House passes curbs on renewal districts

BOISE – Rehabilitating some rundown city areas might become more difficult under a bill the House passed Wednesday to prevent existing urban renewal districts from expanding.

North Idaho renewal agency officials lobbied against the change, saying it would tie their hands. But sponsor Rep. Jim Clark, R-Hayden Lake, said agencies currently have too much “wiggle room” to incorporate new property, which might not be blighted.

One of several bills to restrict renewal agencies proposed by Clark this session, HB 251 still requires Senate approval. The House approved the measure on a 40-30 vote.

Idaho’s 48 urban renewal districts have evolved as a way for cities to renovate deteriorated areas by capturing taxes on increased property values caused by renovation and reapplying the money toward development.

Under the change, cities could still form entirely new districts for buildings or small parcels of land near an existing district – a move potentially more difficult than enlarging an existing district.

Tony Berns, executive director of the Lake City Development Corp. renewal agency in Coeur d’Alene, said maintaining plans as a “living document” is vital to provide for unforeseen needs and to keep plans precise. The bill would be a “terrible limitation to the planning flexibility of a community,” he wrote in a March 1 letter to lawmakers.

But Clark said state law is not a living document. Rather than closing districts after they accomplish their plans and opening new ones as needs arise, officials tack on property to existing plans. Only one district, located in Post Falls, has closed after completing its plan, he said.

Clark said most urban renewal districts are not following the intent of the legislation as passed in the 1960s, and many cities now use them as a primary development tool. Initial plans should be “very precisely done,” he said.

Rep. Les Bock, D-Boise, said the legislation will “bring some sweeping changes” to how urban renewal districts do business.

“By passing this bill, you’re going to create some impediments to community improvements,” he said.

Len Crosby, chairman of the Post Falls Urban Renewal Agency, said it may be difficult for agency officials to guarantee improvements on a small property because it might not generate sufficient money through development.

“To create a little teeny district doesn’t make a lot of sense,” he said.

But Rep. Dennis Lake, R-Blackfoot, said officials treat urban renewal districts as a “cash cow” to create improvements, sometimes to non-blighted property, rather than returning money to taxpayers.

“These tax dollars never get back to finance the basic services” required by cities, such as police and fire protection, Lake said. “They’re using the money for infrastructure.”

In late January, a House committee introduced a similar Clark bill, HB 48, to hold districts to their original plans. In an effort to get votes, Clark killed that legislation and replaced it with HB 251.

At the same time, lawmakers also introduced Clark’s legislation designed to increase accountability of districts, HB 47, that would have required agency leaders to be elected officials. That bill died in committee.