Two major projects touted as keys to the revitalization of downtown Palm Springs do not have the financing to move forward at this time, Mayor Steve Pougnet said Wednesday.

Port Lawrence “isn't going to happen” and the $260 million Hard Rock Hotel isn't funded, Pougnet told members of the Desert Roundtable networking group.

“(Port Lawrence is) impossible,” Pougnet said. “(The developer) just does not have financing.”

As reported on mydesert.com Wednesday, the Hard Rock Hotel's developers are also “not funded,” Pougnet said, adding the financing was with Lehman Brothers, which collapsed in September as a result of the mortgage market crisis.

“They are continuing to hunt for their financing,” Pougnet said.

Pougnet said the city is working with Port Lawrence developer Lawrence Rael to see if there are other things he can do with the four-acre parcel until the time he can redesign the combination retail and condo project and bring it forward again. The mayor said he suggested a possible parking lot.

Rael said the market has changed and it would be “too risky” to build the project as it is currently designed. Rael needed funds from the city's Community Redevelopment Agency to push the project forward, but those funds were not available, he said.

Palm Springs Community and Economic Development Director John Raymond said Rael met with city officials and asked for a figure between $10 million and $20million from the agency to get his project at Palm Canyon Drive and Alejo Road off the ground.

The city was not prepared for the request and it didn't go anywhere, he said.

Rael purchased the property for nearly $17 million, according to public records. Rael said he needed assistance to make the project feasible.

Otherwise, he said there has never been a problem with getting financing.

Other Palm Springs hotels are moving forward, Pougnet said. The Mondrian Hotel, for example, has financing in place and is working its way through the city's design review process.

Scott Morgan, who owns Wild for the Vine next to Port Lawrence, said he chose his location three years ago because of the project's potential. When the buildings were demolished to make way for the project and the construction fence went up two years ago, his business dropped 40 percent, he said.

“I was really upset to find out they were not going to be moving forward,” Morgan said.

Across the street at Hamburger Mary's, owner Joe Garcia said he had hoped Port Lawrence would increase his business 10 percent to 15 percent. He said the city should renew its focus now that the Hard Rock and Port Lawrence will no longer be downtown's “saviors.”

“(The city) should make downtown a viable place for people to come and forget about the major projects,” Garcia said. “Let those be the cream of the crop.”

Hard Rock Hotel developer Rich Meaney said his company, Nexus Development, has sunk $10 million into the 10-acre project at Tahquitz Canyon Way and Calle El Segundo.

It was approved by the City Council in 2005 and since then, the company completed a land swap with the Agua Caliente Band of Cahuilla Indians and purchased property from Lois Anderson of Anderson Travel on Tahquitz Canyon Way.

However, until it secures funding, Nexus Development will not bring the Hard Rock Hotel back to the city for design review as it had done up until September, Meaney said.

“The circumstances are beyond our control,” Meaney said. “(But) we are committed to the project.”

Raymond said both Nexus Development and Rael are “sincere in their belief” that their projects could happen in Palm Springs.

In July, the sales director for Port Lawrence said nearly 50 percent of the 118 condos were reserved with $10,000 refundable deposits. A sales trailer that would have been worth $1 million was also delivered to the site. Rael said he would return the deposits.

Meanwhile, Rael said he is “working really hard” to reposition a new project on that site. Architect Doug Hudson has remained on board, he said.

“It will still be beautiful,” Rael said.

Raymond said he is still confidant something will be built on the two properties.

“These were two really significant shots in the arm that are either going to happen or will happen later,” Raymond said. “How could there be anything other than disappointment?”