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Produced & Maintained by Idaho Mountain Express, Box 1013, Ketchum, ID 83340-1013 
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Copyright © 2003 Express Publishing Inc.
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Wednesday, June 30, 2004

News

Financing for hotel still eludes Barsotti

Developer says city must modify laws to attract downtown lodges


By GREGORY FOLEY
Express Staff Writer

An 11th-hour plan to secure financing for an 80-room hotel in downtown Ketchum has come up short, prompting the developer to call for a loosening of city restrictions on new lodging projects.

Brian Barsotti, the Ketchum-based developer and attorney who has received approval to build a new luxury hotel at 151 S. Main St., said a trip to New York City this month to acquire financing for the estimated $40 million project was ultimately unsuccessful.

In an interview with the Idaho Mountain Express Friday, June 25, Barsotti said he believes his repeated failure to garner financing for the project could provide a valuable lesson to city officials.

Barsotti said he strongly believes that new hotel projects in downtown Ketchum are not viable under the city’s current regulations, which are being enforced amid ever-escalating land and development costs.

Most hotel developers are asking governing agencies for incentives to build, he said, and a contingent of resort cities competing with Ketchum are choosing to provide attractive bonuses.

"They don’t understand what an incentive is here," Barsotti said. "They don’t want to give any height, they don’t want to give any size and they don’t want to put any money in."

In New York City, Barsotti said, two hotel developers echoed comments he had heard during other financing negotiations conducted in recent months with prominent hotel investors all over the world.

"One developer in New York said he would finance the project if it could go to 100 or 110 rooms," he said.

Renowned "flag" hotel operators, such as Marriott, Hyatt and Four Seasons, typically do not consider hotel partnerships unless the plans call for at least 120 hotel rooms, Barsotti said.

"One Four Seasons operator from Singapore said he could get a Four Seasons into Ketchum but needed 120 rooms," he said. "I told the city from Day One that we needed 120 rooms."

When his plan was approved last year, Barsotti received permission to build a three-story, 47-foot-high hotel but the building—per city code—was limited to 85,000 square feet. The original plan for a 59-foot building was rejected.

In addition to a minimum size that can support their investment, hotel developers and financiers are currently seeking the flexibility provided by so-called hotel-condominium developments, Barsotti said.

Developers of hotel-condominiums typically sell and deed the individual hotel rooms to a single owner who might use the unit a mere four to five weeks per year. Proceeds from the sales of the units help offset the building and overhead costs of the hotel project and can serve to keep a project afloat during lean times, Barsotti noted.

"People don’t want to finance a traditional hotel," he said.

City officials—many of whom have stated publicly that Ketchum needs to encourage hotel development in the downtown area—are currently reviewing regulations for hotel development in the city’s commercial core.

Barsotti said he will continue to negotiate financing deals, but anticipated that his Main Street property will ultimately be sold to another developer. The property is on the market for $6.5 million.

"I’m still talking to people," Barsotti said. "The next six weeks will really tell the tale."


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The Idaho Mountain Express is distributed free to residents and guests throughout the Sun Valley, Idaho resort area community. Subscribers to the Idaho Mountain Express will read these stories and others in this week's issue.





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