708 53.5 132,569 53.5 136,546 53.5 140,642 53.5 144,862 53.5 Management Fee 4,035 3.0 5,418 3.0 6,461 3.0 6,799 3.0 7,003 3.0 7,213 3.0 7,429 3.0 7,652 3.0 7,882 3.0 8,118 3.0 INCOME BEFORE NON-OPR. INC. & EXP. 52,436 39.0 89,088 49.3 108,169 50.2 114,521 50.5 117,956 50.5 121,495 50.5 125,140 50.5 128,894 50.5 132,761 50.5 136,744 50.5

NON-OPERATING INCOME & EXPENSE
Property Taxes 3,239 2.4 2,719 1.5 2,115 1.0 1,525 0.7 992 0.4 740 0.3 755 0.3 770 0.3 786 0.3 802 0.3 Insurance 453 0.3 466 0.3 480 0.2 495 0.2 510 0.2 525 0.2 541 0.2 557 0.2 574 0.2 591 0.2 RMP Revenue Distrubution 7,819 5.8 18,871 10.4 30,923 14.4 41,689 18.4 51,197 21.9 56,752 23.6 58,454 23.6 60,208 23.6 62,014 23.6 63,874 23.6 Total Expenses 11,511 8.5 22,056 12.2 33,519 15.6 43,709 19.3 52,699 22.5 58,017 24.1 59,750 24.1 61,535 24.1 63,373 24.1 65,267 24.1 EBITDA 40,925 30.5 67,032 37.1 74,651 34.6 70,812 31.2 65,257 28.0 63,478 26.4 65,390 26.4 67,359 26.4 69,387 26.4 71,477 26.4 Reserve for Replacement 2,690 2.0 5,418 3.0 8,614 4.0 9,065 4.0 9,337 4.0 9,617 4.0 9,906 4.0 10,203 4.0 10,509 4.0 10,824 4.0 EBITDA LESS RESERVE $38,235 28.4 % $61,613 34.1 % $66,036 30.7 % $61,747 27.2 % $55,920 24.0 % $53,861 22.4 % $55,484 22.4 % $57,156 22.4 % $58,879 22.4 % $60,653 22.4 % 0 0 0 0 0 0 0 0 0 0
*Departmental expenses are expressed as a percentage of departmental revenues. % of
Gross
481
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 116
The following description sets forth the basis for the forecast of income and expense.

We anticipate that it will take four years for the proposed subject hotel to reach a stabilized level of operation. Each revenue and expense item has been forecast based upon our review of the proposed subject hotel's operating budget and comparable income and expense statements. The forecast is based upon fiscal years beginning March 1, 2030, expressed in inflated dollars for each year.

Rooms revenue is determined by two variables: occupancy and average rate (ADR).

We projected occupancy and ADR in a previous section of this report. The proposed subject hotel is expected to stabilize at an occupancy level of 69% with an ADR of $1,860.04 in 2033/34. Following the stabilized year, the proposed subject hotel’s ADR is projected to increase along with the underlying rate of growth assigned to EBITDA Less Replacement Reserve.

Food and beverage (F&B) revenue is generated by a hotel's restaurants, lounges, coffee shops, snack bars, banquet rooms, and room service. In addition to providing a source of revenue, these outlets serve as an amenity that assists in the sale of guestrooms. With the exception of properties with active lounges or banquet facilities that draw local residents, in-house guests generally represent a substantial percentage of a hotel's F&B patrons. In the case of the Proposed COVA Coachella, the F&B department will include nine food and beverage outs; moreover, the resort will feature extensive event space. The proposed subject hotel's food and beverage operation is expected to be an important component of the hotel. We have relied on food and beverage projections based on a comprehensive food and beverage market analysis completed by Julian H. King.

Although F&B revenue varies directly with changes in occupancy, the small portion generated by banquet sales and outside capture is relatively fixed.

FIGURE 7-6 FOOD & BEVERAGE REVENUE
#1 #2 #3 #4 #5 2030/31
Food & Beverage Revenue
Percentage of Revenue 24.3 % 37.1 % 38.5 % 35.2 % 42.7 % 30.9 % 27.9 % Per Available Room $53,138 $140,836 $79,935 $49,413 $72,906 $174,149 $151,394 Per Occupied Room $269.50 $577.01 $302.91 $218.35 $337.13 $782.17 $601.13 Comparable Operating Statements Proposed Subject Property Forecast Deflated Stabilized
Rooms Revenue
Food & Beverage
Revenue
482
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 117
According to the USALI, other operated departments include any major or minor operated department other than rooms and F&B. The proposed subject hotel's other operated departments revenue sources are expected to include items such as the hotel's parking operations, pool cabana rentals, the resort's gift shop, telephone charges, upgraded Internet charges, valet laundry, and dry cleaning fees, and other minor items. Based on our review of operations with a similar extent of offerings, we have positioned an appropriate revenue level for the proposed subject hotel.

FIGURE 7-7 OTHER OPERATED DEPARTMENTS REVENUE
#1 #2 #3 #4 #5 2030/31
Percentage of Revenue 9.4 % 5.9 % 9.2 % 17.2 % 10.9 % 4.2 % 3.1 % Per Available Room $20,515 $22,289 $19,042 $24,135 $18,553 $23,515 $16,883 Per Occupied Room $104.05 $91.32 $72.16 $106.65 $85.79 $105.61 $67.04 Comparable Operating Statements Proposed Subject Property Forecast Deflated Stabilized
The proposed subject property’s spa/treatment cabanas are expected to be an important amenity for the resort given its wellness-focused design and amenities.

Based on our review of comparable operating statements, we have positioned an appropriate revenue level given the resort’s planned facility and price point. We forecast the proposed subject hotel’s spa/treatment cabanas to stabilize at $27.61 per occupied room by the stabilized year, 2033/34.

FIGURE 7-8 SPA/TREATMENT CABANAS INCOME
Other Operated
Departments Revenue
Spa/Treatment
Cabanas Income
483
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 118
The hotel is anticipated to generate additional revenue through resort fees, which typically include the use of services and amenities such as Internet access, local telephone calls, and other complimentary or discounted services such as access to preferred tee times or similar services. We have positioned revenues in this line item based on our review of the local comparable competitive operations. We have forecast a 60.0% capture rate, which is supported by our understanding of the area comps. The following table illustrates resort fees within the competitive set.

FIGURE 7-9 LOCAL COMPETITIVE SET – RESORT FEES
Property Resort Fee
Ritz-Carlton Rancho Mirage $50.00
Parker Palm Springs $49.00
La Quinta Resort & club, Curio Collection $45.00
Grand Hyatt Indian Wells Resort & Spa $45.00
JW Marriott Desert Springs Resort $45.00
Proposed CAVA Coachella $45.00
Assumed Capture Rate 60.0%
Projected Resort Fee (Base-Year) $27.00
The miscellaneous income sources comprise those other than guestrooms, F&B, and the other operated departments. The proposed subject hotel's miscellaneous income revenues are expected to include attrition fees, cancellation charges, and other minor items. Based on our review of operations with a similar extent of offerings, we have positioned an appropriate revenue level for the proposed subject hotel. Changes in this revenue item through the projection period result from the application of the underlying inflation rate and projected changes in occupancy.

FIGURE 7-10 MISCELLANEOUS INCOME
#1 #2 #3 #4 #5 2030/31
Percentage of Revenue 1.3 % 5.3 % 2.2 % 1.0 % 1.5 % 0.7 % 0.5 % Per Available Room $2,862 $20,214 $4,632 $1,471 $2,564 $4,150 $2,979 Per Occupied Room $14.51 $82.82 $17.55 $6.50 $11.86 $18.64 $11.83 Comparable Operating Statements Proposed Subject Property Forecast Deflated Stabilized
Resort Fees
Miscellaneous Income
484
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 119
Rooms expense consists of items related to the sale and upkeep of guestrooms and public space. Salaries, wages, and employee benefits account for a substantial portion of this category. Although payroll varies somewhat with occupancy, and managers can generally scale the level of service staff on hand to meet an expected occupancy level, much of a hotel's payroll is fixed. A base level of front desk personnel, housekeepers, and supervisors must be maintained at all times. As a result, salaries, wages, and employee benefits are only moderately sensitive to changes in occupancy.

Commissions and reservations are usually based on room sales and, thus, are highly sensitive to changes in occupancy and ADR. While guest supplies vary 100% with occupancy, linens and other operating expenses are only slightly affected by volume.

The proposed subject hotel's rooms department expense has been positioned based upon our review of the comparable operating data and our understanding of the hotel's future service level and price point.

FIGURE 7-11 ROOMS EXPENSE
#1 #2 #3 #4 #5 2030/31
Percentage of Revenue 21.7 % 29.4 % 26.1 % 25.4 % 26.5 % 36.6 % 26.2 % Per Available Room $30,944 $57,717 $27,229 $16,620 $20,293 $124,967 $93,617 Per Occupied Room $156.94 $236.47 $103.18 $73.44 $93.84 $561.27 $371.72 Deflated Stabilized
Comparable Operating Statements Proposed Subject Property Forecast Food expenses consist of items necessary for the primary operation of a hotel's food and banquet facilities. The costs associated with food sales and payroll are moderately to highly correlated to food revenues. Items such as dishware, linens, and uniforms are less dependent on volume. Although the other expense items are basically fixed, they represent a relatively insignificant factor. Beverage expenses consist of items necessary for the operation of a hotel’s lounge and bar areas. The costs associated with beverage sales and payroll are moderately to highly correlated to beverage revenues. The proposed subject hotel's food and beverage operation is expected to be efficiently managed and operated at an expense level that is in line with other comparable operations.

Rooms Expense
Food & Beverage
Expense
485
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 120
FIGURE 7-12 FOOD & BEVERAGE EXPENSE
#1 #2 #3 #4 #5 2030/31
Percentage of Revenue 84.0 % 77.2 % 75.4 % 58.4 % 69.8 % 74.0 % 71.0 % Per Available Room $44,634 $108,781 $60,251 $28,865 $50,880 $128,871 $107,490 Per Occupied Room $226.37 $445.68 $228.32 $127.55 $235.28 $578.80 $426.80 Comparable Operating Statements Proposed Subject Property Forecast Deflated Stabilized
Other operated departments expense includes all expenses reflected in the summary statements for the divisions associated in these categories, as discussed previously in this chapter. The proposed subject hotel's other operated departments revenue sources are expected to include items such as the hotel's parking operations, pool cabana rentals, the resort's gift shop, telephone charges, upgraded Internet charges, valet laundry and dry cleaning fees, and other minor items. Based on our review of operations with a similar extent of offerings, we have positioned an appropriate revenue level for the proposed subject hotel.

FIGURE 7-13 OTHER OPERATED DEPARTMENTS EXPENSE
#1 #2 #3 #4 #5 2030/31
Percentage of Revenue 44.7 % 88.6 % 60.7 % 71.9 % 39.5 % 44.1 % 40.2 % Per Available Room $9,171 $19,743 $11,553 $17,355 $7,331 $10,382 $6,785 Per Occupied Room $46.52 $80.89 $43.78 $76.69 $33.90 $46.63 $26.94 Comparable Operating Statements Proposed Subject Property Forecast Deflated Stabilized
The proposed subject property’s spa/treatment cabanas is expected to be efficiently managed and operated at a market-appropriate level. We have projected a stabilized expense ratio of 70.0 in 2033/34.

Our projection of spa/treatment cabanas is presented in the following table.

Other Operated
Departments Expense
Spa/Treatment
Cabanas Expense
486
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 121
FIGURE 7-14 SPA/TREATMENT CABANAS INCOME
Administrative and general expense includes the salaries and wages of all administrative personnel who are not directly associated with a particular department. Expense items related to the management and operation of the property are also allocated to this category.

Most administrative and general expenses are relatively fixed. The exceptions are cash overages and shortages; commissions on credit card charges; provision for doubtful accounts, which are moderately affected by the number of transactions or total revenue; and salaries, wages, and benefits, which are very slightly influenced by volume. Based upon our review of the comparable operating data and the expected scope of facility for the proposed subject hotel, we have positioned the administrative and general expense level at a market- and property-supported level.

FIGURE 7-15 ADMINISTRATIVE & GENERAL EXPENSE
#1 #2 #3 #4 #5 2030/31
Percentage of Revenue 8.7 % 8.3 % 8.6 % 7.5 % 7.1 % 3.4 % 2.5 % Per Available Room $19,125 $31,551 $17,838 $10,584 $12,153 $18,994 $13,805 Per Occupied Room $97.00 $129.26 $67.60 $46.77 $56.20 $85.31 $54.81 Comparable Operating Statements Proposed Subject Property Forecast Deflated Stabilized
Administrative &
General Expense
487
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 122
Information and telecommunications systems expense consists of all costs associated with a hotel’s technology infrastructure. This includes the costs of cell phones, administrative call and Internet services, and complimentary call and Internet services. Expenses in this category are typically organized by type of technology or the area benefiting from the technology solution. We expect the proposed subject hotel's information and telecommunications systems to be well managed. Expense levels should stabilize at a typical level for a property of this type.

FIGURE 7-16 INFORMATION & TELECOMMUNICATIONS SYSTEMS EXPENSE #1 #2 #3 #4 #5 2030/31
Percentage of Revenue 1.3 % 1.2 % 1.3 % 0.9 % 1.6 % 0.6 % 0.4 % Per Available Room $2,751 $4,543 $2,655 $1,291 $2,686 $3,205 $2,330 Per Occupied Room $13.95 $18.61 $10.06 $5.70 $12.42 $14.40 $9.25 Deflated Stabilized
Comparable Operating Statements Proposed Subject Property Forecast Marketing expense consists of all costs associated with advertising, sales, and promotion; these activities are intended to attract and retain customers. Marketing can be used to create an image, develop customer awareness, and stimulate patronage of a property's various facilities.

The marketing category is unique in that all expense items, with the exception of fees and commissions, are totally controlled by management. Most hotel operators establish an annual marketing budget that sets forth all planned expenditures. If the budget is followed, total marketing expenses can be projected accurately.

Marketing expenditures are unusual because, although there is a lag period before results are realized, the benefits are often extended over a long period. Depending on the type and scope of the advertising and promotion program implemented, the lag time can be as short as a few weeks or as long as several years. However, the favorable results of an effective marketing campaign tend to linger, and a property often enjoys the benefits of concentrated sales efforts for many months. Based upon our review of the comparable operating data and the expected scope of facility for the proposed subject hotel, we have positioned the marketing expense level at a market- and property-supported level.

Information &
Telecommunications
Systems Expense
Marketing Expense
488
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 123
FIGURE 7-17 MARKETING EXPENSE
#1 #2 #3 #4 #5 2030/31
Percentage of Revenue 4.5 % 5.7 % 6.8 % 6.5 % 9.1 % 2.7 % 2.1 % Per Available Room $9,844 $21,666 $14,199 $9,118 $15,564 $15,433 $11,216 Per Occupied Room $49.93 $88.77 $53.81 $40.29 $71.97 $69.31 $44.54 Comparable Operating Statements Proposed Subject Property Forecast Deflated Stabilized
As previously discussed, the proposed subject property is expected to be operated by the brand; as such, there will be no franchise agreement, and no franchise fees are expected to be required throughout the ten-year forecast period.

Property operations and maintenance expense is another expense category that is largely controlled by management. Except for repairs that are necessary to keep the facility open and prevent damage (e.g., plumbing, heating, and electrical items), most maintenance can be deferred for varying lengths of time.

Maintenance is an accumulating expense. If management elects to postpone performing a required repair, the expenditure has not been eliminated, only deferred until a later date. A lodging facility that operates with a lower-than-normal maintenance budget is likely to accumulate a considerable amount of deferred maintenance.

The age of a lodging facility has a strong influence on the required level of maintenance. A new or thoroughly renovated property is protected for several years by modern equipment and manufacturers' warranties. However, as a hostelry grows older, maintenance expenses escalate. A well-organized preventive maintenance system often helps delay deterioration, but most facilities face higher property operations and maintenance costs each year, regardless of the occupancy trend. The quality of initial construction can also have a direct impact on future maintenance requirements. The use of high-quality building materials and construction methods generally reduces the need for maintenance expenditures over the long term.

We expect the proposed subject hotel's maintenance operation to be well managed.

Expense levels should stabilize at a typical level for a property of this type. Changes in this expense item through the projection period result from the application of the underlying inflation rate and projected changes in occupancy.

Franchise Fee
Property Operations &
Maintenance
489
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 124
FIGURE 7-18 PROPERTY OPERATIONS & MAINTENANCE EXPENSE
#1 #2 #3 #4 #5 2030/31
Percentage of Revenue 2.2 % 4.8 % 4.8 % 4.7 % 4.2 % 1.7 % 1.3 % Per Available Room $4,874 $18,381 $9,895 $6,635 $7,187 $9,378 $6,816 Per Occupied Room $24.72 $75.31 $37.50 $29.32 $33.23 $42.12 $27.06 Comparable Operating Statements Proposed Subject Property Forecast Deflated Stabilized
The utilities consumption of a lodging facility takes several forms, including water and space heating, air conditioning, lighting, cooking fuel, and other miscellaneous power requirements. The most common sources of hotel utilities are electricity, natural gas, fuel oil, and steam. This category also includes the cost of water service.

Total energy cost depends on the source and quantity of fuel used. Electricity tends to be the most expensive source, followed by oil and gas. Although all hotels consume a sizable amount of electricity, many properties supplement their utility requirements with less expensive sources, such as gas and oil, for heating and cooking. The changes in this utilities line item through the projection period are a result of the application of the underlying inflation rate and projected changes in occupancy.

FIGURE 7-19 UTILITIES EXPENSE
#1 #2 #3 #4 #5 2030/31
Percentage of Revenue 1.6 % 3.6 % 2.7 % 2.0 % 2.7 % 0.9 % 0.7 % Per Available Room $3,476 $13,571 $5,711 $2,876 $4,672 $5,105 $3,710 Per Occupied Room $17.63 $55.60 $21.64 $12.71 $21.61 $22.93 $14.73 Comparable Operating Statements Proposed Subject Property Forecast Deflated Stabilized
Management expense consists of the fees paid to the managing agent contracted to operate the property. Some companies provide management services and a brandname affiliation (first-tier management company), while others provide management services alone (second-tier management company). Some management contracts specify only a base fee (usually a percentage of total revenue), while others call for both a base fee and an incentive fee (usually a percentage of defined profit). Basic hotel management fees are often based on a percentage of total revenue, which means they have no fixed component. While base fees typically range from 2.0% to 4.0% of total revenue, incentive fees are deal specific and often are calculated as a percentage of income available after debt Utilities Expense
Management Fee
490
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 125
service and, in some cases, after a preferred return on equity. Total management fees for the proposed subject hotel have been forecast at 3.0% of total revenue.

Real estate in the state of California is assessed at 100% of market value upon the sale, expansion, or new construction of a property. Once established, the assessed value of a property can increase by no more than 2.0% per year, according to state law. A reassessment is triggered by the sale, expansion, or improvement of a property. For purposes of this analysis, we have calculated the first year’s property tax burden based on the estimated market value of the subject property determined by our analysis. Real and personal property are taxed at the same rate.

In most states, the comparison of a hotel’s assessed value with that of comparable hotels is the same taxing jurisdiction can provide insight into whether or not the property is fairly assessed. The assessed value of the land and improvements is divided by the hotel’s number of rooms to provide a unit of comparison with other hotels. This is a useful tool in most states, where properties are periodically reassessed to market value. However, in California, the comparison of assessed values is generally irrelevant due to Proposition 13, enacted in 1978, which removed the relationship between a property’s assessed value and its market value.

Under Proposition 13, a property is reassessed upon sale to market value, which generally presumed to be the sales price; therefore, the assessed value is increased at a maximum of 2.0% per year. Trends in appreciation and depreciation caused by market fluctuations are not reflected in a property’s assessed value in California, unless there is a sales transaction. Thus, comparable hotels in California can have markedly different assessed values, depending upon when the last sales transaction occurred.

Tax rates are based on the city and county budgets, which change annually. The most recent tax rate in this jurisdiction was reported at 0.8200%.

Based on state law and the current tax rate, the proposed subject property’s projected property tax expenses levels are calculated as follows.

FIGURE 7-20 PROPOSED SUBJECT PROPERTY’S TAX CALCULATION $508,000,000 x $4,165,600
Estimated Market Value
Tax Rate
First Year's
Tax Burden

0.82%
It is our understanding that the third-party owners will be responsible for property taxes. An adjustment to property taxes based on sales projection of the units that will participate in the rental program on a prorated basis based on the percent of Property Taxes
491
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 126
units owned by the developer. Please see Chapter 8 for detail on the projected sales pace of unit sales. The following table illustrates the projected developer’s share on annual property taxes. Beginning in 2035/36 and thereafter, the residential units are projected to be sold out and the developer’s property tax burden will be the proportional property tax for 52 developer-owned units.

FIGURE 7-21 INSURANCE EXPENSE - DEVELOPER
Estimated Developer Developer's
Property Owned Share of
Tax Units Property Tax
2030/31 $4,165,600 77.8% $3,239,171
2031/32 4,248,912 64.0% 2,719,304
2032/33 4,333,890 48.8% 2,114,938
2033/34 4,420,568 34.5% 1,525,096
2034/35 4,508,979 22.0% 991,975
2035/36 4,599,159 16.1% 740,465
2036/37 4,691,142 16.1% 755,274
2037/38 4,784,965 16.1% 770,379
2038/39 4,880,664 16.1% 785,787
2040/41 4,978,278 16.1% 801,503
The insurance expense category consists of the cost of insuring the hotel and its contents against damage or destruction by fire, weather, sprinkler leakage, boiler explosion, plate glass breakage, and so forth. General insurance costs also include premiums relating to liability, fidelity, and theft coverage.

Insurance rates are based on many factors, including building design and construction, fire detection and extinguishing equipment, fire district, distance from the firehouse, and the area's fire experience. Insurance expenses do not vary with occupancy.

Insurance Expense
492
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 127
FIGURE 7-22 INSURANCE EXPENSE
#1 #2 #3 #4 #5 2030/31
Percentage of Revenue 0.5 % 0.2 % 0.7 % 1.7 % 1.2 % 0.3 % 0.2 % Per Available Room $1,197 $935 $1,477 $2,394 $2,106 $1,895 $1,187 Per Occupied Room $6.07 $3.83 $5.60 $10.58 $9.74 $8.51 $4.71 Deflated Stabilized
Comparable Operating Statements Proposed Subject Property Forecast The rental management program (RMP) revenue distribution to third-party owners is included as a fixed expense and is equal to 50.0% of rooms revenue, after a 12.0% service charge. An adjustment was made for the sales projection for sales of the units that will be participating in the rental management program. Please Chapter 8 in this report for detail regarding the projected sales pace of unit sales.

The owner revenue distribution calculation is presented in the following table.

FIGURE 7-23 FORECAST OF THIRD-PARTY OWNER REVENUE DISTRIBUTION 2030/31 2031/32 2032/33 2033/34 2034/35
Gross Room Revenue $81,521,710 $122,708,780 $141,444,800 $148,967,300 $153,436,310 % of Inventory Sold 22.4% 36.0% 51.2% 65.5% 78.0%
Room Revenue to Distribute $18,260,863 $44,175,161 $72,419,738 $97,573,582 $119,680,322 LESS 12% Service Charge (2,623,657) (6,433,825) (10,573,074) (14,196,297) (17,285,707) Net Revenue 15,637,206 37,741,336 61,846,664 83,377,285 102,394,615 50% Revenue Split $7,818,603 $18,870,668 $30,923,332 $41,688,642 $51,197,307 2035/36 2036/37 2037/38 2038/39 2039/40
Gross Room Revenue $158,039,400 $162,780,590 $167,664,000 $172,693,920 $177,874,740 % of Inventory Sold 83.9% 83.9% 83.9% 83.9% 83.9%
Room Revenue to Distribute $132,595,057 $136,572,915 $140,670,096 $144,890,199 $149,236,907 LESS 12% Service Charge (19,092,008) (19,664,768) (20,254,712) (20,862,353) (21,488,224) Net Revenue 113,503,049 116,908,147 120,415,384 124,027,846 127,748,683 50% Revenue Split $56,751,524 $58,454,074 $60,207,692 $62,013,923 $63,874,341 RMP Revenue
Distribution
493
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 128
Furniture, fixtures, and equipment (FF&E) are essential to the operation of a lodging facility, and their quality often influences a property's class. This category includes all non-real estate items that are capitalized, rather than expensed. The FF&E of a hotel are exposed to heavy use and must be replaced at regular intervals. The useful life of these items is determined by their quality, durability, and the amount of guest traffic and use.

Periodic replacement of FF&E is essential to maintain the quality, image, and income-producing potential of a lodging facility. Because capitalized expenditures are not included in the operating statement but affect an owner's cash flow, a forecast of income and expense should reflect these expenses in the form of an appropriate reserve for replacement.

The International Society of Hospitality Consultants (ISHC) oversees a major industry-sponsored study of the capital expenditure requirements for fullservice/luxury, select-service, and extended-stay hotels. The most recent study was published in 2023.
6 Historical capital expenditures of well-maintained hotels were investigated through the compilation of data provided by most of the major hotel companies in the United States. A prospective analysis of future capital expenditure requirements was also performed based upon the cost to replace short- and longlived building components over a hotel's economic life. The study showed that the capital expenditure requirements for hotels vary significantly from year to year and depend upon both the actual and effective ages of a property. The results of this study showed that hotel lenders and investors are requiring reserves for replacement ranging from 4.0% to 5.0% of total revenue.

Based on the results of our analysis and on our review of the proposed subject asset and comparable lodging facilities, as well as on our industry expertise, we estimate that a reserve for replacement of 4.0% of total revenues is sufficient to provide for the timely and periodic replacement of the subject property's FF&E. This amount has been ramped up during the initial projection period.

Projected total revenue, gross operating profit, and EBITDA Less Replacement Reserve are set forth in the following table.
6 The International Society of Hotel Consultants, CapEx 2023, A Study of Capital Expenditures in the U.S. Hotel Industry.

Reserve for
Replacement
Forecast of Revenue
and Expense
Conclusion
494
Item 2.

November-2025 Projection of Hotel Income and Expense
Proposed COVA Coachella – Coachella, California 129
FIGURE 7-24 FORECAST OF REVENUE AND EXPENSE CONCLUSION
Year Total % Change Total % Change Total % Change
Projected 2030/31 $134,487,000 — $56,470,000 — 42.0 % $38,235,000 — 28.4 % 2031/32 180,615,000 34.3 % 94,507,000 67.4 % 52.3 61,613,000 61.1 % 34.1 2032/33 215,355,000 19.2 114,630,000 21.3 53.2 66,036,000 7.2 30.7 2033/34 226,624,000 5.2 121,319,000 5.8 53.5 61,747,000 (6.5) 27.2 2034/35 233,423,000 3.0 124,959,000 3.0 53.5 55,920,000 (9.4) 24.0 Total Revenue Gross Operating Profit House
Profit
Ratio
EBITDA Less Replacement Reserve
As a % of
Ttl Rev
495
Item 2.

Coachella City CouncilOctober 7, 2026

Coachella City Council
October 7, 2026