Once upon a time, Desert Hot Springs, CA had been a community down on its luck. Once on a path to insolvency, the town’s decision to embrace cannabis—along with the strategic guidance and capital of Pelorus Equity Group—has completely transformed the community into a now-thriving locale. TDR recently joined Rob Sechrist, the Co-Founding President of Pelorus Equity Group, on location to view this California turnaround success story first-hand.
Desert Hot Springs Narrowly Escapes The Clutches Of Insolvency
As recently as 2013, Desert Hot Springs was on the brink of an economic disaster which threatened the very viability of the community. In November of that year, City Council voted unanimously to approve the emergency declaration, prompted by revenues falling well short of covering the city’s expenses. In the words of interim city manager Robert Adams, the city suffered from a “serious structural imbalance” brought about by the economic downturn and decreased development, bringing the situation to a head.
The budget shortfall was more than just cosmetic or an inconvenience to community residents. It forced a severe cutback of essential policing and ambulance services, as well as pensions to longtime residents who had served the community.
As a city still struggling to avoid defaulting on debt payments stemming from $12 million in aggregate municipal bond issuance following 2001 bankruptcy proceedings, a second bankruptcy would have had wide-ranging negative impact upon the community that would make recovery difficult.
While Desert Hot Springs narrowly avoided a second bankruptcy, the community still had to figure out how exactly it would plug an immediate budget shortfall. Cutting …