URD gets court's OK

COEUR d’ALENE — It’s not an alter ego, and projects inside urban renewal districts do not require a supermajority vote.

The Idaho Supreme Court decided to uphold a plan by officials in Rexburg to use property tax money in an urban renewal district to build a $6.3 million water park, a decision that will likely affect other urban renewal districts throughout the state.

The short and skinny of the decision: Urban renewal boards are separate from the cities they serve, and not loosely disguised alter egos created as a way for municipalities to bypass needing voter approval for projects.

For some members of Lake City Development Corp., the decision came as part relief, part formality.

“It certainly validates the way we’ve operated in the past,” said Denny Davis, chairman of LCDC, the city’s urban renewal board. “Somebody raised the issue and the court looked at it and we’ll go from there. It’s nothing to crow about, it’s just part of doing business.”

Kenneth Hart contested the legality of the Rexburg urban renewal agency using Madison County property tax revenue to pay for building Riverside Park.

He said that cities have so much control over urban renewal agencies that when the agencies raise money it is actually the city raising money, which requires two-thirds voter approval under Idaho law.

But the court ruled otherwise back in November, and put the case officially to rest when it denied Hart’s request for an appeal last week.

That ruling should clear up the blurred line between urban renewal boards and their cities that some critics point to when they claim that the two are too closely joined. Those critics contend that because city council members are allowed to sit on the urban renewal boards and the boards spend tax increment finances from property taxes — even though boards cannot levy taxes — the separation between the two parties is nearly non-existent.

Danielle Quade, LCDC’s attorney, said that argument relied on a lot of presumptions, to which the Idaho Supreme Court agreed.

“We think it’s valuable to have a couple city council members on the commission to serve as liaison and links to city council,” said Tony Berns, LCDC executive director.

That link makes it easier for the board to stay in communication with city leadership, he said, but shouldn’t be viewed as a way for the city to exercise control over the board.

Berns said the court’s decision was good news for the local board that will continue to operate as it has since its 1997 inception.

“We’ve been running our businesses model the same for years, so the court’s decision didn’t come as a complete surprise to us,” he said. “But any time you have an issue that goes to the Supreme Court you hope that they rule in your favor.”

Had the court reverses its stance and agreed with Hart that the agencies are alter egos, buildings inside urban renewal districts could not go up without the two thirds — or supermajority — public support.

LCDC was one of nine urban renewal agencies that filed amicus briefs siding with the Rexburg urban renewal agency.

Another case involving the city of Nampa and its urban renewal board involving a nearly $70 million police station and library project will go before the Supreme Court in the near future. That suit alleges similar arguments as Hart’s case against Rexburg, but has already been denied at the district court level.