Wednesday, June 25, 2008

Three strikes on hotels?


The question in Ketchum this year is whether it will strike out on hotels or bring in a couple of runs in what may be its last at-bat.

When the Ketchum Planning and Zoning Commission began its deliberations on the Warm Springs Ranch Resort, it nearly whiffed out on a curve ball thrown by one of its own commissioners.

Three of five commissioners asked the developer to agree to replace top-floor penthouses—the stuff developers rely on to generate the early money they need to make such projects pencil out—with hotel rooms that generate money only over long periods of time.

The commissioners said the primary reason the city is considering the dense development at all is because it wants a new hotel to be built. They reasoned that hotel rooms on the top floor of the tallest "iconic" section would look more "alive" because they would be occupied and lighted more of the year than penthouses.

Developer Stan Castleton was clear when he said that if the P&Z insists on this demand, it will batter the resort's finances and could be a "deal breaker."

He noted that financing is difficult enough in today's tumultuous economy.

Ketchum has turned down two other proposed hotels in the past couple of years.

It turned down a luxury hotel on Main Street on the site of the old Bald Mountain Lodge because of public outcry over height and traffic.

Then, the city drew a line in a sand trap for the first group of Warm Springs Ranch developers. It told them, "No golf course, no hotel." The death of the project was instantaneous.

The Warm Springs Ranch Resort is not all that's riding on the city's decision. Investors around the country are closely watching the process.

It's the ninth inning. If Ketchum again heaps requirements that are impossible to meet on a hotel project, it could be the city's third strike. The city could find itself out of the game.

If Warm Springs Ranch does not garner city approval, three separate development groups will have tried—and failed—to put a plan in place that can pay for itself, make money for the developers and satisfy the demands of naysayers who want only tiny buildings built on expensive dirt.

A developer would have to be crazy to want to put years of time and effort into a project proposal only to be sunk by city officials who insist that their financial judgment is better than theirs.

The Ketchum P&Z should be careful what it asks for—or risk striking out in what could be its final at-bat for a long, long time.




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