Struggling downtown Boise businesses could get whacked with a big tax bill for a trolley to nowhere if a funding scheme is created to go around the will of the voters.
Rather than put the funding straight forward to a vote of the citizens, they are exploring the creation of a LID–”local improvement district.” LIDs are allowed under Idaho law and require only a majority–in some cases a 60% majority–of property owners adjacent to the project or that will benefit from the project to sign a petition creating the LID.
Most often this funding mechanism is used to finance sidewalks, curb and gutter, and sometimes sewer and water improvements. The obligation lasts for about 20 years to cover the debt and is simply added onto the tax bill.
Here is the dirty little secret: Downtown Boise has many more businesses than it has property owners. Merchants rent space and most commercial leases are written to benefit the landlord as “triple net leases.” One important element of such a lease is a clause that obligates the lessee to “pay any tax increases.”
What this means in effect is that a handful of property owners can impose tax hikes (rent increases)
on a bunch of businesses whether they like it or not. Such a monthly increase could sound the death knell for struggling merchants in these hard economic times.
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