Wednesday, January 16, 2008

Main Street up for sale

Five major properties on market collectively valued at $63 million

Express Staff Writer

A sign on the side of the Roosevelt Tavern in Ketchum offers the ?Casino Block? to buyers able to ante up $13.9 million. Photo by Mountain Express

Looking for somewhere to spend that spare $63.2 million hidden in your mattress?

Well, look no further than Main Street in Ketchum, where five significant pieces of property are for sale, creating the potential for major change in the city.

Development of any of these parcels is likely to be affected by the city's efforts to realize the construction of a major hotel.

Perhaps the most prominent parcel, due to its location, is the "Casino block," on Main Street between Sun Valley Road and Second Street. It includes the Casino Club and The Roosevelt Tavern.

The "block" is actually half a city block offered for sale as one parcel. The property includes five buildings that house eight businesses, and the asking price is $13.9 million for the real estate and two liquor licenses, according to listing agent Heidi Baldwin of Clear Creek Real Estate.

Baldwin said the existing businesses' lease contracts are confidential, but must be honored by any future landlords.

Further north, just past the intersection of Main Street and Warm Springs Road, is the 58-room Clarion Inn, listed at $20 million, according to Colliers International real estate agent Paul Kenny.

Kenny and Matt Bogue are also the listing agents for the former Iconoclast Books building, one of Ketchum's most historic and distinctive structures. The two-story brick building, which sits on the northwest corner of Main and Second streets, was constructed in 1887 as the Lewis Lemon General Store. Along with its historical character, it carries a $1.5 million price tag.

Two blocks to the south is the 1.1-acre vacant lot that still bears the sign of its previous tenant, the Bald Mountain Lodge. Last fall, the "entire city block (which is) city core zoned," as described by the large sign that now adorns the property, hit the market for $12.8 million, said listing agent Ginny Warjone of Aspen Grove Real Estate.

And a neighboring property, on the opposite side of River Street, sports a "For Sale" sign as well. The 1.32-acre lot includes the Gateway Building and is listed at $15 million by Sotheby's International Realty.

While the Clarion Inn property—obviously—already sports a hotel, it is still subject, along with the Gateway and Bald Mountain Lodge properties, to the conundrum of where to locate a large-scale hotel in Ketchum.

The two lots on the southern end of town have already been considered for such a project, the preliminary plans of which were aborted in September when the developer reportedly failed to procure the sites. The developer claimed the city hindered the hotel development process.

However, an ordinance passed by the Ketchum City Council on Monday, Jan. 5, could increase the interest in the properties because of included incentives. Community and Development Director Lisa Horowitz said the ordinance allows for more bulk as long as the development is compatible with the city's "Mass and Scale Study for the Gateway Area" published in June. The study included design guidelines for buildings in that area, which includes the former Williams Market, the Bald Mountain Lodge property and Trail Creek Village.

Whereas the city previously deemed the Bald Mountain Lodge site as an inappropriate location for a hotel of more than four stories, the new ordinance allows for a "limited fifth floor" with a maximum floor space of 25 percent of the building's total footprint. Horowitz said the new ordinance makes the Gateway property more attractive to potential hoteliers, as a development there could go up to four floors instead of three.

"Hotels are something we want," she said.

The former Williams Market building and Trail Creek Village are not for sale, but have been surrounded by talk of redevelopment recently.

"We don't have specific plans at the moment," said David Hutchinson, owner of the Williams Market building. "We should have a number of different scenarios for the property by this summer. The plan will not include keeping the existing building, but we are not interested in flipping the property."

While the city has yet to see a single official hotel application for any of these properties, that could soon change, as Trail Creek Village owner Jack Bariteau has plans to submit a design review application. Bariteau said in an e-mail that his investment group, Trail Creek Fund LLC, will "test the waters" by bringing a four-story, 73-room hotel proposal before the city this month.

The agents for all these Main Street properties said they've received lots of interest, but have made no deals.

Even if a sale were to come through today, however, it would take a while before a hotel might actually be ready for guests, real estate agent Warjone said. She said that with pre-application, architectural design, crunching numbers to determine economic viability, the formal application and actual construction, the process could last around five years.

For some, such a development is worth the wait, as it will help stimulate economic growth throughout the rest of the community, but some involved say the city needs to do more to create an attractive atmosphere for hoteliers.

"The current-day restrictions and regulations on development keep it from being economically viable," said Colliers Agent Kenny.

He explained that the high price of real estate means developers have to work for maximum value when building, which might not always correspond with what some people see as maintaining the character of the city.

"We need to save parts of town that capture the heritage and character of Ketchum," Kenny said. "But we have to allow change to take place. If we end up with nothing but second homes, we will no longer feel like this is even a community."

Main Street price tags

- "Casino Block": $13.9 million

- Bald Mountain Lodge site: $12.8 million

- Gateway Building site: $15 million

- Clarion Inn: $20 million

- Former Iconoclast Books building: $1.5 million

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