Robert Julian Stone, Special to The Desert Sun
Published 8:00 a.m. PT Jan. 6, 2019
On Wednesday, Jan. 9, Palm Springs’ City Council will consider Grit Development’s request for an extension of completion timelines for the Virgin Hotel. The developer is asking for a three-year extension but, despite the Planning Commission’s 5-2 vote recommending that more time be granted, there is simply no justification for any extension on this project.
On Nov. 15, 2017, the council granted Grit a rebate of 75 percent of the transient occupancy taxes (TOT) for 30 years on the new Virgin Hotel and set forth a timeline for completion. The city estimates the value of this TOT rebate to be between $18 and $50 million.
This year, the State Department of Industrial Relations opined that a TOT rebate and other public funding agreements between the city and Grit Development for downtown work done so far, including on the completed Kimpton hotel, make Grit responsible for paying its construction workers a prevailing wage.
Grit wants a three-year extension because the developer intends to keep the promised TOT rebates while appealing the prevailing wage determination to the state. If that appeal fails, Grit’s attorney has indicated the developer will litigate the issue in court.
It appears the developer simply refuses to pay a living wage to workers on this project – and is willing to sue to be relieved of that responsibility.
Even with an extended construction deadline, it’s likely we will be exactly where we are now in three years. Gov. Gavin Newsom’s administration; the Democrat legislative super-majority; and the courts are unlikely to look favorably upon such a request.
It is disappointing that City Council did not pro-actively require prevailing wages for the project at the time they approved the generous TOT rebate for the Virgin project in 2017. Palm Springs is an increasingly expensive place to live. It is incumbent upon our legislators to protect the livelihood of local workers and advocate for a living wage