The plan to spend $43 million in taxpayer funds for development of Desert Fashion Plaza needs serious thought. After all, the amount of public money involved is huge. There are no provisions for the city to participate as an investor and the developer is the only one who will reap profits from any taxpayer involvement. The list of benefits to the city remains speculative, mostly intangible, and the type of studies and commitments a bank or investor would require before becoming similarly involved do not exist. Nothing in the way of significant effort to justify use of public funds to develop the Plaza exists and the question of "why" taxpayer funds should be used remains unanswered - with but one exception.

The only reason taxpayer funds are being considered for use in Plaza development is because influential interests want it done! Those who stand to benefit most from the project are its biggest boosters. The local Chamber of Commerce, downtown business merchants, the film festival folks, Art Museum bigwigs and others all have an interest in Plaza redevelopment. It's their determined involvement that answers the "why" question. Since they appear so staunchly behind taking taxpayer funds for the project that may be the reason little effort has been made to seriously justify use of public monies. An outside investor would surely view the project differently than is currently the case. That investor would not be swayed by local opinion or political clout and instead would look at the underlying fundamentals, including whether it would be a good investment and generally credit worthy. A banker or investor would require answers – and good ones!

Since taxpayers are being asked to donate funds for Plaza redevelopment, answers to questions, similar to the following, should be sought. For example:

• Are there recent surveys indicating plaza redevelopment will benefit the local economy?
• Do surveys enumerate the number of shoppers that plaza redevelopment would attract?
• Exactly what types of businesses are appropriate for the plaza?
• Is there an actual need in Palm Springs for additional retail space?
• Where will plaza business tenants come from (locally or out of area)?
• Will plaza redevelopment cannibalize nearby locations by drawing their tenants?
• What firm, documented indications exist that out-of-area tenants have an interest?
• How will taxpayers benefit financially from a redeveloped plaza? 
• Why should taxpayer funds be diverted for the profit potential of a private developer?
• How will plaza redevelopment significantly foster tourism?
• Should taxpayer funds be used for other local development needs?

The stated purpose behind the new one percent (1%) Sales Tax ordinance is to provide taxpayer funds for private development of Desert Fashion Plaza (recently renamed Museum Market Plaza). Palm Springs city officials need to reconsider the wisdom of giving public funds away to a private developer. The amount of money involved is too great and the effort to adequately justify such a gift has not been made. Any financial involvement in Plaza redevelopment has to be treated as an investment and one that is scrutinized in the same way a bank or an outside investor would do. And, like all investments, it should be structured so there is a reasonable financial return to the city based on the amounts invested. Absolutely no gift of public funds should be part of any city involvement.

Bond Shands
Palm Springs - August 20, 2011

– End –

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More on this topic at DesertObserver.com

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Palm Springs Plaza Fever

Palm Springs Sales Tax Ordinance

Palm Springs Officials Lack Credibility

Palm Springs Financial Skeleton Prospects

Desert Sun Endorses Palm Springs Sales Tax Hike

Desert Fashion Plaza Credibility and Trust Concerns

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