Developer Harry Rinker and the city of Hailey did not break any laws by negotiating development plans for Rinker's 160-acre Peregrine Ranch property, according to 5th Judicial District Magistrate Judge R. Ted Israel, who rendered a decision on the matter Nov. 13.
The plaintiffs, a group of adjacent landowners including Hailey developer Rod Kegley, accused Rinker and the city of Hailey of violating open meeting laws by entering into a closed-door agreement regarding sewer hookups for a possible 380-unit subdivision on the ranch north of Hailey.
The agreement called for Rinker to pay the city $4 million for the extension of sewer services north into the county and the ranch. The deal was struck after Rinker paid $1.35 million to settle a pending lawsuit against the city of Hailey filed by Judy Castle. Castle sued Hailey for $2 million after it turned down her two attempts to develop more than a dozen light-industrial buildings on her 81-acre parcel in southern Woodside. Rinker's $1.35 million payoff was included in his $4 million deal with the city.
The alleged closed-door negotiations between Rinker and the city of Hailey occurred in February 2005.
In his judgement, Israel ruled that the negotiations between Hailey and Rinker were not binding and would not degrade property values in the area.
"(T)he plan is and never was set in stone," Israel wrote.
Last month, Rinker significantly downsized his development plan to just 69 units and a nine-hole golf course linked to The Valley Club, which is located northeast of Peregrine Ranch.
"Because the Sewer Services Agreement can be terminated by the Rinker Trust and because it does not require any specific plan or development of Peregrine Ranch, there is simply no evidence that the adoption of the (agreement) will be detrimental to the plaintiffs," Israel wrote. "As a result, the court need not reach the issue of whether or not the open meeting law was violated."
Kegley said he believes the plaintiffs' case was hampered by Idaho law.
"We weren't successful with the lawsuit, not because the city didn't violate the open meeting law, but because we couldn't prove (that the agreement and potential development) would economically harm all neighbors," Kegley said. "In Idaho, you apparently have to prove it would cause economic harm. They don't give you anything for destroying quality of life. All you can prove is the actual dollar issue.
"Now that the proposal is for (69 homes) and a golf course. It's hard for us to make that case."
But Kegley's got other bones to pick.
He claims Rinker's adjusted plan still poses a risk to two subdivisions—Coyote Bluff and Coyote Two—that he owns adjacent to Rinker's property.
"The subdivision would sit on top of my irrigation ditch," Kegley said. "My water right is 1883. He can't take that away from me. Eventually, he will have to deal with me."
Rinker revised his development plan after abandoning efforts to annex Peregrine Ranch into Hailey, which would have permitted a significantly larger development than the county's zoning laws will allow. Peregrine Ranch could not annex into Hailey unless the Silver Sage subdivision, located just to the south of the ranch, did as well.
To encourage Silver Sage to annex, Rinker offered a series of "carrots" to the homeowners, including full memberships to The Valley Club, partial coverage of Hailey city taxes, and use of play fields and storage facilities on Peregrine Ranch. But Silver Sage wouldn't budge, and Rinker adjusted.
Kegley said he has not yet decided whether to appeal Israel's ruling but that he and the other plaintiffs will be very vocal in the development's public hearing process with the county.
Hailey City Attorney Ned Williamson said the plaintiffs can still pursue the issue in district court.
"The magistrate action right now is only dealing with the public meeting law," Williamson said. "The lawsuit the plaintiffs filed also sought determination on the legality of the agreement, and that is a matter to be determined by district court."
Kegley's attorney, Fritz Haemmerle, could not be reached for comment. Neither could Steve Schossberger, who is representing Rinker.