The Ketchum Urban Renewal Agency, the body behind the creation of the Fourth Street Heritage Corridor, is going to spend the next few years working less on development projects and more on tackling existing debt in a tough economy.
At a special meeting on Monday, Aug. 17, City Administrator Gary Marks said the URA has three large outstanding loans totaling $5.56 million, and that a process has begun to restructure the debt into a single, more manageable financial obligation.
The debts include a $1 million loan from former City Councilman Steve Shafran to help construct the first two phases of the Fourth Street project, $2 million from the Idaho Housing and Finance Association for the purchase of property at the corner of Second Street and Washington Avenue, and $2.56 million from Mountain West Bank for the purchase of the Sun Valley Road building that now houses the Sun Valley-Ketchum Chamber and Visitors Bureau.
Marks said the city will have to begin repaying the principal on the loans, which now only require interest payments, at the end of 2011.
The URA, which is made up of Ketchum City Council members, manages the revenue brought in from the Urban Renewal District. This district was created by the city in 2006 to take advantage of a state law that allows the agency to receive a portion of increases in property tax rolls that occur through new development or inflation. The revenue then goes to support infrastructure improvement projects within the district.
"It's not unusual for a URA to take on debt early," Marks said in an interview. "In the language of the industry, this 'primes the pump,' developing projects to stimulate economic development and increase the increment."
Marks said the economic downturn has slowed that growth, but that he does not foresee any problems in repaying the loans.
For the upcoming fiscal year, which runs from Oct. 1, 2009, through Sept. 30, 2010, Marks anticipates that the URA will receive just under $500,000 from property taxes.
"We're paying off debt we anticipated we would have, not digging ourselves out of a hole," Council President Baird Gourlay said at the meeting.
However, Marks said that by undertaking a number of projects right after the inception of the URA, there will likely be a hiatus of a few years to pay off the loans before new capital projects can begin.
Jon Duval: email@example.com