BLACKFOOT — Payment of debt was the topic of discussion among representatives of the Blackfoot Urban Renewal Agency (BURA), the Bingham County commissioners, and other county officers Friday morning.
Butch Hulse, Bingham County Economic Development Director, and Ginette Manwaring from BURA, answered questions about how Bingham County, the City of Blackfoot and BURA joined together in a joint economic development project to establish the Riverview Technology Park. Premier Technology is located in this park west of Blackfoot.
In 2005, Bingham County purchased 25 acres of land for $429,605.62 with the understanding that this amount would be paid back by the Urban Renewal Agency. The county deeded the property to BURA with the understanding that this amount would be paid back by the Urban Renewal Agency, reimbursing the county from taxes paid on the increment value on personal property from the Riverview Technology Park. (Personal property is equipment.)
When an Urban Renewal District is formed, all of the taxing districts continue to receive property taxes based on the "base value" (the value of the property at the time of the establishment of the district).
The amount of increased value of the property because of project development is called "tax increment" (the difference between the base value and current value).
"Taxes on the increment value are paid to BURA and used to fund the district," said Hulse.
“Each district must maintain separate fund balances and can only use the funding to do projects within the boundaries of its own district," Manwaring said. "It is one of only a few tools that municipalities have had to react quickly to opportunities to bring business and jobs into our area.”
In the case of the Riverview Technology Park project, no specific timeline for repayment was established in the original agreement between the county and BURA. The payment of the taxes that BURA would have received from the personal property increment value for Riverview Technology Park will be paid each year to the county until the debt is retired.
Premier Technology located on 20 of the 25 acres purchased. The company was given the option to use the last five acres if expansion was necessary. The original development agreement between the county and BURA allowed for the final five acres to be purchased at $20,000 per acre, with the $10,000, payment giving the county a "quick return" on its investment.
Premier Technology did expand, utilizing the last five acres. With this latest expansion, the county commissioners agree to forgive one-third of the $100,000.
Doug Sayer, founder and president of Premier Technology, agreed to pay one-third of this sum and BURA will pay the last third. By Oct. 31, 2012, the county will receive $66,666.66.
The remaining balance of $363,039.62 is still owed to Bingham County.
County commissioners asked Bingham County Clerk Sara Staub and Manwaring to work together to present a repayment plan for the $363,039.62 in 30 days to both members of the agency’s board and the commissioners.
This year, bills have been introduced to the Idaho Legislature that would tighten regulations and make it much more difficult to establish and operate urban renewal districts.
Manwaring said, “Tax increment financing has been a good way to provide incentives to bring business and jobs to our area as evidenced by the successful technology park project that has brought hundreds of full-time and high-paying jobs and millions of dollars in growth to our county in a short seven years.”
Most of the proposed legislation would make it difficult to respond quickly enough to respond to opportunities and attract these types of business deals, she said.
"The jobs that have come into the county have benefitted us enormously," said Commissioner Cleone Jolley.
In Blackfoot, there are three urban renewal projects—Riverview, Parkway (between WalMart and Chevron) and downtown Blackfoot.
When urban renewal districts are closed, the tax increment dollars that have not been spent by the agency are distributed to each of the taxing districts in the county on a pro rata basis, Manwaring said. (A pro rata basis gives each taxing district its own share of taxes.)
The increased taxable market value of the property in the area from the former urban renewal areas will substantially increase the tax revenues in the County and drive tax levy rates down.