Wednesday, November 14, 2012

Hotel developers get 1-year extension

Still-slow economy keeps Main Street project on ice

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By BRENNAN REGO
Express Staff Writer

Admitting that the economy has not yet bounced back to business as usual, the Ketchum City Council unanimously granted a second one-year extension to Highmark Investments on its building permit application deadline set by the Bald Mountain Lodge development agreement.

Highmark CEO Michael Kerby appealed to the council on Nov. 5, citing the difficulty of securing investors in the current economic climate.

“I wish I could be here under different circumstances,” he said. “We haven’t been sitting on our hands. We’ve been working hard to figure out how we’re going to get this done.”

Kerby said the “holdbacks” were out of Highmark’s control, but that the firm had made some changes to the project’s design to better tailor it to the current economy. He said Highmark is currently requesting approval from the Planning and Zoning Commission to replace 26 originally planned residential units with more hotel rooms, allowing the developer to increase the total number of hotel rooms from 87 to 119 while reducing the number of condominiums to 11. The project’s exterior would remain the same.

Councilman Baird Gourlay said he thinks increasing the number of hotel rooms is a good idea.

“One of our major original concerns [with the project] was it was going to be a condominium project with a hotel attached,” he said.

Mayor Randy Hall said in an interview that hotel rooms are more desirable than condominiums because they generate more tax revenue for the city and also provide more room for the city to host money-spending visitors. He said short-term hotel guests generally contribute more to the city’s economy than people who purchase condominiums as second homes, but don’t spend much time living—and therefore shopping—in Ketchum.

Councilwoman Nina Jonas said the council should be open to allowing the developer to set its sails with the economic winds. She even suggested freeing the developer to lower the star rating of the hotel from four or five stars to three, should he wish to do so.

“That would give the developer more options, given the current market,” she said.

Mayor Randy Hall said that was a good idea and the other council members agreed.

“I have no problem with that,” Kerby said. “It just gives us more options.”

The project was originally approved in 2010 as a five-story luxury hotel to be built on the west side of Main Street in Ketchum, between First and River streets. Highmark was granted its first extension in October 2011. The council has also approved several extensions to three other pending hotel development projects in the area that were approved before the economy tanked.

Councilman Jim Slanetz said that at some point the council needs to address its position on continually approving those extensions.

Hall said the hotel developers were sufficiently motivated to get their respective projects done just to see a return on their investments in purchasing the properties “and sitting on them for years.” He said the council did not need to motivate them further.

“I think you’re being practical and I recommend that you grant this extension,” said Doug Brown, director of the Wood River Economic Partnership.

Brennan Rego: brego@mtexpress.com

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