With two potential urban renewal districts in the works, staff at Post Falls and the Kootenai County Council of Commissioners are discussing what kind of money these projects could generate.
They agree that the recently passed legislation will reduce the flow of income.
Urban renewal districts are areas where a portion of property taxes is allocated to encourage development, improve infrastructure and attract employment opportunities for a limited period. The Post Falls urban renewal agency, established by the city in 1991, created eight districts and closed four.
In a meeting with the Commissioners on Tuesday, PFURA Executive Director Diane Fountain and Post Falls Town Administrator Shelly Enderud presented two neighborhoods – URD Downtown and Pleasant View – that the city is hoping for soon. launch.
Downtown URD is a revamp of a neighborhood created by Post Falls in 1994 that promoted a mixed-use downtown through street improvements and the construction of several city buildings.
Almost 15 years later, the city is revisiting the idea of a “downtown corridor” that serves as a gathering place for commercial businesses and residential opportunities.
“Right now we’re just looking to encourage this business development in our downtown area and continue what started over the past 20 years with restaurants, breweries and some small retail stores,” Enderud said. .
Some projects discussed for the downtown neighborhood include townhouses, improved parking and the revitalization of the Idaho Veneer site.
The Pleasant View neighborhood is similar to previous URDs, Enderud said, and focuses primarily on job creation and industrial development.
“The goal is to bring (Kenworth Sales Co.) back to Post Falls from Washington,” Enderud said. “They will create about 1,200 jobs and $ 250 million in revenue for the state of Idaho. The estimated payroll is around $ 78 million, as I remember they bring to the state.”
Other companies and developments have also expressed interest in the plots within URD Pleasant View, she added.
Districts use tax increment financing – a tool created by state and federal statutes – that separates property tax revenues into a base and an increment.
“The base value for money of this neighborhood stays with the tax entities, and the increased valuation is what goes to the urban renewal agency to pay for public infrastructure,” Fountain explained. “Then that money comes back to the tax entities once the district is closed.”
With House Bill 389, a piece of property tax relief law signed by Governor Brad Little last week, local governments are limited in collecting tax revenue from new construction like URDs to 90%. The bill also caps a government’s total budget at an increase of 8% per year – including new growth and property tax revenues.
Due to HB 389, Fountain said URD revenue for the county could be reduced by 20%.
“This is a pretty significant decrease in the value of the tax increase that you will receive this year,” she said.
With a base value of $ 2.7 million, Pleasant View’s URD could develop between $ 459 million (50% developed) and $ 881.9 million (100% developed), Fountain said. Based on those estimates, she said about $ 1.6 million would go back to the county.
The downtown district has a base of $ 182 million, Fountain said, with expected additional revenue of between $ 192 million (50%) and $ 288.9 million (100%). Under recent legislation, when the two districts close, Fountain said the county could claim 80% of the new income.
“For Pleasant View at 100% construction, that’s $ 400,000 less per year that will be available for the county,” she said. “In the downtown district, it’s $ 231,000 less. So it’s a big blow to the tax districts.”
Collectively, Commissioner Chris Fillios calculated that the legislation could reduce the county’s revenues from the two districts from $ 2 million to $ 1.6 million.
Commissioners unanimously approved the second of three stages of an intergovernmental agreement with Post Falls for the URD Pleasant View, allowing the annexation of plots from the county to the city. The third step, explained county legal counsel Pat Braden, is the transfer of power from these plots to the URD.
“We create jobs and jobs generate taxes,” Fillios said. “So maybe there is at least one element of growth that will pay for itself, especially when you bring in that level of income, potentially.”