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UPDATED: Will 29 Palms Council Kill Their TOT Golden Goose?

By   /   April 25, 2014  /   42 Comments

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29PalmsGoldenGoose

 

UPDATED April 28, 2014: (42 Comments-see below)Twentynine Palms, Ca.,- Today,Tuesday, April 29, 2014,at 6pm in the Community Center located on Joe Davis Drive, a workshop will be conducted to discuss and evaluate allowing “Vacation Home Rentals” to compete with the hotels who are currently struggling to keep their doors open to fill 595 rooms and, in the past, provided approximately $1 million in annual bed tax revenue to the City.

This workshop will be held jointly by the Twentynine Palms Council and Planning Commissioners to take input from residents at the Community Center at 6PM. Here is the original Press Release by Cactus Thorns for more details>LINK

There has been a half-hearted attempt to get the word out to the citizens to include a paid advertisement in the Desert Trail which does not show up on their website. There is only one letter to the Editor which does not announce this workshop, nor did the Editor add any postscript about this important meeting to discuss the issue of vacation home rentals. In the ad, City Manager Joe Guzzetta invites anyone to call him, however, the offices are closed on Fridays. When did that change? The recorded message states calls will be returned on Monday. (Update: 29Palms has been closed on Fridays for about 5 years with a 10hr/4day schedule)

It is expected to be a small turnout for this workshop due to the fact only 43% of the residential units are owner-occupied and they may not be aware of the proposed changes that will lower their property values and infringe upon their rights to expectation of “Quiet Enjoyment.” The remaining 57% housing is owned by out of area investors that benefit from renting to families from the nearby marine base and are now experiencing a lower occupancy rate. 

One of the lead proponents behind permitting vacation home rentals is Paul Smith, owner of the 29 Palms Inn, who owns 4 vacant homes currently being used to handle any Inn occupancy overflow.

The base has been downsizing and completed most of their construction projects dragging down the hotel occupancy rate resulting in less TOT income, bed tax, payable to the City of Twentynine Palms. The approximate $1 million dollars paid to the city at the height of full occupancy has been trending down to 30%-60% occupancy since 2011. Last year’s TOT income took another hit of $150,000 to reflect in reducing the annual bed tax to $750,000 to the city.

On November 29, 2011, Jim Ricker, liaison from the Twentynine Palms Marine Base, G5, warned of future reduced TOT bed taxes and less diners at restaurants due to the completion of construction on the base. This warning was not heeded by the council members who continued to place this TOT income in their General Fund spending on special projects while ignoring the number #1 duty of government to provide police and fire protection for their citizens.

In the stacked Staff report of the Council’s meeting of March 25, 2014, there is a comparison to the City of La Quinta that has been allowing for vacation home rentals for almost two years. What is left out of this “comparison” is the fact that 29 Palms is no La Quinta and that they have a big problem collecting their VHR TOT. 

La Quinta currently benefits from $6 million dollars hotel TOT income, not vacation home rental income.

(Update: A representative from La Quinta verified the $6 million dollars does include Vacation Home Rentals but mistakenly excluded those TOT numbers due to the current difficulty collecting these Vacation Home Rental TOT payments.) 

La Quinta tourism is event driven…Located near the greater Palms Springs area with an airport, there are over 12.1 million tourists coming to this vacation locale with 28 golf courses, the PGA tour, the International Fine Arts tours, high-end retail shopping, Tamale festivals and popular music venues throughout the Coachella Valley.

What is also left out of the 29 Palms Staff report are the following concerns:

1. What are the costs to regulate and administer the proposed vacation home rentals which could be twice any amount collected from TOT taxes?

2. Will these vacation home rentals be required to be located in commercial zones or scattered in residential neighborhoods?

3. What is the criteria for a vacation home compared to hotels? Will there be mandatory ADA access, room sprinklers, commercial standards applied to electrical or plumbing and insurance coverage as is required by the hotels?

4. What about the additional noise, traffic and transient elements foisted on quiet residential neighborhoods? 

5. What about the rights of home owners and long-term leasehold tenants to “Quiet Enjoyment” of their neighborhood?

6. Will the City of 29 Palms hire and staff additional code enforcement officers to regulate these home rentals on weekends?

7. Will the City be exposed to liability if a fire destroys a vacation home rental causing death due to non commercial wiring and no adequate city fire protection?

 

See March 25, 2014 Staff report, page 72 of 131>LINK

 

In closing and viewing this proposal as an investor, I need to ask these questions:

Where is the City Council loyalty and support to the businesses that invested $5 to $7 million dollars in their City of Twentynine Palms that still bring in a large hotel TOT income to the General Fund?

There is only so much of the TOT pie at this time, why would you invite vacation home rentals to compete with the hotel room business struggling to keep their 595 rooms full?

This appears to be penny-wise and pound foolish looking at the information presented above. Is this being proposed for the benefit of the special interests of the “Inn Crowd,” at the expense of the business health of Twentynine Palms financial future?

Please attend this workshop and bring your friends and neighbors to express your concerns.

 

Update: April 28, 2014-I received a call from the 29Palms General Manager, Joe Guzzetta, and he was very gracious to add the following information:

1.The City is currently pro-active to track down any websites/advertisements for 29Palms Vacation Home Rentals.  Staff has determined in the past, these rentals were actually located outside the City limits, which is beyond their jurisdiction. 

2. He would not be in favor of ANY ordinance that would bring any excessive administration costs to the City. Any fees would have to exceed the costs to regulate or collect the funds while providing income. 

3. Guzzetta confirmed the next fiscal budget would be very conservative placing the projected figure of $725,000 future TOT tax income.

 

 

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About the author

Margo Sturges

Yucca Valley Editor

Note: Margo Sturges has written many articles for Cactus Thorns and is the founder of Citizens4Change.info. Email contact: MargoSturgesYV(at)aol.com "In a time of universal deceit, telling the truth becomes a revolutionary act."- George Orwell

42 Comments

  1. Larry Briggs Larry Briggs says:

    Who wrote this for you Margo?

    • Hi Larry,

      I wrote this article after receiving several calls from concerned 29 Palms residents and interviewing three parties that have been following this issue for several years. I studied the Staff report of March 25, 2014 which is very thorough to present only one point of view in favor of Vacation Home Rentals. I wanted to present an opposing view.

      I also placed a call into Joe Guzzetta to go over the TOT reports but they were closed today. I still left a message for him to call me this weekend.

      As luck would have it, I have been investigating the TOT taxes paid to Yucca Valley from our 200 hotel rooms. Especially after hearing about the $200,000 TOT taxes in arrears that the Town has let slide for no other reason given except it was “someone’s Love Nest.” (Wink-wink!)

      Fortunately for the City of Twentynine Palms, your TOT taxes are paid quarterly like clockwork and are not allowed to go past two months without warning letters to close down the business or step in to collect the rents for taxes owed.

      And your take on the matter?

      • Larry Briggs Larry Briggs says:

        It’s not your usual sentence structure. Reads more like a prepared position paper. All the best, Larry

        • Hi Larry,
          I try very hard to remove the “I” in any post that is chocked with data and research because it takes away from the presentation and could be a distraction.

          Prepared? Possibly due to the fact I have been working on TOT research for several weeks. I had to cut out several words on this post which stiffens my sentence structure.

          A very keen observation on your part Larry. Thanks for the comments.

    • Steve Spear Steve Spear says:

      Here you go Larry a bigger box.

  2. BTW- I was just notified 29Palms has been on a 4-10 schedule for about 5 years now. Thanks to our sharp readers!

  3. michaelv michaelv says:

    To stir the pot a little, I know a former B&B that still takes renters, on the side of course, there by subverting the TOT all together. Margo, I am sure this is going to be another slam dunk for the chosen ones unless the people speak up and voice their concerns.

  4. Hi MichaelV,

    Any Town/City Council business decisions made without looking at the long-term impact is a violation of their elected position on the dais. Being fiscally responsible for the welfare of the entire citizenry, over the wishes and desires of a few, is the test of true character in my book.

    As an Advocate for Responsible Government, I am compelled to speak up and speak out. Will I win any popularity contest in doing so? I think not…but that doesn’t bother me.

    Cactus Thorns is a wonderful Forum to bring things out in the open and shed light on some of these backroom deals.

    I was told a comment was made in a Closed Session in Yucca Valley that a decision was made because the other choice would have been called out by Cactus Thorns and it would not look good for the elected officials. Of course, I was not given the details…but it made my heart soar!

    There are some tax ramifications on owning a vacation home rental that I did not go into. The Real Estate folks often pitch these properties as an investment to bring in income and earn property management fees.

    Also, in the Staff report it was stated there may be ten CUP’s issued to cover Vacation Home Rentals but that did not mean only ten properties. One CUP could be issued to one individual/firm to cover 15 properties, for example. There was no criteria for the issuance of such CUP’s whether First-Come-First-Served or a lottery/drawing basis.

    One final thought, once a vacation home property is established, what is to stop it from being turned into a Time Share and selling 52 weeks to individuals?

  5. michaelv michaelv says:

    This comment taken from your post sums up the entire problem with the City Council. When if ever have they done anything close to what you state?

    Any Town/City Council business decisions made without looking at the long-term impact is a violation of their elected position on the dais. Being fiscally responsible for the welfare of the entire citizenry, over the wishes and desires of a few, is the test of true character in my book. – See more at: http://www.vote29.com/newmyblog/archives/61538#comment-31134

    Instead of a prayer or a moment of silence maybe that statement should be read at every council meeting to remind them of why they were elected.

  6. Mark Clemons Mark Clemons says:

    Why even have a TOT, let the innkeepers promote their own business, all that has been accomplished with the TOT is create a preferred elite class of business, the city is going to pander to their wishes. I travel a little believe me the TOT and resort fees is a consideration on what town what hotel to stay in.

  7. Hi Mark,
    In most Towns or Cities the TOT is used to promote tourism and bring in more tourist dollars. Once it goes into the General Fund and not dedicated, it is pretty hard to wean off that cash flow.

    In Yucca Valley, the Chamber of Commerce is supposed to be marketing the Town but have NO clue how to do so. They continue with the Town “partnership” and manage their Chamber business being subsidized with free rent.

    I blame the Town for allowing this to happen and not contracting out with professionals in the business of marketing.

    Thanks for your comment Mark. I am going off-line until 9 pm this evening.

    Ya’all fill in for me okay?

    10-4!

    • Larry Briggs Larry Briggs says:

      Vacation rentals are for families who come to 29 to spend a week or so on vacation to see the JTNP and other nearby sights. The weekenders would stay in the hotels and motels. JT has probably over 70 vacation rentals. Wonder Valley has about 50. There are many more in the Coachella Valley and on the coast. My trade organization has had a specific form for vacation home rentals since 2006. When you have a statewide form you know it’s big business and lawful. Put the objection another way: The city should have prevented Dollar General from opening because it would hurt Stater Brothers.

      • Larry did you read the Staff report?

        You said, “JT has probably over 70 vacation rentals. Wonder Valley has about 50.”

        29 Palms Staff contacted the SB County Land Use Services and was told there were no vacation homes permitted in Joshua Tree or Wonder Valley. (see page 3 of 36, March 25, 2014. Link above).

        Only the Mountain Region (Big Bear) allow Vacation Home Rentals. (See page 112) There is an application fee of $392.00, $260.00 every two years to renew and $1,050.00 to appeal besides the very strict guidelines & requirements.

        As for Hotel rooms, there are approximately 200 in Yucca Valley and 50 Hotel rooms in Joshua Tree.

        I believe there are permitted Bed & Breakfast establishments in Twentynine Palms which is a different subject.

        • Larry Briggs Larry Briggs says:

          Margo, there’s a difference between being permitted and being open for business without a permit.

          • Steve Spear Steve Spear says:

            Exactly and that is why vacation rentals were not successfully approved years ago.

            Without naming names but you and the rest of us know who they were and are were running businesses in the city, vacation rentals, that were not approved uses.

            They are still not approved uses but the same people are still violating city ordinances by renting them.

            That was the problem I had years ago. These people were in violation of city ordinances and when they were caught they became very nasty.

            Should the council approve of vacation rentals then so be it.

            But to allow these people that are in violation of city regulations to prevail simply because vacation rentals presently exist and are in violation of city ordinance is a weak argument and I hope it is not used in the calculations by the council on Tuesday night.

  8. A few comments:

    We’ve heard some pretty wild stories about vacation renters, from nude vacationers very close to homeowners, to drunken parties and loud music all night long. The point is what is the impact on policing enforcement?

    Another point is the city council has been looking the other way on public safety by spending the 24.6% it receives from increment property taxes, but none for fire safety to protect hotels, motels, and their patrons. They have been taking it in the shorts so to speak.

    Some of these vacation rentals are not chump change. Some go for $600 a weekend.

    Lastly, what Paul Smith wants Paul Smith gets. He has his people on the city council that work for him.

    • Steve Spear Steve Spear says:

      Well I have heard some incredible things and you can rest assured that not one, not one mind you, councilmember, even thought this statement today by Matt McCleary had some real issues.

      Hang on it I will be there in a minute.

      It seems that our city is in agreement that Massage Parlors are just not regulated right and is in agreement with a new proposed change in the state law regulating these small businesses.

      Well that might be a good thing but wait here it comes…

      Our own Matt McCleary is quoted as follows in regards to the duty of the city as reported by Z107.7 news:

      “Twentynine Palms’ Interim Community Development Director Matt McCleary said the city was supportive of the proposed law. “The city’s responsibility is looking after the health, safety, and welfare of residents.”

      Wow! Matt McCleary announces that massage parlors need to be regulated more stringently because the “city’s responsibility is looking after the health, safety, and welfare of the residents”.

      This is a true revelation about the dangers of having nine massage parlors in our fair city as compared to the 13 in Yucca.

      Every citizen knows the evils and dangers associated with loosely regulated but nonetheless regulated massage parlors. We need to crack down on these dens of evil even though only one problem has ever surfaced about them.

      But hey…. lets make sure that the “health, safety, and welfare of residents.” is protected because that is the job of a city.

      Hey Matt!

      Why don’t you and your council, yes your council, because they seem to not think for themselves, wake up, and realize that we lost a fire station!

      And after losing that station it has been pointed out by many the city is keeping about 22 percent of the property tax levy to buy signs and grass and lights and anything but providing for real public safety by providing some assistance to our fire department.

      The last time any of us lowly citizens looked we think that your failure as a city to provide us citizens with REAL public safety measures such as a viable fire department was more important than you jumping on the Massage Parlor band wagon that has harmed not a soul.

      You sir are a sorry piece of work to even equate massage parlors as a public safety issue when we have a closed down fire station.

      You need to go away and go away very fast.

      You pissed me off with your callous comparison of what is real public safety and what is not and if the council does not take you to task I certainly will.

      Looking forward to seeing you soon. Perhaps you can explain yourself in front of the camera or will you do what I expect you to do and sit in silence as directed to do by the city attorney even though you need not do so?

      The silence of a fool is deafening while the words of a scholar compel silence. What the choice is shall be yours.

      • Mark Clemons Mark Clemons says:

        First, The most dangerous the most treating to the public’s health, safety, welfare and LIBERITY is an expectation of government providing our health, safety, and welfare, that expectation of depending on a nanny state for safety, for protection is more dangerous more damaging than most can fathom.

        If one expects that conflicting traffic is going to stop at the stop sign, or a masseuse to be clean because she has had a government inspection is setting their sheeple ass up for disaster.

        It is much harder for 29 in that most here are not contributing to the GNP, most are part of the nanny state, and they are the consumers of the GNP. In one way or the other they have been so consumed, so digested putting them so deep in the bowels of our nanny society that the only path for them is the anus… Just do not think they will ever get it.

        Second Why do we need the city to be involved with renting you own house, we have safe guards for neighbor intrusions, it is called the courts, they have juries of your peers I would much rather count on some common sense coming from the public through a jury than a government entity. Heck with the way things are the city would most likely add a few thousand words for new codes just to control who would work on your rental, who would inspect your rental, they would need an avenue for consumer complaints on and on. Would those new codes give some an advantage? Think!

        Margo thanks for the TOT lesson lol

  9. michaelv michaelv says:

    Great article Steve, the city has not taken care of the health, safety and welfare of its citizens for a long time. If that comment does not bring some heat from the residence, I don’t know what will.

    • Steve Spear Steve Spear says:

      Hi MICHAELV,

      I think that nothing will cause any change here. Ever since I got involved almost 12 years ago there is a very small portion of the population of the city that keeps up with what the city is doing or is not doing.

      As I told Cora a couple weeks ago I wash my hands of it all.

      I was and still am concerned about what McCleary thinks is important as it relates to the safety of the city but there is nothing I can do nor you to make effective change at this time.

      I am not even going to waste my breath anymore speaking at any council meeting because it falls on deaf ears.

      What I will do and I hope others do is evaluate the candidates for this November’s election and vote out those that got us to where we are and vote in some people that have not been tainted and seem to be people that really understand what being an elected official is all about. It is not about garnishing praise and new and select friends.

      It is about remembering why you ran in the first place and never forgetting who brought you to the dance – ever.

  10. Hi Steve,
    I was wondering what happened to you.

    Your response to McCleary is appreciated. No need for me to scorn this miserable scoundrel (again), he has stepped in a big pile of his own discharges.

    Let me say two things:

    (i) As far as vacation rentals are concerned, I pretty understand both sides of the issue. The one issue is property rights of owners to rent their real property out and make a better living. The other side is the tax issue, the harm hotel investors and motel owners may occur and the loss TOT tax base. The other side of this is the disruption to residents that will occur to residents who live close to errant parties goers renting vacation homes.

    I find it appalling that it took four sorry amigos on the council a year of stonewalling to unanimously come to the decision to not help fund the fire department. They lacked a spinal cord to phrase the motion it in proper English terms, but instead, supported Mintz motion to “Not get involved in water district issues.” How cowardly. Mintz is the last person I would want to watch my back… Ohh that’s right, he failed to serve his country in the Military.

    The point I want to make is that Vacation Rental Agenda Item and public meeting happened quite rapidly (within a couple of months). But it took a year of stalling before the council sorry asses had the guts to tell the public their pet projects are more important than public safety.

    (ii) The other thing is I find it distressing you may “wash you “wash your hands of it all.” The city needs people like you. No one is going to pull the wool over your eyes given your many years in local government, sitting on all those county committees, managing and people skills (much of which comes from you’re combat experiences as a field officer. There is no one that is more dedicated to the city and its residents than Steve Spear.

    *Washing your hands of it* all is akin to when people get fed up and no longer vote. Please give it some more thought. The best thing for the city council is for Steve Spear to throw in the towel.
    Officers and Gentlemen don’t do that.

  11. Larry Briggs Larry Briggs says:

    Steve, The best way to control Vacation Rentals is to write an ordnance like many cities and counties in California have done. Wild parties? Call the police like you do when there’s one at a rental with a tenant whoc has a year’s lease. Have an ordnance that requires payment of TOT taxes for these rentals. Many cities in California have these ordnances. It almost verges on restraint of trade. Vacation rentals are here to stay, It’s better to regulate them rather than drive them underground.

    • Steve Spear Steve Spear says:

      I agree no issue with that. My point was that we now have individuals that are running vacation rentals out of city policy.

      They are … well… law breakers. Instead of complying with the law they have opted to break it for the last 6 years or more and code enforcement has done nothing because of who they are. Yet let Mark Clemmons do anything that is out of code and the city is all over him. What gives with that?

      Now they are back trying to get the city to approve their currently illegal land use.

      Should the council approve of it I have no issue. I don’t think they should but I do not have a dog in the hunt because it is not that important.

      What is important is that these self described upright citizens of the city have been breaking the law and one of them just recently had the gall to complain about a resident that planted some trees and blocked supposedly a view of the mountains.

      Now this citizen did everything according to city code whereas this complainer does not and has not with their respective illegal vacation rentals.

      Hypocrisy at its best.

      Always good to her from you Larry have a great weekend.

  12. Larry Briggs Larry Briggs says:

    Steve, what section of the city’s rules and regulations specifically prohibits vacation home rentals?

    • Steve Spear Steve Spear says:

      Our Development Code was written, under a former community development director, that if a use is not allowed then it is prohibited.

      I tried to get that changed when I urged and succeeded in having the city rewrite the General Plan and along with that was to be the new vertically and horizontally aligned Development Code.

      Well that Development Code is still not done.

      But that is where the prohibition comes in.

      • Larry Briggs Larry Briggs says:

        Thanks for the insight. That type of reasoning stifles innovation. Regulating vacation home rentals makes more financial/legal sense that trying to suppress them. Fear of competition is always present. But freedom of the marketplace is best. Monopoly should be a board game, not a business model in this town. Let’s legalize and regulate home rentals for the betterment of the community.

        • Steve Spear Steve Spear says:

          That is why I tried to change the code because it was suffocating.

          Still not changed and here we are what… almost 6 to 7 years.

          Again, if the council wishes to approve the matter that is their choice to make and I have no bone to pick because they are doing it in open session.

          I do not want the things in my neighborhood but then again they might be better than what I have right now.

          A rental on both sides of me and two rentals across the street with a third across the street and two houses down.

          Two of them have issues with parties however I only had to call the police once.

          I am sure the same arguments will be presented on Tuesday night that were presented several years ago when vacation rentals were a matter of discussion for approval by the council.

          At that time the hotel owners prevailed along with several citizens who simply did not want them in their residential neighborhoods.

          Should be interesting. Let me know how it turns out.

  13. michaelv michaelv says:

    Once again we are talking about writing ordinances that will not be enforced. Well, let me rephrase that. They will not be enforced unless you are not part of the “A” team. Then the rules will be thrown in your face for every infraction they can find just to drive you to the point of giving up and allowing their friends and families to prevail.
    Over and over there have been articles posted regarding the “Inn” crowd and how the council bends at every request. Now we have the theater crowd attempting to saddle the citizens with a debt that will last 30 years. In the mean time there is a fire department holding their breath, fearing the inevitable spontaneous multiple calls and not having the resources to cover them all.
    Yes, vacation rentals are going to need to be addressed, hopefully they are smarter than they were with PP.

  14. Speaking of the lack of public safety, we had a 3.2 quake just east of 29 within the last 48 hours. Just a small tremor. When a huge one arrives, the fire department can’t do a whole lot for a population such as 29 — but they can save lives and rescue people.

    When that occurs two fully maned stations are better than one. I certainly would not want to be the shoes of Jay, Joey, Danny and Jimmy if people suffer and parish because pet project became more important than saving lives.

    Just too bad the local media is in bed with said public officials. Too bad they give journalism a black eye on the local level.

  15. Dan OBrien Dan OBrien says:

    Let me ask you Larry when many of the founding fathers and movers and shakers gave up on 29 Palms did you give them as much shit?

    I can name a dozen big players over the years in this town that gave up on changing a single thing about this burg. Moved to Arizona, Texas and Idaho. Some Moved to Yucca Valley and beyond. It would seem the smart money has left.

    These are not necessarily retirees from the Military, but folks that wanted to make a life in 29 but were disappointed by its crushing petty clique politics. I gave it a good go of it, more than 27+ years of it. I figure I am in good company with those that have washed their hands of this place..

    I have grown tired of beating my head against the wall. I’m sorry Larry that I think my talents for blogging might be better served if I use my energy to change things that I have a better chance at changing. There is a huge Wild West of Politics out there and millions of stories to report. I just don’t have the stomach for 29 Palms anymore. Let others carry the battle flag forward.

    PS: So is it your custom to insult potential clients? There are a number of Brokers in town that would love another commercial listing.

  16. michaelv michaelv says:

    Scrolling through this sad blog, I see that a select few through their manipulation of the rules, have sucked the very life out of 29 Palms. To read comments from those who have put up a good fight say they are washing their hands of it all is exactly what they want. Since a majority of residence are military and “entitled” people, they have no real reason to get involved with city politics so the select few run rampant.
    I am sure that there is already comments printed somewhere in city hall covering any disaster that may strike. In case of hotel fire, read this. In case of multiple calls for emergency response, read this.
    My 12 years there were enlightening to say the least. I came from a place were the real families ran it and we didn’t have the continual problems that seem to face 29. Why is it that those elected in this little “city” seem to think that they are now the king and his court. Why do they think they can do anything they want and no one will say a word. Well unfortunately, there are only a very select few who speak up and that number is dwindling.
    I wrote a little story a while ago, if I can locate it, I’ll post it.

  17. Another observation-Paul Smith is an appointed Planning Commissioner for the San Bernardino County. This is the only NEW factor in this round of attempting to pass an ordinance to permit Vacation Home Rentals. Isn’t this a conflict of interest for him to lead this charge as he will directly receive financial benefits? Just saying…

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