Upon entering downtown Ketchum from the south, it is hard to miss: a massive hole on the east side of Main Street surrounded by shaded construction fencing. It has had locals talking and visitors gawking. At times, city leaders have referenced the frustration of residents as months pass and activity at the site—either to recondition the land or resume construction—fails to materialize.
“The hole”—as many Ketchum residents simply call it—is the remainder of the first stage of construction of a luxury hotel and residential project named the Harriman Hotel. Excavation of the site for the 65-room, 14-residence hotel structure at 300 River Street East—at the southeast corner of Main and River streets—started in 2016. Some infrastructure was installed—and then the work stalled.
Now, more than one year after the city declared that developer Jack Bariteau was in breach of his development agreement for the project and Bariteau subsequently filed a tort claim against the city for $100 million in damages, those involved with the project aren’t saying much to shed light on where it stands.
Last week, a city spokesperson said the Harriman Hotel matter “is being handled by attorneys” and the city cannot provide substantial detail on the project’s status.
“Because there is threat of potential litigation toward the city, we cannot go into detail on the remedy actions we are contemplating at this time,” an email from Public Affairs & Administrative Services Manager Lisa Enourato stated.
City Councilwoman Amanda Breen said she likewise could not discuss details of the situation, mainly because city legal matters are discussed by council members in confidential executive sessions.
“I very much want to see a resolution of ‘the hole,’ like the rest of the community,” she said in an email. “The city continues to work with Bariteau on compliance with Ketchum code, as well as a more long-term solution.”
Meanwhile, a phone message for Bariteau’s attorney Ed Lawson, who filed the tort claim, was not returned.
The path to where the city stands with “the hole” is a long and winding one.
More than a decade ago, Bariteau initiated plans to build a luxury hotel on the site. In June 2008, Bariteau cleared the first hurdle of approval for a 73-room project called Hotel Ketchum—now the name of a different hotel farther north on Main Street. Plans went through different iterations after the Great Recession halted most development, and the Harriman Hotel project was eventually approved by the city.
Over the years, the developer has been granted extensions and various amendments to the development agreement. Under the last development agreement with the city, the project had to be completed by the end of this month.
After the project fully stalled in 2020, the story became more complicated, culminating in the city notifying Bariteau last January that the window to resolve the breach of his development agreement had passed and the agreement and associated permits for the project had been voided.
The city declared Bariteau in breach of the development agreement on Nov. 2, 2020, because Bariteau allegedly could not prove he had full financing to complete the project, as required by the agreement. With work on the project halted, Bariteau had 60 days to “cure” the matter by proving he had financing.
When the dispute wasn’t resolved, the city started pursuing collection of a $453,000 bond posted by Bariteau to pay for site restoration in the event the project is not completed. Now, the status of the remediation process remains in question.
When the development agreement was voided, city officials said that if Bariteau wanted to proceed with building the hotel, he would have to file a new development application with the city and go through a new approval process.
In an interview last February, Lawson told the Mountain Express that Bariteau planned to proceed with the project, claiming that the development agreement was not breached and therefore no “cure” was needed.
Last fall, Lawson argued to the city that the requirement to prove financing only applied to one specific date in 2019 and was not required on an “ongoing basis.” He said financing was in place last year but was disrupted by the COVID-19 pandemic.
Lawson said the city’s actions had also complicated acquiring financing and the development team was looking at options to move forward, including formal legal action against the city.
On behalf of Bariteau and Harriman Hotel LLC, Lawson issued the “notice of tort claim” to the city for some $100 million in damages last November. A tort claim is a civil action taken outside of court that alleges a “tort”—or civil wrongdoing—and typically demands damages for that wrongdoing. A notice of tort claim essentially gives a public agency notification that the claimant has a formal complaint and—if the matter is not resolved to the claimant’s satisfaction outside of court—could ultimately choose to file a lawsuit against the agency.
Essentially, the tort claim alleged that the city caused financial harm to Bariteau and the Harriman Hotel group in actions taken in October and November. The claim alleged that “the damages were brought about by the defamation of the claimant and its hotel project, the tortious interference with claimant’s contractual relations and economic interests and the negligence” of city officials. The claim also alleged the city wrongly determined the Harriman Hotel group was in default of the governing development agreement.
The document also made other claims against the city, naming the people involved as Mayor Neil Bradshaw, the four members of the Ketchum City Council, the city administrator, the chief city planner, and the city attorney.
In claiming damages, the filing stated: “Claimant has sustained special damages in excess of $1,000,000 and may sustain special and general damages in excess of $100,000,000. Accordingly, demand is hereby made for payment of said sum.”
Last week, Enourato confirmed that no formal lawsuit had been filed against the city in court by the developer and there is still no approved building permit for the project. ￼