Idaho Falls Redevelopment Agency

IDAHO FALLS REDEVELOPMENT AGENC Y P.O. BOX 50220 IDAHO FALLS, ID 83405 September 15, 2022 Regular Meeting Minutes Council Chambers Call to Order: Lee Radford called the meeting to order at 12:00. Members Present: Lee Radford, Brent Thompson, Chris Harvey, Kirk Larsen (via Webex). Members Absent: Terri Gazdik, Thomas Hally, John Walker Also Present: Brad Cramer; Meghan Conrad, Esq. (via Webex); Renee Magee (via Webex) and interested citizens. 1. Modification to Agenda. None. 2. Approval of Minutes August 25, 2022. Brent Thompson moved to accept the Minutes for August 25, 2022, Chris Harvey seconded the motion, and the motion passed unanimously. 3. Approval of Expenditures and Finance Report. Lee Radford presented the Finance Report Dated September 15, 2022. In the River Commons Area: $100.00 to Rebecca Thompson for transcription of minutes; $8,117.80 to Elam and Burke (related to the Anderson Bush Project); City of Idaho Falls, $22,010.00; BV Lending OPA, $444,000; Bandon River $14,000. In Eagle Ridge Area: City of Idaho Falls, $2,700.00 for administrative services; Eagle Ridge Development OPA $11,534.00. In Jackson Hole Junction Area: City of Idaho Falls, $2,700.00 for administrative services; OPA $89,908.00. Hagedorn indicated that the OPA payments listed would typically go out in August, but he was out in the month of August, so they are late. Hagedorn commented that the Jackson Hole Area didn’t have enough projected in the receipt of taxes and OPA payments, so that District is over budget. Hagedorn stated that typically on the City side, they would transfer budget authority between funds, but not sure on urban renewal districts. Hagedorn stated that the overbudget will be reported on the audit. Radford clarified that they received more in property taxes than expected, therefore, 85% had to be sent out as OPA payment. Hagedorn stated that there is no way of knowing what the County is going to give, and it is a guess based on the City side of what they think the property tax will be, so the valuation is affected due to lack of data. Thompson asked if they go over budget often. Hagedorn stated that when they close out an area, they go over budget, but typically not just in a fiscal year. Hagedorn just wanted to make the Board aware. Radford asked if all the property tax payments are coming off the hotel. Hagedorn stated that there is a hotel and medical office, and a bank that will be open shortly. Brent Thompson moved to approve the Finance Report dated September 15, 2022, Chris Harvey seconded the motion and the motion passed unanimously. 4. Resolution to approve the Urban Renewal Plan for the Pancheri East Bank Urban Renewal Project. Cramer stated that this is the final step in creating a District, and this will establish the allocation area, the projects that are anticipated and how the funds are intended to be spent. Cramer stated that Meghan Conrad has put the Plan together and Renee Magee has done the Financial Feasibility Report. Cramer stated that if the Board accepts the Resolution, the Plan will go to Planning and Zoning Commission in October, and City Council by November. Derek Ence is the developer on the project. Ence stated that they intend to build a new hotel where the old jerky plant is on the river, in conjunction with the Hansen Family who own the current Fairfield. Ence stated that they will be converting the old Fairfield to something else. Ence stated that the plant is vacant and there are no plans to do anything with that building, so they will be tearing that building down at the end of 2023 and commence construction in 2024 of the new hotel and anticipate opening end of 2025. Ence stated that currently everything is going as planned and they have architects working on plans. Ence stated that the assistance requested is to demolish the large building and improvements along the greenbelt, and possibly needing assistance to rearrange the access from Pancheri, and potentially from Yellowstone. Ence stated that these hotels are good property tax generators, and do not see any problem having the funds repaid promptly. Meghan Conrad, Esq., presented the updated Pancheri East Bank Plan. Conrad wanted to go through the plan and site the Code sections where the compliance with the required elements can be found. Conrad stated code 50-2905 there are 8 elements that have to be included in an Urban Renewal Plan. (1) 10% valuation test, where the combined assessment roles of the existing revenue allocation, plus this proposed area, cannot exceed 10% of the total taxable value of the City, and that analysis has been prepared in the Plan and attachment 5 and is well within the 10%.; (2) Requirement for public infrastructure improvement, which is found in Section 301 with a narrative of how the funds will be used, plus specifically outlined in attachment 5; (3) Economic Feasibility Study shown in Renee Magee’s attachment 5, and that report goes into detail identifying the public infrastructure improvements, and provides the revenue projection for the life of the District and based on Magee’s review and analysis, the project has been determined to be feasible, with an estimated revenue over the life of the District is $2.8 million which would cover the anticipated project costs. Conrad feels that this is conservative, and Magee can give further information on Attachment 5. Renee Magee walked through Attachment 5 and gave basic assumptions on how the District will progress. Magee stated that after last months discussion the Board decided to go with a 20-year time frame and the study has been revised to reflect the 20 years and therefore the estimated revenues to be generated are $2.8 million. Magee stated that the information in the study is based on emails and discussions with Sentinel properties, the staff at City of Idaho Falls, and their discussions with private property owners in the proposed RRA. Magee stated that page 3 of Attachment 5 has the public projects listed and they have listed the demolition of the jerky plant, which would include environmental remediation, as well as River Walk Improvements, right of way improvements, improvements to public utilities (water and sewer), estimate for street construction within the RAA as they do not have a good circulation pattern in the 36 acres. Magee stated that there is also money set aside for landscaping pedestrian and additional street improvements at the end of the 20 years. Magee stated that the levy rates are from 2021 as the new levy rates will not be available until November. Magee stated that after staff had discussions with the private property owners in the RAA, Magee decided that a small retail space large enough for 2 occupants and a restaurant in the area should be added. Magee determined those valuations by going back through the existing tax records of Bonneville County and looking at valuations of similar properties, which gave a beginning valuation of about $900,000 for retail space and $2 million for a restaurant. Magee reiterated what Conrad had stated with the mill levy is decreased 1% annually in the projections, the value of new construction increases 2% annually and the base value has been reduced by $1.3 million to reflect the demolition of the King B Jerky facility. Magee stated that if the demolition doesn’t happen until 2024, then the base value will slip 1 year. Magee stated that anticipated revenue and expenses have changed to show administrative costs and reduced the loan estimate from $60,000 to $30,000 as that seemed more realistic as to what it would take to administer this District for the 1st 5years. Magee added into the expenses the cost for the Plan so that would offset the $38,000 under the MOU from Sentinel Properties, and Magee then put the expenses for administration in the first years. Magee stated that she has added $1.3 million for new street construction, and approximately $400,000 for additional improvements that could be made to the right of way for water, sewer, utilities, storm drainage, fiber, etc. Magee stated that this project looks to be economically feasible, and it is anticipated to generate at a minimum of $2.8 million over 20 years and the projects listed would total $2.3 million. Radford clarified that the Derek Ence is asking for the $350,000 to get the building demolished and do some River Walk improvements, and Magee agreed. Radford clarified that Magee has added other things that could happen down the line, if the District is successful, as the initial request will be paid back quickly. Magee stated that they had discussed the 20-year time frame so they could have the revenues to generate some type of circulation system within the 36 acres, and there may be issues with the water, sewer and utilities that serve this area. Magee has added the improvements if the District goes as envisioned. Magee stated that Ence mentioned that there may be some additional improvements requested that are related to access to the Hotel and those maybe covered within the $350,000 because his original estimate for River Walk improvements was $50,000 and Magee increased that to $100,000. Radford stated that they are crossing their fingers that someone else wants to develop in this area that would enable them to put a bigger access farther south on Yellowstone. Radford stated that if Burggraaf’s would get involved they could do what needs to be done for the circulation. Ence is not looking to do the access point to the south at this point. Radford stated that Ence is building a nice hotel that will hopefully entice someone to build something else, and then they could get better access. Ence agrees and feels the 20 years is a good time frame, as when they built Candlewood, they would have liked to see more momentum and he feels it would be more enticing to people if they had more time. Magee stated that the $120,000 for right of way improvements was envisioned to be the beginning of an improvement for the southern right of way and is listed under projects for 2028 - 2030. Magee stated that it could come earlier if the developer wanted to fund that improvement and then be paid back. Magee clarified that the $120,000 would cover the approach for Capital Avenue Extended. Cramer stated that they have had some ideas proposed on the vacant lot towards the southern end of the District. Cramer stated that the discussions were going on during the Yellowstone Pancheri District, but one of the complications was the boundary stopped on the southern side of the street, instead of going far enough that the funds could develop a full approach. Derek Ence asked if it would make sense to include some access in the category that Magee has listed for River Walk improvements. Ence doesn’t want confusion. Magee confirmed that she can change it to say River Walk improvements and Right of Way improvements. Radford is curious of the civil engineering and how they are going to get Capital Ave Extended past the corner of Candlewood Suites to the new hotel. Radford is hoping that they can do it. Thompson asked about Section 102 on Page 5 of the Plan, where it is stated that a portion of the study area was previously included within the boundaries of the original Pancheri Project which terminated in 2020. Thompson asked if that is ok to reinclude property in a new district. Meghan Conrad stated that it is not unusual to have a portion of a project area that did not fully develop during the time, so when you go into a new District the District has to be subject to an eligibility study to determine that deteriorating conditions exist pursuant to State Code on urban renewal. Conrad stated that that study was conducted, and the area was determined to continue to be eligible. Conrad stated that it is understood that it is a process, and it is ok to incorporate old portions of a District into a new District. Thompson reiterated that if areas of a prior District were not developed then they are eligible to be included in a new District. Conrad added that when a property is added to a new District, the base value is reset to the current value, and it is not the base value from the old district. Radford asked about the levy rates in 2022. Radford felt that with the increase in housing values there was a significant change this year. Radford asked Magee if she feels that change has been reflected in this chart. Magee stated that she does, and when she was looking at it, the levy rates went down as anticipated when the Snake River District was closed, but they have increased slightly, so Magee felt comfortable with the 1% decrease annually, as they haven’t continued in a downward pattern. Radford stated that they have seen large increases in residential property valuation it has resulted in decreasing levy rates. Meghan Conrad stated that the remaining plan elements are covered by the Plan and Attachment 5. Conrad stated that Attachments 1 are the boundary map and legal and those should be to Conrad today and they will insert those once they are completed. Attachment 4 is the zoning and future land use map, and those have been prepared by the City and those will need to be inserted. Conrad read the Resolution by Title. A RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE URBAN RENEWAL AGENCY OF IDAHO FALLS, IDAHO, ALSO KNOWN AS THE IDAHO FALLS REDEVELOPMENT AGENCY, RECOMMENDING AND ADOPTING THE URBAN RENEWAL PLAN FOR THE PANCHERI EAST BANK URBAN RENEWAL PROJECT, WHICH PLAN INCLUDES REVENUE ALLOCATION FINANCING PROVISIONS SUBJECT TO CERTAIN CONDITIONS; AUTHORIZING AND DIRECTING THE CHAIR, VICE-CHAIR, OR ADMINISTRATOR AND THE SECRETARY OF THE AGENCY TO MAKE CERTAIN TECHNICAL CHANGES; AUTHORIZING AND DIRECTING THE CHAIR, VICE-CHAIR OR ADMINISTRATOR TO TAKE APPROPRIATE ACTION; PROVIDING FOR THIS RESOLUTION TO BE EFFECTIVE UPON ITS PASSAGE AND APPROVAL; AND PROVIDING AN EFFECTIVE DATE. Kirk Larsen moved to accept the Resolution for Renewal Plan for the Pancheri East Bank Urban Renewal Project as written, Brent Thompson seconded the motion. Lee Radford called for roll call vote: Larsen, yes; Thompson, yes; Harvey, yes; Radford, yes. The motion passed unanimously. 5. Consideration of a Request for Micro-District at Boge and Stanley. Cramer stated that Brendon Dohs is the developer joining via Webex from California. Cramer stated that this item was on the agenda a couple months ago, but they didn’t have enough information to consider it. Cramer has been working with the developer to get enough information to be able to share. Cramer stated that the request is whether the Agency is interested in pursuing another small district. This area is north of Anderson and Science Center Drive. Cramer showed a map of the property site. Cramer showed that there are a couple of developments on Boge Ave, and the proposal of 2 phases. Phase 1 is a 19,000 square foot building and Phase 2 is 32,000 square foot building. Cramer showed the valuations that have been estimated by the developer of $7.5 million for phase 1, and $4.4 million on Phase 2. Cramer stated that the primary request is assistance with rock blasting. Cramer stated that the developer is asking if there is interest to pursue a micro-district and start working towards an eligibility report. Brendon Dohs, Dohs is proposing in Phase 1, 3 19,000 square foot buildings that will be divided for flex spaces and roughly 2700 square foot suites as well as phase 2 will provide a 32,000 square foot building divisible by 3 for some larger tenants. Dohs has done geological studies and found that the site is covered in lava up to the surface of the site. Radford asked if this is a speculative building or are they building for someone. Dohs stated that this is a speculative building, and they are wanting to provide space for smaller local residents looking to grow their business and providing smaller suites allows them to start smaller and grow within the community. Radford asked if there is something different about the basalt on this parcel that is different than the basalt from the other parcels in this area, as this area is a commercial/industrial development with a lot of slabs on grade. Dohs stated that the site has sat undeveloped because of the basalt. Dohs stated that the basalt is above street level at most of the site, which prohibited its development in the past. Dohs is looking to remove the basalt so they can build. Dohs stated that the adjacent sites have portions of basalt, but these specific 6 acres are surface level across the entire site. Radford asked what impact this would have on the community, and why the Agency should put urban renewal money into this parcel. Dohs stated that they want to provide space for local business owners to start small and grow their business larger. This development would promote local growth. Dohs stated that without a micro- district the site will sit vacant because the costs are significant to remove the lava. Dohs stated that the rock is above street level prohibiting connection to utilities. Radford clarified that Dohs is willing to front the costs to get the District put together. Dohs agreed that they are prepared to front the costs to get the District established. Cramer stated that this is an area in general in town geographically where they are seeing more development activity because there is infrastructure available, and it is vacant land, as the City is running out of infill sites. Cramer stated that to the south of this is the Anderson Bush District and to the east of this site, there was interest from a developer of the larger field to the east, and they had talked about doing a larger district, but that developer is not prepared to come on board yet, but Cramer expects another request or two in the area, for a similar request in terms of blasting the rock off of the sites. Radford asked if the rock is actually higher than the other areas. Radford is concerned about neighboring property owners being upset because they weren’t helped by the Agency. Cramer stated that he has not walked the site, but has been in the area, and know the rock has been an issue on a number of sites in the area. Dohs stated that they developed the building across the street the John Stone Building that is 26,000 square feet and most of that site didn’t have basalt, and there was a portion that did have basalt at 3 feet deep, so they had to pour footings and chip away at the basalt rock. Dohs stated that it will depend on the site, as lava is not flush and fluctuates in depth. Larsen is concerned about the demand or lack thereof for this property in this area, or could you do this project somewhere else for less money and not have to use tax money. Larsen stated that it sounds like from Cramer’s report, that the opportunities for infill are diminishing, so it might be a project worth injecting funds into. Radford stated that they have to consider if they want to push developers off the basalt land to build a building like this, that can be built on basalt land, or push them off and build on topsoil. Radford stated that they have to decide if there is basalt, this is the best type of development for that type of land. Thompson likes the idea of infill and getting the unused parcels developed. Thompson asked about what was used as a criterion to establish the boundaries that are shown, and why would they not include the property to the west that is triangular shape, north of total trailer, and across Stanley there is property between Norco and Erik’s North America. Harvey had the same question and wanted to know if this is the proper boundary. Cramer stated that the boundary was brought by the developer and that is where they start the discussion. Cramer stated that if the board wishes to move forward with exploring a district, staff will go out and talk to property owners to gauge interest and see if more properties in the area can be helped. Thompson stated that based on current levy this is 7.5-year payback and asked if that is reasonable. Thompson stated that a request of $560,000 in the first phase for lava and utility work and at 1% of the total valuation multiplied by the levy and divided into the cost it will take 7.5 years to do each phase. Radford confirmed that Phase 2 would come in a subsequent year, but not sure on start date yet. Dohs responded that as soon as they finish Phase 1, they would start Phase 2. Radford stated that if they are going to be built in sequence, they should consider it as a unified project for plan and duration. Harvey stated that on google satellite views you can see basalt on the property. Radford stated that they had talked about the bigger area for mixed use residential, so this area has been thought of before, this is just a different development. Thompson feels it is an appropriate development for construction type because it is surrounded by similar development and undeveloped land. Thompson feels it is a good infill project. Thompson moved to direct staff to explore an MOU and identify a consultant to help put the eligibility report together once the MOU is finalized, Harvey seconded the motion. The motion passed unanimously. 6. RAI/Legislative Updates. Conrad stated that there is a meeting for RAI this afternoon so she may have a report next month. Next Regular Meeting: October 20 2022. Brent Thompson moved to adjourn the meeting, Kirk Larsen seconded the motion and it passed unanimously. Radford adjourned the meeting at 1:00 p.m. Respectfully Submitted: Beckie Thompson