The Ketchum City Council on Monday postponed to Oct. 21 consideration of an amendment to an agreement that extends the city’s approval of the Hotel Ketchum project. Meanwhile, project developer Jack Bariteau said he is still confident he will receive the necessary funding to build the area’s first four-star hotel.
“We will stabilize the economy here with this hotel,” Bariteau said in an interview Thursday. “It is going to bring people into the area who are looking for this quality of room.
“It just helps us balance our economic base, which is predominantly based on second-home ownership. We’re one of few major North American resorts that do not have this kind of facility, so that’s where the opportunity presents itself.”
Bariteau bought the planned site at the southeast corner of River Street and Main Street in November 2004. He began the approval process for the hotel in 2006, and spent about $500,000 on the process until gaining approval in 2008. Due to the economic recession, Bariteau has struggled to get funding for the project, recently receiving his third extension until Oct. 6, 2015, to begin construction.
Bariteau said the extension now allows him more than enough time to get the capital and financing to build the hotel.
“If I could, I’d start construction on this hotel next fall but it might be in the spring of 2015,” he said. “This is going to take two years to build because of the project’s complexity.
“Getting it open in 2017 is not what I would want to happen, but that’s probably what’s realistic. My goal would be to have it open in late 2016.”
According to Bariteau, the planned 73-room hotel will cost $52 million to build. He said the next process he is focused on is completing the design drawings. With of the economic collapse of 2008, Bariteau admits the project has been much more difficult than he anticipated.
“I didn’t foresee this difficulty in finding capital,” he said. “But when you get something approved in November 2008, you know the economy is probably headed for a recession. I’ve been working in the real estate market since 1976, and this is the fourth recession I’ve been through. Nobody could have predicted the depth of this, or the destruction that it’s caused.”
Bariteau told the Mountain Express he is currently vetting through multiple offers to gain funding for the project. He said some proposals involve straight financing, while others are financing with ownership participation, which would mean Bariteau gives up a portion of the project’s ownership to receive funds.
During the City Council meeting in which Bariteau received an extension for Hotel Ketchum, a financial professional named Scott Fuller explained how the hotel could benefit from federal EB-5 funding. In a letter recommending that Ketchum approve the extension, Community Development and Economic Director Lisa Horowitz wrote, “The EB-5 program was created by the federal government 25 years ago as a way of creating jobs in the United States. The basic tenet of the program is that foreign nationals may obtain green cards in exchange for investing money in projects in the United States.”
Both Horowitz and Bariteau said that due to the complexity of the program, it will take at least one full year to develop the application, gain approval from the Citizens Immigration Service and secure funding.
Legal documents indicate that Bariteau’s development group has defaulted on a loan for the property, also known as Trail Creek Village. A notice of auction filed by First American Title Co. states that Bariteau owes an unpaid principal balance of $1,989,862, plus interest in the amount of $503,480, as well as other fees, for a total of $2,497,793. In the interview Thursday, Bariteau said he plans to work with his creditors and is confident the matter will be resolved by the end of the year.
Despite all of the obstacles Bariteau has faced since purchasing the property almost 10 years ago, he insists he is fully determined to build the hotel.
“I am completely committed to this valley,” he said. “I know the hotel will have such a positive force and impact here. I’m just determined to make it happen, and I won’t give up.”
Eric Avissar: firstname.lastname@example.org