FAQ

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Below are many of the frequently asked questions about urban renewal and the Rexburg URA. If you have a question that you can’t find an answer for, you can contact us.

The public benefits resulting from urban renewal and revenue allocation financing include:

  • Job creation from the initial project as well as potential for “spinoff ” developments.
  • Underutilized and deteriorated or deteriorating property is returned to productive use.
  • Infrastructure upgrades enhance capacity for surrounding area and community at large.
  • Improvements to local transportation systems benefit the community at large.
  • Increasing local tax base may mean property owners enjoy lower levy rates in the future.
  • Successful projects generate increased sales and income taxes for the state.

Urban renewal, also known as urban redevelopment and sometimes urban regeneration, is the systematic development of city areas and infrastructure by enhancing or restoring public buildings, roadways, industrial areas, water and sewage systems, sidewalks, parks, new housing, and other public amenities in accordance with comprehensive plans approved by the Mayor and City Council. Projects are funded by Tax increment financing (See tax increment financing).

The Rexburg Urban Renewal Agency, or Rexburg URA, is an independent public body serving the city of Rexburg, Idaho. The Rexburg URA consists of a seven-member commission that oversees and coordinates redevelopment efforts in Rexburg.
The Agency works to stimulate economic/commercial development under three primary goals:

  1. The strengthening of the tax base by encouraging private development and thus increasing the assessed valuation of properties within the Revenue Allocation Area and benefiting the various taxing districts.
  2. The assembly of land into parcels suitable for modern, integrated development with pedestrian and vehicular traffic.
  3. The elimination of environmental deficiencies in the project areas.

These efforts are carried out within several “urban renewal districts” across Rexburg.

Urban renewal districts define the boundaries in which the Agency’s efforts are carried out. There are five urban renewal districts in Rexburg and each has a comprehensive plan and timeline approved by the city.

Learn more about urban renewal districts in Rexburg. 

All board members are appointed by the Mayor. Each member serves as an unpaid volunteer. When a board member’s term ends, a new board member will be appointed by the Mayor. Board Members leaving the board before their term ends are replaced by the Board.

No. All board members serve as unpaid volunteers.

The City of Rexburg began to explore the use of tax increment financing as an economic development tool in 1990. The Rexburg Urban Renewal Agency was established by the City Council on November 6, 1991.

The basic authority to create urban renewal agencies and to undertake urban renewal projects is granted to all cities and counties in Idaho by the state legislature in Title 50, Chapter 20 of Idaho Code. The ability to use tax increment financing or as described in Idaho, revenue allocation financing for urban renewal projects is authorized under the Local Economic Development Act (Title 50, Chapter 29, Idaho Code).

Projects are primarily funded through the use of tax increment financing (TIF).

Tax Increment Financing (TIF) is a unique mechanism that enables an Urban Renewal Authority or board to use the net new tax revenues generated by projects within a designated urban renewal area to help finance future improvements.  Tax increment financing is a new source of tax revenue, not an additional tax, that would not be available but for new investment.

When a redevelopment project is being planned, the Urban Renewal Authority or Board analyzes how much additional property and/or sales taxes may be generated once it is completed.  That “tax increment” then can be used by the urban renewal entity either to finance the issuance of bonds or to reimburse developers for a portion of their project costs.

In either case, the new tax revenue that is created must be used for improvements that have a public benefit and that support the redevelopment effort, such as site clearance, streets, utilities, parks, the removal of hazardous materials or conditions, or site acquisition.

How tax increment financing works

How it works
At the time an urban renewal district is formed, the County Assessor establishes the current value for each property in that district. This value is referred to as the “base” value. All property taxes on the “base value” continue to flow to the taxing districts within the urban renewal district, such as the county, the city, the highway district, etc. Over time, the assessed value of the properties in the urban renewal district will generally increase. That increase in value is referred to as “incremental value.” The property taxes generated by the incremental value above the base value go to the urban renewal agency to be reinvested in the specific urban renewal district.

For instance, if the district is approved in 2010, the assessed value of a property in 2010 becomes the “base value” and all property taxes on that value continue to flow to the usual taxing districts. If the property increases in value after the 2010 base year, the property taxes on the incremental value is distributed to the Agency.

An example would be: if a property was assessed by the County Assessor as having a value of $100,000 in 2010, the property taxes on that amount would all go to the usual taxing entities since that is the “base year value”. Then, if the property value increased to $110,000 in 2011, the taxes on the “base value” of $100,000 would still go to the usual taxing entities and the taxes on the “incremental” $10,000 would go to the Agency.

If the urban renewal district did not exist, taxes on the entire $110,000 value would go to the usual taxing entities so the total tax bill to the property owners remains the same.

History:
Beginning in the 1960s federal funds were the initial source of money for urban renewal projects in Idaho. As these funds were phased out in the 1970s, an alternative financing method was needed. In 1988, the Idaho state legislature adopted the Local Economic Development Act which authorized the use of tax increment financing. Under the Idaho Economic Development Act, urban renewal agencies now receive the majority of their funding from revenue allocation, otherwise known as “Tax Increment Revenue,” and, in some cases, bonds or other long-term debt secured by the Tax Increment Revenue.

The powers specifically granted by the state legislature to urban renewal agencies in Idaho are summarized below.
a. To borrower money and to issue bonds to finance urban renewal projects.
b. To undertake urban renewal projects and related activities within the agency’s area of operation including signing necessary contracts and other documents.
c. To construct streets, utilities, parks, playgrounds, off-street parking facilities, public facilities, other buildings or public improvements and any improvements necessary or incidental to a redevelopment project.
d. To acquire real property (or personal property for its administrative purposes), together with any improvements thereon; to hold, improve, renovate, rehabilitate, clear or prepare for redevelopment any such property or buildings; and to dispose of any real property. (Methods of acquisition include purchase, lease, option, gift, and grant).
e. To invest any urban renewal funds.
f. To construct foundations, platforms and other like structural forms necessary for the provision or utilization of air rights, sites for buildings and to be used for residential, commercial, industrial and other used contemplated by the urban renewal plan and to provide utilities to the development site.
As a result of the law enacted in 1988 to provide, among other things, for financing urban renewal projects with tax increment funds, urban renewal agencies were granted the following additional powers:
a. To apply incremental tax revenues allocated to the agency for the payment of the project cost of any urban renewal project located in a revenue allocation area,
b. To borrow money, incur indebtedness and issue one or more series of bonds secured by incremental tax revenues, to finance or refinance, in whole or in part, urban renewal projects and;
c. To pledge the incremental tax revenue to the payment of the principal of and interest on moneys borrowed, indebtedness incurred or bonds issued. Urban renewal agencies are not permitted to levy taxes and they have no direct regulatory authority unless specifically authorized by the City Council.
Only revenues derived from the increase in property values within an urban renewal district after its creation go to support activities of the Rexburg Urban Renewal Agency, and only if a revenue allocation area has been approved by the City Council. These revenues must be spent on projects that support revitalization of the district. Property owners within a district do in fact support redevelopment of that district, but their tax rate is the same as everywhere else in the city. Formation of a district does not increase property taxes; it only reallocates where the tax revenues go if property values increase.
The Rexburg Urban Renewal Board selects projects to fund within the urban renewal districts based on their ability to create a benefit for the community. The projects authorized are described in the adopted urban renewal plan for each district.
This website was created with the purpose of increasing transparency and awareness of urban renewal activities in Rexburg. Additionally, Idaho law provides numerous requirements designed to ensure transparency and accountability for urban renewal agencies, including:
a. Making records available to citizens upon request pursuant to the Idaho Public Records Laws.
b. Meetings are open to citizens, preceded by public notice and an agenda, and meeting minutes are kept pursuant to the Idaho Open Meeting Law.
c. Urban renewal commissioners are required to disclose conflicts of interest pursuant to the provisions of the Idaho Ethics in Government Act and the Idaho Urban Renewal Law.
d. Urban renewal agencies are required to comply with the provisions of the Local Government Competitive Bidding Law.
e. Urban renewal agencies have the same financial audit requirements as municipalities.
f. Urban renewal agencies must hold public hearings prior to approval of their annual budget and approved budgets must be submitted to the city prior to September 1 of each year
g. Urban renewal agencies with annual expenditures between $100,000 and $250,000 must have a bi-annual independent financial audit, and above $250,000 an annual audit. Those agencies with expenditures under $100,000 are exempt from this obligation but must prepare the annual report described below.
h. Urban renewal agencies are required to prepare and file with the city an annual report of activities for the preceding calendar year by March 31 and publish notice of the report’s availability upon request by citizens. The report must include a complete financial statement setting forth assets, liabilities, income and operating expenses. Prior to submittal of the annual report to the city, agencies must seek public comment on the report draft either in written or public comments.

By initiating the process of designating an area for urban renewal, a community is sending the message that they are interested in assisting with its revitalization.  Through the planning process, market opportunities are identified and the private sector is engaged in understanding these opportunities, as well as the tools which are available to assist with project implementation.  Property owners and businesses benefit from both the public and private commitments and investment through association and proximity.

It can affect your property values, and more often than not, in a positive way. Frequently, when an urban renewal area is designated, property values increase. This happens because many times private individuals begin to purchase land (speculation) in anticipation of both future development and increased property values. It also happens because properties located within an urban renewal area are often perceived by the development community as valuable because of the availability of financial incentives which are not available outside the district.

The boundaries of the area must be defined “as narrowly as possible.  Conversely, the boundaries of the survey area can be defined more broadly in an effort to understand, comprehensively, the range of factors contributing to “blight.” Both areas may include some vacant and under‐utilized parcels and should include areas either adjacent to or influenced by key qualifying parcels.

No.  The ability to condemn property is a right of any municipality under eminent domain, regardless of whether or not it is in an urban renewal area.  The use of condemnation by government is limited to instances deemed necessary for the “public good” and usually as a last resort.  Property for an urban renewal project is most often acquired by private interests in arms‐length transactions at fair market value.  Most municipalities are extremely reluctant to use their condemnation powers for many reasons, not the least of which is the lengthy acquisition and negotiation process.

The same municipal regulations which applied prior to the urban renewal designation, apply after, e.g. zoning, special districts (if any), etc.  The presence of urban renewal does not impose additional restrictions on property use.  Rather, it makes available additional tools (incentives) to assist with implementation projects which are consistent with the urban renewal plan.

Typically they are as follows:
1. Determine Survey Area Boundaries
2. Verify Presence and Location of Blighting Conditions
3. Prepare Conditions Survey *
4. Present Conditions Survey Findings to Urban Renewal Entity and Council for Acceptance; 5 Identify Market Opportunities Within Area and Quantify Timing
6. Together with Stakeholders – Define Future Role of Area in Community
7. Prepare Urban Renewal Plan
8. Complete Financial Analysis (Tax Increment Finance – TIF)
9. Complete Impact Analysis (as per legislation) and Share With All Impacted Taxing Bodies
10. Present Urban Renewal Plan to Urban Renewal Entity and Council for Adoption
11. Issue Request for Projects
12. Implement Plan
* Based on conditions survey findings, modify boundaries for urban renewal area, if necessary

Neighborhoods are not necessarily declared “blighted,” rather, “areas are determined to have conditions present such that it can be determined eligible for an urban renewal designation.”  The “area” in its entirety may or may not include a neighborhood or neighborhoods.  Having a home within an urban renewal area should not have a direct impact in terms of value – either positive or negative – depending on its relationship to potential reinvestment zones.  Experience has proven that properties within or in the vicinity of potential reinvestment activity tend to increase in value upon designation as an urban renewal area as property owners begin to speculate on the likelihood of acquisition offers.

There is no additional assessment to properties within an urban renewal area and no increase in the mill levy with formation of the district. Any increase in tax payments by property owners would be associated with an action other than creation of the urban renewal area, or an increase in the taxable value of property because of investments that are happening in the area. Residents within an area that are senior citizens are further protected under the Homestead Exemption. Referendum A, the homestead exemption for senior citizens, passed on a state‐ wide vote in November of 2001. The amendment provides an actual value reduction (exemption), up to a maximum of $100,000. This applies only to primary residences for citizens over the age of 65. Also, this actual value reduction is applicable only to a primary residence that has been owner‐occupied for the 10 years immediately preceding the subject tax year. This homestead exemption for senior citizens began with 2002 property taxes that were payable on or after January 1, 2003.

Question to Alan Dornfest, Idaho State Tax Commission, on November 19, 2008:
“Given the recent modifications to the urban renewal code resulting from bills generated in the past few legislative sessions, I would appreciate your current thoughts as to the impact of urban renewal districts on the local property taxpayer.”

Answer: “I would suggest that most of the changes in recent years and especially the changes resulting from HB 470 in 2008 and the legislation in 2007 that eliminated new construction within URDs from the budget capacity calculations until the dissolution of the revenue allocation areas add to the effective neutrality of urban renewal.” -Alan Dornfest