Harrison councilman encourages development

Posted: Wednesday, Aug 20, 2008 - 10:50:06 pm PDT
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By TOM GREENE
Staff writer 

Letter says city could lose revenue if Legislature changes urban renewal law

HARRISON -- A City Council member sent a letter this week to his constituents laying out reasons why the annexation of the 1,300-home Powderhorn Ranch development should be fast-tracked before Dec. 31.

Councilman Russell Riberich writes that Harrison could lose out on potentially $31 million in revenue that could be used for needed infrastructure in the city.

The project would be tied into the city's newly created urban renewal agency, Riberich writes, and since urban renewal agencies have been targeted by legislators at the state level in the past "The chances are very good that the legislation that governs URAs will be changed next year, potentially removing this tool from consideration by Harrison."

"As I see it, we have two options. We can continue both the annexation and URA process at a slow, deliberate pace and, should we choose to annex in the future, run the potential risk of losing 31 million dollars due to decisions made at the State Legislature," Riberich writes. "The other option is to move forward in a timely but focused and deliberate pace, and if we do then choose to annex we have guaranteed our option to collect 31 million dollars."

Heartland LLC is proposing to build 1,000 to 1,300 homes, three 18-hole golf courses and an equestrian center on a 2,000-acre property on the Powderhorn Peninsula across the bay from Harrison, which has a population of about 300.

The average home price of the gated community would be about $2.3 million.

Several phone calls to Rand Wichman, vice president of Powderhorn Ranch, were not returned.

"The problem is the state Legislature constantly puts URAs at risk by trying to vote out certain components or the whole program all together," Riberich said Wednesday. "It's a stressful situation for a city like us. If they choose to get rid of them next year we lose that potential revenue from developers."

In order to complete the proposed Powderhorn Ranch annexation within the year, Riberich wrote in his letter dated Aug. 18, he "added four items to the agenda in an attempt to meet the aggressive timeline set before us," at an Aug. 12 special council meeting.

Powderhorn Ranch has already tried the county track for project approval. Kootenai County commissioners gave the green light for the project against the recommendation of the county planning commission in 2006.

After a protest was filed, a judge ruled in July 2007 that the commissioners should have held another public hearing and their decision was invalid. The only Kootenai County commissioner from the first decision who still holds office is Rick Currie. He cast the one vote against the project at the first hearing.

The Harrison Urban Renewal Agency was formed last spring. Attorney and former lawmaker Freeman Duncan was hired as its attorney two weeks ago. Duncan said the $31 million figure in revenue that Harrison stands to lose comes from a projection over a 24-year URA plan.

The push to put Powderhorn Ranch on a fast-track is driven more because of Harrison's dire infrastructure needs than possible Legislature outcomes, Duncan said. Duncan said Harrison has several infrastructure needs that deserve immediate attention including domestic water, wastewater and roads.

"I don't see any major legislation that could pose a problem, but you never know what could come up," Duncan said. "Primarily, it's because if we don't get started, we'll never get there."

Missing the Dec. 31 deadline means Harrison would have to wait another year, he said. Duncan said revenue from the project probably wouldn't be available until 2011 even if it was approved this year.

"The whole purpose of the URA is to generate funds that can be used to go target our project list like wastewater and streets," said Dennis Irish, chairman of the Harrison URA and resident for 16 years.

Included on the city's project list is a refund for local improvement districts.

A local improvement district formed six years ago for improvements and expansion of the sewer cost homeowners $4,200 per home.

"It (the local improvement district) was a bitter pill to swallow and it still is to this day," Irish said.

In his Aug. 18 letter, Riberich wrote that the "city is facing a potential cost of $500,000 to repair and restore Fredric Street, to name just one challenge facing us all."

Harrison has a total budget of about $400,000, Duncan said.

"Harrison's a small town," Irish said. "We're always wrestling with funds just to function."Urban renewal information

• Tax Increment Financing, or TIF, is the way urban renewal agencies fund projects.

First an agency establishes an Urban Renewal District. From the time that district is established, the new property taxes from all development within that district are funneled to the agency until the district is retired.

• The property tax revenue on new construction/improvements within the districts that is diverted from other taxing entities (i.e. the city, schools, highway districts) is then used to finance bonds that pay for more projects within the district. When the district is retired, the property tax revenue it was collecting goes on the tax rolls.

• TIF is oftentimes used to pay the debt service on bonds for the life of a project.

• The names/titles for urban renewal agencies, redevelopment agencies, TIFs, and URDs are sometimes used interchangeably.