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Insight Weekly focuses today on 
Ketchum's Urban Renewal Agency (KURA), taking it from various angles. There's a lot of information here to browse at your leisure. If you have follow-up questions or information, don't hesitate to let me know.
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General Background. Urban renewal programs were started in the mid-1940's to improve blighted areas in inner cities. Municipal governments pinpointed unsafe and rundown areas for economic development, job creation, affordable housing, and infrastructure improvements to be enabled by collaborative public and private investment.
URAs are primarily funded by tax-increment financing (TIF); bonds are an additional funding source. With TIF, a base property value is set for the designated renewal area. If property values increase above that base level, each year's ensuing tax increases ("increments") are paid into a City-held URA fund. For the 24-year life of the URA (if it lasts that long), base level taxes continue to be paid to other taxing entities (e.g. city, county, and fire, cemetery, recreation, ambulance districts), but the increments are diverted into the URA.
URA Boards, appointed by city government, are intended to be citizen-driven and to pursue a concrete pre-established citizen-approved development plan. Click here for more background on URAs.
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Ketchum's URA (KURA). The KURA was formed in 2006 by Ketchum's government working with an external consultant. Its two primary economic development goals were providing affordable housing and implementing the Downtown Master Plan. As of today, no affordable housing has been built nor has the Master Plan been completed. The URA has about $5.5 million in debt; the debt service requires about 45% of KURA's income.
How has the money been used? KURA's website lists its accomplishments. This is my take on the KURA's activities:
>2006: Purchased two lots and an old home on First Street (behind U.S. Bank) in November for affordable housing at a cost of $2 million in loans. The property has been empty since purchase.
>2007: Purchased the Mountain West Bank building with two lots on Sun Valley Road for affordable housing at a cost of $2.56 million in borrowed money.
> 2007-2008: Assisted development of two phases of the still incomplete Fourth Street Heritage Corridor, including the Town Plaza, using a $1 million loan from a private citizen toward project costs of roughly $2 million.
>2010: Altered the purpose of the Mountain West property from affordable housing to commercial use; leased 3/4 of the space to a national chain, Starbucks, for 25 years and 1/4 to the Sun Valley Marketing Alliance (SVMA) for a Visitors Center. A large portion of the business community offered a viable alternative but was shut down. The KURA paid $140,000 for infrastructure improvements and subsequent lease income has been roughly $3,600/month (although the SVMA recently moved to less costly space).
> 2010: Incorporated Sun Valley's River Run site into the urban renewal area in November spending $90,000 on the revised URA plan. (The site had been annexed into Ketchum two months earlier.) Projected income was $50.5 million to 2030, although Wally Huffman indicated construction wouldn't begin until 2017 at the earliest. There may be a separate agreement with Sun Valley Company that addresses the KURA's obligations for infrastructure development.
> 2013: Helped the Ketchum Community Development Corporation complete "Walkable Ketchum" with about $100,000 for signage and solar lights.
Other "achievements" cited by the URA include: Restructuring its debt (a "must-do" to meet loan payments); visioning sessions; vague plans for an "energy project;" $50,000 for a proposed (but stalled) Transportation Center; and a proposed land exchange (also stalled) for affordable housing. None of these characterize significant economic development through job creation or small business growth. Starbucks claims to be doing well but, in benefiting a national chain, the URA has provided competition for at least five competing locally-owned cafes.
Understanding the KURA's financials is a challenge. Its website provides three years of budgets starting with FY 2012-2013. Budgets for two previous fiscal years are on Ketchum's website. Nowhere can I find the budget for FY 2011-2012. The budget format is opaque to the average citizen, lacking notes to explain confusing column headings like, "Actual", "Adopted," "Estimated," "Proposed." This is not a trivial oversight if you want citizen participation.
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Those involved in URAs across the U.S. agree they can be an excellent mechanism for sponsoring economic development. In Idaho, it's the only mechanism. But people also agree that URA management is challenging and often done ineptly. Many jurisdictions have ended their URA prior to fulfilling its plans or by not renewing it. Citizens complain about URA impacts on tax income for non-URA jurisdictions. Most controversial of all, they oppose the frequent abuse of tax money to support pet projects and private interests. Sun Valley's River Run area might be one such example. Click here for examples of URA successes and failures, Click here for pitfalls of URAs.
My observation of KURA's history is that those who initiated it were overly optimistic, woefully uninformed, and negligent in follow-up self-education. The trend has continued across other Board members. Some of this comes from arrogance of power, some from favoritism, some from ineptitude with a complex process, and some from well-meaning but naieve trust in the "experts."
So, we must now consider the future of the KURA. Perhaps this history will soon be moot as Micah Austin, Ketchum's new head of Planning and Zoning, comes in with what appears to be extensive and successful URA experience in nearby Jerome. It's time for someone to lead a clear-eyed assessment that looks at KURA's real, not ostensible, successes and failures and determines whether it has a future worthy of its promise for well-planned, successful economic development.
Until next week.....Jima Rice
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