The word “Northgate” has definitely become part of the Pocatello area’s vocabulary.
Northgate refers to an 1,800-acre section of northeast Pocatello where Millennial Development of Utah and Portneuf Development of Chubbuck hope to build industrial parks to attract big companies that will offer good-paying jobs aplenty.
The developers also hope to construct thousands of homes that will provide those workers with places to live.
Northgate first became known to locals when the developers, the cities of Pocatello and Chubbuck, Bannock County and the Idaho Transportation Department agreed to all fund an interchange on Interstate 15 that would attract those big companies.
That interchange as well as some of the streets in Northgate itself are under construction.
However, those promised big companies and all of their jobs have not materialized.
That fact and other doubts about Northgate made for some debate about whether the Pocatello City Council should grant the development tax increment financing, or TIF, district status.
The developers said that without the TIF designation, they would have a tough time developing Northgate.
There has been a lot of hype over Northgate since the first mention of the proposed interchange was made a couple years ago and that hype is causing doubt about the project, largely because no homes have been built and no big companies have agreed to locate there.
These doubts along with what happened with Pocatello’s last big development — the Hoku polysilicon plant that was built but never opened — have added to the ranks of Northgate naysayers.
But what people should understand is that the Northgate TIF designation approved by the City Council on Thursday night carries very little risk for the city.
The designation means that the Northgate developers will pay for all the infrastructure such as roads and water and sewer lines needed so that the industrial parks and thousands of homes can be built.
Without that infrastructure, no development at Northgate can occur.
This infrastructure will cost the developers around $60 million.
They will get paid back for that investment via the TIF designation when the industrial parks and homes are built. That development will increase the value of the property within Northgate meaning more property taxes will be paid. The money resulting from the increase in property taxes will go toward paying the developers back for the infrastructure improvements they made to make the development at Northgate possible.
It’s estimated it will take 20 years for the developers to be paid back. That’s counting on the development at Northgate occurring.
After that 20-year period ends, the Northgate TIF district will be retired and all of the tax dollars generated by the development within Northgate will go into the city’s tax coffers.
TIF districts are the only incentive Pocatello currently has to attract development and compared to some of the alternatives, it’s a pretty good incentive from the standpoint of limiting the risk to the city and its residents.
The city is not by any means giving a blank check to Northgate’s developers with the TIF designation, but is rather offering to pay them back for the infrastructure improvements needed to develop Northgate via the increased property taxes collected by the expected development -- the homes and businesses hoped to be built there.
If that development doesn’t come, the developers won’t get paid back for the infrastructure. In essence, the developers are accepting all of the risks if Northgate becomes another Hoku.
Pocatello City Councilman Roger Bray voted against granting the TIF designation to Northgate because he believes the city has not properly studied what kind of impact the designation will have on the city.
The City Council should never be a rubber stamp and the questions Bray and others brought up to scrutinize the Northgate TIF district were worth asking. Bray and others are correct in pointing out that if Northgate develops as projected things like police and fire stations and other city services will be needed to serve the newly built industrial parks and homes.
Those city services will cost millions of dollars and will obviously have an impact on the city’s finances and property taxes.
The reality is that there isn’t any development out there that will not have a resulting impact on city services and if you have a problem with that, you probably don’t want Pocatello to grow at all.
Most of us see development like Northgate as a good thing, especially if big companies offering good-paying jobs do come here as a result.
One of Pocatello’s biggest problems after all is that family sustaining jobs are tough to find here and this fact results in many of our best and brightest young people moving to other cities and states to find work.
The anti-development folks among us might want to ponder that trend before deciding to fight to stop Northgate.
That being said, the next time a big project comes along seeking a TIF district designation, the city should decide on whether to approve the TIF designation right off the bat rather than leaving the project in limbo for so long. The city could have also avoided some of the recent debate over the Northgate TIF district had it done a better job of explaining the district to the public.
There will very likely be more ups and downs with Northgate in the future and for everyone’s sake we hope at least some of the promised development occurs.
But if it doesn’t, the taxpayers of Pocatello won’t be paying the bill.
That’s perhaps the one sure thing with this project.