Plan for one of downtown Boise’s largest construction projects collapsed. What went wrong
Editor’s note: This story was updated Tuesday, Nov. 12, 2024, with the vote by the board of the Capital City Development Corp.
An ambitious plan to redevelop three downtown Boise city blocks just south of Boise High School disintegrated Tuesday after the city’s urban renewal agency, Capital City Development Corp. or CCDC, and several developers agreed that it would no longer be possible thanks to difficult market conditions.
CCDC and the developers had sought for years to build about 30,000 square feet of commercial space and 400 apartments spread between a seven- and 15-story building on State Street, a few blocks west of the Idaho Capitol.
The seven-story building, called Block 69 North for planning purposes, was to include workforce housing. The 15-story apartment building, called Block 68 South, was to include a parking garage and “mobility hub” that tied into the commuter-heavy State Street corridor. The block names come from the city’s original 19th century plat map.
The developers — Portland’s Edlen & Co., Eugene’s deChase Miksis, Meridian’s Elton Cos., and the YMCA — also planned to move the downtown YMCA a block south, across State Street; and to raise a third mixed-use building over the site of the current Y. They also planned an office building for a small parking lot across from the Y that the nonprofit uses for customer parking.
The new $80 million Y, however, is one of the only pieces of the development to move forward. Two weeks after local leaders celebrated its groundbreaking on Oct. 30, the urban renewal agency’s board of commissioners voted to scrap most other pieces of the project, including the workforce housing.
Homes that qualify as workforce housing are reserved for those who earn 80% to 120% of the area median income, with rent capped at 30% of those incomes. In Boise, 80% of the area median income for a one-person household is $54,900 and 120% is $82,938. That means rent would max out at $1,373 and $2,073 at those levels.
At the board’s Tuesday meeting, they agreed to a “mutual termination and release” for the seven-story and 15-story buildings.
According to the meeting packet, the developers won’t be able to finish the projects by September 2026, when the urban renewal district the site is in expires. When the district expires, the developers would not be able to access CCDC funding.
“The development team led by Edlen & Co. and deChase Miksis has shown remarkable tenacity and creativity throughout this process,” said Alexandra Monjar, CCDC’s project manager for the development, during the meeting. “While these projects did not reach our hoped-for outcomes, the commitment that they’ve had amidst very challenging market conditions has been evident, and we welcome future opportunities to partner with them.”
It’s unclear what could happen to the small office building, the mixed-use building planned for the current site of the Y, or the now vacant half-block catty corner to the Y where crews demolished two buildings for the seven-story building.
Monjar said CCDC now owns the site of where the small office building would have gone and the half-block, which could be used for construction staging for nearby projects. The agency also now owns the site of Block 68 South, where the 15-story building was planned.
“CCDC purchased property on Block 68 South with the intention to develop structured parking to catalyze the development of surrounding surface parking lots, and the agency remains committed to this vision in the immediate short term,” Monjar said.
According to Lana Graybeal, spokesperson for CCDC, the agency is continuing to work with the YMCA on its new location and is looking to keep pieces of the project such as a proposed childcare development center and St. Luke’s Health System clinic on the ground floor of Block 68 South.
“Knowing that a childcare development center and additional clinic space are critical components of redevelopment in the neighborhood, CCDC plans to accept assignments of reservation agreements that the developer executed with St. Luke’s and the YMCA,” Graybeal said by email. “This means a medical clinic and a childcare facility could be included in the future redevelopment.”
Graybeal said that while details and timing are still being worked out, the agency hopes to host a ribbon cutting for those pieces in 30 to 36 months.
Fading hope for new buildings in Boise’s core
While the construction of a new YMCA has remained safe, the developers and the urban renewal agency struggled with the other elements of the project since the local commercial construction market soured in 2023.
High interest rates, expensive construction costs and an ongoing labor shortage — exacerbated by massive projects like Micron’s $15 billion Boise expansion and Meta’s $1 billion Facebook data center in Kuna — started threatening the project.
In August 2023, the developers estimated that the cost of Block 68 South and Block 69 North had swelled from about $186 million to $204 million.
With inflated costs and the approaching closure of the district, the developers and CCDC modified the development agreement, but that wasn’t enough. A year later, the developers acknowledged they wouldn’t be able to hit all their goals.
“Despite their best efforts, our partners are not prepared to move forward with these projects under (the development agreements),” Monjar said during an Aug. 12 meeting.
According to Dean Papé, partner at deChase Miksis, the financial partner for the 15-story building pulled out, which affected the developers’ ability to finish the project.
The developers suggested removing the apartments on the 15-story building and just leaving the parking structure. And they tried to partner with the Boise City Ada County Housing Authorities to build the seven-story building. It’s not clear if that partnership fell through or not. Deanna Watson, executive director of the authorities, did not immediately return a call Monday requesting comment.
What happens now?
According to documents the urban renewal agency’s staff prepared for Tuesday’s meeting, the developers will keep ownership of drawings, studies and project materials but will lose $45,000 in deposits for the two buildings. CCDC could redistribute the $13.25 million it had set aside for Block 68 South and $1.4 million for Block 69 North.
In August, it seemed likely that the parking garage of the 15-story building was still on the table. But parts of that may be in question, too.
“Because of the circumstances stated herein, the design of the parking garage including parking stall counts, circulation, ground floor design and the ownership, operation and management of the parking garage will need to substantially be revised and modified,” according to the meeting materials.
The new three-story Y is still safe from the fallout, and it could show the need for the parking garage, according to the materials.
The Y is expected to include an indoor track, indoor play space, a creator space, teen hangout area, child care center, Blue Cross of Idaho center along with its regular offerings including studio space, a gym, swimming pools and administration offices. It is scheduled to open in the fall of 2026.
This story was originally published November 11, 2024 at 12:50 PM.
