The Hailey City Council on Monday opposed a petition from Sunbeam developer Ed Dumke to reduce the neighborhood’s unit count from 147 to 132 and add more street frontage—both modifications intended to create larger, more separated single-family lots.
The 54-acre neighborhood originally received planned-unit development approval from the council in June 2020, along with preliminary plat approval for its first phase of construction.
The development currently calls for 147 residential units between two phases. That first phase—now well underway—will see 67 single-family homes and 18 “cottage” style condominium units built on the western side of the property closest to Quigley Canyon for a total of 85 residential units.
The second phase—which has yet to receive preliminary plat approval from the city—is slated to add 42 single-family homes and 20 “cottage” units for a total of 62 units, filling in the northwest corner of the property along Mother Lode Loop and Myrtle Street.
On Monday, project representatives asked the council for permission to remove one single-family lot and two out of three cottage lots from the phase-two site plan, which would reduce the number of condominium units from 20 to six and single-family lots from 42 to 41.
The applicant team further asked to modify the PUD agreement by removing a road connection via El Dorado Lane—proposing a pedestrian-only connection in its place—and adding three new alleyway sections and a new public road.
Project representative Ben Young, landscape architect with BYLA, argued that removing the cottage-style condominium units was necessary because the units would not accomplish the city’s goal of affordable housing.
Young, who referred to the cottage lots as “high-density lots,” said the proposed PUD modifications were a response to “changing times” and “prices gone stratospheric.”
“We loved this three years ago because it was the idea of affordable housing, which we all want. At the time we said, hey, that sounds good,” he said. “But [the cottage units] are completely incomparable with all the neighborhoods around—it’s basically like injecting a higher density zone into a more traditional zone.”
Young noted that the neighborhood was originally configured to hold only 108 lots, but the applicant team—at the request of the council earlier in 2020—increased the density to 147 lots by dividing, narrowing and relocating lots. (That figure is still under the theoretically allowed density of 177 lots in Hailey’s “Limited Residential” zone.)
Young said he fulfilled the council’s request “begrudgingly.”
“It was a lot of work to figure how to fit everything,” he said.
Project representative Samantha Stahlnecker of Opal Engineering agreed with Young’s assessment of the cottage units. More space between homes would facilitate the construction of accessory-dwelling units, which she said was a more “affordable” option.
“The current condition of the real estate market in the city of Hailey and the country really does not support an affordable product. The land is expensive,” she said. “What’s before you is a decision as to whether or not you agree that ADUs can provide more affordable housing opportunities here. Or, would you prefer to see 20 cottage units?
“In our opinion, the cottage units that are going to be built are not affordable,” Stahlnecker continued. “And, it’s not often that a developer says ‘I want less density, I don’t want to make as much money,’ because more units equal more money.”
Sunbeam property manager Sherry Thomas called the cottages a “nightmare.”
“I can tell you right now I don’t think they are going work for affordability at all. ADUs are coming through, though,” she said.
Community Devlopment Director Robyn Davis noted that the city has had 27 ADU applications come in since the start of 2021. About “10 to 12” are being used for family members and have not entered Hailey’s short-term or long-term rental pool, she said.
Council, public differ in opinion
Of the dozen residents that spoke in Monday’s public-comment session, most were neighbors and Sunbeam landowners who preferred the developer’s plan for fewer lots. Only three residents advocated for the original plan.
Hailey resident Martha Bibb said the cottage units would promote a “diversity of income groups.”
“There are middle-income people like retirees, widows, teachers, single parents with one child that could afford a [cottage] unit. Having all wealthy people with their $1 or $2 million homes as their second or fifth home doesn’t benefit our town,” she said.
Hailey resident Nick Maricich said he supported “relying on the ADU component” instead of cottage units, especially to house relatives. Resident Robert Lonning, however, said there was “no guarantee” homeowners would voluntarily build ADUs.
“It seems to me we’re just continuing to avoid the problem of the housing crisis. Maybe those cottage homes projected aren’t going to be as cheap as they could be, but it seems to me that it’s part of the solution,” he said.
Ed Lawson, attorney for Dumke’s Marathon Partners, told the council that Dumke wanted to see the project “changed to reflect economic conditions in the marketplace.”
“He feels strongly about it to the point where he may not do Phase Two if he can’t get this approved,” Lawson said. “I submit that the only responsible decision is to say ‘Yes, I support your effort, and I will approve your [modification] application.
“We’ve got a superstar developer—a superstar player—wanting to renegotiate his contract. As the owner of a sports team, you would want to renegotiate that contract, because you’re going to end up the beneficiary.”
Councilman Juan Martinez said his greatest concern was deviating from the council’s original understanding of the neighborhood.
“It scares me a little bit to change what we have on the table, because on May 5, 2020, after two and a half hours, we approved this … based on a diversity [of lot sizes],” he said. “The vision was you might have smaller households—single teachers, nurses—living here, not only families moving in with their three or four kids. That creates a special neighborhood.”
Councilman Sam Linnet stressed that the smaller cottages would still provide a less expensive option amid current market conditions, and that removing them would violate the city’s comprehensive plan.
“Our plan says that we should have variety of housing options. The proposed changes eliminate that policy achievement in my view,” he said. “Also, ADUs are already allowed, no matter what we do tonight, and we get both cottages and ADUs if we keep the current plan.
“At this time in our community with the housing issues that we’re facing, I cannot in good conscience approve a reduction in density for the last large development in Hailey.”
Councilwoman Kaz Thea asked the applicant team about “looking into affordable units.”
“The Quigley [Farm] development has many affordable units for ARCH and St. Luke’s. This has nothing,” she said. “Just about every one of us needs an affordable home at this point, from teachers to emergency workers to bread bakers.”
Young expressed dismay at the council’s subsequent vote to put the proposal on hold, calling the idea that “$600,000 cottage units will somehow solve a problem … laughable.”
Hailey Mayor Martha Burke responded that the development team should have been aware of the council’s position.
“You’ve heard clearly what our goal was when we approved phase one: to provide a mix of housing opportunities so that we didn’t end up with a very exclusive [community] where no one who works in Hailey can afford to live,” she said. “But what I think I’m hearing in this denial is that it’s not the end of the discussion. It is concern of letting go of our original intent—some kind of housing to blend socioeconomic differences.” ￼