The Board of County Commissioners considers multiple extension requests for "paper plats" such as Mountain Legends and Canyon Creek.
County Commissioners consider multiple extension requests for "paper plats"
When the housing market was booming a few years ago, projects could not be approved and built fast enough. Then, with the slowdown of our local economy, requests for extensions of time for all sorts of stages in the development process became an increasingly common occurrence. There were final plat extensions, recording extensions, development agreement extensions… And now, for the first time, the County Commissioners were asked to consider development agreement extensions for “paper plats” (subdivisions that have 0% of their infrastructure completed). Until now, all previous development agreement extension requests were for projects like Huntsman Springs that are almost 100% completed, but just need a little more time to finish up. The big policy question here is whether extensions should ever be given for paper plats considering absolutely no infrastructure work has been completed for the project. These first decisions by the board are precedent setting. At their Sept 26th work meeting, the Commissioners considered the following extension requests:
Canyon Creek PUD – the first extension request on the agenda.
Platted in 2009 with 400 lots on 2,600 acres straddling Teton and Madison Counties, this was originally designed as an exceptionally large and remote equestrian themed planned unit development (PUD) that would include a horse arena, lodge, commercial village, and employee housing. The zoning of this area is Ag-20, but as you may recall, the County's old 2007 PUD ordinance allowed for large density bonuses and additional commercial uses so long as other open space requirements were met. No lots are sold and no financial surety has ever been posted for this project. The Canyon Creek development group recently applied for a re-plat under the county’s new ordinance, but it was met with lukewarm reception by the Planning & Zoning Commission.
The attorney for the Canyon Creek development group, Herb Heimerle, now appeared before the Board of County Commissioners to request a year extension so he could market and hopefully sell the property to a conservation buyer. The Canyon Creek development agreement expires July 23, 2012. Heimerle explained that this extension request was being made a year early incase no such sale could be achieved, then the extension would be useful for accomplishing a meaningful re-plat of this PUD. The Canyon Creek development group has met with VARD and the Teton Regional Land Trust to discuss potential conservation alternatives for this sensitive piece of property, which includes some very valuable habitat stringers for big game and also grouse leks.
As sort of a counter-offer, Heimerle also added that the development group did have the money and the ability to bond for the $720,000 it would cost to build the 1st phase of this 26-phase project. Thus, if not given an extension of time by the Commissioners, the development group would break ground on Phase 1 and technically perfect their entitlement to the remaining 25 phases.
Commissioner Rinaldi supported the potential for a conservation buyer, but worried that there was no certainty that it would actually happen. Technically, the property could be sold to anyone – even another developer, and then the extension would have been granted in exchange for no public benefit. Given the high cost for building Phase 1 of this project (which was only 5 lots), Rinaldi did not think that was a likely option for the developers, but a re-plat could be a great opportunity to drastically reduce infrastructure costs and design a development that was not so out of whack with the surrounding area. Commissioner Benedict agreed that a conservation outcome would certainly be best, but the situation before them was “more like a game of chicken, but it’s just a matter of when we choose to play the game of chicken.”
The deliberation on this project seemed particularly hard for the Board; however, the precedent of allowing an extension based on so much risk clearly troubled the Commissioners. In the end, the Board voted unanimously not to grant a development agreement extension to Canyon Creek. However, it must be noted that this is not the end of this project. The development group has until July 23, 2012 to break ground on Phase 1. Another option is to still move forward with re-platting Canyon Creek, since the development agreement does not expire for almost nine more months. If an earnest re-platting attempt is underway by the time of expiration, it is certainly possible that the Commissioners would then grant the extension of time to successfully accomplish this re-plat. And, of course, the development group can always still market and sell the property into conservation, as well. We will keep you posted on what happens next.
Mountain Legends PUD – a less obvious extension request.
Platted in 2007 with 114 lots on 197 acres at 5000N and Stateline Road, this was a controversial PUD even back in 2007, with at least 1 remand ordered from the Board of County Commissioners and huge public opposition at all of the public hearings held on this project. In 2009, the commissioners granted a 1-time only 12 and 18 month phasing extension that gave the developer until April 4, 2012 to install the infrastructure for this development. No lots are sold. This particular public meeting was called so the Board of County Commissioners could consider developer Harry Statter’s formal request to release his surety for the development. Usually, the County requires the developer to bond for the subdivision improvements. Bonding ensures that the developer has the funds to actually build the project and not just sell lots in a subdivision that may never be built. As a security for this money being released back to him, Statter proposed that he would either re-bond or re-plat his project within 12 months.
Returning Statter’s surety was not such a simple issue, however. As pointed out by Commissioner Benedict, Mr. Statter could not re-bond for his project within 12 months, because the prior extensions granted by the Board of Commissioners were absolutely final. Essentially, Statter’s request would buy 12 more months of life for Mountain Legends, when really, there are no further extensions of time allowed. In addition, Benedict pointed out that the development agreement between Mr. Statter and Teton County stipulated that the surety could only be released to the developer on the condition that the Mountain Legends plat be vacated first. Despite this unambiguous language in the development agreement, Mr. Statter’s attorney Herb Heimerle (Heimerle was appearing on behalf of Canyon Creek as well as Mountain Legends) emphasized that Statter did not want the plat vacated because he was considering utilizing the county’s re-plat ordinance to reconfigure his project in the next few months before it expired on April 4, 1212.
This sort of counter-proposal begs an interesting question: Should the County’s option to re-plat a subdivision even be available for paper plats? When the county adopted the re-platting ordinance last year, it was envisioned to be a solution-oriented tool by which highly complicated subdivision projects that are partially built and have multiple lots already sold (like River Rim Ranch) could be re-configured. The ordinance was supposed to be a way to navigate these incredibly complex real estate conundrums to get derailed zombie subdivisions back on track. We all know that real estate development is a gamble. These paper plats have simply lost the bet. If the County allows the developers of paper plats to re-plat their projects, has this become a process by which projects that are 0% completed are able to hang on to entitlements without any performance or any financing? Or put another way: Are these paper plats being given a second roll of the dice when they no longer have any money to back up their gamble?
After a very lengthy deliberation, the Commissioners voted unanimously to release the surety back to Statter on the condition that no lots are sold in Mountain Legends, no construction will be allowed at all, and that between now and the development agreement deadline of April 4, 2012, this project will either be re-platted, or vacated entirely. They declined to uphold the language in the development agreement presumably because the County’s current policy is that all expired subdivisions can have the opportunity to be re-platted. Thus, regardless of the clear language in the contract, the Commissioners wanted to extend the same opportunity to Mountain Legends as has been given to other defunct projects. Time will tell what will happen next. We will keep you posted.
Ridgeline Ranch PUD – no taxes, no extensions.
This development was platted in 2009 with 56 lots on 160 acres just due west of River Rim Ranch. Another highly controversial project, Ridgeline Ranch was the only development in the history of Teton County to twice be recommended for denial by the Planning & Zoning Commission, but still be ultimately approved by the County Commissioners. No lots are sold, and no surety has ever been put in place for this project. The development agreement between the developer and Teton County obligated the developer to begin infrastructure work this summer, and the agreement expires all together on Oct 31, 2012. This particular extension request was originally recommended for denial by county staff because they found no reasonable basis for granting the extension. However, no final decision has been made regarding this extension request because the application was pulled from the Commissioners’ agenda and tabled indefinitely because the developer is delinquent in property taxes. We will keep you posted.