As a state legislator it has been my policy to refrain from commenting on local issues. However, two recent My Turn articles dealt with the subject of economic development and one of them, unfortunately, contained errors. The information needs to be corrected. It should be understood I regard the authors of both articles as visionary businessmen committed to community improvement. My comments are not personal.
The errors occurred in the article by Mr. John Stone. In the first paragraph he said an Urban Renewal District (URD) is the only economic tool available to local municipalities. This is grossly wrong and was a response to a preceding My Turn column, in which Ron Nilson of Ground Force Manufacturing had been critical of URD programs in Coeur d'Alene.
There are, in fact, nine other programs and agencies that provide effective incentives and assistance for business expansion or relocation. The list includes Community Development Block Grants, Industrial Revenue Bonds, Work Force Training Grants, Panhandle Area Council, Small Business Administration, U.S. Economic Development Agency, the Idaho Procurement Technical Center, the Idaho Department of Commerce and Jobs Plus. A URD, therefore, is just one of 10 tools that can be used by local government and developers for economic development.
In the nearly 20 years I have been in public office I learned to use all these economic development programs and agencies. I found there is synergy in using one program or agency to assist or complement another. The benefits of such management are maximized results and minimized local costs. Evidence of its success includes recruitment of Cabela's, Buck Knives, Empire Airlines, Kimball Office, Ground Force Manufacturing and the 20 or more companies in Riverbend Industrial Park among others. URD incentives were used as needed with some, but not all, of these companies.
Since July 1 a new program is available that adds significant strength to the array of economic development incentives. It is the Idaho Opportunity Fund which the legislature approved with a $3 million start-up appropriation. Based on the actual creation of new permanent jobs, the fund reimburses certain costs incurred by companies to create new employment. It also authorizes payment of some impact fees and other startup costs. Governor Otter established the Opportunity Fund to make Idaho competitive with other western states in recruitment of new employers. Developers should join hands with local government officials to learn about this new program.
The second error in Mr. Stone's column is in the second paragraph where he said "Post Falls received a $500,000 grant specifically to assist Mr. Nilson in developing important infrastructure." This is a misinterpretation of the facts. All of the grant funds were invested to expand city infrastructure serving a large tract of industrially zoned property located on the north side of Seltice Way. None was spent for Nilson's building which uses only a fraction of the land. The improvements are owned by the city and installed only on publicly owned property.
When city sewer and water service became available, Ground Force paid the city $40,352 for sewer cap fees, $7,559 for water cap fees and Impact Fees of $19,714.14. Grant monies paid none of these costs or any of the building permit fees associated with the new building. Information from public city records show that the total of all Ground Force fees for the new building was $100,123.25. In addition, Ground Force paid 6 percent sales tax ($180,000) on the $3 million it spent buying building materials for the new factory.
The third error in Mr. Stone's column is his allegation that (Nilson) "extends his hand for similar urban development action grants." Again, this is not true. I am the person who initiated the grant which is the subject of John Stone's comments. Nilson was unaware of my actions. I started the grant application after learning that Ground Force would expand to either Shoshone or Benewah County where industrial sites were available. My motive was to fund the infrastructure needed to keep the new factory and its employment in Post Falls.
After starting the grant procedure I turned it over to the mayor and his staff in Post Falls. Mr. Nilson's only role in the application was to make an irrevocable commitment to create at least 50 new full-time jobs. He did this via a letter that became part of the overall application which had been prepared by the Panhandle Area Council. At the last count, there were more than 100 new, full-time employees in the new factory. Their average wage is about $35,000 and all are provided medical and vacation benefits and a 401K investment opportunity.
I hope these comments help the public better understand the process of business development and incentives for business growth. Economic development is a competitive, demanding activity that brings out the best but sometimes exposes the rough edges of those involved. John Stone and Ron Nilson are two of the best. They have unrelenting ambitions for a strong, vibrant local economy. I suggest we always be ready to give them a pat on the back for their commitment to economic progress.
Their debate in My Turn on the management of URD's, however, is a local issue I will gladly leave to them.
Frank N. Henderson is a Post Falls resident now serving his fifth term in the Idaho House of Representatives where he is chairman of the House Business Committee. He previously served three terms as a Kootenai County Commissioner and one term as mayor of Post Falls. In 2004 he was presented a Lifetime Achievement Award by President Bush for his work on economic development and public administration in former communist countries in Eastern Europe.