Idaho Supreme Court

Idaho Supreme Court building in Boise.

BOISE — A lawsuit claiming the city of Boise’s establishment of two new urban renewal districts violated the Idaho Constitution is pending before the state Supreme Court.

At the end of November, two leaders of the libertarian-leaning think tank Idaho Freedom Foundation and four other plaintiffs appealed a lawsuit to the Gem State’s highest court asking them to rule whether or not Boise deciding to create urban renewal districts broke the state’s law preventing cities from taking on debt without the will of the voters. This suit was filed in January 2019 and was thrown out by a judge in Idaho’s 4th District Court in July.

Idaho Freedom Foundation spokesman Dustin Hurst had no comment Monday.

Mayor Lauren McLean’s spokeswoman Melanie Folwell also declined to comment on the appeal.

“The city cannot comment on pending litigation, but we are confident the Supreme Court will rule appropriately and fairly on the issues presented in the case,” Folwell said in a statement.

There is currently no estimated timeline for when the case will go before the court, according to urban renewal agency Capital City Development Corporation’s attorney Ryan Armbruster. CCDC is not directly named in the suit, but its board voted unanimously to file an amicus brief in support of the city Monday.

The suit was filed by Idaho Freedom Foundation President Wayne Hoffman, the organization’s Vice President Fred Birnbaum and four other Ada County taxpayers concerned about the legality of urban renewal agencies. A later amended complaint was filed that included the Blue Valley Tenant Association and 10 other tenants of the Blue Valley mobile home park as plaintiffs, which falls in the newly created Gateway East urban renewal district, but these additional parties were thrown out by the judge in the 4th District when the case was dismissed.

The lawsuit requested a judge issue an injunction to stop the two districts — one near the river on the edge of downtown Boise and the other near the airport — which Boise City Council approved at the end of 2018 and took effect at the beginning of 2019. Despite the lawsuit, the districts have been operating as usual.

Urban renewal is a process in which local governments can use tax increment financing to pay for infrastructure improvements and other development projects as an economic development strategy. Districts are created for a set window of time and, during the life span of the district, taxes collected from increased property values are directed to the urban renewal agency for improvements within that district instead of back to the city. Once the district sunsets, the city can once again tax the entire value of an area and reap the benefits of the improvements completed.

The basis of Judge Lynn Norton’s decision to dismiss the case in July at the district court level came from the 2009 Idaho Supreme Court case Rexburg v. Hart. In this case, a resident sued the city because he did not believe revenue allocation financing through the urban renewal agency was a legitimate way to fund a project. The court ruled in the city’s favor, finding that urban renewal agencies are not “alter egos” of cities and their borrowing funds without consent of the voters does not violate the constitution.

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