Idaho Falls Redevelopment Agency

IDAHO FALLS REDEVELOPMENT AGENC Y P.O. BOX 50220 IDAHO FALLS, ID 83405 August 15, 2024 Regular Meeting Minutes Council Chambers Call to Order: Lee Radford called the meeting to order at 12:00. Members Present: Lee Radford, Chris Pelkola Lee, Chris Harvey, Brent Thompson Members Absent: Terri Gazdik, Jon Walker, Lisa Burtenshaw Also Present: Wade Sanner, Catherine Smith, Meghan Conrad, Esq. (via Teams), Renae Magee (via Teams), and interested citizens. 1. Modification to Agenda. Sanner indicated that Item No. 8 needs to be removed. Conrad clarified that it was a confirmation of reimbursement. 2. Approval of Minutes July 11, 2024. Chris Pelkola Lee moved to accept the Minutes for July 11, 2024, Harvey seconded the motion, and the motion passed unanimously. 3. Approval of Expenditures and Finance Report. Lee Radford presented the Finance Report dated August 15, 2024. In the River Commons Area: $75.00 to Rebecca Thompson for transcription of Minutes; $675.00 to Elam and Burke for legal services; $1,090.00 to City of Idaho Falls for administrative services. In Eagle Ridge Area: $25.00 to Elam and Burke for legal services; $100.00 to City of Idaho Falls for administrative services. In Jackson Hole Junction: $100.00 to the City of Idaho Falls for administrative services. Thompson moved to approve the Finance Report dated August 15, 2024, Chris Pelkola Lee seconded the motion, and the motion passed unanimously. 4. Public Hearing FY 2024/2025 Budget. Radford opened the public hearing. No one appeared in support or opposition, and staff did not receive any written comments. Radford closed the public hearing. 5. Resolution Approving FY 2024/2025 Budget. Conrad read the Resolution by Title. A RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE URBAN RENEWAL AGENCY OF IDAHO FALLS, IDAHO A/K/A IDAHO FALLS REDEVELOPMENT AGENCY, TO BE TERMED THE “ANNUAL APPROPRIATION RESOLUTION,” APPROPRIATING SUMS OF MONEY AUTHORIZED BY LAW AND DEEMED NECESSARY TO DEFRAY ALL EXPENSES AND LIABILITY OF THE URBAN RENEWAL AGENCY, FOR THE FISCAL YEAR COMMENCING OCTOBER 1, 2024, AND ENDING SEPTEMBER 30, 2025, FOR ALL GENERAL, SPECIAL AND CORPORATE PURPOSES; DIRECTING THE CHAIR OR EXECUTIVE DIRECTOR TO SUBMIT THE RESOLUTION AND BUDGET TO THE CITY OF IDAHO FALLS AND ANY OTHER ENTITY ENTITLED TO A COPY OF THE RESOLUTION AND BUDGET; AND PROVIDING AN EFFECTIVE DATE. Conrad wanted to make sure that the budget has Exhibit A attached thereto. Conrad confirmed that it will be the published notice that will be attached to the budget. Chris Pelkola Lee Moved to approve the Resolution Approving FY 2024/2025 Budget, Harvey seconded the motion. The motion passed unanimously. 6. Consider Boge Industrial Park Project Status Update Consideration of Eligible Projects to be Included in the Owner Participation Agreement with 2700 Boge Ave LLC (Stanley Boge Urban Renewal Project). Conrad indicated that they have established the Stanely Boge Project area and have been working closely with developers to finalize the OPA. They are working through their design and getting firmed up construction estimates. They reached out in July with some options as to how they can proceed. It requires Board input regarding updating the reimbursement amount in the OPA regarding rock blasting. The estimated cost was $885,350. Conrad wants the developer to present to the Board to get direction on next steps to aid in finalization of the OPA to bring back at the next meeting. Treespring Partners. They summarized the project. Slide 1 - 6+ acres. Slide 2 – They are planning on building 3 different phases, with phase 1 being 2 buildings to the south. Once the micro district was approved, they started hiring design consultants and civil engineers to put together a grading plan and storm water retention plan, etc. to complete the project. They did not do that upfront because they did not know if the micro district would be approved, and they didn’t want to spend money up front. Once the district was approved, they hired the designer and started design process. They got completed construction drawings and went to bid out the project with contractors and they have had numerous meetings to approach this, and Bateman Hall has been helping them as well as Knife River who is Subcontractor for grading and rock blasting. They have worked with Atlas Geo Tech for soil. When they bid on the project and the rock and blasting that needs to be removed and in order to bring this to a buildable site, it is $2.5 million. The original estimate was close to $900,000. It is more than double the original price. The main reason for the increase was before they didn’t have exact quantities and were based off of surface level investigation. Until they had a design where the contractors could price the amount to be blasted, removed, and replaced they didn’t have an accurate price. Now that they have bid that and have accurate numbers they have come to $2.5 million. They have worked to try to figure out what to do. Slide 3- The current site condition shows large mounds of rock and that is scattered throughout the 6+ acres on the site. The street slopes from the north to the south downward. Slide 4- They showed an image showing the road and rock and what they needed to blast to get to street level, and to get the building at grade they have to go lower than street level. There is an unknown amount of blasting and rock removal. Once they start blasting and grading, they will get to the ultimate cost. They have decided in order to save money, they started talking about building the site up, rather than blow out the rock. Slide 5 - Option 2 shows an image importing dirt and building above the lava, doing that saves $500,000 to go with the second option. There is some blasting still needed for option 2. There is a scenario that they might not use all the rock blasting budget if they build up. Option 1 has a higher probability of using all of the budget ($2.5 million) or more, and option 2 has a likelihood of not using all of the $2 million to complete. Slide 6- The rock blasting required for Option 1, is double the rock blasting for option 2, and imported soil for option 1 is half the soil for option 2. They feel they will save $500,000 by importing soil. They feel comfortable with the budgets and feel option 2 would save money to build the project. Radford asked what the original cost estimate was. Conrad stated that it was $885,350 and with option 1 is $2.5 million and option 2 is $2 million. Radford asked about eligibility with the current updated amounts. Conrad stated that she has not revised the projections and feels it would be close and would depend on the timing of the phases. If all three phases move forward quickly there is a better chance of reimbursement. Conrad understood that $2.5 would blast for the full site, not just phase 1. Conrad also asked if buildings above grade are permitted by the City. Treespring indicated that the estimates include all phases for the entire site. Treespring indicated that because they will build up the site, they will avoid the rock blasting for utilities and will have the required soil to connect to the City. The elevation is not precluded but does affect the slope of the driveway and they will need a longer driveway. The design will change on the first Phase but is not a problem on the 2nd and 3rd phase. Chris Pelkola Lee asked if Fire, garbage, etc. is ok with the slope. Treespring stated that as long as they stay within a certain grade percentage they are within rules. The slope cannot be more than 6% and in order to maintain that the driveway is longer. Radford confirmed that the developer understands that an OPA risk of payback is on the developer. Treespring agreed they do understand. Thompson asked if the $2 million is for the entire District, and what percentage is the 1st phase. Treespring stated that the District includes a larger area than what they own. Conrad agreed and indicated that the reimbursement is just for the site, not for the full District. Treespring stated that there are a lot of other parcels in the District. Thompson confirmed it is just a 6-acre site. Thompson asked how many undeveloped acres are in the District. Conrad stated that the full District is 113 acres, and their parcel is 6.5 acres. Radford indicated that there is no one else coming forward to develop parcels in the District at this point. Chris Pelkola Lee asked about drainage if this lot is raised and would it create a problem with future drainage on other sites. Treespring stated that they will have onsite retention and drainage. Sanner indicated that the City requires that. Harvey asked if the reconfiguration of the design affects the number/ size of the units that they can build. Treespring stated that they lose 1 additional suite to curve the road up. They have proposed 14 and if they redesign the site, it will be 13. The size of the suites remains. Harvey asked if the differential in site plan is $500,000 how does that compare to the value of losing a suite. Treespring stated that it makes more sense to raise the site up because the value doesn’t benefit the site as much. Conrad indicated that when a plan is adopted it is based on best estimates and due to the increase in construction cost and for blasting, these costs are not inconsistent with the increases. The reimbursement is based on actual eligible costs. Conrad stated that the OPA is a developer at risk agreement and if the development doesn’t occur as quickly, or the revenue is less than anticipated due to lower assessed value, lower levy rates, etc., then the developer will not be reimbursed. Conrad stated they are seeking direction from the Board on building above grade, and the willingness to increase to $2.1 or $2.5 to finalize the OPA. Thompson asked if imported soil in lieu of excavation of lava is eligible cost. Conrad stated that soil would need to be reviewed and, in this circumstance, it is a site condition of concern as it impacts the eligible condition on the site that would drive new taxable development. It is something to talk about, but what they have focused on in the plan is reimbursement for the rock excavation and blasting and that would increase to $2.5 million. Lee stated that Anderson Bush, they left it up to the developer as to what is the best approach to deal with basalt and they will leave it to the developer to find the geology that maximizes their profitability. Thompson understands and indicated that if they go along on the basis that lava is an eligible cost, are they looking at $2.5 million when they spend $2 million. Thompson feels it could be an overbudget. Lee agreed that the dollars are a risk to the developer, and they will do it as cheap as possible. The Board is just giving a higher ceiling. Thompson stated that the amount of lava excavated on option 2 was about half of Option 1, and so that is $1.25 million that would be the most likely actual cost. Lee stated that they will have to get on the site and get the equipment out. The Board can lift the ceiling for the developer. Treespring stated that they want to get reimbursed and if they are not able to recoup the cost for importing the soil, they will go with the rock blasting because it is reimbursable. They have figured out a way to save them and the City and if they are paying for extra soil, they will be reimbursed for that cost. Lee stated that they will have to do whatever is most efficient. Thompson asked Conrad about reimbursement for soil. Treespring agreed that they want to be reimbursed for soil, otherwise they will go with the more expensive option, so they get reimbursed. Conrad stated that in some respects the rock and soil do go hand in hand in terms of what they are talking about for site preparation. The blasting has always been the most significant cost, and soil is a reasonable extension in terms to the impediment that needs to be remediated for the project to move forward. Conrad stated that it wasn’t clear to her, as to the elevation of the building whether there were issues with building above grade or digging down and building at grade. Treespring has found a way to proceed with the project, which is still significantly more expensive than the original estimates. Conrad stated that she sees rock blasting and importing soil going hand in hand, as the primary goal is to make the site developable. Thompson wants clarification that soil is an eligible cost. He doesn’t need an argument on to why they need soil. Conrad stated that it has been a reimbursable cost in other developments, and it will be spelled out in the OPA to make the property buildable. Radford stated that $2.5 million is a lot and they should leave it to the developers to determine whether the market is strong enough to support properties that cost that much to develop. Chris Pelkola Lee indicated that she doesn’t have a copy of an OPA, Feasibility Study, and Eligibility Study and she would like a copy. Radford stated that there will be an updated Feasibility in the updated OPA. Conrad stated that the eligibility study is not part of the OPA, and the Eligibility study was critical in moving forward in the planning effort, and now they work with the developer on what the Board is willing to reimburse and that drives whether they will move forward or not. Radford stated that the question for the Board is whether they are willing to raise the reimbursable ceiling and give the developer the decision on which way they want to go. Conrad asked if the $885,000 included the soil. Treespring stated that the original estimate was option 1 and once they were able to get accurate quantities the cost went up significantly. Thompson asked what number they are considering. Thompson wanted Conrad to confirm that the bigger numbers would fit within a revised feasibility study. Radford stated that the developers need to bring information showing that it will pay back as the feasibility is in the area feasibility. Radford feels that Treespring understands and can determine if it will pay back. Harvey moved to authorize Conrad to prepare the OPA at $2.5 million that would include soil or basalt removal. Thompson seconded the motion. The motion passed unanimously. Radford also wants to see numbers related to the contemplated market and that it will be able to pay back. Harvey wants to see numbers next time for both building options because if the street option does include another building, then there is some more value to the developer, and that is ongoing value to the Agency and additional tax revenue. 7. Resolution Approving the Willow Creek Eligibility Study for the Proposed Willow Creek Project Area. Renee Magee presented. Slide 1 – Magee stated that the Willowcreek Study is approximately 100 acres located south of Stanley Street, East of Boge, North of Anderson, West of Holmes. Willowcreek Park is the vacant area on the interior of the study area. Slide 2 - The study area is in the lower right-hand quadrant of the map shown, QBST denotes basalt and therefore the criterion of unsuitable topography is met in the study area. In addition, the soil to the west of Willowcreek is Polatis Rock outcrop and this is the same topography that was just discussed on the Boge property. Eagle Rock Engineering prepared a Geotechnical Soils Report on the 51 Acres known as Willow Creek Park. Eagle Rock drilled multiple test holes and depts of 2-4 feet or on the surface in the northern and western portion of the 51 acres. Slide - 3 One parcel appears not to be in the study area, and that is considered owned by Conrad and Bischoff. The existing public utilities are limited to Boge Ave., Anderson, and Holmes and none in the study area and the lack of utilities impairs the development of the study area, and it also presents a possible health hazard if it develops without public utilities. Slide – 4 There are no public streets in the interior of the study area. Development has only occurred adjacent to the arterial streets and is served by private driveways onto Holmes and Anderson which are designated as arterial streets. In today’s world private driveways onto arterials are discouraged. There is a need for 2 collectors in the study area. Slide –5 The thin black lines are the boundary of the parcels, and the parcels are narrow or shallow and some have been combined into one ownership. In addition to the irregular sizes and shape, the interior of the study area must be subdivided to allow development at urban densities. Slide –6 The study area is underdeveloped. The Comprehensive Plan shows the area as General Urban or Industrial. At least 60% of the study area is vacant and it qualifies as an urban renewal area. Slide –7 Photo on left is an overview and designated as Willow Creek Park. Tyson Fitzgerald – developer. Fitzgerald stated that the site is directly adjacent to Boge, and this development is facing similar challenges. Fitzgerald stated that they are confident that they can overcome the challenges that are presented. Conrad read the Resolution by Title. A RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE URBAN RENEWAL AGENCY OF THE CITY OF IDAHO FALLS, IDAHO, ALSO KNOWN AS THE IDAHO FALLS REDEVELOPMENT AGENCY, ACCEPTING THAT CERTAIN REPORT ON ELIGIBILITY FOR CERTAIN PROPERTY REFERRED TO AS THE WILLOW CREEK AREA AS AN URBAN RENEWAL AREA AND REVENUE ALLOCATION AREA AND JUSTIFICATION FOR DESIGNATING THE AREA AS APPROPRIATE FOR AN URBAN RENEWAL PROJECT; TO MAKE ANY NECESSARY TECHNICAL CHANGES TO THE REPORT; AUTHORIZING AND DIRECTING THE CHAIRMAN OR ADMINISTRATOR TO TRANSMIT THE REPORT AND THIS RESOLUTION TO THE CITY COUNCIL OF THE CITY OF IDAHO FALLS REQUESTING ITS CONSIDERATION FOR DESIGNATION OF AN URBAN RENEWAL AREA AND SEEKING FURTHER DIRECTION FROM THE COUNCIL; AND PROVIDING AN EFFECTIVE DATE. Chris Pelkola Lee Moved to approve the Resolution Approving the Willow Creek Eligibility Study for the Proposed Willow Creek Project Area. Thompson seconded the motion. The motion passed unanimously. Conrad explained the next step is to take the eligibility report to the City Council for consideration and if City Council approves the findings, it would direct the Agency to commence preparation of an urban renewal plan. 8. (Withdrawn) 9. Devco Presentation for a proposed new Urban Renewal District. Jay Hanz and Melanie Davies. Hanz indicated that they are talking about a site-specific urban renewal area for the corner of North 5th and W 33rd in Idaho Falls. Hanz is the acquisition manager for Devco, and Melanie Davies is the Planning Manager. Devco is a 30-year-old company, and they are the largest affordable housing developer in the state of Washington. They are a for-profit company. They build and operate first class multifamily housing that are assets to the community to deliver a good value to the residents, to provide a challenging satisfying environment for employees and contractors, and to earn a fair profit. Hanz stated that 4 years ago they were only in the State of Washington and now in14 states with 10,000 units. Hanz indicated that they work with 30, 40, 50, 60 and 70% of AMI and they income average that at 60% of AMI. Hanz stated that 60% of AMI for Bonneville County for a family of 4 (60% of AMI for Bonneville County is $87,000) and the taxpayer rent would be approximately $1300/month and market rate rent is $1700 /month. Hanz stated that they have 9.5 acres with an acre cut out for property owned by Rodney Jenkins on the west side and they are working to possibly purchase that property to make more continuity throughout the site. They will have 304 units, 104 1 bed; 12 2 bedroom; 56 3 bedroom; 16 4 bedroom. 35 units per acre. The infrastructure is what is creating the gap in funding for their project. Water system improvements are needed with a 12” water line extension along W 33rd N and N5th W and align the subs from the public roads and install a pressurized irrigation system. They will need to relocate the existing irrigation ditches. That is a big issue on the site. Frontage improvements on W 33rd, including N Willowcreek Culvert, and widen the road and sidewalks, frontage improvements on N5th W include sidewalk and street widening. The seller would be responsible for the improvements on N5th and 33rd North, and DEVCO responsible for 50% of the construction of Smooth Stone Lane and Creek Bed Way. Hanz stated that in the State of Idaho there is not soft financing to fill gaps like in other States. Hanz stated that they then have to look for things like Urban Renewal to bridge the gap. Hanz feels that several of the requirements are fulfilled to make this property a candidate for urban renewal. Hanz stated that they met with City on March 7, signed PSA March 8, they assume 3rd Quarter of 2025 for approval with IFRA and close on 4% LIHTC funding with IFHA. Hanz showed what they intend to build on property. Chris Pelkola Lee asked if they have spoken with the Innovation District to see if it fits in with their plans. Sanner stated that the Innovation District is still being discussed and has never come to fruition. It is a master plan for the INL Campus. Hanz stated that they did talk to Brad Cramer and INL and they wanted to know what would be provided for retail and food service and not really housing and they haven’t had conversations since. Hanz stated that they have land under contract. They tie up land on developer terms and they get through entitlement, and they want to close on their financing with the tax credit closing. They will close on the land when they close on the funding. Hanz stated that it is currently 9.6 and hoping to acquire another acre from Rodney Jenkins. Radford stated that the next step would be to go for an eligibility study and there are 14 factors, and the question is whether this is an area that would be found to be eligible, and it is hard to say that without the study. Hanz showed on Google Maps the property that they are acquiring and where Rodney Jenkins home is located, with the current plan to build around Jenkins. Harvey might need to abstain because he is the land use attorney for DOE, and he might have a possible conflict. Chris Pelkola Lee asked why they have come to the Agency instead of just develop the property and asked if there is an impediment that she missed on the site. Hanz stated that there is lack of gap funding for projects like this approximately $1 million they are trying to fill. Hanz stated that this site has infrastructure issues. They use the tax abatement from the increment created to fill the gap. Lee asked if there are issues with Greenfield on this. Radford agreed that they need to discuss that. Radford stated that they shouldn’t spend money on something that won’t be profitable. Chris Pelkola Lee stated that this is currently being farmed and INL is expanding on its own and is this something that could develop on its own and appears to currently be greenfield. Radford asked Conrad what they should do, as Harvey is involved with INL, Thompson has a family relationship with the remaining owner, Radford has a friend relationship with the existing owner. What should they do? Can they even discuss this item? Conrad stated that conflict issues are tricky, and she thinks since there is a bare quorum present that probably should abstain from further discussion. This is only a presentation, and they have time to consider next steps. An action item might be on the next agenda. Radford asked Conrad what is next. Conrad stated that the developer is representing there are not a lot of options, and there is further conversation warranted on an affordable housing project in this area. The developer needs to decide if they want to move forward, and they could enter into a MOU to extend planning costs. Radford explained that the State of Idaho does have a gap, and the Agency is not a gap filler they can only do what they are authorized to do, and this is a sensitive area, and the Legislature keeps a close eye, and in order to do that and fill that “gap” they would have to have somethings in the eligibility study. Radford urged Hanz to talk to Conrad on what to do next. 10. RAI and Legislative Update. Nothing to report. Next meeting September 19, 2024 Thompson moved to adjourn the meeting, Chris Pelkola Lee seconded the motion passed unanimously. Radford adjourned the meeting at 1:30 p.m. Respectfully Submitted: Beckie Thompson