First Homes At Disney-backed Cotino In Rancho Mirage Could Be Ready By January | Old North State Wealth News
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First homes at Disney-backed Cotino in Rancho Mirage could be ready by January

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Cotino — the Disney-branded development in Rancho Mirage that will feature hundreds of homes, a swimmable lagoon and more — is gradually emerging on a sprawling swath of land off Bob Hope Drive. And to fund the sewer and water pipes, street upgrades and other public infrastructure that will come with it, the city council recently voted to make the landowner and future Cotino homeowners pay up to $50 million.

The first residents are expected to move in early next year.

Cotino is slated to eventually have nearly 2,000 homes and condos on land just east of Bob Hope Drive, between Frank Sinatra and Gerald Ford drives, and across from the entrance to Sunnylands Center and Gardens. Its first phase featuring more than 300 homes, some of which will be in a 55-plus community, is planned on the property’s north end near the lagoon.

Home sales began this year, with prices starting north of $1 million for some designs and in the “mid-$2 millions” for others. As of May 1, a dozen lots had been sold to a homebuilder under contract with buyers, while many others are subject to ongoing negotiations, according to documents submitted to the city council last week.

The development has been led by Arizona-based developer DMB Development, and Disney joined as a partner in 2022, announcing Cotino as its first Storyliving by Disney community. (Late last year, Disney said its second Storyliving community will be about 30 miles west of Raleigh, North Carolina.)

Well before Disney entered the picture in Rancho Mirage, the land was on the radar of developers and city officials. The roughly square mile of vacant land, which was long owned by the Annenberg Estate, was sold to investors in 1977, and the city later approved plans for a residential golf development known as The Eagle.

But that project fell through due to its investors’ financial struggles, and the land was bought for $75 million in 2018 by EC Rancho Mirage Holdings, a group of investors led by a Canadian private equity firm who then brought in DMB Development to manage and develop the site. Its specific plan for the site received city approval in 2019.

Now, with grading complete on the land for the project’s initial phase, Cotino officials expect the first houses from builder Shea Homes to be finished in eight to 10 months, Karlee Dutton, public relations manager for Disney Signature Experiences, told The Desert Sun in an email Friday. Based on that timeline, the first homes would be completed between January and March 2025.

Cotino Bay — a 24-acre “grand oasis” lagoon with a beach available to guests for a fee — is expected to open in 2026, according to Dutton. That year should also see the opening of a town center with shops and restaurants, which gained approval from the city council late last year.

Funding paves way for street upgrades, sewers, more

The city council last week authorized selling up to $50 million in bonds to pay for infrastructure for Cotino. EC Rancho Mirage Holdings and its affiliated entities, which still own the 618-acre property, will be primarily responsible for paying off the bonds for now. Eventually, homeowners will also be expected to pay them off via annual special taxes, with their contribution depending on the size of their homes.

The bonds, which will be sold in May and June, were enabled by the city’s 2021 formation of a Cotino community facilities district, a special tax district to allow for new infrastructure upgrades within a particular area. The special district, which includes four separate “improvement areas” to be developed over time, allows for eventual bond financing of roughly $110 million for public services, including street upgrades, a city parking garage, utility undergrounding and sewer and water infrastructure.

For now, the $50 million in authorized bonds will be repaid through special taxes levied on properties in the first improvement area, which is slated to include roughly 500 single-family homes and 150 condos, as well as a private club that will be owned and managed by Disney.

Future area homeowners will have to pay between $2,167 and $11,383 in annual special taxes, depending on home size, according to a report submitted to the council last week. The report notes the total tax burden is expected to be less than 2% of a property’s assessed value.

The report adds that it “may take until 2026 before over half of the special tax” in the improvement area is paid by homeowners, based on projected property sales. During the homebuying process, prospective buyers will receive a detailed notice regarding the terms of the special taxes and their impact on their property tax bill.

“Please note that these bonds are not the city’s debt. The city has no obligation to pay debt service,” Kofi Antobam, the city’s director of administrative services, told the council Thursday. “In the event of a default or nonpayment, these bonds are the sole responsibility of property owners within the special district.”

As of mid-April, the ownership group and Storyliving by Disney had spent roughly $165 million on land acquisition, entitlements, infrastructure and landscaping improvements for Cotino, and they expect to spend an additional roughly $96 million to complete them, according to an official statement included in the city’s agenda packet and provided to investors.

Cotino officials have enlisted three homebuilding companies — Shea Homes, Davidson Communities and Woodbridge Pacific Group — to work on a variety of home designs approved by the council last year. While Shea Homes has acquired 12 lots, the other two, which recently released new home designs, are expected to start marketing their homes this month and begin construction on model homes by July.

And at least one condominium developer is expected to sign on sometime in 2024, according to the statement.

Nobody from the public or the development team spoke during the council’s meeting Thursday. Mayor Pro Tem Ted Weill said the way bonds are being sold and paid off for Cotino is “standard operating procedure on a number of developments” in the city, most recently the 55-plus Del Webb community.

“The bond indebtedness … goes to each property owner and is not a liability of the city and works out well for all parties,” Weill said.

Tom Coulter covers the cities of Palm Desert, La Quinta, Rancho Mirage and Indian Wells. Reach him at thomas.coulter@desertsun.com.

This article originally appeared on Palm Springs Desert Sun: When will people move in to Disney’s Cotino in Rancho Mirage?

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