Dover council OKs urban renewal district

DOVER — With the largest waterfront community on Lake Pend Oreille under construction inside its bounds, the city is taking an innovative step which could produce millions of dollars for city enhancements before the Dover Bay housing project begins to generate revenue for the city.

The City Council voted April 14 to establish an Urban Renewal District, the first step in a plan to seek tax incremental financing, a method which utilizes an anticipated increase in the tax base to generate revenue immediately. Backers say it could generate $12 million or more as Dover Bay is built over the next 10 years.

During the same meeting, the council appointed a three-member board which will decide how best to use the funds, such as improving the city's water and sewer system and paving city streets.

"It's a one-time opportunity to develop the urban renewal district," Mayor Randy Curless said. "Regardless of how the board decides to use the tax money, it can't be anything but a benefit to the city."

The Dover Urban Renewal District board is made up of Chairman Louis Collins, a retired dairy industry businessman; Kim Keaton, principal at Sandpoint Middle School; and Doug Lieuallen, a retired oil industry executive. Collins said they will be holding their first of many public meetings in the near future to decide how the money should be spent.

"I look at it as a partnership between the citizens of Dover, the Dover City Council and the urban renewal agency to do what is best for Dover," said Collins.

Idaho has 30 Urban Renewal Districts, but Dover's makes only the third that is north of Boise, according to Duncan Freeman, a Coeur d'Alene attorney who specializes in land use issues and URDs in North Idaho. The Dover URD is considering hiring Duncan, who has been a consultant for Ralph Sletager, whose company is developing Dover Bay.

"When I heard about urban renewal districts and studied how tax incremental financing works, I learned that it was a great tool for cities that are growing to be able to provide needed infrastructure. I was really delighted that Dover took advantage of forming the district so that the city can benefit from tax incremental financing," Sletager said.

The concept of tax incremental financing took hold in the 1980s, when it was used to combat urban blight on the East Coast and in the Midwest, when suburbs began to develop, leaving downtown cores in a state of deterioration, Duncan said.

"Cities help form a plan to improve public infrastructure. The revenue gained is based on the difference between the current tax base of the area deteriorating and the tax base for new development in the area. That's the increment," Duncan explained.

The URD agency becomes a legal and distinct entity, separate from the city. To avoid conflicts of interest, board members cannot own property in the URD. If the urban renewal plan is created by the end of the year, the base tax will be the tax value of the area for the tax year beginning Jan. 1, 2005. The URD agency then sells bonds, which are repaid as revenue from property taxes are paid beginning in December 2006.

Curless said some of the pressing infrastructure needs in Dover include the city's need for a new access to U.S. Highway 2 on the west side of the bridge and making sure there's enough water storage for fire-fighting purposes. Other possible improvements include sewer plant expansion, city beach improvements, street paving and a fire station.

Sletager worked with David Eacret, a Sandpoint-based consultant with a doctorate in economics, to develop a spreadsheet predicting how much revenue the city can expect from Dover Bay and the Dover URD. The economic benefit calculation from 10 years of tax incremental financing could easily be $12 million. When the TIF, bonding capacity, one-time fees and grant possibilities are calculated, the total monies available to Dover for improvements could exceed $29.3 million by the year 2016.

"It's going to put the city in a great position," Sletager said. "They will have money to do the many things they need or want to do for the city."