Wednesday, November 24, 2010

Hailey senior-housing project on hold

Sweetwater lawsuit jeopardizes 24-unit rental complex


By TONY EVANS
Express Staff Writer

A senior-housing project planned for River Street in Hailey is in jeopardy due to a lawsuit filed against the city by Tennessee-based developer J. Kevin Adams.

ARCH Community Housing Trust, in partnership with the city of Hailey, has plans to build a three-story, 24-unit senior-housing apartment building at 731 N. River St. The rental units would be built on property given to the city by Adams as part of a development agreement struck several years ago during the real estate boom.

Adams deeded the property, then valued at $1.9 million, to the city in lieu of constructing on-site affordable housing units at the Sweetwater housing development in Woodside.

The City Council agreed to lease the property to ARCH for $1 per year to make the senior-housing project possible.

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.

ARCH Executive Director Michelle Griffith said on Monday that she will have to give back the money she has acquired for the project on Dec. 2 if the issue is not resolved.

"There is a great demand for this project," she said. "We have a waiting list already."

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 bought the property for the development in 2005.

In September, Adams filed a lawsuit seeking to reclaim the River Street property from the city, claiming the city's affordable-housing ordinance was unconstitutional. The city has since rescinded the ordinance.

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.

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.

City Attorney Ned Williamson told the City Council on Monday that he has been in settlement talks with Adams to establish clear title to the River Street property, but that the talks have broken down.

"We are at an impasse," Williamson said.

The council reviewed plans for the housing project, but refused to deliberate on a planned-unit-development proposal until the litigation is resolved. Williamson is scheduled to report to the council with any developments at its Nov. 29 meeting.

"Unless we own this property on Nov. 29 and the issue is settled, we are not moving forward," Councilman Fritz Haemmerle said.

Adams, who lives in Memphis, Tenn., could not be reached for comment by press time.

 In other Hailey news:

( Police Chief Jeff Gunter was recognized for being awarded the highest certification level of "Executive" from the Idaho Peace Officer Standards and Training Academy.

Tony Evans: tevans@mtexpress.com




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