Friday, September 30, 2005

Feds asked to postpone IRS auction

Cities want to save Bavarian Village for affordable housing

Express Staff Writer

IRS auction

The auction is scheduled for Tuesday, Oct. 4, beginning at noon. Potential buyers may preview the property on Oct. 2 from 1 p.m. to 4 p.m. A portion of the proceeds of the auction will go to Idaho State Police, the Ketchum Police Department and Blaine County Sheriff's Office.

The cities of Ketchum and Sun Valley have requested from the Idaho U.S. Attorney's Office direct negotiation for the purchase of the Bavarian Village apartment units that are destined to go on the IRS auction block next week.

The cities' attorneys co-signed a letter and faxed it to Boise Thursday in hopes of postponing the units' auction, scheduled for Tuesday, Oct. 4.

The Internal Revenue Service auction has sparked a spirited, if somewhat tardy response from city and county officials, who are trying to secure the units for affordable housing.

The Ketchum City Council on Wednesday, Sept. 28, approved an emergency resolution approving the use of "in-lieu" housing funds to bid on the units.

"I believe this housing issue has brought our community to a tipping point," said Council President Randy Hall. "We're compromising our health, safety and welfare."

Appropriating funds may not be enough, however, since the city will likely be up against bidders with deeper pockets.

In the short time following that meeting, city leaders, along with the Blaine-Ketchum Housing Authority, Advocates for Real Community Housing and other backers, have been scrambling to find a way to acquire the units for affordable housing.

The cities' legal counsel has advised against condemning the property to acquire it, Sun Valley Mayor Jon Thorson said Thursday.

The letter sent to the Idaho U.S. Attorney cites a section of state law that says a city can authorize the transfer of property to a tax-supported governmental unit. In other words, the cities maintain, both they and the federal government can circumvent the public auction process under certain circumstances.

The Internal Revenue Service said earlier this week they would not delay the auction, Hall said. The cities are attempting to get a different answer from U.S. Attorney Thomas Moss, who, as the IRS's representative, has the authority to postpone it, Hall added.

"If we don't stop the process now, we're going to be having to negotiate against the private sector and it's not likely we'll be able to compete in that environment," Hall said.

Thorson said there is precedent for the IRS to delay auctions.

The apartment buildings, which were seized from drug smugglers, have an assessed value estimated at $3 million. The 14 units in the three buildings, at 106 and 110 Rember St. and 154 Bird Dr., include a mix of studio and one- and two-bedroom units. They will be auctioned together in one sale.

During the meeting Wednesday, Thorson offered his city's moral and financial support to the Bavarian Village project in particular, and the acquisition of affordable housing in general.

"We're all here for one purpose: for maintaining and acquiring workforce housing," he said. "It's critical for the vitality of the community. The city of Sun Valley will support this effort financially and with whatever other resources we have."

Others in the crowd of approximately 35 underscored the need for workforce housing.

Greg Schwab, chief of fire and emergency medical services for the city of Ketchum, said only about one quarter of his staff live in Ketchum.

"As emergency responders, having our responders live here is key," he said.

Blaine County School District Superintendent Jim Lewis called on all members of the community to look for ways to tackle the affordable housing challenge.

"I think every group in the community ... needs to proceed from this day forward, that if we want to help the community we have to find every piece of property, every grant we can get. If we want to help the community we can't let any deal go by."

The Rev. Brian Baker, of St. Thomas Episcopal Church in Sun Valley, took a familiar theme and applied it to a larger whole.

"As a priest, I'm interested in the soul of a community," he said. "If we don't act aggressively with what's happening now ... I think we'll lose our soul. Look beyond essential personnel. How do we keep the soul of our community?"

Council members were motivated by the comments.

"The tenor in this meeting is going to push us fast and furious," said Councilman Ron Parsons. "It's pretty rare when you get a room full of people and you get a near 100 percent consensus."

While the feeling of unanimity pervaded the auction discussion, attempts by the city to secure more affordable housing units may be a harder sell.

Interests of the real estate community and landowners should be considered before amending city codes, said Dick Fenton, partner in Ketchum-based McCann-Daech-Fenton Realtors.

"If the city desires engaging the real estate community, they need to keep in mind a multi-pronged approach," he said Thursday. "If you're going to try to enlist the support of developers, property owners, Realtors, who are potentially impacted by (this), get them to be a part of the solution. Create a sensible ordinance that everyone buys in to."

Increasing allowable density in larger projects and allowing smaller projects to buy their way out of requirements at a lesser rate than what is now allowed are options, he said.

He added that there would be a "fairly significant" economic impact when market-rate housing units are replaced by affordable housing, and the effects of that should be addressed when discussing amendments to city code.

Affordable housing advocates have sometimes found themselves on the defensive as units disappear.

Ketchum city leaders didn't find out about the auction until a couple of weeks ago.

"It never came across our radar until the city planner brought it to our attention," Hall said. "We need to find an answer how not to let (that) happen in the future."

But Michael David, executive director of the Housing Authority, was buoyed by Wednesday's turnout, and noted that community-wide efforts foster results.

"A lot of people said there's not much happening. There's not much progress," he said. "But to see all the people here today, this cross-section of people, that's progress. This is the whole community. This is everybody, and everybody is essential."

David Kipping, Housing Authority board member, said the city is in crisis mode but political will is starting to change.

"If this fails, I hope what we saw in this room will allow us to push for other projects," he said.

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