‘Heck of a Deal’ on Low-Cost Housing at Indian Wells OKd

As critics bemoaned the “heck of a deal” being given to “one small, elite city,” the Assembly on Monday easily passed legislation to allow California’s wealthiest town to build most of its state-required low-income housing outside its borders.

The bill, approved on a vote of 56-15, would apply only to Indian Wells, a tiny desert city east of Palm Springs with the state’s highest per capita income. The measure, which has passed the Senate, was sent back to the upper house for expected agreement on last-minute amendments.

Officials in Indian Wells have been lobbying for an exemption from the housing regulations, contending that construction of luxury resorts has left the city without enough room to build the low- and moderate-income homes that state law requires.

“Without this legislation, frankly, the housing would not be built,” Assemblyman Jim Costa (D-Fresno), who carried the bill on the Assembly floor, said in defending the measure.

But opponents labeled the bill a disguised effort to relegate poor workers needed to keep the luxury resorts running to “servants’ quarters” in less affluent areas outside of town.

“It most certainly will disenfranchise a segment of the population from any kind of policy input into the city of Indian Wells where they will be working,” declared Assemblyman Steve Clute (D-Riverside).

At issue is the city’s controversial use of state redevelopment laws that are intended to help aging cities battle slums and blight. Although Indian Wells is composed almost exclusively of expensive homes and pristine desert, officials there declared virtually the entire town blighted so that they could use redevelopment law to spend tax money on a plan to attract world-class resorts.

Specifically, the city spent its redevelopment money to build two championship golf courses demanded by resort developers as necessary to assure the success of their projects.

The plan worked, but officials ignored a provision of the law that also required it to spend 20% of its redevelopment money on low- and moderate-income housing within the city. The city’s reluctance to build the housing prompted poverty lawyers to file a lawsuit.

The result was an out-of-court settlement that requires Indian Wells to build 148 units of low- and moderate-income housing within the city, but grants an exemption so that an additional 1,350 dwellings can be built out of town. The agreement requires these dwellings to be built within 8 miles, or a 30-minute drive of the city.

Public-interest lawyers who negotiated the settlement said they agreed to have the dwellings built elsewhere because of the likelihood that a court battle would take years to resolve and would delay construction of any low income housing.

Unenforceable Pact

The agreement cannot be enforced, however, unless the bill, introduced by Sen. Robert Presley (D-Riverside), is passed by both houses and signed into law by Gov. George Deukmejian.

Supporters tried to keep the debate focused on the affordable housing that would be built under the agreement. But tempers flared over what some critics characterized as the city’s blatant misuse of redevelopment law.

“Here is an impoverished city with the highest per capita income in the state of California,” declared Assemblyman William P. Baker (R-Danville). “The (city) says you keep the hotel and bedroom taxes and the sales taxes and export the low-income housing to neighboring cities.

“It’s a heck of a deal and I’d wish they’d offer it to Orinda and Danville, my impoverished areas.”

Lobbying Campaign

The bill also has been the subject of a strong behind-the-scenes lobbying campaign, financed primarily by developers of Sunterra, a proposed 4,500-room Indian Wells resort, who have contributed generously to campaigns of most of the Legislature’s 120 members. The bill is opposed by nearly all of Indian Wells’ municipal neighbors and by the Marriott Corp., which operates two desert hotels that would have to compete with Sunterra.

That enabled supporters to characterize the fight as nothing more than a business rivalry.

Pat Green, an Indian Wells resident and spokesman for the bill’s opponents, issued a statement after the vote accusing the Legislature of paving the way for the new resort while failing “miserably to provide enough housing for workers.”