A senior housing project planned for River Street in Hailey is now in limbo, after Sweetwater Community developer J. Kevin Adams filed a lawsuit seeking to reclaim the property from the city.
ARCH Community Housing Trust, in partnership with the city of Hailey, had plans to build a three-story, 22-unit senior-housing apartment building at 731 N. River St.
The property was valued a few years ago at $1.9 million. It was deeded to the city by Adams in lieu of constructing on-site affordable housing units at the Sweetwater Community housing development.
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 ceased operations at Sweetwater in September 2008 in the wake of the recession and housing crisis. Since then, he has sought relief from several financial requirements placed on him by the city before eventually acquiring final plat approval and moving forward with sales of the completed units.
With sales lagging, Adams filed suit against the city over its affordable-housing ordinance in August, claiming that it is unconstitutional. Adams is now claiming he has lawful title to the River Street property that he deeded to the city.
The city began in September a repeal of its five-year-old affordable-housing ordinance, which calls for 20 percent of housing units built in subdivisions with five or more units to be sold as deed-restricted community housing. Developers had been given a 20 percent increase in density allowances to offset the requirement.
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Adams was required to fulfill an $8 million affordable-housing obligation to the city in the forms of on-site, deed-restricted units, vacant land on River Street and cash in-lieu fees.
"It's unfortunate that this claim is jeopardizing this important project," said City Attorney Ned Williamson, who advised the city to put off signing a 99-year lease with ARCH for use of the property until the lawsuit is resolved.
Williamson said the city would need a court order dismissing the lawsuit, or have Sweetwater relinquish all claims to the property before ARCH could move forward with the project.
"I totally disagree with the claim," Williamson said.
He said he will respond to the lawsuit with case law that he said shows the city has lawful title to the property.
"They voluntarily signed agreements with the city over the property, for which they received numerous waivers and variances with regard to the Sweetwater development," he said.
ARCH took advantage of the city's virtually free donation of the River Street property to get financing for the senior housing project. The nonprofit organization was able to secure $515,000 from the U.S. Department of Housing and Urban Development's HOME program, and $592,000 in federal tax credit funding to complete the project.
The senior-housing rental units would be available to Blaine County residents ages 55 and older.
Tony Evans: tevans@mtexpress.com
Units at Sweetwater, above, are on the market, but sales have reportedly been slow.
