In 1988, the city of Idaho Falls formed a group of citizens whose charter would be to promote economic growth in blighted areas, through a tool called tax increment financing.
The group, named the Idaho Falls Redevelopment Agency, was originally established in 1966, then dissolved. It was re-established, in 1988, to spur commercial interest, through infrastructure investment, on the west bank of the Snake River.
It chose, as its first project, to invest $2.1 million in Lindsay Boulevard, on road, curb, gutter, sidewalk, and water and sewer line improvements, hoping that businesses would follow.
In the early 1990s, the project, called the Snake River Urban Renewal Area, expanded to include the entire west bank of the Snake River, bordered by U.S. Highway 20 and Pancheri Drive to the north and south, Interstate 15 and the Snake River to the west and east. In 2006, the project again expanded to include downtown.
The Snake River Urban Renewal Area has reached the end of its lifespan. The agency has stopped awarding grants and the urban renewal area will dissolve this year.
The base assessed value of the area, in 1988, before the area was expanded, was about $57 million in today's dollars. Thirty years later, the net taxable value of the expanded area is about $246 million, thanks to the new hotels, retailers, restaurants and other businesses that have opened during that time.
The urban renewal area has added about $190 million in tax increment value, which will be returned to local tax levy calculations.
Urban renewal beginnings
In 1965, the Idaho Urban Renewal Law legalized tax increment financing, a way to leverage property tax dollars and future property value, to pay for economic growth.
A tax increment district is managed by an agency independent from local government. The Idaho Falls Redevelopment Agency, which has seven members, is a mix of citizens and public officials.
The agency pinpoints a blighted area that it hopes to develop, then funds infrastructure improvements.
If infrastructure draws development, and property values increase, any additional tax money is reinvested in infrastructure within the urban renewal area.
Once the job is done, the agency dissolves the tax increment district and returns the increased values to local taxing districts.
In 1988, the Shilo Inn opened on Lindsay Boulevard, and the newly formed Redevelopment Agency decided to leverage the new hotel's tax value to secure a bond, which would fund road improvements.
A 1990 Post Register article, titled "Building a better boulevard: Lindsay work may start this spring," reported that the Redevelopment Agency wanted to repair Lindsay Boulevard's paving and drainage problems, in hopes of attracting new businesses as well as more people to existing businesses.
"By reconstructing the boulevard, you provide good access," Jim Countryman, the agency's former chairman, said in the article. "Because of the access, there will be new business."
Tax increment financing had, and still has, its doubters.
Since any tax increases are reinvested in the urban renewal area, traditional taxing districts — schools, police, fire, cemeteries — don't see any of the new tax money, until the urban renewal area is dissolved.
Former Idaho Falls City Council member Larry Carlson, in 1994, sought to squash tax increment financing here, saying the tool would hurt taxpayers.
"Hey, somebody is going to pick up the difference for police and fire protection, and it's the rest of the taxpayers of Idaho Falls," Carlson told the Post Register at the time.
Tax increment financing has been challenged in court over the years. It withstood multiple Idaho Supreme Court decisions, most recently in 2009, related to a Rexburg water park.
Idaho Falls' Snake River Urban Renewal Area survived three decades, and residents who have lived here long enough to witness its effects say they can see the difference it made.
Blighted area and lava rock
The central question surrounding a new urban renewal area is this: Will economic growth happen organically or is public investment necessary to give the area a boost?
The Redevelopment Agency thought the latter was true of the Snake River's west bank.
Linda Hill, 70, of Bonneville County, grew up in Idaho Falls. She said the Snake River received little attention during her childhood in the 1950s and ’60s.
"There wasn't really much there," Hill said. "It was wild, it was overgrown. The river itself was not an attractive, appealing place like it is now. It was a shame to waste that wonderful resource. When you have a beautiful, world-famous river, it's very sad not to capitalize on that."
Downtown Idaho Falls saw some urban renewal attention in the 1970s, but over the next decade, the west bank remained the ugly stepchild of the city center.
Hill said the area got the attention it deserved in the ’80s and early ’90s, not just from the city, but from other local organizations, as well.
The Idaho Falls Rotary Club founded the Great Snake River Greenbelt Duck Race in 1991. Proceeds from the duck race, in addition to federal and state grants, were used to beautify the greenbelt, now known as the Idaho Falls River Walk.
"We have always focused on putting money into the development of the greenbelt," said Hill, a Rotary Club member since 1995.
Lee Radford, the Redevelopment Agency's current chairman, grew up in his family's business on the west bank. It was an automobile repair shop, located in one of the pre-urban renewal brick buildings that still stands today.
"It definitely wasn’t the good side of town, but that’s where I grew up. That’s where my business was, so I loved it," Radford said. "This side of town (downtown) had tree-lined streets, new developments, hospitals — everything was on the east side of the river. The west side just wasn’t well taken care of."
Developers, who saw the west bank's untapped potential (a high-traffic area between downtown and I-15), faced a challenge from the start: basalt, or lava rock. It was a costly barrier to eradicate before constructing a building's foundation.
"Everywhere you go, you dig a couple of feet and you're hitting solid rock," Radford said. "It just made it hard to build."
In addition to investing in road improvements — Utah Avenue was reconstructed after Lindsay Boulevard — the Redevelopment Agency became a lava rock blaster.
"Probably the biggest thing we've done is blast lava rock," Radford said.
With the Redevelopment Agency as a resource, funding infrastructure improvements and blasting rock, the west bank became a viable area for businesses to invest.
City on the river
Radford is a shareholder with the law firm Parsons, Behle and Latimer. His office is in The Broadway, a new riverfront development in downtown Idaho Falls, within the boundaries of the Snake River Urban Renewal Area.
In his office, there is a wall-sized map of Paris, an ancient city on the River Seine. Like many of Europe's metropolises, Paris has thrived as a city on a river, benefiting from travelers and trade (and now tourism) the river brought.
"It's critical to look at what your city is and its transportation," Radford said. "Where are your resources? The river is our main resource."
At the west bank of the Snake River, planes, trains and automobiles intersect. The train brings commercial goods. The interstate and highways, along with the airport bring travelers, with money in their pockets.
"The transportation, the rail corridors, the water corridors, a lot of the other infrastructure intersects right there," Radford said.
From a city planning perspective, that's the cheapest and most practical place for business to blossom, he said.
"If you can build your city where everything intersects, you're going to save a lot of money," Radford said. "That's just a better way to do things. (The west bank) got left behind because of this problem with the basalt. We're at this great location and that's where things should be."
That's why the Redevelopment Agency spent about $26 million, through bond proceeds, loans or cash reserves, on infrastructure improvements to the Snake River Urban Renewal Area, to attract businesses.
Marriott's Residence Inn and SpringHill Suites, Chili's, Applebee's, Olive Garden, Hilton Garden Inn, Hampton Inn, Taylor Crossing on the River and Walmart are some of the commercial developments that appeared on the west bank in the last 30 years.
Some had owner participation agreements with the Redevelopment Agency, where the developer agreed to front the cost of public infrastructure improvements and be repaid later by the agency.
One such agreement, with Renaissance Partners, covered demolition and infrastructure improvements that made way for Walmart, Olive Garden, Famous Dave’s Barbecue, Fairfield Inn, Wendy’s, Arctic Circle, Panda Express and two retail commercial strip centers.
Another agreement, with Taylor Crossing on the River, produced improvements to the River Walk.
Hill said the improvements to the River Walk, with new hotels on the west bank, have made Idaho Falls a destination, rather than a brief stopping place for travelers.
"It is scenic, it is beautiful," she said. "People can go there and appreciate the river itself. Obviously, all of the businesses that are there have added tremendously to our economy, our tourist economy. It's become the absolute jump-start of our community, and it wasn't that way when I was growing up."
It's not clear yet whether the Redevelopment Agency will choose another urban renewal area to replace the Snake River area.
"We don't have to," Radford said. "It's an important tool, and we want to use the tool in the places that it's appropriate."