Friday, April 29, 2011

Timely balk


The Hailey City Council came to its senses this week when it decided to reject a deal that would have removed $4.5 million in contractual cash and housing obligations to the city from the developer of Old Cutters subdivision.

The council's action reflected the new realities of the year 2011 in which the value of property is uncertain and cash is king—just the reverse of the situation that existed in 2006 when the city accepted the subdivision for annexation.

Then, the developer agreed to pay $3.87 million in fees to the city and to build 20 community and workforce housing units.

The developer later deeded early water rights to the city to reduce the cash owed, leaving a $2.5 million balance.

This month the mayor and two council members voted to accept eight subdivision lots whose value in today's roiled market is anyone's guess.

The deal blew up when the developer refused to sign a "no-flip" clause that would have restricted the sale of developer-owned properties for four years unless the restriction also applied to the city-owned lots. This, along with residents who voiced skepticism about the deal, drove the council to balk—unanimously.

It was a timely balk.

The original negotiations over Old Cutters were complex, but ended as a win for developers and a win for the city, which needs the fees to cover the annexed subdivision's long-term infrastructure impacts.

In rejecting what may have amounted to a fee waiver in the present economy, the council is doing what its members were elected to do: protect and serve the current and future interests of Hailey residents.




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