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THE PALM SPRINGS HOTEL
FINAL ECONOMIC DEVELOPMENT SUBSIDY REPORT
PURSUANT TO GOVERNMENT CODE SECTION 53083
FOR AN OPERATING COVENANT AGREEMENT
BY AND BETWEEN
CITY OF PALM SPRINGS
AND
AEK CAPITAL MANAGEMENT, LLC
The following Final Report has been prepared pursuant to California Government Code Section 53083. Section 53083 requires that for economic development subsidy agreements approved on or after January 1, 2014, the City must hold a public hearing at the end of the subsidy with a term of 10 years or more and provide an update on the project. As required, this report reiterates details of the Operations Covenant and Declaration of Covenants and Restrictions (Agreement) between the City of Palm Springs (“City”) and AEK Capital Management. LLC (“Capital Management”) and provides information on subsidy payments to date.
1. The name and address of all corporations or any other business entities, except for sole proprietorships, that are the beneficiary of the economic development subsidy.
AEK Capital Management, LLC
13207 Weddington Street
Sherman Oaks, CA 9140
2. The start and end dates and schedule, if applicable, for the economic development subsidy.
The Agreement started on November 1, 2014 and ended October 31, 2024. The "start date" of the Agreement was the date at which the renovation project was deemed fully completed and the calculation of the Transient Occupancy Tax (TOT) increment commences.
3. A description of the economic development subsidy, including the estimated total amount of the expenditures of public funds by, or of revenue lost to, the local agency as a result of the economic development subsidy.
The subsidy was the rebate of 50% share of TOT increment collected annually calculated as follows: after the start date November 1, 2014 the subsidy was based on TOT collections for the year, subtracted from the established base; 50% of any increment was payable to Capital Management. Pursuant to the Agreement, the City rebated $492,322.91 to Capital Management.
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4. A statement of the public purposes for the economic development subsidy.
The has confirmed the Capital Management’s operation and maintenance of the hotel facilities improvements, enhances the tourist and travel experience for visitors by providing attractive and desirable facilities and assists the City in achieving its tourism goals.
5.The net tax revenue accruing to the local agency as a result of the economic development subsidy.
The net tax revenue retained by the City totaled $492,322.91.
6. The number of jobs created by the economic development subsidy, broken down by full-time, part-time, and temporary positions.
The hotel had not change in employment and 50 jobs were created during the construction period.