The city of Ketchum is considering an extension for a mixed-use development project on First Avenue, immediately south of Perry’s restaurant. The project includes housing for employees of the planned Harriman Hotel in Ketchum.

Plans for a three-story, mixed-use housing and commercial building in Ketchum proposed by developer Jack Bariteau got a boost from the city Tuesday, when members of the Planning and Zoning Commission voted to recommend that the city extend the project’s approved time frame for construction.

In a 3-2 vote, P&Z commissioners recommended that the City Council give Bariteau additional time to move forward with the approximately 35,000-square-foot project, planned for a site on the southwest corner of the intersection of Fourth Street and First Avenue. The City Council—which will render a final decision—is scheduled to review the developer’s request to amend a development agreement for the project on Tuesday, Jan. 19.

The decision of the P&Z came amid lengthy discussion about whether the city should amend the development agreement with Bariteau, the developer of the stalled Harriman Hotel project at the southern entrance to Ketchum. The mixed-use project at issue includes employee housing for the 65-room, 14-residence hotel, which has been in development for more than a decade and has received several extensions from the city.

The hotel site on Main Street was excavated in 2016 and some infrastructure has been installed, but the site remains a large hole in the ground. After construction on the hotel stalled last year, City Council members voted unanimously on Nov. 2 to declare the project in breach of its development agreement with the city. Later that month, the development group filed a tort claim against the city for $100 million in damages, citing defamation and “tortious interference.”

The stalled hotel project and tort claim loomed as a backdrop to a long debate among P&Z commissioners about whether Bariteau should be allowed to move forward without proceeding through a new approval process for the First Avenue building.

The project would include 22 housing units, approximately 8,000 square feet of commercial and office space, and an underground parking garage with 31 spaces. Fifteen of the housing units would be apartments for employees of the Harriman Hotel and seven units would be market-rate condominiums on the second and third floors.

Bariteau is under an agreement with the city to provide at least 18 beds for hotel employees. Amid questions Tuesday about whether the First Avenue project is directly linked to the hotel development, Bariteau told P&Z commissioners that the project “stands on its own,” apart from plans to lease the apartments to hotel employees. The agreement with the city stipulates that if the units designated for hotel employees are not used for that purpose—in the event the hotel is not built—12 of the apartments would be designated as deed-restricted community housing under the purview of the Blaine County Housing Authority.

“We have every intention of going forward with this project, no matter what the legal issues are with the hotel,” Bariteau told the P&Z.

Under Bariteau’s development agreement for the First Avenue project, he was originally granted two years and eight months from the date of the city’s final decision, a period ending Feb. 10, 2022. With proposed amendments, the modified development agreement would be in effect for two years after the city issues a building permit. Bariteau—who is working with the city to acquire a building permit—would have 60 days from approval of the new agreement to secure the permit. The expired design-review approval of the project would also be extended.

Bariteau said the development was delayed by complications with a city process of vacating the alley on the west side of the property, as well as the COVID-19 pandemic. He said he intends to demolish buildings on the site in February and could tap into financing and start construction by April.

P&Z commissioners voiced overarching support for the project, but four members expressed strong concern about whether the city should be lenient in granting extensions for development projects that do not meet the established timelines.

P&Z Chairman Neil Morrow said he wants to see the project move forward, but does not want the city to became entangled in complications with the hotel project—which he called the “hole in the ground.”

“I swear I don’t want to hear, ‘Oh, something is wrong with the lawsuit or something’s wrong with the hotel and we need more time,’” Morrow said.

Commissioner Tim Carter noted that Bariteau has stalled on the hotel, but has completed other, successful development projects in Ketchum.

“Do we want him to fail on another one here?” he asked.

Commissioner Brenda Moczygemba suggested granting the amendments to the timeline with a condition that Bariteau not commence excavation of the site until proof of financing is recorded.

Commissioners Morrow, Carter and Moczygemba approved the extension with the condition, with commissioners Mattie Mead and Jennifer Cosgrove voting against the favorable recommendation to the City Council.

Editor's note: The headline for this story was amended for clarity. The hotel development group has issued the city a notice of tort claim, the first step towards suing a public entity, but no lawsuit has been filed in court.

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