Friday, August 21, 2009

Old Cutters is not burden to Hailey


John Campbell, of Hailey, is the principal developer of Old Cutters subdivision in Hailey.

By JOHN CAMPBELL

It has come to our attention that readers of the Mountain Express may mistakenly believe that Old Cutters is struggling financially and at a cost to the city of Hailey. This is not the case. The poor economy and poor real estate market have not been helpful. However, Old Cutters is current with all of its financial obligations. Additionally, Old Cutters has the financial strength to remain current moving forward, even if the economy and real estate market remain poor and recover slowly.

It seems the biggest reason for the confusion about Cutters' financial strength surrounds its second annexation payment that was due to the city. Cutters made the first payment of $275,000, as per its contract with the city, back in November of 2007. The second payment of $875,000 was due either after the 35th lot sold or in November of 2008. Cutters was ready to make the November payment. However, the owners of Cutters approached the city and asked for a restructuring of the payment schedule. Because only three lots had been developed with houses, it seemed reasonable to request an extension on a payment fee that was supposed to cover the development impact of 35 houses.

It is important to note that at no point has Cutters asked for a reduction in annexation fees, even though the final annexation fee amount charged by the city was approximately double the recommended amount by professional consultants. Cutters only asked for a restructuring. We think it reasonable that the city receive the money for the impact of people moving into the subdivision prior to the actual impact, but it's not necessary to receive payment years and years prior to the actual impact.

About this time, the Indian Creek Homeowners Association (ICHA) made the argument that the city of Hailey erred in allowing Cutters to sell their water rights. ICHA argued some of the water rights needed to remain in the city's possession. Although Cutters had originally offered the water rights to the city in lieu of annexation fees, the city chose not to accept that offer. Compounding the problem was the fact that Cutters had entered into a contract to sell the water to a third party. The City Council then told Cutters they wanted a certain portion of the water back. Since all of the water was under contract to be sold, Cutters had to make a request to the buyer to accept less water, so that some could go to the city. This negotiation was time-consuming and difficult. Despite diligent efforts by the city, Cutters and the third party, negotiations between all parties delayed Cutters' second payment to the city.

The Mountain Express reported Cutters was in "breach of contract", which was not an accurate description of the situation. Cutters was in fact working hard with the city to avoid a potentially difficult and expensive legal problem for the city.

We encourage the public and newspaper staff to visit the subdivision. Streets are tree-lined with sidewalks. There is a big park with a nice playing field and play structures for kids, as well as a nice picnic area. There are walking trails paralleling a canal and the hillside. Hailey residents are already utilizing the many amenities offered by Cutters. We believe Old Cutters is a valuable asset to the city of Hailey that will provide cash in the form of property taxes, annexation payments and water rights.




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