Virgin Hotel developer responds to Wessman surprise

City Council has always known Wessman involved

PALM SPRINGS, Calif. - Michael Braun, a development partner behind the approved Virgin Hotel in Palm Springs is speaking out about a controversial vote to give the project the green light.

This comes after David Freedman, co-chair of the Transparency Working Committee, and Roger Tansey, co-chair of Campaign Finance Committee, sent a letter to the city of Palm Springs on Monday, detailing what they say were violations during the Nov. 15 open meeting requirements and the city's new ethics and transparency policies.

The council approved the Virgin Hotel in the downtown project in a 3-2 vote.

Read: Palm Springs City Council accused of violations during vote for Virgin Hotel

In a statement on Tuesday, Michael Braun, the director of Grit Development, formerly Wessman Development commented on concerns about the staff report for the Nov. 15 meeting, which Freedman and Tansey stated "failed to disclose the true ownership interests behind DTPS 3-B, LLC. which included John Wessman as a retired passive owner."

"The claim that John Wessman’s ownership interest was unknown to the City is simply untrue. In July, 2017, when the TOT (transient occupancy tax) rebate issue was considered and tabled, the ownership structure for the Virgin property was given to the City. Prior to the most recent Council meeting, the City Attorney confirmed that that structure had not changed. The City Council has always known that John Wessman had an ownership interest in the property, and suggesting this was a surprise is disingenuous at best," said Braun.

Braun said Wessman"has relinquished all management and control of all of the entities involved in the downtown project, while and his estate have guaranteed the loans that have made the downtown development possible."

As for the vote process of the hotel, Braun said the development approval was set by the current council, not by former Palm Springs Mayor Steve Pougnet. "So how are those votes tainted? Where is the conflict that would justify 1090?"

Read: Three accused in Palm Springs City Hall scandal to return to court in March 2018

Developer John Wessman, 78, and Richard Meaney, 51, are accused of paying Pougnet, 54, around $375,000 between 2012 and 2014 so that he'd vote favorably when their development projects came before the City Council.

Braun said the Virgin Hotel will bring $30 million in new tax revenue to the city, new customers and 200 jobs. 

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