In a “My Turn” column in the CdA Press this morning, Scott Reed attempts to explain urban renewal as a wonderful advantage to the city. Apparently, according to Scott, there are no downsides to this fabulous mechanism.
I would give you a link to his article, but it’s not on the Press web site. I will warn you that his column is very long and heavily laden with numbers and bewildering obfuscation.
Here are some of the ideas Mr. Reed is twisting improperly:
1. Mr. Reed compares the tax incentives to a “loan” that the developers get from LCDC. He even mentions an interest rate of 6 percent. What he doesn’t tell you is that LCDC pays the interest to the developers! So, the developers have a contract to get almost all their property taxes returned to them for years and years, PLUS they are paid between 6-10% interest on the money they spend for the approved items in their development.
2. Mr. Reed claims LCDC is “Tax Neutral”. This is not true. And his quote from the Idaho Tax Commission is squishy political-speak. The tax commission guy was pressured by LCDC for a comment on some changes to the urban renewal law back in 2008, and he answered that the changes would “add to the effective neutrality”. He DIDN’T say it is neutral. I met with Post Falls urban renewal Exec. Director and their City Administrator and asked them that very question: “Does urban renewal raise our tax rates?” YES, they both said instantly. And then they explained that this is why they are so careful to keep their districts small, with specific goals and the shortest time line possible. Also, I have direct numbers from the state that show a clear and irrefutable increase in property taxes because of urban renewal: more than 17% in the city of CdA, and more than 6% in the County.
3. Scott Reed describes lots of LCDC projects, saying that only the taxes for Parkside go to pay Parkside back, and only the taxes from Riverstone go to Riverstone, etc. He is right about that. But what he’s not telling you is that LCDC’s districts are HUGE. It’s not just a circle around Parkside or even Riverstone. The first LCDC district grabs all of the downtown and much more. The second one grabs all the way out Seltice to include Mill River. Basically all of our commercial core is in the LCDC disitricts, and EVERY PENNY of tax increment from EVERY BUILDING within the districts goes to LCDC for a minimum of 11 more years and part of it will go for 17 more years. Read it again: every building. NOT just the ones that get money from LCDC. That’s why the tax impact is so great. If they had small, specific districts, the tax impact would be minimal. This year alone, LCDC will get $5.2 MILLION in tax increment. We all pay more to make up that difference.
4. This big tax increment allows the LCDC and city to keep our taxes high and decide on all kinds of public projects WITHOUT A VOTE OF THE PEOPLE. Scott failed to mention that.
I do not understand Scott Reed.
Do his partisan blinders make him blind to the truth, or do his functioning partisan eyes attempt to deceive those around him.
I like Scott. Therefore, his carrying the water for the downtown scally wags is very sad to me. Is the water he carries laced with “Kool-Aid?”
Comment by citizen — October 17, 2009 @ 2:26 pm
I read this article this morning. Ridiculous! Did this man really think everyone would read all of that convoluted nonsense. When you want to make a point, short and concise wins the day. This was just more of what I call politi-babble.
Comment by Faringdon — October 17, 2009 @ 4:36 pm
What is noteworthy is what he did not say. Almost all of the criticism on the way urban renewal works locally centers basically on two elements, not discussed in Mr. Reed’s lengthy, lawyerly discourse. These criticisms are directed at discretionary spending by the LCDC Board of Commissioners that are seen as abusive and insensitive to the taxpayer.
1. The diversion of all property taxes from increased valuation from all properties in each Urban Renewal District goes to the coffers of the LCDC, even if your property is not part of any project. If you live within the boundaries of one of the URDs check your property tax statement. Look at how much of your property tax that you thought was going to the city and other local government entities is being diverted. This practice is not a valid criticism? It is, because the law allows the Districts to be formed as project specific which would leave non participants out of the scheme. But it is no secret that the LCDC Board with the encouragement and approval of the Mayor and city council, formed both URDs as a huge, all encompassing district in order to grab all the taxes generated whether or not your property is one of the participants.
2. Outright grants have been given from part of the tax increment(diversion)to developers only to enhance the value of their project with no public benefit. Examples, replacement facing on the Loft Condo project on Sherman Avenue, fancy fencing on a condo project off Mullen Ave, to name a few. There are others.
Comment by Gary Ingram — October 17, 2009 @ 7:17 pm
It would grossly overstate the validity of Reed’s perspective to suggest he views the issue from an Archimedean point.
Comment by Bill — October 18, 2009 @ 6:42 am
I looked up Archimedean in my pocket dictionary and could not find it. However, I learned that Archimedes (287? to 212 B.C.) was a Greek physicist and inventor. Having missed something in my education, I will proceed to the encyclopedia to find out if he invented the arch.
May I be so bold as to suggest that we send money to the Gookin and Brannon campaigns.
Checks can be sent to Att: Randy Bates, 1119 Ironwood Parkway, Suite 301, CdA, 83814. (made out to “Campaign to Elect Jim Brannon”).
Does anyone know where to send checks for the Gookin campaign?
Comment by citizen — October 18, 2009 @ 7:16 am
Yes, Citizen, DONATIONS are greatly needed by all the challengers’ campaigns! Dan Gookin’s donation mailing address is:
Dan Gookin CDA
714 W. Empire Ave.
Coeur d’Alene, ID 83814
Or you can DONATE by PayPal on his web site: http://www.dangookin.com
Comment by mary — October 18, 2009 @ 8:34 am
Mary: “Also, I have direct numbers from the state that show a clear and irrefutable increase in property taxes because of urban renewal: more than 17% in the city of CdA, and more than 6% in the County.”
I’d like to see the date from the State, Mary. I have yet to see any evidence that taxes are higher because of URDs, at least since the legislation changed disallowing local governments from adding URD new construction to their tax rolls. Indeed, what I don’t understand is how taxes can be raised by local governments when they don’t have the authority via new construction to do so.
Comment by JohnA — October 18, 2009 @ 11:34 am
Sorry for the delay, JohnA. The numbers from the State Tax Commission are the very latest: Just new from Sept. 2009. The valuation of property within the URDs shows the City of CdA with 17.9% and
Kootenai County with just over 6%.
Comment by mary — October 20, 2009 @ 5:42 pm
Mary, just to clarify, you mean the State Tax Commission has supplied you with information that valuation within the LCDC district boundary comprises 17.9% of CDA’s total valuation? If so, that is different than saying taxes went up by that percentage.
Again, taxing districts can’t raise taxes outside of URDs by any more than the 3% allowed by law plus new construction outside of the URDs. They simply can’t MAKE UP for taxes going to URDs to cover needed services.
So, unless you have other data, I don’t think it’s prudent to continue to reference tax increases that you say have occurred because of new construction dollars going to URDs. I’ve seen no evidence to that effect.
Comment by JohnA — October 21, 2009 @ 10:49 am