Friday, May 15, 2009

Hailey ponders possible Quigley payoffs

Fiscal impact study says city would get $5.8 million in 10 years


By TERRY SMITH
Express Staff Writer

City officials in Hailey are still pondering the potential value of a development in Quigley Canyon.

The Hailey City Council is approaching final deliberations to decide whether to annex 1,109 acres of Quigley Canyon into the city limits. The annexation and development—proposed for land that's now in Blaine County just east of the city—would bring 377 homes into Hailey, three times the density allowed by county zoning.

Although the development group, Quigley Green, has offered to build an 18-hole public golf course, a clubhouse and an extensive trails system in the canyon, city officials have yet to decide if the project makes sense for the city. In the last year, two major real estate developments in Hailey have been hit hard by the recession.

Earlier this week, city officials got their first report on a key piece to the puzzle, a fiscal impact study prepared by consultant Rich Caplan & Associates. The study says the city would net $5.5 million in fees from the development over the next 10 years.

Caplan presented his findings to the City Council Monday night. He said a combination of one-time and annual revenues, minus expenses for city services, would net the city $5.5 million over a decade, if the development gets built out completely.

About $3 million of that sum would come to the city as an annexation fee to offset the combined negative impact of $276,000 on the city's operating costs over the next 10 years, based on the city's current level of services, Caplan said.

The cost-benefit study—funded by the developer, with a citizen survey to assess city priorities, at a price of $24,000—was conducted to determine if the project would generate sufficient revenues to offset the costs it incurs to the city.

The study's 10-year projections do not include development impact fees and contributions recommended by the Planning and Zoning Commission, or the value and costs associated with water and wastewater services.

"Hailey has a limited revenue base, offset by development impact fees and local option taxes. Property taxes will be the single biggest ongoing revenue source associated with this project," said Caplan.

The study projects a 10-year build-out for the project, resulting in a final property value of $322,800,000 in 2019, generating $384,059 in ongoing revenue for the city. It assumes that demand for new housing in Hailey will continue to grow at 2.7 percent, or about 106 housing units, per year, over the next 10 years. The figure is based on residential growth rates in Hailey since 1990.

The proposed project is expected to capture 34 percent of projected growth in the city, or 38 housing units per year for the next 10 years. Caplan expects in-fill areas in the city to absorb another 68 units per year.

The study's projections are based on inclusion of the golf course, clubhouse, restaurant and other amenities in the development, which Caplan says will produce 54 full-time jobs.

"When you have a golf course, people will buy here who wouldn't otherwise buy in Hailey," Caplan said after the meeting Monday.

Hailey resident Peter Lobb said the success of the proposed development is based on a "growing economy" and that the lack of success at Old Cutters subdivision and the Sweetwater development in Woodside point to a change in economic circumstances.

"The developers of these projects dangled carrots also and look what happened to them," said Lobb.

Real estate agent and restaurateur Rob Cronin said the developer's plan would provide a financial boon for a city that has an abundance of vacant commercial space.

"We can't sit here waiting for Sweetwater and Old Cutters to absorb. That won't happen in my lifetime," he said. "We need someone who is willing to bring in money to this city, and he is sitting right here."

The golf course, if it is built, is expected to bring revenues to the Blaine County Recreation District, which would eventually manage it. Recreation District Executive Director Tim Hamilton said at Monday's meeting that unless he finds a source of increased revenue, he will, at some point, have to cut programs.

Development representative David Hennessy said the development would create 490 construction jobs in the city, in addition to the 54 full-time jobs at the golf course, restaurant and clubhouse, which Caplan included in his study.

In the end, council members directed Caplan to expand his study to include expected fiscal impacts on the Blaine County School District.

A final hearing for the city to take public comment about the plan is scheduled for Tuesday, May 19, at 5:30 p.m. in the multi-purpose room of Wood River High School, in Hailey.

The meeting will begin with a discussion of the biggest issue facing Hennessy in his request for annexation: a recommendation by the P&Z that the developer not build above Quigley Pond or in an area called Deadman's Gulch. These areas have been deemed too environmentally sensitive for development by the Idaho Department of Fish and Game.

Hennessy has said that he will not be able to proceed with the development of the golf course and other amenities if he is unable to build on "estate-sized" lots in these areas. The Caplan study estimates that prohibiting Hennessy to build in these areas would set him back $43,000,000 in his overall plans.

"The developer has said this would be the deal breaker," said Councilman Don Keirn, following Monday night's meeting.

After the May 19 hearing, the council will deliberate at following public meetings before making a final decision, likely some time in June.

Tony Evans: tevans@mtexpress.com

Next public meetings

· May 19: Last public comment opportunity. Council will hear public comments on any topic relating to the application; to be held in the Wood River Middle School Multi-Purpose Room at 5:30 p.m.

· May 21: Canceled.

· May 26 & 28: Workshop and council deliberation, no public comment; topics to be determined, including water and wastewater plans.




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