Report to City Council
ID: 26-0234 Page 1
TO: Mayor and City Council
FROM: Steven B. Quintanilla, City Attorney
Sean Kelleher, Assistant City Manager (Development)
AGENDA DATE: June 2, 2026
TITLE: ROCIII CA BELAGO ’S REQUEST FOR CITY
COUNCIL’S CONSENT TO ASSIGN RANCHO DEL SOL
GOLF COURSE PROPERTY MAINTENANCE
AGREEMENT (REPORT OF: CITY ATTORNEY)
(DISTRICT 4)
TITLE SUMMARY: ROCIII CA Belago’s Request For City Council’s Consent To Assign Rancho Del Sol Golf Course Property Maintenance
Agreement
DISTRICT: District 4
Recommendation(s)
That the City Council:
1. Grant its consent to allow ROCIII CA Belago to assign the Rancho Del Sol Golf Course Property Maintenance Agreement (as amended) pursuant to terms and conditions of the attached Assignment and Assumption Agreement by and between ROCIII CA Belago, LLC and RDS Golf Property, LLC.
SUMMARY
ROCIII CA Belago, LLC (the “Assignor”) is required to maintain the Rancho Del Sol Golf Course (“Golf Course”) and to complete construction of a permanent Golf Cou rse Clubhouse (“Permanent Clubhouse”), in addition to other obligations related thereto pursuant to the terms and conditions of the attached Rancho Del Sol Golf Course Property Maintenance Agreement (as amended) (“Maintenance Agreement”). The Assignor has
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been in escrow to sell the Golf Course (which includes the Golf Course Club Hous e) to RDS Golf Property, LLC ( the “Assignee”) and has requested that the City Council grant its consent to allow the assignment subject to the terms and conditions of the attached Assignment and Assumption Agreement (“ Assignment Agreement”), which assigns the Assignor’s rights, title, interests, and obligations under the Maintenance Agreement to the Assignee.
The Assignee represents that it is an experienced golf course operator with a track record of managing and restoring golf course facilities within Riverside County, and they intend to invest significant capital into repairing irrigation infrastructure, restoring Lake Nine and making other improvements to the Golf Course , and properly maintaining the facility for public use, consistent with the purpos es of the Maintenance Agreement. The Assignee currently operates Desert Falls Country Club in Palm Desert, and its management team has experience operating other management and customer focused business ventures.
The Assignment Agreement requires satisfaction of specified financial, operational, and compliance obligations in connection with the transfer of title to the Golf Course from the Assignor to the Assignee, as follows:
1) Authorizes the Assignor to assign all the Assignor’s rights, title, interests, and obligations under the Maintenance Agreement to the Assignee , subject to the City’s formal written consent;
2) Requires the Assignee, at the time fee simple title to the Golf Course is conveyed by deed, to assume all of Assignor’s rights, ti tle, interests, and obligations under the Maintenance Agreement from and after the date of conveyance, while providing that any obligations, fees, charges, taxes, assessments, fines, penalties, or interest incurred or arising before conveyance remain the sole responsibility of the Assignor;
3) Provide s that, upon conveyance of title to the Golf Course , the Assignee is subject to and assumes all of the Assignor’s rights, title, interests, and obligations of the Maintenance Agreement , which includes demolishing the existing Temporary Clubhouse and completing construction of the Permanent Clubhouse, after which the City will issue the requisite C ertificates of Occupancy to allow occupation of the Golf Course’s associated apartment units; 4) Provides that, upon conveyance and execution of the Assignment Agreement, the Assignee must provide for the appropriate Performance Security to ensure that the Assignee will meet the maintenance obligations (over a five-year period) as set forth in the Maintenance Agreement – which is currently in the form of a $1,200,000 Performance Bond which is subject to reductions based on compliance of the Assignee’s annual Golf Course/Clubhouse obligations and an $800,000 Cash Deposit that secures the final two years of the Assignee’s Golf Course/Clubhouse obligations;
5) Requires the Assignee to provide the City access to any water wells previously used to irrigate the Golf Course, through a recorded easement or irrevocable
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license, for maintenance and repair of related wells, pipes, equipment, and fixtures; and
6) Requires the Assignor and Assignee to resolve all pending Municipal Code violations and pay all related outstanding fines, fees, penalties, and abatement costs owed to the City regarding maintenance of the Golf Course/Clubhouse prior to or at the time the deed is recorded.
It is important to note that the City is designated and named as a “Third-Party Beneficiary” to the Assignment Agreement which allows the City to enforce the terms and conditions of the Assignment Agreement. In addition, the City reserves the right to pursue other available remedies associated with any violation of the terms and conditions of any related discretionary permits issue d for the overlying “Project,” which include issuing citations, imposing fines and/or suspending and revoking any of the related entitlements.
Background
The Assignor’s obligations to maintain the Golf Course /Clubhouse and to construct the Permanent Clubhouse were memorialized in the Maintenance Agreement, w hich was approved and executed in 2018. Thereafter, in 2020, a First Amendment to the Maintenance Agreement (“First Amendment”) was approved and executed.
In 2020, a Temporary Certificate of Occupancy was issued for the existing Temporary Clubhouse. In 2021, the Planning Commission approved a 5,000 square foot Permanent Clubhouse. In 2022, after the City received the necessary building permit application and requisite information from the Assignor, the City was prepared to issue a building permit for the Permanent Clubhouse – subject to the Assignor completing the required on -site grading and obtaining the necessary approvals from outside agencies, including, but not limited to, the Eastern Municipal Water District (“EMWD”). In 2023, after the Assignor submitted the requisite grading permit application, the City issued a grading permit for the construction of the Permanent Clubhouse. Thereafter, however, the Assignor informed the City that the grading for the Permanent Clubhouse would not commence until sometime in December 2023 . Notwit hstanding the Assignor’s representation that the subject grading would commence in December 2023, it was not until seven months later, in July 2024, when the Assignor actually commenced the required demolition work related to the grading permit for the Permanent Clubhouse, and it was not until May 2025, after the Assignor completed the necessary work, the City was able to conduct the last on-site inspection associated with the grading permit issued for the construction of the Permanent Clubhouse.
With respect to the related apartments, the City issued the necessary grading permit in March 2021. However, it was not until two years later, in February 2023, after the Assignor completed the necessary grading, that the City was able to issue the necessary building permit for construction of the related apartments.
Generally, the Performance Security is intended to secure Golf Course maintenance obligations over a five-year period commencing upon recordation of the deed. The parties acknowledge an estimated annual maintenance cost of $400,000, excluding water costs.
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If the City determines at the end of each calendar year that the Golf Course has been properly maintained, the Performance Security may be reduced by up to $400,000, less any outstanding fines, fees, penalties, and abatement costs related to pending enforcement actions.
From staff’s perspective, the Assignment Agreement provides a clear enforcement framework because it keeps the Maintenance Agreement in place while expressl y transferring the associated obligations to the Assignee. The Assignment Agreement also strengthens the City’s position by making the City a Third-Party Beneficiary with enforcement rights and providing that the Assignment Agreement controls in the event of a conflict with the Maintenance Agreement.
Staff believes the Assignment Agreement appropriately protects the City’s interests by requiring the Assignee to assume the existing maintenance obligations prospectively upon conveyance, preserving Assignor’s responsibility for pre -conveyance liabilities, carrying forward the existing cash security, requiring a new City -approved Performance Bond under a new escrow arrangement, preserving water well access rights, and resolving outstanding compliance issues before or at the time the transfer is completed.
These provisions are intended to help ensure continued maintenance of the Golf Course and completion of the Permanent Clubhouse, and provide the City with enforceable remedies if the Assignee fails to perform.
In light of the foregoing, staff recommends that the City Council consent to allowing the Assignor to assign its duties and obligations under the Maintenance Agreement to the Assignee subject to the terms and conditions of the Assignment Agreement.
ALTERNATIVES
1. Grant consent to allow the Assignor to assign the Maintenance Agreement to the Assignee , subject to the terms and conditions of the Assignment Agreement. Staff recommends this alternative.
2. Deny consent to allow the Assignor to assign the Maintenance Agreement.
Staff does not recommend this alternative.
NOTIFICATION
Posting of the agenda.
PREPARATION OF STAFF REPORT
Prepared By: Department Head Approval:
Steve Quintanilla Steve Quintanilla
City Attorney City Attorney
Concurred By:
Sean Kelleher
Assistant City Manager (Development)
CITY COUNCIL GOALS
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CITY COUNCIL STRATEGIC PRIORITIES
1. Economic Development
2. Public Safety
3. Library
4. Infrastructure
5. Beautification, Community Engagement, and Quality of Life
6. Youth Programs
Attachments:
Rancho Del Sol Golf Course Property Maintenance Agreement First Amendment to the Maintenance Agreement
Assignment and Assumption Agreement
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Report Approval Details
Document Title: STAFFREPORT_CA_RANCHO_DEL_SOL.docx
Attachments: - AGREEMENT REGARDING GOLF COURSE PROPERTY MAINTENANCE.pdf
- FIRST AMENDMENT TO AGREEMENT REGARDING GOLF
COURSE PROPERTY MAINTENANCE.pdf
Final Approval
Date:
May 27, 2026
This report and all of its attachments were approved and signed as outlined below:
Brian Mohan
Natalia Medina
Felicia London, MPA
Launa Jimenez
Patty Rodriguez