La Quinta sues Talus developer, alleging interference as city seeks to replace him

The City of La Quinta is suing the longtime developer of Talus — a long-stalled project planned to be one of the Coachella Valley’s largest luxury resorts — and accusing him of deliberately hindering plans for a new developer to take over.

Talus, formerly known as the SilverRock Resort, has faced several years of delays as its developer, Robert Green, sought funding from lenders to move forward with the roughly $600 million project. He missed a key June deadline to secure the funds, opening the door for a new developer, Christopher M. George.

It's unclear how the new case could impact the timeline for Talus, with George expected to soon decide whether to take over the project.

Plans for Talus include a Montage hotel and a Pendry hotel, as well as 29 single-family homes and 55 condominiums from the same luxury brands to be used as short-term rentals. A golf clubhouse, a large conference center and a luxury spa are also planned for the sprawling site south of 52nd Avenue.

While one golf course opened there in 2005, further plans were derailed by economic turmoil from the Great Recession and, most recently, the COVID-19 pandemic. Construction on buildings has largely been paused since fall 2022.

Green missing the deadline June 30 prompted the city to deliver a third recent default notice and allowed George to weigh the project’s viability, as outlined in a memorandum of understanding signed in May by the city, both developers and some lenders and contractors.

But the city says that since the missed deadline, Green and his affiliate companies are “intentionally and fraudulently trying to frustrate and thwart” that deal by recording new unauthorized liens and loans on the Talus property in early July, according to the complaint.

"The Talus resort project is a cornerstone of the City’s land use plan and is expected to create jobs, generate revenue, and enhance the quality of life for residents and visitors alike," the city said in a statement sent by spokesperson Marcie Graham. "The City is committed to protecting this important investment and ensuring the project moves forward."

Through the lawsuit, the city is seeking compensatory damages and a court order voiding the recent liens and deeds of trust and compelling Green to honor his obligations under the MOU.

Green, who first took over the project in 2014, told The Desert Sun on Friday: “While we have not yet even received or reviewed a copy of the complaint, our policy is that we do not comment on matters under litigation. However, we will provide a complete statement of our position in due course.”

The city’s action is the second suit filed recently against Green’s companies, after a Talus investor filed suit against them in June for allegedly failing to provide crucial details ahead of a $5 million investment.

More: Talus developer sued, accused of hiding information from investor

What's in the lawsuit?

The lawsuit, which was filed last week in Riverside County Superior Court, lists more than 30 defendants, including SilverRock Development Company, the Robert Green Company and other entities run by Green, as well as several individuals and trusts tied to other families. Several of those individuals and trusts are referred to collectively as “unknown and unapproved” equity investors in the city’s complaint.

The complaint, which came after the council authorized the option in a closed session vote earlier this year, states Green’s companies “have over-leveraged (their) holdings and valuation of the Talus project, and have many equity investors with unsecured interests,” including the other defendants in the case.

Those investors were not approved by the city as required under terms of the Talus development agreement. Under the recent MOU, Green also indicated that he had no knowledge of “any agreement with third parties” that would prevent him from following the terms of the MOU.

“The City also is informed and believes ... that some equity investors do not even know about the other equity investors,” the city's new complaint states.

Several transactions occurred after the June 30 deadline passed and Green was in default under the terms of the development agreement. The complaint details a roughly $20 million promissory note that Green’s company entered in early July with Axia Talus LLC, which is tied to Utah-based Axia Partners, a real estate group.

In early July, Green and his affiliate companies also recorded six mechanics liens totaling roughly $9.47 million against several parcels of the Talus property, according to the complaint. It says the city only learned about these actions “through communications from other MOU parties.”

The city sent a cease and desist letter to Green’s company on July 10, but their demand was “blatantly disregarded,” according to the complaint.

“(Green) clearly had no intent of transferring all SDC’s interests in the PSDA, Development Agreement, and all other valid agreements and did not intend to convey ... ownership interest in the SDC-Owned Properties to (George),” the city said in its complaint.

Even after sending the letter, the city says it learned of additional unpermitted steps. Green’s company had recorded three more deeds of trust on July 5, outlining debts totaling roughly $28.5 million for several of the individuals and trusts included as defendants in the city’s lawsuit, according to the complaint.

“... None of the purported creditors or their respective funding contributions were approved by the City, all in violation of the (development agreement), and all were entered into and recorded after (SilverRock Development Company) was in default and in complete contradiction to the City’s July 1, 2024 Notice of Default and the MOU,” the complaint states.

The city’s complaint largely focuses on issues that arose in early July, though it notes some issues dating back a few months, such as the developer never informing the city of “significant amounts of debt owed” during negotiations and approval of the latest amendment to the Talus development agreement in November 2023.

Without court intervention, the city “will lose the bargained for benefit and contractual right of selecting the proper developer” and “will suffer damages from the resulting delay in developing the Talus project,” according to the complaint.

Through the lawsuit, the city is seeking the recent deeds of trusts and mechanics liens to be voided, as well as injunctive relief to require Green to perform the obligations of the MOU.

It’s unclear how the legal action will impact the timeline for George, the prospective new developer, as the MOU gives him until the end of August to proceed. George could not be reached for comment.

Tom Coulter covers the cities of Palm Desert, La Quinta, Rancho Mirage and Indian Wells. Reach him at [email protected].

This article originally appeared on Palm Springs Desert Sun: La Quinta sues Talus developer as city seeks to replace him