Thursday, October 19, 2006

Cost of living dips as gas prices fall

by Joe Estrella @ Idaho Statesman
October 19, 2006

Treasure Valley consumer prices fell 1 percent in September, thanks to an almost 6 percent drop in area gasoline costs, according to the monthly Wells Fargo Boise Area Cost of Living Report. It was the second consecutive month that area inflation has declined.
But area gasoline costs remain 25 cents above the national average, AAA Idaho reported Wednesday.

"Boise saw a welcome 5.6-percent decrease in transportation costs during September, and utility expenses also went down, more than offsetting gains in grocery, restaurant and health-care costs," said Sterling K. Jenson, regional managing director of Wells Capital Management."

The report showed increases in the price of health care and clothing last month, while utility costs were down more than 1.3 percent.

Even with last month’s decline in pump prices, area gas costs have risen 6.4 percent in the last six months, the report said.

AAA Idaho reported Wednesday that the cost of self-service regular unleaded in the Valley now averages $2.47 a gallon, down 51 cents in the last month, but still 25 cents higher than the U.S. average.

"Assuming that gas prices mirror what’s happening with crude oil and gasoline futures markets, we think Idaho’s gasoline prices should be significantly lower than they are right now," AAA spokesman Dave Carlson said in a statement.

Nationally, the Labor Department reported that its closely-watched Consumer Price Index fell 0.5 percent last month, the biggest decline in U.S. consumer costs since a 0.7 percent fall in November of last year. Core inflation, which excludes energy and food, edged up by 0.2 percent, the third straight month of modest gains following higher readings earlier in the year. Wells Fargo does not measure core inflation in the Treasure Valley.

Analysts believe the bigger-than-expected decline in consumer prices should help reassure investors that a slowing economy is helping to reduce inflation pressures according to the script written by the Federal Reserve.

Wednesday, October 18, 2006

Microsoft Boise emerges

by Ken Dey @ Idaho Statesman
October 18, 2006

ProClarity officially became Microsoft Boise on Tuesday.
Six months after the Redmond, Wash. software giant announced it had purchased the Boise business-software firm, most of the transition to Microsoft is complete.

“Everyone has been pretty heads down and working on getting the team integrated,” said Bob Lokken, ProClarity’s former CEO and now senior director of Microsoft’s office business applications. “We’ve designated today (Tuesday) as the official launching of Microsoft Boise.”

A new Microsoft sign now adorns the former ProClarity location at 500 S. 10th Street in Downtown Boise.

By next June, the first Microsoft-labeled business-software product will be introduced.

Before the acquisition, ProClarity had long had a relationship with Microsoft, which uses ProClarity’s software.

That software helps businesses analyze large amount of data in conjunction with Microsoft applications like Excel and Sharepoint.

When Microsoft purchased the company, it could have moved operations to Redmond, but choose to keep them in Boise. Lokken said Microsoft appreciated the quality of life in the Boise area.

The two cities are only an hour away by plane, making it easy for executives and employees to travel to Redmond when needed, he said.

Lokken says this is just the start of what he predicts will be a bright future for Microsoft in Boise.

“We’re pretty excited about future growth prospects in the city,” Lokken said. “It’s a great location for Microsoft.”

The company has already added a few new positions to its Boise work force of about 100 people.

Although it’s too early to put any number on the potential new jobs in Boise, Lokken said, expansion in Boise likely will be discussed next spring when Microsoft starts its planning for the next fiscal year.

“Hopefully, we’ll be able to fill out the operation in Boise,” he said.

Russ Whitney, principal development manager for Microsoft Boise, said a number Redmond-based Microsoft employees with ties to Idaho have applied for the open positions the company does have because they want to return to Boise.

Whitney said he’s also been working closely with Boise State University’s engineering and computer science departments to build a relationship that will help the company when Microsoft goes into a more-aggressive hiring mode.

Lokken said Microsoft also has started discussions with state and local officials about Microsoft’s plans for the area.

“We’ve had discussions on how we can work together to make Boise a better place for Microsoft employees and a desirable place for Microsoft to continue expanding,” Lokken said. “Microsoft has grown so much in Redmond that it’s consistently running out of room, and we think there are good prospects to continue building this site as we go forward.”

Lokken and Whitney said there have been some adjustments going from a small company to part of the world’s largest software company, but for the most part the changes have been positive.

Whitney said employees now have access to better benefits and the advantages of working for a larger company. Some employees also received raises.

But the biggest change is how the Microsoft name has elevated the profile of the company’s products.

“Our product strategy has changed significantly,” Whitney said. “We used to be a mouse in a field of elephants. Now we’re an elephant. It’s pretty exciting to be in that position.”

New option emerges for Downtown convention center

by Joe Estrella @ Idaho Statesman
October 18, 2006

Boise’s largest Downtown landlord and a national hotelier have come up with a plan that could give the city its new Downtown convention center.
Oppenheimer Development Corp. of Boise and John Q. Hammons Hotels Management LLC — whose properties include Hilton, Courtyard by Marriott and Embassy Suites — will present a proposal to the Greater Boise Auditorium District board of directors today for a hotel/convention center on a 220,000-square-foot piece of land the district owns between 11th and 13th streets.

The meeting is scheduled for 10 a.m. today at the Boise Centre on The Grove.

Coonce declined to offer details about the joint venture’s proposal.

Jack Coonce, Oppenheimer Development vice president, confirmed that the two companies have created a joint venture, Hammons/Oppenheimer Associates, to explore the project.

City and local real estate experts believe a new convention center would breath life into a mostly barren stretch of former Union Pacific Railroad right-of-way between 9th and 15th, and set the stage for future downtown development.

Oppenheimer Development owns and manages 1 million square feet of real estate in Idaho and Wyoming, including two sites in Boise: the 200,000-square-foot Wells Fargo Center at 9th and Main streets, and the 220,000-square-foot One Capital Center, 720 W. Idaho St.

John Q. Hammons Hotels manages 63 hotels across the continental United States. Some of its other properties include the Mariott, Homewood Suites, Radisson, Renaissance, Residence Inn and Sheraton hotels.

Pat Rice, general manager of the Boise Centre on The Grove, said Coonce first brought up the issue a few months ago when he asked if the auditorium district “was still looking for a developer” for its proposed convention.

“Then he called me in Denver last Friday and wanted to know when they could make a presentation to the the board,” Rice said.

After two failed attempts to get voter approval for a new convention center, the auditorium district has been proceeding with a controversial plan calling for phased construction of a new facility using an additional $750,000 a year produced by a newly approved 1 percent increase in the city’s hotel room tax to 5 percent.

Rice said that whatever the plan proposed at today’s meeting, construction will have to be on the site owned by the auditorium district between 11th and 13th streets.

“That’s the only piece of land we control,” Rice said.

New plan for Downtown convention center unveiled

by Joe Estrella @ Idaho Stateman
October 18, 2006

The Greater Boise Auditorium District entered into an agreement today that could bring the city a new 130,000 square feet Downtown convention center and an 11-story, 286-room Embassy Suites Hotel by 2009.
The auditorium district board voted unanimously today to enter into exclusive negotiations on the estimated $80 million project with Hammons/Oppenheimer Associates, a joint venture between Oppenheimer Development Corp. of Boise and hotelier John Q. Hammons Hotel Management LLC.

Hammons, founder of some of the nation’s premier hotel chains, said the joint venture would raise the money to build the convention center and then lease it back to the auditorium district on a year-to -year basis. Pending a final agreement with the auditorium district, Hammons said construction could begin within 12 months, with an expected completion date 18 months later.

Auditorium District Chairman Stephenson Youngerman said he thought it would not take six months to negotiate a final agreement.

“The auditorium district will not be a drag on these negotiations,” he said. “We go along as rapidly as other people want to go.”

Hammons said the joint venture is talking to Capital City Development Corp. on a deal under which the city’s urban renewal agency would assist with financing on the convention center’s underground parking area.

Tuesday, October 17, 2006

Supervalue reports strong earnings


Supervalu, which owns Idaho Albertsons stores and reported strong quarterly earnings last week, doesn’t appear to be impacting vendors — yet.
“We haven’t seen any big changes yet,” said Jerome Eberharter, founder and CEO of White Cloud Coffee, based in Garden City. “No doubt there will be some down the road. I think they’re still trying to get their arms around the communities they’re in.

“It’s a big deal to undertake,” he said. “As long as we can keep our sales strong and keep supporting them like with did with the old Albertsons, we should be OK.”

Eberharter said changes impacting Albertsons vendors could vary based on whether the vendor is dealing with stores owned by Supervalu or the Cerberus-led Albertons LLC — which doesn’t own Idaho stores but is based in Boise.

Scott Schoenherr of Rafanelli & Nahas hasn’t heard of any changes in the works among Albertsons vendors. His company’s River Quarry complex on ParkCenter Boulevard in southeast Boise houses Storecast Merchandising, Procter & Gamble and an Albertsons information technology group.

“They have not contacted us about downsizing,” he said. “We don’t see any scaling back.”

Calls to Albertsons vendors Dannon Yogurt, Procter & Gamble and Sara Lee weren’t returned immediately. All field Boise-area offices.

Supervalu reported its earnings nearly quadrupled in its second quarter because of its newly purchased Albertsons grocery stores, the Associated Press reported.

Chairman and CEO Jeff Noddle said the Albertsons purchase added to profit right away, not counting one-time costs from the acquisition, according to Associated Press.

Minnesota-based Supervalu said it earned $132 million, or 61 cents per share, in the three months ended Sept. 9, up from $34 million, or 24 cents per share, during the same period last year.

Sales more than doubled to $10.67 billion, up from $4.56 billion a year ago.

Analysts surveyed by Thomson Financial had expected earnings of 53 cents per share on revenue of $10.64 billion.

Some Idaho property taxes may not go down as much as owners might expect

by Lora Volkert @ Idaho Business Review

Boise residents and business owners may not see their property taxes fall as much as expected.
The Property Tax Relief Act of 2006, passed in August by a special session of the Legislature, means most school maintenance and operations budgets will come out of the general fund rather than being paid with property taxes.

That essentially eliminated a 0.3 percent property tax levied by school districts. The money will be replaced with an additional 1 percent sales tax and $50 million from the budget surplus.

But the Boise School District will still levy property taxes for its maintenance and operations budget, Commissioner Tom Katsilometes said at a recent meeting of the Idaho State Tax Commission.

Boise School District started with a higher levy rate than other school districts — 0.66 percent. Katsilometes said that, after the reduction, taxpayers in the Boise School District will still pay 0.36 percent.

The Boise School District won’t be the only one that still levies property taxes, Katsilometes said. The Blaine, Swan Valley, Avery and McCall-Donnelly school districts will be able to levy property taxes for their budget stabilization funds.

Those funds insure that the school districts receive the same amount of money per child that they did in prior years, regardless of what happens to their school populations or the economy, Katsilometes said.

The Property Tax Relief Act dealt with about $260 million in school maintenance and operations funds, equating to 19 percent of property taxes levied in the state. But Katsilometes said the actual amount of the school maintenance and operations budget is about $346 million.

The Boise, Blaine, Swan Valley, Avery and McCall-Donnelly school districts would still levy the remainder, he said. About 60 percent of the remaining $87 million goes to the Boise School District.

The school maintenance and operations budget was projected to increase by 16 percent before the Property Tax Relief Act went into effect.

Another change to the school district taxing structure that hasn’t been discussed much is that the schools will now be more subject to the legislative appropriations process, said Gary Houde, senior research analyst for the State Tax Commission.

Most people he talks to seem to be under the impression that the extra penny per dollar in sales tax will be automatically earmarked for schools every year, but it is not, he said.

$260 million

School maintenance and operations budget to be paid from the general fund instead of property taxes.

$87 million

Property taxes that would still be levied by school districts.

$52 million

Property taxes that would be levied by Boise School District alone.

No burst bubbles in Caldwell building boom

by Lora Volkert @ Idaho Business Review

Caldwell is defying the construction slowdown that’s hit other parts of the Treasure Valley.
Most cities had construction levels equal to or less than the abnormally high levels of 2005. However, Caldwell issued over 1,000 more building permits through September than were issued for the same period in 2005.

Higher real estate prices elsewhere in the Valley seem to be driving development in Caldwell, where land and housing are consistently cheaper, Caldwell Building Official Brett Clark said.

“Caldwell’s the place to be right now. Everybody else has had their turn,” Clark said. “With the cost of housing going up, it’s Caldwell’s turn.”

Things are likely to speed up again next year, he said. Some subdivisions are on hold as streets, fire hydrants and other infrastructure are built.

On the other end of the spectrum, Meridian’s downward trend in construction is becoming more pronounced. In 2005 the city issued almost three times as many building permits for the first three quarters of the year as were issued for the same period in 2006.

The Meridian Building Department has had to downsize its staff by four inspectors, according to building official Daunt Whitman.

The city issued 76 residential building permits in September, up from 52 in August, though the number is down from the triple digits of the last three Septembers.

The most recent permits are being used to build less expensive homes. The average residential permit value for September 2006 was $222,602, down from $248,934 in August and $292,438 in July.

Construction stayed almost flat in Boise and Nampa this year compared to the first three quarters of last year.

Other cities may be down, but not for long.

Kuna issued fewer than 400 building permits in the first nine months of the year for the first time since the turn of the century. The Kuna downturn is apparently in response to last year’s rapid pace. In 2005, the city issued nearly 700 permits in the first three quarters of 2005, compared to 400 to 450 in most recent years.

But this is just the calm before the storm, said Interim Planning and Zoning Director Diana Sanders. Five new subdivisions have recently been approved or are under review by Ada County, she said.

Though Eagle’s permit numbers are down from 2005, the city is still on track compared to prior years.

Eagle issued 765 permits in the first three quarters of 2006, compared to 744 for the same period in 2004.

Permits for first three quarters


2006 — 6,732

2005 — 5,620


2006 — 12,691

2005 — 12,632


2006 — 765

2005 — 982


2006 — 94

2005 — 78


2006 — 386

2005 — 693


2006 — 2,188

2005 — 6,202


2006 — 1,694

2005 — 1,653

Twin Falls

2006 — 871

2005 — 863

Housing boom forces mayors to grapple with affordability

by Lora Volkert @ Idaho Business Review

Rising real estate prices and low wage growth have prompted Idaho mayors to look for ways to increase the amount of affordable housing in their cities.
Mayors from three cities shared their methods at this month’s Idaho Conference on Housing.

The city of Boise is considering inclusionary zoning, which would require developers to either dedicate for affordable housing a percentage of the housing units they build or pay into an affordable housing fund, Boise Mayor David Bieter said.

The Building Contractors Association opposes the idea, he said. But Beiter believes the city needs to consider the plan as a way to increase housing opportunities and supplement the city’s other homelessness initiatives, such as rental assistance programs the city is starting with the help of churches and civic organizations.

Inclusionary zoning isn’t the only Boise housing initiative to spark controversy. Neighborhood groups have opposed another of Bieter’s housing priorities, infill development.

Most citizens understand the need to fight urban sprawl, so the battles over infill projects are paradoxical, Bieter said.

“The only thing we dislike worse than sprawl is density,” he said.

The city has tried to promote dense infill by tweaking building codes to make multi-family housing more affordable to build and own, he said.

Boise changed its codes to allow up to five stories of wood-framed construction on top of a concrete and steel building of up to three stories. Downtown residential projects have boomed as a result, he said.

Likewise, the city doesn’t require fire sprinkler systems in four-plexes because such systems would significantly increase construction costs without appreciably increasing safety, he said.

“The future of Boise is to bring infill projects to the city,” Bieter said.

He believes infill can help the city sustain its growth because it uses existing infrastructure, unlike the many planned communities proposed outside town.

Other mayors have been encouraging infill in their own ways. Caldwell Mayor Garret Nancolas spoke at the conference about his efforts to encourage private industry to redevelop downtown with mixed-use development around Indian Creek. Within 10 years the city expects 300 to 400 units of urban housing in downtown, he said. The city broke ground on the Indian Creek project last month.

Pocatello Mayor Roger Chase said his city had the dubious distinction of having the oldest housing stock in the state. A quarter of the city’s housing was built before 1940.

The city acquired a community development block grant to rehabilitate 232 houses and build new second-story housing in old commercial developments in the center of town.

* * *

Developer confident of financing

by Lora Volkert @ Idaho Business Review

Boise Place developer Gary Rogers said last week he still hasn’t signed a deal to finance the proposed high-rise, but he hopes to do so by the project’s Nov. 8 Boise Design Review hearing.
Boise Place is planned as a 31-story building on the site where the Boise Tower was started.

“The good news is we know it’s there,” he said of the financing. Rogers said he is still working with two potential financial partners.

The developer for the Boise Tower, Rick Peterson, was never able to obtain financing for the project, although he said several financial institutions were interested.

Boise Place doesn’t warrant comparisons to the Boise Tower, said Rogers, the manager of Charterhouse Boise Downtown Development, and Boiseans don’t need to worry about financing for Boise Place.

“This is not the old project. This is the new project. It happens to be on the same site. But we’ve got new people and new money and everything else,” he said.

Boise Place would be 400 feet tall, cost $126 million to build, and include ground-floor retail, parking on floors two through six, a spa and fitness center on floor seven, hotel rooms and condos on floors eight through 21, more condos on floors 22 through 30, and a rooftop terrace.


Natural-fodds groceries eye Boise market

by Brad Carlson @ Idaho Business Review

Whole Foods Market officials have made at least one visit to Boise to check out a downtown-area site for potential store development.
The Austin, Texas-based grocery chain sells natural and organic foods. Although the company has no announcement regarding a Boise location, a spokeswoman said, Whole Foods continues to open stores and seek sites for future stores.

“We are growing, and we’re always looking for great new store sites,” Whole Foods spokeswoman Amy Schaefer said last week. “Some of the most important elements we seek include high foot or vehicle traffic, a 40,000- to 75,000-square-foot location, abundant parking, and 200,000 or more people within a 20-minute drive time.”

Boise City Planning Director Hal Simmons said a local architect, a real estate agent and Whole Foods store-development officials came to Boise about four months ago.

“They came in and asked us for a meeting to show us their concept for a Whole Foods and a hotel on the old University Place site” at Front, Myrtle and Broadway, he said. “They didn’t give a timeline.”

City planners suggested the group meet with Capital City Development Corp., Boise’s urban-renewal agency, Simmons said.

The group has not filed a project application or held a pre-application meeting with Boise city planners, he said. Before an application is filed, a developer first holds a preliminary meeting with Boise planners and a neighborhood meeting, he said.

The city of Boise has the vacant University Place site zoned for residential-office, with design-review approval required, Simmons said. As presented last summer, the Whole Foods store and hotel project would require a conditional-use permit, and probably a height exception for a seven- or eight-story hotel, he said.

White Cloud Coffee founder and CEO Jerome Eberharter, whose company is a supplier to several grocery chains, visited a Whole Foods store in Santa Fe, N.M., early this month. He said a store manager didn’t know of a store planned in Boise, but said the company is aggressively moving toward the Northwest and Intermountain areas.

“I think the market is dynamic enough and also upscale enough to attract that kind of chain,” Eberharter said. “I don’t think it’s a matter of ‘if’ — it’s a matter of ‘when.’”

Wild Oats/

Trader Joe’s

Another sizable retailer of organic and natural foods, Wild Oats Markets, is also seeking a Boise site.

“We have no signed lease in Boise, although it’s a very appealing market to us and we are actively looking for a potential location,” said Sonja Tuitele, spokeswoman for the Boulder, Colo., company. Wild Oats hasn’t confirmed a location or timetable, she said.

Trader Joe’s is a chain of neighborhood grocery stores that stock specialty and private-label items. One rumor had the Monrovia, Calif., company seeking a site in the Treasure Valley.


“Boise isn’t in our two-year plan at this time,” company spokeswoman Alison Mochizuki said.


Idaho building materials company opens new plant in Boise

by Melissa McGrath @ Idaho Statesman

A local company that manufactures building materials opened a 37,000-square-foot manufacturing plant in Boise.
Idaho Truss and Component Co., based in Meridian, had to expand into the plant located off Federal Way in Boise because its prefabricated wall panel business has taken off in recent years, said Kendall Hoyd, president of Idaho Truss.

The company has grown from selling about $25,000 worth of wall panels in a month in 2001 to selling between $400,000 and $500,000 a month this year.

“One of the things we did in 2005 was the Tamarack members’ lodge. That was our first major project,” Hoyd said. “Since then, we’ve been very successful in pursuing that kind of work. We were awarded the next six buildings in the Tamarack development.”

The company also is helping to build a lodge in Sun Valley, a condominium project in Sun Valley and a hotel in Seattle.

Idaho Truss can design the frame for a building, manufacture the wall panels and install them.

Sixty people currently work at the Idaho Truss plant in Boise. The company plans to add another 30 or 40 workers in the next year, Hoyd said.

Nampa Defines Areas as 'deteriorating'

by Sandra Forester @ Idaho Statesman
October 17, 2006

Nampa City Council agreed by split vote Monday to move toward creating an urban renewal district that would put about $44.1 million into new buildings and other improvements, with a new downtown library as the top priority.
Also on the council agenda was a proposal to revamp the city’s auto reimbursement policy in response to concerns about a recent doubling of the mayor’s auto allowance.

That issue had not been addressed by press time Monday, and the meeting was expected to run late into the night.

Further discussion of the proposed urban renewal district also was expected late Monday, with council members adjourning their meeting to reconvene as the board of the Nampa Development Council, the city’s newly renamed urban renewal agency. As the development board, council members were expected to decide whether to approve the proposed boundaries and other aspects of the district.

The council split 2-2 on a resolution to declare downtown Nampa and other key commercial and industrial areas as “deteriorating” — the first step in creating an urban renewal district. Stephen Kren and Bob Schmidt voted against the resolution, and Lynda Clark and Martin Thorne voted for it. Mayor Tom Dale broke the tie, approving the resolution.

A draft plan presented to the City Council Monday listed the projects and costs by priority: additional library, $15.5 million; sewer and water lines for North Nampa, $4 million; a public safety building, $14.6 million; Garrity Boulevard right-of-way improvements, $1 million; Nampa-Caldwell Boulevard improvements, $5 million; Franklin Boulevard right-of-way, $3 million; Interstate 84 interchange improvements, $1 million.

A “pay as you go” plan would allow the library construction to begin in 2012, and other projects would be paid as tax-district revenues are collected through 2017, officials said.

Another option is to pay for the projects through bonds that would be paid off by urban renewal district revenues. This would allow library construction to begin in 2009.

The district would cover hundreds of industrial and commercial acres north of Interstate 84, land on both sides of Nampa-Caldwell Boulevard, and most of Nampa’s downtown.

The council also considered a written policy for reimbursement of mileage expenses that eliminates taxable auto allowances for employees hired in the future.

The new policy would require direct reimbursement at the state rate for employees who use their personal vehicles on city business.

The issue of reimbursement versus auto allowance came up after council members discovered in August that the mayor’s allowance doubled to $800 in June without council approval.

Dale said last week his accountant recommended he be paid based on the net auto allowance he receives after taxes instead of the gross before taxes.

Dale asked finance director Debbie Mammone to figure out a way he could be justly compensated for driving his car more than 1,000 miles a month. The result was the increase to $800.

To offer story ideas or comments, contact reporter Sandra Forester at or 377-6464.

Wednesday, October 11, 2006

Businesses benefit from exemptions to sales tax

by Brad Carlson @ Idaho Business Review

On Oct. 1, most Idaho consumers and businesses began paying another penny in sales tax for every dollar spent.
The tax increase was approved by the Idaho Legislature Aug. 25 as part of Gov. Jim Risch’s proposal to ease property taxes. According to state Division of Financial Management estimates, the hike from 5 to 6 percent will generate about $219 million for the state over a full fiscal year.

However, at least half-a-billion dollars in potential revenue won’t be collected because dozens of goods, services and entities are exempt from paying sales tax.

And the list of exemptions keeps growing. The Legislature last winter approved several new areas of spending now free of sales tax, including movie production, museum admissions and a special kit used on wrecked trucks.

A 2002 interim legislative committee on sales taxes studied each exemption and its fiscal impact, Associated Taxpayers of Idaho President Randy Nelson said. However, no exemptions were removed.

Some are sacred cows.

The so-called “production exemption” means companies don’t pay sales tax on equipment and supplies used in manufacturing, farming and mining, said Jim Husted, with the Idaho State Tax Commission.

“It has a fairly large impact, and also is (an exemption) that manufacturers very much feel is necessary,” he said.”

Don Reading, an economist with Ben Johnson Associates, said it’s unlikely the Legislature would ever curtail or suspend the production exemption.

“That, to the Idaho business community, is like Social Security is to the AARP,” he said.

Division of Financial Management Administrator Brad Foltman said equipment sales that fall under the production exemption would generate $78 million in fiscal 2007 — if the sales tax were collected. Sales of supplies would generate $59.1 million, he said.

Some of the exemptions, were they removed, would have an even larger impact to Idaho’s tax revenues.

Explosive growth in recent years led to a statewide building boom. However, while builder-developers pay sales taxes on construction materials, construction services are not taxed.

A Division of Financial Management estimate puts the impact of that exemption at $123,169,000 for the current fiscal year.

Micron and media

Micron Technology, the state’s largest company, spent about $2.2 billion on capital expenditures for the fiscal year that ended Aug. 31.

Not all of the company’s capital expenditures will be on production equipment and thus exempt from sales tax. However, company spokesman Dan Francisco said that, historically, about 70 percent of the capital-expenditure total has been “fab-related” — spent on semiconductor wafer fabrication equipment, tool sets and the like.

Equipment and supply purchases for publishing and broadcasting are also exempt from sales tax.

KTVB General Manager Doug Armstrong said each television station in the Boise area installed digital broadcasting equipment a few years ago to meet a Federal Communications Commission requirement.

He wouldn’t disclose KTVB expenditures, but said each station in the Boise area probably spent more than $1 million.

“We are a regulated industry and are required to provide that service to our channels, so (the exemption) does have some foundation in common sense,” Armstrong said.

Roughly half of KTVB’s expenditures are exempt from sales tax, he said. Purchases not directly related to broadcasting and transmitting — for items such as vehicles and computers — are charged sales tax.

Armstrong said that if broadcast-specific expenditures were subject to sales tax, KTVB would make fewer taxable and non-taxable purchases overall.

The financial impact of each sales-tax exemption can be found in the General Fund Revenue Book, which the Division of Financial Management publishes each January.

Mike Ferguson, chief economist at the Division of Financial Management, said the Legislature typically grants sales-tax exemptions because it deems a particular entity or activity worthy.

“It could be hardship, promoting the economy or any number of reasons, and it’s going to vary case by case,” he said.

The line-item dollar amounts in the Revenue Book don’t represent exact totals lost to each exemption, he said. State budget estimators assume spending totals would differ without the exemptions.

Even with the exemptions, Idaho sales tax collections have grown consistently over the years, Nelson said.

“How much stronger they might have been (without the exemptions) is hard to say,” he said of sales-tax revenues. “A lot of the reason is to incent more economic activity. To put a number on that gets really difficult.”

Become exempt

Husted said the exemptions are the result of someone requesting, and receiving, approval from the Idaho Legislature.

“It does not cause a problem administratively as long as the exemption is well defined,” he said. “Sometimes if the language is not clear, then generally we will have an argument with the taxpayer, who feels the exemption is broader than the commission’s interpretation. Some of them, we almost never disagree on.”

Disagreements usually come to light through audits of taxpayers that produce Tax Commission rulings, Husted said. However, some taxpayers request a ruling before doing business. (See related story on Cabela’s on next page.) And in some cases the Legislature takes care of it.

In the 2006 session, lawmakers aimed to encourage film and media productions when they passed House Bill 497, Nelson said.

The new law gives a sales-tax rebate to film and media productions making at least $200,000 in qualifying expenditures over three years. The exemption is scheduled to end in 2013.

“You may see more and more of that — investment, then the rebate,” Nelson said. “You want the jobs to come with it.”

The 2006 Legislature also approved House Bill 475, which exempts museum admissions. Other exemptions to the sales tax approved this year included “glider kit” replacements for wrecked trucks, free dental clinics, heating pellet manufacturers, domestic violence support groups, fees at nonprofit shooting ranges and competitions, dues at nonprofit hunting and shooting organizations, and a clarification to the exemption for pollution control equipment.

Nelson said it could be hard for lawmakers to refuse a new exemption similar to one already on the books.

“They’ve got to be careful it doesn’t open up to applying to a whole bunch of unintended folks,” Nelson said. “They just have to be very careful, and narrow. The folks bringing the requests understand that and want to keep the fiscal impact as minimal as possible.”


Run-down shopping centers could get help from city of Boise

by Lora Volkert @ Idaho Business Review

Capital City Development Corp. is considering the creation of urban renewal districts to improve blighted and largely vacant shopping centers outside downtown Boise.
Sites under consideration include the Hillcrest Shopping Center at Orchard Street and Overland Road, a shopping center on Collister Drive, and another at Orchard and Emerald streets, CCDC Executive Director Phil Kushlan said.

“Orchard and Emerald is an area that could use some love,” Boise Mayor David Bieter said at a housing conference last week.

The city expects to have more specific plans in four to five months, Bieter said.

CCDC, the redevelopment agency for the city of Boise, builds parking garages and pays for street improvements, landscaping and public art within its districts. The agency also enters into public-private partnerships to assist developers with projects that revitalize undeveloped or underdeveloped areas.

Too late

A renovation of Vista Village shopping center should be finished by spring, said Donna Jacobs, a property manager for Day Realty.

It’s part of a large revitalization on Vista Avenue, driven by local businesses.

“I think the whole neighborhood seems to be going through a Renaissance,” she said.

However, Day Realty could have used help from the city on the $5 million Vista Village project, she said.

“Sadly enough, we are doing things all on our own,” she said.

The area could use some public art or funding to improve the streetscape, she said. A parking garage and landscaping would have been great, said David Day, of Day Realty.

Although Vista serves as the main artery between the airport and downtown, CCDC has until recently always focused its redevelopment efforts downtown.

“I don’t want to take anything away from downtown,” Jacobs said. “But the city needs to make sure the Vista neighborhood looks good. It’s often visitors’ first impression as they come to Boise.”

For Day, the prospect of the city helping other ailing shopping centers raises questions about competition.

“It’s kind of a problem when government gets involved in competition,” he said. “When somebody builds you a parking garage…” he said.

However, he made it clear that the Vista Village renovation would have happened regardless.

Bieter said Vista Village is a great example of how the private sector can redevelop areas without government assistance. The shopping center has spurred a revitalization movement that includes the Farmers & Merchants and Wells Fargo bank buildings on Vista, he said.

Other areas

Kushlan didn’t rule out extending urban renewal assistance to Vista, but other areas seem to be a higher priority for the city, he said.

Fowler Property Acquisitions, which bought the Hillcrest Shopping Center, started demolition work two months ago on a $4 million rehabilitation project. The company plans to rebuild taller stucco facades to increase visibility and match the upgrades made to the nearby Albertsons, said Chad Eisenbud, vice president of Fowler’s commercial division. The project should be finished by the end of the year, he said.

“It’s probably bad timing for us,” he said of the CCDC proposal. “Obviously it’s great for other centers around the city. If they want to contact us, we’ll definitely talk to them. But it’s not going to slow up our process.”

* * *

Banner Bank Building part of expansion plan

by By Brad Carlson @ Idaho Business Review

A full-service branch in a downtown Boise building that bears its name is the latest expansion for Banner Bank.
The bank, based in Walla Walla, Wash., plans more offices.

“Right now our growth is focused on the Pacific Northwest — southern Idaho, Portland and the Seattle area,” Southern Idaho Regional Retail Manager Tammy Wheeler said. “We can’t build them fast enough.”

The new branch anchors downtown Boise’s new Banner Bank Building, an 11-story, 180,000-square-foot structure at 950 W. Bannock St.

Boise-based development firm Christensen Corp. earned a Platinum certification for the building from the U.S. Green Building Council.

The bank occupies all of the first floor and part of the second floor. The new building includes drive-through banking facilities.

Five people work in the retail branch, which Rene Kidwill manages. Willis Robinette, Banner Bank’s regional commercial manager, recently moved nine employees to the new building from 1161 W. River St. The bank also employs information technology specialists and a residential real estate lending team in the new building.

Banner operates four retail branches and two commercial banking centers in southern Idaho. The bank also fields a residential construction lending office.

Wheeler said Banner aims to have a total of 10 to 15 offices open in the southern Idaho region in the next five years.

“We are continually looking for good spots in the Treasure Valley,” she said.

In the BlackEagle development at Overland and Maple Grove roads in southwest Boise, construction has started on a 3,500-square-foot retail branch. Wheeler expects it to open in December or January. Mary Frazer will manage the branch, to employ five.

Also at BlackEagle, Banner plans to move an existing residential construction lending office, employing seven, to a larger space in a new two-story building at the corner of Overland and Maple Grove, Wheeler said.

In Nampa’s new Treasure Valley Marketplace development, off the Karcher Road interchange with Interstate 84, Banner plans a two-story, 6,500-square-foot building for a retail branch and commercial banking center, Wheeler said. She expects construction to start early next year northwest of the Target store, as weather allows, and conclude in June or July.

The bank recently signed a letter of intent to buy property for branch-office construction near the southwest corner of Glenwood and State streets in Garden City in the River’s Edge development, Wheeler said. She anticipates a mid-2007 opening.

Project cost estimates weren’t released.

CSDI Construction is building the BlackEagle branch and completed tenant improvements downtown. Petra Inc. is working on tenant improvements for the larger residential lending office at BlackEagle.


P&Z recommends annexing 601 acres south of Boise

Article published Oct 11, 2006
by Kate Brusse @ Idaho Statesman

P&Z recommends annexing 601 acres south of Boise
Commissioners OK higher density than Boise Airport officials had wanted

Construction may start next fall on The Reserve planned community south of Boise if the City Council follows the Planning and Zoning Commission's recommendation to annex 601 acres.

The commission voted unanimously late Monday night to recommend approval of Pleasant Valley South LLC's request to annex one of the last places Boise has left to grow.

Commissioners recommended a gross density of five dwelling units per acre for the property south of the planned Lake Hazel Extension — a move that would add 400 more homes that Boise Airport officials did not want.
The Boise Airport asked for density of four units per acre to limit the number of homes out of concern about airport and overflight noise.

"The airport preferred low density, as the more people in the area, the more complaints the airport will likely receive," city planner Angie Brosious said.
The developer had requested six units per acre to provide diverse housing and price points, said Larry Sale, project manager with The Hellhake Co.

Activity on an assault strip south of Gowen Road, also known as the airport's third runway, will pick up in 2010 or 2011, airport spokeswoman Larissa Stouffer said.

The military uses the assault strip for C-130 training. Private helicopters also use the strip.
In four to five years, uses may expand to include cargo planes and private aircraft, Stouffer said.

At that time, the area will be subject to average sound levels of 60 to 65 decibels, or about the sound level of a normal conversation, and aircraft traffic patterns below 1,000 feet, according to a letter from Matt Petaja, deputy director of the airport.
Sound would be painful at 130 decibels, which is about the sound level of a jackhammer or power drill.

Jerry Heimbuch, a retired civil engineer who lives on South Cole Road near the proposed development, supported the increase in density on the property.

"It's the lower densities that really do cause urban sprawl," he said.
Commissioner Andy Brunelle said overhead noise from flights is "just a fact of life here in Boise."

The airport also recommended that the developer provide a notice to each lot buyer disclosing proximity to the airport, potential aircraft noise and future airport development — a request developer Pleasant Valley South plans to follow.
Pleasant Valley South also plans to pay for a half-mile, two-lane extension of Orchard Street, which will provide the main access to and from the development.

The developer also will provide right-of-way for the road to be expanded to five lanes through property owned by the city and state and through The Reserve.

In making the motion to recommend approval of the annexation, commission member Tony Orman said The Reserve is the city's chance to be on the front end of a planned community. Ada County has approved similar communities outside the city limits.
"It's going to happen, so we might as well take the bull by the horns and do something about it," Orman said.

Sale said he expects the City Council will hear the request in December.
Commissioner Doug Cooper did not deliberate or vote on the proposal because his firm McKibben & Cooper Architects is working on the development.

What is a planned community?

Attachment to Cynthia Sewell's artical in the Idaho Stateman

A planned community, also called master-planned community (MPC), is a large-scale development featuring a wide range of housing prices and styles, a mix of commercial uses and an array of amenities including trails, parks, open space and recreational facilities. They characteristically emphasize social and local community services such as schools, community centers, libraries, worship sites and other public land uses.
Southern California's Irvine Ranch is one of the oldest and largest planned communities in the U.S. Started in the 1960s, the 93,000-acre community is home to about 230,000 people. More than half of its acreage is permanently preserved as open space and parks.
The philosophy behind planned communities is sometimes called "cradle to grave" or "stroller to walker" because the communities are designed to accommodate young single people, families and retirees. As people's housing needs change, they can remain in the same neighborhood. Also, several generations can live near each other.
"Master-planned communities have always been popular; most well-executed MPCs are able to offer a lifestyle and sense of community that you can't get from a conventional subdivision," said Neal Tsay, a vice president of Robert Charles Lesser, a national company that tracks the industry for developers.
Planned communities also offer residents certainty, according to Jim Heid, a national planned community expert. Residents can look at the master plan and know where schools, parks and retail centers will be.
If someone moves into a subdivision adjacent to empty land, the homeowner has no guarantees as to what could be built next their subdivision, Heid said. Residents have no guarantees whether the city will provide parks nearby or whether trails that cross private land will remain open.
The primary focus of the development's planning effort is to create a particular environment, a sense of place. Some planned communities are themed — golf, tennis, equestrian, nature conservation or active seniors — providing residents a common bond with their neighbors.
The planned community lifestyle is not for everyone. The carefully planned developments often have detailed guidelines for architecture and landscaping and strict CCR's (covenants, codes and restrictions).
Laurie Barrera, a relocation specialist for SelEquity Real Estate, said she receives requests from both people who want the consistency of a regulated development and people who want less restrictions on their property, maybe to build a shop or other outbuilding or install a certain type of landscaping, like xeriscaping, which may not be allowed in some subdivisions or planned communities.
"Some people don't mind strict CCR's because they know what to expect, other people want more flexibility," Barrera said. What is important for her clients is that they have a choice and planned communities are simply another choice.

Beyond Subdivisions (Planned Communities)

Article published Oct 11, 2006
by Cynthia Sewell @ Idaho Statesman

Developers, homebuyers are bringing Western trend of planned mini-cities to wide-open spaces of rural Ada County

When Paul and Susie Headlee decided to move to Idaho from Alaska six years ago, they knew they wanted to live in a planned community. At the time, the Boise area had one planned community — Hidden Springs in the Foothills northwest of Boise. The Headlees visited Hidden Springs, liked what they saw, and moved in.

"Living in a planned community wasn't just about purchasing a home — it was a lifestyle choice for us," Susie Headlee said. "Hidden Springs was the only planned community that we knew of in Idaho. We were particularly interested in this planned community because of its founding principles, which include an emphasis on open space, trails, agriculture and environmental education."

Tracy L'Herisson put her name on a waiting list earlier this year for a home in a planned community not yet under construction. She plans to leave her custom home on five acres in Eagle to move to a new home in Avimor, an 830-acre planned community nestled against the Foothills off Idaho 55. It will be a couple of years before her home can be built.
The Headlees and L'Herisson are at the forefront of trend that has been sweeping the West for decades, but is just now making an appearance in Idaho. In the six years since the Headlees moved to the area's only planned community, developers have begun work on about 20 planned community proposals in Ada County.

The nation's five fastest-growing states are in the West — Nevada, Arizona, Idaho, Utah and Colorado. Planned communities — mini-cities built from scratch — are one of the most popular kind of developments in four of those states, but not in Idaho ... yet.
About a decade ago only 5 percent of new housing was in planned communities. Last year, 20 percent of new housing in the U.S. was in planned communities.

In Phoenix, 65 percent of new housing was in planned communities, according to Gerry Armstrong, Ada County Development Services director.

"You can see how far behind the curve we are," Armstrong said.
Idaho will not be behind the curve for long. Developers have set their sights on rural Ada County, with its sagebrush sea, quiet locales and scenic views, as the ideal place for planned communities. In the last couple of years, Ada County Development Services has seen a marked increase in developers wanting to submit planned community applications. The county went from processing two such applications in the past 10 years to juggling five applications so far this year alone, Armstrong said.

The county's first planned community, Hidden Springs, was approved in 1997 as a 1,035-home, 1,844-acre community with a nature conservation theme, to help preserve the environment and encourage wildlife-friendly yards. Today, about 500 homes have been built as well as a post office, charter school, office and retail buildings, and an organic community garden.
Avimor, the second planned community in rural Ada County (Harris Ranch is located within Boise city limits), was approved earlier this year. The 684-home, 830-acre community off Idaho 55 is adjacent to public land and will feature an extensive trail system. The developer plans to start building homes this spring. Construction will take about five years.

The county is poised to decide on a third planned community in the next couple of months. The Cliffs is a 1,350-home, 707-acre development with a nature conservation theme to be built atop Hammer Flat overlooking the Boise River east of Boise.
What is a planned community
A planned community, also called master-planned community, is a large-scale development featuring a wide range of housing prices and styles, a mix of commercial uses and an array of amenities including trails, parks, open space and recreational facilities. They characteristically emphasize social and local community services such as schools, community centers, libraries, worship sites and other public land uses.

Southern California's Irvine Ranch is one of the oldest and largest planned communities in the U.S. Started in the 1960s, the 93,000-acre community is home to about 230,000 people. More than half of its acreage is permanently preserved as open space and parks.
The philosophy behind planned communities is sometimes called "cradle to grave" or "stroller to walker" because the communities are designed to accommodate young single people, families and retirees. As people's housing needs change, they can remain in the same neighborhood or village. Also, several generations can live near each other.

"Master-planned communities have always been popular. Most well-executed (planned communities) are able to offer a lifestyle and sense of community that you can't get from a conventional subdivision," Neal Tsay, a vice president of Robert Charles Lesser, a national company that tracks the industry for developers, said.

Planned communities also offer residents certainty, according to Jim Heid, a national planned community expert. Residents can look at the master plan and know where schools, parks and retail centers will be.
If someone moves into a subdivision adjacent to empty land, the homeowner has no guarantees as to what could be built next their subdivision, Heid said. Residents also have no guarantees whether the city will provide parks nearby or whether trails that cross private land will remain open.

The primary focus of a development's planning effort is to create a particular environment, a sense of place. Some planned communities have themes — golf, tennis, equestrian, nature conservation or active seniors — providing residents a common bond with their neighbors.
The Headlees say Hidden Springs is meeting their expectations of what a planned community should offer.

"We love the sense of community that living here brings. It is a very easy place to meet your neighbors and make new friends," Paul said. "Besides the emphasis on open space and the environment, the community provides many social activities in a pedestrian-friendly environment."

The Headlees also like knowing what Hidden Springs future development will look like because certain architectural styles and landscaping are allowed.
The planned community lifestyle is not for everyone. The developments often have detailed guidelines for architecture and landscaping and strict covenants, codes and restrictions.

Laurie Barrera, a relocation specialist for SelEquity Real Estate, said she receives requests from both people who want the consistency of a regulated development and people who want fewer restrictions on their property. For instance, they may want to build a shop or other outbuilding or install a certain type of landscaping, such as xeriscaping, which may not be allowed in some subdivisions or planned communities.

"Some people don't mind strict (covenants, codes and restrictions) because they know what to expect; other people want more flexibility," Barrera said.
Lure of open space
Open space is important to L'Herisson. After careful consideration, she has decided living in a planned community can guarantee her access to open space more so than her rural home.
"When I move to Avimor, I will have thousands of acres right outside my door," L'Herisson said.

Land surrounding her rural 5-acre retreat is being sold. Gates and no-trespassing signs indicate the intentions of the developers or new owners, she said. Her regular walks have become shorter, her routes fewer.
"We can no longer live like we used to live here," L'Herisson said, freely walking or riding across their neighbors' land — honoring an unwritten agreement that even though it was private land, people could access it as long as they respected it.

She has lived on a farm or large multi-acre lots all her life. She likes the privacy and freedom to roam and wander the land. She knows the value of open space, and for suburban expansion she is a supporter of planned communities — mini-cities build on large tracts of land.

As more homes go up, open space disappears. L'Herisson thinks planned communities are a solution to this dilemma because homes are built in clusters with open space around them and the open space can never be developed, guaranteeing residents and the public the freedom to roam.
"I am avidly opposed to development of Idaho land in general, but when suburban sprawl starts to eat away at the West's open spaces that is were I am fully behind planned communities with a lot of open space preserved," L'Herisson said. "Humans need this contact with uncultivated, unpruned and natural land."

More than 60 percent of Avimor's 830 acres will remain open, natural space. The site borders several thousand acres of public land on one side and Hidden Springs planned community on another, which has its own trail and open space system.
Making them work
Planned communities in Ada County aren't without controversy. Ada County has its own planned community ordinance, as do Boise and Eagle.

Cities are concerned that remotely-located planned communities will strain their already limited resources.
Boise Mayor Dave Bieter has said he supports planned communities, but with a caveat: He does not support planned communities away from cities or transportation corridors or in the Foothills or other environmentally sensitive areas.

Proponents say private land is going to be developed anyway, and a 1,000-acre planned community is more comprehensive than a patchwork of 10 hundred-acre subdivisions.
In Ada County, the planned community ordinance requires wildlife and traffic plans, and at least 20 percent of the land needs to be open space or parks. The county also requires developers to provide for sewer, water, fire protection, parks and school sites. Developers also must pay for a percentage of the cost to provide law enforcement and other services, such as school busing to the area, until tax revenue from new residents goes into the tax rolls.

According Ada County's planned community ordinance, a development must "demonstrate that its utilities and services are self-supporting and not subsidized by residents living outside the community."

The county insists planned communities can be self-supporting and requires each developer to prove it on paper. But without a fully built-out planned community in Ada County to analyze, it is too soon to determine whether a planned community can be totally self-supporting.
Whether the Treasure Valley can sustain a dozen or more planned communities is not known. The Valley's population is expected to reach 1 million by 2027, but the market can be fickle.

"As long as planned communities are able to differentiate themselves from one another and know who their markets are and what their market position is, Boise could sustain a number of concurrently selling planned communities," Tsay said.

G.I. Joe's plans to open store in Meridian

Article published Oct 11, 2006
by Ken Dey @ Idaho Statesman

G.I. Joe's plans to open store in Meridian
Sporting goods retailer at Ustick and Eagle roads will employ about 70 people; opening set for May

G.I. Joe's, an Oregon-based sporting goods retailer, said Tuesday that it will open its first Idaho store in Meridian in May.

The 52,000-square-foot store will be located at the corner of Ustick and Eagle Roads in Meridian in the CenterPoint Marketplace, which will also be home to Idaho's first Kohl's department store.

The company announced early this year its plans to build a store in Meridian, but hadn't determined the location.
The new store is expected to employ about 70 people.

Norm Daniels, G.I. Joe's president and CEO, said the company is also exploring opportunities to build a store in Nampa, but didn't name a potential location.
"The area abounds with recreational opportunities, and as such there is a strong demand for the kinds of sports, outdoor products and services that G.I. Joe's is famous for," Daniels said in a statement. "The G.I. Joe's selection makes it possible for the advanced sports and outdoor enthusiast to find the expertise and technical gear they want, yet still allows the recreational or casual outdoor consumer to find what they need to get out there."

The Meridian store will include fishing, hunting and outdoor sports departments as well as a marine department for boat owners. The store is expected to have one of the largest ski and snowboard shops in the Pacific Northwest and a pro shop that will offer ski and snowboard maintenance.

The intersection of Eagle Road and Ustick Road is the latest major retail growth area for Meridian. Teri Sackman, executive director of the Meridian Chamber of Commerce, expects more large retailers are on the way to Meridian.
"The population center of the metro area is pretty much Eagle Road, and Meridian is the center of the Valley," she said. "There is plenty of land and good intersections where large stores can open."

Sackman said population growth in Meridian and the neighboring cities of Eagle and Kuna is driving the new business. Some of the larger big-box retailers also don't have the competition in Meridian that they have in other areas, she added.
Founded in 1952, G.I. Joe's is a privately held company that operated 25 full-line "sports, outdoor & more" stores in Oregon and Washington.

The expansion of G.I. Joe's to Idaho follows the August opening of the first Idaho store for Nebraska-based Cabela's. The outdoor retailer also indicated that it may build another Cabela's in Post Falls.

Meridian isn't the only location where G.I. Joe's is expanding. New stores are planned to open in both Bellevue and Kirkland, Wash. in the spring of 2007 followed in late 2007 with a new location in Spokane, Wash.

Monday, October 09, 2006

Nation's unemployment rate dropped

Last Week in the News
reported in Metro Capital Mortgage site

Employers added 51,000 jobs in September, less than half of the 120,000 positions analysts had expected, the Labor Department reported October 6. Despite the disappointing increase, the nation's unemployment rate dropped from 4.7% in August to 4.6% in September.

Service sector growth fell sharply in September to 52.9, down from 57 in August, according to the Institute for Supply Management (ISM). The ISM index was the poorest showing since April 2003 and far below analysts' expectations. A reading above 50 indicates economic expansion.

The nation's retailers, however, reported better-than-expected gains in September with the arrival of cooler temperatures and easing gasoline prices. The International Council of Shopping Centers' index of retail sales rose 3.8% in September. Kohl's reported a robust 16.3% gain in same-store sales (sales at their stores open at least a year) and Nordstrom registered a 13.4% rise in same-store sales.

Overall construction activity unexpectedly edged up 0.3% in August, the Commerce Department said October 2. While private home construction dropped 1.5% in August, the decline was more than offset by a 3.4% rise in nonresidential construction, the biggest one-month increase since a 4.1% gain in September 2005.

For the week ending October 6, interest rates on 30-year mortgages fell to a seven-month low, Freddie Mac reported. Rates have been headed lower as financial markets have become convinced that a slowing economy will keep the Federal Reserve from raising interest rates.

This week look for updates on the trade deficit on October 12.

Sunday, October 08, 2006

Boise leaders look at plan to enhance quality of life

Article published Oct 8, 2006
by Kathleen Kreller @ Idaho Statesman

Boise leaders look at quality of life
Long-term plan tries to improve air quality and fund a detox center

Boise leaders are working on a long-term plan intended to improve the quality of life for residents and maintain it for the next generation.

Over the next several months, city leaders hope to finish up a detailed plan to govern everything from funding a new detox center to building sewer lines to improving air quality.

The strategic plan was one of Mayor Dave Bieter's top goals when he took office in 2004. In part, Bieter called for a strategic plan to avoid future scandals like the travel and spending debacle that sent former Mayor Brent Coles and his chief of staff to jail.
"The council was marginalized by the Coles scandal," said Councilwoman Maryanne Jordan. "We have a responsibility to break some of those habits."

Creating and implementing a strategic plan is not an easy task. The plan is broad and encompassing. And the city still has a long way to go before the document is honed down to specific tasks, timelines, costs and accountability.
The goals are tied a real-world budget and the plan provides an avenue for staff to give input and to measure its success.

The city has hired a consultant team to keep it focused and help nail down details.

"The next two-year budget is when we start this. I want to see some progress," Councilwoman Elaine Clegg said during a Friday workshop. "No organization can change immediately."
The city budgets for two years at a time, so Bieter's administration inherited the 2005 budget from former interim Mayor Carolyn Terteling-Payne.

Bieter's goals for fiscal year 2007 include finishing Boise Blueprint, which addresses redevelopment and city expansion, funding a detox facility and launching a 10-year plan to end homelessness.
To achieve those goals, the strategic plan lays out focus areas for each city department, like healthy urban environments or new transportation systems.

The business world regularly creates similar plans. The strategic plan — which is typically used for years — is basically a business plan for city departments. The goals and objectives in the plan were generated from an in-depth 2005 citizen survey.

Next steps include the consulting team meeting with departments to finish up work plans on how they will implement the strategic goals.
"The city should be doing this," said Chris Blanchard, assistant to the city council. "How are we performing for the citizens? If we aren't thinking in that way, we are really off the mark."

Unemployment remains stable

Article published Oct 7, 2006
by Joe Estrella @ Idaho Statesman

Jobless rate stays below 4 percent for 17 months; nationwide, new jobs fall short

Idaho's jobless rate remained unchanged at 3.3 percent in September, while unemployment in the Treasure Valley fell one-tenth of a percentage point to 2.8 percent.

State officials touted numbers indicating that all but 100 of the 2,800 people entering the labor force last month found jobs.

"When you have the labor force grow that much, and the job market grows to match it, that's pretty good," said Commerce and Labor spokesman Bob Fick.
Nationwide, however, the employment picture was not as bright. The Labor Department reported that U.S. employers added just 51,000 jobs in September — the fewest in almost a year — as the unemployment rate dropped one tenth of a percentage point to 4.6 percent.

Idaho's jobless numbers last month marked the 17th straight month that the unemployment rate has been below the 4 percent mark that economists consider full unemployment.
Fick said the strength of the local job market continues to make it hard for Idaho businesses to attract workers.

Earlier this week, he said, Micron Technology was advertising for workers on a billboard located on the south side of The Connector near downtown, while Qwest Communications was advertising on the side of city buses for workers at its local call center.

"And our Commerce and Labor Offices are reporting new job fairs almost every week," Fick said.
Meanwhile, the amount of payroll added nationwide in September fell short of the 120,000 new jobs analysts expected. Helping to take the sting out of September's tepid payroll figure, however, was news that July and August employment numbers had been revised upward by the Labor Department.

The lower-than-expected employment numbers for September was enough to halt three straight days of record-setting gains on Wall Street. The Dow Jones industrial average was down 16.48, or 0.14 percent, at 11,850.21 Friday, down from the record close of 11,866.69 a day earlier.
Broader stock indicators also fell Friday. The Standard & Poor's 500 index was down 3.64, or 0.26 percent, at 1,349.58, and the Nasdaq composite index fell 6.35, or 0.28 percent, to 2,299.99.

The jobs report gave investors further confirmation that the economy is slowing. But Friday's Wall Street decline indicated they're concerned that the economy might be moderating too much.

Investors were hoping that a slightly weak report would further the notion that the economy had slowed enough to allow the Federal Reserve to consider a cut in interest rates.
"We've had a market that wants to see bad news as good news with respect to the Fed," said Bryan Piskorowski, a market analyst at Wachovia Securities LLC.

"(Now the) economy is slowing, the housing market is slowing, consumer spending is starting to slow. You run that tightwire where good news eventually becomes bad news."

Proposed growth in Star

Article published Oct 7, 2006
by Katy Moeller @ Idaho Statesman

Proposed growth in Star raises questions about city services
City Council will consider 507-acre planned community on Oct. 17

Up to 1,800 homes could be built in Star as part of a 507-acre master planned community. That's a lot of homes for a city of about 5,000 — particularly one headed into a recall election Nov. 7 because of growth-related issues.

"There's nothing else in Star that will be this big," said Dave Roylance, president of the Idaho Division of Sacramento-based Corinthian Homes and developer of the community.

The Star City Council approved annexation of the east Canyon County property earlier this year, contingent upon approval of the development agreement. While the Corinthian property is in Canyon County, the rest of Star sits in Ada County. A public hearing is set for the Star council's Tuesday, Oct. 17, meeting, a city officialsaid Friday.
Corinthian's proposal to build a planned community is part of a trend in the Treasure Valley. Ada County alone is now processing applications for five planned communities. Advocates of planned communities tout their holistic approach to building — they don't create gigantic mazes of homes disconnected from the rest of the community. They aim to meet the broader needs of residents, creating nearby opportunities for shopping, school sites, library branches and other amenities.

One of the things that makes the Corinthian proposal unique in the Valley is that the little city of Star is experiencing big turmoil over how it should grow. Mayor Nate Mitchell and three members of the City Council face a recall election prompted by a group who says the council is pro-growth and isn't adequately planning for its impacts.
The proposed East Canyon planned community also requires Star to grow across a county line — so the city would straddle Ada and Canyon counties.

That raises all sorts of jurisdictional questions:
• Which agency will provide police protection in the Canyon County section of the city?

• Who will maintain the roads and highways?

• Which schools will the students attend — and will there be room?
• Does the Star Sewer and Water District have the capacity to serve all those homes, along with growth in the rest of the city?

Roylance touts the East Canyon development — which will include commercial space on both the north and south sides of Idaho 44 and at least one school site — as a place where people can live, work, shop and play.
That could be comforting to anyone reading the traffic study done for the development.

The traffic study by Stanley Consultants projects an additional 28,436 vehicle trips per day to the area. It lists impacts on specific roads as well: 12,670 vehicles per day on Idaho 44 east of the site; 3,170 vehicles per day west of the site; 6,420 vehicles per day on Can-Ada Road.

The traffic study had considered the East Canyon development when 1,166 homes were proposed — hundreds of homes fewer than what's now on the table.
Roylance points out that Corinthian's proposed 1,800 homes won't appear all at once. He said development of the community is market-driven and could take as long as 15 years to complete.

So if road-widening is needed to accommodate the added traffic, who will pay for it?
"There is no funding for widening the highway (Idaho 44) at this time," said Molly McCarty, a spokeswoman for Idaho Transportation Department.

McCarty said the department receives $200 million more in road improvement requests than what it can fund.

Roylance said Corinthian Homes understands that and is prepared to pay for some or all of the road-widening costs for Idaho 44 and Can-Ada Road.
"We have a responsibility to deal with traffic impacts attributable to our project," he said.

Roylance, an engineer and longtime Treasure Valley resident, had his own development company before joining Corinthian Homes this year. His company developed Eagle's Lexington Hills, a 600-home subdivision that some say sets the tone for larger high-end projects in the city.
Corinthian Homes will work with the Middleton School District to help accommodate the district's needs for a future school site, Roylance said. He said that wouldn't necessarily mean the donation of a site; it might mean that the land could be sold to the school district at a discounted price.

Middleton School District Superintendent Richard Bauscher sent a letter in May to Corinthian Homes and the city of Star requesting donation of a minimum of two sites, totaling 80 acres, for an elementary and high school.

Bauscher said his district already has three other donated elementary sites. The district has a greater need for another high school site.
Who will provide police protection in the Canyon County section of Star is unclear.

"My understanding is that we will patrol it," said Ada County Deputy Ken Ramage, who runs the Star unit.
But Canyon County Sheriff Chris Smith had a different impression Friday.

"If it's in Canyon County, it's our responsibility, even if it's not our contract," Smith said.

What about roads?
Timothy Richard, district engineer for Canyon Highway District No. 4, said the district would maintain the roads in the Canyon section of Star.

"We are obligated (by law) to maintain roads within any city that does not have a functioning street department," Richard said.
The highway district is asking the city to send property taxes collected for road maintenance to the district. Star may be entitled to a portion of the tax collected for roads, but the highway district hopes to see all of it be sent to them.

The issue of sewer and water capacity is clearer.

Hank Day, maintenance and operations foreman for the Star Sewer and Water District, says the sewer plant currently has an excess capacity of 2,000 equivalent dwelling units and can easily expand capacity.
As for water, the district has two wells and another one was recently drilled, though it's not on line yet. He said they have plans for several more wells.

Friday, October 06, 2006

'Flat' home prices expected in Idaho

Article published Oct 6, 2006
by Joe Estrella @ Idaho Stateman

'Flat' home prices expected in Idaho
Construction industry job growth could shrink, but report sees state doing better than many areas of the U.S.

Two reports released this week produced some good news for the slumping single-family housing sector in Idaho, but not so good news for the state's surging employment market.

The good news is that the current dip in Idaho real estate activity will be "less painful" to home sellers than to those in other parts of the country. The bad news is that fewer residential real estate transactions threatens to undermine construction industry job growth that has been fueling the economy.

Mark Zandi, chief economist at Moody's, said Idaho home prices will be "flat" next year, compared to other parts of the country. Elsewhere housing values could fall as much as 3.6 percent in 2007, the sharpest decline for an entire year since the Great Depression.
A 195-page report co-authored by Zandi is forecasting lower housing values next year in 133 of the nation's 379 metropolitan areas.

"Idaho was late to the (housing) boom. It has only seen rising prices for the last few years, compared to other areas that have seen double-digit increases for the last five or six years," Zandi said. "So I expect that the market there will go nowhere, and a year from now, we'll see Idaho prices where they are right now."
Zandi said flat home prices actually will be a blessing for the Idaho industry. If housing prices were to continue to rise at a time when sales stalled, then the homeowner would have to slash prices to attract buyers, which in turn would drive down housing values.

The Treasure Valley has already shown signs of a real estate slowdown, with overall home sales falling 13 percent in July and 25 percent in August when compared to the same months a year ago.

Helping to keep area housing in the doldrums for sellers is a growing inventory of unsold homes on the market. According to, there were 6,938 Treasure Valley homes on the market on Monday, an increase of 88 percent in the last five months.
Boise State University economics professor Don Holley predicted that the glut of homes will initially hurt the small homebuilder "who has everything tied up in eight or 10 unsold homes."

But George Tallabas, a local realtor with ReMax Advantage in Nampa, said even large builders have had to resort to concessions that would have been unheard of last year. One of the most recent instances involved a large area builder who is offering realtors an additional $10,000 for finding a buyer willing to close on a new home, he said.
John Eaton, government affairs director for the Idaho Association of Realtors, said current sales should not be compared against 2005 figures. Those were skewed by an influx of outside investors looking for undervalued homes to convert into rental properties.

"We're seeing less of that now, so we're returning to a more normal, but still very hot, cycle," Eaton said.

But the recent housing retreat threatens the state's robust job market, according to a Federal Deposit Insurnace Corp. State Profile of Idaho released Thursday.
In its quarterly snapshot of economic activity in the state, the agency reported that Idaho led the nation in job creation during the second quarter of 2006.

Between June 2005 and June 2006, a total of 31,367 jobs were created in Idaho, led by 8,200 construction industry spots, said Shayna Olesiuk, a regional manager with the FDIC regional office in San Francisco.
However, the report said that a second quarter decline of 5.6 percent in building permits from the same period a year ago has "possible adverse implications for overall job growth and the demand for construction financing."

"But Idaho has a lot going for it. It has a high in-migration of people from other states, as well as a high level housing affordability," Olesiuk said.

Eagle stakes out a role in Foothills development

by Cynthia Sewell @ Idaho Statesman
Article published Oct 6, 2006

Eagle stakes out a role in Foothills development
City tries to ensure that large planned communities, which may be annexed, will fit with its vision for Eagle

A large swath of land in the Ada County Foothills is not part of Eagle, but the city is getting in the game to help mold how those 50,000 acres will be developed.

"We will probably inherit this land at some point," Eagle Mayor Nancy Merrill said. "Everything that is above us is going to come through us one way or another."

The possibility of annexation has Eagle officials trying to ensure the development meshes with the city's vision of a well-planned community. They want the city to stay true to its rural roots with amenities for outdoor recreation.
Up to 30,000 more homes are planned for the area by developers, who have snapped up large parcels of bare land in the Foothills in last couple of years.

And if the number of homes is bound to double or triple in the Eagle area, Merrill wants it under Eagle's purview to ensure that city roads and services don't become clogged from development over which the city had no say.
Ada County and Eagle are simultaneously creating plans to guide development in the Foothills north of Eagle between Idaho 16 and Idaho 55. The undeveloped land is under the county's jurisdiction, but that is not stopping Eagle from planning the area’s future.

Eagle is putting the time and effort into planning the area because if it were to be annexed into Eagle, the balance of power would shift from the county to the city.

One landowner, M3, already has requested annexation of 6,000 acres where the company wants to build a 12,000-home planned community.

Another landowner, SunCor, has asked Eagle to include its 20,000 acres -- which extend into Boise and Gem counties -- in the city’s comprehensive plan, setting up the basis for potential annexation.

If these two parcels alone came under Eagle’s fold, and M3 and SunCor each build 12,000 homes, Eagle’s population would increase from 20,000 to about 80,000.

Eagle would expand from about 15 square miles to 56 square miles.

By comparison, Meridian now covers about 25 square miles and has a population of about 70,000.

SunCor is keeping its options open as far as annexation into Eagle, said Bob Taunton, SunCor Idaho president.

In February, the county approved SunCor’s application to build Avimor, an 830-acre, 684-home planned community.

In its Sept. 22 application to be included in Eagle’s comprehensive plan, SunCor stated that its experience with the county during the Avimor process and since has “brought the viability of future planned communities in the Foothills into

The draft (county plans) are ambiguous about their support for planned communities.”

SunCor also stated, “Avimor is currently outside the area of impact for the city of Eagle. Therefore, the city’s policies do not address (Avimor’s) property.

Without inclusion of the Avimor property in the comprehensive plan, future annexation would be unlikely.”

SunCor told Eagle that future phases of Avimor would cover 6,290 acres of SunCor’s 20,080-acre parcel, which stretches from Idaho 55 on the east to Willow Creek via Big Gulch on the west.

The northern boundary reaches nearly five miles north of the Ada-Gem county line.

Contact reporter Cynthia Sewell at cmsewell@ idaho statesman. com or 377-6428.

Business Professor promotes Boise's creative potential

by Anne Wallace Allen @ Idaho Stateman
Article published Oct 5, 2006

Business professor promotes Boise's creative potential as economic resource
Napier will conduct workshop Oct. 12-13 on how to keep creativity thriving in Valley

The potatoes are well known; so are the microchips.

Now, as Idaho competes in the world market, a Boise State University professor is looking for ways to promote another valuable state export: the creativity that has led to the success of the state's strongest industries.

Nancy Napier, professor of international business, will host her third workshop on the creative economy Oct. 12 and 13 .
The gathering of experts is aimed at helping business, education and other leaders focus on how creative work has helped Idaho's economy thrive, and how they can keep that creativity strong.

"If we're not doing something systematically, they're going to pass us by," Napier said of other countries that have focused in past decades on building creative industries including the arts, film, design and architecture, and software. "There's evidence that's happening."
Napier, a 20-year employee of BSU, believes that creative thinking has been such an integral part of pioneer cities such as Boise that it's now taken for granted. She wants business and public leaders to pay more attention to the notion of creativity, and to manage creative areas and make them stronger.

Napier closely follows the work of author Richard Florida, an economic development guru whose best-selling "The Rise of the Creative Class" theorizes that the most successful cities are the ones that attract highly educated creative workers.

After discovering Florida's work a few years ago, Napier started taking a close look at key Idaho organizations that have used creativity to excel — such as BSU's Bronco football team; the Idaho Shakespeare Festival; and ProClarity, a Boise-based software company that was recently purchased by Microsoft.
What she learned energized her. In an essay she wrote after studying those entities, she said Boise and Idaho — once little known by outsiders — were coming to be seen as a place with a high quality of life and good business environment that attracted a new wave of pioneers: creative people looking for a place to do their work.

"We have super-high technology and super-high talent," said Napier of people working in high-tech Boise jobs. Well-educated creative people are likely to support arts and education, Napier said. And those entities, in turn, attract other creative people.
"You've got smart people with talent who want to live in a nice place," Napier said. "They come to places like this, and they find interesting things to do, and they create interesting things to do. That kind of thing is likely to attract entrepreneurs."

Creativity is a new or original idea that fits its context and has value. Napier uses as an example the Idaho Shakespeare Festival, which has adapted its performances to appeal to Boise's audience of outdoor-loving, modern theatergoers.

The festival is hugely successful — 53,000 people will attend its shows in Boise this season, said its producing artistic director, Charlie Fee. That's more than 10 percent of the city's population.
"As you start to invest in the arts, the community takes on a whole new, psychological setting, which is this is a hip place to be," said Fee, who moved to Boise in 1991 to lead the Festival. "That generates more interest for the businesses, and then you get more interesting people moving to Boise."

Where the arts are concerned, Boise already has a lot of offerings — its relative remoteness long ago spurred its residents to support the symphony, the ballet, and opera.
But now other cities — including many in northern Europe that Napier has studied — have started promoting those creative industries and others such as film, and Napier thinks the United States is starting to drop behind.

"This is a competitive issue long-haul for the U.S.," she said.

Idaho has all the assets it needs to pull ahead of its competitors, Napier said. First, creative people who can choose where they live are likely to choose Idaho not only because it has some strong cultural offerings but because it's easy to get around, is relatively inexpensive, and has very accessible outdoor activities. In fact, nature might make people more creative, she said.
"In Idaho, the air is so big, the sky is so big, that people are so open that they have no borders in their thinking," she said.

Then there's Idaho's pioneer tradition.
"There's an openness and a grittiness that you have to have to live in this part of the country," Napier said. "Everything's not already there; we're creating it as we go, so to speak."

Idaho is so small that you can make things happen faster than you could somewhere else, she added.

"Everybody is accessible; I can get in to see the governor if I want to, a lowly professor"
But she said political leaders must continue working to make Downtown attractive, and businesses must keep encouraging workers to find new and better ways of doing things. Her workshop this month will have teams of workers from various Idaho organizations focus on creative problem-solving with a Canadian professor, Min Basadur.

"We've gotten costs down as much as we can; we've used technology in so many ways, but it's that creativity spark we need," she said.

Monday, October 02, 2006

Lender remain hungry for commercial building projects

by Brad Carlson @ Idaho Business Review

Interest rates moved up and down this year, but lenders’ appetites for new commercial real estate projects stayed steady in the Treasure Valley.
Developers typically take out long-term financing to replace a short-term construction loan after signing income-producing occupants.

Moves by the Federal Reserve Board to raise short-term interest rates at 17 consecutive meetings – during a two-year period through June – affected construction loan rates more than rates on long-term loans, said Jim Klumpp, partner in Boise commercial mortgage brokerage Harty Capital Corp.

Interest rates on long-term loans are primarily tied to the bond market’s perception of inflation and economic growth, he said.

Yields on 10-year U.S. Treasury bonds rose from around 4.4 percent at the start of the year to 5.24 percent in late June, according to Yahoo Finance. The yield was 4.6 percent last week.

Klumpp said long-term lenders got more active as Treasury interest rates fell recently, but that lending activity never really slowed this year.

“Overall I think their underwriting is becoming more rigorous on general concerns of overall economic health,” he said. “But they remain really active.”

Recent declines in Treasury yields sparked additional financing activity by long-term lenders and brought 2006 volume to a level that’s pretty consistent with last year, Klumpp said.

“The lenders are active. There are ample funds out there of long-term financing,” he said. “That part is working well.”

Brokers at Harty Capital remain busy.

“With Boise being a strong growth market population-wise and job-wise, there is a lot of interest from long-term lenders in the market,” Klumpp said. “So we have been doing all product types.”

“The challenge with commercial is to make it economically feasible,” said Rob Perez, senior vice president with U.S. Bank in Boise.

Rents haven’t kept pace with rapid increases in land and construction costs, he said.

Nevertheless, long-term lenders’ demand remains strong, Perez said.

“Long-term lenders have reduced spreads and offset some of the rate increases early in the year,” he said. “They reduced spreads because of demand for product.”

Banner Bank Vice President and Commercial Banking Officer Margaret Sato said some residential builders are feeling the impact of higher interest rates on construction loans.

Construction loan interest rates are tied to the Prime Lending Rate that banks charge their best customers, or the London Interbank Offered Rate, she said.

Prime has stayed at 8.25 percent since June, after steadily increasing two years earlier from 4.25 percent.

“It can be pretty significant, and if they are sitting on inventory, it gets pretty painful,” Sato said.

She does some commercial construction lending as well. “That certainly has not dried up,” she said.

“We’re very aggressive, very optimistic,” said Winston Moore, principal in Meridian-based developer W.H. Moore Co. “You still have to have the right location and the right product. You have to build what people want, and, of course, you have to be able to compete.”

Retail is the strongest segment, and office leasing is softer, he said.

On the industrial side, average vacancy dropped in the past year as two big buildings attracted buyer-occupants and high land prices encouraged some developers to postpone projects, Colliers International real estate broker Steve Foster said at a recent conference.

General Growth Properties Inc., the publicly traded company that owns the Boise Towne Square mall, reported that its real estate property net operating income for the second quarter rose by 6.3 percent from a year earlier.

Washington Trust Bank’s construction-loan production is up a bit from 2005, says Dean Oberst, southern Idaho and Utah senior vice president for income properties and builder services.

Idaho Trust National Bank opens in BoDo


Idaho Trust National Bank opened last week at 888 W. Broad St., Boise, in the BoDo development downtown.
The 12-year-old company recently expanded into business and personal banking, making Idaho Trust the first new bank to open in Boise in a decade.

Syringa Bank was Boise’s last new bank, opening in February 1997, although existing banks have entered the market in recent years.

Idaho Trust National Bank employs 32, has $50 million in assets and manages about $360 million in client assets. Officials said the expansion into business and personal banking was in response to clients’ requests for a single-source banking solution.

Former trust and estate attorneys Dan and Tom Prohaska founded Idaho Trust and are CEO and president, respectively. A few years ago they moved the headquarters to Boise from Coeur d’Alene, where the company operates an office.

Phil Bratton is executive vice president of Idaho Trust National Bank. He has been involved in numerous bank start-ups, mergers and acquisitions in nearly 30 years in the banking industry.

Idaho Trust was vacating a downtown Boise office space at 300 Main St. last week.

The bank targets professionals and owners of small businesses.

Officials said Idaho Trust combines business and private banking with a concierge service, filling a void created in the 1980s and ‘90s when consolidation transferred many trust and investment services from local offices to out-of-state service centers.

The community banks that opened during the period restored a level of personal service, and chose a traditional banking approach, Tom Prohaska said in a statement.

“By starting instead with trust administration and investment management, and then adding business and personal banking services, our approach acknowledges the synergy between our clients’ business activities and personal wealth management needs,” he said.

“Added to this is a service mentality that respects their accomplishments while helping them move to the next level in their financial life.”

Foothills projects

by Lora Volkert @ Idaho Business Review

Dorothy McKay’s request to Boise Planning and Development Services seems fairly straightforward.
McKay owns eight acres that she wants transferred from one planning area to another. Her parcel was orphaned in a land swap between the cities of Boise and Eagle. It’s separated from the rest of the land in the planning area by a road, a canal, a cemetery, a subdivision and a landfill. It no longer has much of anything in common with the rest of the area.

McKay may sell the land one day for residential development, according to her application to the city, and the change would allow a developer to build four units to an acre instead of one.

There’s just one problem: The land is in the Foothills Planning Area.

The planning staff has decided to recommend that the city approve her request, Comprehensive Planner Bruce Eggleston said. The parcels, located on Hill Road Parkway, are flat, not hilly. There are no threatened or endangered species on the land. Any scenic values the land may once have held were lost when Dry Creek Cemetery, the landfill and the subdivision were built.

But that doesn’t stop it from being a touchy subject to bring up.

“‘Tricky’ is a rash understatement,” Eggleston said when asked how tricky it is to deal with Boise Foothills land.

People get emotional about the Foothills, he said. “They’re the identity of all Ada County, especially Boise.”

So even in seemingly clear cases like McKay’s, city planners have to be doubly careful when evaluating requests and provide a clear justification for their decisions, Eggleston said.

“We don’t want to establish a precedent where just any land could be taken out of the Foothills,” he said. “The standard has to be as high as possible.”

It’s especially important to set good standards now. For the last four years, the city hasn’t had a single application for a building or a zone change in the Foothills area, Eggleston said. But that’s changing.

Harris Ranch plans about 350 housing units in the Foothills in its next phases. Avimor and The Cliffs are planned entirely in Foothills areas. Kastera Homes is working on feasibility studies and preliminary plans for a 270-acre Foothills development around Hill Road and 28th Street, and Capital Development is doing the same for a 160-acre development across Collister from Quail Ridge in the Foothills.

Developers want to be seen as doing their part to develop responsibly and preserve as much of the Foothills as possible.

Wayne S. Forrey said Kastera is working with the city to analyze what areas of the land the company purchased need to be preserved and made accessible to the public, and what areas are appropriate for development.

“We don’t want to be an insensitive developer,” he said. “We love the Foothills as much as your readers do. Just because we own the land doesn’t mean we can’t be good stewards of the land.”

Avimor developer SunCor plans to preserve open space within the planned community and make the trails it builds in those areas available to the general public, said developer Bob Taunton. It also sited the community in a way that would minimize any changes to the view from the highway.

“We approached what we’re doing from the standpoint that we want the community to have a benefit to the region beyond the residents in there,” he said.

But some citizens are bound to be upset by development in the Foothills.

“I think you build up there, you’re going to step on somebody’s toes,” said Jeannette Duwe, spokeswoman for Skyline Development, which plans to build The Cliffs.

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