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Attachment A
(Ordinance)
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ORDINANCE NO. __________
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, AMENDING SECTIONS
5.27.050(D) AND 5.27.040(D), (E), AND (F) OF THE PALM
SPRINGS MUNICIPAL CODE, CLARIFYING CITY’S
AUTHORITY TO ENFORCE CONDITIONS OF
RESTRUCTURED HOTEL OPERATIONS INCENTIVE
PROGRAM
City Attorney’s Summary
This ordinance amends the City of Palm Springs Municipal Code to clarify the City’s authority to enforce the conditions of its restructured hotel operations incentive program and clarifying language regarding hotel incentive tiers.
WHEREAS, on February 25, 2026, during a regular meeting of the City Council, the City Council adopted Ordinance No. 2126, adding Chapter 5.27 to the Palm Springs Municipal Code, restructuring the City’s Hotel Operations Incentive Program; WHEREAS, following the adoption of Ordinance No. 2126, the City Council desired to amend Chapter 5.27 of the Palm Springs Municipal Code to further clarify the City’s authority to enforce the conditions of the restructured Hotel Operations Incentive Program and to clarify language regarding hotel incentive tiers.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES ORDAIN AS FOLLOWS:
SECTION 1. Recitals. That the recitals reflected above are true and correct, and are incorporated by this reference herein as the cause and foundation for the action taken by and through this Ordinance.
SECTION 2. Code Amendment. Subsection D (Failure to Remain Current with TOT Payments) of Section 5.27.050 of the Palm Springs Municipal Code is amended to read in full as follows. New text is marked in underline, deleted text is marked in strikethrough:
“D. Failure to Remain Current with TOT Payments
1. Should an operator fail to remain current with all TOT payments, pursuant to Section 5.27.050(A)(6), the city may shall issue a written notice to the operator, providing thirty (30) days to become current with all TOT payments.
2. If thirty (30) days passes from the date of receipt of the first notice and the operator is still not current with all TOT payments, the city shall be entitled to terminate the incentive package agreement and the operator shall thereafter not be entitled to any further distributions from its incentive package.”
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SECTION 3. Code Amendment. Subsections D, E and F of Section 5.27.040 (Incentive Tiers) of the Palm Springs Municipal Code is amended to read in full as follows.
New text is marked in underline, deleted text is marked in strikethrough:
“D. Tier 3. An operator investing a minimum of Four Three Hundred and Fifty Hundred Thousand Dollars ($350,000) per room is eligible to receive an amount equal to ninety (90) percent of the transient occupancy tax increment collected and remitted to the city pursuant to Chapter 3.24 of this code for five (5) years, thereafter decreasing to sixty-five (65) percent, and such payments shall be made for a total of twenty-five (25) years, or until the operator has received an amount equal to ADI, whichever event occurs first.
E. Tier 4. An operator investing a minimum of Seven Six Hundred and Fifty Thousand Dollars ($600,000) per room is eligible to receive an amount equal to ninety (90) percent of the transient occupancy tax increment collected and remitted to the city pursuant to Chapter 3.24 of this code for five (5) years, thereafter decreasing to seventy-five (75) percent, and such payments shall be made for a total of thirty (30) years, or until the operator has received an amount equal to ADI, whichever event occurs first.
F. Projects awarded an incentive package pursuant to this chapter, may be eligible for bonus incentives if the below criteria are met. An operator may only elect to receive one of the following bonuses to their incentive package. However, in no case shall an amount exceed 75 percent benefit to the operator.
1. Hotels that are Class 1 or Class 2 Historic Resources as defined in Palm Springs Municipal Code Chapter 8.05, shall be eligible to receive an additional five (5) percent of the transient occupancy tax increment collected and remitted to the city beginning in the sixth (6th) year of the incentive package agreement.
2. Convention Center Hotels shall be eligible to receive an additional ten (10) percent of the transient occupancy tax increment collected and remitted to the city beginning in the sixth (6 th) year of the incentive package agreement.”
SECTION 4. Effective Date. This ordinance shall become effective 30 days after its adoption.
SECTION 5. Certification. The Mayor shall sign and the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same, or the summary thereof, to be published and posted pursuant to the provisions of law.
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SECTION 6. Severability. If any section or provision of this Ordinance is for any reason held to be invalid or unconstitutional by any court of competent jurisdiction, or contravened by reason of any preemptive legislation, the remaining sections and/or provisions of this ordinance shall remain valid. The City Council hereby declares that it would have adopted this Ordinance, and each section or provision thereof, regardless of the fact that any one or more section(s) or provision(s) may be declared invalid or unconstitutional or contravened via legislation.
PASSED, APPROVED AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS ___ DAY OF ___________________, 2026.
NAOMI SOTO
MAYOR
ATTEST:
BRENDA PREE, MMC, CERA
CITY CLERK
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CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, BRENDA PREE, City Clerk of the City of Palm Springs, do hereby certify that Ordinance No. ___ is a full, true, and correct copy, and was introduced by the City Council at a regular meeting held on the __ day of _____________, 2026, and adopted at a regular meeting of the City Council held on the __ day of ______________, 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this ______ day of ______________, 2026.
BRENDA PREE, MMC, CERA
CITY CLERK