CVIndependent

Sun09242017

Last updateFri, 16 Sep 2016 12pm

John Wessman was a mighty developer, known for his lucrative deals across the Coachella Valley—and his significant influence at Palm Springs City Hall.

The high point of his career was supposed to be the Palm Springs downtown revitalization project, currently estimated by experts at $350 million in value.

Today, however, Wessman is better known for being indicted on numerous counts of alleged bribery involving former Mayor Steve Pougnet—and involving that downtown development project.

Wessman effectively retired upon the indictment and is not talking to the media. So, in an attempt to find out the latest news regarding the downtown development project—which has benefitted from millions of dollars from Palm Springs taxpayers via Measure J—we reached out to city officials, all of whom still publically support the downtown project. We started by trying to talk to Mayor Robert Moon.

We received this response from Amy Blaisdell, the city’s communications director: “Mayor Moon asked me to reach out to you regarding your request for an interview. He and the other councilmembers along with the city manager will not be granting interviews at this time regarding the investigation and recent indictments.”

This was a lie: Three weeks later, Robert Moon, City Manager David Ready and City Councilman J.R. Roberts sat down for a chat with KMIR.

In any case, we reached out to Judy Deertrack, a local urban lawyer and activist. She is a land and government-affairs consultant, and a legal specialist in land-use law. She is a Palm Springs resident and has lived and worked in the Coachella Valley since 2004. Here’s an edited version of our chat.

Let’s dig in from scratch: When did the trouble start brewing with the Palm Springs downtown project?

The problem with the downtown plan is that it was processed as … a relatively modest redevelopment project for the Desert Fashion Plaza that involved demolition and renovation.

How was Measure J entangled with the downtown project?

In early 2012, the state of California (ended cities’) redevelopment powers and financing, but the city went on to enlarge this project anyway, and financed it with a municipal bond issuance for $47 million that is paid back through Measure J funds at $3.3 million per year for about 25 years.

What was Wessman’s cut in the whole deal?

Since the original release of $47 million in 2012, change orders, (the) purchase of the event center lot, and its proposed approvals have added about another $20 million. Wessman has also gotten an additional $150 million in hotel subsidies coming to him through a bed-tax rebate. This project originally did not anticipate hotels. That is inching toward a quarter-billion in subsidies.

Has the $47 million been spent by Wessman, and has it been spent solely on capital improvements?

No one knows, but $32 million went into a private escrow account owned by Wessman for this project, and the city claims it has no access to know the status of that account currently.

How did the city of Palm Springs end up in such a mess?

I can’t in a few words give an exact story of what happened. Suffice to say, the permits started going through as project finance agreements rather than engineered diagrams. The city and Wessman kept the conceptual plans fairly private and vague enough that the dimensions could be changed at will, and there was no clear planning process in sight. A lot of this bypassed public hearings, except for the hotels.

So Wessman was also given a lot of freedom?

There appeared to be no upper limits … because the city used and abused the planned development permit (PDD). The specific plan set limits on height… and setbacks, and bulk, and floor-area ratio. Then the PDD took those limits away.

Is it possible the city violated any significant regulations and laws?

California’s environmental-review laws say that when cities set limits in their general plan and specific plan, it creates an environmental threshold for impacts, and when they build in excess of those limits, violating the threshold is a “significant environmental effect” that creates the need for further data, evaluation, public hearings and mitigation of project impacts.

How exactly did the city get away with such inconsistencies?

Palm Springs exceeded the limits of its plan on downtown, and then concluded there was no significant environmental effect of doing so—and made what I consider to be false findings that the project “was consistent and in conformity” with the general plan and specific plan, when, in fact, using the PDD and the project finance agreements to set the project development standards and requirements was a violation of those mechanisms.

The resulting “inconsistency” between the project and the specific plan is why in January 2016, the new City Council went back in and re-did about 50 percent of the wording of the specific plan to eliminate all of the outstanding inconsistencies. It was a major cleanup—but is not allowed in the state of California. A plan cannot be later amended to conform to illegal approvals that violate the plan.

It appears that the whole downtown affair is far from over.

Well, the original specific plan is lost to time and many, many changes. All of this occurred during an alleged racketeering scheme between the mayor (Pougnet) and the developer where the mayor, in the words of District Attorney (Michael) Hestrin, was paid to influence the vote of a majority of the sitting City Council. And no matter what was happening, and how illegal the permit processing became, there was always a majority vote—and tremendous pressure put on the architectural and planning commission boards to pass this project up and along, not on evidence, but on influence.

There were some attempts by the city to clean up the mess, correct?

That awful specific plan cleanup … in January 2016 was the tail wagging the dog! … The city over time absolutely bastardized the development restrictions on this project, and now City Hall is bragging they have cut the size by 49 percent. How unique! This sounds like a retail fire sale where the prices are increased 100 percent, and then cut back 50 percent, and we are told we just got a bargain.

What can be done to remedy this downtown quagmire?

This city and its citizens should be demanding change—a lot of change—and a lot of explanation for what has happened. Instead, we are allowing ourselves to be bullied and hoodwinked. The citizens of Palm Springs have been far too compliant with this outrage. Part of the problem is that no one is demanding information. Virtually no one is challenging the inconsistencies and untruths that abound on the public record. Just a few have stood up—too few!

If you were on the City Council, what would you do?

It is an obligation of the sitting City Council to first order a full accounting of expenditures and funds from Wessman on the project to date. Then, audit all accounts, and confer with the state of California on compromised public funds, such as municipal bonds or subsidies. Identify notification responsibilities to the bond-holders. The city has not acknowledged these obligations to date.

Published in Local Issues

We put the finishing touches on the March print issue on Thursday, Feb. 16. (Yeah, it was a little earlier than normal, because February is a short month, and we have a narrow window with our printer.)

That particular day was, to say the least, a completely bonkers news day. On a local level, Riverside County District Attorney Michael Hestrin announced he was filing corruption charges against former Palm Springs Mayor Steve Pougnet and developers John Wessman and Richard Meaney. According to Hestrin, Pougnet took in $375,000 in bribes. All of a sudden, the status of Palm Springs’ big downtown redevelopment project is very much up in the air.

Meanwhile, on the national level, the president held a press conference during which he sounded completely unhinged—a term I do not use lightly.

He claimed he inherited a mess from the previous administration. He said his administration was a “fine-tuned machine.” He viciously attacked the press for reporting on various leaks from his administration. He called reports that his campaign advisers were in contact with Russia “fake news.”

The New York Times, which is generally rather restrained, put it this way: “The session was marked by an extraordinarily raw and angry defense the likes of which has never been seen in a modern White House. At times abrupt, often rambling, characteristically boastful yet seemingly pained at the portrayals of him, Mr. Trump seemed intent on reproducing the energy and excitement of his campaign after a month of grinding governance. He returned repeatedly to his contest with Hillary Clinton and at one point plaintively pleaded for understanding.”

Holy shit.

This brings us to this March 2017 print edition of the Coachella Valley Independent, which is hitting streets now. While the news on the Palm Springs corruption charges broke too close to deadline for us to cover them in any meaningful way—watch for that later—we did include two features in our expanded news section about the mess that is the 45th president’s administration, which you can read online here and here.

Meanwhile, for the second straight month, we’re featuring art—in a big way—on our cover. Why would we do this two months in a row? Well, this month’s subjects—the La Quinta Arts Festival, and the brand-new Desert X—are fantastic. Just for starters, did you know the La Quinta Arts Foundation has given out $1.23 million in scholarships to local young artists over the years? Wow.

Thanks, as always, for reading the Independent, and be sure to pick up March 2017 print edition at one of 380-plus valley locations.

Published in Editor's Note

A Palm Springs City Hall power struggle involving freshman Mayor Rob Moon and longtime City Manager David Ready seems like a classic David vs. Goliath battle.

In this case, the mayor is playing the underdog role of David, while the role of mighty Goliath goes to Ready. Since 1994, according to the city charter, Palm Springs has basically been run by the city manager, while the role of the mayor is largely ceremonial: He’s just another City Council member who also gets to cut ribbons, greet dignitaries, attend events, give speeches and so on.

However, that does not mean a mayor has no power whatsoever: A mayoral term is four years long, which offers plenty of time for a motivated mayor, if he so chooses, to put the pressure on the City Council to use its power to fire the city manager.

That’s exactly what Moon proposed, more or less, back in April, when Moon called a special meeting to evaluate the performance of Ready and Doug Holland, a contractor who serves as the city attorney. Moon’s proposal came in the wake of a turbulent year during which the city was dragged into an FBI investigation.

However, Moon soon learned that he was the only council member who supported removing the city manager. After a closed session on April 13, the City Council voted unanimously to keep Ready.

Today, the power struggle continues—and Moon is now saying he wishes he’d stood his ground and voted to fire Ready.

“I wanted the City Council to go on the record,” Moon said. “I did then vote to endorse the city manager, but I regret that vote. I should have stood my ground and at least made a symbolic vote against it.”

Since becoming city manager in 2000, Ready has largely reigned unchallenged during the terms of four mayors: Will Kleindienst, Ron Oden, Steve Pougnet and now Moon.

Ready offered a diplomatic response to the “evaluation” of his job performance that Moon initiated.

“It is the prerogative of the mayor and any member of City Council to discuss my employment contract,” he said, “and as always, I serve at the will and pleasure of the City Council.”

Ready earned $421,221 in pay and benefits last year, making him the highest-compensated city government employee in the Coachella Valley—and one of the highest-paid city managers in the state. I asked Moon what he thought about capping the city manager’s salary.

“That’s probably a good idea,” Moon said. “… But if there is a cap, perhaps a person who has been around a long time would not like it and would go to work in a big city, like Chicago.”

While Ready’s salary has increased over the years, he said he’s made some personal sacrifices when it comes to his pay. 

“With regard to salary increases, in several years, I have refused to take increases outlined in my contract as we went through the recession,” Ready said. “Hence, salary or salary caps are not an issue for me, personally.”

Both Moon and Ready said they’re awaiting the results of the ongoing probe into city affairs—apparently involving the conduct of former Mayor Steve Pougnet.

“The FBI, the IRS and the (district attorney) seized certain documents, servers, cell phones etcetera,” Moon said. “I’ve no idea what they were looking for. … I expect that sometime by end of this year, my guess, we’ll hear what the outcome of the investigation is.”

Ready said the city has been transparent throughout the investigation and added that documents removed during the raid have been returned and posted on the city’s website for public review.

“Those agencies were doing their jobs,” Ready said about the law enforcement agencies investigating the city. “The city is fully cooperating with the investigation, and we are committed to keeping our citizens and the public updated on any information that we receive.”

However, the city has indeed suffered from some lapses in transparency. Shortly after the Sept. 1, 2015, FBI raid, former Riverside County District Attorney Rod Pacheco—despised by some members of the community thanks to his hard-line role in a 2009 Warm Sands area sex sting that was tinged by homophobic remarks—was hired to “assist” the City Council in the matter. However, that information was not released to the public until this spring—after Ready at one point told The Desert Sun that the city had not hired outside legal help.

Moon said he was shocked when he learned the city had hired Pacheco.

“Right after I was sworn in, we had a closed-session meeting, and Mr. Pacheco was introduced to the new council,” Moon said. “Once I found who he was, I felt that it was inappropriate for us to be employing him, even indirectly. I was one of those people who very strongly led a movement to cut any ties with him.”

Ready said it was not his idea to hire Pacheco in the first place, and instead pointed a finger at City Attorney Doug Holland.

“The city attorney decides to hire outside legal services,” Ready said. “In this case, in order to fully cooperate with the district attorney, the city attorney indicated his decision to hire Mr. Pacheco was based on his extensive knowledge and understanding of the operations and procedures within the District Attorney’s Office.”

Moon is now leading a charge to replace the existing contracted city attorney with an in-house city attorney. Moon is on a city subcommittee working with recruiting firms to find a new city attorney.

“It’s been approved by the City Council, and it’s in the budget,” Moon said. “I’ve strongly felt that we need a city attorney to be a member of our team—actually employed by the city. I would like to get it done in six months.”

Ready said he is indifferent regarding the issue, and added that the matter is out of his hands.

“As with the city manager’s position, the city attorney is a position that is hired by the City Council,” Ready said.

Published in Politics

The Agua Caliente Band of Cahuilla Indians is at a crossroads.

The tribe, which has some 32,000 acres of land across Palm Springs, Cathedral City, Rancho Mirage and outlying areas, is making big plans for its prime downtown Palm Springs real estate. Meanwhile, the tribe is involved in a controversial lawsuit against the valley’s two largest water agencies over control of the area’s water rights.

In addition, tribal leadership, with Chairman Jeff Grubbe at the helm, is preparing for an uncertain future that includes online gambling—which may or may not hurt the tribe’s casino revenues.

The late Richard Milanovich (1942-2012) reigned as the tribal chairman for 28 years, during which he placed winning bets on the gambling industry. He led his people from obscurity to become the first Native American tribe in California to own and operate two major casinos—Spa Resort Casino in Palm Springs, and Agua Caliente Casino Resort Spa in Rancho Mirage.

The Tribe’s 480 members significantly benefit from the casinos. “There’s a direct per-capita payment to all tribal members, both minors and adults,” Milanovich told me in a 2003 interview.

Milanovich was a brilliant speaker and a clever leader who was always open to the media. However, Grubbe is a different kind of leader. He’s not media-savvy like his predecessor was, and prefers to lead from the background.

The current Tribal Council consists of familiar names. Grubbe’s close childhood friend, Vincent Gonzales III (whose aunt Barbara Gonzales was a tribal chairman) is the secretary and treasurer. Tribal councilmember Anthony Andreas III needs no introduction; after all, Andreas Canyon is named after his family. The vice chair, Larry Olinger, 78, is the oldest councilmember; the youngest is Richard’s son, Reid Milanovich, at 32.

Grubbe, who was elected to the council in 2006 and became chairman after Richard Milanovich’s passing in 2012, recently granted the Independent a rare interview. He recalled an occasion at what was then the Wyndham Hotel in Palm Springs when Richard Milanovich “threw him in the fire” to test his mettle.

“It was one of the first times I spoke publicly for the tribe,” Grubbe said. “Richard called me and said he wanted me to speak instead of him, and to welcome everybody to the tribal reservation at this conference. He said it’d be about 20 people.”

When Grubbe got there, he realized there were actually 500 people present.

“I started my opening remarks with how Richard had just pulled an Indian trick on me,” Grubbe said. “Later, Richard told me that I did great, and that at some point, I’d have to talk, anyway.”

During his first stint as governor, Jerry Brown appointed Grubbe’s grandfather, Lawrence Pierce, to the state Water Quality Control Board. Today, Grubbe said, the tribe enjoys a positive and a solid relationship with the governor.

“Gov. Brown has been good to us, and he respected us,” Grubbe said. “I’d been close to the governor. We had dinners a few times, and we talked several times.”

The tribe is presently pursuing two hefty lawsuits, regarding water rights and taxes.

Grubbe said he could not talk about the lawsuits. “But the water issue is that the aquifer is overused, and the quality of the water dumped in is low,” he said. “And for some reason, both the (Coachella Valley) Water District and the (Desert) Water Agency refused to hear our concerns. So we had to address the issue.”

The water litigation is ongoing.

As for the tax lawsuit: Riverside County assesses and collects a possessory interest tax from leaseholders on tribal lands in the valley. In a sense, the tax is a replacement for a property tax. Tribe spokeswoman Kate Anderson claims those taxes are not returned to the valley in the form of services, but are primarily used elsewhere in Riverside County. The tax lawsuit is also ongoing.

From time to time, tribal leadership gets criticized for a lack of transparency.

“I think that is not necessarily true. The tribe has been open, and it continues to be open,” he said. “I just spoke at a Palm Springs Chamber of Commerce meeting before 300 people—local and state officials, business owners and community leaders—and talked about what the is tribe working on. Sometimes, when the tribe does something that certain groups don’t like, they throw in that the tribe is not open enough.”

The tribe has plans for a new Agua Caliente Cultural Museum building on Tahquitz Canyon Way in Palm Springs. However, the tribe wants the community to chip in to help with the $65 million capital campaign.

“It’s a tough job to raise the money for it,” Grubbe said. “My mom’s been on the (Cultural) Museum Board for years. I’ve been talking to the mayor and a couple of City Council members in hopes that the city could possibly get involved, too.”

Grubbe addressed the relationship with the city of Palm Springs, considering the two governments need to exist side by side.

“I try to meet with the mayor nearly every month or so,” Grubbe said. “And there are two new City Council members, Geoff Kors and J.R. Roberts, who seem interested in talking and working with us. But Ginny Foat said some negative comments about us in the newspaper.”

I also asked Foat about her comments, made to The Desert Sun last year, during which she was quoted as saying she “would never do anything on Indian land.”

“I didn’t say what was in the paper,” Foat said. “They took my quote totally out of context. I didn’t say anything negative about the tribe and tribal land.”

Grubbe also talked about former Mayor Steve Pougnet and the current federal investigation of him and the city of Palm Springs.

“We’ve been very careful not to get involved with anything that will put the tribe in danger,” Grubbe said. “I always thought that the mayor (Pougnet) did some good things for the city, and I had no idea about all these other things. I still don’t know what’s going on, and the tribe does not deal with those kinds of things. We’re far removed from it.”

Of course, everyone in the area is curious about the goings-on around the Spa Resort Casino in downtown Palm Springs. Grubbe and the other tribal members have thus far been tight-lipped regarding their plans, although he did offer some hints about what is to come.

“We’re excited about the plans and design for the new downtown hotel, about the style of the rooms, etc.,” Grubbe said.

According to Grubbe, the old Spa Resort hotel had to be torn down because of errors made when the building was constructed in the 1960s. He cited a poorly designed and located entrance as an example.

“We’re looking for possibilities to have a new hotel with an entrance from Indian Canyon (Drive),” Grubbe said. “We’re talking to our membership about all these ideas. We want to build something special to redefine the downtown.”

Tom Davis, the chief planning and development officer who’s been with the tribe since 1992, offered yet more hints. He said it was possible the tribe could construct two hotels downtown.

“I expect that sometime this year, the tribe will come up with a certain architectural plan for a spa development, and perhaps some type of a boutique hotel,” Davis said.

Davis also said the tribe expects the city to return the street portions of Calle Encilia and Andreas Road to the tribe.

“This is consistent with the Section 14 master plan and the existing agreements with the city,” Davis said.

Grubbe—a former football jock who stands tall at 6 foot 2 inches—also addressed the current lack of women on the tribal council.

“We’re a very democratic tribe,” he said. “We have a strong presence of women at our tribal meetings, and they tell us exactly how they feel. In the past, we had an all-female tribal council. We don’t have any women running now for the council, but I’m sure it’ll change.”

Published in Local Issues

A bottle, perhaps two, of Barolo might have helped cost the city of Palm Springs a fortune.

The Italian red wine was served during a meeting in 2010 between Steve Pougnet, then Palm Springs’ mayor, and developer John Wessman. Before the meeting, Pougnet had publicly talked about filing eminent-domain proceedings against Wessman’s Desert Fashion Plaza—which the developer had kept largely empty for almost a decade.

The following day, at the State of the City luncheon, Pougnet announced a deal with Wessman and a “new downtown vision that will benefit all of Palm Springs and the valley.”

The bond between Pougnet and Wessman grew after that. The mayor was hired to work for the Palm Springs International Film Festival—which has long included Wessman as a board member and vice chair. IRS records show that the Palm Springs International Film Society, the nonprofit that runs the festival, paid Pougnet $37,500 in the fiscal year 2011-2012, while Wessman Development Co. was paid $90,638 for building rent.

That was not the first time Pougnet and Wessman would find their financial interests linked.

In 2012, according to public records, Wessman purchased a property at the foot of the Tramway Road for $1.1 million. The property, known as Pedregal, was once owned by developer Dennis Cunningham, who lost the development. In addition, the City Council, led by Pougnet, awarded Wessman $4 million that Cunningham owed in bonds on the property.

The high-profile FBI raid of Palm Springs City Hall on Sept. 1, 2015, gathered documents and other evidence regarding Pougnet’s deals with developers, including Wessman. But beyond the ongoing scrutiny and the corruption probe, Wessman finds himself busier than ever.


Despite his high profile, Wessman remains an enigma: Not much is known about the man himself. His age is even hard to pin down; a Palm Springs Life article from May 1980 said he was 40 then; if accurate, that would make Wessman now 76 or so.

Wessman—who did not directly respond to requests to speak to the Independent—grew up on a farm in Hemet, surrounded by his six brothers and Swedish-born parents. As a teen, he worked in construction and never finished a college.

In 1964, he was employed by a construction company owned by Warren Coble and Arthur Press. A year later, Wessman bought out Press, and in 1972, he parted with Coble as well.

He’d soon develop one of the most unusual—and profitable—developing philosophies the valley has ever seen. In that aforementioned Palm Springs Life piece, he stated: “… I make more money from keeping property than I do by building and selling.”

The most prominent example of Wessman’s business strategy can be found smack-dab in the midst of downtown Palm Springs. It all started with the Desert Fashion Plaza, which he managed to keep largely vacant after purchasing it in 2001. Over the years, he held on to the property—and wore down many of his critics, a group that at one time included Pougnet.

Then in 2011, Palm Springs voters approved Measure J, a 1 percent increase in the city sales tax slated to be used on various city projects. Soon thereafter, the Palm Springs City Council, lead by Pougnet, opened the city’s wallets for Wessman Development Company.

“In the initial round,” said local real estate broker Robert Stone, “he got $32 million in public funds to help with the private improvements to the Desert Fashion Plaza parcel. It was simultaneously accompanied by another $11 million for streets, sidewalks and infrastructure improvements that are typically a developer expense.

“Then there were a bunch of change orders to the original giveaway,” Stone said. “When Wessman failed to provide adequate open space as required by the city’s specific plan for the site, the city bought a large parcel from him and made it permanent open space. They paid him $5.3 million for it, based on an appraised value which considered the value of the parcel if fully developed.”

One of the key elements of Wessman’s development is a Kimpton Hotel, rising quickly where the Fashion Plaza once was. However, Wessman has never built a hotel before.

“The 155-room Kimpton Hotel is our first hotel project,” said Michael Braun, the senior vice president at Wessman Development Co.

According to Braun, who’s also Wessman’s son in law, the Kimpton will be first new relevant large hotel in Palm Springs since 1988, when what is now the Renaissance was built.

Wessman recently announced plans to build yet another significant hotel downtown: a 150-room Virgin Hotel. Some opponents of Wessman’s project have expressed concerns about density, traffic and parking space for the proposed 69-foot-tall hotel. According to Braun, there is no problem.

“Based on current approvals, the downtown site has more parking spaces than required,” Braun said.

Another problem is the current occupancy rate for Palm Springs hotels, which is less than 60 percent. Additionally, other hotels may be built soon, including one by the Agua Caliente tribe on its downtown property.

Again, Braun said there was no problem. “You have to distinguish between various hotel-product offerings,” he said. “Palm Springs needs several new four-star products to attract a different tourist segment. The … occupancy rate is irrelevant, as it relates to all product offerings in Palm Springs.”

According to Judy Deertrack, a local urban lawyer, the downtown project morphed over time into something quite different than what was in the original plan.

“There has been no attempt at a market study or feasibility study since 2011, even though the project has grown from an expected $110 million in construction costs to its current estimate of $350 million,” Deertrack said.

“All the way through, the downtown development has shown a lack of public hearings and transparency, (and an) inappropriateness (in) the way the entitlements have gone through on the consent calendar and new business agenda without public notice, hearings and citizen review,” she said.

Over the years, Wessman has been associated with at least 44 companies, according to public records; 33 of the companies are still active.

“About five years ago, I did a search to find out how many parcels Wessman owns personally or in conjunction with other investors under his many DBAs,” Stone said. “At that time, he owned 135 properties in the valley. They were all commercial properties or unimproved land.”

Deertrack expressed serious concerns about the ongoing FBI investigation.

“The elephant in the room,” Deertrack said, “is the connection between the ongoing public corruption investigation, for possible fraud or undue influence, and the extraordinary entitlements granted to Wessman. The cities are prohibited from granting contracts or land entitlements to a developer or party who is a source of income to any City Council member, the mayor included.”

As for the FBI probe, Braun had only this to say: “It is company policy not to comment on any ongoing investigation.”


Meanwhile, Pougnet is no longer part of the City Council. While the new council slate seems to be keeping a more watchful eye on Wessman’s project, new Mayor Rob Moon said via email that construction will definitely continue.

“At our last City Council meeting, our council agreed unanimously that we were not content with continuing to ‘kick the can down the road’ on the downtown development. As I said at that meeting, further unnecessary delay is not fair to the developer, the residents, and certainly not to the downtown businesses who have been impacted by construction and the associated traffic, dust and noise. The council therefore stepped up to the task for which we are responsible, and we voted on each and every designated block and decided on height, density and setback for each of them.”

Moon said that while Wessman is currently planning to build two hotels, he has agreed not to build a third—at least not for a while.

“Wessman Development has agreed not to build a third hotel, currently described as a JC Marriott, until the members of the downtown hotel association have two years of occupancy over 62 percent,” Moon said. “That is a request made by the other hoteliers, which our Planning Commission has publicly supported, as well as the City Council. Nobody, least of all the other hotel owners, want to saturate the market.”

As for what Deertrack called the “elephant in the room”: What would happen to the city funds given to Wessman if he or Pougnet were ultimately prosecuted?

Moon said he did not know the answer to that question, and that he would forward the query to City Manager David Ready. Ready, in turn, forwarded the question to City Attorney Doug Holland.

“The developer’s obligations are secured by a performance deed of trust, and in the event the developer defaults on its obligations, the city has the right to exercise its rights under the performance deed of trust, and ultimately force a sale of the property for which financing has not been secured, and building permits have not been issued,” Holland said “This is the city’s primary enforcement tool.

“The city has acquired the parking structure and certain lots, and therefore, the payments for these assets would not be part of any default. Two properties have been released from the performance deed of trust (the Kimpton parcel on Block C-1 and the “West Elm” building on Block A) because these properties were fully financed, and building permits were issued. The remainder of the project is still subject to the performance deed of trust.

In other words … since the Kimpton and West Elm properties have been released, the city would have no real recourse regarding those parcels should criminal charges be filed.

Published in Local Issues

The year 2015 was not easy for Palm Springs government, especially after City Hall was rocked by an FBI raid targeting documents related to then-Mayor Steve Pougnet’s relationship with various developers and businessmen.

Then came a contentious and at times ugly election season, which ended with businessman and former military man Rob Moon defeating City Councilmember Ginny Foat by 11 percentage points in the eight-way mayoral race—a result that shocked many political insiders.

The Independent recently caught up with Rob Moon at Townie Bagels to talk about his first three months in office. I asked him if anything had surprised him about being mayor.

“The only thing that’s been difficult has been keeping up with the e-mails,” Moon said. “I probably get 150 a day, maybe 200. Just reading and responding to the ones I need to respond to, forwarding the e-mails I need to—it’s vastly time-consuming. Even my executive assistant finds herself 200 to 300 e-mails behind. It’s crazy!”

However, he said nothing really surprised him regarding city government.

“I’ve been following the city for a long time and haven’t missed more than three or four City Council meetings over the past few years,” he said. “I attended Planning Commission meetings, and I was chairman of the Measure J Commission. I had my finger on what was going on.”

Right from the get-go, Moon and the revamped City Council—newcomers Moon, Geoff Kors and J.R. Roberts joined hold-over incumbents Foat and Chris Mills on the five-person council—have been hard at work. Of course, downtown redevelopment has been a major focus.

“The very first night when I took over, we had to vote on the historic designation for Tahquitz Plaza, which we did. That had been hanging for years, and we resolved that our first night,” he said about the Hugh Kaptur-designed midcentury modern buildings at 600-700 E. Tahquitz Canyon Way, which once were targets for demolition. “Then we worked on the downtown development project.

“At the last City Council meeting, the staff wanted us to do a public hearing and take public testimony and continue it to a time indefinite. As a council, we said no. It wasn’t fair to the developer, to the residents or the downtown businesses to drag this out. We wanted to make decisions—which is what we were put in office for. We had a meeting that went until 1 in the morning and voted on every single outstanding issue, with the height of the buildings and all that stuff. We did vote after vote after vote. It wasn’t all unanimous, but we did our job that night.”

One of the things the council took action on was the ever-controversial downtown development being built by John Wessman. The council frustrated the developer by limiting the height on one of the proposed buildings.

“We settled the height of the hotel at the City Council meeting, and that’s going to be 49 feet. It’s not going to overwhelmingly large, and it’s a compromise,” he said.

The spirit of compromise shown by Moon and the other new council members has eased the concerns of some community activists, who were afraid Wessman was getting whatever he desired from the previous council.

“It hasn’t really been a struggle,” Moon said. “We made decisions, and we took a good compromise and the developer didn’t get everything he wanted. (Advocates for Better Community Development, led by Frank Tysen) and other activists who didn’t want to see the development done didn’t get everything they wanted, either, but we reduced the density by 40 percent, and we widened some of the streets. So needless to say, everybody got something.”

The Hacienda Cantina and Beach Club—which had been operated by developer Richard Meaney, one of the primary targets of the FBI investigation—is now shuttered, with no revival seemingly in sight. It’s likely to be one of the new council’s major headaches.

“The Hacienda is something I can’t really comment on, because we’re in litigation now, but the previous City Council agreed to give them $250,000 as an incentive, and apparently they did not use that money for what one would expect—to pay their contractors—and no one knows what they did with it,” he said.

Moon said the city budget is a constant concern for him and his fellow council members.

“Any city, state or federal government has concerns about budget, because you can’t do everything you want to do,” Moon said. “We’re really understaffed at City Hall; we have a serious problem with the homeless; we have infrastructure (work) that needs to be done and roads that need to be paved. The library needs to be redone, and City Hall has a leaky roof. There’s a massive amount that needs to be done. We did pass the Measure J tax that adds the 1 percent sales tax that brings in $13.1 million a year; $3.5 million of that goes toward the bond for the downtown development project, which leaves close to about $9 million a year right now to do additional capital projects.”

Moon said one of the biggest challenges for the city is the homelessness issue.

“I don’t know the answer to that,” he said. “Councilwoman Foat has a task force she’s working on to get services to homeless people who want services, but what about the people who don’t want services—the ones who don’t want a place to stay, don’t want help, and just want to live in empty lots, panhandle and be a burden on society? That’s a challenge, and I don’t know how to address it. One of our problems is we have a lot of open land in Palm Springs, which the other cities don’t have, which makes it more difficult for us.”

Moon said the Agua Caliente Band of Cahuilla Indians, which is currently making plans to redevelop the Spa Resort Casino, continues to have a good working relationship with the city of Palm Springs.

“I had lunch with Chairman Jeff Grubbe a few times, because we have a good relationship, and I’m working very hard to make sure we have a relationship of trust and respect between him and me, and that helps when reaching out to the tribe,” Moon said. “… Chairman Grubbe told me, ‘What’s good for Palm Springs is good for all of us.’ I think that’s important. The tribe only has 400 members and owns half the land in Palm Springs. A lot of the members don’t live here and live elsewhere. They have a very complex governmental organization. What I want to do going forward is make sure we have better communication with them to where we talk to them about what we’re doing, and they talk to us about what they’re doing, and we work together.”

Moon said he’s committed to keeping the workings of the city government transparent.

“Transparency, like democracy, is messy and takes a lot of time,” he said. “We have City Council meetings going until midnight and beyond, because we’ve been debating things in public … and not passing through things quietly. We’ve been bringing it out in the open and discussing these things. Councilman Geoff Kors and I are also heading up a new commission to write some new rules in regard to transparency. We’re both on the finance committee as well and are scheduling public meetings about the budget, and residents can come down and talk about the budget and how they’d like to see their tax dollars spent. We’re also going to have a separate meeting for the City Council where they debate the budget instead of doing it as an agenda item on the regular meeting.”

Published in Politics

Nejat Kohan is an Iranian Jew who, like many immigrants (myself included), came to this country in hopes of creating better life.

Kohan’s dream was to become a big-time developer. One of the first projects he was involved with here in the desert was the reconstruction of the historic Spanish Inn—nowadays known as Triada—the iconic hotel on Indian Canyon Drive in Palm Springs.

The property has been a hot spot for Hollywood celebrities since 1939. Lana Turner and Elizabeth Taylor frequented there, as well as Howard Hughes and Alan Ladd. In 1995, Los Angeles-based investor Hormoz Ramy bought the deteriorating hotel; Kohan stepped in as his business partner in 2002. Kohan threw all of his financial resources, time and energy into the reconstruction, he said.

“The project I was working on was a massive undertaking,” Kohan said. “There are three complexes within the 65,000-square-foot lot. The underground parking alone is 14,000 square feet.”

Since the property was a historic site in the famed Movie Colony neighborhood, the renovation was done slowly and carefully.

“Many of the hotel’s precious 1930s tiles have been restored to their original condition,” Kohan said. “Most of the damaged Spanish barrel roof tiles were replaced by ones from old 1930s homes located in the L.A. area. It took a lot to make it right.”

While Kohan was focused on the details, the city of Palm Springs began placing requirements on the developers—including the Movie Colony Traffic Calming Program.

“At first, I considered the city’s request for a traffic plan as a normal procedure when such reconstruction was under way,” Kohan said. “The city approved the shared cost of the street improvement with the clause about reimbursements.”

According to Kohan, the deal looked fine on paper, as the city’s demands obligated other surrounding properties to contribute; both the Spanish Inn and the Colony Palms Hotel were asked to put in an estimated $100,000 each.

But by 2007, as Kohan has indicated in documented complaints to the city, trouble was brewing.

“The city approved a covenant for Colony Palms Hotel, reducing its share for the street improvement from $109,000 to $45,000, without my knowledge,” Kohan claims. “That left me to cover the $362,000 cost for that project and then seek reimbursements from several surrounding properties.”

Meanwhile, the cost of the street improvements skyrocketed.

“In 2008, I finished the street plan at the cost of over half a million,” Kohan said, “and the Spanish Inn reconstruction was delayed by it for two years.”

By 2010, according to Kohan, his complaints to the city regarding reimbursement were accumulating—with no visible results. Kohan said he was quite desperate, and that is when the city’s mayor, Steve Pougnet, called him.

“On Monday, Sept. 27, 2010, Steve personally called me around 5:30 p.m.,” Kohan said. “He said: ‘This is Mayor Pougnet. I’m going to come visit your project, the Spanish Inn, right now! Would you also make a check for $500 to my campaign?’ I told him: ‘Yes!’

“The mayor came in a few minutes, and I toured him around,” Kohan continued. “The mayor told me that he was impressed with the progress of the project,” which was then about 80 percent completed. “I gave him the check. He spent about 10 to 15 minutes with me at the Spanish Inn.”

Kohan gave at least three other checks to Pougnet, too—all dated on the 27th day of a month, starting with a birthday check on Pougnet’s birthday, April 27.

“I attended the mayor’s birthday party in one of his friend’s homes and again donated the money to Pougnet’s campaign,” Kohan said. “Later, I was invited to a party at the mayor’s residence and contributed again to his campaign. I did feel that I was obligated to donate to Steve’s campaign in order to get his attention to Spanish Inn problems, particularly to the city’s agreement for the traffic plan.”

But it was all for naught.

“The city never paid anything for the traffic plan which was imposed as a pre-condition for building permits,” Kohan said.

After funding $7 million as a construction loan, the lender stopped financing the Spanish Inn project in 2011, Kohan said.

“I have lost about $2 million in my Spanish Inn investment and general contracting fees,” Kohan said. “Furthermore, there are some claims and liens up to $6.5 million for my personal guarantee. In 2011, the Pacifica Group bought the Spanish Inn in a trustee’s sale for $3.5 million.”

In 2012, the Los Angeles Times reported that the Colony Palms Hotel, about the same size as Spanish Inn, sold for $15 million.

Kohan said he questions Pougnet’s actions.

“I think I was discriminated against, and I believe that the discrimination was based on my origin,” Kohan said. “I also absolutely believe that Pougnet took advantage of my situation as a developer when he asked me for the donation.”

Pougnet did not initially respond to various requests for comment. However, after the initial version of this story was posted, Pougnet sent responses to some questions that had been emailed to him. He said he recalled receiving one “unsolicited contribution from Mr. Kohan in 2010.” In response to a question about whether he discriminated against Kohan, Pougnet responded: “Absolutely not!”

Marcus Fuller, the Palm Springs deputy city manager and city engineer, confirmed the street modifications were a requirement imposed on both the Spanish Inn and Colony Palms Hotel by the City.

Today, Nejat Kohan is no longer a developer. He is now an attorney—with an emphasis on business law and construction.

(Story updated at 5:35 a.m. on Wednesday, Nov. 18)

Published in Local Issues

The film Selma is one of the most acclaimed movies heading into awards season. It’s nominated for four Golden Globes, including Best Drama, even though it doesn’t open in wide release until Jan. 9.

A week before that opening date, the film was the star attraction as the official opening night screening of the 26th Annual Palm Springs International Film Festival, at Palm Springs High School, on Friday, Jan. 2.

On the unusually crowded red carpet, director Ava DuVernay and two of the film’s actors, David Oyelowo and Common, graciously posed for photographers and spoke with news crews and reporters about the controversy stirred by the powerful film.

“We couldn’t have prepared for this. I’m just thankful that we made a truthful enough film that it is meeting this moment in a real and potent way,” said Oyelowo, who portrays Martin Luther King Jr. in the film, referring to current tension happening after the deaths of black men at the hands of law enforcement officers in Ferguson, Mo., and many other areas across the nation.

“Seven years ago when I first read this script, I felt God tell me that I was going to play this role,” Oyelowo continued. “There were very frustrating moments along the road where the film just wouldn’t get made, so to look at this divine timing of it coming out now, for me, I don’t think it’s an accident at all. I just feel very honored and humbled to be at the center of it.”

Scroll down to see some photos from the red carpet.

Published in Snapshot

When the pain of the Great Recession was just beginning to be really felt in 2009, Brian McGowan—then-Gov. Arnold Schwarzenegger’s deputy secretary for economic development and commerce—approached Coachella Valley leaders about developing an innovation hub.

“We didn’t really have a clue what it meant,” said Palm Springs Mayor Steve Pougnet at a news conference on March 31.

Spurred by McGowan, Pougnet—along with Cathedral City Mayor Kathy DeRosa and then-Desert Hot Springs Mayor Yvonne Parks—formed the Coachella Valley iHub. After the three cities chipped in, the iHub became one of the first six in California—there are now 16 in the state—and it’s starting to pay dividends: 21 tech-related companies are currently part of the Coachella Valley iHub.

“We do have the top iHub in the state,” said Tom Flavin, the president and CEO of the nonprofit Coachella Valley Economic Partnership, which is now working with the three founding cities (as well as the cities of La Quinta, Palm Desert and Indio, plus Riverside County) on the iHub.

More dividends are coming, too: According to a study released at that March 31 news conference, the iHub is projected to have a $12.5 billion impact on the Coachella Valley between 2017 and 2036. Yes, that’s billion with a “b.”

By 2036, the study—by research economist John Husing—estimates that 81 companies involving clean/renewable energy, technology, health/medicine or advanced manufacturing will be operating in the valley as a direct result of the iHub. A projected 3,544 new jobs will be in place at those companies in 2036, with a total payroll of $174 million.

The iHub currently includes companies working at the CVEP business center, and at the iHub Accelerator Campus, located near the Palm Springs International Airport. Leaders are also hoping to build a second iHub campus, for advanced manufacturing, in the East Valley with the assistance of a federal grant.

“We have a lot of work ahead of us, but the economic payoff is significant,” Flavin said.

Joe Wallace, the managing director of the Coachella Valley iHub, explained that Husing’s study makes some fairly conservative assumptions. It assumes that seven companies will “graduate” (i.e. go out on their own from the iHub) each year, with an average of 15 employees each; half of those companies are projected to go out of business. The bulk of the surviving companies are assumed to have 10 percent job growth per year, with expansion stopping at nine years and 35 employees; every fifth company is presumed to keep expanding beyond 35 employees, and every 10th company’s job growth is projected to be 20 percent per year. Each job’s pay is modestly projected at $48,900—the median salary of an Inland Empire manufacturing worker in 2013.

The development of an iHub is especially important in the Coachella Valley, elected officials say, because the valley’s economy is currently over-dependent on tourism—a fact which reared its ugly head during the Great Recession.

It’s also important because the valley currently lacks a lot of good-paying jobs outside of the service and tourism sector. Today, many young people who grow up in the valley are forced to leave due to a lack of work.

“Most of the kids who grow up here would like to stay,” Wallace said.

Silicon Springs Enterprises—a company that partners with and helps develop tech companies that want to do business in the Coachella Valley—was the first company to graduate from the iHub. It’s a great example of a new local company that has big plans—and big potential.

“We want to create another Silicon Valley, one that’s smaller and more efficient, in the desert,” said Joel Fashingbauer, Silicon Springs Enterprises’ president and chief operating officer, at one of the company’s regular Desert Tech Meetups, as reported by the Independent in December.

At the March 31 press conference, Pougnet patted himself and his fellow mayors in Cathedral City and Desert Hot Springs on the back for taking the initial steps to form the Coachella Valley iHub in 2009 and 2010.

“We invested money when times were tough—and we’re now beginning to see the fruits of our labor,” he said.

Published in Local Issues

Some folks just don’t like change.

That’s one of the messages of Brian Blueskye's profile of Frank Tysen, the local hotelier who has been leading the charge against John Wessman’s hotel/retail development on the site of the former Desert Fashion Plaza. The piece went online last week, and serves as our March print-edition cover story.

Tysen says he’s in favor of downtown redevelopment in Palm Springs—but not this kind of downtown redevelopment. He thinks the proposed Kimpton Hotel is too big, too boxy, too glassy, too L.A. He thinks a new shopping center in Palm Springs is a terrible idea. And he thinks it’s stupid to try to attract younger professionals and millennials as tourists to the Coachella Valley, because they lack the time and money that older visitors have.

I don’t agree with Frank Tysen. I think, in this case, change is good.

To my untrained eyes, the plans for the Kimpton Hotel (a hotel chain which I’ve had nothing but good experiences with on my various travels) look just fine. The height—about the same as the Hyatt next door—doesn’t bother me. A shopping center, if it has the right tenants and support, could work in a revitalized downtown Palm Springs. And up until I gave up my job (and a lot of money) to move here and start the Independent, I was a young professional who spent a lot of time and money in this city as a tourist—so I know he’s wrong there.

While I don’t agree with Tysen, I respect him—and regrettably, a lot of city officials, most notably Mayor Steve Pougnet, have shown a distinct lack of respect for the man.

That bothers me. Tysen isn’t just some loudmouth crank; he’s owned a small business and has made it work in downtown Palm Springs for 25 years. He’s had a distinguished career in architecture and urban planning—including a Guggenheim Fellowship (!)—so he knows what he’s talking about.

Yeah, Tysen may not like change, and I definitely disagree with him. But he deserves respect—and I think you’ll come to the same conclusion after reading Brian Blueskye’s profile of him.


As for some other downtown Palm Springs folks who apparently don’t like change: The Independent’s theater reviewers have seemingly been banned from receiving review tickets from the Palm Canyon Theatre.

Here’s what I know: In the not-quite-a-year that the Independent has been reviewing plays, critics Valerie-Jean Hume and Bonnie Gilgallon have covered a half-dozen Palm Canyon Theatre shows. They thought some shows were so-so; others they really liked; and only one review, arguably, was more negative than positive (of October’s The Sound of Music).

Well, something in Bonnie Gilgallon’s recent review of Les Miserables must have upset the folks at the PCT. Valerie-Jean Hume recently called to arrange to see a performance of the latest show, 9 to 5 (which opens this week)—and was told that theater managers were meeting to determine whether they’d continue offering press comps to us. The woman to whom V.J. spoke said she’d call back after the meeting.

V.J. never received a return call, so she called back the PCT and left a message, which went unreturned. I then called to find out what was going on, and left a message. As of this writing, I, too, have yet to receive a return call.

I don’t know what’s going on. I do know that in my lengthy career as an editor, I have never had a theater company ban any of my reviewers from receiving press tickets (even after reviews that could be classified as scathing)—much less issue a ban without the courtesy of an explanation.

If the theater ever gets back to me, I’ll let you know what’s up. But as of now, it seems the Palm Canyon Theatre doesn’t like the change that the Independent has brought to town—namely, honest theater reviewers who tell it like it is.

Published in Editor's Note

Page 1 of 2