Palm Springs moves to create hotel district to fund convention center expansion

The Palm Springs City Council on Wednesday approved a resolution of intention to establish the Palm Springs Tourism Infrastructure District, setting in motion a formal process that could generate approximately $4.1 million annually to fund expansion and modernization of the Palm Springs Convention Center.

The resolution triggers a required 45-day protest period and sets two upcoming public hearings — a public meeting on May 12 and a final public hearing on May 27, both at 5:30 p.m. at City Council Chambers.

The district, known as the PSTID, would assess all lodging businesses within Palm Springs city limits at a rate of 1% of gross short-term sleeping room rental revenue. The assessment would apply to hotels, motels, inns and vacation rentals regulated under city code, but would not be collected on stays longer than 28 consecutive days or on stays covered under contracts executed before July 1, 2026.

Finance Director Kristopher Mooney told the council the PSTID committee — made up of hotel owners and industry stakeholders — met every other week over a period of months to develop the plan. Petitions supporting the district were submitted by lodging businesses representing more than 50% of the total projected assessment, as required under state law to initiate proceedings.

The district’s total budget is projected at approximately $4.1 million per year, or roughly $164 million over a 40-year term. According to the Management District Plan, those funds would be used first to pay bond debt service and construction costs for the convention center expansion, and then — if funds allow — to support marketing and sales programs for assessed businesses.

To finance capital improvements, the city or a joint powers authority would issue bonds, with a maximum principal amount not to exceed $55 million. Assessments would be pledged to repay the bonds and could be levied for up to 40 years.

PS Resorts, a private nonprofit corporation, would serve as the initial owners’ association, managing funds and implementing programs in accordance with the plan. A PSTID committee drawn from assessed lodging business owners would have decision-making authority over programs, within the limits of the plan.

“This whole thing is not just the convention center,” Councilmember Jeffrey Bernstein said during discussion, “This is a whole new center in our downtown and residents and small businesses benefit.”

The city would collect assessments on a monthly basis and retain up to 3% of amounts collected to cover administration costs.

If written protests are received from businesses representing 50% or more of the projected assessment by the time of the May 27 public hearing, the district formation would be halted for one year. If the council approves formation following that hearing, an anticipated start date of July 1, or as soon thereafter as possible, is outlined in the plan.

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