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ECONOMIC & DEMOGRAPHIC PROFILE PALM

SPRINGS

“Palm Sprin gs is also a leader when INTRODUCTION it comes to local job creation…The The resort city of Palm Springs is situated at the base of the Santa Rosa Mountains,

new iHub [innovation hub]…serves south of Interstate 10, at the westernmost extension of the Sonoran Desert. This as an incubator for green companies upscale desert community sits at the base of 10,000-foot Mt. San Jacinto, in an area to create new jobs in the region. long famous for its hot springs. The city is located approximately 110 miles east of Los [Mayor] Pougnet calls it an Angeles and 120 miles northeast of in Riverside County, one of the fastest- ‘economic game changer for Palm growing counties in .

Springs and the entire Coachella Palm Springs is one of nine cities that comprise the Coachella Valley, whose economy Valley’...If all goes as planned, the creation of more than 2,500 jobs is revolves around tourism, real estate, health care, retail trade, and personal services. projected by 2016.” Additionally, the city of Palm Springs is home to over 100 golf courses and 130 hotels and resorts.

--Coachella Valley Vision 2012-2013 Long known as a retirement destination, the city is also gaining ground as a trendy

spot for young visitors due to its semi-urban character and the impending POPULATION TREND PALM SPRINGS, CA development of newer, more youth-oriented hotels/resorts. 50,000 48,000 POPULATION 46,000 Despite a constrained supply of land available for new development, Palm Springs’

44,000 population continues to increase. Between 1990 and 2014, the city’s population rose 42,000 by 13.5%, growing from 40,287 to 45,712. 40,000 38,000 With a projected annual average growth rate of 0.86% over the next five years, Palm 36,000 Springs’ population is expected to reach 47,691 by 2019. The city’s median age is 1990 2000 2010 2014* 2019* *PROJECTED 52.4 years, reflecting a large share of baby boomers and retirees.

1 HOUSING

Palm Springs’ housing inventory consists of 35,022 units as of 2013, with 58.7% owner AVERAGE APARTMENT VACANCY RATE PALM SPRINGS, CA occupied and 41.3% renter occupied. 14.0% 12.0% Local home prices are seeing stronger gains as the local economy and housing 10.0% market embark upon a strong recovery phase. Indicative of this improvement, Palm 8.0% Springs’ median home price rose 40.0% over the year ended in November of 2013, 6.0% from $214,000 to $299,000. 4.0% 2.0% Considered a submarket of the Inland Empire apartment market, the Palm Springs/Palm 0.0% 2008 2009 2010 2011 2012 2013 2014* Desert area recorded an overall average vacancy rate of 5.3% at the close of 2013, an *PROJECTED improvement of 30 basis points from one year prior. Vacancy levels are expected to see steady improvement through 2014, with the average rate projected to drop to 4.0% by AVERAGE APARTMENT RENT the end of the year. PALM SPRINGS, CA $1,150 The Palm Springs/Palm Desert submarket has seen steady improvements in average $1,125 $1,100 rents since falling from an all-time high of $1,125 in 2008 to just above $1,000 in $1,075 2010. Over the year ended in December of 2013, the Palm Springs/Palm Desert $1,050 submarket saw its average rent increase by 0.5%, from $1,015 to $1,020. Average rent $1,025 $1,000 is forecasted to rise by 2.0% in 2014, reaching $1,045 by year’s end. $975 $950 ECONOMIC DEVELOPMENT / NEW CONSTRUCTION 2008 2009 2010 2011 2012 2013 2014* Palm Springs is currently building on its existing downtown assets to transform itself into *PROJECTED an entertainment, cultural, and lifestyle center. Several large, mixed-use projects have been proposed and approved in the downtown area. Among the area’s major projects planned or recently completed are the following:

Innovation Hub – Together with Desert Hot Springs and Cathedral City, Palm Springs was designated as a state “iHub,” or “Innovation Hub,” in 2010. The new office space for the iHub is located across from the Palm Springs City Hall; the iHub focuses on research and development in emerging technologies. As of 2013, the iHub had seven in-house and six virtual tenants. Additionally, in July of 2013, the iHub was approved for Downtown PS $1.5 million in grant funding that would support the development of a medical technology center at the site. By 2016, companies supported by the iHub are projected generate 2,500 n ew local jobs.

Downtown PS/Ho tel Palomar – The $300-million redevelopment of the now-vacant Desert Fashion Plaza will entail a mixed-use project, dubbed “Downtown PS,” with 150,000 square feet of retail space, seven restaurants, and 100 multifamily units. In May of 2013, Kimpton announced that it will open a 190-room Hotel Palomar at the site; the hotel will include a “destination restaurant,” along with meeting space, a rooftop bar/pool, and more. It will be the city’s first new four-star hotel development in Hotel Palomar

hendricksberkadia.com 2 ECONOMIC & DEMOGRAPHIC PROFILE

20 years and is building upon Palm Springs’ recent success in attracting younger visitors as well as retirees. Estimated completion: 2015.

Hard Rock Hotel – opened in October 2013, the Hard Rock Hotel is a revamp of the former Hotel Zoso on Indian Canyon Drive; the hotel consist of 160 rooms, a pool, spa, restaurant/bar, and more. (A separate proposed Hard Rock project that would include 499 hotel rooms remains in the planning stages). The Hard Rock’s entry into Palm Springs is yet another sign of the city’s renewed appeal to a more youthful clientele. College of the Desert, Western Valley Center

Dolce Palm Springs – In June 2013, the Palm Springs Planning Commission approved amendments for this project, to be located on a site formerly slated for a

Mondrian-branded project. The Dolce project is slated to include a 200-room hotel, 143 condos, and underground parking.

College of the Desert – Planned new Western Valley Center campus in Palm Springs; 199-acre site will include a 70-acre “green park” designed to support sustainable

energy systems and clean technologies research. Other college programs will include hospitality, culinary arts, film, media, and allied health. The first phase of the campus Edwards Harris Center for Architecture & Design will open in mid-2014, and the site will eventually support 20,000 students.

Edwards Harris Center for Architecture & Design – The Palm Springs Art Museum is renovating a 1960s-era building into a new facility to house its increasing collection of architecture and design-related works. Estimated completion: mid-2014. The

museum recently opened the Faye Sarkowsky Sculpture Garden.

Escena – Former Palm Springs Classic ourse was redeveloped into an 18-hole golf course; additional plans call for 332 single-family homes, 652 attached multifamily units, and a hotel on a 450-acre site; in planning and approval process Escena Desert Hills Premium Outlets – A $100 million expansion of this popular outlet mall

(located about 20 minutes from the center of Palm Springs) is underway. The expansion will include 158,000 square feet of additional retail space, along with a four-story parking garage, allowing for 60 stores to be added to the mall, bringing its total size to 650,000 square feet. The expansion is expected to create 400 new permanent jobs, along with 500 construction jobs. Estimated completion: late-2014.

ECONOMY / EMPLOYMENT Desert Hills Premium Outlets The city of Palm Springs is the business and employment center of the Western

Coachella Valley. Currently home to over 1,700 businesses—up more than 26% from 2000—Palm Springs boasts approximately 24,000 jobs.

Additionally, the city enjoys a superior advantage in terms of access to health care options for its residents and those that work in the community. The single-largest

3 health care employer in the Coachella Valley is Desert Regional Medical Center, which LARGEST EMPLOYERS is one of Palm Springs’ largest employers. This 394-bed hospital is located within Palm PALM SPRINGS, CA Springs and is part of Tenet California. Spa Casino 1,000-4,999

The local economy is primarily supported by the tourism industry, with millions of visitor Desert Regional Med. Ctr. 1,000-4,999 staying in Palm Springs each year. The Palm Springs International Airport has a Care Fusion 250-499 tremendous impact on the regional economy as well. Palm Springs Personnel 250-499 Desert Sun 250-499 A number of smaller employers (100-249 employees) are located in Palm Springs, including the Agua Caliente Band of Indians, Hilton, Knott’s Soak City Waterpark, Le Palm Springs Riviera Resort 250-499

Parker Meridien, L owe’s, Palm Canyon Resort & Spa, Premier Healthcare, UPS, Savoury’s Inc. 250-499 Regency, and Home Depot. Source: City of Palm Springs, Comprehensive Annual Financial Report, 2013 “… the disappearance of industrial land in the urbanized portion of the Inland

Empire, combined with the rapid rise of imports through the ports of and Long Beach, will likely open a new source of jobs in the Coachella Valley in the next decade. These will be in the logistics sector. In 2007, 43.2% of all containers entering the country passed through ’s ports. There is a crying need for facilities where the goods in these containers can be unloaded, stored, managed and shipped as needed. The Coachella Valley is the next place along the I-10 truck route a nd Union Pacific Railroad mainline that will be asked by the development com munity to host these facilities once the San Bernardino-Redlands area runs out of room.”

—Coachella Valley E conomic Partnership

Approximately 9,000 people are employed at the 10 casinos in Riverside and San Bernardino counties, including several located in the Coachella Valley. Employment growth is expected to continue to increase with the passing of Proposition 1-A, which allows -style slots and video poker. The annual payroll for the top five casinos is in excess of $115 million, and the gaming industry employs LARGEST EMPLOYERS thousands of Coachella Valley residents, which has a tremendous positive impact COACHELLA VALLEY on the local economy. The resort nature of Palm Springs and the Valley portends KSL Recreation Corporation 6,214 exceptional future growth in this sector. Eisenhower Medical Center 4,259

The leading employment sectors in Palm Springs are services (61.1%) and retail County of Riverside 2,320 trade (12.2%). The construction and finance, insurance, and real estate sectors Aqua Caliente Band of Indians 2,200 employ a significant number of local workers as well. Approximately 61% of Desert Sands USD 2,200 employed city residents work in white-collar positions. Bird Products Corporation 1,848

Palm Springs’ unemployment rate declined to 7.9% in November 2013, the lowest Palm Springs USD 1,751 rate in four years and well below the Riverside County rate of 9.6% for the same Coachella Valley USD 1,189 time period. Unemployment in Palm Springs is expected to fall to 7.4% in 2014, Cabazon Band/Fantasy Springs 1,050 below the countywide rate of 8.9% forecasted for 2014. Source: Coachella Valley Economic Partnership

hendricksberkadia.com 4 ECONOMIC & DEMOGRAPHIC PROFILE

Over the year ended in May of 2013, nonfarm employment in the Riverside-San Bernardino-Ontario MSA increased by 1.1% on the addition of 17,440 jobs.

ANNUAL UNEMPLOYMENT RATES PALM SPRINGS, CA According to Moody’s, the metro area will see stronger job growth of 1.8% by 2014* the end of 2014, with a 1.9% gain projected for 2015. These increases will result

2012 in 43,500 new jobs added to the region over the next two years.

2010 “The Inland Empire will witness improvements in almost all areas in 2014... In 2008 the coming years, the key advantages for the Inland Empire will once again be 2006 the affordability of housing, population growth and available low-cost land for

2004 additional warehouse construction.” 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% —Los Angeles Economic Development Corporation, 2013 *PROJECTED Moreover, according to the Southern California Association of Governments,

Riverside County is projected to add more than 628,500 jobs between 2010 and 2035, equating to an increase of more than 80%. Palm Springs is expected to account for approximately 28,000 of these jobs. MEDIAN HOUSEHOLD INCOME PALM SPRINGS, CA $70,000 INCOME

$60,000 The median household income of Palm Springs residents was estimated at $50,576

$50,000 for 2013, reflecting an 85.4% increase over the $27,284 recorded in 1990. The

$40,000 city’s median household income is projected to grow an additional 22.6% to reach

$30,000 $61,986 by 2018. This rate of growth is well above the projected national gain of 13.4% over this period. $20,000

$10,000 EDUCATION 1990 2000 2014* 2019* *PROJECTED The Palms Spring Unified School District (PSUSD) provides public education to

residents of Palm Springs, as well as nearby communities of Cathedral City, Desert Hot Springs, Palm Desert, Rancho Mirage, and Thousand Palms. This independent school district operates 14 elementary schools, four middle schools, three comprehensive high schools, and one continuation school, among others.

Several institutions of higher learning are located in and around Palm Springs, as listed below. Additionally, California State University, San Bernardino and the University of California, Riverside operate satellite campuses nearby.

College of the Desert (Palm Desert) – building a new Western Valley campus in Palm Springs; the center will ultimately support 20,000 students University of Phoenix-Palm Springs Bryman College ITT Technical Institute Coleman College United Education Institute

5 TRANSPORTATION

Air transportation is provided at the Palm Springs International Airport, which is served by 10 airlines that connect to airports throughout the U.S. and Canada. Illustrative of the valley’s popularity with domestic and foreign travelers, the Palm Springs airport attracts visitors from 500 different cities each year. The airport served more than 1.7 million passengers in 2012, up 14.3% from 2011. Supporting this growth, the airport recently completed a $30 million capital improvement project, and two new airlines have added flights.

Rail service is provided by Amtrak, which has stations in Palm Springs and nearby Indio. SunLine Transit provides bus service in Palm Springs and the entire Coachella Valley.

TOURISM / RECREATION

As the western gateway of the Coachella Valley, Palm Springs draws tourists from around the world. Approximately 1 million tourists stay in hotels in Palm Springs annually, while another 600,000 visitors rent homes or timeshare units.

The golfing industry has a significant impact on the city’s economy as well. With over 100 golf courses and numerous annual tournaments, the Palm Springs area is considered the Golf Capital of the World.

Palm Springs is also considered a desert oasis that is home to a thriving outdoor lifestyle. Recreational activities in the area include biking/cycling, hiking, climbing, water sports, horseback riding, and the Palm Springs Aerial Tramway—home to the world’s-largest rotating tramcars, which takes visitors to the top of Mount San Jacinto at more than 8,500 feet elevation. Additionally, the area is home to several casinos, world-famous reso rts, and resort-spas. Downtown Palm Springs is home to numerous antique shops, museums, restaurants, art galleries, and nightclubs.

The Palm Springs International Film Festival, held every January, showcases movies and documentaries made by independent and/or foreign filmmakers. The festival features more than 400 screenings of over 200 films from 60 different countries, with screenings held on 15 screens throughout Palm Springs. It is one of the largest film festivals in North America, attracting more than 130,000 attendees each year.

hendricksberkadia.com 6 ECONOMIC & DEMOGRAPHIC PROFILE

Palm Springs is known for its mid-century architecture, dating from the time the city became known as “Hollywood’s Playground.” The city was home to Rat Pack celebrities such as Frank Sinatra, Dean Martin, and Sammy Davis, Jr., along with Bob Hope, Bing Crosby, Cary Grant, and more. Today Palm Springs continues to attract Hollywood stars, both as seasonal residents and visitors, and the city’s reputation as a destination for the rich and famous continues to lure residents and visitors alike. The annual Modernism Week celebrates Palm Springs’ architectural heritage and draws thousands of tourists each year.

Other local events and attractions include: Desert Arts Festival Tour de Palm Springs biking tournament

Palm Springs Exotic Car Show & Auction Palm Springs Festival of Lights Parade Village Fest Palm Springs Art Museum Moorten Botanical Garden and Cactarium

The Fabulous Palm Springs Follies

Sources Hendricks-Berkadia Research Services; ESRI Business Information Solutions; City of Palm Springs; Palm Springs Chamber of Commerce; Palm Springs Convention and Visitors Bureau; Coachella Valley Economic Partnership; Reis; The Press Enterprise; ; Palm Springs International Airport; Bureau of Labor Statistics; California Association of Realtors; DataQuick; California Department of Finance, Demographic Research Unit; SunLine;

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