Friday, January 18, 2013

Should Hailey appeal Old Cutters decision?

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By JOHN CAMPBELL

Should the city of Hailey appeal the recent court decision on the Old Cutters development? Here are some facts:

The court found that Old Cutters is not legally obligated to pay any additional annexation fees (it has already paid $1.3 million of the demanded $3.8 million) or to provide community housing. The court found that both demands by the city are not authorized by Idaho law and, therefore, the city exceeded its powers by demanding them in exchange for a legislative decision. The city was only entitled to seek an annexation fee that covers the actual costs resulting from the annexation, which the city admitted during the litigation was less than $788,000. The city has already spent more than $120,000 in attorney fees related to this dispute. Moreover, Old Cutters is entitled to seek an award of the fees it paid ($60,000) because it is the prevailing party. Old Cutters has offered to waive this payment if the city does not appeal. If Old Cutters prevails on the appeal, the city will likely spend a total of $300,000 to $350,000 on this issue.

About two years ago, when Old Cutters found out that the city may have acted illegally, Old Cutters tried to work constructively with the city and settle. Initially, Old Cutters proposed a land-for-fees solution. After voting publicly to accept this arrangement, city leaders changed their minds and rejected it. During the litigation, city leadership rejected a cash settlement offer of $690,000. Since the judge ruled in favor of Old Cutters, the city now has neither land nor cash, but instead has legal bills.  

If city leaders take the current $60,000 offer and don’t appeal, what happens? First, the city doesn’t incur an additional $60,000 bill for its lost suit. Second, about 10 houses are slated for construction at Cutters this summer. At $300,000 each, that’s $3 million paid to local workers and local businesses. According to the former Sun Valley-Ketchum Chamber and Visitors Bureau, money spent in the valley gets re-spent an average of 10 times. Thus construction at Cutters this summer will result in roughly $30 million more circulating in our valley.  

Since the decision to appeal is so consequential, city leaders may want to consider having a public meeting. In the spirit of transparency, critical facts could be shared with the public, and the public could then voice its informed opinion. City leaders can then incorporate the public’s opinion into their decision to appeal or not. This would also best demonstrate responsible representative governance.  

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John Campbell is president of Old Cutters Inc. The city of Hailey in 2006 approved annexation of 143 acres at the Old Cutters site, northeast of downtown Hailey.

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