Agency considers expanding taxing district to entice new businesses to Pocatello, Idaho

Local business and civic leaders want the Pocatello Development Authority to expand its tax increment financing (or TIF) district to the area around the Portneuf Medical Center to accommodate new businesses. At least one public official is wary of the idea.

By Steven Friederich – Journal Writer

http://www.journalnet.com/articles/2003/12/18/news/local/news08.txt

A medical-related company that could bring about 265 new jobs is in negotiations with the Bannock Development Corp., Executive Director Ray Burstedt told PDA members Wednesday.

The company, which Burstedt refused to name, would need to be located near the hospital because at least 95 of the new company’s employees would work at the medical center, he said. Portneuf’s Community and Public Affairs Vice President Marilyn Speirn said the hospital has been involved in talks with Burstedt about the new TIF district.

Expanding the TIF district would allow the city to finance infrastructure improvements such as adding new streets and sewer lines to encourage the company to move here, Burstedt said.

"The new company is not a done deal," PDA Chairman and City Councilman Harry Neuhardt cautioned.

Tax Increment Financing is a development tool designed to help bolster a city’s economic development by paying for infrastructure improvements. In return for improvements, the PDA receives a portion of property taxes back into its coffers that are diverted from the general fund.

Bannock County Commissioner Jim Guthrie, a PDA board member, said he was wary of any TIF district expansion because it would mean less county revenue for public services, but added he might consider supporting the project.

He recommended the PDA turn the entire city into a TIF district and then put a limit on the amount of funds the district can generate, leaving the leftover funds for local governments’ coffers.

Neuhardt said the PDA expects to raise $14 million from its TIF districts by 2009. But some of that money has already been dedicated to long-term projects such as $8 million to redeveloping Old Town and $1 million for a bridge on Cheyenne Avenue.

The PDA initially considered expanding its TIF district several months ago when developer Bill Isley, who owns property near the hospital, asked PDA members to consider it. At that time, Neuhardt and other PDA members said Isley planned to build a multi-story parking garage with a medical professional building on his land.

Isley declined to talk about his project but said, "I was thinking of the city as a whole."

Burstedt said besides infrastructure, the PDA might need to provide grants or loans for the unnamed medical-related company. For example, the PDA provided AMI Semiconductor with a $1.2 million interest-free loan in 2002 to be repaid at the end of the 10-year lease on its new engineering and research center on Alvin Ricken Drive.

And it provided the company a $250,000 grant for infrastructure improvements.

Steven Friederich covers the Idaho National Engineering and Environmental Laboratory along with federal and local political issues for the Journal. He can be reached at (208) 239-6001 or by e-mail at [email protected].