An ultimatum landed in front of the Ketchum Urban Renewal Agency last Friday. It demanded that the URA halt its effort to lease much of the city's visitor center building to a Starbucks franchise. If written confirmation of an abandonment of the effort isn't received in a week, a group of Ketchum businesses say, they will file a lawsuit to obtain a court injunction.
The ultimatum was the key point of a letter sent by Alexander McLaughlin, a Boise attorney hired by the businesses, to the URA on Friday.
"This letter is intended to put the URA on notice that if it does not cease all efforts ... in leasing the Visitors Center to the Cairde Group [investors backing the Starbucks franchise] or any other private commercial entity, this firm will immediately institute litigation against the URA," the letter states.
The URA owns the visitor center building on Sun Valley Road. The agency is separate from the city government but is still a public entity funded by property taxes and led by Ketchum's elected officials plus two other people. On Feb. 6, the URA advertised 1,200 square feet of empty space on the building's ground floor for lease to a food-service establishment. It did so after hearing from Starbucks that it was interested in relocating to the visitor center. Even though the Sun Valley Chamber of Commerce and its visitor center would share the building with Starbucks, it has no say in the matter. The URA said it put out the request for proposals to be fair but received only one applicant—Starbucks—by the deadline, and would charge the group market-rate rent.
Many business owners aren't satisfied with this claim to fair practices and are fighting the URA tooth and nail. They're arguing, with the help of attorney McLaughlin, that the URA's actions "disregard" city and state law. McLaughlin asserts that these businesses stand on solid ground for winning a suit. The URA's attorney, Stephanie Bonney, claims the contrary.
"I'm comfortable that the URA complied with city ordinances and state statutes," she said in an interview, adding that she told URA board members the same.
McLaughlin repeated an argument made in URA meetings that leasing to Starbucks would violate the city's "off-site vendor ordinance."
The ordinance states that "[it] shall be unlawful for any person to engage in or conduct business in ... a public way," defining "public way" in part as the "interior and areas surrounding public buildings or other places owned in fee by the city of Ketchum."
Bonney argues that the ordinance doesn't apply since the building is URA owned, not city owned. However, McLaughlin claims, the URA used $640,000 of the city's affordable-housing money to buy the visitor center building. Bonney said that even if the building were city owned, the ordinance still isn't applicable.
"The mere fact that a public agency owns a building does not make it a public building," she said, adding that the building has to be used for a government function.
That's where McLaughlin calls on state URA law.
"The URA's very mission is to benefit and serve the public via urban renewal projects," he said, referring to an excerpt from state law to support his point: "The property of an urban renewal agency ... is declared to be public property used for essential public ... purposes."
"I don't know if they're going to back down or say, 'Give us your best shot,'" McLaughlin said. "We'll be prepared for both."
He'll know by the end of Friday.
Ketchum Mayor Randy Hall, a URA board member, said in an interview that he wants to move forward with leasing the space to a food and beverage provider. He argues that it would drive foot traffic into the visitor center. A lease with Starbucks has not been drafted or signed at this point.
"Believe it or not, there's a lot of support for what we're doing," Hall said, claiming the board didn't do anything illegal. "Clearly, we have an issue here. But it's a political issue, not a legal issue."
URA board not united
Despite the URA board's voting on March 16 to accept Starbucks' plans for the building and to draft a lease, one member is not on board. Nina Jonas, also a council member, was on vacation then.
"Legality is beside the point," she said. "We have a social contract to listen to the people."
She said she has talked with many business operators—including those outside of the food/beverage sector who wouldn't be competing with Starbucks—and they're of the opinion that the building was bought for the public and should benefit the public, not Starbucks. Jonas said she agrees and "swapping" those intentions to earn rent would be wrong.
She said leasing to Starbucks would "alienate" a large segment of the population.
"I don't know how we're going to get anything done after that," she said, adding that it didn't help when Hall started the March 16 public hearing by declaring, "The decision to lease the space has been made. We're already past that."
Jonas said that was "insulting" to those about to state their arguments against renting to Starbucks. Lisa Rippo, an owner of Java coffee shops, was one of the people who spoke at the meeting and has spearheaded the opposition since then. She put out a petition this week to obtain as many signatures as possible against leasing the space to a private company. Rippo said she'll hand over all the signed pages to the URA on Thursday.
"We're going to have 500 by the end of the day," she said Tuesday.
"There are a lot of upset people," said Doug Brown, executive director of the Wood River Economic Partnership, a group of about 100 businesses valleywide. "They don't feel like they're being respected or heard. The train just keeps running on no matter what they say."
He said his organization is not taking a position on the issue, and members fall on both sides of the fence.
Trevon Milliard: email@example.com