The $2.09 million deal clears a path for a 113-room AC Hotel beside Sunridge’s existing Residence Inn. The hotel still needs development approvals, while a separate 96-unit affordable housing plan advances on adjoining city land.
The La Quinta City Council approved a $2,092,186.80 sale of approximately three acres of city-owned Highway 111 frontage to Indian Wells Hospitality Group LLC, clearing a path for a second Marriott hotel at the southeast corner of Highway 111 and Dune Palms Road.
The council approved the agreement Tuesday, Sept. 15, on a 3-0 vote. Councilmember John Peña was absent, and Councilmember Steve Sanchez recused himself because of a potential financial conflict.
Indian Wells Hospitality Group, an Arizona company owned and controlled by Sunridge Hotel Group, proposes a four-story, 113-room AC Hotel by Marriott with a pool and outdoor lounge. A 3,000-square-foot restaurant or retail pad could be added later along Highway 111.
The hotel would stand immediately west of Sunridge’s existing 108-suite Residence Inn by Marriott, which opened in December 2020. Together, the two properties would give Sunridge 221 Marriott rooms at one location.
The site plan for a future AC Hotel, a Marriott brand.
The vote approved the land sale, not the hotel itself. The project still needs a development agreement, a site development permit, a subdivision map and other city approvals. It has not closed escrow, received construction permits or broken ground.
A second Marriott at the Dune Palms Site
The two hotels would target different segments. Residence Inn is Marriott’s extended-stay product, while the AC Hotels brand is a select-service offering built around design, public spaces and food-and-beverage service. Developers told the council the new property would pursue business travelers as well as seasonal visitors drawn by the Coachella and Stagecoach festivals and other events.
Sunridge says it has developed about 50 hotels since Paul Welker founded the company in 1981. It has worked with Marriott since 1999 and says it has received Marriott’s Partnership Circle Award 10 times.
The sale price is based on an appraised value of $16.01 per square foot. The purchase agreement gives the buyer time to complete due diligence and ties closing to the city’s review of the development applications and other conditions. The city retains discretion over every future entitlement.
Housing will move on a separate track
The hotel is one half of a broader plan for approximately 6.5 acres of city land. La Quinta intends to create a second parcel to the south for a three-story affordable housing development proposed by Pacific West Communities, the affordable housing division of The Pacific Companies.
The city is planning a second parcel to the south for a three-story affordable housing development proposed by Pacific West Communities.
The preliminary housing plan calls for 96 income-restricted apartments plus a manager’s unit. The units would serve households earning 30 percent to 80 percent of Riverside County area median income, averaging 60 percent, and would remain restricted for at least 55 years.
The arrangement grew from California’s Surplus Land Act. The state Department of Housing and Community Development found that the city’s property-disposition process complied with the law, provided it records an affordability covenant.
The council has not approved a purchase agreement for the housing parcel. On Tuesday, it allowed the hotel transaction to move ahead on a separate schedule while negotiations with Pacific West continue. The affordability requirement remains attached to the housing land.
Lower traffic but an uncertain economic return
City planners concluded the hotel and commercial pad could rely on the environmental analysis completed for a retail project on the same land in 2018. The city estimates the new plan would generate about 1,699 vehicle trips a day, 85 percent fewer than the 11,514 trips projected for the earlier retail concept. Annual water demand also would be about 36 percent lower.
If escrow closes, the city would receive about $2.09 million. A completed hotel also would generate property, sales and lodging taxes, including La Quinta’s 10 percent transient occupancy tax.
The city packet does not estimate construction cost, permanent employment, annual room revenue or tax yield, and it gives no groundbreaking date or target opening. Those details should become clearer during entitlement and financing reviews.
For now, the approved land sale moves the project forward without guaranteeing it will be built. The next consequential step will be the city’s review of the development agreement and site plan.
