City exploring urban renewal

RATHDRUM – Run-down areas in Rathdrum may eventually get some extra help.

City officials said recently they’re looking into establishing an urban renewal district, which uses public funds to promote private development and spruce up blighted areas.

City Administrator Brett Boyer said last week the city is in the early stages of researching the idea.

“We’re looking at it … as a potential way to help with development in certain areas,” Boyer said.

“Part of the issue is where and what. Where would it be beneficial? You can specifically target the tax dollars in the urban renewal district to the areas you want to improve or work on, whether that’s infrastructure or other development,” he said.

Communities including Post Falls, Spirit Lake and Coeur d’Alene have established urban renewal districts to improve specific areas of town.

In Post Falls, for example, the urban renewal agency oversees six districts, including one in the city center. This summer, the city and urban renewal agency have teamed up to redo Fourth Avenue to make it more pedestrian-friendly and to enliven downtown.

The urban renewal districts, though, can be controversial.

In Coeur d’Alene, some residents have charged the Lake City Development Corp. with pandering to affluent private developers and siphoning money from other public agencies.

Urban renewal districts get funding through tax-increment financing. As property values rise within a district – resulting in more taxes being collected – the increase, or increment, feeds urban renewal agencies’ budgets.

Proponents say the funding is tax-neutral because it doesn’t add taxes for residents. But opponents say that other taxing districts, such as schools, don’t benefit from the increase in property values until the urban renewal district expires.

Local governments set boundaries for urban renewal districts, and they can operate for up to 24 years in Idaho. An urban renewal commission is appointed to oversee designated projects.

John Austin, an urban financial planner with the Panhandle Area Council, said most small towns that establish urban renewal agencies don’t run into much opposition.

“They don’t have a lot of ways to attract development and to help get infrastructure to those developments,” he said.

In Rathdrum, the city could target the downtown area or the state Highway 41 corridor – or even include proposed rail-crossing improvements with the regional Bridging the Valley project, Austin said.

“That’s what it really is all about – helping small towns deal with infrastructure needs” such as parks and sewer and water services, he said.

More than 10 years ago, Rathdrum formed an urban renewal commission, but it never identified any projects, said city Clerk Judy Hollenbeck.

“A board met and was looking at different options, but it never went any further,” she said. “They were looking into it, and it just didn’t pan out.”

In 2005, the cities of Dover, Sandpoint and Spirit Lake established urban renewal districts, Austin said.

Dover has experienced the most success, thanks to the development of the 285-acre Dover Bay waterfront community, Austin said.

In the last year, Dover has built a City Hall and fire station with tax-increment dollars, he said.