Dear Neighbors

At the end of Friday’s meeting, your Board went into executive session to discuss the Jericho Project and the formal annexation of a portion of the Community School’s Sagewillow Campus that the School contends is not part of Elkhorn and therefore not subject to SVEA’s jurisdiction. The following summarizes the Board’s decisions on those matters:

The Jericho Project

The Jericho Project contemplates the construction of 19 townhouses in Elkhorn Village. The project will eliminate a grassy area in the village core and about 20 parking spaces next to the tennis courts.

SVEA and Elkhorn Springs Master Association (“ESMA”) have been in negotiations with Mr. Jadallah, the developer of the Jericho Project, for over four months to try to find a mutually acceptable transaction that would preserve the grassy area and the parking spaces. Mr. Jadallah has now proposed that SVEA pay his development company $250,000 (of which $125,000 would be refundable under certain unlikely circumstances). In exchange, SVEA and ESMA would receive a 60-to-90-day period in which to negotiate a land swap by which SVEA would trade land presently classified as “Open Space” in exchange for the Jericho Parcel. If that fails, he suggests that we negotiate the price and terms of a cash deal. And, if that, too, fails, Mr. Jadallah would proceed with the development of the Jericho project.

SVEA has decided to reject that proposal for the following reasons:

The $250,000 Up-Front Payment and Design Review Approval

SVEA does not want to levy a special assessment on its members to raise the required $250,000. Moreover, the promise of a $125,000 refund if negotiations fail to produce a deal is more illusion than reality. Here is why. If negotiations fail Mr. Jadallah would then pursue approval of the Jericho Project. In that regard, he desires to shorten the design review process:

• First, Mr. Jadallah insists that the ESMA design committee and the SVEA design committee meet with his architects to develop an approved plan without further review by the two organizations’ respective Boards. That would be inconsistent with both organizations’ governing documents. SVEA’s Board will not agree to follow a procedure that violates its members’ rights to be heard at the Architectural Committee’s meeting and to appeal the Committee’s decision to the Board. Those rights are established in Elkhorn’s Master Declaration. 

• Second, the refund would not be paid if either ESMA’s architectural design committee or SVEA’s Architectural Design Committee (the “ADC”) rejected the project. There are two problems with this. First, SVEA has no control over ESMA’s review process. Second, SVEA is unwilling to put the two committees under artificial financial pressure that might push them to approve a project that would otherwise be unsatisfactory. 

• Third, the refund would not be paid if both design committees did not complete their review within a 90-day period. This deadline is unrealistic, especially since the SVEA committee does not start its review until after the ESMA committee has approved the project. SVEA believes these professionals should be free to take the time required to make a good, unbiased decision free from artificial pressure.

A Property Swap is Unacceptable

A property swap with the developer of the Jericho Project will not provide a solution for the whole community. It would simply move unwanted development from one area to another, and that would have the effect of pitting the interests of one group of homeowners against those of another. That would not be solution; it would be the start of a new problem.

Moreover, the proposed swap would have required SVEA, at its own expense, to rezone the subject parcel from “Open Space” to Residential. Such a re-zoning request would be sure to be controversial and the Board could not predict how it would be received by the Sun Valley P & Z Commission and the City Council.  Also, the land would have to be reclassified under the Elkhorn Master Declaration from “Open Space” to Residential.  That would require SVEA to incur the expense of organizing a Special Meeting of Homeowners at which the reclassification would have to be approved by an absolute majority of all homeowners. And, in the uncertain event these approvals were obtained, the value of the subject property would very likely exceed the value of the Jericho Parcel which would complicate negotiations on the financial terms of the exchange. Your Board did not believe those things could be accomplished in the 60 to 90 days available under Mr. Jadallah’s proposal.

Finally, the Board considered surveying its members on the issue, but Mr. Jadallah insisted on a prompt response and that did now allow sufficient time to conduct a fair survey.

The Cash Price Is Very Large

Mr. Jadallah’s price has varied during negotiations. At first it was a break-even price that would allow him to recover what he had spent. Later that figure increased to about $4,000,000. Most recently, he has suggested that he would insist on the current market value which he believes to be substantially above $4,000,000.  The Board is unwilling to levy a special assessment for amounts that large, especially since it would be the second assessment this year.

What’s Next?

The Board has informed Mr. Jadallah of its decision. He responded in a cordial email saying he intended “to take the final steps for Jericho’s approval.” The Board respects his decision, but if he reconsiders and wishes to make another proposal (one that addresses the concerns in this message), the Board is willing to listen.

Here is what Mr. Jadallah must do to get final approval of the Jericho Project.  

• He must obtain approval from the City of Sun Valley. He may seek to place the project on City Council’s agenda as soon as August 3, 2023.

• After that, he will have to obtain approval from the ESMA architectural committee. That committee has already rejected the project once because it did not comply with ESMA’s design rules. Any member of ESMA who is dissatisfied with the committee’s final decision may file an appeal to the ESMA Board.

• After that, he must obtain approval from SVEA’s Architectural Design Committee. Any Elkhorn homeowner who is dissatisfied with the ADC’s final decision may file an appeal to the SVEA Board.

We will be watching this process closely and will try to keep our members informed every step of the way.

Village Parking

Mr. Jadallah has indicated that if SVEA does not accept his proposal, he will not permit residents to use the 20 or so parking spaces located on the Jericho Parcel. SVEA and ESMA are continuing to seek solutions to alleviate the looming parking problems in the village.

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Annexation of

The Community School’s Sagewillow Campus

There are two components to the Sagewillow Campus. One component consists of the athletic fields and the area around the horse barn. As a result of a settlement of litigation between the School and SVEA in 2006, this part of the campus is clearly a part of Elkhorn and subject to the jurisdiction of SVEA. The second component is an area called the Arrowleaf Subdivision. It consists of five residential lots and is the focus of the School’s current rezone application. SVEA contends that this area is also part of Elkhorn, but the School contends that it is not. If the School is right, it means the School will not have to seek approval from SVEA’s Architectural Design Committee, and SVEA will have no jurisdiction over that part of the campus. The disagreement stems for questions regarding legal documents dating back to the 1990s. As in all matters in which people disagree, there are arguments on both sides. Accordingly, if the matter were litigated the outcome could be uncertain. SVEA wants to formally annex Arrowleaf to clarify its jurisdiction and to establish terms that will serve the best interests of our Elkhorn community.

SVEA has written to the School about this and suggested that the area be formally annexed into Elkhorn. The School responded by saying it was willing to discuss the terms under which such an annexation would be accomplished.

SVEA will be represented in these discussions by Fritz Haemmerle, Esq. Our usual lawyer, Jim Laski, has recused himself because a member of his firm once advised the school in the rezoning request. Mr. Haemmerle is a well-regarded lawyer with over 35 years of experience, much of it involving land use issues such as those involved in this matter. Mr. Haemmerle also served eight years as mayor of Hailey. SVEA is lucky to have the benefit of Mr. Haemmerle’s experience and wisdom.

Respectfully,

Your Board of Directors