The Coeur d’Alene urban renewal agency — embarrassed by its recent failure to get a developer proposal for taxpayer-bought property it owns in midtown — is now needlessly rushing to figure out its next step. The alternatives it’s considering make no sense, and one would be illegal.
At issue are five lots owned by the agency in the 800 block of Fourth Street — the Paris Flea Market and the bare land directly south of it. The agency also owns the two parking lots directly north, but is hanging on to those.
In 2016, the agency hired appraiser Stan Moe to appraise the Paris Flea Market land and building. Moe’s Nov. 9, 2016, appraisal said the land and building have a fair market value of $320,000.
The bare land hasn’t been appraised — but in July, 2017 the Kootenai County assessor assessed those four bare lots (tax parcels 8, 9A, 9B and 10A) at $60,000, $48,000, $48,000 and $48,000 — a total of $204,000. Those are assessed values, not fair market value — fair market value is typically greater.
Add the bare lots’ $204,000 to the Paris Flea Market’s $320,000, and you have a total of $525,000 — or more — fair market value of the property involved.
That property was bought with tax money paid by Kootenai County taxpayers. The urban renewal agency is funded entirely by your property taxes — it skims taxes off the top that would otherwise go to the city, county, NIC and other public agencies.
Idaho Code 50-2011(a) — part of the urban renewal statute that governs the agency — expressly provides that real property owned by an urban renewal agency may not be “sold, leased, [or] otherwise transferred” to a private party for less than its “fair value.” The public is harmed when real property its taxes bought is sold in a below-market “sweetheart deal.”
The agency acquired its midtown property in pieces over the past 15 years and has sat on it — preventing private development. Until recently, the bare land was a weed patch, and the parking lots were riddled with cracks and potholes.
The agency’s district in which this property sits — the Lake District — is required by law to close by the end of 2021. At that time, any property the agency still owns in the Lake District will automatically revert to city ownership.
So with the Lake District closing in a few years — and having blocked any private development there since the 2000s — the agency, last September, issued a request for developers to submit proposals to develop the property. Submissions were due by mid-January.
The request was “wide open” — it allowed anything that complied with the applicable zoning (C-17 and midtown overlay). And, as required by the urban renewal statute, it specified that the purchase price must “in no case [be] less than the fair value” of the property.
In response, the agency received a grand total of one proposal — which offered to pay $150,000 for all the property — property worth more than $500,000. That “lowball” offer obviously did not comply on price — and other particulars — and was rejected.
This all came out at the agency’s Jan. 17 meeting. You can read about it in a Jan. 18 article in the Coeur d’Alene Press (“Midtown misfortune — Only one developer shows interest in purchasing ignite cda property”). Or you can watch the video of the meeting on the agency’s website (click on “Resources”).
So after that, what’s the agency doing now?
It’s considering doing another request for developer proposals — although why the result would be any different from what just happened no one says.
It’s also considering cutting the price — illegally — below the property’s “fair value” of $500,000+. Does it think it can just tell a new appraiser to come up with a number lower than the previous appraisal and assessments — even though everyone knows real estate prices have only been going up?
Here’s a suggestion to the urban renewal agency from someone who actually lives in midtown (me) — don’t do anything.
Leave the bare lots as a green space, and have music, movie nights and other events there during the warmer weather. Resurface the parking lots, and inexpensively remodel and rent out the Flea Market. And leave things like that until the property reverts to the city in a few years.
Meanwhile, do a study of midtown’s long-term parking needs (parking is already tight there), and if the performing arts center feasibility study determines that a center is feasible, consider putting that in midtown.
But please don’t rush to do something — anything — just because the Lake District is closing, and you’d like to be able to say you did something.
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David Lyons is a Coeur d’Alene resident.