Tax-increment fund use debated

POST FALLS – Several Post Falls Urban Renewal Agency projects are on hold as the organization and the city’s attorney spar over appropriate use of the tax-increment funds.

Until the debate is resolved the agency is delaying all payments, including funding for improvements to Fourth Street in front of the new Post Falls City Hall.

“It seems as though the city’s legal counsel was acting fairly unilaterally on this,” said Post Falls Urban Renewal Agency Director Luke Malek. “In the meantime, we have stopped all payment on everything, including to the city.”

Post Falls City Attorney Jerry Mason said two different issues are in question: Can the urban renewal agency fund projects that fit with the intent of urban renewal district plans but are not explicitly described in those plans, and what constitutes a “public improvement”?

“It was just a question. It wasn’t an accusation,” Mason said.

Mason’s position is that district plans must be amended to specifically include projects before those projects can be funded. He also questions whether an urban renewal agency proposal to fund work-force housing can be classified as a public improvement.

Mason said that public improvements made using tax-increment financing are typically parks, streets, sewers, sidewalks and other infrastructure and amenities available to the general public.

Urban renewal districts work by temporarily using the additional tax money generated by new development to pay for public improvements within the district.

The two proposals in question are to buy property in the city center for a “New Urbanism” pilot project to encourage development in the area and a plan to use property tax money from new, work-force-priced housing to pay for construction fees to keep the cost of that housing affordable.

Mason said both currently violate Idaho codes.

“It could go for housing if it was publicly owned housing,” Mason said of the work-force housing plan. The other project would be legal if it were added to the official urban renewal plan for the district, Mason said.

Malek disagreed.

“Everything we have been doing and how we’ve been operating is well within our parameters,” he said, adding that affordable housing is essential for development and that the agency never intended to hold onto the city center property for an extended amount of time, only as much time as necessary to jump-start other projects there.

He added that the accusations that the agency has been acting inappropriately were a complete surprise.

“I felt blindsided by it. It seemed to fly in the face of everything we’ve been trying to work toward,” Malek said.