Ketchum's Urban Renewal Agency (KURA) has undertaken a self-evaluation after nine years of existence - better late than never to grasp its purpose, projects, and financial situation!

A KURA workshop led last week by Micah Austin, Ketchum's new Planning and Zoning Director, and the KURA's new attorney, Ryan Armbruster, explained the history of URAs in Idaho, the state's recent changes to URA laws, the KURA's proper role in economic renewal, the status of its current projects, and its long-term financial projections. For the first time, these topics were dealt with openly and competently in collaboration with a Board willing to learn and do the right thing. Yesterday's Mountain Express covered the story in depth, so I'll just make additional observations. 

1. Armbruster emphasized that URAs are built to "Get in, do your projects, and get out so you can return money to the taxing districts" from whom income is being diverted in order to help (in this case) Ketchum's economy. He was referring to how URAs are funded: For 20 years after their inception, they are allowed to capture a portion of taxes that would have gone to other taxing districts: e.g. school, ambulance, flood, Ketchum, the County. For example, Austin reported that $700,000 went to Ketchum's URA in 2014 that would have normally been collected by other districts. 

Armbruster added that every URA essentially makes a "covenant with other taxing districts" to act as quickly as possible and get back to normal. As Jerome's URA head, Austin fulfilled that covenant by honchoing the successful closure of an urban renewal district 10 years ahead of its time. Closing out early has never been a focus of the KURA.

2. The Workshop made it clear that the KURA has a lot of knots to untangle. Austin's review of 72 projects cited in the KURA's 2010 plan (30 attached to the development of River Run) shows that none have been completed. Of the primary projects, affordable housing has not been built, the Doll's House property sits empty with encumbrances to its sale, the Starbucks building (which the URA would like to sell) has a sub-market value lease until 2021, and the KURA is servicing $5.5 million in debt.

Total debt includes nearly $1.5 million borrowed without repayment stipulations from Ketchum's in-lieu housing fund - provoking questions about how/when repayment should take place. The City has asked that the funds be returned.

3. KURA revenue forecasts made in 2010 for the 2015-2035 period were circulated by Austin against his 2015 calculations - providing more knots to untangle. Predicted revenue in 2010 was overstated by an average of 197.11 percent; instead of revenues of $111 million in 2035, Austin predicts just $46 million. 

He pointed out that some of the estimates were based on unrealized hotel projects, including River Run. I later pointed out to Austin that Wally Huffman had clearly stated in a public URA meeting that River Run construction would not begin, at the earliest, until 2017; therefore estimates for URA income beginning in 2015 were wrongly included in 2010. A further question is why River Run's URA status runs five years longer than the original KURA in which it was included. More knots to be untied!  

4. The URA Board brought its own conundrum to the table for consideration by Austin and Armbruster: Should it be composed of five or seven members and who should they be? Armbruster explained that governance has been an issue for URAs from their inception since they are comprised of politically appointed individuals who spend large amounts of public money but are not publicly accountable. He has typically seen one-two City Council members on the Board for public accountability. (For URAs formed post 2011, state law now requires that all Board members be elected.) 

Some of my readers may recall that the KURA Board has been challenged about its membership numerous times. At its start, the City Council and Mayor appointed themselves to the KURA Board - ill-advised but not illegal. The City's staff and attorney also worked for the URA. Given that the two groups also held successive meetings, the question often arose as to which hat was being worn by a person during discussions.

This unfortunate overlap may be why there were no repayment stipulations made when the KURA Board (composed of City Councilors) asked the City Councilors for a loan from the in-lieu housing fund.  It may also be why there is some challenge to sorting out projects in Ketchum's 2006 Downtown Master Plan from those in its 2006 KURA plan. I'm sure there are other knots to be uncovered still. 

After some heat, the KURA has realigned its membership twice and now has seven members: three City Councilors and four "outsiders."  In my view, public accountability suggests at least one City Councilor should be on the Board and well as someone from one of the affected taxing districts. I also think five people is a good number given that the Board is deliberative rather than operational. They just must be people who are informed about the function of urban renewal and about how to fulfill that function!

One last point. Armbruster explained at the start of the Workshop that URAs are supposed to come to an end within, or before, a fixed time period. That is a good thing! Yet, at the end of the workshop, two representatives from two other economic development groups were present to talk about their projects - hoping to gain the support of the URA.  Once again, the Board fell into old habits: starting to consider ideas (worthy or not) that were entirely new, would require financial resources, and would expand the work of the KURA, rather than bring it to a close. 

Until next week...Jima Rice  

P.S. Perhaps the City Council ought to consider a new attorney given the poor directions provided throughout URA history.