Frequently Asked Questions

Funding occurs through tax increment financing; a taxing concept for economic redevelopment. The basic idea is simple: future tax revenues pay for revitalization efforts. The City Council, acting on the recommendations from the Ketchum Urban Renewal Agency (KURA), draws a line around an area (Revenue Allocation Area) and identifies desirable improvements or concepts within that area (Urban Renewal Plan). The KURA issues urban renewal bonds to pay for the identified improvements, or pays for these improvements directly out of the tax revenue, often called “pay as you go”.  As property values increase in the area due to new investment, the rise in property tax revenues (called “tax increment”) is used to pay off the urban renewal bonds. This financing method is called tax-increment financing, and it is the most common method of paying for improvements in an urban renewal area.

Like almost all urban renewal agencies across the country, the Ketchum Urban Renewal Agency relies on tax-increment financing for funding.   That means that when the agency was created, it had no funds available for projects because no property tax revenue had been collected.  So, like many young URAs, the KURA jump-started its revitalization efforts by borrowing money.  Those borrowed funds (approximately $5.6 million) were used to help develop the Fourth Street Heritage Corridor and to invest in two properties that were deemed good strategic investments (491 Sun Valley Road and 211 First Street East).  In 2010, the KURA refinanced the debt by issuing municipal bonds and repaying the initial three lenders.  For the past five years, the KURA has collected property taxes, and is now using that revenue for repayment of the debt and general operations.

The vast majority of the funds have been used to service the debt, as well as to build up a separate fund dedicated to future debt repayment (which was recently fully funded).  Other projects include:

• Investment in the development of the Fourth Street Heritage Corridor
• Investment in the Walkable Ketchum project
• Purchase and improvements to the Visitors Center building at 491 Sun Valley Road (at East Avenue)
• Purchase of the properties at First Street and Washington Avenue which is currently being leased to the City of Ketchum for public parking
• Investments in the development of the Downtown Master Plan and the 2010 Urban Renewal Plan
• Construction of sidewalks in the downtown including the Warm Springs Sidewalk
• Funding for the Atkinson Park Tennis and Pickleball Courts, and the expansion of the Guy Coles Skate Park

An urban renewal agency can undertake a variety of projects and tasks to help revitalize an urban area.  In Ketchum, the agency’s emphasis has been on the installation of public improvements so as to encourage private investment and development.  The work includes everything from planning and prioritizing which projects to undertake, working and partnering with developers to pursue and implement projects, investing dollars in public resources and strategic properties, and managing the facilities it owns.  The overarching goal of all of the KURA’s activities is revitalization and ensuring the City’s economic health.

The average interest rate is 5.37% and the average life is 16.3 years.  The average annual interest payment by the KURA is approximately $400,000.

Urban renewal is a program, codified in state law, designed to help communities improve and redevelop areas that are physically deteriorated, unsafe, poorly planned, under-developed or in need of redevelopment. All fifty states have some form of urban renewal legislation. Urban renewal began over fifty years ago as a federal program to improve inner city housing.  It has evolved from a big-government program of large-scale inner city demolition to a local, collaborative process aimed at strengthening existing communities by creating a revenue stream to fund projects of value to the community.  Though it has undergone many changes since its inception, urban renewal has endured as an effective way for cities and towns to make capital investments into their future.

Legislation enabling urban renewal in Idaho dates back to 1965.  (See Idaho Code, Title 50, Chapter 20).  Today, there are 42 Urban Renewal Agencies throughout the state, from Boise to smaller rural communities such as Driggs.  A city can create an urban renewal agency by ordinance.  Once created, they are independent of the city government and, by law, may use tax increment financing to finance the economic growth and development of urban renewal areas.