Idaho Falls council reviews sale options for four Pinecrest-adjacent parcels amid 1950s covenants
January 13, 2025 | Idaho Falls, Bonneville County, Idaho
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City officials updated the Idaho Falls City Council on efforts to market and potentially sell four city-owned parcels adjacent to the Pinecrest Golf Course, explaining that restrictive covenants from the 1950s limit development to single-level, single-family homes and have complicated a previous sale attempt.
The municipal services director, Pam Alexander, told the council the four parcels were donated to the city in September 2016 with an appraisal value at donation of $610,000. An appraisal done shortly after a 2022 donation showed a land value near $1.9 million; an auction held June 17, 2022 received no bids. The city later entered a purchase-and-sale agreement in September 2022 for a reported $2.0 million in cash that fell out of escrow after title work revealed the older covenants and restrictions (CC&Rs). A refreshed appraisal in November 2024 put the land value at about $1.635 million, Alexander said.
Why it matters: the CC&Rs, drafted in the 1950s, restrict building to single-story, single-family residences on the parcels in question. Builders FirstSource, which operates adjacent to the parcels, has proposed a covenant amendment that would remove the single-story restriction for the city-owned parcels in exchange for new covenant language preventing future nuisance lawsuits by purchasers of those parcels against Builders FirstSource’s existing operations. City staff told the council the exchange is intended to give the lumber-yard operator greater assurance that future buyers will not successfully sue over the mill’s current activities.
Alexander described the city’s options and the ongoing negotiation work: the city holds an exclusive commercial listing with broker TOK (signed August 2022), and TOK representative Nick Terry is working with staff and local counsel to draft amendment language and evaluate potential buyers. Alexander said the city’s legal team and outside specialized real estate counsel are reviewing the proposed documents.
City Attorney (unnamed) explained the legal trade-offs of a covenant amendment versus litigation. As the attorney summarized it, a covenant-based restriction "would release the condition that only single-family homes that are one level" could be built on the parcels and would replace that restriction with a covenant that prevents nuisance litigation by future buyers. The attorney noted that covenants and contracts are generally easier to predict in court than common-law nuisance claims and that the amendment would give Builders FirstSource "assurances" about future intensification of use that might otherwise lead to litigation.
Council members pressed staff on the geographic scope of the CC&Rs and the mechanics of an amendment. Staff said the restriction applies only to the subdivision’s third phase (the handful of lots outlined in the material presented) and that amending the covenants requires agreement by two-thirds of the parcels bound by the restriction. City staff estimated that the city, together with Builders FirstSource’s parcels, would constitute more than two-thirds of the lots bound by the CC&Rs, meaning the city and Builders FirstSource could potentially agree to an amendment without obtaining signatures from individual homeowners.
Councilors also raised planning and infrastructure issues. Parks and Recreation Director PJ Holm confirmed the planned canal trail would be built on the west side of the canal and that sidewalk/pathway improvements on Lincoln are planned; councilors asked staff to explore whether a pedestrian connection or easement could be negotiated through the parcels to link the canal trail with the golf-course trail. Council members discussed tax-increment financing (TIF) and the possibility the redevelopment agency could manage a request-for-proposals process if a developer needed public assistance; staff said the redevelopment agency has expressed interest but no formal arrangement had been made.
Staff acknowledged geotechnical unknowns. Alexander said a prior interested buyer (a charter school) had not completed a geotechnical study; staff indicated they do not currently have a full geotechnical report and that any buyer would likely perform due diligence, including subsurface investigation, as part of a purchase agreement. Alexander said the November 2024 appraisal was done by a Boise firm that asked specific questions about site conditions and considered visible rock and temporary pavement uses in its analysis.
On pricing and negotiation, Alexander asked the council for direction about an acceptable negotiating posture. Councilors generally instructed staff to seek the appraisal or better and to use discretion in negotiations rather than a rigid lower floor; several council members said that if staff recommends accepting less than the appraisal they should provide a specific, documented reason explaining the lower price to the public. One councilor said staff should not present to the council an offer the council would categorically reject; staff requested the flexibility to negotiate while committing to return to the council for formal approval of any final sale.
No sale or covenant amendment was approved at the meeting. Alexander said if staff and Builders FirstSource reach terms they will return to council with a proposed amendment to the CC&Rs and any associated sale agreement.
Votes at a glance:
- Motion to receive recommendations from the Jan. 7, 2025 Planning and Zoning Commission pursuant to the Local Land Use Planning Act: moved by Councilor Francis; seconded; roll-call vote recorded as in the affirmative by Councilor Francis, Councilor Dingman, Councilor Freeman, Councilor Larson, Councilor Bradford and Council President Burtonshaw (motion approved).
- Motion to convene an executive session under Idaho Code sec. 74-206(1)(f) to consult legal counsel regarding pending or imminent litigation: moved by Councilor Francis; seconded; motion carried.
What’s next: Staff will continue negotiating with Builders FirstSource and interested buyers, extend or renew the exclusive listing with TOK if needed, and bring any proposed covenant amendment and sale agreement back to the council for formal approval. Staff also said it will seek to obtain or rely on buyer-supplied geotechnical data during typical due-diligence periods.
Speakers and roles quoted in this article are drawn from the council meeting record and include Pam Alexander, Municipal Services Director; Nick Terry, TOK (commercial broker); PJ Holm, Parks and Recreation Director; Emily Geisler, City Clerk; the City Attorney (unnamed in the record); the Mayor (unnamed); and multiple council members identified by their titles (Council President Burtonshaw; Councilors Radford, Dingman, Freeman, Francis, Larson and Bradford).
The municipal services director, Pam Alexander, told the council the four parcels were donated to the city in September 2016 with an appraisal value at donation of $610,000. An appraisal done shortly after a 2022 donation showed a land value near $1.9 million; an auction held June 17, 2022 received no bids. The city later entered a purchase-and-sale agreement in September 2022 for a reported $2.0 million in cash that fell out of escrow after title work revealed the older covenants and restrictions (CC&Rs). A refreshed appraisal in November 2024 put the land value at about $1.635 million, Alexander said.
Why it matters: the CC&Rs, drafted in the 1950s, restrict building to single-story, single-family residences on the parcels in question. Builders FirstSource, which operates adjacent to the parcels, has proposed a covenant amendment that would remove the single-story restriction for the city-owned parcels in exchange for new covenant language preventing future nuisance lawsuits by purchasers of those parcels against Builders FirstSource’s existing operations. City staff told the council the exchange is intended to give the lumber-yard operator greater assurance that future buyers will not successfully sue over the mill’s current activities.
Alexander described the city’s options and the ongoing negotiation work: the city holds an exclusive commercial listing with broker TOK (signed August 2022), and TOK representative Nick Terry is working with staff and local counsel to draft amendment language and evaluate potential buyers. Alexander said the city’s legal team and outside specialized real estate counsel are reviewing the proposed documents.
City Attorney (unnamed) explained the legal trade-offs of a covenant amendment versus litigation. As the attorney summarized it, a covenant-based restriction "would release the condition that only single-family homes that are one level" could be built on the parcels and would replace that restriction with a covenant that prevents nuisance litigation by future buyers. The attorney noted that covenants and contracts are generally easier to predict in court than common-law nuisance claims and that the amendment would give Builders FirstSource "assurances" about future intensification of use that might otherwise lead to litigation.
Council members pressed staff on the geographic scope of the CC&Rs and the mechanics of an amendment. Staff said the restriction applies only to the subdivision’s third phase (the handful of lots outlined in the material presented) and that amending the covenants requires agreement by two-thirds of the parcels bound by the restriction. City staff estimated that the city, together with Builders FirstSource’s parcels, would constitute more than two-thirds of the lots bound by the CC&Rs, meaning the city and Builders FirstSource could potentially agree to an amendment without obtaining signatures from individual homeowners.
Councilors also raised planning and infrastructure issues. Parks and Recreation Director PJ Holm confirmed the planned canal trail would be built on the west side of the canal and that sidewalk/pathway improvements on Lincoln are planned; councilors asked staff to explore whether a pedestrian connection or easement could be negotiated through the parcels to link the canal trail with the golf-course trail. Council members discussed tax-increment financing (TIF) and the possibility the redevelopment agency could manage a request-for-proposals process if a developer needed public assistance; staff said the redevelopment agency has expressed interest but no formal arrangement had been made.
Staff acknowledged geotechnical unknowns. Alexander said a prior interested buyer (a charter school) had not completed a geotechnical study; staff indicated they do not currently have a full geotechnical report and that any buyer would likely perform due diligence, including subsurface investigation, as part of a purchase agreement. Alexander said the November 2024 appraisal was done by a Boise firm that asked specific questions about site conditions and considered visible rock and temporary pavement uses in its analysis.
On pricing and negotiation, Alexander asked the council for direction about an acceptable negotiating posture. Councilors generally instructed staff to seek the appraisal or better and to use discretion in negotiations rather than a rigid lower floor; several council members said that if staff recommends accepting less than the appraisal they should provide a specific, documented reason explaining the lower price to the public. One councilor said staff should not present to the council an offer the council would categorically reject; staff requested the flexibility to negotiate while committing to return to the council for formal approval of any final sale.
No sale or covenant amendment was approved at the meeting. Alexander said if staff and Builders FirstSource reach terms they will return to council with a proposed amendment to the CC&Rs and any associated sale agreement.
Votes at a glance:
- Motion to receive recommendations from the Jan. 7, 2025 Planning and Zoning Commission pursuant to the Local Land Use Planning Act: moved by Councilor Francis; seconded; roll-call vote recorded as in the affirmative by Councilor Francis, Councilor Dingman, Councilor Freeman, Councilor Larson, Councilor Bradford and Council President Burtonshaw (motion approved).
- Motion to convene an executive session under Idaho Code sec. 74-206(1)(f) to consult legal counsel regarding pending or imminent litigation: moved by Councilor Francis; seconded; motion carried.
What’s next: Staff will continue negotiating with Builders FirstSource and interested buyers, extend or renew the exclusive listing with TOK if needed, and bring any proposed covenant amendment and sale agreement back to the council for formal approval. Staff also said it will seek to obtain or rely on buyer-supplied geotechnical data during typical due-diligence periods.
Speakers and roles quoted in this article are drawn from the council meeting record and include Pam Alexander, Municipal Services Director; Nick Terry, TOK (commercial broker); PJ Holm, Parks and Recreation Director; Emily Geisler, City Clerk; the City Attorney (unnamed in the record); the Mayor (unnamed); and multiple council members identified by their titles (Council President Burtonshaw; Councilors Radford, Dingman, Freeman, Francis, Larson and Bradford).
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