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It’s official: Palm Springs now has the highest sales tax in Riverside County. Thanks to newly approved Measure D, the rate will be 9.25 percent. The half-cent sales-tax hike will bring in an extra $6.7 million annually, according to estimates.

Voters in November also approved Measure E, a new tax on recreational marijuana.

These new revenues will be coming into city coffers along with, among other revenue sources, funds from Measure J, the one-cent sales tax increase approved by voters in 2011.

Measure J has indirectly led to a lot of bad publicity for the city—because some of those funds were and are being used for the now-coming-to-fruition downtown redevelopment project that was embroiled in the shady dealings that led to the arrest of developer John Wessman and former Mayor Steve Pougnet on bribery charges.

With an entirely new City Council taking office over the last two years, it’s worth taking a look at those Measure J funds, as well as the whole city budget—a budget that is, according to many observers, not so transparent and very hard to understand.

Palm Springs, with 47,000 residents (and a lot of visiting tourists), has a general-fund budget of $110,130,162 for the fiscal year 2017-18. However, the city’s various special funds actually total more than the general fund—bringing the total fiscal-year budget to $229,966,656, an amount confirmed by City Attorney Edward Kotkin, although he added that the amount has yet to be audited.

Figuring out what’s going on with all of these special funds is nigh impossible. I spent several weeks trying to get information from the city’s director of finance and treasurer, Geoffrey Kiehl. After not getting a response, I reached out to Councilman J.R. Roberts.

Roberts said there are 64 separate special revenue funds. “I had to look that up,” he said.

Why are there so many funds—totaling an amount more than the general fund?

“Unlike most cities in the valley, Palm Springs has an airport, a sewer treatment plant, a convention center, etc.,” Roberts said.

Of course, having so many separate funds raises questions about transparency and fiscal responsibility. Roberts responded that city’s website OpenGov website is easy to navigate. He also pointed out that Measure J funds are under the strict supervision of its oversight committee.

“Once the Measure J oversight committee has made its recommendations, the money is moved to the various projects that were decided upon,” he said.

However … if everything concerning the city’s use of Measure J funds is clearly posted on the city website, how did the fund end up getting FBI attention, including a raid at City Hall? Robert Stone, a self-proclaimed FBI informant and constant city-government critic who unsuccessfully ran for the City Council this year, said one of the problems is that the public is only able to find out how the funds were spent after the fact.

“The Measure J funds are controlled by the city manager and the council, with recommendations from the Measure J Committee,” Stone said. “The reasons behind who gets what are not always clear, and disbursements are pretty much at the discretion of the city manager for smaller disbursements, and council for the larger disbursements.

“We only find out how the funds have been administered at the end of the fiscal year,” Stone said. “We never know in advance where the Measure J money is going. We only find out as the transfers are made.”

As for the new Measure D funds: In their pitch to voters, city officials claimed the funds would help the city maintain essential city services, such as public safety. However, it’s unclear what the city will do to handle its huge long-term pension obligations.

“Measure D does nothing to address the ongoing $220 million unfunded pension and health care liability of the city,” Stone said, claiming that the burden from pension and health-care liabilities will bring the city to its knees if it does not fundamentally change the way it does business.

One common complaint about the city budget: generous salaries. In recent years, Palm Springs City Manager David Ready has been the Coachella Valley’s highest-paid public official, with salary and benefits totaling more than $420,000. However, the problem extends well beyond Ready: According to TransparentCalifornia.com, 68 city of Palm Springs employees earned more than $200,000 in pay and benefits in 2016—and when these employees retire, they’ll be in line for huge pensions. Councilman Roberts confirmed that former Palm Springs Police Chief Al Franz, who retired in December 2015, is receiving a pension of $189,083 per year.

In other words … when it comes to transparency and getting the city budget under control, the all-new Palm Springs City Council has a lot of work to do.

Published in Local Issues

On Nov. 7, voters who live in the city of Palm Springs will go to the polls to select two new members of the Palm Springs City Council.

This election will mark a complete changing of the guard, so to speak, after the indictment of former Mayor Steve Pougnet and a couple of developers on corruption charges two years ago. The two new members will replace retiring City Council members Ginny Foat and Chris Mills, and joining three new members who were elected two years ago: Geoff Kors, J.R. Roberts and Mayor Rob Moon.

With City Manager David Ready, this new council will help guide a city that is enjoying the best of times … and, at the same time, suffering through the worst of times.

The city is more popular than ever as a tourism destination—yet it is enduring the aforementioned scandal involving its huge, signature downtown development project. Some areas, such as the Uptown Design District, are enjoying a resurgence—yet the homelessness problem continues to worsen.

The Independent’s Brian Blueskye recently spoke to each of the candidates about these various issues and more. He asked them about the issue of homelessness; the new vacation-rental ordinance; the lack of affordable housing in the city; ethics and transparency;the downtown redevelopment project; and the city’s relationship with the Agua Caliente Band of Cahuilla Indians. Finally, he asked each candidate whether the city is opposed to fun—a charge against the current council leveled by some, including the Cactus Hugs website.

Here’s what each of the candidates had to say.

The Palm Springs City Council Candidate Interview: Christy Holstege

The Palm Springs City Council Candidate Interview: Glenn Flood 

The Palm Springs City Council Candidate Interview: Henry Hampton

The Palm Springs City Council Candidate Interview: Judy Deertrack

The Palm Springs City Council Candidate Interview: Lisa Middleton

The Palm Springs City Council Candidate Interview: Robert Julian Stone

Published in Politics

Of the six candidates running for the Palm Springs City Council this year, Robert Julian Stone is certainly the most blunt.

The author, film critic and community advocate certainly was not shy about sharing his views during a recent interview—including a conspiracy theory regarding the current City Council and two of his opponents.

But before we get to that … on the subject of homelessness, Stone was rather thoughtful and analytical. He told me the recent film The Florida Project was helpful in exposing the national problem of homelessness.

“The solution everyone talks about is the ‘housing first’ solution,’ Stone said. “It’s the best solution for a certain number of people who find themselves without homes. Maslow’s hierarchy of needs states that there are three things human beings need to be productive in society: They need food; they need shelter; and they need clothing. If you take any one of those things away from them, they cannot be a productive member of society. That’s the challenge that we’re facing: We must provide shelter, but how you go about doing that is a very expensive proposition, because (homelessness) numbers continue to grow. The ‘housing first’ solution works best for people who are living one paycheck to another. When you fall out of your housing, and you’ve lost your job, or you have a ruined credit rating because you’ve been evicted, or you’re unemployed—what it takes to get back in is the first month’s rent, a security deposit and employment. If that’s not immediately available to you, you’re out on the streets. The ‘housing first’ model works really well. because (these people) aren’t used to living on the streets, don’t want to live on the streets, and want to get back into a stable situation.

“If you’re talking about the people who don’t want four walls and a roof over their heads, or have addiction and mental health issues—those people are more difficult to handle.”

Stone said the vacation-rental situation in Palm Springs has been poorly handled.

“Airbnb is not going to go away, and it’s here to stay. The thing that we need to do is figure out the best way to manage it,” he said. “I don’t think creating a $1.7 million-a-year bureaucracy to handle the problem was necessarily the right way to go. When Palm Springs did their big vacation rental ordinance, they did not run it through the Planning Commission; they didn’t hold public hearings over a period of time. It was mostly Geoff Kors and J.R. Roberts in a back room coming up with this proposal, which went through a tumultuous unfolding when they got slapped with petitions to recall them and recall this ordinance if they didn’t change it. It was badly handled, and the biggest thing they missed was they didn’t do any density controls, and there’s nothing that prevents 98 percent of the homes next to your home from becoming short-term vacation rentals—and that’s a problem.”

Stone didn’t mince words on transparency—especially involving the funding for Measure J, a 1 percent sales and use tax approved by voters in 2011 that was slated to go toward city services, maintenance and redevelopment.

“They’re certainly transparent on the general-fund portion, but there are dozens of other side funds that don’t appear anywhere in the public forum for the city’s residents to understand or (figure out) exactly what’s going on with that money,” he said. “The city budget is $110 million; the other dozens of other funds make up an aggregate of another $110 to $120 million—things like the airport fund, the Measure J fund, the utility tax fund, the gas tax fund—and they’re run like a sideshow. They’re controlled by the city manager, who dips into those funds to transfer into the general fund as he sees fit, or to transfer from the general fund into those funds when they have shortfalls. Some have income; some of them, like the golf course fund, have income and expenses. We never really get a true picture of what our budget is, because half of it is run behind a curtain, and that’s a problem.”

Regarding the city’s relationship with the Agua Caliente Band of Cahuilla Indians, Stone said the city needs to work with the tribe in a more cooperative fashion.

“That’s a very difficult question, because the city has taken a position that changes from day to day depending on the subject on the table,” Stone said. “Sometimes, they say, ‘They’re a sovereign nation; we have nothing to do with them.’ I’ve heard Ginny Foat articulate that many times, saying they don’t get involved in their business. At the same time, we have a master plan … a bilateral agreement that both sides signed and should be adhering to. But when it comes down to enforcing it, the city never tries to. We need to invite them to the table. … If you look at the history of Palm Springs and the tribe, it’s very checkered. We need to have a better agreement with the tribe; we need to have one that is neutrally supportive. With the way the downtown (redevelopment) project was handled, and the 31 counts of corruption which relate directly to the downtown plan, we can’t really take the moral high ground when it comes to the tribe’s property, given the way the city handled their own downtown development.” 

Stone is not happy with the downtown redevelopment project.

“I think the hotel is a scar on the landscape. It will always be that,” he said. “If you look at the very first building near Tahquitz (Canyon Way) and Palm Canyon (Drive), that building which will house the Starbucks, that’s exactly the scale we were promised: It’s single story; it’s a tall building, and it’s a nice addition to the neighborhood. Then you look at these other buildings, and they’re horrible. It’s better than what we had, because what we had was terrible, but it’s so much less than what we deserved.”

What does the city need to do to be more transparent? Well, here’s where that conspiracy theory part comes in.

“The first thing that we can do is elect me,” Stone said with a laugh. “I also want to talk about where we’re headed if the Lisa (Middleton) and Christy (Holstege) train pulls into the station: We are going to be doing old-school Chicago politics with Councilmember Geoff Kors in the role of Mayor Richard Daley. We’re going have two people seated solely because of the support and the campaign management and campaign contributions that came from a sitting councilmember. Lisa’s campaign is being run by Geoff Kors’ husband. … They are the chosen two—so Geoff Kors will have the two votes he needs if they are seated, and then all bets are off, because it’ll be government by Geoff Kors, for Geoff Kors and about Geoff Kors. If you think that those two women are going to do anything to oppose what he wants, you’re too naive to be talking to—because that’s what we’re going to get, and that’s very troubling, because that’s not good for democracy.”

When I asked Stone whether he thinks the city is opposed to fun—a criticism some have made against the current City Council—his answer, much to my surprise, involved the ethnic makeup of the city.

“They are so not fun,” Stone said with a laugh. “Hell to the no on that! I’m sorry, but we have too many white people living in this town. I lived in San Francisco, and I’m used to living in a very diverse city where Caucasians were the minority. I was born and raised in Detroit, which was largely an African-American city. That’s the kind of demographic I’m used to. I’ve lived here full time for the past 12 years, so if you don’t mind me mixing metaphors: I know where the bodies are buried, and I can hit the decks running when I sit in that chair. I understand the demographic that lives here, because I’m a part of it, but I always wish there was more diversity in the community and diversity on our City Council. I’m sorry—I’m a white male, and I can’t help it.”

After our interview, he emailed me additional thoughts that were a bit more measured.

“Las Vegas has glitz, but Palm Springs has chill,” Stone said. “And chill is cool, sophisticated, and somewhat fragile. We can’t let (the city) be dragged into the vortex of beer bongs and guzzler helmets. So if the City Council may seem a bit stodgy on some points, I think it’s because they have an intuitive understanding of what makes our city special, and a commitment to maintaining it.”

Published in Politics

Judy Deertrack and Robert Stone—both of whom have declared their intent to run for the Palm Springs City Council—recently disclosed that they were informants to the FBI regarding the Palm Springs City Hall corruption case.

The case has resulted in bribery charges in connection with downtown development against former Mayor Steve Pougnet and developers John Wessman and Richard Meaney.

In total, Deertrack, who is an urban lawyer, and Stone, a real estate broker and author, say they invested about 7,000 hours into collecting more than 10,000 pages of documentation.

According to Stone, he called the U.S. Attorney on the morning of April 10, 2015.

“That afternoon, I received a return phone call from Joseph Widman, U.S. attorney for Riverside County,” Stone said. “He informed me that a supervisory FBI agent, Colin Schmitt, was also on the line.”

Widman and Schmitt were intrigued by what they heard, Deertrack and Stone said, and an in-person interview was set up to be held about 20 days later.

“Judy and I spent 90 minutes discussing the case with Widman, Schmitt, Jorge Chavez from the DA’s office and three field agents,” Stone said. “The last words Schmitt said to us were: ‘You have the full attention of the federal government at the highest level.’”

Deertrack explained what they found that led them to contact the authorities.

“Robert researched the mayor’s income and found a defunct corporation making payments to Pougnet,” she said. “Over three years, I testified to the City Council on 22 projects that appeared suspect. Eighteen of those projects are now in the indictments.”

According to sources, Pougnet and Wessman hated each other, so Meaney was brought in to handle the alleged payments, because he was the mayor’s friend. One of the investigators at one point called the trio “the dumbest criminals ever” because of the way the alleged incriminating payments were made—and there is a possibility that one of the three suspects might cooperate with the DA in return for immunity or a lighter sentence.

Beyond taking credit as whistleblowers, Deertrack and Stone said they couldn’t comment on many specifics, as the case is still under investigation. However, they were obviously able to comment on what they’d do if elected to the Palm Springs City Council come November, when two seats will be up for grabs.

“We need to have a two-term limit,” Stone said. “Eight years for the mayor, and that’s it, because an absolute power corrupts.”

It is worth noting that Pougnet was on the City Council from 2003 to 2007, when he was elected mayor. He served two terms and was apparently going to run for a third before deciding against it when the scandal erupted in 2015.

As for Deertrack, she said her first initiative would be to protect the city from what she called further legal and financial troubles by asking for more state and federal help.

“My very first response would be a motion for the City Council to immediately contact the FBI, U.S. attorney general and state attorney general to confer and identify any ongoing threats to funding, projects or infrastructure as a result of the 18 or so projects that appear in the indictments, and partner with these agencies on remediation,” she said. She referred to the scandal that rocked the city of Bell, and said that city’s remediation actions saved Bell up to $100 million.

Both said they may lose votes as a result of their reputations as whistle-blowers and frequent city-government critics. They also said that they don’t fear for their safety in the wake of their criticisms.

“The intense public scrutiny is its own protection,” Deertrack said. “That does not mean our role was without risk. We were cautioned at times by law enforcement to be careful.”

On a lighter note, Stone, who has authored four books so far, hinted that he may write about the city corruption case one day.

“It’s such a book,” he said.

Published in Politics

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