Warring sides in the debate over Idaho's 45-year-old urban renewal laws are raising concerns about reform efforts that have dominated hours of hearings in the 2010 Legislature, but have so far managed to make nobody really happy, reports AP reporter John Miller. Click below to read Miller's full report.

Move to reform Idaho's URD law raises concern
By JOHN MILLER, Associated Press Writer

BOISE, Idaho (AP) — Warring sides in the debate over Idaho's 45-year-old urban renewal laws are raising concerns about reform efforts that have dominated hours of hearings in the 2010 Legislature, but have so far managed to make nobody really happy.

A 26-page bill was introduced Monday in the House Revenue and Taxation Committee. Full hearings are planned.

Idaho municipalities have come to rely on such agencies — there are now 66 statewide, in 23 counties, controlling about $50 million in property taxes, according to the Idaho Tax Commission — to improve blighted areas of Boise or boost growth in other Idaho regions.

They fear some of the bill's proposed changes could hamper their ability to sell bonds for their projects.

Meanwhile, critics of urban renewal agencies say Monday's measure falls short of boosting public oversight of districts they believe operate outside the purview of good representative government.

If opposition from all quarters is a sign of good legislation, then Rep. Dennis Lake, chairman of the House tax panel, has the finest bill of the session. Lake, R-Blackfoot, says even though this compromise package resulted from weeks of hearings and discussion, in public and behind closed doors, it could be amended, yet again.

"There's nothing in here that's absolutely written in stone," Lake told The Associated Press. "If we've done something that's not workable, we'll certainly address it."

Urban renewal agencies collect property taxes from improvements inside their districts — called a "tax increment" — and dedicate the revenue to provide incentives to lure and finance new projects.

In Boise, for instance, Capital City Development Corp. credits the law with helping it plant trees, build parking garages, lure private developers — in short, turn a barren urban landscape created in the 1970s with the razing of historic buildings into a more-vibrant economic center.

Critics, however, argue some districts abuse the law to promote development that would have happened anyway. Districts eventually exist only to further themselves, they contend, sapping local governments of million's they'd otherwise have to cover services necessitated by growth.

Recently, such districts have been the target of state court battles where they've been accused of skirting the Idaho Constitution's requirement of a two-thirds vote before taking on debt.

For instance, foes of Rexburg's plan to build a swimming pool challenged its urban renewal agency's ability to finance the project without asking residents first.

In November 2009, however, the Idaho Supreme Court ruled urban renewal districts are independent from local governments; no vote was necessary, justices wrote.

Now, Capital City Development Corp. director Phil Kushlan said he's been told by his Denver-based bond lawyers that provisions in Monday's bill giving mayors and city councils more authority to remove urban renewal district commissioners without cause could have the effect of undoing that state high-court victory. He's been told that if the bill passes, they might not sign off on future bonds.

"I think you've got some very difficult and limiting factors that call the effectiveness of (urban renewal districts) into question," Kushlan said.

Rep. Leon Smith, R-Twin Falls and the bill's sponsor, tried to pre-emptively remedy Kushlan's concerns by defining an urban renewal agency as an "independent public body." Its debts, according to Smith's measure, "are not debts or liabilities of the municipality."

What's more, the bill limits mayors to firing just a single commissioner without cause every six months, meant to prevent a politically motivated bloodletting, while not going so far as to require commissioners be elected, as some urban renewal foes demand.

"That would have been totally unacceptable, in my view," Smith said.

Dan Gookin, a technology writer from northern Idaho and candidate for Coeur d'Alene City Council in 2007, has taken on his city's Lake City Development Corp. over what he sees as its unfettered power to pick and choose projects, with little regard to good public policy. Gookin hadn't seen Smith's bill Monday morning, but he's heard it falls short of reforms he advocates.

Giving mayors or city councils more power to remove commissioners is unlikely to have any real impact, because those same people made the appointments in the first place, Gookin said. Instead, he'd like to Idaho to create a state oversight agency that gives critics an opportunity to raise concerns with a panel not so closely affiliated with local politics.

"You can't fix urban renewal by fixing city hall," Gookin said.

Details of bill to reform Idaho urban renewal law

Copyright 2010 The Associated Press.

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