City Council

Idaho Falls Sister Cities Youth Meeting October 16, 2017 Attendees: Cameron Archer Elliot Boring Kylie Eaton Brenda Padron Rebecca Smith David Archer Melinda Cebull Katie Eaton Jorge Padron Whitney St. Michel Jenna Bauer Peter Cebull Mario Estrada Kendra Peck Ian St. Michel Karen Bauer Tate Corbridge Victoria Estrada Nathan Peck Anna St.Michel Max Benjamin Garrett Corbridge Delsina Matranga Dallin Peck Jackie Sugai Maggie Boring Brennan Corbridge David Matranga Laurie Retallic Stephanie Van Ausdeln Wendy Boring David Eaton Gabe Padron Jacobi Retallic Ness Villasenor Business Section of the Meeting Minutes: The October 4th meeting minutes were provided to the group by email. Mario motioned to approve the meeting minutes and Kendra seconded his motion. Fundraisers:  JACL Bento Fundraiser – David Eaton contacted the JACL to see if there would be a bento fundraiser this year. David found out the JACL decided to hold the fundraiser every other year. He let them know we are available if they need help in the future.  Ice Skating Night – David Archer talked with people at the ice skating rink, and they seem interested in having the fundraiser. He has the contact information for the person at the city but has been unable to contact them.  Paramount Discount Cards – Whitney has emailed the Paramount manager to set up a date for ticket sales. She has not heard back and will continue to try to contact him.  Snake River Rapid Wash – Whitney suggested a car wash in the spring. She said this was a successful fundraiser for the swim team. International Sister Cities: David Eaton asked members of the group if they had a chance to read the emails from the International Sister Cities. He said the emails are about fundraisers, study abroad opportunities, and a national Sister Cities meeting in Denver. He encourage members to read the emails and let him know if there is group interest in attending the meeting in Denver. Japanese Lessons: Junko Flynn is willing to provide Japanese lessons to groups of 5-6 students for $15 an hour plus $10 per student cost. The group discussed whether or not the group should pay the $15 fee or if it should be split between the students who take the lesson. The group decided to split the fee so members would pay $12 - $13 instead of $10. The lessons would be weekly at the library. The group talked about having students prepay for the month. The times for the lessons have not been decided. A list was sent around to help decide what time would work best for most people. The table below shows students availability. Name Mon Tues Wed Thur Fri Sat Cameron Archer Y Y Maggie Boring Y Y Y Elliot Boring Y Y  Tate Corbridge Y Y Jacobi Retallic Y Y Y Gabe Padron Y Y Y Y Ian St Michel Y Y Jenna Bauer Y Y Y Y David Matranga Y Y Y Nathan Peck Y Y Dallin Peck Y Y Anna St Michel Y Y Kylie Eaton Y Y ? Stephanie Van Ausdeln Y Student Section of the Meeting Ness talked about some applications to help students learn Japanese. She provided the list below. Name of App Description Free/Free trial Monthly Cost Annual Cost Duolingo Always Free, No payment Free N/A N/A Required Memrise Lots of free content, Paying is Free $8.99 $59.99 not necessary Daily review options Mondly Free beginner course & core free $9.99 $47.99 vocab Free Daily lessons FluentU Free beginner lessons Free $29.99 $239.99 Free video/audio Flash cards Busuu Free lessons and courses Free $9.99 $69.99 Social aspect Babbel 1 lesson available in every Free $9.99 $59.99 course Hello Talk Free social, Payment not Free $2.99 $21.99 required Lifetime payment <80.00 Italki Not free, Social app, Comparable to Hello Talk Learn Japanese $7.99 unlocks all lessons not sure its credibility. (Howell Peebles) Japanese A better Google Translate for Japanese (Nenzo) Drops We also played a game about cognates. Cognates are words that sound the same in different languages. Here is a list of some cognates that we used. Large list of cognates in Japanese - Great list - not all of these are English Cognates but the list is extensive. Motion to adjourn was made by Kendra and seconded by Victoria.  Mayor Casper and City Council Randy Fife November 3, 2017 Timeline for 4-H Property Purchase The Bonneville County Commissioners have determined, pursuant to the Idaho Code that applies to counties, to offer the 4-H Fairgrounds property (Tract 2) for sale to the City. The County’s decision was based upon a Purchase and Sale Agreement that the Council previously reviewed and (preliminarily and informally) approved. Next steps: The City and the County each need to twice publish in their official newspaper, a public hearing date, time, and place (along with general features of the Agreement) to consider, then vote on the Agreement. If both entities vote by at least a 2/3rds majority to complete the purchase, the City will execute the Agreement and the sale will occur pursuant to the Agreement. The City will hold its hearing on November 21st. The County will hold its hearing on November 22nd. Two other activities are occurring simultaneously to facilitate the design and construction of the Maeck Education Center on Tract 2. 1. Appraisal. The County has ordered an appraisal of the property. If the property appraises between the floor price of $600,000 and the ceiling price of $750,000, the City will pay the actual appraised value. 2. Platting. The City is drafting a plat for the County to sign. The plat will be scheduled for consideration by the City Planning &Zoning Commission on November 14th. NOTICE OF PUBLIC HEARING A public hearing pursuant to Idaho Code section 67-2323, will be held to consider City of Idaho Falls purchase from Bonneville County of 3.382 acres of 4-H property at the southeast corner of Rollandet and Rogers Streets. Contract terms include payment by the City at execution of a non-refundable $50,000; independent appraisal to set total purchase price of not less than $600,000 and not more than $750,000; closing within 30 days of appraised value; and, vote by each party. The hearing will be held at the City of Idaho Falls Council Chambers, in the City Annex Building, located at 680 Park Avenue, Idaho Falls, Idaho at 7:30 p.m. on Tuesday, November 21, 2017. All interested persons are invited to appear and provide comments regarding the proposed purchase. Dated this 2nd day of November, 2017 s/ Kathy Hampton Kathy Hampton, City Clerk Publish: November 7 and November 14, 2017  The Basis for My Vote Against the Urban Renewal Plan for Jackson Hole Junction By Lee Radford Chair, Idaho Falls Redevelopment Agency For many years, the Idaho Falls Redevelopment Agency (“Agency”) has been successful in working with developers and the City of Idaho Falls to use tax increment financing to attract new projects to used and distressed sites in the urban core of the City. Because the urban renewal tool has been narrowly focused on renewing “urban” areas, the Agency has been able to lead the way to revitalizing the central, but previously built-out, core of the City. The results of this effort speak for themselves, as the appearance and function of the urban core of the City has improved dramatically during the Agency’s life. However, on September 21, 2017, the Agency voted to authorize up to $4 million in tax increment financing for Jackson Hole Junction, a development located on the new Sunnyside exit of interstate highway I-15. While the majority of the Agency members approved this proposed plan, I voted against that authorization. While I share the excitement of the other Agency members for a new real estate project in our community, I nevertheless believe that it is not an appropriate project for Agency assistance. Because I will not be available for the City Council’s work session on this project, it may be helpful for me to provide more detail in writing regarding why I believe this authorization for public funds for the project was not appropriate, and why I believe this step sets the Agency on a path that will harm its mission. This is Development, Not Re-Development For a market-based approach to city planning, it is important that City government follow the axiom that “development must pay for development.” That means that new development must pay for the new infrastructure needed to support that development. The new streets, sewer lines, water lines, electrical lines, and other infrastructure needed must be paid for by the developer who seeks to develop a new area. This approach utilizes the free market to push developers to utilize locations close to existing infrastructure, which minimizes development costs. Under the market system, real estate developers 1 can then select the best sites with the lowest development costs. Generally, this market approach results in development in the optimal locations for the community. But this approach sometimes fails when an area that has previously been developed is passed over by developers because the costs of clearing a previously developed area are higher than locating on empty agricultural land. When that happens, previously developed urban areas are left behind to deteriorate further, as new development locates further from the city center, on valuable agricultural land. The result is a need for more infrastructure, longer roads, longer sewer and water lines, and deteriorated neighborhoods. This extension of services can become a burden on the City and other governmental agencies, and result in higher tax rates. The Idaho legislature has provided the tax increment financing tool to urban renewal agencies in Idaho to help to address this imbalance. Tax increment financing provides an incentive for developers to re- develop brownfield areas that have been blighted and left behind. The central purpose of these tools is to “renew” areas that have previously been developed, but are now distressed and deteriorated. Essentially, the purpose of these tools is to “redevelop,” not “develop.” Use of the tool beyond this central purpose provides support for those who oppose tax increment financing for urban renewal. Because this tool has been so helpful to the City of Idaho Falls, it is prudent to keep its use within strict bounds. Keeping the tool within these strict bounds avoids further endangering the future viability of Idaho’s heavily challenged urban renewal tool, which already regularly confronts a vigorous and organized opposition. The Proposed Location Is Not Urban or Blighted or Developed The proposed development at Jackson Hole Junction is certainly a positive and worthy commercial real estate development. It is commendable that entrepreneurial developers would invest in the community in this way. It appears to meet a need for services at this key intersection of Sunnyside Road and I-15. It would appear to be a good addition to the Idaho Falls community, and would likely be successful in attracting businesses to locate there. It is easy to see why this location has attracted efforts at commercial development. But the Jackson Hole Junction “urban renewal” plan asks that the Agency provide public money to the developer in order to build the road, sewer, water, and electrical infrastructure needed for this project. The location of the project at the new intersection of Sunnyside Road and I-15 contradicts that request. The land has previously been used for pasture and agriculture in a typical county pattern of small rural farms and houses associated with those farms. In no way is this area “urban,” nor can it be considered as previously “developed” beyond its historic use for rural farming. There is no need to provide any further incentive to develop this prime freeway intersection location. The City and other governmental entities have previously provided extensive support to this location. Sunnyside Road has been expanded. A new bridge has been built nearby on Sunnyside Road over the Snake River. The freeway intersection was upgraded and improved. Through the work of government and investment of many tax dollars, this land has come to be located on a significant commercial crossroad. 2 Further evidence that this is not a distressed or “deteriorated” area is shown by a number of significant new developments on the parcels immediately surrounding this location. A number of real estate developers have previously built new developments surrounding this prime land. This includes five new state-of-the-art automotive dealerships: Smith Chevrolet, Smith Honda, Ron Sayer BMW, Teton Toyota, and Teton Volkswagen. The land immediately surrounding this area also includes a new convenience store, retail center, hotel, and bank. This new commercial development around this area is shown in the aerial view provided in the proposed plan. (Proposed Urban Renewal Plan, Attachment 1). Each of these other developments were built in the areas immediately surrounding the proposed Jackson Hole Junction, but none asked for or received any tax increment financing to build the roads, sewer lines, water lines, and electrical lines needed to support their developments. Authorizing this plan leaves the question of why this parcel merits tax increment financing, when none of the surrounding parcels received such public assistance. If authorized, this surrounding development raises two other questions. First, how will the developers of these previous new projects feel once they understand that this neighboring project received tax increment financing assistance, while their projects did not? Second, will those prior developers take any action to obtain public tax increment financing assistance for the costs they spent on roads, sewer lines, water lines, and electrical infrastructure, once they understand that these same costs were provided for the Jackson Hole Junction project? While such an after-the-fact request is likely not viable, these prior developers could not be faulted if they felt treated unfairly. 3 In light of these prior developments, it is not possible to characterize the land of Jackson Hole Junction as “deteriorated” or “urban” in comparison to other properties in our City. 1 This Development Provides No More Economic Development than Any Other Development The developer of Jackson Hole Junction argues that the proposed project should be allowed because it would contribute to economic development. The developer correctly argues that economic development is a permissible purpose of tax increment financing under the urban renewal laws. The developer also correctly argues that the tax money provided for this subsidy is tax money that will be paid by the buildings on this development. The flaw in this argument is that it fails to distinguish this location from any other real estate project. Every new real estate development provides economic development in the same way as this project. Every new house and every new business will add their new value to the property tax rolls, and pay taxes based on their value, in the same way as this development. Similarly, every new development contributes to the economy through the creation of jobs for construction, operations, and maintenance. Every new home constructed in a new subdivision adds value to the property tax rolls, and adds jobs to the economy. But in spite of this, each homeowner is expected to pay their full property taxes, all of which go to the governmental entities providing services for that home. Through the price of each developed lot, each homeowner also pays its share of the costs of the new street and sewer and water and electricity infrastructure provided for that home. There is no evidence that this particular development would provide any more economic development than any other development currently underway in Idaho Falls. And the urban renewal laws are not currently structured in a way that would allow any distinction between the economic development from this development as opposed to any other subdivision or real estate development in the community. In other words, there is nothing to indicate that a dollar spent building this development would improve the economy any more than a dollar spent building any other home or business. And neither the 1 Note that the Agency and the City have approved an eligibility report for the Jackson Hole Junction Area, which found that the area meets the criteria for “deteriorating” or “deteriorated” area under the definitions of those terms provided in Idaho Code §§ 50-2018(9) and 50-2903(8). These criteria provide a minimum threshold for the use of tax increment financing as part of an urban renewal plan. But, as evidenced by this location, this minimum threshold can be easily satisfied, so much so that these criteria can be found to have been satisfied even at one of the most prime undeveloped land sites in the area. If nothing more than these criteria were needed, nearly every parcel of real property would qualify for urban renewal funds from taxpayer money. A standard at that low bar would undermine the free market principle that “development pays for development.” The Agency has never considered the satisfaction of this minimum threshold to be sufficient to justify the application of tax increment financing. Instead, as a matter of policy, the Agency has limited its assistance to areas that were clearly previously developed in the urban core of the City. This more conservative approach ensures that the urban renewal tool is not over-used to pay for normal greenfield development. This more cautious approach is similar to the approach to eminent domain. The Agency also meets the criteria to use eminent domain procedures to take land for urban renewal purposes. Nevertheless, in following prudent policy of avoiding government overreach, the Agency has never considered using those eminent domain powers. The granting of the power to take an action does not mean that the Agency should refrain from using the power in a more conservative manner in the interests of good government. 4 Agency nor the City has any criteria for determining why it should assist this economic development rather than any other new development project. With no way to distinguish the economic impact of this development from the economic impact of any other commercial development, arguments regarding economic development fail to provide any basis for the approval of the Jackson Hole Junction urban renewal plan. Subsidizing this Development Provides the Wrong Incentives When used in distressed areas of a community, tax increment financing provides an incentive for developers to re-use and re-develop areas that have been left behind. Tax increment financing provides a boost to these distressed areas, so that they can compete with greenfield and undeveloped areas further from the core of the community. By re-using and maintaining older areas, the size and distance required for government services is lessened, saving taxpayer money. However, if tax increment financing is used to subsidize a greenfield development on undeveloped land, it undermines the purpose of the urban renewal tool. If tax increment financing is used to subsidize greenfield development, it encourages the developers to continue to build on undeveloped greenfields, which are usually at a distance from the core of the public services. Such an approach acts as a disincentive to develop in the urban core of the community, because it subsidizes development away from that urban core. This is a fundamental problem with Jackson Hole Junction plan. While it is a worthy private effort at development, using public funds to assist that development distracts from the incentives to encourage development on the used and distressed central areas of the City of Idaho Falls. The prior urban renewal areas of the Redevelopment Agency have been in highly distressed areas of the City. Anyone who lived in the community before the initiation of the Agency in 1989 knows that the areas currently under urban renewal plans were heavily blighted. Since 1989, the Agency and the City have effectively used the tax increment finance tool to encourage development near the Snake River and at the core of the City. There can be little doubt that the tool has encouraged a redevelopment and renaissance of the center of Idaho Falls. Subsidizing this greenfield development on a freeway intersection far from the city center undermines the distressed areas of the community that still need much attention. There are other areas at the core of the City that need to attract redevelopment and urban renewal. This includes the Northgate Mile, the commercial area of First Street, and the former creamery area north of Pancheri Drive. Beyond that, there are yet other potential areas that need urban renewal, including the area north of E Street downtown, the west side area near Happyville, or other areas alongside the rail tracks through the City. If this developer had desired to locate in these areas, the tax increment finance tool could be used to its full extent to incentivize the revitalization those areas. But this developer did not select this location because it was at the urban core, or because it was blighted. This location was selected because it is prime bare commercial land located on a newly redeveloped freeway intersection. Providing any subsidy to this development actually undermines urban renewal, because it entices hotels, restaurants, and other businesses to locate far from the urban core, rather than in the heart of the City. 5 Hotels and restaurants that may have considered locating in the urban core are instead subsidized to locate outside of the city center. This plan also undermines urban renewal more broadly by signaling developers that they do not need to incur the expense of redeveloping brownfield parcels in order to get urban renewal money. Instead, this subsidy would give a precedent to developers that they can obtain tax increment money for any greenfield development at any prime commercial location. That is a course that is directly contrary to the purpose of urban renewal, and would set the Agency on a path that would engender opposition from the groups who already feel that the urban renewal tool has been improperly used in that way at other locations. This Area Has Already Developed Without Any Subsidy A fundamental question for deciding whether to assist any development project is whether the area would develop without any subsidy from the Agency. If taxpayer money is not needed for a development, taxpayer money should certainly not be provided for the project. In this case, the developer will represent that this subsidy is necessary for the development of this area. But the evidence undermines that contention, in two significant ways. First, this developer announced this development long before ever approaching the Agency for assistance. That announcement did not contemplate any assistance for this development from the Agency. At that point in time, the developer apparently considered that the development was possible without any assistance from taxpayer funds. Second, as shown in the aerial photo above, this area has already developed without any assistance from the Redevelopment Agency. As shown above, this development includes five new state-of-the-art automotive dealerships: Smith Chevrolet, Smith Honda, Ron Sayer BMW, Teton Toyota, and Teton Volkswagen. The area also includes a new convenience store, retail center, hotel, and bank. Not only is this area prime for future greenfield development, that type of development has already happened in a significant way. In light of the extensive development at this prime location, there can be no dispute that this area will develop without any governmental assistance. All of these other developers were able to complete their developments in the same area without any subsidy from tax increment financing. And those developers were required to invest significant amounts for infrastructure. In light of these facts, there is no reason why this property cannot develop as the other surrounding properties already have done. The Position of Bonneville County The two taxing entities that are impacted the most by the loss of funds through tax increment financing by the Agency are the City of Idaho Falls and Bonneville County. Tax increment financing means that both of these entities forego property tax revenue needed to provide public services to the entire area, in an attempt to improve some areas in a way that will decrease property taxes in the long run. 6 Because of this impact on Bonneville County, for many years the Redevelopment Agency has tried to make decisions in close cooperation with the wishes of the elected Bonneville County Commissioners. Other communities in the State of Idaho have put the concept of tax increment financing in jeopardy by ignoring the wishes of elected County officials. The Redevelopment Agency has tried to avoid that by receiving the input of the County Commission. For that reason, a meeting was scheduled and held regarding this Plan with all three members of the Bonneville County Commission. At that meeting, the Commission asked again that the Agency to follow two guiding principles. First, the Commission does not want the Agency to pay for what other developers normally pay for. Second, the Commission does not want the Agency to pay for what the City would normally pay for. The Commissioners communicated that the Agency should remove impediments to development, but should not pay for normal development costs. The Jackson Hole Junction plan fails these County criteria. Most of the costs requested are simply costs for the construction of a road, sewer lines, water lines, and electricity infrastructure that any developer would be required to provide for this type of development. To the extent the City requires over-sizing of any of infrastructure for City needs or for the purposes of future developments, the City normally pays those costs. County Commissioner Dave Radford voted in favor of the Jackson Hole Junction proposed plan, as passed by the Agency. However, my impression from the meeting with the County Commission was that his vote did not reflect the will of the majority of the County Commission, nor did it follow the guidelines the Commission requested. For these reasons, I would strongly advise the City Council to hear from the entire County Commission before endorsing this plan. For many years, the Bonneville County Commission has been a key supporter of Agency projects that carefully utilize the urban renewal tool within proper limits. In light of the County’s past support and cooperation with the Agency, there is no reason to create any unnecessary division between the City and the County on this issue. Conclusion The bottom line is that the Agency is supposed to be the Idaho Falls “Redevelopment” Agency, not the Idaho Falls “Development” Agency. The name the City gave to the Agency clearly spells out that the Agency’s mission, which is to use its powers to “redevelop” areas that were previously developed but which are now distressed or outdated. This Agency is not sanctioned to assist with initial “development” of green field projects. And the Agency has no governing criteria to follow for the development of green fields. Jackson Hole Junction is located on prime real property, on the new intersection of Sunnyside Road and I-15. This is new development on what is essentially bare farm ground. Based on my experience, the use of tax increment financing on this new development is contrary to the Redevelopment Agency’s mission. Providing this subsidy for this project is not fiscally conservative. It would also significantly derail the historic efforts of the Agency to focus these tools on the blighted areas in the urban core of the City of Idaho Falls. 7  The Basis for My Vote Against the Urban Renewal Plan for Jackson Hole Junction By Lee Radford Chair, Idaho Falls Redevelopment Agency For many years, the Idaho Falls Redevelopment Agency (“Agency”) has been successful in working with developers and the City of Idaho Falls to use tax increment financing to attract new projects to used and distressed sites in the urban core of the City. Because the urban renewal tool has been narrowly focused on renewing “urban” areas, the Agency has been able to lead the way to revitalizing the central, but previously built-out, core of the City. The results of this effort speak for themselves, as the appearance and function of the urban core of the City has improved dramatically during the Agency’s life. However, on September 21, 2017, the Agency voted to authorize up to $4 million in tax increment financing for Jackson Hole Junction, a development located on the new Sunnyside exit of interstate highway I-15. While the majority of the Agency members approved this proposed plan, I voted against that authorization. While I share the excitement of the other Agency members for a new real estate project in our community, I nevertheless believe that it is not an appropriate project for Agency assistance. Because I will not be available for the City Council’s work session on this project, it may be helpful for me to provide more detail in writing regarding why I believe this authorization for public funds for the project was not appropriate, and why I believe this step sets the Agency on a path that will harm its mission. This is Development, Not Re-Development For a market-based approach to city planning, it is important that City government follow the axiom that “development must pay for development.” That means that new development must pay for the new infrastructure needed to support that development. The new streets, sewer lines, water lines, electrical lines, and other infrastructure needed must be paid for by the developer who seeks to develop a new area. This approach utilizes the free market to push developers to utilize locations close to existing infrastructure, which minimizes development costs. Under the market system, real estate developers 1 can then select the best sites with the lowest development costs. Generally, this market approach results in development in the optimal locations for the community. But this approach sometimes fails when an area that has previously been developed is passed over by developers because the costs of clearing a previously developed area are higher than locating on empty agricultural land. When that happens, previously developed urban areas are left behind to deteriorate further, as new development locates further from the city center, on valuable agricultural land. The result is a need for more infrastructure, longer roads, longer sewer and water lines, and deteriorated neighborhoods. This extension of services can become a burden on the City and other governmental agencies, and result in higher tax rates. The Idaho legislature has provided the tax increment financing tool to urban renewal agencies in Idaho to help to address this imbalance. Tax increment financing provides an incentive for developers to re- develop brownfield areas that have been blighted and left behind. The central purpose of these tools is to “renew” areas that have previously been developed, but are now distressed and deteriorated. Essentially, the purpose of these tools is to “redevelop,” not “develop.” Use of the tool beyond this central purpose provides support for those who oppose tax increment financing for urban renewal. Because this tool has been so helpful to the City of Idaho Falls, it is prudent to keep its use within strict bounds. Keeping the tool within these strict bounds avoids further endangering the future viability of Idaho’s heavily challenged urban renewal tool, which already regularly confronts a vigorous and organized opposition. The Proposed Location Is Not Urban or Blighted or Developed The proposed development at Jackson Hole Junction is certainly a positive and worthy commercial real estate development. It is commendable that entrepreneurial developers would invest in the community in this way. It appears to meet a need for services at this key intersection of Sunnyside Road and I-15. It would appear to be a good addition to the Idaho Falls community, and would likely be successful in attracting businesses to locate there. It is easy to see why this location has attracted efforts at commercial development. But the Jackson Hole Junction “urban renewal” plan asks that the Agency provide public money to the developer in order to build the road, sewer, water, and electrical infrastructure needed for this project. The location of the project at the new intersection of Sunnyside Road and I-15 contradicts that request. The land has previously been used for pasture and agriculture in a typical county pattern of small rural farms and houses associated with those farms. In no way is this area “urban,” nor can it be considered as previously “developed” beyond its historic use for rural farming. There is no need to provide any further incentive to develop this prime freeway intersection location. The City and other governmental entities have previously provided extensive support to this location. Sunnyside Road has been expanded. A new bridge has been built nearby on Sunnyside Road over the Snake River. The freeway intersection was upgraded and improved. Through the work of government and investment of many tax dollars, this land has come to be located on a significant commercial crossroad. 2 Further evidence that this is not a distressed or “deteriorated” area is shown by a number of significant new developments on the parcels immediately surrounding this location. A number of real estate developers have previously built new developments surrounding this prime land. This includes five new state-of-the-art automotive dealerships: Smith Chevrolet, Smith Honda, Ron Sayer BMW, Teton Toyota, and Teton Volkswagen. The land immediately surrounding this area also includes a new convenience store, retail center, hotel, and bank. This new commercial development around this area is shown in the aerial view provided in the proposed plan. (Proposed Urban Renewal Plan, Attachment 1). Each of these other developments were built in the areas immediately surrounding the proposed Jackson Hole Junction, but none asked for or received any tax increment financing to build the roads, sewer lines, water lines, and electrical lines needed to support their developments. Authorizing this plan leaves the question of why this parcel merits tax increment financing, when none of the surrounding parcels received such public assistance. If authorized, this surrounding development raises two other questions. First, how will the developers of these previous new projects feel once they understand that this neighboring project received tax increment financing assistance, while their projects did not? Second, will those prior developers take any action to obtain public tax increment financing assistance for the costs they spent on roads, sewer lines, water lines, and electrical infrastructure, once they understand that these same costs were provided for the Jackson Hole Junction project? While such an after-the-fact request is likely not viable, these prior developers could not be faulted if they felt treated unfairly. 3 In light of these prior developments, it is not possible to characterize the land of Jackson Hole Junction as “deteriorated” or “urban” in comparison to other properties in our City. 1 This Development Provides No More Economic Development than Any Other Development The developer of Jackson Hole Junction argues that the proposed project should be allowed because it would contribute to economic development. The developer correctly argues that economic development is a permissible purpose of tax increment financing under the urban renewal laws. The developer also correctly argues that the tax money provided for this subsidy is tax money that will be paid by the buildings on this development. The flaw in this argument is that it fails to distinguish this location from any other real estate project. Every new real estate development provides economic development in the same way as this project. Every new house and every new business will add their new value to the property tax rolls, and pay taxes based on their value, in the same way as this development. Similarly, every new development contributes to the economy through the creation of jobs for construction, operations, and maintenance. Every new home constructed in a new subdivision adds value to the property tax rolls, and adds jobs to the economy. But in spite of this, each homeowner is expected to pay their full property taxes, all of which go to the governmental entities providing services for that home. Through the price of each developed lot, each homeowner also pays its share of the costs of the new street and sewer and water and electricity infrastructure provided for that home. There is no evidence that this particular development would provide any more economic development than any other development currently underway in Idaho Falls. And the urban renewal laws are not currently structured in a way that would allow any distinction between the economic development from this development as opposed to any other subdivision or real estate development in the community. In other words, there is nothing to indicate that a dollar spent building this development would improve the economy any more than a dollar spent building any other home or business. And neither the 1 Note that the Agency and the City have approved an eligibility report for the Jackson Hole Junction Area, which found that the area meets the criteria for “deteriorating” or “deteriorated” area under the definitions of those terms provided in Idaho Code §§ 50-2018(9) and 50-2903(8). These criteria provide a minimum threshold for the use of tax increment financing as part of an urban renewal plan. But, as evidenced by this location, this minimum threshold can be easily satisfied, so much so that these criteria can be found to have been satisfied even at one of the most prime undeveloped land sites in the area. If nothing more than these criteria were needed, nearly every parcel of real property would qualify for urban renewal funds from taxpayer money. A standard at that low bar would undermine the free market principle that “development pays for development.” The Agency has never considered the satisfaction of this minimum threshold to be sufficient to justify the application of tax increment financing. Instead, as a matter of policy, the Agency has limited its assistance to areas that were clearly previously developed in the urban core of the City. This more conservative approach ensures that the urban renewal tool is not over-used to pay for normal greenfield development. This more cautious approach is similar to the approach to eminent domain. The Agency also meets the criteria to use eminent domain procedures to take land for urban renewal purposes. Nevertheless, in following prudent policy of avoiding government overreach, the Agency has never considered using those eminent domain powers. The granting of the power to take an action does not mean that the Agency should refrain from using the power in a more conservative manner in the interests of good government. 4 Agency nor the City has any criteria for determining why it should assist this economic development rather than any other new development project. With no way to distinguish the economic impact of this development from the economic impact of any other commercial development, arguments regarding economic development fail to provide any basis for the approval of the Jackson Hole Junction urban renewal plan. Subsidizing this Development Provides the Wrong Incentives When used in distressed areas of a community, tax increment financing provides an incentive for developers to re-use and re-develop areas that have been left behind. Tax increment financing provides a boost to these distressed areas, so that they can compete with greenfield and undeveloped areas further from the core of the community. By re-using and maintaining older areas, the size and distance required for government services is lessened, saving taxpayer money. However, if tax increment financing is used to subsidize a greenfield development on undeveloped land, it undermines the purpose of the urban renewal tool. If tax increment financing is used to subsidize greenfield development, it encourages the developers to continue to build on undeveloped greenfields, which are usually at a distance from the core of the public services. Such an approach acts as a disincentive to develop in the urban core of the community, because it subsidizes development away from that urban core. This is a fundamental problem with Jackson Hole Junction plan. While it is a worthy private effort at development, using public funds to assist that development distracts from the incentives to encourage development on the used and distressed central areas of the City of Idaho Falls. The prior urban renewal areas of the Redevelopment Agency have been in highly distressed areas of the City. Anyone who lived in the community before the initiation of the Agency in 1989 knows that the areas currently under urban renewal plans were heavily blighted. Since 1989, the Agency and the City have effectively used the tax increment finance tool to encourage development near the Snake River and at the core of the City. There can be little doubt that the tool has encouraged a redevelopment and renaissance of the center of Idaho Falls. Subsidizing this greenfield development on a freeway intersection far from the city center undermines the distressed areas of the community that still need much attention. There are other areas at the core of the City that need to attract redevelopment and urban renewal. This includes the Northgate Mile, the commercial area of First Street, and the former creamery area north of Pancheri Drive. Beyond that, there are yet other potential areas that need urban renewal, including the area north of E Street downtown, the west side area near Happyville, or other areas alongside the rail tracks through the City. If this developer had desired to locate in these areas, the tax increment finance tool could be used to its full extent to incentivize the revitalization those areas. But this developer did not select this location because it was at the urban core, or because it was blighted. This location was selected because it is prime bare commercial land located on a newly redeveloped freeway intersection. Providing any subsidy to this development actually undermines urban renewal, because it entices hotels, restaurants, and other businesses to locate far from the urban core, rather than in the heart of the City. 5 Hotels and restaurants that may have considered locating in the urban core are instead subsidized to locate outside of the city center. This plan also undermines urban renewal more broadly by signaling developers that they do not need to incur the expense of redeveloping brownfield parcels in order to get urban renewal money. Instead, this subsidy would give a precedent to developers that they can obtain tax increment money for any greenfield development at any prime commercial location. That is a course that is directly contrary to the purpose of urban renewal, and would set the Agency on a path that would engender opposition from the groups who already feel that the urban renewal tool has been improperly used in that way at other locations. This Area Has Already Developed Without Any Subsidy A fundamental question for deciding whether to assist any development project is whether the area would develop without any subsidy from the Agency. If taxpayer money is not needed for a development, taxpayer money should certainly not be provided for the project. In this case, the developer will represent that this subsidy is necessary for the development of this area. But the evidence undermines that contention, in two significant ways. First, this developer announced this development long before ever approaching the Agency for assistance. That announcement did not contemplate any assistance for this development from the Agency. At that point in time, the developer apparently considered that the development was possible without any assistance from taxpayer funds. Second, as shown in the aerial photo above, this area has already developed without any assistance from the Redevelopment Agency. As shown above, this development includes five new state-of-the-art automotive dealerships: Smith Chevrolet, Smith Honda, Ron Sayer BMW, Teton Toyota, and Teton Volkswagen. The area also includes a new convenience store, retail center, hotel, and bank. Not only is this area prime for future greenfield development, that type of development has already happened in a significant way. In light of the extensive development at this prime location, there can be no dispute that this area will develop without any governmental assistance. All of these other developers were able to complete their developments in the same area without any subsidy from tax increment financing. And those developers were required to invest significant amounts for infrastructure. In light of these facts, there is no reason why this property cannot develop as the other surrounding properties already have done. The Position of Bonneville County The two taxing entities that are impacted the most by the loss of funds through tax increment financing by the Agency are the City of Idaho Falls and Bonneville County. Tax increment financing means that both of these entities forego property tax revenue needed to provide public services to the entire area, in an attempt to improve some areas in a way that will decrease property taxes in the long run. 6 Because of this impact on Bonneville County, for many years the Redevelopment Agency has tried to make decisions in close cooperation with the wishes of the elected Bonneville County Commissioners. Other communities in the State of Idaho have put the concept of tax increment financing in jeopardy by ignoring the wishes of elected County officials. The Redevelopment Agency has tried to avoid that by receiving the input of the County Commission. For that reason, a meeting was scheduled and held regarding this Plan with all three members of the Bonneville County Commission. At that meeting, the Commission asked again that the Agency to follow two guiding principles. First, the Commission does not want the Agency to pay for what other developers normally pay for. Second, the Commission does not want the Agency to pay for what the City would normally pay for. The Commissioners communicated that the Agency should remove impediments to development, but should not pay for normal development costs. The Jackson Hole Junction plan fails these County criteria. Most of the costs requested are simply costs for the construction of a road, sewer lines, water lines, and electricity infrastructure that any developer would be required to provide for this type of development. To the extent the City requires over-sizing of any of infrastructure for City needs or for the purposes of future developments, the City normally pays those costs. County Commissioner Dave Radford voted in favor of the Jackson Hole Junction proposed plan, as passed by the Agency. However, my impression from the meeting with the County Commission was that his vote did not reflect the will of the majority of the County Commission, nor did it follow the guidelines the Commission requested. For these reasons, I would strongly advise the City Council to hear from the entire County Commission before endorsing this plan. For many years, the Bonneville County Commission has been a key supporter of Agency projects that carefully utilize the urban renewal tool within proper limits. In light of the County’s past support and cooperation with the Agency, there is no reason to create any unnecessary division between the City and the County on this issue. Conclusion The bottom line is that the Agency is supposed to be the Idaho Falls “Redevelopment” Agency, not the Idaho Falls “Development” Agency. The name the City gave to the Agency clearly spells out that the Agency’s mission, which is to use its powers to “redevelop” areas that were previously developed but which are now distressed or outdated. This Agency is not sanctioned to assist with initial “development” of green field projects. And the Agency has no governing criteria to follow for the development of green fields. Jackson Hole Junction is located on prime real property, on the new intersection of Sunnyside Road and I-15. This is new development on what is essentially bare farm ground. Based on my experience, the use of tax increment financing on this new development is contrary to the Redevelopment Agency’s mission. Providing this subsidy for this project is not fiscally conservative. It would also significantly derail the historic efforts of the Agency to focus these tools on the blighted areas in the urban core of the City of Idaho Falls. 7