A proposed option would give developer Kam Sang two years to pursue a 200-room hotel and 26 villas, with financing, golf course changes, and any city contribution still to be resolved.
The Palm Desert City Council approved a land deal on November 12 that could bring a 200-room hotel and 26 hotel villas to Desert Willow Golf Resort, adding another major hospitality project to Kam Sang Company’s local portfolio, the firm behind investments at the JW Marriott Desert Springs and Ritz-Carlton Rancho Mirage.
The proposal gives Kam Sang a 24-month option to purchase approximately 34.11 acres for $3.87 million. The preliminary concept includes restaurants and other food and beverage outlets, retail, a spa and fitness facilities along with the hotel.
For Palm Desert, the potential payoff extends well beyond selling the land. City staff estimates a completed hotel of this scale could generate about $3.5 million annually in transient occupancy and sales taxes for the general fund. But the cost of helping make the resort possible, including potential infrastructure work and relocating a golf hole, remains unresolved.
The immediate decision is narrower than approving a new resort. The proposed agreement allows Kam Sang to seek development approvals before buying the property. It does not authorize construction, guarantee approval of the concept, or commit the city to financial assistance.
A Desert Willow Hotel Proposal Moves Beyond Negotiations
The land, identified as Lot Pads C and D within Desert Willow Golf Resort, belongs to the successor agency responsible for winding down Palm Desert’s former redevelopment agency’s assets.
Palm Desert’s aerial exhibit identifies Lot Pads C and D within Desert Willow Golf Resort, the property proposed for Kam Sang’s hotel and villa development. Red shading denotes successor-agency ownership. Source: City of Palm Desert; aerial imagery
The properties completed the state’s surplus-land process in 2024 and received clearance for disposition. That September, the agency entered into a six-month exclusive negotiating agreement with Kam Sang. Extensions in April and October 2025 provided more time for due diligence, design changes, financial analysis and evaluation of a possible golf-hole relocation.
The purchase option moves those discussions into a more defined arrangement, with a price, deadlines and conditions that must be met before ownership changes hands.
The $3.87 million price reflects an appraisal by Urban Property Advisors, according to the city’s proposed transaction terms. Kam Sang will deposit $100,000 into escrow within three business days of the agreement’s effective date, with that payment credited toward the purchase price.
Approval by Palm Desert’s successor agency does not make the agreement immediately enforceable. It also requires approval by the Riverside Countywide Oversight Board and the California Department of Finance. The 24-month option period will begin upon approval by the State Finance Department.
Financing Must Be in Place Before the Land Sale
Kam Sang would have 180 days from the effective date to submit a complete entitlement application, including required environmental documents.
Closing the sale would require considerably more: final project approvals and environmental clearance beyond applicable appeal or challenge periods; necessary maps, construction drawings and permits; an executed development agreement with the city; proof of complete project financing; and signed construction contracts.
Those requirements would keep the property in public ownership while the developer assembles the approvals and financial commitments needed to build. They also distinguish the proposed transaction from a land sale that leaves construction financing to be secured afterward.
Once escrow closes, the developer would be required to begin construction within 30 days and complete the project within 24 months of starting work.
The schedule includes paid extensions. Staff describes up to six additional months for entitlements at $10,000 per month. Closing extensions could run another six months, costing $100,000 per month for the first three months and $150,000 per month for the next three. Additional option consideration would be credited toward the purchase price.
A Golf Hole and the Public Cost Remain Unsettled
One of the project’s more consequential design questions involves the Mountain View course’s fifth hole, which bisects the properties.
The concept contemplates relocating the hole. Hurdzan Architects, the original course designer, Kemper Sports Management and city staff have reviewed the relocation concept, according to the staff report.
If the sale proceeds, a separate transaction would exchange approximately 5.2 acres of city-owned golf course land for an equal-sized portion along the eastern boundary of Lot D. That exchange would be distinct from the successor agency’s sale of the hotel property.
The arrangement makes the project more complicated than developing an isolated vacant parcel. A hotel plan must fit alongside an operating golf course, and the cost and responsibility for changing that course still need to be addressed.
A future development agreement would consider project obligations and any proposed city participation. Staff identifies regional infrastructure improvements, the golf-hole relocation and potential shared parking as matters requiring further evaluation. Any city funding would return to the City Council for separate consideration.
The land-sale proceeds also would not flow entirely to Palm Desert’s general fund. Staff estimates the city’s share as a taxing entity at 3 percent, or approximately $116,100, of the successor agency’s $3.87 million gross proceeds.
The larger municipal opportunity is recurring revenue from an operating resort. The $3.5 million annual tax estimate, however, is a projection, and the eventual public benefit would need to be assessed alongside whatever financial commitments the city later considers.
Kam Sang Has Other Major Resort Investments Nearby
Kam Sang’s regional history gives Palm Desert an established hospitality investor to evaluate.
The company acquired the JW Marriott Desert Springs Resort & Spa in 2017. A $40 million renovation completed in 2020 upgraded the 884-room property and created additional suites. In 2022, Kam Sang obtained a $128 million refinancing arranged by JLL and originated by Goldman Sachs Bank USA.
Palm Desert participated in that resort’s expansion. A 2023 hotel-tax sharing agreement outlined support for a new ballroom of at least 25,000 square feet. It provided for sharing half of hotel-tax revenue above an established baseline, with payments capped at the lesser of $10 million or half of project costs over up to 15 years.
That agreement provides a local precedent for evaluating resort incentives, but it does not establish the terms of any assistance for Desert Willow. Those negotiations would be separate.
In Rancho Mirage, Kam Sang is the applicant for the Ritz-Carlton residences and resort expansion. The environmental description includes 106 residences, comprising 48 residential suites and 58 villas, along with 23,840 square feet of event space, additional amenities, parking and a restaurant in the Sky Mesa recreation area.
Rancho Mirage approved the associated development agreement in December 2025, with the ordinance’s second reading approved January 15, 2026. The plan revises residential entitlements dating to 2006, illustrating the long development timelines that can accompany substantial resort additions.
Together, the projects show Kam Sang’s experience with existing resort investment, residential components and expanded hospitality amenities. Desert Willow would require the company to assemble another project-specific package of approvals, financing and construction commitments.
Environmental Review and Design Decisions Come Next
The Desert Willow properties carry a Resort Commercial general plan designation but are zoned Planned Residential at five units per acre. The hotel concept still must go through the city’s discretionary approval process.
City staff treats the purchase option as a preliminary action that does not itself authorize physical development. Environmental review would accompany the subsequent project application, and the agreement would not bind the city to approve a particular design or feature.
The November 12 item is listed on the consent calendar for the joint council and agency meeting, scheduled to begin at 4 p.m. at Palm Desert City Hall.
Bob Marra is the CEO/Publisher of GPS Business Insider and GPS Market Intel. He has been studying, writing and giving presentations about business, economic and public affairs news and issues and the local economy in the Greater Palm Springs/Coachella Valley region for more than 20 years.
