The future of Sweetwater Community, a development only partially built in Woodside, was thrown into further uncertainty Monday when the Hailey City Council refused to grant concessions to its financially struggling developer.
The denial was another in a series of setbacks for the stalled 421-unit housing project on 20 acres in southern Hailey. Originally approved by the city less than three years ago, Sweetwater was the largest housing development ever proposed in the town. Forty of the units are designated as deed-restricted affordable housing.
When Tennessee developer J. Kevin Adams shut down construction at Sweetwater last fall, only 49 of the project's units had been built. Since they have not been platted, none of the units constructed has been sold.
Through local attorney Jim Laski, the developer was requesting nine concessions from the city. They included amending the planned-unit development agreement to waive $2.23 million in in-lieu community-housing fees and to expand commercial uses of the property. The developer also requested an amendment to Hailey's floodplain ordinance to allow Sweetwater to remove part of its property from the Floodplain Overlay District by filling the area.
"Sweetwater is way under water," Laski said, referring to the development's financial state. "Normal, rational decisions may not always make sense in this economy. Do you want to work with a developer to get him out of a mess, or do you not?"
Though every member of the council praised the development and appeared to want it to succeed, none could justify voting for the proposed changes.
"We would be setting a precedent of a bailout package for a developer," Mayor Richard Davis said. "What could occur to our city? Past projects could come back and ask for refunds."
In an interview, Laski said the development's future is totally uncertain.
"It's almost anybody's guess what will happen," he said. "It will be up to the banks."
He said Sweetwater is negotiating with several lenders. He said that if the property is foreclosed upon, the planned-unit development agreement with the city will probably be void.
Laski said Sweetwater may file a lawsuit challenging the constitutionality of Hailey's community-housing ordinance. He called the requirement to pay the $2.23 million in-lieu fee a "huge burden" on the project.
