HomeMy WebLinkAboutExhibit A - North Central Area Urban Renewal Eligibility Report
THE NORTH CENTRAL AREA
URBAN RENEWAL ELIGIBILITY REPORT
PREPARED FOR THE
REXBURG URBAN RENEWAL AGENCY
BY
RICHARD HORNER
of
THE REXBURG REDEVELOPMENT AGENCY
July 3, 2020
THE NORTH CENTRAL AREA
URBAN RENEWAL ELIGIBILITY REPORT
BACKGROUND
Preparation of this report was authorized by the Rexburg Urban Renewal Agency (“Agency”) in July 2020. This report will provide the technical support for the first step in planning
urban renewal projects. That first step is a policy decision by the Mayor and City Council to designate a specific area as deteriorated or deteriorating and to authorize an urban renewal
project for this area.
The proposed urban renewal area includes necessary properties and roadway along the proposed extension of North 5th West from the Madison County Fairgrounds to West Moody Road, including
properties necessary to construct an overpass on West Moody Road over State Highway 20. The proposed area also includes properties and roadway along North 2nd East and the North Yellowstone
Highway from East 1st North to East Moran View Road. The proposed area also includes properties and roadway along East 7th North and Barney Dairy Road. It also includes undeveloped
properties between East 7th North and Barney Dairy Road and East 2nd North. Lastly, the area also includes necessary properties along the proposed extension of East Parkway from about
6th South to East Moody Road. The geographic area under review is referred to as the “North Central area” or the “Study Area.” A significant portion of the Study Area is currently located
within unincorporated Madison County.
Please see the attached map for a clearer understanding of the Study Area boundaries, which includes the City boundary line to assist with identification of the parcels located within
unincorporated Madison County.
Idaho Code Section 50 2008(a) states:
An urban renewal project for an urban renewal area shall not be planned or initiated unless the local governing body has, by resolution, determined such area to be a deteriorated area
or a deteriorating area or a combination thereof and designated such area as appropriate for an urban renewal project.
REXBURG NORTH CENTRAL AREA
A. 10% Analysis
The Agency Board has asked that a study be completed to determine compliance with the statutory requirements regarding assessed value limitations before recommending to the Rexburg
City Council that a new urban renewal area be created. The assessed value limitation statutory requirement found in the definition of “revenue allocation area” in Idaho Code Section
50-2903(15) mandates that the base assessment roll values of all revenue allocation areas within the City (including this proposed new revenue allocation area) cannot exceed 10% of
the current assessed valuation of all taxable property within the City. While a significant portion of the Study Area is within unincorporated Madison County, to be conservative, and
for purposes of this calculation, the estimated base assessment roll of the Study Area is compared to the assessed taxable value of the City (as opposed to a comparison with the assessed
taxable value of Madison County).
County records show that the 2019 adjusted base assessment roll values for Rexburg’s four existing revenue allocation areas minus homeowner’s exemptions are as follows:
North Highway $6,646,722
Downtown Rexburg $33,297,201
University Boulevard $8,190,994
North Interchange $4,145,769
Total $52,280,686
The City of Rexburg’s net taxable value minus the homeowner’s exemption and personal property exemption for 2019 is $1,258,690,595. Ten percent of that value is $125,869,059 which marks
the limit for 2019. The 2019 assessed values for the Study Area are $27,798,027.
Therefore, the total adjusted base assessment roll values for all existing revenue allocation areas including this proposed North Central area are $80,078,713, which is $45,790,346 below
the 2019 maximum limit of $125,869,059.
B. Steps in Consideration of an Urban Renewal District
Step One in planning new renewal projects is a review of the conditions within the Study Area to determine whether the area is eligible under the Idaho Urban Renewal Law of 1965, Chapter
20, Title 50, Idaho Code, as amended (the “Law”), and the Local Economic Development Act, Chapter 29, Title 50, Idaho Code, as amended (the “Act”). The Law and the Act set forth criteria
in the definitions of a “deteriorating area” and/or a “deteriorated area,” at least one of which must be found, for an area to be considered eligible for urban renewal activities. The
attached definitions of deteriorating area, deteriorated area, and urban renewal project are very pertinent to this step and are the focus of this report.
If this report finds one or more of the conditions present within the Study Area, then the Rexburg Urban Renewal Agency may accept the report and forward it to the City Council for its
consideration. If the City Council adopts the report and makes the necessary findings by resolution, it may direct the Rexburg Urban Renewal Agency to prepare an urban renewal plan
for the Study Area. As a portion of the Study Area is within unincorporated Madison County, compliance with Idaho Code Section 50-2018(18) is necessary, and the Madison County Board
of County Commissioners is required to adopt a resolution declaring a need for an urban renewal project.
Step Two in the urban renewal planning process is action by the Agency to prepare the urban renewal plan, including the establishment of a revenue allocation area, and recommend its
approval to the City Council. Once the urban renewal plan is completed and approved by the Rexburg Urban Renewal Agency, the plan is forwarded to the City Council for its formal consideration.
If the urban renewal project area includes parcels located within unincorporated Madison County as currently included in the Study Area, prior to consideration of the urban renewal
plan by the Rexburg City Council, Madison County and the City shall agree on administration of a revenue allocation financing provision, which agreement shall be formalized by a transfer
of power ordinance adopted by Madison County.
The City initiates Step Three by referring the plan to the Planning and Zoning Commission for a finding that the plan is in conformity with the City’s Comprehensive Plan. Additionally,
the proposed plan is transmitted to the affected taxing entities, which includes those taxing districts levying property taxes within the boundaries of the proposed project area and
are provided a thirty (30) day comment period prior to the public hearing before the City Council. Following the Planning and Zoning Commission making its finding of conformity and
the expiration of the thirty (30) day period, the City Council will hold a public hearing and formally consider the adoption of the urban renewal plan establishing a new revenue allocation
area.
Step Four is the adoption of a City Council ordinance approving the plan, after a public hearing, and transmittal of post-ordinance adoption documents to Madison County officials, the
State Tax Commission, and the affected taxing entities.
DISCUSSION
This report focuses on whether the Study Area, as previously described and as outlined on the attached map, qualifies as a deteriorating area and/or a deteriorated area pursuant to
Idaho Code Sections 50-2018(9) and 50 2903(8)(b) under virtually identical definitions. A copy of this joint definition is attached. The first statutory reference is from the Law, while
the second comes the Act.
Pursuant to the Law and the Act, a “Deteriorated area” does not mean not developed beyond agricultural, or any agricultural operation as defined in section 22-4502(2), Idaho Code, unless
the owner of the agricultural operation gives written consent to be included in the deteriorated area, except for an agricultural operation that has not been used for three (3) consecutive
years. A significant portion of the Study Area likely falls within the definition of an agricultural operation requiring property owner consent to be included in the urban renewal project
area. Efforts to identify parcels requiring consent is underway; however, such consents have not been obtained. Compliance with this requirement will need to be determined by Agency
and City staff before the City Council certifies the area as deteriorating.
A substantial portion of the area is predominately open land, so the area must qualify under a specific portion of Idaho Code Section 50-2018(9) and a different statutory provision,
Idaho Code Section 50-2903(8)(c), which reads as follows:
Any area which is predominately open and which because of obsolete platting, diversity of ownership, deterioration of structures or improvements, or otherwise, results in economic underdevelopment
of the area or substantially impairs or arrests the sound growth of a municipality. The provisions of section 50-2008(d), Idaho Code, shall apply to open areas.
Finally, the report will discuss why the area is appropriate for an urban renewal project.
A. Present Conditions
The attached definition of deteriorating area and deteriorated area [Idaho Code §§ 50 2018(9) and 50 2903(8)(b)] lists ten different conditions that may be present in such an area,
with the tenth being the catch-all “any combination of such factors.” The presence of these conditions was documented through physical observation in 2020, as well as, contacts with
various City officials, County officials, and assessor file information. Then the area and its public infrastructure was evaluated, and the numbers that correspond to the applicable
characteristics in the definition were placed at the appropriate locations on the attached map.
B. Open Land Area
In addition to the eligibility conditions identified above, the Study Area is also required to satisfy the “open land” conditions. The definition of Section 50 2903(8)(c) cited above
lists several of the same characteristics as Sections 50 2018(9) and 50 2903(8)(b) under the same or similar descriptions. “Diversity of ownership” is the same, while “obsolete platting”
appears to be equivalent to “faulty lot layout in relation to size, adequacy, accessibility, or usefulness.” “Deterioration of structures or improvements” is apparently a combination
of “a substantial number of deteriorated or deteriorating structures” and “deterioration of site or other improvements.” The final term, “or otherwise,” at least implies that a predominately
open area shares some of the same characteristics as the previous definition of deteriorated area, Idaho Code Section 50 2903(8)(b). There is also an additional qualification that “The
provisions of Section 50 2008(d), Idaho Code, shall apply to open areas.”
Section 50 2008(d) lists the findings that the City Council must make in the ordinance approving an urban renewal plan. In addition, this section lists the special findings that the
City Council must make “if the urban renewal area consists of an area of open land to be acquired by the urban renewal agency.” There is one set of findings if the area of open land
is to be developed for residential uses and a separate set of findings if the land is to be developed for nonresidential uses.
Basically, such open land areas may be acquired by the Agency and developed for nonresidential uses if such acquisition is needed to solve various problems associated with the land or
the public infrastructure that have retarded its development. These problems include defective or usual conditions of title, diversity of ownership, tax delinquency, improper subdivisions,
outmoded street patterns, deterioration of site, and faulty lot layout, all of which are included in one form or another in the Section 50 2903(8)(b) definition of deteriorated area.
The problems that are listed only in Section 50 2008(d)(4)(2) (the open land section, specifically for non-residential uses) include economic disuse, unsuitable topography, and “the
need for the correlation of the area with other areas of a municipality by streets and modern traffic
requirements, or any combination of such factors or other conditions which retard development of the area.”
The conclusion of this discussion about open land areas is that such areas qualify if any of the standard 50 2018(9) and 50 2903(8)(b) characteristics apply. But such areas also qualify
if any of the problems listed only in 50 2008(d)(4)(2) apply. Clearly, the parcel size, lack of water and sewer facilities, a nonexistent or inadequate street system allowing access
to these properties, and lack of fire protection facilities are all conditions which retard development of the areas.
The report text that follows below discusses each of the applicable characteristics of a deteriorated area, as defined by Idaho Code Section 50 2903(8)(b). Several of these characteristics,
including diversity of ownership and predominance of defective or inadequate street layout, have exact or approximate counterparts listed under Section 50-2008(d)(4)(2), so their associated
numbers, 6 and 2, may be used interchangeably. Other numbers, such as 4 (insanitary or unsafe conditions) and 9 (the existence of conditions which endanger life or property by fire
or other causes), fit the broader characteristic of “any combination of such factors or other conditions which retard development of the area.” As discussed above, the lack of public
infrastructure in the predominately open areas has been a significant factor in retarding development in these areas.
C. Deteriorating/Deteriorated Area Characteristics
The following is a listing of conditions found in the Study Area by their corresponding numbers in the attached joint definition and a brief explanation of that condition and how it
was evaluated and identified:
(1) A substantial number of deteriorated or deteriorating structures. A significant portion of the area under consideration has traditionally been used for agricultural purposes and
represents an area in transition. The structures in the North Central area mainly include the Madison County Fairgrounds on the corner of North 5th West and West 2nd East. These buildings
would not constitute a substantial number of deteriorated or deteriorating
structures in an area that is largely open land. This characteristic does not apply to the Study Area.
(2) Predominance of defective or inadequate street layout. Moody Road, Moran View Road, State Highway 33 (North Yellowstone Highway), North 5th West, Barney Dairy Road, and North 2nd
East are the streets that serve the area now. While there is no internal street system needed to support the current agricultural uses, the transition to support contemplated and/or
future land uses will require significant street improvements to safely connect the real property to these existing streets. Also, there is no direct east side connection for traffic
to proceed to State Highway 20, which is why planning documents contemplate a proposed new road, the East Parkway. This situation constitutes an inadequate street layout and this characteristic
is met.
(3) Faulty lot layout in relation to size, adequacy, accessibility, or usefulness. In general, the Study Area includes a number of larger parcels currently transitioning from their
traditional agricultural use. To implement the planned development for the Study Area, the parcels will likely require division into developable lots. Further, there is an undeveloped
parcel between Highway 33 and the railroad tracks. The size, shape, and location of this parcel makes it difficult to develop; hence a number “3” appears on the map. This characteristic
is met.
(4) Insanitary or unsafe conditions. There are several conditions existing within the Study Area where this characteristic applies. Typical insanitary conditions include excessive amounts
of junk, trash, and weeds in violation of City or County sanitation codes. Another insanitary condition occurs in areas that lack sanitary sewers or where the sanitary sewer system
has insufficient capacity. Basically, most of the east side of the Study Area has no sanitary sewer system. The existing system stops at Barney Dairy Road. Therefore, when the number
4S appears on the map, it indicates problems with the sanitary sewer system, in this case, lack of sewer mains. Although there are sewer lines in some of the existing streets within
the Study Area, the large undeveloped parcels lack sewer mains. The number 4S indicates area where more sewer main line access is needed to support anticipated development. This
characteristic also applies where significant investment is necessary to support water system improvements to ensure sufficient fire flows, as well as remediation of any drainage issues.
There are also unsafe conditions in the Study Area. Most are found with the street system and include lack of sidewalks, curbs, and gutters; narrow, inadequate streets; and lack of any
street access, streetlights, and safe intersections. The number ”4ST” on the map indicates unsafe conditions with the street system, particularly North 2nd East, West Moran View Road,
West Moody Road, State Highway 33, and Moody Road that are all two-lane roads. Proposed new streets include North 5th West, west-bound connections for Barney Dairy Road, and the East
Parkway and its connection to East 2nd South. These streets will provide the vehicular access to the expected new businesses in the area. This characteristic is met.
(5) Deterioration of site and other improvements. Site improvements include parking lots, fences, and landscaping areas, basically things other than structures that make up a developed
property. The term “other improvements” is the place where public improvements such as streets, sidewalks, curbs, gutters, bridges, storm drains, parks, water mains, sanitary sewers,
and public facilities such as swimming pools and public buildings are included. When the number 5 appears on the map in a street right-of-way, it denotes those streets are deteriorated.
As noted above, existing structures within the Study Area mainly include the Madison County Fairgrounds on the corner of North 5th West and West 2nd East. These buildings would not
constitute a substantial number of deteriorated or deteriorating structures in an area that is largely open land. Due to the existing site conditions, this characteristic is met.
(6) Diversity of ownership. Typically, this characteristic is present when an area that needs to be redeveloped because of rundown buildings is divided into a number of different ownerships.
It could also occur where existing businesses are hindered in expanding because of the number of adjacent property ownerships. Multiple ownerships are more difficult for developers
to assemble. While there are 25 different ownerships, most parcels are fairly large and could accommodate a development without having to assemble a large number of parcels. For these
reasons, this characteristic is not met.
(7) Tax and special assessment delinquency exceeding the fair value of the land. This characteristic does not apply to the Study Area.
(8) Defective and unusual conditions of title. These conditions have not been found in the Study Area.
(9) The existence of conditions which endanger life or property by fire and other causes. Sufficient water system capacity will be necessary to ensure adequate fire flows to protect
the anticipated development in the Study Area. This characteristic is met.
(10) Any combination of such factors. This number is placed on all areas where two or more of the other characteristics are present.
D. Effects of Present Conditions
North Central Area
(a) Results in economic underdevelopment of the area. Field review and aerial photography confirm the current underdeveloped status of the area as compared to the City and County planning
documents. This area represents a prime opportunity for expanding commercial and industrial development consistent with the goals of the community.
(b) Retards the provision of housing accommodations or constitutes an economic or social liability. In its current condition, the parcels within the Study Area are in transition and
are producing minimal property taxes. In addition, there is very limited public infrastructure serving the areas. Hence such areas tend to become economic liabilities for the City of
Rexburg and Madison County.
(c) And is a menace to the public health, safety, morals, or welfare in its present condition or use. The previous discussion has established that the Study Area has had very slow
growth and, as a result, has become a modest economic liability. In addition, the nonexistent fire protection facilities create a safety problem in the areas. Accordingly, these conditions
represent a menace or threat to the public welfare or prosperity and safety of the community.
E. Appropriateness of the Area for an Urban Renewal Project
The second part of the City Council’s determination is the policy decision of whether or not the area is appropriate for an urban renewal project. Note that part of the definition of
an urban renewal project includes “undertakings and activities of a municipality in an urban renewal area for the elimination of deteriorated and deteriorating areas.”
NORTH CENTRAL AREA SUMMARY
This report has provided support for a finding that the North Central Area is a deteriorating area because of the presence of various conditions, most of which are related to the public
infrastructure. The public infrastructures, particularly sewer and street access, are very inadequate and only marginally serve the needs of planned future development. Should a new
major commercial and/or industrial development be developed on one of the large parcels on North 2nd East or on the east edge of the City, the City would be confronted by the high cost
of infrastructure improvements that could not be attributed to the specific development.
Preparation and approval of an urban renewal plan, including a revenue allocation financing provision, would give the City an additional resource to help solve the public infrastructure
problems in the North Central area, which to implement broader connectivity planning goals between the City and Madison County require the inclusion of parcels currently located within
unincorporated Madison County but within Rexburg’s Area of City Impact. In effect, property taxes generated by new development within the area can be used by the Urban Renewal Agency
to finance the needed public improvements to encourage more development. Finally, the new development would also generate additional jobs that would, in turn, benefit residents of
the community.
CONCLUSION
This report concludes that the North Central area described in this report is a deteriorating and deteriorated area characterized by inadequate public infrastructure that is appropriate
for urban renewal projects.
DEFINITION OF DETERIORATING AREA, IDAHO CODE § 50 2018(9)
AND DETERIORATED AREA, IDAHO CODE § 50 2903(8)(b)
A deteriorating or deteriorated area is any area which by reason of the presence of (1) a substantial number of deteriorated or deteriorating structures; (2) predominance of defective
or inadequate street layout; (3) faulty lot layout in relation to size, adequacy, accessibility, or usefulness; (4) insanitary or unsafe conditions; (5) deterioration of site or other
improvements; (6) diversity of ownership; (7) tax or special assessment delinquency exceeding the fair value of the land; (8) defective or unusual conditions of title; (9) the existence
of conditions which endanger life or property by fire and other causes; or (10) any combination of such factors, (a) (results in economic underdevelopment of the area); (b) substantially
impairs or arrests the sound growth of a municipality; (c) retards the provision of housing accommodations; or (d) constitutes an economic or social liability; and (e) is a menace to
the public health, safety, morals, or welfare in its present condition or use; provided, that if such deteriorating area consists of open land the conditions contained in the proviso
in Idaho Code Section 50 2008(d) shall apply. Provided, however, this definition shall not apply to any agricultural operation, as defined in Section 22-4502(2), Idaho Code, absent
the consent of the owner of the agricultural operation, except for an agricultural operation that has not been used for three (3) consecutive years.
Idaho Code § 50 2008(d)
(d) Following such hearing, the local governing body may approve an urban renewal project and the plan therefor if it finds that (1) a feasible method exists for the location of families
who will be displaced from the urban renewal area in decent, safe and sanitary dwelling accommodations within their means and without undue hardship to such families; (2) the urban
renewal plan conforms to the general plan of the municipality as a whole; (3) the urban renewal plan gives due consideration to the provision of adequate park and recreational areas
and facilities that may be desirable for neighbor hood improvement, with special consideration for the health, safety and welfare of children residing in the general vicinity of the
site covered by the plan; and (4) the urban renewal plan will afford maximum opportunity, consistent with the sound needs of the municipality as a whole, for the rehabilitation or redevelopment
of the urban renewal area by private enterprise: Provided, that if the urban renewal area consists of an area of open land to be acquired by the urban renewal agency, such area shall
not be so acquired unless (1) it is to be developed for residential uses, the local governing body shall determine that a shortage of housing of sound standards and design which is
decent, safe and sanitary exists in the municipality; that the need for housing accommodations has been or will be increased as a result of the clearance of slums in other areas; that
the conditions of blight in the area and the shortage of decent, safe and sanitary housing cause or contribute to an increase in and spread of disease and crime and constitute a menace
to the public health, safety, morals, or welfare; and that the acquisition of the area for residential uses is an integral part of and essential to the program of the municipality,
or (2) if it is to be developed for nonresidential uses, the local governing body shall determine that such nonresidential uses are necessary and appropriate to facilitate the proper
growth and development of the community in accordance with sound planning standards and local community objectives, which acquisition may require the exercise of governmental action,
as provided in this act, because of defective or unusual conditions of title, diversity of ownership, tax delinquency, improper subdivisions, outmoded street patterns, deterioration
of site, economic disuse, unsuitable topography or faulty lot layouts, the need for the correlation of the area with other areas of a municipality by streets and modern traffic requirements,
or any combination of such factors or other conditions which retard development of the area.
DEFINITION OF URBAN RENEWAL PROJECT, IDAHO CODE § 50-2018(10)
“Urban renewal project” may include undertakings and activities of a municipality in an urban renewal area for the elimination of deteriorated or deteriorating areas and for the prevention
of the development or spread of slums and blight, and may involve slum clearance and redevelopment in an urban renewal area, or rehabilitation or conservation in an urban renewal area,
or any combination or part thereof in accordance with an urban renewal plan. Such undertakings and activities may include:
(a) acquisition of a deteriorated area or a deteriorating area or portion thereof;
(b) demolition and removal of buildings and improvements;
(c) installation, construction, or reconstruction of streets, utilities, parks, playgrounds, off-street parking facilities, public facilities or buildings and other improvements necessary
for carrying out in the urban renewal area the urban renewal objectives of this act in accordance with the urban renewal plan;
(d) disposition of any property acquired in the urban renewal area (including sale, initial leasing, or retention by the agency itself) at its fair value for uses in accordance with
the urban renewal plan except for disposition of property to another public body;
(e) carrying out plans for a program of voluntary or compulsory repair and rehabilitation of building or other improvements in accordance with the urban renewal plan;
(f) acquisition of real property in the urban renewal area which, under the urban renewal plan, is to be repaired or rehabilitated for dwelling use or related facilities, repair, or
rehabilitation of the structures for guidance purposes, and resale of the property;
(g) acquisition of any other real property in the urban renewal area where necessary to eliminate unhealthful, insanitary or unsafe conditions, lessen density, eliminate obsolete or
other uses detrimental to the public welfare, or otherwise to remove or to prevent the spread of blight or deterioration, or to provide land for needed public facilities;
(h) lending or investing federal funds; and
(i) construction of foundations, platforms and other like structural forms.
4818-7289-5937, v. 4