Hailey-based attorney Keith Roark was hired this week by the Hailey City Council to appeal a federal bankruptcy decision last month that prohibits the city from collecting $2.5 million in unpaid annexation fees from Old Cutters Inc.
The decision, handed down by federal Judge Jim Pappas in Boise on Dec. 3, also prevents the city from requiring Old Cutters to build 20 affordable-housing units in the partly developed 108-unit subdivision in eastern Hailey, on the grounds that no state law upholds the city’s community-housing requirement.
Old Cutters has paid $1.3 million in annexation fees to the city already, none of which the developer sought to be refunded. Pappas stated that based on several Idaho court decisions, Hailey’s annexation fee of $3.8 million, included in a 2006 annexation agreement, was “unquestionably in excess of” that required to compensate the city for actual costs resulting from the annexation.
In February 2008, 4th District Judge Thomas Neville ruled that the city of McCall’s requirement that 20 percent of all new development be set aside for deed-restricted housing is unconstitutional and amounts to an illegal tax. The city of Hailey repealed its similar affordable housing ordinance the following year.
Hailey City Attorney Ned Williamson said he would appeal the decision, saying it would violate the “sanctity of a contract” between Old Cutters and Hailey.
In a Jan. 18 guest opinion in the Idaho Mountain Express, Old Cutters developer John Campbell questioned the city’s decision to appeal. He said in an interview that he had seven to 10 homes ready for construction this summer if the appeal does not move forward.
“The city wants to appeal the judge’s decision because it believes ‘a deal is a deal’, apparently even if the deal contains illegal provisions,” Campbell wrote in an email.
Roark could not be reached for comment.
In other Hailey news:
l The City Council approved a skijoring event at Old Cutters subdivision, to be held on Feb. 9-10.
“I’d like to have it downtown next year,” Mayor Fritz Haemmerle said.
l The council authorized city staff to establish a premium quote with Blue Cross of Idaho for city employee coverage by March 1, in case the city decides to drop out of the Idaho Independent Intergovernmental Authority insurance pool, formed last year.