Talus, a long-delayed luxury resort in La Quinta, faces foreclosure, default
Tom Coulter, Palm Springs Desert Sun
Updated 6 min read
Work has slowed on the Talus project in La Quinta as the developer works to get financing. Work on residences is show in September 2023.
The future of a long-delayed luxury resort in La Quinta called Talus is in doubt once again, as a major lender threatened this week to foreclose on parts of the property. And on Wednesday, following the lender's sale notice, the city took steps to protect its interests and issued a notice of default against the developer, although city officials say the project could still get back on track.
The city announced the default notice against the SilverRock Development Company, as well as project leader Robert Green, just a day after the council received an update on the project from City Manager Jon McMillen that largely focused on the company’s efforts to finalize the financing for the $600 million project by late May.
The default notice — which marks the third issued by the city against the development company — was issued the same day that Cypress Point Holdings, a corporate investment firm for Talus, recorded a notice of trustee’s sale against Green and his company and scheduled a foreclosure sale.
Green and his company have seven days to “cure” the city’s default notice, which would require him to pay off his obligations to the Cypress firm, after it issued a notice of default and election to sell properties under a deed of trust, including the project’s main components, in January. (Green could also seek a deal, known as a forbearance agreement, to grant him more time and delay any foreclosure proceedings.)
The latest update comes as Green is aiming to secure more than $300 million in financing for the project by late next month, with a looming deadline at the end of June that, if missed, would again place the company in default under its development agreement with the city.
Talus is slated to include a pair of luxury-brand hotels, as well as 29 single-family homes and 55 condominiums from the same brands, Montage and Pendry, that will be used as short-term rentals. A golf clubhouse, a large conference center and a luxury spa are also planned for the 525-acre project site.
The project, which has seen its total price tag rise to more than $600 million, has been in the works for several years. The foothills area just south of 52nd Avenue in La Quinta has been eyed by city officials for a large-scale development, formerly known as SilverRock, since at least 2002.
But while one golf course opened there in 2005, further plans were derailed by economic troubles during the Great Recession and, more recently, the COVID-19 pandemic. Coming out of the pandemic, Green has engaged with several new lenders to refinance much of the project.
Since then, the project has seen delays, such as in 2022 when Green said the hotels were expected to open by 2024. In October 2023, the La Quinta City Council approved an amendment to the development agreement that set a new timeframe for the project, requiring the Montage luxury hotel and other components to be built by 2025.
That amended agreement set a June 30 deadline for Green’s company to secure the project's necessary financing. The city manager, McMillen, told The Desert Sun on Wednesday that the June deadline “still stands.”
“As far as what else might come out of this, it's really hard to say really,” McMillen said. “All the moves that the city will make will be based on really whatever action the developer takes between now and the expiration of the seven days.”
“If they're able to cure it, all is good and we continue to move forward, because then they'll be back in good standings until that June 30 date,” he added.
However, if the developer is unable to cure the latest default notice, the city has legal options. During a closed session in February, the council unanimously voted to authorize the city attorney to initiate litigation against Green’s company to “protect the interests of the city and that project” if necessary, McMillen said Wednesday.
Green, whose company first joined the project in 2014, did not immediately respond to a request for comment.
Talus developer aiming to soon have $360M lined up
The Santa Rosa Mountains provide a backdrop to the delayed Talus development, seen in September 2023.
While some of the standalone Montage-branded homes have been built at the site, construction has slowed significantly until the additional funding is finalized, with work on most of the buildings paused since late 2022.
At Tuesday’s council meeting, McMillen noted rising construction costs and rising interest rates that have led to an “uphill battle” for the developer, saying the project has been reorganized as its cost has risen from an initial estimate of roughly $400 million to more than $600 million today.
He specifically highlighted a pair of “bridge loans,” including a multimillion-dollar loan from Silver Arch Capital that the developer was unable to finalize. That Silver Arch loan would’ve “put their debt and equity ratios in line” to close other deals in place, such as another hefty loan through C-PACE, a long-term financing program that incentivizes energy-efficient development.
“The rated-bonds structure that was initially put out there that relied on the Silver Arch Capital to come in as a bridge, that did not materialize because Silver Arch did not come in as that bridge,” McMillen told the council. “They have gone to a non-rated bond structure.”
McMillen said the "senior" lender, along with the lender through the C-PACE program, are targeting a May 31 closing date, with him and the city attorney receiving weekly updates.
“Effectively, they're looking to raise $360 million through that bond issue and combined with the C-PACE (loan),” McMillen said Tuesday.
He added the city remains in touch with Montage International, saying the luxury hotel company is still “fully committed” to the project.
Only one resident, Ron Holmes, spoke during the council’s discussion Tuesday, saying it “sounds like a leap of faith that a lender is going to come in and bail them out.”
The project has also drawn criticism from neighboring residents, with more than 300 people recently signing an online petition that raises concerns about blowing dust coming from the project. (The city manager said Tuesday that public works teams with the city have been monitoring the site and that the area is being treated for dust control this week.)
If Green is able to cure the current default notice within a week, the project’s trajectory will still depend on him meeting the financing deadline this summer. On Wednesday, McMillen described June 30 as a “hard” deadline, unless a positive result appears within close reach.
“I don't want to eliminate the possibility for a future amendment, but they would have to have a closing that was imminent,” McMillen said. “They would have to have something else to bring to the table that, from the city's perspective, signaled a clear, successful path forward.”
Tom Coulter covers the cities of Palm Desert, La Quinta, Rancho Mirage and Indian Wells. Reach him at thomas.coulter@desertsun.com.
