Community housing advocates continue to fight for three West Ketchum apartment buildings they feel they rightfully won in a drug-forfeiture auction on Tuesday.
Rebekah Helzel, founder of Advocates for Real Community Housing, placed an auction-high $2.3 million bid to pull off a major coup for affordable housing in the Wood River Valley. Funding for the bid was a joint effort between ARCH and the Blaine-Ketchum Housing Authority, and was widely supported by the Ketchum and Sun Valley city councils.
But officials from the Internal Revenue Service and EG&G Tech Services, the private contractor handling the auction, said they would not sign a contract since the bid was $1.2 million short of the undisclosed minimum purchase price of $3.5 million.
On Thursday, Helzel said ARCH, the Housing Authority and the city of Ketchum were in negotiations with the U.S. attorney's office and that no agreement had been reached.
"We are negotiating (and) talking, but that doesn't necessarily mean there will be a resolution," Helzel said. "But they haven't hung up on us yet."
Helzel added that she is neither "optimistic nor pessimistic," and that it's still "too early to tell what the outcome will be."
Ketchum City Attorney Ben Worst is leading negotiations with the U.S. attorney's office and Ketchum City Council President Randy Hall is "our point man," Helzel said.
Hall said he believes the three buildings—known as the Bavarian Village, located at 106 and 110 Rember Street and 154 Bird Drive—were significantly overpriced in the federal government's appraisal process.
According to Hall, the total size of the Bavarian Village property is 27,000 square feet, and the government claims it was appraised at about $4 million. But directly across the street from Bavarian Village, which has become run down in recent years, a 50,000-square-foot lot recently sold for $3.24 million.
"Where in the hell did the feds come up with a $3.5 to $4 million appraisal?" Hall asked. "There appears to be a disconnect, and if we could get our hands on their appraisal ... we could cut right to the chase."
The property was seized several years ago in a drug case against Patrick O'Malley Cannon and David Stanley Brocklebank, of Ketchum and Hailey, respectively. It was officially forfeited to the IRS in February of 2004, after the men were sentenced to 40 months in prison for money laundering and conspiracy to smuggle and distribute drugs. Since then, the property has fallen into a state of disrepair but is still being rented out to occupants.
"They weren't good stewards of the property and they allowed it to get run down," Hall said.
Hall also claims the federal government tried to keep seizure of the property a secret from the city in order to avoid an affordable-housing uprising. Affordable housing is at a serious shortage in the Wood River Valley.
"They didn't advertise the property, nobody ever told us what was going on," Hall said.
The city learned of the auction last month, and tried to postpone it in order to give ARCH and the Housing Authority more time to raise funds. But the IRS denied the request.
Anthony Pounders, an operations manager for EG&G, said he felt the property would have sold for more in the auction but developers were frightened off by the affordable housing issue.
Hall also questions why an open house, which is a legal requirement in such a case, was never held.
"My understanding is that this never happened," he said. "I think there is a procedural problem here—there are problems all the way through.
"We're just trying to get to the bottom of this, and the government is not helping matters."
Helzel said negotiations and discussions will continue into next week and she expects a decision sooner than later.
Ernestro Rizo, 3, was recruited Tuesday to rally sentiment for affordable housing. Unfortunately, his efforts were in vain since the Advocates for Real Community Housing's high bid for the Bavarian Village in West Ketchum was rejected by the auctioneer for the IRS. Photo by Willy Cook
