Land swap to cost tens of thousands
Ketchum plans to use reserve funds to cover extra expenses
By GREGORY FOLEY
Express Staff Writer
A pending land trade between the city of Ketchum and Wells Fargo Bank could significantly draw down the city?s rainy-day reserve fund.
And, as members of the Ketchum City Council prepare to approve the city?s proposed budget for the upcoming 2004-2005 fiscal year, questions have arisen about why the costs of the trade are not outlined in the $15.4 million spending plan.
At issue is an approved deal to trade the city?s Town Square parcel?the site of the Sun Valley-Ketchum Chamber & Visitors Bureau information cen-ter?for a vacant piece of land directly south of the Giacobbi Square shopping center, at the corner of Fourth Street and East Avenue.
Wells Fargo Bank owns the private parcel, which is currently leased to Giacobbi Square managers for use as a parking lot.
The City Council in July voted to formally endorse the land trade. The city and the bank intend to close the transaction in September, after the end of the city?s Wagon Days celebrations over Labor Day weekend.
A key element of the deal calls for the city to make a cash payment to the bank, primarily to cover a difference in the appraised values of the two proper-ties. The city parcel at 411 N. Main St. has been appraised at $1,232,000, while the Wells Fargo parcel has been valued at $1,353,000.
Wells Fargo earlier this summer asked that the city pay for the difference in the appraised values and make an additional payment to ensure the bank re-ceives at least the same amount it originally paid for its Fourth Street parcel.
In addition, Wells Fargo has demanded that the city raze the existing visitor center on the Main Street parcel and leave the lot in a level, usable condition.
Mayor Ed Simon said this week that the total cost to the city could range in the neighborhood of $170,000. (An exact figure was not available this week because the city administrator and the city clerk were on vacation.)
The immediate costs of the land trade?because the deal did not develop until earlier this year?are not specifically included in the city?s current 2003-2004 budget. Nor are they included as a line-item expense in the proposed 2004-2005 budget.
City Administrator Ron LeBlanc noted last week that the costs were not outlined in the 2004-2005 budget because they surfaced after the spending plan was submitted to the City Council.
After Councilwoman Terry Tracy?among others?asked how the city would cover the land-swap expenses, LeBlanc said he would likely take the funds from the city?s so-called fund balance, a reserve account estimated to reach approximately $1.2 million in the next fiscal year.
However, new questions have surfaced about whether the city can spend the money from the fund balance without weighing it against a line-item expense in the budget. Typically, foreseen expenses must be listed somewhere in the plan.
City Attorney Ben Worst this week said he plans to research the matter before council members are asked to approve the 2004-2005 budget at a special meeting Tuesday, Aug. 31.
In the future, the city will likely incur additional costs from the land trade. If, as planned, the estimated $300,000 visitor center is demolished this fall, the city will have to consider whether it will build a new facility to welcome tourists into town.
Currently, the Chamber is planning to lease a commercial space in the Copper Ridge building on Washington Avenue to house a new visitor center. The organization is set to receive extra funds next year from the city, largely to cover the new lease expenses.
At the same time, city officials will have to determine if they want to build a new set of public bathrooms downtown to replace those located in the appar-ently doomed Chamber building on Main Street.
Despite the challenges, Simon said he firmly believes the land trade is the right move for the city. Ketchum cannot afford to simply purchase the Wells Fargo property, he said, and will ultimately get more public benefit by trading to acquire the site.
?I don?t think (the Main Street parcel) has been put to its best use,? he said.
Simon said the Wells Fargo parcel could ultimately become a ?park-like setting? with public restrooms and an underground parking garage.
The mayor said he now envisions the site as the focal point of a project to redevelop parts of the city?s commercial core. The plan for the area?which could possibly be funded through a bond issue?might include new open-space areas, sidewalks, street lighting and public parking.
?The idea is to really coalesce that parcel into a complete downtown master plan,? Simon said.
Ultimately, the mayor said, the decision on how to use the Wells Fargo site will rest with the City Council, which would hold a series of public hearings on the matter before any decision is made.