$76 Million In Lost Revenues Slated For Discussion: Palm Springs

PALM SPRINGS, CA — As Palm Springs continues to stare down an estimated $76 million in lost tax revenue through next fiscal year due to COVID- 19, the city council Thursday will consider extending a temporary ban on all vacation rentals and hotel stays not related to the coronavirus response for another month.

The ban, which has been in place for nearly two months, is set to sunset at the end of May, but city staff are recommending the mandate be lengthened to the last day of June due to uncertainties with the state's timeline for reopening.

A similar requirement was nixed at the county level earlier this month, making Palm Springs eligible to jumpstart its mostly tourism-based economy if it decides to lift the ban that has been in place since March 24.

The city's order applies to all temporary lodging, including hotels and vacation rentals like Airbnb, unless those rentals are being used for "migration and containment measures related to the spread" of COVID-19, according to the city.

Violators can be fined $5,000 for a first offense, which increases to $10,000 and $25,000 for second and third offenses, respectively, the order reads.

City staff recommend extending the order for another month, unless Gov. Gavin Newsom moves California into stage 3 of California's Resilience Roadmap sooner. The state's four-stage reopening plan concludes with stage 4, representing the lifting of Newsom's stay-at-home order — which has been in place since March 19 — and the reopening of higher risk businesses such as sports arenas and concert halls.

California is currently in the beginning of stage 2, with stage 3 including the reopening of "hospitality" services, "which would appear to include hotels and other short-term lodging," according to the report. "However, the State is not yet at Stage 3, and the Governor has given no clear date at which he believes the State will be there. Therefore, it would seem prudent to extend the City's short term lodging prohibition through the end of June. Should the State move to Stage 3 sooner, the City could rescind or modify this order."

The council's possible decision to keep hotels and local Airbnbs mostly shuttered comes as Palm Springs continues to confront an estimated $76 million in lost tax revenue due to COVID-19. This includes diminished sales tax revenue, as well as lost money normally generated through the city's transient occupancy tax, also known as a room or bed tax, which is collected through hotels or other short-term lodging facilities.

Thursday's City Council meeting will start at 3 p.m. instead of the normal 6 p.m. time due to an anticipated lengthy meeting attributed to budgetary discussions, according to city officials.

Due to COVID-19, Thursday’s Council meeting will be held virtually by teleconference. Residents and businesses may submit public comments to the City Council electronically. Materials may be emailed to cityclerk@palmspringsca.gov. Transmittal prior to the start of meeting is required. Any correspondence received during or after the meeting will be distributed to the City Council and retained for the official record.

In addition, citizens will have the opportunity to provide public comments to the Council over the telephone by calling the City Clerk’s Office at (760) 323-8204 by no later than 6 p.m. in order to be added to the comment queue. At the appropriate time, a staff member will call members of the public wishing to provide testimony to the City Council.