Ritz-Carlton Gets Deadline From Rancho Mirage

By Kate McGinty, The Desert Sun
December 4, 2009

The long-awaited Ritz-Carlton in Rancho Mirage must open for business by June 2011, the City Council decided Thursday.

Under a new operating contract with the hotel, which was approved 4-0, the city laid out details of a modified financing agreement and set a new deadline for the hotel to open for business.

The Ritz-Carlton, in the Santa Rosa Mountains at the top of Frank Sinatra Drive, must open its doors by June 30, 2011.

The hotel — which is “coming back to life”— plans to pick up construction by March to make that happen, project attorney Emily Hemphill said.

“I think finally I can stand here and tell you we are making significant progress,” she said.

The previous hilltop hotel, The Lodge, shut down in August 2006 to be renovated into the Ritz-Carlton. The city estimated it would raise at least $1.2 million in annual transient occupancy tax.

Construction came to an abrupt halt last year, though, after Lehman Brothers Holdings Inc., a major investor, filed for bankruptcy.

That left about 80 percent of the project complete and more than 200 people without jobs.

Now, the hotel is on the cusp of clearing its debt on the project and an equity partner is buying the lender note, Hemphill said.

The hotel will next secure a construction loan, which Hemphill estimated could be about $50 million.

Construction is then expected to take about seven months, City Manager Pat Pratt said.

Hemphill was optimistic the hotel could open ahead of schedule.

“I don't think it would be very long. My guess is if we could get started in the first quarter of the year, that we would be open for the subsequent season,” she said.

Councilman Dana Hobart said Rancho Mirage residents and the rest of the Coachella Valley have eagerly awaited the opening, and its progress is a sign the valley can flourish.

“The completion of this project will be evidence to all of the world that the Palm Springs valley is a tourism destination that is a vibrant destination, regardless of world and national distress,” he said.

Report: California foreclosures drop in December

from the LA Times:

Notices of default dropped 17.5% compared with November and 32.5% on a daily average basis, according to the report by ForeclosureRadar.com.

The drop in foreclosures appears to reflect an easing in activity by banks and other lenders hoping to avoid delivering disheartening news to troubled buyers and shutting people out of their homes during the holiday season, said the website, which is based in Discovery Bay, Calif.

Mortgage titans Fannie Mae and Freddie Mac suspended foreclosures for part of last month through Jan. 3, and Citigroup Inc. also said it would suspend some foreclosures and evictions for part of last month through Jan. 17.

“The dramatic drop in foreclosure activity may have been a Christmas gift to homeowners,” Sean O’Toole, chief executive of ForeclosureRadar.com, said in a statement. “Given rising mortgage delinquencies, it is becoming increasingly clear that foreclosure activity no longer fully represents market realities.”

Foreclosure sales were canceled at an increasing rate in December, but only by 3.5% on an average daily basis. That was much smaller than anticipated by analysts at ForeclosureRadar.com, given the push by the Obama administration to make trial loan modifications under its Home Affordable Modification Program permanent.

-- Alejandro Lazo