Boise & Garden City

Boise suggests stadium safeguards, denies secrecy amid questions over officials’ roles

Over the last year and a half, public officials from three Boise agencies have been briefed on a proposed Downtown sports stadium, offered feedback and guidance, or have met with the project’s developer.

It remains unclear to what extent these contacts, many of which took place outside of the public eye, risked improper influence under Idaho’s transparency laws.

No official stadium proposal has yet been submitted. But the project’s size and the involvement of government money have piqued public interest sooner than is common for land-use projects. Documents provided to the Idaho Statesman show employees, appointed board members and elected officials for the city of Boise, Greater Boise Auditorium District and the city’s urban renewal agency have been actively fleshing out their agencies’ possible roles in the stadium project, vetting the lead developer and contacting other cities with publicly owned stadiums.

Among city staff’s most recent contributions are proposed safeguards that would protect taxpayers from the stadium’s early financial risk. It’s not clear whether developer Chris Schoen would agree to any of the proposals — efforts to contact him for this story were unsuccessful. But they represent the agencies’ latest effort to reassure the public they are approaching the project responsibly.

Officials from the various agencies reject any suggestion that they are making key decisions in secret. They say they are committed to involving the public in the stadium’s fate.

And while publicly financed sports stadiums remain controversial nationwide, some experts here see no red flags with Boise’s approach, which would rely on a mix of public and private money. Schoen would pay upfront construction costs, then build new development to create property tax income to pay off long-term bonds. He would be reimbursed by the city, auditorium district and renewal agency.

“I don’t see anything wrong with it,” Don Holley, a Boise State University professor emeritus of economics, said of the financing proposal. “And that’s not my professional opinion. But it doesn’t look illegal, and it doesn’t look unethical.”

MEETING QUESTIONS

Staff members from the three agencies have been negotiating details, examining financial plans, doing background checks on Schoen’s development firm, and contacting cities such as Fort Wayne, Ind., and Jacksonville, Fla., about how they’ve handled stadium contracts and ownership.

That’s not unusual. Complications arise from the involvement of various public officials — some elected, all bound to comply with Idaho’s transparency laws.

This summer, Gary Michael, former Albertsons CEO, and Bill Ilett, former managing partner of the Idaho Stampede minor league basketball team, founded Concerned Boise Taxpayers to lobby against the stadium effort.

Last month, Concerned Boise Taxpayers asked Ada County Prosecutor Jan Bennetts to investigate whether the auditorium district violated Idaho’s open meeting law in 2014 by arranging meetings between Schoen and one or two members of its governing board at a time, instead of as a quorum in a public meeting. A county sheriff’s detective is looking into the matter.

Emails between Schoen’s firm, Atlanta-based Greenstone Properties, and local government officials show plans for similar meetings between Schoen and most of the individual auditorium district board members in December 2016. One describes the meetings as a precursor to securing, “at least informally,” the auditorium district’s commitment to the stadium project. But there was no sign in the emails as to whether the meetings took place. Board members earlier acknowledged the 2014 meetings to the Statesman, but none interviewed in recent weeks said they attended anything in December 2016.

Emails between board member Peter Oliver and Schoen show plans for a Dec. 19, 2016 meeting, for example. But Oliver didn’t recall it. He said he met with Schoen and Boise Planning and Development director Derick O’Neill this summer, when they discussed the Treasure Valley’s commercial real estate market — not the stadium.

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An artist’s rendering, marked “in progress,” of the proposed stadium, from a March 22 email to a Boise city staffer. City of Boise

Hy Kloc, another board member, said the only times he met Schoen were in 2014 and during a Sept. 27 public board meeting at which Schoen made a stadium-related presentation.

Kristin Muchow, elected to the board in May, said she met with Schoen and O’Neill for about 20 minutes in late July. She said they talked about general background topics but did not get into specifics on the stadium proposal.

Efforts to contact other board members were unsuccessful.

The Statesman first learned of the emails from Concerned Boise Taxpayers. The city later provided copies of them and other documents in response to a records request.

Boise Mayor David Bieter was copied on many of the December emails. According to one of them, he suggested Schoen meet with members of the auditorium board. Bieter did not participate in any decision to break up the meetings in order to avoid a quorum, city spokesman Mike Journee told the Statesman.

“The mayor simply helped ensure Mr. Schoen had the opportunity to meet as many board members as possible in the limited amount of time he had in town,” Journee said.

TRI-AGENCY

The stadium has also been a topic at meetings of the Downtown Leadership Working Group. Known unofficially as the “Tri-Agency,” this group is made up of public officials — board members from the auditorium district; the urban renewal agency, Capital City Development Corp.; and two City Council members.

The Tri-Agency was formed in 2013 in response to an inquiry about a Downtown performing arts center, said Pat Rice, executive director of the auditorium district. It has met eight times since July 2014, he said, to keep all three agencies informed on proposals and initiatives that come up. The meetings have agendas, but they take place behind closed doors, with no quorum of any one public board attending.

The Tri-Agency has no authority to make decisions on public issues — though agendas and email conversations suggest it has used meetings to flesh out and move forward preliminary concepts of the stadium proposal, and its members have heard at least one early presentation from Schoen.

“It was established to be simply a clearinghouse for ideas,” Rice said. “It is absolutely not, in any way, shape or form, a decision-making body.”

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An early schematic charting the level of development around a proposed Boise sports stadium, ahead of creating a new urban renewal district to help pay for the project. The district boundaries suggested here are not necessarily current. City of Boise

Outside of its Tri-Agency participation, CCDC appears to be approaching the project in a way prescribed by Idaho law. Its board held a private meeting in February at which it apparently discussed the stadium and other topics, according to a Feb. 12 email from executive director John Brunelle to Jade Riley, Bieter’s chief of staff. Idaho law allows public boards to hold private meetings in a variety of circumstances, including to discuss acquisition of “an interest in real property.”

‘NO SIDE DEALS IN SMOKY ROOMS’

The perception of secrecy around the stadium deal reinforces a suspicion that Boise’s leaders are making decisions without regard for their constituents’ opinions. Residents have echoed that belief in dozens of interviews and off-the-record conversations.

“I am concerned about some of the lack of transparency,” a constituent said in a March 30 email to Councilman Scot Ludwig, who has been deeply involved in the stadium project for more than a year now.

The city refutes accusations of secrecy.

“There are no side deals in smoky rooms,” Ludwig responded to the constituent who emailed him. “We do not do business that way in Boise.”

City leaders contend that there’s been more public discussion on the stadium than almost any recent project Boise has contemplated — and that’s before an application or official proposal has been presented. Controversy usually erupts only after developers file applications for major projects, such as the St. Luke’s Downtown expansion and Syringa Valley, a major housing development south of town.

Documents acquired by the Statesman show that, at least as early as February, Boise anticipated public involvement in the stadium project.

“The city will ensure that the citizens have multiple opportunities to get involved,” an internal document reads. “There will be a robust public process to get community input.”

Last month, City Hall hosted three open house events to answer questions on the stadium and field feedback from the public. Responses in favor of the stadium outnumbered negative ones by three-to-one, according to Journee.

The City Council discussed the project during a public meeting Nov. 7. Boise plans to hold a town hall-style meeting for the public to speak to Mayor David Bieter and the council about the stadium. A date has not been set.

“It is an unusual thing for us to be in circumstances like this and, frankly, we’re there in large part because of some of the reaction that we had,” Journee said. “We want to be responsive to the concerns that people have.”

Other than Ludwig, Elaine Clegg and Maryanne Jordan are the only City Council members who have met privately with Schoen, Journee said. As the stadium deal gained steam earlier this year, he said, Boise drafted a nondisclosure agreement that would have prohibited the city from releasing any details. The city never executed the agreement, however, Journee said.

Keeping real estate deals quiet is common. Staffers typically don’t release details about projects that would involve the city, Journee said. The law that allows the urban renewal agency to hold private meetings on buying real estate applies to cities, too.

“These negotiations have to be confidential to be effective,” Journee said.

NEW SAFEGUARDS

The city is willing to talk about the new ideas to reduce the stadium’s financial risk to taxpayers.

First, Schoen would have to build the roughly $36 million stadium at his own cost through Greenstone. He would be reimbursed by the three Boise agencies, but Schoen and Greenstone would have to pay for any construction cost overruns.

CCDC would shoulder most of the reimbursement to Schoen through 20-year bonds. It would repay those with income from stadium lease payments and property tax money from at least $67 million of private development Schoen would build next to the stadium.

The last two safeguards deal with insulating that arrangement. One would require Schoen’s other company, Agon Sports and Entertainment, to guarantee yearly lease payments of around $1 million for a few years — maybe three, maybe five — after the stadium is open.

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A map of Boise’s urban renewal districts from a September 2016 presentation to the Downtown Leadership Working Group, made up of public officials from the city of Boise, Greater Boise Auditorium District and Capital City Development Corp. The dark red outline at lower left shows the rough area where a sports stadium and other new development would be built, financed through the carving-out of a new district. City of Boise

Agon owns the Boise Hawks, a minor league baseball team that would be the stadium’s principal tenant. Agon would hold a master lease to the facility and rent it to other users, such as a professional soccer team and organizers of events like youth sports tournaments, festivals and concerts.

Additionally, Schoen and Greenstone would have to cover any gap between the urban renewal agency’s debt payments and the combined lease/property tax income. This arrangement would continue for a few years after construction.

Michael of Concerned Boise Taxpayers said the proposed safeguards don’t relieve his concerns about the project’s viability. He pointed to news reports and academic analyses warning about public involvement in sports venues.

“You know, we keep saying, ‘Boise’s different. Boise’s different,’” Michael said. “And I’d like to believe all that. We all love it here. But I still don’t buy it.”

PUBLIC-PRIVATE ARGUMENT

That argument speaks to a common criticism of the stadium deal: that it represents an unethical use of taxpayer money for a project that benefits a private organization.

Supporters say the arrangement is appropriate because the stadium would benefit the public in ways that fit the missions of the agencies contributing to the project. For example, they point to the auditorium district’s charge to “promote the prosperity, security and general welfare” through the taxes it collects on hotel room stays.

Critics are unconvinced. “These are out-of-town owners who want us to pay for the stadium,” the Concerned Boise Taxpayers website reads. “They will reap the financial gains from getting to develop the area. Private investors would make all the money while we pay the costs.”

That last claim isn’t entirely true. If the stadium deal unfolds as proposed, the city and auditorium district would contribute a total of about $8 million to the stadium’s construction. But Agon and Greenstone — both private organizations that Schoen manages — would pay much of the stadium’s cost. Schoen would contribute $1 million in cash and the land where the stadium would sit, which he has agreed to buy from St. Luke’s Health System.

CCDC would borrow about $28 million for the stadium. Agon’s lease payments would cover about half of the agency’s debt payments. The remainder would come from property taxes on private development that Schoen is required to build around the stadium. That development — and the tax money it generates — is unlikely without the stadium.

The city’s analysis suggests the four acres that make up the stadium site are worth more than the $3 million Boise would pay toward the stadium’s construction. Additionally, Boise would come to own the stadium itself after 20 years, when CCDC pays off its debt.

Boise taxpayers would not be liable if the urban renewal agency can’t make its bond payments. Private bondholders — investors who essentially lend money to the agency — would assume that risk.

Taxpayers also wouldn’t have a chance to vote on the matter. Under most circumstances, Idaho law requires two-thirds of voters to approve public agencies’ long-term debt. But that requirement doesn’t apply to urban renewal agencies. The auditorium district used this exception to finance an expansion of Boise Centre, its convention venue on The Grove Plaza, in a funding structure the Idaho Supreme Court approved.

Why not hold a vote anyway, to also clear up the claims of back-room dealings? So far, the pro-stadium crowd has resisted that idea. Ludwig said decisions like this one are exactly why voters pick representatives in their government — to examine and, ultimately, make a call on whether to back a project or back away.

“I respect the voters, but when you have a dozen complicated pieces, it gives a lot of opportunity for misinformation,” he said.

Several elections in the past few years have given voters opportunity to indirectly weigh in on a stadium, though some took place before specifics of this project came to light. At least three of the auditorium district’s five board members were among the most vocally pro-stadium candidates to run in the past five years.

Bieter has long advocated for a Downtown stadium. If that were a big problem for voters, Journee said, they would’ve removed him from office instead of making him the city’s longest-serving mayor.

“A big percentage of our city voted for Mayor Bieter and our council members,” he said. “And in doing so, they said, ‘Yes. Your vision for our town is what we like. And we are giving you the authority to look into those options and make the decisions that are best for our community.’ And they do that every day.”

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