POCATELLO — A day before private developers will host public tours of the Northgate project area, Pocatello officials told the Journal that the city will not reimburse those developers for nearly $750,000 spent on infrastructure improvements to Olympus Drive completed earlier this year.

On Thursday afternoon, city spokesman Logan McDougall confirmed that one of the private developers, Buck Swaney of the Utah-based Millennial Development, rescinded the request for the reimbursement. The Pocatello City Council had been set to vote on the request during its regular meeting on Thursday evening.

“It’s a relief,” Pocatello City Councilman Roger Bray said about the rescinded reimbursement request. “I didn’t want to pay it in the first place because I thought that I should have been a participant in the decision to approve the work.”

Northgate’s private developers — Millennial and the Chubbuck-based Portneuf Development — had completed improvements to about 900 feet of Olympus Drive from the Chubbuck Road intersection to Jerome Street. That section of Olympus, located in both Bannock County and the city of Pocatello, was widened from two lanes to four and received electrical, water, sewer and communication utility upgrades.

Swaney presented the Pocatello City Council with the $744,655 reimbursement request on Oct. 23, at the time claiming the private developers did not originally agree to pay for the Olympus Drive improvements when the Northgate public-private partnership was created last year.

Swaney said that he had provided Pocatello Mayor Brian Blad with a general estimate of how much the improvements would cost, but the first time the Pocatello City Council learned about the work and the developers’ request for reimbursement was on Oct. 23.

Swaney said at the Oct. 23 special City Council meeting that Millennial Development and Portneuf Development were responsible for paying for only the widening and upgrading of Olympus Drive from its intersection with Chubbuck Road north to the proposed site for the Interstate 15 interchange. Swaney said the developers paid for the additional Olympus Drive improvements from Chubbuck Road to Jerome Street after receiving a verbal commitment from Pocatello Mayor Brian Blad that they would be reimbursed.

Bray said Swaney withdrew the developers’ reimbursement request from consideration because city of Pocatello officials uncovered an agreement that stated the developers were in fact responsible for paying for all of the Olympus Drive improvements from Chubbuck Road to Jerome Street.

“Initially, the city committed $450,000 to do the improvement we needed on Olympus Drive from Jerome Street to Chubbuck Road as part of our overall contribution to the project,” Bray said. “Later, when (the developers) needed the money to go to the (interchange construction) itself because of state requirements we moved that money over to the (interchange). There was an agreement that amended the initial agreement and recorded the transition of those funds. That agreement left the developers responsible for paying for this extra work.”

Evidently that agreement was forgotten about, Bray added.

“We had an entire meeting that seems to be for not,” Bray said about the Oct. 23 City Council session. “When the amended agreement was brought forward by (city) staff, my understanding is that the developers rescinded the request.”

Swaney did not return phone calls from the Journal for this story.

Bray said he does not think this incident will create any tension between the private and public partners involved with the Northgate project. The private partners are Portneuf Development and Millennial Development while the public partners are the cities of Pocatello and Chubbuck, Bannock County and the Idaho Transportation Department. The Pocatello Development Authority, an independent public entity that has a wide range of authority to effectuate local urban renewal projects such as Northgate, is also involved with the project.

The private and public entities involved with Northgate are collectively paying more than $20 million to construct the Interstate 15 interchange at Siphon Road and Olympus Drive with the belief that it will usher in an era of massive industrial, commercial and residential growth in the Northgate area — the undeveloped land along the Interstate 15 corridor north of Pocatello and east of Chubbuck.

The Idaho Transportation Department announced on Thursday that Cannon Builders of Blackfoot will begin construction on the much-anticipated Interstate 15 interchange on Monday. Bray said the construction will continue through the winter, adding that inclement weather will likely limit how much work Cannon can complete. ITD officials said the interchange will be finished by August 2019 at the earliest.

To assist with paying for the infrastructure needed to provide for future economic development in the Northgate area, the city of Pocatello is planning to create a new tax increment financing, or TIF, district there. Most of Northgate has already been annexed into Pocatello.

A TIF district is an economic tool that municipalities use that involves earmarking increases in future property tax revenues that result from increases in real estate values in the TIF district — a developing area such as Northgate — to pay for public infrastructure improvements in that area or to compensate private developers for their investments.

Bray said the PDA told the Pocatello City Council on Thursday that the necessary financing for the TIF district is feasible.

But Bray said he still has concerns about providing municipal services inside the Northgate TIF district if most of the property tax revenues in the district are set aside to pay for the infrastructure improvements required for Northgate — such as roadwork and water, sewer, electrical and communication utilities. If the property taxes paid by the future residents and businesses in Northgate are going to pay for the infrastructure needed to develop that area under a TIF district arrangement, the rest of Pocatello’s residents and businesses would end up collectively paying for the city services such as police and fire protection, sanitation and street services that Northgate would require.

“What we have not addressed yet in my opinion is how much it will cost those who are taxpayers in Pocatello living outside of the Northgate area to provide municipal services in that TIF district,” Bray said. “There will essentially be no property taxes coming in for Pocatello or Bannock County services (under a TIF district), including street, fire and emergency operations.”

Public tours of the Northgate project area are set for Friday and the private developers have invited the public to see the new Olympus Drive extension, Northgate Parkway, the Interstate 15 interchange site and other key locations within the Northgate area. Bus tours will start at 10 a.m., 11 a.m., noon and 1 p.m. Friday and will leave from the Portneuf Wellness Complex main parking lot. A bicycle tour starts at 2 p.m. Friday. Participants are encouraged to bring their own bicycles 15 minutes beforehand to the Wellness Center’s main parking lot where the tour will embark from.

For more information on the tours, call 801-694-4279 or email buck@mdp.land.