Wednesday, October 24, 2007

County eyes Agave Place settlement

Deal could lead to sale of affordable units on open market

Express Staff Writer

A draft settlement that would allow Agave Place developer Henry Dean to sell the affordable housing units, above, on the open market was viewed by a skeptical Blaine County Commission Tuesday morning. In exchange for selling the units at market rate, Dean would have to deliver the same number of homes at a different location to be sold as affordable units.

The Blaine County Commission was presented with a draft settlement Tuesday that would release Agave Place developer Henry Dean from his obligation to provide 12 community housing units at a prearranged site at the north end of Buttercup Road.

In exchange, Dean, the developer of The Valley Club's West Nine expansion, the 43-unit market-rate project north of Hailey whose approval by the county in May 2005 resulted in the construction of the 12 Agave Place units nearby, would have to provide 11 community housing units elsewhere. He would be required to provide the lesser number of affordable housing units because one of the Agave Place units has already sold.

The fact that the remaining 11 Agave Place units still remain empty months after being built was the impetus for the draft settlement presented to the commission by representatives of the Blaine County Housing Authority.

Under the terms of the plan, Dean would be required to provide substitute affordable housing units that meet with the approval of the Housing Authority. Unlike in the Agave Place development, the units could not exceed income category 3.5 as established by the Housing Authority. The units developed at Agave Place are currently priced at the higher income categories five and six.

Perhaps the most vexing aspect of the proposed settlement would be the requirement that the county amend the plat for the Agave Place project. This would be necessary so that Dean could sell the units on the open market.

Housing Authority board member John Flattery, who attended Tuesday's meeting and helped write the draft settlement, said Dean would be free to sell the Agave Place units on the open market under the tentative deal. Flattery said the First Bank of Idaho, the lending institution that financed the Agave Place project, has apparently given Dean a notice of foreclosure on the $2.6 million loan.

Because of this, the developer is eager to sell the remaining Agave Place units as quickly as he can, Flattery said.

How successful he'll be in that endeavor remains to be seen, a fact that didn't go unnoticed by the county commissioners.

Flattery said numerous potential homebuyers who are on the Housing Authority's waiting list have viewed the Agave Place units, but have decided against purchasing them because of perceived design flaws. Among other things, the homes reportedly lack storage, closets, have no enclosed garages and are without the plumbing needed to install garbage disposals or dish washers.

In short, their "design is marginal, the quality is marginal," Flattery said.

Under the tentative deal, Dean wouldn't have to deliver any of the replacement units within six months should the Housing Authority board and the Blaine County Commission approve the Agave Place settlement.

After that time but within 30 months, the developer would have to deliver one affordable housing replacement unit at an alternative site for every two West Nine market rate units he sells. Out of the 43 West Nine units constructed by Dean, a total of 36 remain unsold, Housing Authority Executive Director Jim Fackrell said.

Fackrell said a likely site for the replacement units could be in Hailey.

"Which is closer to services," he said.

Fackrell said the units could also be provided as far south as Bellevue, but no further.

For his part, Blaine County Commissioner Larry Schoen expressed grave concerns with the idea being proposed. Schoen questioned whether Dean could actually sell the Agave Place units on the open market, and if he couldn't, where that would leave things.

"I don't get how this is a relief (for Dean)," Schoen said.

Addressing Fackrell, Schoen questioned whether Dean would rather face foreclosure or sell the Agave Place units at a lower income category. Selling the units at a lower income category would ostensibly widen the field of potential homebuyers for the Agave Place units.

Schoen repeatedly stated his desire to see the Agave Place units sold to affordable house buyers.

"Real homes for real people. That is the goal of this program," he said. "I want to see this project a success as it was originally proposed."

County Commissioner Tom Bowman seemed more amenable to the deal than Schoen. Having sat in on a discussion between the First Bank of Idaho, the Housing Authority and Dean, Bowman said the bank representatives indicated they thought the wider pool of market rate buyers would lead to the sale of the Agave Place units.

He said the county could elect to place a lien on an unspecified number of the West Nine market-rate units to ensure that Dean lives up to the tentative settlement.

"As collateral for coming through on this promise," Bowman said.

In the end, Fackrell and Flattery indicated that they would take the commission's concerns back to the Housing Authority board to factor in on their consideration of the tentative settlement. Once the Housing Authority board comes up with and votes on a preferred settlement with Dean, they will be sending it to the County Commission for final approval.

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