The Boise City Council is set to approve a resolution Tuesday night that will delay the requirement for Utah-based developer Gardner Co. to pay some $500,000 in impact and permit fees for its planned City Center Plaza, a $70 million retail/office/parking/convention development on U.S. Bank Plaza.
Typically, developers pay fees before building. Impact fees offset the development's impact on municipal resources such as emergency response and streets. Permit fees help pay for the city's Planning and Development Services operations, which include planning and zoning, design review, historic preservation and building inspections.
In this case, Gardner would be allowed to not pay the City Center Plaza impact and permit fees — about $500,000 — until receiving its certificate of occupancy.
Yesterday, Boise watchblogger David Frazier slammed the city for the deferral. His headline, "Give Away $.5Mill to Developer, But Pay Your Parking Tickets," is misleading. The city is not giving Gardner $500,000. Frazier knows that.
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Now, whether it's a good idea for the city to grant Gardner this deferral is a legitimate topic of discussion. Frazier, who's suspicious of, well, everything the city does, thinks it smells rotten.
"We suspect the firm is either woefully short of cash and credit or really brilliant at using the public's money," he wrote in his blog post. "Billed as 'public-private partnerships,' both of the planned structures will use public funds, and apparently won't pay fees at least for now."
Gardner COO Tommy Ahlquist said the City Center Plaza project is "absolutely not" in financial trouble. He pointed out that $500,000 is a small fraction of the project's overall cost.
So why not pay it now? The deferral allows Gardner to avoid paying interest on the cost of the fees between now and the time the project's done, which is expected in early 2016. Again, a small amount.
There is at least one precedent for this fee deferral, and it went to —surprise — Gardner. A few years ago, as the city staggered out of the Great Recession, the city offered all developers fee deferrals as an way to encourage economic activity. Gardner took advantage of that offer when it built 8th & Main, which is Idaho's tallest building and filled a scar in Downtown Boise known as "The Boise Hole."
Jade Riley, Mayor David Bieter's chief of staff, said Boise is more willing to offer incentives for the City Center Plaza project because it includes public components the City Council and mayor want to see happen: an expansion of Boise Centre, the local auditorium district's convention center, and an underground, $10 million public transportation hub.
It is interesting to see the murmur of a public backlash against Gardner. A year ago, you heard almost nothing negative about the company as it worked to finish 8th & Main. People were just happy to have the hole filled. City Center Plaza has been a different story.
That could be the result of a complex project that includes publicly funded items — the Boise Centre expansion and transit hub, whose concept historically has been so unpopular that the local transit authority tried a half-dozen times to find a Downtown home for it, only to be rebuffed by neighbors who didn't want a magnet for poor people near them.
Representatives of businesses on the Basque Block — just across Capitol Boulevard from U.S. Bank Plaza and the future City Center Plaza — raised their own concerns about the project. They worry about losing their view of the Grove Plaza and the way traffic will react to a counter-intuitive traffic flow once the transit hub goes in.
Or the grumbling about Gardner could be a natural response to an aggressive company that some Boiseans are suspicious of and see as an outsider trying to reshape the city in its own image. If there's one thing I've learned over the past (almost) two years covering Boise government and development, it's that people who live here care deeply about their city. For example, I can't imagine people in any other city I've covered taking such an acute interest in bike lanes.
Or maybe I'm just wrong, and there is no growing backlash against Gardner.
One way or the other, Gardner plans to break ground July 1 on City Center Plaza.