Where is the LCDC?

The 729 acre LCDC Lake District contains certain portions of the downtown, midtown and Northwest Boulevard sections of the City of Coeur d’Alene. The 363 acre LCDC River District is located between Interstate 90 and the Spokane River, and runs from approximately Ramsey Rd to the City of Huetter.

For more information about district locations and projects click here.

What does the LCDC do?

LCDC is a catalyst for economic vitalization within the Coeur d’Alene Urban Renewal Districts. LCDC’s primary responsibilities within the Districts include strategic and master planning, public/private partnership development, community education regarding redevelopment initiatives, and the support of quality public art and quality public open space within the redevelopment districts. 

LCDC development activities include both public and public/private partnership projects. All projects to date have been funded by tax increment financing; public funds used to leverage private sector investment funds within the Districts. Examples of project partnerships to date include the Riverstone Mix-Use Development on Northwest Boulevard, McEuen Terrace, Mill River Mix-Use Development along the Spokane River, the Kroc Community Center, and the downtown Coeur d’Alene Public Library.

Where does LCDC get its authority?

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, Idaho Code. The ability to use tax increment financing for urban renewal projects is authorized under the Local Economic Development Act (Title 50, Chapter 29, Idaho Code).

How is LCDC funded?

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 1985, the Idaho state legislature adopted the Local Economic Development Act which authorized the use of tax increment financing. In simplest terms, under tax increment financing (or revenue allocation in Idaho), the taxes generated by increasing property values in an urban renewal District are used to pay for public improvements and other revitalization activities in that District. 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. Over time, as both public and private dollars are invested and development occurs in the District, property values tend to rise. The increase in value over the base is called the “incremental” value, or increment. The taxes generated by this incremental value are utilized for redevelopment work by the urban renewal agency, if the City Council or County Commissioners have created a revenue allocation area to go with the urban renewal District. In Coeur d’Alene, the City Council has created revenue allocation areas for the urban renewal Districts it has formed, and therefore the tax increment is allocated to LCDC. These funds must be reinvested in projects either within or which provide public infrastructure to the District from which the funds originate.

What powers does LCDC possess?

The powers specifically granted by the state legislature to urban renewal agencies in Idaho are summarized below. A complete list is found in Title 50, Chapter 20 and Chapter 29 of the Idaho Code.

1. To borrow money and to issue bonds to finance urban renewal projects.
2. To undertake urban renewal projects and related activities within the agency’s area of operation including signing necessary contracts and other documents.
3. 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.
4. 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, grant and eminent domain.)
5. With approval of the City Council prior to approval of any urban renewal plan, to acquire real property in an urban renewal area, demolish and remove any structures on the property, and pay all costs related to the acquisition, demolition or removal, including any administrative or relocation expenses.
6. To invest any urban renewal funds.
7. 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 uses contemplated by the urban renewal plan and to provide utilities to the development site.

As a result of the law enacted in 1987 to provide, among other things, for financing urban renewal projects with tax increment funds, urban renewal agencies were granted the following additional powers:

1. 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,
2. 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;
3. 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 or County Commissioners.

Do my tax dollars go to support an urban renewal project?

Only revenues derived from the increase in property values within an urban renewal District after its creation go to support activities of the LCDC, and only if a revenue allocation area has been approved. 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.

How Does LCDC Select Projects to Fund?

The LCDC Board selects projects to fund based on their ability to create a “public benefit” for the community.  A few examples:  One LCDC partnership project may create public benefit by increasing the number of residential units in a key area within a redevelopment district.  Another LCDC partnership project, like the Coeur d’Alene Public Library, creates public value by becoming a great public gathering place for the community, which thus incents additional investment by the private sector (key redevelopment tenet: private investment follows public investment).  Another LCDC partnership project, like the Riverstone development, creates public benefit by reclaiming an old sawmill (brownfield) site and creates a mix-use environment providing entertainment, shopping/restaurants, new public space (park & pond) and residential amenities for the community.

Does urban renewal raise my taxes?

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 area add to the effectiveneutrality of urban renewal.”  Alan Dornfest

Lake City Development Corporation (LCDC) Project Financing Models

Owner Participation Agreement (OPA)

An OPA is a contractual agreement between the LCDC and an owner (i.e. developer) pertaining to value-adding community projects that are built and occupied, typically over several years, potentially in phases. An OPA authorizes the LCDC to reimburse the developer for LCDC pre-approved public improvements using tax increment revenues (i.e. property taxes) generated solely from the developer’s project.

• The developer pays for all of the pre-approved public improvements up front.

• The LCDC reimburses the developer over time from the property tax revenue generated solely from the developer’s project.

• Prior to any LCDC reimbursement to the developer, the LCDC conducts a third party cost validation to assure that the pre-approved public improvements were completed in a cost effective manner and properly installed.

• If the developer’s project does not generate sufficient property tax revenues to reimburse the developer for his public improvement costs by the time the LCDC district term expires, then the developer does not get fully reimbursed.

By using this financing model, the LCDC Board of Commissioners assures zero risk to the public since no public funds are invested up front; all of the public improvement investment risks reside with the developer. 
OPA project examples: Riverstone, Mill River

Improvement Reimbursement Agreement (IRA)

An IRA is a contractual agreement between the LCDC and a developer pertaining to value adding community projects that are built and occupied in a relatively short period of time. An IRA authorizes the LCDC to reimburse the developer for LCDC pre-approved public improvements using tax increment revenues (i.e. property taxes) generated solely from the developer’s project.
   

• The developer pays for all of the pre-approved public improvements up front.

• The LCDC reimburses the developer over time from the property tax revenue generated solely from the developer’s project.

• Prior to any LCDC reimbursement to the developer, the LCDC conducts a third-party cost validation to assure that the pre-approved public improvements were completed in a cost effective manner and properly installed.

• If the developer’s project does not generate sufficient property tax revenues to reimburse the developer for his public improvement costs by the time the LCDC district term expires, then the developer does not get fully reimbursed.

By using this financing model, the LCDC Board of Commissioners assures zero risk to the public since no public funds are invested up front; all of the public improvement investment risks reside with the developer. 
IRA project examples: Ice Plant, Parkside, Northwest Place

Disposition and Development Agreement (DDA)

The purpose of a DDA is to assist in carrying out a developer’s redevelopment project by providing for the disposition (i.e. sale) and development of certain LCDC-owned real property located within the boundaries of an LCDC urban renewal district.
The LCDC agrees to sell LCDC-owned property to a developer to aid in the development of a value-adding project for the community. Similar provisions of an IRA could also be included in the DDA if certain LCDC pre-approved public improvements are included in the redevelopment project.
DDA project example: CDA Chamber of Commerce building