The Blaine County commissioners offered their first exemptions for affordable housing under a new ordinance on Thursday, trading tax relief for income limitations on units in a pair of related developments near downtown Ketchum.
The board agreed in principle to waive five years of property tax for the KETCH and KETCH 2 projects on the corner of First Avenue and Sixth Street, provided that Portland-based developer WDC Properties restrict three additional two-bedroom units in each building to “Category 3” applicants making between 60 and 80 percent of area median income. That translates to just below $50,000 for a two-person household, paying no more than $1,312 per month in rent, based on 2018 Housing and Urban Development metrics compiled by the Blaine County Housing Authority. WDC’s application to the board stated that two-bedroom units would initially rent for $1,275.
In exchange, WDC will save about $8,000 per year in property tax on KETCH, and nearly $10,000 annually on KETCH 2, over the five-year deal.
WDC has already agreed to deed-restrict five total units to the same income range between the two buildings in a deal with the city of Ketchum to relax density limitations.
If signed by the May 15 deadline, the deal will be Blaine’s first under a relatively new law granting counties broad authority to grant tax exemptions for commercial developments utilizing more than $500,000 in investment—including those maintaining five or more rentals. The two KETCH properties will house a total of 35 units, alongside a commercial space likely used for a rental office, according to project spokesman Ross Kelley.
The commissioners are required to renew the exemption each year, allowing the board to monitor compliance.
“It seems pretty clear to me that there will be a direct economic benefit to Blaine County,” Commissioner Dick Fosbury said. “If these projects don’t get built, it will be a period of years before rental units get built in Ketchum.”
For a nearby project, the exemption wasn’t incentive enough. Through Ketchum real estate broker Tim Eagan, developer Jack Bariteau withdrew his application for an exemption on his city-mandated employee housing tied to his stalled hotel project on Main Street.
Eagan could not provide the commissioners with target rents for the 15 workforce or four market-rate units in the building, and balked at the board’s suggestion of placing income limits on either.
Isolating the housing portion of the 35,000-square-foot multi-use building, Fosbury floated a tax exemption worth some $58,000 per year in exchange for four Category 3 units.
“You’re trying to incentivize development, and, frankly, I don’t see this as an incentive,” Eagan said. “Fifty-eight thousand dollars? That’s a line item. If you want to incentivize development, make it worthwhile.”
The developer doesn’t expect to break ground until August, and Bariteau may apply again, Commissioner Angenie McCleary told the Idaho Mountain Express.
“My incentive is to get that hole filled up in Ketchum,” Fosbury said. “And when it is, that hotel is going to change downtown, change business and create a lot of demand—for jobs, and for housing. We’ve got to crack that puzzle somehow.”