After four years of public input, careful consideration and professional analysis, the Hailey City Council on Wednesday unanimously denied a request by developer David Hennessy to annex about 900 acres of Quigley Canyon into the city limits.
Yet, the council indicated it would like the city to one day annex the canyon on the eastern side of town, perhaps with less housing density than proposed, rather than see "ranchettes" with large lots and fences built there under county zoning.
"In the county, we get all the impacts and not a dime [of revenue]," said Councilwoman Carol Brown.
Hennessy, with a Connecticut-based investment group, had proposed annexing the land into the city to support a development of 444 houses mixed with open space and recreational facilities. As incentives, he offered 1880 water rights linked to the property and public access to hiking and Nordic skiing trails.
In denying the plan, council members cited uncertainties regarding the financial feasibility of the proposed development, the current economic woes of the city and the undesirable impacts of increased traffic as reasons for the denial.
The council praised Hennessy's professionalism and the high level of public input in helping it come to a decision.
"There are no rights and wrongs, only a balance of interests," said Mayor Fritz Haemmerle following the vote.
Haemmerle said undertaking an annexation that would eventually bring 440 new houses into the city was too risky a proposition at a time when the city can scarcely cover its current infrastructure expenses.
"Before we proceed with another annexation, we need to get our house in order," he said. "We have $20 million in projected capital costs and will be lucky after Woodside [Boulevard redevelopment] to have $500,000 in the general fund."
Councilwoman Carol Brown cited the city's ongoing legal battle with Old Cutters developer John Campbell as another reason for pause. Campbell is suing the city in order to avoid paying about $2.5 million in agreed-upon annexation fees.
"Old Cutters has had a chilling effect," Brown said.
The city's comprehensive plan states that annexations must pay for themselves, have no negative fiscal impacts and be deemed in the best interest of Hailey citizens.
A 25-year projected cost/benefit study of the proposed development, prepared by consultant Caplan Associates, concluded that the proposed development would pay for itself over time by bringing millions of dollars to city coffers. But it failed to inspire confidence in the council members.
Councilman Pat Cooley called the study "flawed" because it did not include provision for a needed fire station. Councilman Don Keirn said the study's predictions were too long-term to provide sound advice.
"Twenty-five years is purely conjectural," he said. "I doubt if in 1987 [25 years ago], anyone could have predicted the train wreck that we are in today."
Hennessy has the option of pursuing a development in Blaine County, where he would be allowed about a quarter of the housing density he might have received under city zoning. He could also return to Hailey with another annexation request after a year, but said in an interview that he will not.
"Four years is enough," he said.
Hennessy said he would have negotiated with the council on housing densities, annexation fees, water rights or other issues, had he been given the opportunity.
"We would have sat down in good faith and negotiated. We were waiting for them to respond [to the proposed 440 home plan]," he said.
Hennessy said he will now proceed with a proposed eight-lot development above Quigley Pond, an environmentally sensitive area that he would have left undeveloped under the proposed annexation.
He said Nordic skiing trails groomed by the Blaine County Recreation District will "probably not" be allowed to continue in the canyon.
"It's private property and we have other plans for it," he said.
Tony Evans: email@example.com