Pf Considers Disadvantage

Post Falls leaders could officially decide their town is a “disadvantaged border community” at a hearing Tuesday evening.

The label is the first step in allowing special financing to help private business.

If the Post Falls City Council adopts an ordinance declaring itself disadvantaged, then the city Urban Renewal Commission can approve certain commercial and industrial projects for tax-increment financing.

Opponents of the financing method say it’s a means of subsidizing private business at the expense of the taxpayers.

But proponents say the opposite is true.

By encouraging business and increasing the property tax base, “the end result is to help lower property taxes,” said John Hendrickson, Post Falls city administrator.

A state law, sponsored by Rep. Hilde Kellogg, R-Post Falls, was passed last year specifically to allow tax-increment financing for “disadvantaged border communities.”

The Kootenai County Property Owners Association vigorously opposed the plan and pushed a Post Falls ballot measure that would have required a public vote for every attempt to use tax-increment financing.

The ballot measure failed in February.

That means that once the City Council passes its ordinance, then developers only have to go to the Urban Renewal Commission to get the financing approved.

Tax-increment financing allows cities to back bonds sold to fund infrastructure, such as streets and sewers. The bonds are paid back by tax revenue generated from those land improvements.

Proponents say the method is virtually risk-free for the taxpayer. If the project fails, investors who bought the bonds are the ones at risk.

Taxpayers do foot the bill for increased public services while the new development’s taxes go toward paying off the bond debt, however.

The ordinance specifically designates the area west of McGuire Road to State Line as an economically disadvantaged area for commercial and industrial developments 40 acres or more in size.

The rest of the city is disadvantaged only in terms of industrial developments of 40 acres or more, according to the proposed ordinance.

The idea to designate Post Falls a disadvantaged border community was raised to help bring about the proposed International Expo, a mega-mall on the scale of Mall of America.

Plans for Expo have been scaled back since the developer failed to secure any major anchor retailers.

Now Expo is emphasizing industrial uses.

Expo’s developer helped pay for a consultant’s report that provides evidence that the city is economically disadvantaged when placed next to Spokane. The council members will each get a copy of the report written last fall.

“Nothing’s changed, so the report’s still valid,” Hendrickson said.

The council meeting starts at 7 p.m. Tuesday in City Hall.

, DataTimes MEMO: This sidebar appeared with the story: MEETING Post Falls City Council meets at 7 p.m. Tuesday in City Hall.