"Could that $600,000 to the City possibly be a payoff from Thunder Spring for not fulfilling the original quantity of community housing 'on the hill?'"
That was the question posed by Ketchum resident Ruth Lieder in a letter to the editor in last Friday's edition of the Mountain Express.
As the controversial proposal by the developers of the Residences at Thunder Spring to construct 19 units of affordable housing moved from the Planning and Zoning Commission to the City Council, comments alleging political impropriety such as Lieder's have been bandied about with little dispute.
But Councilman Baird Gourlay was quick to point out that the $600,000 was received as an in-lieu payment for a senior housing requirement from the original Thunder Spring development agreement.
This money was in turn used in the purchase of the two-lot parcel located at 211 First St. E., also known as the Dollhouse property, which the city will likely use for an affordable housing project. The purchase price for the parcel was $2.2 million and is adjacent to two other city-owned lots.
David Hutchinson, president of Ketchum-based Valley Properties Inc., manager of Thunder Spring LLC, said that the check for $600,000 was written soon after his company took over from previous owner Wareham Development in 2005. Hutchinson was a member of the city council when the original development agreement was approved in 1997.
"Wareham was prepared to dispute all its requirements," said Hutchinson. "They were trying to wiggle out of the requirements because they were never enforced."
In addition to the senior housing, the original development agreement also required 4,800 square-feet of affordable housing and 5,000 square-feet of non-profit office space.
However, the city, led by then-Mayor Ed Simon, granted the original developer's certificate of occupancy without enforcing those requirements.
"The city's real power in this matter is to hold the developer's feet to the fire by not allowing them to sell any units," Hutchinson said.
With the newest portion of the project, the 24-fractional unit Residences at Thunder Spring, scheduled for construction next spring, Hutchinson is now attempting to fulfill the past and present requirements in one fell swoop.
The proposed project would be located on the four-acre parcel between the southern end of the Bigwood Golf Course and the Ketchum Cemetery.
The commission recommended the approval of allowing six units in the proposed project to replace the housing and non-profit office requirement from the original development agreement.
Three additional units would round out the requirement for the Residences, which would also have four units of employee housing on-site.
The remaining 10 units would depend on other developers, perhaps those looking to fulfill community housing requirements offsite.
Hutchinson said that he's not required to put the housing on-site at the residences and that while he hopes to fulfill these requirements with his current proposal, it will ultimately be up to the council.
"If it comes down to it and the council wants something else we'll talk about it," Hutchinson said, indicating that alternatives could include an in-lieu payment or the purchase of land for the city. "We just want to give the housing ordinance credibility and life."
However, all parties agree that the past oversight by the city on the enforcement of the original development requirements was a mistake.
"We've learned a lesson from it," Gourlay said. "Now we know to require a specific timeline for the housing to be completed, rather than taking it on good faith."
By contrast, the original project took eight years to complete, with a portion of the requirement tied to a building that was never constructed.
"We wanted to satisfy these requirements or we never would have gotten involved," Hutchinson said.
With the council scheduled to continue deliberating the issue on July 21, the question of who has a legal claim to the property in question remains. While City Special Counsel Stephanie Bonney maintains that the Thunder Spring LLC has the right to develop or sell the land, opponents, especially Bigwood subdivision homeowners, contest that the land was restricted as open space in the development agreement.