Idaho lawmakers review urban renewal practices, pursue possible reforms

Idaho lawmakers are working to come up with a plan to overhaul the state's 50-year-old urban renewal laws, which have helped lure major companies to Idaho, but still face criticism for lax oversight.

A legislative interim committee met Monday to discuss the issue, but lawmakers want more information before submitting a recommendation to the 2016 Idaho Legislature. The panel will meet in October to gather public testimony and listen to more presentations.

Urban renewal agencies have become a staple in Idaho municipalities looking to improve blighted areas or boost economic growth. Idaho has about 70 agencies scattered through more than 20 counties. The agencies collect taxes from improvements in their districts and use that money to attract and finance new projects.

While municipalities have other options to raise money for economic growth — such as passing a bond through a ballot measure — state law bars municipality officials from creating local sales taxes. With no easy financing tool at hand, municipalities argue urban renewal agencies should remain available and flexible to use.

However, critics argue that some agencies abuse the law to promote development that would have happened anyway, while also operating under low accountability guidelines. Districts eventually exist only to further themselves, they contend, sapping local governments of millions of dollars.

Lawmakers on Monday's panel quizzed ElJay Waite, chair of the Caldwell Urban Renewal Agency, on his district's incentive program that provides grants of up to $200,000 for investments in businesses that create jobs after raising concerns that the district was using tax dollars to pay for private property upgrades.

"Sounds to me like it's skirting the law," said state Sen. Jeff Siddoway, R-Terreton.

Waite countered that the city's attorney reviewed the proposal and found no red flags.

Also a point of contention is how agency members are selected. Idaho law allows city officials to appoint board members rather than having them run for election.

State Rep. Kathleen Sims, R-Coeur d'Alene, said that she recently hosted a town hall where more than a 100 people showed up to talk about the Coeur d'Alene urban renewal efforts. She said she's worried the agency is passing out grants with no oversight. The overwhelming response from the public during the town hall was a desire for more accountability and transparency, Sims said.

"The board is accountable to no one, members are not elected," she said. "It's taxation without representation."

Yet, no one on Monday advocated for the total elimination of urban renewal agencies. That's because successful urban renewal efforts — like those in Twin Falls — have proven key in bringing big companies to Idaho.

The south-central Idaho agency chipped in more than $17 million in public improvements, like water and sewer maintenance, as part of the many incentives used to woo Greek yogurt-giant Chobani into building a plant in Twin Falls back in 2011. The same agency then supplied nearly $19 million in public improvements while securing Clif Bar into building a 300,000-square-foot bakery, which broke ground earlier this year.