Meridian could soon have its third urban renewal district.
Plans for the proposed Union District, which would span about two city blocks downtown, include a new community center and mixed-use development with apartments.
Downtown Meridian already has an urban renewal district, but it’s seen minimal private investment since it was established in 2002.
The proposed Union District is expected to generate an estimated $16.3 million in tax increment revenue — the property tax revenue from increased market value — over its 20-year life span. The boundaries would be Main and Third streets to the east and west, the railroad tracks to the south and Idaho Avenue to the north. The area includes 11 publicly owned and four privately owned properties.
The Galena Opportunity Fund, a Boise developer, has big plans for the area, and the Meridian Development Corporation, or MDC, the city’s urban renewal agency, hopes to capitalize on upcoming development to fund infrastructure improvements and a new community center.
The Union District area “could greatly benefit from public infrastructure improvements,” including “upgrades to the sidewalks, community lighting and water and sewer lines and roads,” said MDC administrator Ashley Squyres in an email.
MDC oversees two urban renewal districts: the Meridian Revitalization Plan, better known as the Downtown District, and the Ten Mile District. The Downtown District is scheduled to sunset in 2026.
The 16 acres comprising the Union District already fall within the more than 600-acre Downtown District. But with just six years remaining before the Downtown District sunsets, not enough tax increment financing will be generated “to fully redevelop and tackle public infrastructure improvements” in the area, Squyres said.
The new downtown district would take some property out of the existing one. MDC has started the legal process to de-annex property from the Downtown District and move it to the Union District.
“Creating a new, smaller district will allow tax increment financing to continue to be directed to this section of the community to spur growth, economic opportunities to benefit the entire city and upgrades to critical infrastructure, along with removing one of the most blighted properties in Meridian,” Squyers said.
The Galena Opportunity Fund is planning to invest more than $125 million on two projects within the district: redevelopment of the city’s community center and a mixed-use development with hundreds of apartments.
Throughout the proposed district’s lifespan, the developments are estimated to generate $16.3 million in tax increment financing, which would fund about $15 million in public improvements that MDC has identified in a Union District urban renewal plan.
Urban renewal is a tax increment financing tool meant to encourage development in blighted areas. When a government agency creates an urban renewal district, tax rates — including city property taxes and other taxing entities — are frozen for properties within the district for a period of time. Increases in property tax revenue within the district are invested in infrastructure improvements. Once an urban renewal district sunsets, taxes returns to regular taxing entities.
Last year, Galena responded to a request for proposals from the city to redevelop the community center site, dubbed the Civic Block. In October, the city accepted Galena’s proposal contingent on several conditions, including that a new urban renewal district be created before the Civic Block project moves forward.
Galena’s proposal for the 1.24-acre Civic Block included plans for the community center, an auditorium, mixed-use commercial space and possibly a charter school. The city also required a new parking structure.
The Civic Block — bounded by East Idaho and Broadway avenues to the north and south and East Second and Third streets to the east and west — currently includes these publicly owned entities:
- Centennial Park
- The Meridian Community Center
- The former AEI Systems Group building and future unBound library branch
- An office building housing the Community Planning Association of Southwest Idaho and Valley Regional Transit
According to a draft plan for the Union District, public improvements for the Civic Block would cost about $12.3 million, which includes construction of the community center ($6.5 million), site improvements ($1.6 million) and structured public parking ($4.3 million). The city of Meridian agreed to contribute $3 million to the project from its impact fee fund.
The other Galena project within the Union District is a mixed-use development, called Union 93. The two 100-foot-tall buildings would include 385 apartments, about 28,000 square feet of retail space and two parking garages.
Public improvements for Union 93 are about $1.2 million. Improvements include about $600,000 worth of street improvements to Third Street and Broadway Avenue.
Another $1.5 million also has been identified in the Union District plan for additional public parking.
Galena would front the cost for the public improvements and be reimbursed through an owner participation agreement, the draft plan says.
“Galena’s project will bring huge investment and energy into downtown by removing significant blight, providing significant enhancements to infrastructure and providing structured parking that will benefit the downtown,” Squyres said.
Steps to de-annexation
A third-party eligibility report for the Union District found the district meets state law regarding eligibility for urban renewal. The district met eight of the 10 criteria for eligibility — only one condition is required — including the presence of deteriorating structures, age and economic underdevelopment, among others.
The two eligibility criteria the Union District did not meet were tax delinquency and diversity of ownership — the majority of parcels in the district are publicly owned, and Galena owns the rest.
Meridian City Council members, when reviewing a Union District draft plan Tuesday, expressed concern about the lack of ownership diversity.
“I worry a project like this, that benefits one, single entity, would very quickly land on our friends in the Legislature’s radar,” said Councilman Luke Cavener. “I recognize the opportunity, and as somebody who loves downtown and wants it to be successful … I just worry about the potential risk we face … if we move forward with a project with a single entity that benefits.”
The state Legislature in recent years has passed laws curbing urban renewal agencies’ ability to fund projects without public approval. Last year, plans by Boise’s urban renewal agency to potentially contribute to a new sports stadium and public library drew backlash from the Legislature, which passed a law requiring a public vote on certain projects.
Ryan Armbruster, a local attorney working as a consultant on the Union District plan, told Meridian council members the Union District plan is “a very focused, very finite project, so it would seem to … meet most of the objectives that the Legislature has indicated in terms of project scope and project breadth.”
The Union District draft plan will be finalized by MDC soon and come back to the City Council for approval in the coming months. MDC hopes the council can host a public hearing on the plan in June.