Friday, December 19, 2008

Developer to city: Want cash for housing?

Warm Springs Ranch developers offer revenue stream to city

Express Staff Writer

Developers of the proposed Warm Springs Ranch Resort are getting ahead of the game on the potential for community housing required by the city of Ketchum.

The city's Planning and Zoning Commission will continue its deliberations on the issue on Jan. 7, Park City-based developer DDRM Greatplace presented its own solution.

In a letter submitted to the city on Tuesday, DDRM Greatplace CEO Stan Castleton offered to impose a 0.5 percent transaction fee on the sale of any unit or lot in the resort project. The money would be given to Ketchum once the sale is closed.

Castleton's proposal includes a requirement that the city match that amount with the additional property tax revenue it will receive through its urban renewal district as a result of construction of the resort. Richard Caplan, economic consultant for the city, said the tax revenue could total $13 million during the first 10 years of the project.

Castleton expects to make $600 million from sales of the resort's condominium suites, townhomes, villas and estate lots. Under the terms of his offer to the city, Castleton's program would net the city $6 million. The transfer fee would also be imposed on every subsequent re-sale of the properties.

Castleton suggested that the money could go to the city or an entity of its choosing, such as the Ketchum Community Development Corp., with a significant portion being used for community housing for residents not working at the resort.

"We understand and agree that one of the underlying premises of the WSRR project is to be a stabilizing source of economic and social benefits in the city on a long-term basis," Castleton wrote in his letter. "Community Housing is one of the several ways that WSRR will be able to contribute to such stabilization. In short, WSRR wants to be a good 'partner' and therefore proposes ... a more global solution."

When the commission approved the 77-acre, five-star resort in June, it waived any community housing requirements on the basis that the resort would provide economy-boosting, high-end "hot beds," meaning those available for rent, and had a significant workforce housing plan in place.

In the latest design, the developer has included over 35,000 square feet of housing for 93 of the resort's employees, as opposed to the 44 required by city ordinance.

In addition, Castleton said that the resort would also provide employees not housed on site with rental housing subsidies, down payment assistance and mortgage buy-down programs.

The community housing issue is being revisited because of the developer's requested increase of up to 60,000 square feet for the block of the property that would contain the hotel, a number of townhomes, the workforce housing and the Warm Springs Ranch Restaurant. That change resulted in the City Council's decision to remand the planned-unit development application back to the P&Z.

Ketchum Community and Economic Development Director Lisa Horowitz said that while some issues may arise—the city would have to wait until sales are recorded before it gets its cash—the overall idea could benefit the city.

"I think this is a very progressive step on (DDRM's) part," Horowitz said. "This is the first developer to offer a transfer tax, which would create a revenue stream for community housing. It's a viable proposal that goes beyond what we have seen from other developers."

Horowitz said the potential revenue would provide the city with many different opportunities.

"I don't think it's dodging their responsibility," Horowitz said. "This kind of public-private partnership to address community housing is absolutely the way to go."

Horowitz said the funds would allow for a range of uses, including the purchase of existing market-rate homes to convert to affordable community housing and down-payment assistance.

"There has to be an array of tools," Horowitz said of the effort to provide community housing. "This could really help us move forward."

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