Friday, July 19, 2013

I Support Urban Renewal When Done Smart - Update to Citizens Express Concern

Chubbuck absolutely needs to grow commercial tax base, which I don’t have an issue with; however, I do think that the Urban Renewal Area (URA) should be honed to a more conservative area.  The existing commercial properties do nothing to help with the cost of services and maintenance due to the largest being tied to TIF.  Examples of these properties are Wal-mart and Sears among others.   In addition to citizens, the business community expects the City to provide adequate police, fire, utilities, and other services for them to function and be profitable.

As for the increase in funds to the budget for Street Maintenance, at the meeting that Mayor England and Mr. Smart had with citizens there was no mention of an increase in the budget for that.  I don’t
understand why they did not outline what the City is doing to get on top of maintenance.  
Even though the budget is not funded enough for the road word necessary in the Stuart Sub-division, it would at least show that the City has shifted its priorities.

My Take on Urban Renewal Areas and Tax Increment Financing

Closing the TIF district  

I don't support not utilizing TIF.   I believe it must be more project oriented as Pocatello has done.  The Chubbuck URA and TIF has a structure has limited benefit while it kills the General Fund. I believe by
  •  looking at the strategic planning for growth for the City 
  • a careful look at the areas that are currently included in the URA
  • overlay State and Federal regulations impacting the City
we can hone TIF for more profit and more advantages to the City.  Just because you close a TIF
district does not mean that you can’t open a new one.  Pocatello just opened a new TIF district at the old Albertson’s site this month.  They have had great success with TIF and I think Chubbuck would be wise to learn from how they overcame their challenges.   They have done a fabulous job of showing how a TIF should be run.   

Twelve years ago Pocatello had a significant issue because of the massive TIF areas they had.  They realized the City of Pocatello was suffering from such a wide spread area being part of URA.  Good
management and a Council that saw the need for change allowed Pocatello to stop the stranglehold on the General Fund.  Concurrently Pocatello attracted more business – for example,  the Pocatello Square development that also allowed Costco to locate here.

When it comes to Federal mandates and rising cost, Cities have always had those issue to balance.  The current URA does nothing to help Chubbuck with that issue.  Those costs come at least yearly regardless.  Raising property tax or stripping services only prevents growth in commercial properties.  Businesses need to know the City is stable; therefore, showing the General Fund is in good shape is paramount.  Although the individuals I have talked to will not go on the record, I have been told by several sources that businesses that were considering us did not come because they believed our police and fire departments were not funded correctly.   They thought their properties would be protected adequately and their insurance rates would be too high.  

Councilman Ellis is right, I know firsthand how difficult the balancing act between funds and services is.   This is when the City has to get back to basics.  They need to do what must be done for our City to have success.  When the basics start to fail it has a chilling effect on the City.

As long as Chubbuck ties up all her money in TIF and does not restructure it toward some of the areas where growth will undoubtedly take place, we will continue to see residential growth at a disproportionate rate to commercial.  We have great position here and my understanding is that the Syphon Interchange has been approved, it’s the funding that is the issue right now.  As soon as that’s done, it’s going to open the north end of the City. We need to be sensitive to that and also have a plan
we can show prospective businesses on when we will expand police and fire because that's necessary to growth.  I would propose that he URA’s and TIF be
redefined as follows:

  1.            Keep the State Farm area open until all the commitments from the City are met.
  2.             If Knutsen still has commitments against it, keep it open until those are completed
    1. a.       The above would be two URAs with TIFs 
  3.            Make another URA west of Chubbuck where the industrial commercial is now located
    1.           This allows that area to have TIFs added there to match any company that wanted to locate in that area.
  4.         Make a URA that goes from the North Chubbuck Business Park (where Premiere was) to Syphon and west to at least Hawthorne and east to Hiline.

I believe that these four districts would give a phenomenal amount back to the City as they develop and at the same time allow the 20 year old properties to start helping to pay the General Fund.  TIF is not an all or nothing deal.  One of the reasons Pocatello’s TIF has so much success is they have taken this type of approach and benefitted greatly because of it.

As for the commercial sites, 

We have Wal-Mart, the Denny’s area of that pad as well, the Pine Ridge Mall, I am not sure but I think that Sears is actually still included in the TiF so it wouldn’t  impact.  We have State Farm (as you mentioned), Both Pine Ridge Theaters,  and we do need to GROW that base, but we have to be realistic in what the area needs too.

I believe by taking these steps, the City could grow gracefully and showcase its advantages.