EDITORIAL: Urban renewal: Far more friend than foe

Urban renewal.

Those two words are guaranteed to make some eyelids flutter toward sleep, and some hearts to beat faster while tempers rise.

In Idaho, urban renewal is considered one of the most potent economic development tools available to municipalities, which is why since 1988 it has sailed above pools of boredom and waves of outrage.

We contend that urban renewal is broadly misunderstood. A couple of newspaper editorials won’t greatly alter that reality, but with Post Falls recently closing one of its urban renewal districts, we thought this a good opportunity to shed a little light on the subject.

State-authorized urban renewal agencies create districts where development is targeted to increase the tax base significantly. That matters to everyone reading this editorial, and we’ll try to show you how.

For the time a district exists — in Idaho, many are open for 20 years — the goal is to build the tax base so when the district closes, the higher level of tax revenue will help foot the bill for taxing districts including the city you live in, public schools, maybe a county library system — basically, every taxing district that appears on your property tax notification.

Simply stated, here’s how an urban renewal district operates:

At inception, let’s say the property within that district generates $10,000 a year in property taxes. The urban renewal agency partners in developing the district, so within, say, five years, the property is now generating $25,000 a year in property taxes.

That’s a difference of $15,000 — and that $15,000 will go back to the urban renewal agency to continue investing in the district. The original $10,000 will go each and every year during the life of the district to the other taxing districts it’s helping support.

By the time an urban renewal district closes, it’s generating substantially more property taxes than it would have if left alone — and now every penny goes to the other taxing districts, basically into perpetuity. In Kootenai County it’s been a winning formula.

Of key importance to citizens: Urban renewal can lead to outstanding commercial and residential developments like Riverstone in Coeur d’Alene; to public treasures like the Atlas park on the Spokane River; to development of vital medical facilities like the health corridor in Coeur d'Alene; and to the general benefit of the entire region by creating jobs.

Those additional property tax dollars can also make up a bigger chunk of the overall tax burden pie so your share remains manageable. The additional jobs help spread the wealth and the tax load obligation. And meantime, the many public services every citizen enjoys have the support not just to continue, but perhaps to improve.

On Friday, we’ll look at two recent urban renewal district closures, one in Post Falls and one in Coeur d’Alene.