Pandemic could be business driver

The pandemic didn't quell growth in North Idaho.

In fact, it stimulated it, not only in population but, according to the Coeur d'Alene Area Economic Development Corporation, wealth-creating industries.

In a Kootenai County Community Development meeting Thursday, CDAEDC executive director Gynii Gilliam spoke to commissioners on the possibility of a new business in the area. Though details are still hush-hush, Gilliam said the company is one of dozens that have taken a special interest in the area since the pandemic began.

Wealth-producing industries stimulate the economy much differently than the service or government sectors, Community Development Director David Callahan said. Some examples of these are technology, real estate, investing, manufacturing, food, and telecommunications.

"You get a much larger ripple effect," he said. "The wealth-creating part is huge because it actually creates value added to the economy."

Coeur d'Alene and the growing Kootenai County community is largely a service- and tourism-based economy, which Callahan notes is why adding wealth-creating industries is crucial for the area. He told The Press that consistently around the country, residential development is no longer paying for itself.

"What picks up the tab in most communities are the taxes from retail and commercial uses, but primarily from industrial/manufacturing uses," Callahan explained in an email.

Manufacturing is important to any community because it is the only land designation that provides value-added production.

"This added-value is also what's behind the notion of wealth-creating industry. The industry brings more money to the local economy than would otherwise exist," Callahan said. "What's more important from my land-use planning perspective is that a local economy that has a good balance of retail, commercial, and industrial uses is much more stable and resilient to changing economic conditions."

Part of the board's hesitation is the passage of legislation that could alter the state's taxing regulations. Notably, Senate Bill 1108 plans to change the formula municipalities use to collect new growth and property taxes in annual budgets.

"I think we would just need to weigh everything because potentially if they don't touch that (new growth and Urban Renewal District returns), we wouldn't have ongoing funding for our buildings instead of forgone or a bond," Commissioner Leslie Duncan said.

Gilliam mentioned that she has alerted companies expressing interest that the Legislature could pass new regulations affecting taxes and commerce, but many out-of-state businesses are still interested.

Some options to incentivize a company's move are tax exemptions, breaks, or discounting building permit prices. Incentives can vary considerably, Callahan said, usually depending on a company's needs and the economic and political conditions.

"Typically, the incentive comes in some form of tax forgiveness that is granted over a period of time," Callahan said. "The logic is always that the long-term positive effects brought to the community by the new industry will ultimately exceed the initial incentives."

As far as a tax incentive match, Gilliam noted the county would have to be willing to provide a significant amount of funding to convince the mystery company to leave Oregon.

"There are more regulations over there (Oregon)," Gilliam said. "A lot of the companies that have called us just through the pandemic had been thinking about moving already, and the pandemic nudged them forward."

The reasons, Gilliam said, range from government regulations, increased fees, or simply the quality of life North Idaho provides.

"I, for one, am in favor of something just because you know as well as anyone in the county, probably better, that wealth-creating industries are altogether rare here," Callahan said. "This one looks like a good one."

Callahan said he has heard from Gilliam that Post Falls incentivizes companies to come to the area by taking 50% off the building permit price — a discount Callahan felt was doable.

Commissioner Chris Fillios agreed with Gilliam and Callahan, especially given the rapid inflation of housing prices.

"If we don't get higher-wage jobs here, I don't know how people are going to be able to keep pace," Fillios said.

Details aren't certain, but the Board of County Commissioners could consider incentives for the industry during a meeting next week.