Controversial plan for short-term rentals in La Quinta withdrawn for now over power issues

A proposal for 78 homes in La Quinta that would operate as short-term rentals, which drew strong neighborhood pushback, has been withdrawn for now, with the project’s developer citing power supply issues as a main hurdle.

Known as the Estates at Griffin Lake, the 40-acre development first won approval from the city council in 2015. The land includes a former home of the late Merv Griffin, the creator of the TV shows "Jeopardy!" and "Wheel of Fortune," as well as a five-acre lake.

The property is surrounded on three sides by a community known as Griffin Ranch, consisting of more than 200 homes in a neighborhood first approved by the city in 2005. Both developments are located just south of Avenue 54, with the Madison Club to the north and parts of PGA West to the south.

Roughly two dozen residents from Griffin Ranch spoke or submitted comments against the proposal to allow the short-term rentals during the city’s planning commission meetings in January and February, when the commission twice granted the developer’s request to continue the hearing. Their concerns mainly focused on the noise and traffic issues that could arise from late-night partying at the proposed rentals.

More: Developer wants 78 new short-term rentals in La Quinta, and neighbors cry foul

A law firm representing the Griffin Ranch Homeowners Association also wrote a letter to the city opposing the project, which is included in an online petition that has drawn more than 500 signatures.

While the development (including the homes themselves) gained approval several years ago, La Quinta’s 2021 ban on new short-term rental permits except in specially zoned areas prompted the developer to seek an exception through a development agreement. Currently, the Merv Griffin Estate is the only home on the parcel allowed to operate as a short-term rental.

The short-term rental proposal from Griffin Ranch Investors LP was estimated to generate roughly $2.1 million annually in transient occupancy tax revenue, along with about $1 million in development impact fees, per a fiscal study conducted by a consulting firm as part of the developer's proposal.

Why was the proposal withdrawn?

Mark Majerovic, who has represented the applicant group in the meetings, told city officials that they were withdrawing the application — with plans to reapply in the future — in mid-March due to power issues.

“Unfortunately, new project challenges have emerged since the application was originally filed and it does not make sense to continue pursuing it right now until they are resolved,” Majerovic wrote in an email. “More specifically, the (Imperial Irrigation District) power crisis and securing a reputable and qualified rental operator for the project.”

IID power substations in La Quinta are “nearing or have reached capacity and need to be expanded or upgraded for both existing customers and for new development,” according to a city staff report presented at a council study session in January. The report says IID is requiring developers to pay for electrical substation upgrades worth millions of dollars when there isn’t enough electricity for new development.

Regarding the Estates at Griffin Lake, Majerovic had previously told the commission that all 78 rental homes would be owned and operated by a single party. On Tuesday, he told the planning commission Tuesday that his group recently held a lengthy neighborhood outreach meeting to discuss the project, but the initial operator had already left the project until IID can provide power.

“Due to the fact that many of the questions that were being asked of me were, ‘Hey, who’s the operator? What is their experience? How do you intend to address our concerns?,’ truth be told I didn’t have real answers to those questions, and I won’t until I have either the same operator come back or find a new one,” he told the commission.

Majerovic thanked city staff and the planning commission for working through the application and considering the project in recent months, adding: “I look forward to bringing it back before you when it makes more sense.”

Tom Coulter covers the cities of Palm Desert, La Quinta, Rancho Mirage and Indian Wells. Reach him at thomas.coulter@desertsun.com.

This article originally appeared on Palm Springs Desert Sun: Controversial plan for La Quinta short-term rentals withdrawn for now