Friday, February 19, 2010

Hotel Ketchum start deadline extended

Many hotel developers have asked for extensions due to financing troubles


By TREVON MILLIARD
Express Staff Writer

A northside view of the proposed Hotel Ketchum. Courtesy graphic.

In November 2008, Jack Bariteau, owner and developer of the proposed Hotel Ketchum, was given two years to apply for a building permit and start construction of his 73-room hotel and six residential condos. Now that the deadline is creeping up, Bariteau says the November due date isn't feasible.

"Obviously, everyone knows the situation we're all facing," Bariteau said during a Thursday Ketchum City Council meeting, referring to hotel developers' struggling to obtain financing. "I really can't forecast this. That's why I'm asking for the maximum time I think will be needed."

If the deadline weren't met, Bariteau's conditional use permit for a planned-unit development would be void. He would have to go through the entire process of city meetings again to get the PUD approval he now has.

To avoid that, Bariteau asked for the window to be expanded by three years, making the deadline to apply for a building permit November 2013. Once a permit is granted, a developer has 18 months to start construction, meaning Bariteau would have until May 2015 to break ground.

Council members unanimously agreed to a compromise of a two-year extension.

"Take that time and get the thing done," Councilman Curtis Kemp said.

Despite that directive, the council agreed that if the November 2012 deadline comes around without construction being underway, Bariteau could ask for an additional one year, with justification.

Bariteau has said construction of the four-story hotel, at the southeast corner of Main and River streets, would take 22 to 24 months.

The extension means he will have had a total of four years since approval to start building.

The decision marks the third time in recent months that hotel developers have been given four years to start construction. The usual window under city ordinance is one year, but developers are claiming that unusual times call for creative solutions.

The first to be given four years was the Warm Springs Ranch Resort. Its building permit deadline is August 2013, with a deadline for construction completion of August 2019.

"It may kill me, but I'm going to get this thing done," said Warm Springs developer Stan Castleton, CEO of DDRM Greatplace, at a city meeting in November.

City leaders have used the Warm Springs decision as a guide for other hotels.

Bald Mountain Lodge developers—who are proposing Ketchum's first five-story hotel—wanted a five-year window to start construction because of trouble with financing, but the Planning and Zoning Commission suggested four years, the same as for Warm Springs.

Sun Valley Co.'s base village at River Run may be approved by the city some time in the first half of this year, assuming negotiations move along. The resort owner claims it would start construction of the 138-acre base village in 2012—a shorter time span from approval than the other two hotel projects—but building wouldn't be done until 2023. However, the base village consists of far more than just a hotel. Plans call for 520 dwelling units—everything from cabins to condos— along with the 110-foot-tall hotel, and 35,000 square feet of retail and restaurant space.

Sun Valley Co. had said the hotel would have all 180 rooms open for business by 2014.

While council members are willing to grant extensions to start construction, they're apprehensive about pushing back employee-housing requirements. For example, Bariteau's Hotel Ketchum is required to provide a detailed employee-housing plan that would provide housing for 18 employees on a site acceptable to the council and within city limits. The city also requires that the plan be submitted and approved before the building permit can be issued, meaning hotel construction can't be started until Bariteau conveys realistic plans for providing employee housing. And this housing needs to be available to employees before the hotel can be used.

Bariteau has asked the council to consider making the housing requirement a "back-end cost" so he doesn't have to spend so much at the beginning of the project.

"I, for one, am getting uncomfortable," said Councilman Larry Helzel, later adding. "If these projects go through, we'll have a need for housing but no housing until later. We need to really be careful, or we'll be so far behind the curve that we'll never catch up."

If all four of these hotels and resorts are constructed, the impact will be about 1,000 new employees, according to a city report.

Councilman Kemp said he encourages "creative thinking in all these things" because of the rough state of the economy hindering hotel projects.

"It [the housing requirement] won't be solved tonight," Kemp said.

Regardless, Councilman Baird Gourlay said the employee-housing requirement would need to be met one way or another.

"We don't seem to need it currently," Gourlay said. "But as the economic climate changes, we'll need it."

Bariteau said he's not trying to "escape" providing housing, but just wants to spread out his costs.

Trevon Milliard: tmilliard@mtexpress.com




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