Rancho Palos Verdes Modifies Hotel Tax Rebate Loan to Terranea Resort

Rancho Palos Verdes on Friday modified the terms of its Hotel Tax Rebate Loan to the Terranea Resort. The City Council had previously approved a deal last week that would have loaned all of the 10% Hotel Tax that it would have collected over the next 27 months back to the Terranea Resort. Yesterday, the City Council modified the deal to loan back 80% of the Hotel Tax owed by the Resort. The loan is expected to total up to approx. $6.6 million of the estimated $8.2 million in Hotel Occupancy tax expected to be collected over the 27 month period.

The Loan terms calls for the loan to be repaid by the end of 2013 at a floating interest rate, tied to three month LIBOR, currently set at 8.65%. The loan may be extended for an additional year at a higher interest rate. The loan is subject to the Resort obtaining a new $10 million loan to finance its operating costs and to also receive the remaining $13.5 million of a $180 million construction loan from its distressed primary lender, Corus Bank.

As part of the deal, city residents will receive a 25% discount off of room rates, as well as a 10% discount on golf, spa and food. Off peak golf tee times will include a 20% discount.

For more information on the Terranea Resort , visit my website at http://www.maureenmegown.com