Staff recommends waiting to close urban renewal districts; members say closing hospital district now could forfeit larger opportunities
Loading...
Summary
City financial staff outlined the one‑time and ongoing revenue impacts of closing urban renewal districts and told the board a conservative timeline could yield materially higher returns; several members urged caution on closing the Health Corridor (hospital) district now because Kootenai Health is planning a master plan for its Coeur d'Alene campus and pilot revenues could exceed a one‑time payout.
City financial staff briefed the Ignite CVA board on the fiscal implications of closing several urban renewal districts, recommending the city delay closure to capture greater long‑term revenue and to avoid forfeiting partnership opportunities.
Katie, a city finance presenter, explained the two ways the city benefits when a district closes: (1) ongoing additional property taxes as increment folds into the city's taxable base and (2) a onetime share of the district's liquid assets after existing debts are satisfied. She said closing the Health Corridor District today would add roughly $250,000–$257,000 in ongoing revenue in the example presented and that the district's audit showed about $1.3 million in liquid assets of which 42% would be allocable to the city—yielding a onetime payout a little over $1 million in that example. Katie stressed those numbers are estimates and depend on county levy data and outstanding obligations.
Katie also described the River District and Atlas District scenarios: waiting until obligations end (she used 08/01/2028 as a conservative example) would likely increase both ongoing increment and one‑time payouts, reduce owner‑participation repayments at closure and therefore preserve more funds for city priorities. Staff noted some long‑term accounts receivable and loans (including a loan from the River District to the Atlas District and a wastewater fund obligation of roughly $5,720,000 in the model) that would affect net payouts.
Several board members, including Will representing Ignite, urged caution about closing the hospital (Health Corridor) district now. Will and other members said Kootenai Health plans to roll out a master plan for its Coeur d'Alene campus and that pilot programs and potential ongoing payments tied to development could produce more long‑term benefit than a one‑time cash payout. One member framed the single payout as a ‘‘short‑sighted’’ approach, noting the district’s initial challenges during COVID and a period of leadership transition at the hospital.
Staff and members discussed alternative public financing tools the hospital could use if it moves away from an urban renewal district, including business improvement districts or local improvement districts, and agreed to seek further meetings with hospital leadership and Ignite representatives before the council offers formal direction.
Action taken: A motion to adjourn the Ignite CVA board meeting was moved and seconded and carried on a voice vote; no formal decision to close any district was made at the meeting.
Next steps: staff will meet with the hospital director and return to the council during the next financial presentation to seek direction if members wish to give it then.
