City Council approves $26 million contract for restoration of Plaza Theatre, method for funding the work

The Palm Springs City Council unanimously voted to approve a $26 million construction contract for rehabilitating the historic downtown Plaza Theatre on Thursday, but only after agreeing that thorough oversight of the project and its funding was needed.

The theater, acquired by the city in 2015, opened in 1936. It was last fully utilized as the home of the Palm Springs Follies but has been in disrepair since that show closed in 2014. The city hopes to restore it for use as a modern performance venue.

Leading the restoration efforts is the Palm Springs Plaza Theatre Foundation, a nonprofit led by a former city councilmember and recent Planning Commission member, J.R. Roberts. Through large and small individual contributions and a $2 million contribution from the city, Roberts and other foundation volunteers raised roughly $16 million, which they thought would cover construction costs.

Once city staff sought bids for the work earlier this year, however, it became clear that initial estimates were far from reality. While foundation members once estimated the construction costs to be about $12 million, multiple bids came in more than twice that amount.

At issue Thursday was both the approval of one of those bids – $26.3 million to Woodcliff Corporation – and how to pay for it. The latter proved hard to swallow for some residents when it was reported earlier this week that the foundation was seeking an additional $20 million from the city.

In a report to the Council prepared for Thursday’s meeting, city staff said there could be $15 million in existing Measure J tax monies, $10 million from budget reserves, and $5.6 million from budget set-asides that could be used to supply the $20 million request. 

On Thursday, the Council elected to approve an agreement that commits $7.5 million of the Measure J funds – as recommended earlier in the day by the Measure J Oversight Commission – and a total of $12.5 million from the set-asides and general fund to help fund the theater’s rehabilitation. 

While some of the funds had been earmarked to assist with getting other projects off the ground, those projects will not be at risk, the community was assured, as continued fundraising by the foundation is expected to help replenish city coffers.

“We don’t believe that other projects like the public library and the fire station would be affected in any way by the project financing that we’re talking about today,” City Manager Scott Stiles assured the Council. 

Also approved was a request to assign a manager to the oversee the project, another safeguard to assure that city funds would be well-spent

“If I was being asked to take money away from community-initiated projects, I would not vote for it,” Councilmember Lisa Middleton said prior to the vote. “(W)hat I’m being told is that money will in fact be returned.” 

“If it’s not, it doesn’t matter where I’m at. I will find you,” Middleton concluded, directing her comments toward the city’s finance director. “Others have seen me mad, but it doesn’t happen very often. That money will come back.”

The exact date that construction will begin has yet to be determined. Under terms of the contract approved Thursday, Woodcliff would be expected to finish the project within a year of its start.

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