Wednesday, February 23, 2011

URA reform bills almost through House

What implications would legislation have?

Express Staff Writer

Despite lobbying by Sun Valley Co. and other major developers to quash proposed curtailments to the powers of urban renewal agencies, the Idaho House is set to take the last step today in passing four bills that would do just that.

Randy Hall, Ketchum mayor and URA chairman, sent a letter to the House last week claiming the reform would have a "chilling effect" on the URA's ability to spur growth through partnerships with developers.

"We urge you to not pass this urban renewal legislation," he wrote.

The House planned to hold the third and final reading of the bills today, Feb. 23, then pass them on to the Senate.

Urban renewal districts are created in areas designated by a city government as deteriorated or underdeveloped. The purpose of the districts, as set out by state law, is to promote development by building infrastructure. That's done through property taxes. The district—legally separate from the city government—doesn't increase property taxes, but takes a piece of the pie that would normally be distributed among the school district, county, city and other taxing districts. The district gets only the property taxes resulting from property value increases during the time of the URA, which is a maximum 24 years.

The Ketchum URA agreed to return half the property-tax revenue generated from the Bald Mountain Lodge—planned on Main Street at the block between First and River streets—or $1.5 million, whichever is less, to pay for surrounding infrastructure such as sidewalks.

"Key to [Bald Mountain Lodge's] financing is the partnership we negotiated with the Ketchum URA," said Michael Kerby, the lodge's landowner.

Another example is Sun Valley Co., which is planning a 138-acre ski base village at River Run, including infrastructure such as roads, bridges, sewer and water.

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"The cost to install these facilities is estimated to be in excess of $25 million," said Wally Huffman, Sun Valley Co.'s director of resort development. "It is likely the River Run project will not happen without the URA partnership on infrastructure."

But would the proposed reform hinder Ketchum's ability to engage in these partnerships with developers?

House Bill 96 would allow government entities—like school, highway and fire districts—to opt out of urban renewal districts at their creation, meaning URAs wouldn't receive all the property taxes from growth but would have to share. Hall argues that the URA may then not have enough revenue to fund its projects creating growth in the first place.

House Bill 97 would require URAs to clearly spell out projects before beginning them and force the URA to return unused money.

"We are opposed ... because it would prohibit the URA from saving for projects," Hall said.

House Bill 110 would require URAs to hold public hearings before adopting their planned projects.

House Bill 114 would require the URA's board members to be chosen in a countywide election. Currently, the city leaders choose the URA board.

Rep. Wendy Jaquet, D-Ketchum, argued in a phone interview that this doesn't make any sense since URAs often apply only to land within a city, not a whole county.

"None of these work except maybe 110," she said, adding that URAs are the "only economic tool" cities have at their disposal and shouldn't be micro-managed.

However, she said, a bill just introduced by Rep. Leon Smith, R-Twin Falls, may be a "good compromise" between those wanting more control over URAs and those wanting nothing changed. Smith's bill would require an urban renewal district's sponsoring governing agency—the Ketchum city government, for example—to annually review a district's funds not designated for a specific purpose. The council would have final say, after a public hearing, on whether the money stays with the URA or returns to the usual taxing district. The bill would also prevent URAs from expanding their boundaries.

This last piece wouldn't be supported by Ketchum, which added Sun Valley Co.'s 138 acres to the URA area.

"We'll have to look at it more closely," Jaquet said of the bill, "but this might work."

Trevon Milliard:

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