Looming sale of River muddles parking issue
The status quo remained in effect at The River this week. Just business as usual, folks. Which means the customer counts were high, valet parking remained free and multi-millionaire Jerome Snyder still was calling the shots at the popular dining, shopping and entertainment complex.
One aspect of the operation is expected to change in the next month or two, however. The River, a 40-unit collection of predeominantly restaurants and specialty retail shops, is up for sale and at least one potential new ownership group has held preliminary discussions with Snyder.
Is a sale of the $70 million project imminent?
“The more I know, the more I conclude that very little is certain,” said Dana Hobart, a Rancho Mirage city council. “But in the absence of hearing anything to the contrary, I do expect the sale to go forward. Mr. Snyder has not told the city why he’s selling, but that he had an offer he can’t refuse. One can only assume it’s because he will make a lot of money by doing so.”
Snyder, the 74-year-old managing partner of a $1 billion commercial/residential development firm based in Los Angeles, declined to announce it when The River was placed on the market. And he has declined comment since. News of a possible sale cam from city officials.
Hobart said he’s aware of only one potential buyer – the Grosvenor Group, a London-based development and investment consortium with a portfolio recently valued at nearly $9 billion.
“We have yet to hear of any firm offer,” said Richard Kite, another city councilman. “The River does generate a substantial amount of sales-tax revenue for the city.”
Rancho Mirage Director of Economic Development Barry Foster said the city has received nearly $500,000 in sales-tax revenue from businesses at The River in each of the last two yars. Foster alsonoted the city receives additional property-tax revenues for its redevelopment zone from outlets at The River. That figure was $224,000 in 2003.
Hobart and Kite also are members of a city subcommittee that for the last six months has been negotiating settlement agreement with Snyder to resolve a long-term dispute over spaces for self-parking and charging for valet parking at The River. On Jan. 13, the city announced that an agreement had been reached containing terms acceptable to both sides. However, last month when a final draft of the agreement was sent to Snyder for signature, he informed the city that he was in the process of selling the project. And some conditions of the agreement loomed as potentially unacceptable to a new owner. An example is the condition concerning this year’s planned construction of a parking structure at The River.
“We had a deal and we were waiting for his signature on the document,” said Hobart. “Now we might as well flush it down the toilet. It is meaningless because he didn’t sign it in order to agree to the terms to which we had agreed orally.”
Under terms of the unsigned agreement, the city was to construct the parking structure, then lease it back to River ownership.
The agreement also stipulates that the valet charges (an estimated $250,000) collected by Snyder’s company during two periods of The River’s 3 1/2-year existence are to be transferred into the city’s general fund. Without a signed agreement, however, it’s uncertain if Snyder will do so.
“Right now, I have no reason to believe that Mr. Snyder will start charging for valet parking again.” said Rancho Mirage City Attorney Steven Quintanilla. “But there is no agreement of any kind in place. I am assuming that anyone interested in buying The River would meet with the city of Rancho Mirage as part of their due diligence. We would go over all the issues,” Quintanilla also noted that the city still has legal issues concerning Snyder’s past practice of charging for valet parking – allegedly a violation of a city ordinance. Last year, the city filed a valet-charges-related civil action against Snyder and also had its code enforcement department issue infraction citations for ordinance violations to Snyder and River General Manager Julie Reese.
Those legal issues seemed about to go away back in January when the pending settlement was announced. Councilman Ron Meepos (who was mayor at the time) said the issues probably would be dismissed in light of the circumstances. Those circumstances have been turned upside down now, however.
“We still have outstanding civil and criminal litigation which either will go to trial or get settled,” said Hobart. “Those remain live issues,” said Quintanilla.
Quintanilla also noted that, under terms of the disposition and development agreement between the city and Snyder for The River, Snyder must obtain the city’s written permission in order to sell it. The condition also is written into the grant deed for the property. Asked to comment on the notion that Snyder is just a businessman making a business decision, Hobart said, “I wish he had attended to solving the parking problems with as much gusto as he has in securing a price he liked.
“The City of Rancho Mirage is very disappointed. We have wasted untold hours of negotiating with him and incurring legal expenses to draft the settlement agreement. I think Mr. Snyder [a part-time resident of Rancho Mirage] could have provided a real service to the city by closing the settlement deal before accepting the sale.”
Copyright Desert Publication, Inc. and Sharon Apfelbaum Jun 21, 2005
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