The Idaho Freedom Foundation is suing Boise over urban renewal, arguing that the city uses urban renewal districts to avoid Idaho’s requirements that voters pass a referendum with a two-thirds majority to take on debt.
Cities can create urban renewal districts through city ordinances to spur economic growth, as Boise has done six times since 1987. Two were passed in December, creating the Shoreline district on Downtown’s southwest edge and the Gateway East district in far southeast Boise. Unlike other taxing districts, urban renewal districts can take on debt without voter approval.
“Boise, through its abuse of urban renewal, is shutting out taxpayers to fund expensive pet projects,” said Freedom Foundation President Wayne Hoffman at a news conference Friday outside Boise City Hall.
The district freezes property taxes. As the value of property in a district increases — through inflation or the construction of new buildings — the district takes any additional tax money above the amount property owners were paying at the time the district was established. Boise has previously used such funds to improve streetscapes, build parking garages and renovate The Grove Plaza, the Statesman previously reported.
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The Freedom Foundation’s lawsuit alleges that Boise violates the Idaho Constitution, which states that cities cannot take on debt.
Hoffman said he hopes the lawsuit will bring an end to urban renewal districts throughout the state.
He also said Boise’s urban renewal districts were increasing property taxes and making the city less affordable.
A spokesman for Mayor David Bieter called Hoffman’s assertion “silly.”
“Boise is a successful city,” Mike Journee said in an interview with the Statesman. “When that happens, property values do rise.”
Boise’s first urban renewal district was in a part of Downtown that lies mostly between Capitol Boulevard and Front, Bannock and 9th streets. Over its 30-year lifespan, assessed property value inside the district grew from $31.1 million to more than $370 million — almost 1,100 percent, the Statesman previously reported. The district expired in September.
“Urban renewal is an amazing tool for creating economic conditions where businesses thrive,” Journee said.
The Capital City Development Corp., Boise’s urban renewal agency, took in almost $60 million in property taxes diverted from the city, school district and other taxing bodies during that time. In Boise, tax diversions to CCDC affect the city itself and the Boise School District the most.
The Freedom Foundation is also currently suing the state to block voter-approved Medicaid expansion in Idaho.
After Hoffman’s news conference, Bieter tweeted, “Surprised [the Idaho Freedom Foundation] has time to sue over urban renewal while working to deny 62,000 low-income Idahoans voter-approved health care through Medicaid expansion. Any irony in using a great public space, partially funded by urban renewal, to announce opposition to urban renewal?”
State law permitted the Downtown Boise’s district to last for 30 years when the district was established, but now limits districts to 20 years.