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Urban Renewal Districts - Frequently Asked Questions What is an Urban Renewal District (URD)? How would creating a URD affect the properties within the area? An Urban Renewal District is a Tax Increment Finance (TIF) tool that helps fund public infrastructure to support redevelopment (downtown), bare undeveloped land that is infrastructure challenged (business/industrial parks) and brownfield development (industrial site). Tax Increment Financing: when a URD is put into place, property tax revenues begin to be separated into two groups – the base and the increment. Once the District sunsets, increased annual incremental revenues are placed on the new construction roll for taxation. 1. Help with Blight and Infrastructure Challenges – A City with an area that struggles to redevelop because of blight, deteriorating buildings, or a lack of infrastructure can utilize Urban Renewal to invest in specific districts. It is one of the only tools available to cities to help fund public infrastructure improvements. 2. Funded by Property Tax Increment – Establishing an URD doesn’t raise property taxes. Over time if redevelopment happens, the property values increase. As they increase, the new tax revenue (that wouldn’t have been there if not for urban renewal) is re-invested in the URD. 3. District Plan – Cities follow a District Plan and can only work on projects outlined within that plan. Once the URD sunsets, increased annual incremental revenues are placed on the new construction roll for taxation. URBAN RENEWAL DISTRICTS FREQUENTLY ASKED QUESTIONS Does a URD take money away from other local government services? Is the URD going to increase taxes? What projects and/or improvements are anticipated? How is the boundary of the URD determined? The boundary of a URD is determined by examining areas of the City that are prime for redevelopment (downtown) or development (future business and/or industrial areas). These areas will be evaluated to determine eligibility. Eligibility criteria, per Idaho Code, includes deteriorating buildings or sites, defective street layouts, faulty lot layout, insanitary or unsafe conditions, diversity of ownership, tax delinquency, defective and unusual conditions of title, or endangerment of life or property. An additional eligibility requirement is that the combined base assessment rolls of district(s) must be below 10 percent of the current assessed valuation of all taxable property within the City. A URD/TIF does not raise taxes or affect impact fees. W here economic disinvestment is evident and revitalization is essential the taxing districts of local government (schools, emergency services, etc.) receive all revenue to which they are entitled under state law and applicable budget and levy limits (base). Mostly likely NO. Property taxes are not increased when a URD is formed. Assuming the redevelopment activities result in growth that would not have occurred otherwise, the URD’s activities help raise property values within Meridian’s renewal district(s) at a faster rate than Meridian as a whole. This translates into a more valuable property for the owner and in turn, more tax revenue in the district. That said, rising levy rates are a function of increasing budgets, voter approved bonds/levies and lower taxable value. For example, if there is significant new construction occurring outside the RAA, then levy rates could be lower even with existing project areas. See Tax Increment Financing Graph 1 and Graph 2. Urban renewal districts are formed in areas that are often in need of additional public infrastructure for support of schools, police, housing, roads, utilities, etc. Anticipated improvements may include but are not limited to streets, sidewalks, public utilities, water, sewer, irrigation, lighting, etc.