Friday, December 2, 2011

Ketchum approves changes to Warm Springs Ranch

Developer does not have to build onsite employee housing

A rendering of the Warm Springs Ranch Resort project shows a development downsized from what was originally approved by the city of Ketchum. Courtesy graphic


For the Express

The Ketchum City Council approved changes to the plans for Warm Springs Ranch Resort by unanimous vote at a meeting Tuesday, Nov. 29.

The developer, Helios Development, must pay $300,000 in recreation fees to the city in two years from the date of opening for the hotel. Helios had wanted to take six years to pay that amount. In addition, groundbreaking must take place in the next three years.

"This project is a game changer for the community," Ketchum Mayor Randy Hall said. "Ketchum has the ability to take the lead in new economic development."

The council heard from Helios and the public over concerns about employee housing and reduced recreation opportunities for the public.

City ordinance requires that any hotel provide housing for 25 percent of its employees.

"The ordinance says the hotel developer can cover the housing requirement by alternate means," Lisa Horowitz, Ketchum community and economic development director, told the council.

In this case, she said, that could be requiring an employee housing mitigation fund to be administered by the Blaine County Housing Authority. The idea behind the fund is to increase the affordability of housing in Ketchum for employees of the Warm Springs Ranch Hotel by subsidizing rents by qualified employees of current vacant apartments according to HUD income guidelines. The plan was designed by the developer instead of building onsite housing, which Helios declined to do in this latest revision of the Warm Springs project.

There would be 108 new employees at the five-star resort once it's in operation, said Mike Barnard, consultant for the project. Of those, 65 would qualify for the subsidy paid by Helios directly to landlords. Council members expressed concern that this housing proposal provided no additional affordable-housing units to current supply, which according to a Blaine County Housing Authority study for 2011 was 220 units short of what is needed by the community.

"To require building new units would be a deal-breaker for the project," Barnard told the council. "If you do that, the developer will move on."

The project was approved through the planned-unit development process, which gives developers flexibility with some design standards in exchange for additional benefits to the city. Besides a downsized hotel, the amended plans also come with a reduction in active recreation aspects and a different approach to supplying workforce housing.

After a multi-year process, the city approved the project in 2009. Plans called for a 538,151-square-foot, nine-story luxury hotel along with a nine-hole golf course, spa, event house, villas, estate lots and workforce housing for 93 employees. The city also approved 67 acres of the property to be annexed into Ketchum.


However, due to the economic downturn, Helios resubmitted plans for a smaller project.

The latest incarnation for the 77-acre site northwest of downtown is a 500,000-square-foot development, reduced from the original 750,000 square feet. The first phase is now planned as 357,000 square feet, composed of 120 hotel rooms, 31 residential units, a spa, a swimming pool, tennis courts, a Dave Pelz short-course golf practice facility, a fishing area and other amenities. Homes are scheduled to be built in phases 2 and 3.

City officials have since granted several time extensions to this and other hotel developers because of the economic downturn.

Starwood Hotels & Resorts would manage the resort under the St. Regis label.

"The St. Regis name with its worldwide recognition will put Ketchum on the map," Barnard said.

About a dozen residents turned out in support of the project.

"I like the unique solution to the housing situation," said Sustain Blaine spokesman Evan Lawler.

But Housing Authority Executive Administrator David Patrie expressed concern that potentially 130 jobs from one project would take up all the rental units in Ketchum.

"We need to build units, not take away from the current supply," he said.

Patrie also expressed concern that the subsidy would be a disincentive to landlords for improving their properties.

"Many of the rental units in Ketchum need to be upgraded," he said.

Board Ranch resident and former Ketchum Mayor Jerry Seiffert expressed support for the housing deal.

"We have not built a five-star hotel since 1936 when Averell Harriman built a hotel in the Idaho wilderness," he said. "It's been 75 years. We have to go with the five-star."

At the end of the evening, the council agreed.

"I'm placing the emphasis on the lack of a five-star hotel over employee housing," Councilman Curtis Kemp said.

Councilman Larry Helzel warned that Ketchum will be left holding the bag if the project is built and does badly. He argued for something up front.

"I hate to show my cards," Councilman Baird Gourlay responded, "but I think the developer will fold if we do that."

"We have an immediate need for jobs," Hall said. "These are desperate times. You can't have a resort without hotel rooms. The housing problem is real but a small part of it. I can live with that."

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