The city of Ketchum has notified the developer of the stalled Harriman Hotel project that the window to resolve a breach of his development agreement has passed and the agreement and associated permits for the long-running project have been voided.
The action by the city essentially nullifies the approvals granted by the city to developer Jack Bariteau to build the luxury hotel and residential project at the southern entrance to the city.
In a Jan. 8 letter to Bariteau and his attorney, Ed Lawson, City Attorney Matt Johnson states, “At this time the cure period has run with no cure or pending cure by Harriman Hotel. Therefore, the Development Agreement is void by reason of default and any such opportunity to cure such default is now passed. ... Any further associated building permits or the like associated with this Development Agreement are now likewise void.”
The city declared Bariteau in breach of the development agreement on Nov. 2, 2020, because Bariteau 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 has financing.
The city is pursuing collection of a $453,000 bond posted by Bariteau to pay for site restoration in the event the project is not completed. The property was excavated—with that work starting in 2016—and some infrastructure has been installed, but limited progress has been made and the site at the southeast corner of Main and River streets has remained a large hole in the ground.
Ketchum City Administrator Jade Riley said that if Bariteau wants to proceed with building the hotel, he will have to file a new application with the city and go through a new approval process.
On Tuesday, Lawson said Bariteau plans to proceed with the project, claiming that the development agreement was not breached and therefore no “cure” was needed.
“Too much time and money has been invested,” he said.
In the 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.” Lawson said Tuesday that financing was in place last year but was disrupted by the COVID-19 pandemic, an argument he also made to the city in the fall as a reason not to declare a breach. He said the city’s actions have also complicated acquiring financing and he is “looking at a number of different options” to move forward, “including formal legal action against the city.”
On behalf of Bariteau and Harriman Hotel LLC, Lawson on Nov. 10 issued a “notice of tort claim” to the city for up to $100 million in damages. 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.
Riley confirmed on Monday that a formal lawsuit against the city has not been filed.
Essentially, the tort claim alleges that the city caused financial harm to Bariteau and the Harriman Hotel group in actions taken in October and November. The claim alleges 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 filing also alleges the city wrongly determined the Harriman Hotel group was in default of the governing development agreement.
The document also makes 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 states: “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.”
The city has ninety days to respond to the tort claim. Lawson said Tuesday that the city has not responded. If it does not respond, the claim is deemed to be denied and Bariteau and Lawson can decide whether to take formal legal action.
Riley said on Monday that Bradshaw could not comment on a matter of potential litigation.
Bariteau has been working to develop the 65-room, 14-residence hotel structure at 300 River St. E. for more than a decade. Over the years, amendments to the development agreement have been made and the project has been granted extensions. Under the now-voided development agreement with the city, the project had to be completed by the end of December 2021.
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(16) comments
How about putting something up there that has the following. Parking in the hole for every resident plus extra parking for the community. Then a retail/restaurant floor and condos on the top floors. In the middle, community housing, paid for by the retail and condos (not land giveaways by the mayor). Everyone wins that way. We get more parking, we get more community housing without taxpayer subsidies, we don’t put more hotel rooms into a market with chronically low occupancy, we get expanded tax base and we can reduce on street crowding and traffic in town. Maybe even Jack Bariteau could be enticed into building this. But this would require the mayor to rethink his approach to development that favors taxpayer giveaways, crappy community housing that isn’t integrated into neighborhoods, concentration of development rights with out of town developers, etc.
Indian Casino!
Agree, good for Ketchum City Council. It is about time.
So why doesn't the IME post the tort claim
How incredibly short sighted of our city council to pull the plug on the Harriman Hotel. What does our mayor and our local legislators think - 5-star luxury hotels just pop out of the ground in small, Idaho resort towns like Ketchum? Not only would a project of this nature create positive aesthetic, architectural, and favorable national, if not global recognition of the town, it would bring in millions of dollars in revenues each year. The benefits are innumerable and yet the City is revoking the permits for the project? Seems our elected officials would get smart and find a way to make sure the project actually gets built - doing everything possible to support the developer in his efforts to make that happen. If we want to take advantage of our growing popularity, let’s at least get behind the developments that are in keeping with our image of a small but beautiful resort town that offers superlative amenities for our visitors and guests? AND make some money for the town while we’re at it.
mkrivelo - have you been following this saga from the beginning?!? The developer has been working on this for OVER 10 years and all that he has to show for it is a huge hole in the ground. It was the prudent decision to stop the insanity of empty promises and constant delays.
I am aware the project has been in the works for a decade. During the last 10 years Ketchum has slowly recovered from a deep recession, lending for hotels across the country has been scarce and then when financing was nearly in place last year there were difficulties with the city ... and then Covid. Developing hotels of this nature is a complex and time consuming process and I hail the efforts of the developer to keep it going despite the many setbacks. My feeling is this hotel would bring an elegant and elevated choice in lodging for visitors to the area, a significant revenue stream for the town, and affluent tourists who would support our local shops and businesses.
“My feeling is this hotel would bring an elegant and elevated choice”
“Feelings” don’t build hotels there sunshine and Bariteau has had plenty of time to locate financial backers; yet has FAILED to do so. 10 years and no one is willing to back his project?! That in itself can be viewed as a statement about Bariteau. Ie, he’s obviously not the right man for this project.
Seems like it’s time for Bariteau to man up, accept his losses and let someone else take over this project for the good of our community.
Do you have any date on hotel occupancy for the past 5 years for Ketchum hotels (including the 5 Limelight?). Are you aware the city has approved a 6-story Marriott to be built across the street from the hotel? They will only provide housing for 23 of their 100 workers—where are the other 77 going to live? Do you know what the different hotel jobs pay? You laud the money coming into the town, but the town will put out that much money or more to build low income housing to house all these low wage jobs. Take a look at Bluebird. No parking. No windows in the bedrooms. Maybe we should look at all the costs and benefits to the entire town of these hotel projects. Especially the ones that benefit out of community developers and investors.
Given that Bluebird is being built to house the Marriott hotel workers, why not move Bluebird to that location? And build underground city parking underneath. It would take a lot of the Bluebird safety traffic and parking issues away from the core retail area. It’s right on the bus line and close to the bike path for the mayor’s green commuting vision. Seems like it would be a more tourist friendly way to go, too. And more convenient for anyone in the low income housing who works in Hailey (as they can’t be required to work in a Ketchum). Seems like a much better location than putting 12 dozen people and their cars right in the middle of town with inadequate parking. Much easier for them to commute.
That makes too much sense, they’ll never go for its
Be a good spot for a campground ⛺️
it
Good for the Ketchum City Council. Call Bariteau's (and his lawyer) bluff.
I hope the Council has learned something in all this mess.
Indeed
The tort claim is baseless.
Welcome to the discussion.
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