The Bluebird Village workforce-housing project planned for the site of City Hall would have 51 rental units and a variety of amenities.

Ketchum city leaders approved a 75-year land lease for the Bluebird Village workforce-housing development last week.

The City Council voted 3-0 on Nov. 18 to approve the lease of the two-lot, city-owned site at 480 East Ave.—the former location of Ketchum City Hall—to the Ketchum Community Development Corp., a partner in and future owner of Bluebird Village project. Council President Courtney Hamilton recused herself from the discussion and vote because of a conflict of interest related to her employment.

In the planned 51-unit Bluebird Village project, Seattle-based GMD Development is working in partnership with the Ketchum CDC to develop two four-story buildings on the 0.6-acre site. The city is providing the land and has reserved $1.4 million from its Housing In-Lieu Fund—money collected from developers who pay the city in lieu of building required workforce housing—to potentially assist in some expenditures.

Tax-credit financing being applied to the project mandates land-use restrictions that would require the development be maintained as affordable housing for 45 years. In the complex financing model, the Ketchum CDC—a nonprofit organization that works on revitalization projects in the city—would assume ownership after 15 years.

With oversight, the project would implement a “local preference policy” that targets local workers at a variety of income levels in the workforce, based on the area median income at the time. The lease includes language to ensure the site is used for affordable housing.

The city will charge the CDC $10 per year for the use of the land. The reduced rent is being offered as financial support for the project. In the lease, the city agrees to demolish the existing building on the site and clear the land by April 30, 2022. The CDC is required to pay all taxes on the property and to maintain a $1 million liability insurance policy.

In the meeting last week, City Administrator Jade Riley explained to City Council members and Mayor Neil Bradshaw that managers of the project will review tenants’ eligibility to live in Bluebird Village but cannot expel a tenant whose income increases above the limit while they are living there.

Currently, studios would have rents ranging from $619 to $881, with estimated maximum incomes ranging from $26,250 to $36,750. Rents for one-bedroom units would range from $662 to $984 for workers earning a maximum income ranging from $28,125 to $39,375. For two-bedroom units, rents would range from $843 to $1,181 for workers earning between $33,750 and $42,750.

Greg Dunfield, CEO of GMD Development, said managers will employ a “comprehensive” application and annual recertification process and that “it is not the norm” for people whose incomes significantly increase to stay in an affordable-housing unit.

The city is still working on its preference policy for local workers, Riley said.

The city has approved the development plans for the Bluebird project but has not yet allocated the money from its Housing In-Lieu Fund.

Dunfield has said he intends to start construction next March. 

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