Friday, August 13, 2010

Sweetwater developer sues Hailey

City plans to repeal affordable-housing requirements

Express Staff Writer

Numerous units at Sweetwater Community in Hailey are ready for sale. Developer J. Kevin Adams filed a lawsuit against the city of Hailey last week, challenging the city’s “inclusionary housing ordinance.” Photo by David N. Seelig

Hailey officials are making plans to repeal the city's "inclusionary housing ordinance" this fall, but not in time to dodge a lawsuit filed by Sweetwater Community developer J. Kevin Adams.

Sweetwater Community is a partly built, 421-unit, $200 million housing development on 20 acres of land straddling Countryside Boulevard in Woodside subdivision. Only 49 townhouse units have been completed since Adams purchased the property for the development in 2005.

Adams sought numerous waivers from the city to get his project approved and off the ground in 2006, but suspended operations at Sweetwater in October 2008 when the housing crisis hurt sales. Since then he has been at odds with the Hailey City Council over his agreement to provide community housing and in-lieu payments to satisfy the city's inclusionary housing requirements.

"You're going to wind up with a New York lawyer one day here who is going to make it very difficult for you," Adams warned the council as he stormed out of City Council chambers in 2008.

It seems as though he is making good on his promise, but there is no indication of where Adams' lawyer is from.

"The city of Hailey has been consistently unwilling to engage in any meaningful discussions to address Sweetwater's concerns related to the community-housing ordinance," Adams said in a press release announcing the lawsuit on Tuesday.

Adams went on to say the ordinance, which requires 20 percent of new housing units to be deed-restricted for low-income housing, is unconstitutional under Idaho law.

"Constitutional challenges in Idaho to community-housing ordinances similar to Hailey's have been successful," Adams wrote. "In each such case, the community has repealed the ordinance. But even though these ordinances have been proven to be unenforceable, Hailey has refused to repeal its ordinance and disregarded Sweetwater's efforts to amicably resolve the issues."


Adams is referring in part to a 2008 court decision handed down by an Idaho 4th District judge that ruled that a similar affordable-housing ordinance in McCall—requiring that 20 percent of all new development must be set aside for deed-restricted housing—was unconstitutional and amounted to an illegal tax. Blaine County repealed its inclusionary housing ordinance following the McCall decision.

Adams said he thinks Sweetwater's market-rate units qualify as affordable housing.

"In today's market," Adams said, "the units are priced significantly lower than originally contemplated. I see no reason why Sweetwater should be singled out for compliance with an illegal ordinance to the tune of over $4 million plus 42 deed-restricted units."

Hailey City Attorney Ned Williamson said he had informed Adams about the city's plans to repeal the ordinance.

"The challenge to the inclusionary-housing ordinance was not necessary, " said Williamson. He added that the proposed repeal of the ordinance would not reduce the requirements placed on Adams several years ago when he entered into a planned-unit development agreement with the city.

"Hailey intends on vigorously defending the lawsuit," Williamson said.

As part of his original agreement with the city, Adams conveyed title to a $1.7 million property on River Street in Hailey. The Hailey City Council has partnered with ARCH Community Housing Trust to build an affordable residential apartment complex on the parcel consisting of 20 to 30 apartments for senior citizens. That project has been initiated.

"In the near future, Hailey will evaluate how this lawsuit impacts this project," said Williamson.

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