Pitfalls in Urban Renewal Area Management.
When managed well, URAs can transform deteriorated areas into places of economic vitality that bring jobs, enhance real estate values, and enlarge the tax base. URAs enable long-term planning, independent of yearly government budgets. They seek community participation in planning for the future and can enable lower tax levies as the tax base increases with time.
URAs also have potential drawbacks: conflicts of interest, lack of public accountability, and poor financial management. Ultimately, a URA’s success relies on Board expertise, good faith practices, and adherence to legislative intentions. Ketchum has three urban renewal districts. Bellevue has one and Hailey recently formed one. What are possible pitfalls to be avoided by all of them, using the Ketchum URA as an example.
Conflicts of interest. Idaho Code describes a URA as a legal body of as few as three and as many as nine commissioners appointed and approved by the Mayor and City Council. Commissioners should have varied backgrounds pertinent to implementing urban renewal. They must have no economic interest in the urban renewal process but they might well include representative from taxing districts whose taxes are being diverted to the URA.
Originally, Ketchum’s Mayor and City Council served as the URA Board, despite other suggested approaches. This led to confusion in meetings about what was a URA versus Ketchum issue as well as an insular approach lacking sufficient public input. Changes have have slowly been made, however, and the Board increasingly represents a larger slice of people with vested interests in Ketchum. The Mayor and two elected officials still sit on the Board but they are important for URA accountability and knowledge of City issues.
Public accountability. Community involvement is a central tenet of URA operations since the Board is not elected and the agency controls large sums of tax money. Publicly approved URA development plans should be followed; if not, changes require public hearings. Communications should be clear, accurate, and include an annual report.
The primary source of information for the KURA is its website which includes 2012 and 2013 annual reports and audited financial statements from 2009 forward. The site has only two budget reports and those it has are opaque to the average citizen. Above all, there is no link to it on Ketchum’s website. You have to know what it is.
Effective and ethical financial management. A key question is whether URA monies should be managed conservatively or aggressively. Some URA’s accrue funds before starting renewal projects; others take on debt and proceed immediately. Either way, debt amounts, project costs and a risk analysis should guide a URAs approach. As one might expect, many Idaho URAs have begun conservatively.
Another key question is whether private enterprise should receive URA development subsidies. "Kudos and Criticisms" addresses both successful and bogus projects. For example, was including Sun Valley Company’s River Run property in a URA appropriate? Should the URA be assisting any private development that would happen on its own schedule and its own terms? Should it grant waivers to developers without evidence that there will be a reasonable return on investment for the public?