Idaho Mountain Express: Old Cutters developer sues Hailey

Friday, December 23, 2011

Old Cutters developer sues Hailey

Suit filed in bankruptcy court

By TONY EVANS
Express Staff Writer

Citing "extortionate" annexation fees and an unlawful affordable-housing requirement, Old Cutters subdivision developer John Campbell has filed a lawsuit against the city of Hailey. The suit seeks a declaration that Old Cutters does not owe any more in annexation fees and cannot be required to provide deed-restricted affordable housing.

Mountain West Bank, a lender to the subdivision, also filed a suit against the city claiming that the annexation and development agreement signed between Campbell and the city in 2006 is invalid.

Both lawsuits were filed in U.S. Bankruptcy Court in Boise, the Old Cutters suit on Nov. 28 and the Mountain West Bank suit on Dec. 1. Campbell filed suit on behalf of Old Cutters for Chapter 11 bankruptcy protection in August.
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Prior to the bankruptcy filing, the city established a lien on "market rate" lots in the subdivision as security for the payment of about $2.5 million in annexation fees that Hailey officials say Campbell still owes the city. The Old Cutters suit seeks to have the lien declared void.

Campbell's lawsuit states that Old Cutters has already paid more than five times the actual cost of impacts that the development would have on the city. The suit notes that the city repealed its community housing ordinance in 2010 in response to court decisions invalidating similar ordinances in Sun Valley and McCall.

Campbell agreed to pay the city $3,787,500 in annexation fees in 2006. To date he has paid the city $1,317,00, the lawsuit states.

Hailey City Attorney Ned Williamson could not be reached for comment.

Old Cutters—on the northeast flank of the city—is partially developed.

Tony Evans: tevans@mtexpress.com

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