The dispute centers on a Municipal Utility Development Agreement finalized on February 11, 2026, following a nine-month negotiation period. Stronghold argues the selection was neither rushed nor secretive, noting the City Council approved the deal in an open session. Despite the subsequent June 4 vote to void the contract, the company continued fulfilling its obligations, delivering mandatory design documentation as late as August 2026.

Stronghold CEO Scott Bailey expressed a preference for reconciliation over litigation, stating the firm remains open to negotiation. The company’s internal projections suggest the project could have generated $54.2 million annually in public funds. This total includes $3 million for the City’s general fund and $22 million in net utility revenue, with the remainder earmarked for local schools, Riverside County, and the Coachella Valley Water District. To date, Stronghold maintains that its $8 million capital expenditure was funded entirely by private sources rather than taxpayer money.