COEUR d'ALENE - The Coeur d'Alene City Council denied a developer's request to consider annexing 105 acres of property near Best Hill on Tuesday, forgoing with it a chance to acquire 50 hillside acres for its parks foundation.

"I'm stunned," Councilwoman Deanna Goodlander said about the council's decision. "I cannot believe it."

It's the second time since 2008 Halko LLC has approached the city about possibly developing the land, and the second time it was turned away.

The first time around, the city's Public Works Committee recommended the project not go forward amid concerns from nearby neighborhoods before the plan was shelved.

This time around, Halko, represented by Verdis consultant Gary Young, presented a scaled down version of the proposed Nettleton Ranch subdivision, with 50 acres on Best Hill donated to the city to keep as a park.

Despite the changes, a nearly divided council said it wasn't enough.

The council voted 4-2 against it, saying that too many of the original concerns lingered enough to warrant the denial.

"I just don't think we should be developing on hillsides," Councilman Mike Kennedy said. "As a matter of course, as a matter of policy, as a matter of philosophy."

A portion of the requested area is in the 100-year flood plain of Nettleton Gulch Creek.

That's an area that could flood every 100 years, development of which is regulated by city code that adheres to Federal Emergency Management Agency requirements so property owners will be eligible for flood insurance.

A portion of the property also has steep slopes with an average slope of around 25 percent grade. That was another concern, the council said, considering possible difficulty with water and sewer hookups.

The 2008 request didn't have specific building proposals before Public Works declined it.

Before that though, Halko had proposed a 35-lot subdivision, which the neighbors comprising the Best Hill Coalition fought against in court for two years before winning their case in 2007 on grounds that it was too dense for their neighborhood covenant.

The proposal likely would have had around 27 lots, adhering to the one unit per 2 acre neighborhood standard. It was also smaller, 105 acres compared to 120. It would have extended Best Avenue around a quarter mile with two cul-de-sacs, and is contiguous to city property. It also offered the hillside land.

The city designated the proposed land urban reserve in its Comprehensive Plan, which means it could be developed but is a low priority for topography reasons, among others, Councilman John Bruning said.

"I'd say it's a very, very low priority," he said.

In 2009, the city of Coeur d'Alene accepted around 50 acres of Fernan Hill from private donors, on terms that the land remain undeveloped.

Bruning said Wednesday that gift was different because it wouldn't be developed at all compared to Halko's, which had possible developments close to the hill.

Tuesday's proposal was not the annexation, but a request to consider annexing.

The proposal asked if the City Council would grant the applicant permission to begin the official process to make the request before the proper commissions. Had that been approved, the City Council would have been the voting body to officially decide if the annexation would go through - had it got that far.

Bruning, Kennedy and council members Al Hassell and Ron Edinger voted against it. Goodlander and Councilman Woody McEvers voted for it.

"I was frankly pleased with how the compromise looked," neighbor Jeff Coulter said Wednesday on the new proposal, but adding that the area in question has flooded every spring since he moved nearby in 1996. "I just think there are some problems that you might be able to solve on paper, but to really mitigate them, I'm not so sure."

The company would have to wait one year should it want to bring it back to the city.

After the vote, Young said he was surprised by the decision, given the compromise from the first plan to the second.

"It just really doesn't make sense," he said. "You can't call that a hillside development, because it's not."

He said the developer could seek the option of working through Kootenai County. He did not immediately return a message Wednesday for further comment.

Goodlander referred to the developer possibly working through the county during the meeting.

"It just doesn't make sense to me for us to say, 'Well, we're not going to grow anymore out there period. This is it, we're done. You can't do anything there so if you want to do something in the county go ahead,'" she said.