A decade ago, before the housing collapse and the Great Recession, developers proposed two communities in the Foothills north of Eagle.
On the east side of Idaho 55, a community named Avimor would be a miniature city with homes, parks, stores and schools. On the west side, a community called Spring Valley Ranch would be much the same.
Today, you can throw a rock from the highway toward Avimor and likely hit a house, park, community center, baseball or soccer field, or one of nearly 100 miles of developed trails. Throw the rock toward Spring Valley Ranch and you will hit sagebrush.
Avimor is a story of a locally owned project whose owners decided to build slowly but steadily through the recession, and which is growing fast today. Spring Valley Ranch is a story of a Texas pension fund that invested poorly, spent tens of millions of dollars without turning a shovelful of dirt, and left residents of Ada County to wonder: What now?
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Avimor land’s owners: Keep it debt-free
In 2007, Avimor and Spring Valley Ranch were among seven newly approved planned communities in rural Ada County. Developers planned to build more than 23,000 homes on nearly 13,000 acres on sites stretching from Interstate 84 southeast of Boise to the Eagle Foothills. A dozen more megadevelopment projects were in the idea stage, too.
The recession winnowed all of them but Avimor and Spring Valley.
Avimor’s owners could afford to ride out the recession, because they weren’t beholden to a bank. The McLeod family has owned nearly 40,000 acres in the Avimor area for nine decades. In 2005, the family decided to develop 800 acres as Avimor. One of the family’s conditions for the development was that it be debt-free.
“Avimor was designed to weather economic cycles, which a project of this scale is sure to endure more than once,” said project manager Dan Richter. “The economic collapse we experienced in 2007 was a true test, which we were able to manage.”
The development had 24 homes by 2010 and has about 300 today, with 37 in the construction queue, Richter said. Avimor has built seven parks, two fishing ponds, a baseball field, a soccer field, an amphitheater and a community center, which includes an indoor pool and an Ada County Library annex. “We are finalizing plans for a convenience store and a restaurant,” he said.
Home prices range from about $200,000 to $600,000, averaging about $300,000.
Dallas pension-fund managers saw riches
As Avimor grew, Spring Valley languished.
In 2007, M3 got Eagle to annex the property, promising a community that would nearly double the city’s size by adding 6,017 acres, 7,160 homes, a hotel, a vineyard, equestrian centers and restaurants.
Spring Valley Ranch briefly bubbled to life in 2014, when Eagle approved a preliminary plan for the project’s first subdivision: 190 homes on 346 acres with a wastewater-treatment plant on the western edge of the property, just east of Idaho 16 at Pollard Lane.
“We are just really excited to get going,” Mark Tate, the project manager, said then.
But questions were swirling in Dallas about the pension fund’s investments, some of which were worth far less than the fund had reported. That year, the pension board ousted its longtime director. It hired Kelly Gottschalk to succeed him. In 2015, she traveled to Idaho to tour Spring Valley Ranch.
She was dismayed at what she saw: thousands of acres of rolling foothills dotted with sagebrush. No roads, no buildings, no signs.
“It was really shocking,” Gottschalk told the Dallas Morning News for an investigative story published May 26. “I don’t know what they were ever thinking.”
All planning, no action
Besides its $42 million land purchase, the pension fund paid more than $20 million to its partner, M3 Cos, the Morning News reported.
Last year the pension fund and M3 parted ways. The Morning News said the fund agreed to pay M3 $1.5 million for its interest in the partnership.
Now the fund managers must figure out what to do with their albatross.
The fund’s fiduciary adviser, Hearthstone Inc., has hired Bob Taunton, a Treasure Valley land-use consultant. Taunton had moved to the Treasure Valley when his employer, SunCor Development Co., planned to develop what is now Avimor. The McLeod family later decided to develop Avimor itself. When SunCor pulled out, Taunton stayed and went into consulting.
“We have been asked to take a fresh look at the property,” he told the Statesman.
He said he will perform a financial analysis, review entitlements (legal rights to develop land), and determine infrastructure needs and development costs.
Taunton said the acreage has some assets, including the entitlements, a water permit and a special property-taxing district set up to repay bonds sold to finance roads, water and sewer facilities, parks and other infrastructure. M3 had expected to spend $667 million on infrastructure over 20 years, with about $277 million of that eligible for taxing-district funding.
But time is running short on Eagle’s 2014 development approval. It will expire Nov. 17 unless development begins or the city extends the deadline.
Other Texas holdings in Idaho discarded
Spring Valley Ranch is one of three parcels in the Treasure Valley that the Dallas pension fund bought.
In 2005, the fund bought the 1,440-acre Dry Creek Ranch on the east side of Idaho 55, adjacent to the Hidden Springs planned community north of Boise and about 4 miles south of Avimor.
The fund partnered with Land Baron Investments of Las Vegas to develop Dry Creek Ranch as a planned community with 3,500 homes and 650,000 square feet of commercial space. It was one of the seven approved projects felled by the recession.
After Taunton analyzed the property’s potential, the fund decided to sell it. Boise Hunter Homes bought it last September. In February, Ada County commissioners approved a change in the development agreement to reduce the number of homes to 1,800 and the commercial space to 85,000 square feet.
The fund also jettisoned 110 acres in Nampa west of the intersection of Middleton and Karcher roads, where its plans for a multi-use development never took off. This sale decision, too, followed a Taunton analysis. The Hoff Co. bought the property in December 2015.
Eagle Mayor Stan Ridgeway said Spring Valley Ranch is in limbo as city officials and residents wait to see what the pension fund decides.
“A lot of people are frustrated, because a lot of planning has been going on to accommodate [Spring Valley Ranch],” he said. “And who knows if it is ever going to be built.”