Surf resort in Palm Desert moving forward with changes following pandemic-related delays

Sherry Barkas
Palm Springs Desert Sun

Palm Desert council members have approved an amended agreement for development of a $200 million surf resort at Desert Willow that now calls for fewer hotel rooms than originally planned and instead adds villas that will be for sale and usable as vacation rentals.

DSRT Surf is a planned 14.6-acre resort, with a 5.5-acre surf lagoon as its centerpiece, on about 18.65 acres of vacant land at Desert Willow that Desert Wave Ventures LLC is buying from the city for just over $2 million.

The proposed development initially included a four-story, 350-room hotel, which is now 92 hotel rooms and 83 villas – 50 two- to three-story stacked flats and 33 single-family houses.

The villas will be sold, and the owners will have the option of renting them out to vacationers with management by the hotel, said Doug Sheres, a principal partner of Desert Wave Ventures.

Beach Street Development rendering of the 5.5-acre, 7-million gallon surf lagoon that would be part of the planned DSRT Surf resort at Desert Willow in Palm Desert, as submitted to the city council on Jan. 27, 2022.

Pickleball courts, skateboard pump track, sand volleyball and various other recreational amenities are also planned along with restaurants and bars.

The surf lagoon will be open to the public with technology that makes it something for all skill levels, from beginner to competitive. The plan will be to hold competitive events at the surf lagoon, with spectator bleachers also planned.

The lagoon is a 7-million-gallon pool with anticipated evaporation of 7 million to 9 million gallons of water per year, plus annual draining which adds up to about 23.8 million gallons of water use per year, Sheres said.

Much of that water will be reclaimed through dry wells which recharge the aquifer effectively recycling DSRT Surf water back into the system.

To help conserve water, developers have created a “turf for surf” plan for the development. By converting 24 acres of non-playable turf at Desert Willow into drought- tolerant landscaping, resulting in a savings of nearly 35 million gallons of water per year, Sheres said.

Councilmember Karina Quintanilla asked if there is a plan should the governor further restrict water access due to severe drought.

“What could happen with this project in the future?” Quintanilla asked. “What are the contingencies should there be severe water restrictions…?”

While water usage is based on annual drainage of the lagoon, Sheres said, similar lagoons of the same size and scope can go two to three years without being drained.

“So, there is an assumption right there that our water use is going to drop dramatically from what we have presented to you,” Sheres said.

Reducing lagoon depth by up to 3 inches is another water-saving option that won’t impact the velocity of the waves, Sheres said.

With the reduction of hotel rooms, water usage by the resort is reduced by 50 acre-feet per year, said Nicole Sauviat Criste of Terra Nova Planning & Research, which prepared the original environmental impact report for the project in 2019. An addendum was done in 2021 addressing the project changes, which found that the reduction in hotel rooms reduces overall water usage by about 50-acre-feet per year.

Beach Street Development rendering of the DSRT Surf resort hotel and villas, planned for 18.65 acres of vacant land at Desert Willow Golf Resort in Palm Desert.

The project includes a transient occupancy tax share between the city and Desert Wave Ventures not to exceed $16.1 million over 20 years. Over that 20-year period, the city is estimated to see $42.6 million in revenues from DSRT Surf — $39 million transient occupancy; $2.3 million sales; and $1.3 million property taxes — said Eric Ceja, deputy director of development services.

Support for high school surf club

Just two people spoke during public comments, both in support of the project.

Krysten Gonda, a Palm Desert resident and teacher at Desert Mirage High School where she started a surf club for the students, East Valley Board Riders, said the resort will bring a surf lagoon that is unique to the valley.

“Surfing is a new option and is not a current option for recreation in Palm Desert,” she said.

The resort brings benefits to Palm Desert and Coachella Valley residents and visitors to the area with a potential that is “mind boggling,” Gonza said.

“But more importantly is that we are bringing in a business that truly believes in giving back to their community,” Gonza said.

Desert Wave Ventures has donated equipment to East Valley Board Riders and coordinated surf trips for the high school students, as well, Gonza said.

Pandemic leads to project delays

DSRT Surf resort received unanimous approval from the council in November 2019 with options for up to two extensions.

An amended purchase and sale agreement was approved by the council in April 2021, which extended the agreement into August 2021 when the council approved an extension.

Under original the purchase agreement with the city in 2019, Solano Beach-based Desert Wave Ventures LLC had 12 months to close escrow on sale of the land, with options for two extensions to 24 months.

The challenge has been the pandemic, which not only brought delays for development but also brought changes to the way people want to vacation, Doug Sheres, a partner with Desert Wave Ventures, told The Desert Sun.

“The delay came about via COVID,” Sheres said. “When the pandemic hit in 2020, everything stopped, though we didn’t stop so much as everything stopped around us.”

Beach Street Development rendering of a bar at DSRT Surf resort hotel and villas, planned for 18.65 acres of vacant land at Desert Willow Golf Resort in Palm Desert, Calif.

Where it hit hard was in the hospitality industry due to the closure of hotels and resorts and restaurants for several months, along with travel bans or limitations. At the same time, the pandemic brought an increased demand for short-term vacation rentals.

With that, Desert Wave Ventures reconfigured the plan for DSRT Surf, reducing the number of hotel rooms and adding the villas, Sheres said.

“We tried to redesign something that would be much more palatable in an age of COVID,” Sheres said.

The pandemic has brought people to look for activities that get them outdoors where they can distance themselves from others but get exercise and relax, he said.

DSRT Surf resort would offer an outdoor experience with a focus on active lifestyles and wellness, he said.

“It checks the boxes in terms of it’s all about fitness, and health and wellness and being outdoors and not being crammed into tight spaces,” Sheres said.

The surf lagoon, which Sheres stressed is not a water park, gives people room to spread out and enjoy “a premium experience. It’s relatively safe and an attractive thing to do even in an environment where people are concerned about COVID.”

Escrow is expected to close on the land sale by the end of October. The project will take about two years to build, once construction starts.

In approving the amended project, council members applauded Desert Wave Ventures for its attention to environmental issues, including desert landscaping, solar panels on residential units and capability for panels on the hotel down the road, and water-saving efforts.

“This is truly a special proposal for the benefit of the whole community,” Councilmember Kathleen Kelly said.

Desert Sun reporter Sherry Barkas covers the cities of La Quinta, Indian Wells, Rancho Mirage and Palm Desert. She can be reached at sherry.barkas@thedesertsun.com. Follow her on Twitter @TDSsherryBarkas