LCDC: A tale of two perspectives

The Lake City Development Corporation appreciates the community's interest in our efforts to promote economic vitality. Ms. Smith brings to light some frequently asked questions and we are thankful to The Press for allowing us to clear up some misconceptions.

Claim: The city of Coeur d'Alene and Kootenai County are the only taxing entities affected.

LCDC response: Actually, several taxing districts (city, county, NIC, highway districts) receive the taxes associated with the base property valuations when a district is established. The LCDC receives the taxes paid on the increase in property value (the increment) until the district is terminated.

Claim: On the average, county property owners pay 7.5 percent more tax than they should and city property owners pay almost 20 percent more than they should due to the increased costs of infrastructure upkeep caused by LCDC improvements.

LCDC response: We are unaware of where these percentages come from or how they were derived. The Idaho State Tax Commission states that the impact of urban renewal on the taxpayer is neutral. The projects supported by the LCDC within its Lake and River districts encourage growth and investment beyond the agency's boundaries. The tax increment generated by increased valuation outside the boundaries supports "the effective neutrality of urban renewal."

Claim: The LCDC is contracted to develop its two districts.

LCDC response: LCDC is not "contracted" to do anything. The agency was formed by city ordinance in 1997 following Idaho state statutes, and is a separate legal entity from the city.

Claim: The LCDC district encompasses 18% of Coeur d'Alene.

LCDC response: Assuming they are referring to geographic area, the two LCDC districts represent 11% of the city's current city limit area.

Claim: In 2011, $5,655,488.00 was diverted to the LCDC.

LCDC response: Actual LCDC revenues for fiscal year 2011 totaled $5,594,408.

Claim: The LCDC spends its money buying properties in its districts and may rent or develop said properties.

LCDC response: The majority of LCDC tax increment revenue goes toward partnership project initiatives involving other parties. The agency owns 23 properties in the LCDC Lake District that were acquired for strategic redevelopment purposes that will add value to the community.

Claim: The City Council made an agreement to allow the LCDC to be tax-exempt.

LCDC response: The City Council did not make any type of agreement. Property owned by all public entities is exempt from property taxes.

Claim: Property owners in the areas pay full property taxes and their tax bills show how much is given to the LCDC. For us outside the areas, the amount is not shown on our tax bill; but our taxes increase.

LCDC response: This is misinformation that's arisen many times. The "amount" referred to is not shown because an increase does not exist. This is because an owner's property value has increased over time, thus the incremental value is higher; property appreciation is viewed by many as a good thing.

Claim: Contractors and developers are given rebates for their work within LCDC districts.

LCDC response: No rebates are given to developers who work within LCDC districts, just reimbursements for public improvements. The LCDC uses the following economic development model: Public/private partnerships where developers pay for agreed-to public improvements up front, and then are reimbursed by LCDC over time using property taxes generated solely by their projects. There is no risk to the public and the public receives public improvements.

Claim: The LCDC will collect $100 million over the terms of its two districts.

LCDC response: Through fiscal year 2011, LCDC has realized $27 million in tax increment revenues from both districts. Assuming fiscal year 2011 annual revenue receipts were to hold steady until the end of the district terms (which is a hopeful assumption), and each district term reaches its full 24-year life, then the projected total tax increment revenue for the LCDC would be $92 million.

Claim: The LCDC doesn't save the money it gets. The agency will borrow $14-16 million to build the 1st phase of McEuen Park.

LCDC response: LCDC does "save" tax increment revenues; the agency leverages those cash assets for the benefit of the community. The LCDC funds targeted for the McEuen Park initiative will be generated from future tax increment revenues generated from properties located with the LCDC's Lake District

Claim: When the LCDC districts expire, taxes should go down.

LCDC response: The incremental property valuation associated with the districts will go back on the tax rolls. Individual property owners' tax bills may, or may not, decrease based upon each taxing entity's budgeting process.

Claim: Property owners outside the LCDC districts pay extra taxes to help the agency out.

LCDC response: As previously stated, the LCDC's impact on the taxpayer, according to the Idaho Tax Commission, is neutral.

The LCDC strives to inform the public about its projects and how it impacts the community. Visit our website at lcdc.org for current LCDC news, answers to frequently asked questions, and more. We also have a Facebook page that is updated often and encourages public interaction. Additionally, we have recently created an online newsletter to inform the public (anybody can join our mailing list by visiting our website), and our monthly meetings are open to the public and televised.

Tony Berns is executive director of Lake City Development Corp.