City of La Quinta Says Ruling Puts Long-Stalled Resort Back on Track
A Delaware bankruptcy judge has approved the $65 million sale of La Quinta’s long-delayed SilverRock resort project to an affiliate of Turnbridge Equities, a ruling city officials say finally positions the 134-acre site for a reboot after years of delays and litigation.
U.S. Bankruptcy Judge Mary Walrath issued her decision on Tuesday, Oct. 21, following an August land auction in which a Turnbridge-affiliated entity emerged as the winning bidder. The order came despite objections from several lenders who argued the price undervalues the property and that the city exerted outsized influence over the sale process.
City Attorney Bill Ihrke, briefing the City Council at its October 21 meeting after the ruling earlier in the day, said the court “granted the debtor’s [sale] motion in its entirety” and found the marketing and auction were conducted fairly under federal bankruptcy procedures. “The court read its lengthy ruling from the bench,” he said, adding that Turnbridge “may proceed with purchasing the debtor’s assets free and clear of prior monetary liens.”
Ihrke called the outcome a “team effort” involving the city, the debtors, and the court-appointed restructuring leadership. He said the immediate next step is to work with Turnbridge and the debtors “as part of the escrow to effectuate the purchase and sale” of the property. In a related decision the same day, the judge also granted the debtors’ motion to amend debtor-in-possession financing backed by the city.
A narrowed first phase under a new developer
The sale approval clears the way for a recalibrated first phase anchored by a single 154-room luxury hotel, a realigned public golf course and new clubhouse, and a smaller set of for-sale residences and condos permitted for short-term rental within a hotel-managed program. The plan trims the two-hotel concept pursued by the prior developer, whose Chapter 11 filing in August 2024 froze the project.
Those revisions mirror actions the City Council took at a Sept. 22 special hearing, when it conditionally approved an amended development agreement with Turnbridge’s affiliate while making clear the deal hinged on bankruptcy-court authorization of the asset sale. At that session, Turnbridge representatives highlighted community benefits, including thousands of construction jobs and hundreds of permanent positions, alongside a right-sized site plan that demolishes remnant structures from the two-hotel era and relocates the clubhouse for easier public access.
Financially, the council during its Sept. 22 meeting endorsed a 15-year transient-occupancy-tax sharing structure, a fixed $17 million option for adjoining Phase 2 land, and long-range revenue projections totaling roughly $302 million to the city over 30 years – arrangements later cited in court filings as essential underpinnings for a viable transfer and build-out.
Objections from lenders and the court’s findings
In opposing papers, lenders questioned the $65 million price tag, pointing to earlier valuations of $300 million to $400 million. Builders Capital, with about $44 million in loans tied to the site, also argued that bid procedures and city requirements created “insurmountable barriers” for prospective purchasers and raised issues about its ground-lease interests. The city countered that the cited appraisals were outdated, that structures had deteriorated after years of exposure to desert conditions, that key prior entitlements had lapsed, and that market fundamentals had changed. It also pointed to an updated 2025 appraisal pegging fair market value at $71.7 million. It emphasized that the project’s economics depend on two “linchpins” only the city can provide: the Phase 2 land option and early-years lodging-tax sharing, which are concessions estimated at approximately $100 million in value.
Ihrke told the council that the judge rejected a creditor-proposed alternative that surfaced during the hearing, ruling it failed to comply with bid procedures, was late, lacked firm financial commitments, and lacked the required city approvals. The court, he said, concluded the sale process was designed and executed to attract qualified bidders and obtain the best achievable price under the circumstances.
What happens next
City Manager Jon McMillen previously indicated the SilverRock sale could close as soon as Nov. 12, a date he cautioned could slip depending on the timing of escrow. If the transfer closes, initial vertical development – centered on the hotel, golf realignment, and clubhouse – remains several years out, with mid-2029 targeted for early completions and additional phases extending into the 2030s.
Ihrke said city special counsel, his office, and the debtors’ team would now “work with… Turnbridge as part of the escrow” to consummate the transfer in line with Tuesday’s orders, noting the DIP-financing amendments approved by the court were consistent with directions the council gave in August and memorialized in the city’s September economic development report.
How we got here
SilverRock’s modern reset began as the city moved to replace the prior developer, The Robert Green Company, which filed for Chapter 11 in August 2024 amid litigation and notices of default. Construction has been largely dormant since 2022, and the site briefly rebranded as “Talus” before reverting to its original SilverRock name. The council’s September vote to back the Turnbridge plan, pending court approval, was the “key hurdle” setting the stage for this week’s sale order.
As Ihrke summarized after the hearing, Tuesday’s rulings validate the bidding path, confirm the city-backed financing adjustments, and clear the way for a new owner to take control. “It was a team effort to reach a result today that both the city and debtors view as very favorable,” he said.
