CITY COUNCIL STAFF REPORT
DATE: SEPTEMBER 9, 2026 BUSINESS & LEGISLATIVE
SUBJECT: REPORT ON THE PERFORMANCE STATUS OF THE DREAM HOTEL
PROJECT
FROM: Scott C. Stiles, City Manager
BY: Flinn Fagg, Assistant City Manager
SUMMARY:
This staff report provides the City Council with an update on the status of the Dream Hotel project located at the northwest corner of Avenida Caballeros and East Amado Road. A Settlement and Development Agreement (“Agreement”) between the City of Palm Springs and the hotel developer, Selene Palm Springs, LLC (“Developer”), was first approved in 2023, and included a performance schedule. The performance schedule was later updated through the approval of a First Amendment to the agreement in March 2026.
This report provides a status update of the Developer’s compliance with the performance schedule.
RECOMMENDATION:
Receive the report and provide direction to staff.
BUSINESS PRINCIPAL DISCLOSURE:
Selene Palm Springs, LLC, is a California Limited Liability Company. A completed Public Integrity Disclosure Form, as required by Section 2.60.050 of the Palm Springs Municipal Code, is included as Attachment C to this report.
BACKGROUND:
The Dream Hotel project has been subject to extensive City review and public process over nearly two decades, reflecting both its scale and its location adjacent to the Convention Center and established residential neighborhoods.
In July 2007, the City Council approved Planned Development District (PDD) 333 for the property, authorizing a mixed-use project consisting of a hotel and residential
City Council Staff Report
September 9, 2026 -- Page 2
Dream Hotel Status Report
condominium development. Subsequent actions in 2009 and 2013 modified the site layout, elevations, and phasing, while preserving the fundamental land use concept.
In March 2013, the City and the Developer entered into a Purchase and Sale Agreement and related Services Agreement governing conveyance of the City-owned property, performance milestones, and obligations related to public parking replacement.
Between 2014 and 2017, the City Council approved multiple amendments to these agreements adjusting entitlement deadlines, construction timing, and financing structure in response to market conditions and the project redesign.
In June 2017, the City Council approved a significant amendment to PDD 333, transitioning the project to a Dream-branded hotel concept, including a 170-room hotel and 35 residential condominium units, with associated parking and amenities.
In November 2017, the Council approved an Amended and Restated Hotel Operations Covenant, extending the project’s participation in the City’s Hotel Operations Incentive Program and revising performance benchmarks.
Between 2018 and 2019, the City approved further amendments to the Purchase and Sale Agreement and Final Development Plans, including adjustments to the hotel-to- condominium unit mix, relocation of residential buildings, and extensions to construction and opening milestones. These actions preserved the project’s eligibility for incentive participation while responding to evolving design, financing, and construction realities.
During this same period, construction began on the foundation and underground parking garage for the principal building, but which was later stalled.
In June 2023, following continued public hearings and Planning Commission review, the City Council approved amendments to the Final Development Plans and Tentative Tract Map, together with a Settlement and Development Agreement (Attachment B) intended to facilitate completion of the project. As part of that action, the Council directed additional architectural review of the North and South Villas and requested heightened attention to neighborhood interface, site security, and project timing.
In 2024, the Architectural Review Committee conducted multiple hearings on the residential components of the project, resulting in further refinements to building massing, materials, solar control, and perimeter treatments. These reviews did not alter the overall entitlements but ensured consistency with Council direction and neighborhood compatibility.
Following the 2024 approvals and subsequent architectural reviews, the Developer continued pre-construction activities while coordinating closely with City staff. These efforts focused on maintenance of the site including landscape and fence conditions, completed $80 million in value engineering, secured ministerial entitlements, refined construction sequencing, and advanced financing discussions.
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September 9, 2026 -- Page 3
Dream Hotel Status Report
The Developer has also undertaken steps to improve transparency and responsiveness to community concerns, including the preparation of materials for neighborhood meetings, developing a project webpage framework, and coordinating with staff regarding site maintenance and security issues raised by nearby residents.
On March 11, 2026, the City Council reviewed and approved the First Amendment to the Settlement and Development Agreement (“Amendment;” please see Attachment A for the complete document). The Amendment was the result of efforts by the Developer to advance the project, including preparation of construction drawings and finalization of construction details, visits by City officials to the Dream Headquarters and with ownership, correspondence between the City and the developer, and discussions focused on schedule compliance. The amendment included an updated performance schedule and formalized commitments made as part of ongoing coordination between the Developer and the City.
STAFF ANALYSIS:
As noted in the project background, the Amendment included an updated Schedule of Performance with specific dates for key project milestones. The Schedule of Performance is listed in the following table, and includes an assessment on each milestone:
Action Date for Action
Completion Notes
Site monitoring Daily until start of
construction
Daily until start of
construction
Complete Value
Engineering
Complete Completed prior to
adoption of Amendment
First Community Meeting &
Webpage
Complete Completed prior to
adoption of Amendment
Financing Partnership
Notification to City
Complete Completed prior to
adoption of Amendment
Site clean up Ongoing Ongoing
Tree Removal Complete Completed prior to
adoption of Agreement
Fence Improvements Daily until start of
construction
Ongoing
Construction Drawings
Submitted to City at 80%
March 31, 2026 Completed (plans
submitted by deadline –
plan check is ongoing)
Site Investigative Work
Begins
March 30, 2026 Started by milestone date,
investigative work is
ongoing
Complete Model Room April 30, 2026 Model Room started by milestone date and is
nearing completion
City Council Staff Report
September 9, 2026 -- Page 4
Dream Hotel Status Report
Action Date for Action
Completion Notes
Site Remediation Start April 30, 2026 Started by milestone date GMP Guaranteed
Maximum Price
July 30, 2026 Developer did not submit
by milestone date
Financing Complete September 30, 2026 --
Construction Start October 1, 2026 --
Construction Complete December 30, 2028 --
Opening December 31, 2028 --
As noted above, the Developer did not submit the Guaranteed Maximum Price (GMP) for construction of the project by the required July 30th deadline. In the plan review process, City staff noted that the project as designed did not meet certain life safety requirements relative to exiting; the Developer’s design team has been working with staff to identify a resolution to this issue to bring the project into compliance with code requirements.
Resolution of this code issue will need to be resolved before the Developer can secure the GMP.
City staff and the Developer’s team have been in discussions regarding the Developer’s missed GMP deadline.
ENVIRONMENTAL ASSESSMENT:
This current report is administrative in nature and does not propose any changes to the scope of development; therefore, further environmental review is not required.
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with the following City Council Strategic Plan Broad Goal: Economic Development.
FISCAL IMPACT:
None.
REVIEWED BY:
Assistant City Manager: Flinn Fagg
City Manager: Scott Stiles
ATTACHMENTS:
A. First Amendment to the Settlement and Development Agreement (2026) B. Settlement and Development Agreement (2023)
C. Public Integrity Disclosure Form
D. Letter – Notice of Default and 30-Day Cure Period