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City Council OKs partnership with ARCH to develop 19 workforce units at historic site in Hailey

By August 15, 2023August 21st, 2023News

Sun Valley to ink contract for Ellsworth housing project

City Council OKs partnership with ARCH to develop 19 workforce units at historic site in Hailey

By GREG FOLEY Express Staff Writer

Read the full article here.

Sun Valley city leaders took a big step last week in advancing plans to develop a high-profile property it owns in Hailey with workforce-housing units.

After a tense discussion, City Council members voted 2-1 Thursday, Aug. 3, to award a contract to the nonprofit ARCH Community Housing Trust to develop 19 units of affordable workforce housing on the approximately two-acre Ellsworth Estate property on southern Third Avenue in Hailey.

Council members Jane Conard and Brad DuFur voted in favor of the plan, while Councilman Keith Saks vehemently opposed it, stating that he believed it represented a clear conflict of interest because Councilwoman Michelle Griffith is the executive director of ARCH. Griffith recused herself from the discussion and vote.

Saks called the proceedings a “failure of due process” and repeated a claim that Griffith had previously told him that ARCH would not be involved in the city’s project at Ellsworth.

“I think this is a blatant conflict of interest, and I’ll repeat, no two ways about it, that Councilwoman Griffith said ARCH would not be involved. I remember that so clearly,” Saks said. “It was off the record, so I can’t come up with it and show you transcript.”

Saks—who opposed the city’s decision last winter to buy the property, made in an emergency City Council meeting with short notice—also expressed displeasure with the city’s intention to move forward on the project without a firm financial commitment from the city of Hailey, which has been included in discussions as a potential partner in the project.

Mayor Peter Hendricks pushed back, stating that his recollection was that Griffith stated that ARCH would not bid on purchasing the property, but did not preclude ARCH from potentially being involved in the redevelopment of the site.

“I recall nothing [being said] about development of the property, after we buy it,” Hendricks said.

The city has been aiming to develop a plan for the property after it moved to purchase it in February for $2.3 million. The property—which includes a nine-bedroom main house and smaller, outlying cottages amid old, large trees—has been operated in recent years as a bed-and-breakfast-style inn.

The vote last week came after the city in May issued a formal “request for proposal”—or RFP—to develop the site in partnership with the city. The city’s RFP states that it intends to partner with a developer that will—using its own financing—design and construct the housing units, and then manage the operation under a long-term lease from the city, renting the units to selected Wood River Valley workers.

The RFP states that the project goal is to “provide permanent affordable workforce housing units for households with a target income of 80% to 130% of area median income.” The rental rates would be set to be no more than 30% of the renter’s individual gross income, the RFP states.

ARCH, through Griffith, was the only development entity to submit a proposal to the city by its July 7 deadline.

The ARCH plan calls for developing 19 units on the site, the maximum allowed under its current Hailey city zoning. The nine-bedroom inn would be renovated and reconfigured into six one-bedroom apartments. The remaining units would surround the main building on its north, east and south sides. Ten would be new, stand-alone, three-bedroom units, while two would be new, stand-alone, four-bedroom homes. Lastly, an existing cottage on the property would be renovated into a two-bedroom unit.

The ARCH proposal calls for completing the project in phases, with work concluding at the end of 2025.

The city has used money from reserves to finance the project, City Administrator Jim Keating told the Mountain Express. It has incurred approximately $24,000 in expenses for maintenance and repairs since the purchase, he said.

The city will identify “future financing options” with ARCH through discussions of the contract, Keating said.

During a public comment period at the beginning of the Aug. 3 meeting, Sun Valley resident Beth Willis alleged that the city had been “reckless” with taxpayer dollars and asked city leaders to slow the process down and show “complete transparency.”

“What is the return on investment on this project?” she asked.

Before opening the discussion about the ARCH contract, Hendricks stated his strong support for moving ahead with developing workforce housing on the Ellsworth site. The housing would not be reserved for Sun Valley city employees alone, he said.

“We realize that we are part of a community,” he said. “We are part of the Wood River Valley. We are not set aside in any special way, shape or form. This is how we deal with community action, and I’m very proud that we are moving forward with this. I am enthusiastic about how this will play out, and I’m very, very excited about the developer that’s going to take over this project.”

Quickly, Saks delivered a lengthy statement of opposition, highlighting his stance that ARCH should not be awarded the development contract and his initial questioning of the Ellsworth purchase, after limited notice and public input.

“Although the notice may have barely been legal, I do not believe it was ethical, since the public had no reasonable opportunity to be heard,” Saks said.

In ensuing comments, DuFur—who recused himself from the February vote on the property purchase—said that given the fact that the city now owns the property, it had to decide whether to simply “do nothing” and let it sit, move forward with developing it, or sell it.

“As long we’re not spending any more city resources going forward, doing this negotiating, via contract, to see what they come up with, I’m OK going forward and seeing what we come up with, before we decide, say, to sell it,” he said.

Conard defended the decision to purchase the property, stating that the acute need for workforce housing in the region called for action. She also stated that the purchase was a “business opportunity” and that she has not seen any violation of due process.

“We need to make it possible for the valley as a whole to have reasonable and safe accommodation, affordable rents, so that we can all live here, and in a safe environment,” she said.

Conard made the motion to award the development contract to ARCH.

DuFur seconded the motion, noting that he wants to “see what unfolds before we take the next step.”

Hendricks said the city will move “speedily” to develop the city contract with ARCH. Keating later said the goal is to have the contract completed in time for the City Council to consider it at the next scheduled monthly meeting on Sept. 7.