Given the current challenges of financing large-scale real estate projects, the developer of the Warm Springs Ranch Resort could build the hotel in sections to mitigate the financial risk.
Stan Castleton, CEO of Park City-based DDRM Greatplace, told the Ketchum City Council last Thursday that his company is considering breaking the project into several portions rather than constructing a single large building. Using a hand-drawn diagram, Castleton explained that the sections would be built independently as financing became available and connected to each other via walkways and bridges.
When fully built, the sections would contain a minimum of 120 "hot beds," meaning those placed in the rental pool.
Castleton said the new plan would still fit within the "tent diagram" approved by the council in February as part of the project's planned-unit development application. That restricts the height and mass of the core hotel building, but allows for flexibility of design within those restrictions.
During the PUD process, the developer's preliminary designs showed a 538,151-square-foot luxury hotel with nine floors, one of which will be completely underground, and a maximum height of 93 feet.
While the new approach would change that design significantly, Castleton did not say how it would affect the heights of any of the sections.
The approved plans for the project include the hotel, townhouses, a restaurant, a spa and other recreational facilities.
The first draft of a development agreement, which details conditions for the project and obligations to the city, was presented in a workshop at the beginning of the month. The agreement committed the developer to obtaining a building permit for the initial phase of construction within 30 months.
However, Castleton said Thursday that difficulties in securing funding under the current economic climate are making that timeframe unrealistic. He said 42 to 44 months would be more likely.
"We don't want to bet the project on 30 months," Castleton said.
In response, Councilman Charles Conn said all parties "need to be respectful of the economic situation."
"No one has any visibility of when this will end," he said. "Still, we want something to be done, but we need more detail."
To that end, Castleton said he would provide the council with a better idea of the phasing schedule at a meeting on March 30.
That will likely include outlining when the city can expect to receive the promised benefits, which include restoration of Warm Springs Creek and a $500,000 contribution to the Ketchum Parks and Recreation Department.
"It would be irresponsible for the council to approve (the development agreement) without dates certain for the community benefits," Councilman Larry Helzel said.
The developer and the city did resolve an issue surrounding a real estate transfer fee that, in lieu of creating affordable community housing, would charge 0.5 percent on all for-sale units or lots in the project. The proceeds would go to a city-managed housing fund, netting the city an estimated $3 million when all the units are first sold. The transfer fee would also be imposed on every subsequent re-sale of the properties.
As originally proposed by Castleton, the city would match those funds with revenue taken in from the Urban Renewal District, which will receive part of the property taxes that would otherwise go to Blaine County. However, City Attorney Susan Buxton said the city is not legally allowed to commit the funds, as that would restrict actions of future council members.
The developer agreed that even if URA funds are unavailable for a contribution at some point in the future, the transfer fee would still go to the city's housing fund.
Another issue that remains outstanding for the next meeting is the possibility of creating a roundabout at the intersection of Warm Springs Road and Flower Drive, a difficult proposition as the city would need to buy some private land from adjacent property owners.
Jon Duval: jduval@mtexpress.com
The design of the hotel building of the planned Warm Springs Ranch Resort is evolving. This design, from late last year, has been modified.
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