Idaho Legislature considering $90 million for cybersecurity facilities

There is an effort this year at the Idaho Legislature to build two new major facilities in Idaho Falls focused on cybersecurity and advanced computing.

One building, called the Cybercore Integration Center, would focus on cybersecurity research and education. The other building, called the Collaborative Computing Center or C3, would be an 80,000-square-foot building meant to house an advanced supercomputer for research and scientific simulation.

In many ways, the project is modeled after the Center for Advanced Energy Studies, which lies adjacent to the plots of land where Cybercore and C3 are proposed. It’s a partnership between INL and state universities funded by state bonds. But this project is much larger.

CAES was largely financed by about $10 million in bonds, which are expected to be paid off soon. The proposal for Cybercore and C3 involves a $90 million bond, according to State Board of Education spokesman Blake Yourde.

“The State Board of Education and INL have been looking at this project (since the end of the last session),” Yourde said. “… It’s really generating a highly qualified, highly technical specialized workforce that will benefit Idaho and grow an industry that you can’t help but turn the news on and see (the need for).”

The two plots of land where construction is contemplated are owned by Idaho State University and the Idaho State University Foundation. Yourde said the facilities could either host or provide support for up to 20 separate degree programs at state universities.

“The state already owns that land in Idaho Falls,” said Rep. Jeff Thompson, R-Idaho Falls. “It puts to use assets the state already has and produces a return on the state’s investment.

The bill is still being massaged behind the scenes, and it may be days or weeks before a move is made to print it. Until the bill is publicly available, some details about the financing remain unknown.

But those crafting the bill say it is built to ensure that Idaho taxpayers never get a bill. Under the proposal, INL would continue paying the state to use the building after the bond is paid off — providing tax-free revenue to the state.

Because many lawmakers haven’t seen a final bill, many say they still have questions they need to ask. But many local lawmakers say they support the broad terms of the deal.

“In general, I think it’s a great idea,” said Rep. Bryan Zollinger, R-Idaho Falls, who said he had met with officials from INL, the city of Idaho Falls, the State Board of Education and other interested parties. “Everybody seems to think it’s a good thing.”

Zollinger said the facilities would mean a huge investment and lots of highly paid jobs in Idaho Falls. And it would help the nation face growing threats from hackers.

“It’s definitely something that our country needs right now,” Zollinger said.

Still, Zollinger said he will need to review the final terms of the bond and leasing agreements before the project wins his full support.

Rep. Janet Trujillo, R-Idaho Falls, said the ability to pay off the bond is “a huge concern” for her.

“These are very specific buildings,” Trujillo said. “If the contractor or the federal government were unable to fulfill the lease agreement, then the state of Idaho would be left with a very large building (that would be) extremely hard to fill.”

But it’s difficult to conceive a scenario under which INL would have trouble paying the bond. INL’s current annual budget is over $900 million — 10 times the estimated cost of the two facilities. And Yourde said the state is contemplating a 20-year bond. So the annual bond payments would likely be a fraction of a percent of the lab’s annual budget.

By analogy, INL paying off the two facilities is a bit like a person who makes $100,000 per year (after taxes) taking out a 20-year mortgage on a $10,000 house. The main difference is that in this proposed deal, INL wouldn’t end up owning the buildings. Instead, it would continue paying rent to the state after the bond is paid off.

Thompson said he has no worries about INL being unable to pay off the bond.

“That’s never happened with an INL project,” Thompson said. “We’re talking about the faith and credit of the federal government. We have Rep. Mike Simpson (in Congress). I pretty much guarantee that will never happen.”

Rep. Wendy Horman, R-Idaho Falls, said she never gives her support to a bill before she has read the final version, but she said the project would provide students with an education that’s “rigorous and relevant to real-world demands.”

“The opportunity to have a CAES-like partnership with INL that’s providing real life work experience, internships to our Idaho students in the areas of cybersecurity and supercomputing, she said. That would be an invaluable addition to area.”

The issue that’s likely to get the most scrutiny is the financial terms of the state bonds and the lease to INL.

Another issue some have raised is that the buildings would be owned by the state, so they wouldn’t be on the property tax rolls.

The city of Idaho Falls, the entity which would miss out on the most revenue from the buildings’ tax-exempt status, has expressed strong support for the proposal. On Jan. 9, Mayor Rebecca Casper sent a letter, cosigned by all six members of the city council, urging support for the project.

“We are optimistic that development of these two new facilities and the opportunities they’ll create will benefit Idaho colleges, universities and, most importantly, our students,” Casper wrote.

“When I look at the INL, that’s a home run for economic development,” Councilman Ed Marohn said in an interview. “We’re on board.”

Regional Economic Development Eastern Idaho CEO Jan Rogerssubmitted a Jan. 10 letter to Otter endorsing the project. The presidents of all eight state colleges in Idaho sent a similar letter to INL Director Mark Peters on Dec. 23. The Idaho Regional Optical Network and the Leadership in Nuclear Energy Commission also support the project.

This story was originally published January 16, 2017 at 11:15 AM with the headline "Idaho Legislature considering $90 million for cybersecurity facilities."