It's a Deal: Boise Defers $500,000+ in Fees for Gardner Project

Yes, Gardner will have to pay, but not anytime soon (and interest free)


What's half-a-million dollars between friends?

Not much, when those friends are the city of Boise, Greater Boise Auditorium District, Capital City Development Corporation, Valley Regional Transit and the Ada County Highway District--and anyone else who thinks that the Gardner Company has become their personal genie, ready and willing to grant all their wishes.

Much has been broadcast and written about the Tuesday, July 1, groundbreaking at Boise's Grove Plaza, which will launch a massive construction project to build a subterranean transit center; new retail and office space, including a corporate headquarters for Clearwater Analytics; and something called the Centre Building, which will complement the Boise Centre with new dining and convention space. But there has been little public conversation about the unprecedented number of agreements between Gardner and the city, GBAD, CCDC, VRT and ACHD; and one of the more interesting items is a contract that would see more than $500,000 in fees deferred until Gardner is ready to get a certificate of occupancy for the buildings--in other words, at the end of construction.

According to a contract approved June 10: "Now, therefore the City and the applicant (Gardner) agree all building and development impact fees the City is authorized to charge and collect from the applicant in connection with the applicant's request for building permits for the property shall be deferred."

How much are we talking about?

Building permit fees: $239,481.

Building application fees: $155,663

Fire plan review fees: $38,317

Development impact fees (police and fire): $99,846

Erosion and sediment control permit fees: $315

Gardner and the city of Boise agree that the sum of $533,622 is an estimate of "all charges due," and the amount will be adjusted "based upon certificates of value and plans submitted with building permit applications."

Meanwhile, city officials have agreed to issue building permits for Gardner. But the certificate of occupancy won't be handed over until the fees are paid in full. If, by some chance, the building permit were to expire prior to the fees being paid, the building fees (but not the other fees) would be immediately due. And in no case would any of the fees be deferred beyond two years from the date of the structure's application.

"The agreement includes redundant protections to ensure payment of deferred fees," reads the contract. "Most of the deferred fees, if unpaid, will constitute a special assessment against the property, collectible in the same manner as taxes."

The contract also reveals some other interesting numbers, the initial valuations of each of the pieces that will become the City Center Plaza:

The subterranean multi-modal transit center (to be operated by VRT): $9.1 million

The headquarters for Clearwater Analytics: $23.2 million

The Centre Building, including structured parking (to be owned by GBAD): $13.3 million

The new retail space to be added to the U.S. Bank Building (owned by Gardner): $415,000

Additionally, Gardner has entered into a separate agreement with the Ada County Highway District to also defer ACHD's impact fees until later in the building process. The amount of the ACHD impact fees were not yet calculated in the agreement.

Making the deal that much sweeter is a complex agreement by which GBAD has approved something called "a judicial confirmation," which, contrary to its name, has nothing to do with confirming judges. Instead, it's an elaborate plan in which the auditorium district will use CCDC's authority to incur debt by selling tens of millions of dollars worth of 24-year bonds. CCDC likes to call the arrangement a "pass through," but nothing is passing through without a 25-page lease agreement, including a dozen articles (sections) and 66 subsections (BW, News, "The Centre Piece," May 7, 2014).

And here's another wrinkle: The project will relocate Boise's geothermal lines beneath Main Street, but the city now wants to up-size its geothermal lines from six-inch pipe to eight-inch pipe--starting with the Gardner location. However, a separate deal allows the developer to only pay the cost of a six-inch pipe, with the city covering the difference.

But things should be warming up well before then, as Gardner lights the fuse on the hottest deal in town on Tuesday, July 1.