Renewing Renewal

Lawmakers and redevelopers plot future of blight

| March 17, 2010

When asking folks about urban renewal there are a few constants in the responses: "ahs," "ums" and "well that's complicateds ..." Even lawmakers have a hard time describing the complex topic.

So Unda' was recently left asking, "Just what the hell is urban renewal?"

The Idaho Legislature is reviewing multiple bills on the issue, including one from Boise's urban renewal agency.

The process, popularized in 1950s California to redevelop blighted urban areas, hasn't been revised here since the '80s. Some legislators oppose urban renewal as a shady use of taxpayer dollars. Others recognize its benefits as a strong tool for cities. Blackfoot Rep. Dennis Lake, chairman of the House Revenue and Taxation Committee, cited a specific concern in his district.

"One of 'em started out as 61 acres. It's composed of Walmart and a little shopping area down there. This has been in existence for 20 some odd years. There's not been one dime that's gone to city services yet, it's all gone to urban renewal. Once they got the infrastructure paid off, they just expanded the district."

Some of these entities, like one Lake cited in Coeur d'Alene, have used the state's definition of "blight" to abuse--by some accounts--property-swiping powers granted to urban renewal districts, even nabbing lakefront property.

An urban renewal agency effectively acts as a dairyman at a creamery: skimming off the frothing fat from a vat of milk. But they skim off extra property tax value instead, whether it is a small increment from inflation, or a larger value, and apply it directly to the blighted area. Thus, any property value money goes to improvements, often through private developers, which in turn bump up the property value further.

Rep. Phil Hart of not-so-blighted Athol brought a number of bills to the Rev and Tax's urban renewal subcommittee, which was tasked with examining the vast issue. His bills all focused on making urban renewal agencies more publicly powered, through directly electing commissioners, extended public comment and allowing taxing districts to opt out.

"They're the only boards that spend taxpayer dollars that isn't publicly elected," said Hart. "It allows the city council to commandeer--I say commandeer--the tax revenue of other taxing districts. I think what's happened is urban renewal has grown into beautifying the city or promoting private industry."

Boise's urban renewal agency also sought changes to the state's law, including an effort to separate classic blight redevelopment from efforts to use redevelopment for economic development or beautification.

"The idea was if there were any good ideas in the other bills, we could do that in the subcommittee," said Rep. James Ruchti of Pocatello.

The bill that survived the subcommittee is similar to the one proposed by Boise's redevelopment agency, Capital City Development Corp. It provides a shorter lifetime for urban renewal agencies (down to 20 years from 24), ensures a proportional ratio of board members from the area and allows the mayor an easier way to eject board members. Shoestringing, or picking up small chunks of property for an existing district, would also be banned.

But the public election of commissioners or votes on district formation were left out, perhaps after pressure from multiple cities' urban renewal boards. CCDC's idea for separating economic development functions from urban renewal also fell by the wayside.

Phil Kushlan, executive director of CCDC, is a kind of redevelopment wunderkind in Idaho.

"In order to make one of these happen, the impetus comes from one of three sources: our board can say, 'we see an area that needs attention, so we think it ought to happen.' The city can say, 'this area needs attention, make it happen.' Or the property owners of the area can express an interest and make it happen," said Kushlan.

From there, the board must demonstrate blight, form a redevelopment district and the tax increment financing (TIF) begins to roll in.

"The property value is certified by the county assessor, and that's called the base value. All the taxing agencies continue to levy their tax rate. Over time, people are gonna come build stuff there, you're gonna have growth and investment--and just inflation, too," said Kushlan. "That increment comes to the urban renewal board to fund these upgrades."

Boise's BODO area is a direct result of TIF, as are the big sidewalks and trees on Eighth Street. What was once an "economic liability" is now a strip of restaurants and a popular hangout. Future CCDC plans include a link from BODO to the Greenbelt.

Some legislators--those more tea party friendly than Eighth Street loiterers--told Unda' the Rotunda they weren't thrilled with the outcome of the subcommittee. House Assistant Majority Leader Scott Bedke did agree, however, that the bill is a good start.

And Kushlan said the subcommittee's efforts are a win for urban renewal in Idaho, though he has a few concerns about some parts of the new bill, including the section that makes redevelopment board members serve at the will of the mayor and city council.

A hearing is expected this week.

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