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PALM SPRINGS—Jaime Kowal left Vancouver for Palm Springs in 2012, deciding to move to this southern California paradise almost on a whim.“I came for Christmas vacation and never left,” she says.

A freelance photographer, she decided to channel her creative spirit into being an entrepreneur of another sort. She founded The Desert Collective, which in three years has grown to include a coffee house, tiki bar, and boutique accommodations.

She’s not stopping there. A yoga retreat in nearby Joshua Tree is also in the works.

“There’s a lot of culture. We have a lot of entrepreneurial friends,” Kowal, 38, says over wine at Ernest Coffee, one of her properties. “It’s a new generation that has seen the potential of the architecture and history. It’s a new wave.”

Palm Springs was once known as a desert playground for retirees and Hollywood celebrities of a bygone era. Now, a new crop of young entrepreneurs is reviving the community with restaurants, hotels, boutiques and art galleries.

This town of 47,000 is a beaming example of mid-century modern architecture. The Palm Springs Art Museum Architecture and Design Center highlights the town as a go-to place for design buffs.

Each year, the city plays host to Modernism Week, an 11-day festival celebrating mid-century modern design, architecture, art and culture. This winter, the festival drew 97,000 participants, an increase of more than 25% over last year.

“It’s much of what put Palm Springs back on the map,” says Robert Imber, an architectural enthusiast and tour guide who executive produced the documentary Desert Utopia: Mid-Century Architecture in Palm Springs. “Palm Springs became the mecca of modernism … People have some kind of a bond or affinity for modernism.”

An effort to preserve buildings from the 1930s and 1970s, from private homes to civic centers,…