New Twin Falls Building Will Be First Major Opportunity Zone Project In Idaho
Downtown Twin Falls will soon look a little different. The old Idaho Youth Ranch building that’s been sitting empty for over a year will be torn down this fall, and in its place will be the tallest building on the block by a whole lot.
The Twin Falls Urban Renewal Agency purchased the building for $470,000 when the thrift store closed down in early 2018.
“We didn’t want to have a vacant building that didn’t have any offers on it, so our agency purchased it with the intent to redevelop the site," says Nate Murray, who leads the URA.
The agency sold the building to a Ketchum-based developer, Summit Creek Capital, for just $100. And soon, this will be the site of the tallest building on Main Avenue, at 75 feet — or six stories.
“It’ll stand out," Murray says. "The building next door to it is approximately 35 feet, so we’re looking at about twice the height.”
The first floor will be retail, the second floor office space, and then on top of that, there will be four floors of apartments. Between 40 and 50 apartments will be available for rent. They’ll be the first multi-family units in downtown Twin Falls.
Another interesting thing about this development is it's in an Opportunity Zone.
Opportunity Zones were passed into law by Congress in the Tax Cuts and Jobs Act of 2017.
"Opportunity zones are essentially economically distressed census tracts," says Jerry Miller, an economic development specialist at the Idaho Department of Commerce.
He says the goal of the program is to encourage investment in low-income areas. Investors who put money into these zones can earn capital gains tax relief. The longer their money stays in the Opportunity Zone, the more the benefits increase.
“So in a nutshell," Miller says, "the idea behind the provision is to get money moved from paper investment stocks — from Wall Street, if you would — onto Main Street.”
The redevelopment of the old Idaho Youth Ranch in Twin Falls is the first major Opportunity Zone project in Idaho, as far as Miller is aware. He says while Idaho identified several rural areas that could use development, urban areas are getting the most attention from investors.
“Areas like Boise, Twin Falls, Nampa, Meridian are probably going to get the most looks and the first looks," Miller says.
The Galena Fund, which is a funding partner for this Main Avenue project, has had its eyes on Twin Falls for a few years now, according to Boise-based President Bill Truax.
“We see it and we say, 'Man, the time is right for that market.' In fact, it was probably three years ago that the time was right for that market," Truax says.
That brings up one common critique of Opportunity Zones — that investors get a good deal on projects they might have devoted money to anyway, without the tax cuts.
“I will tell you that our investments, primarily, we would have done whether the Opportunity Zone existed or not," Truax says.
But, he says, with the Opportunity Zone credit, his fund is likely to make larger investments.
Another concern is that the projects could drive up real estate values, making the low-income areas less affordable.
“It is definitely a concern," Truax says. "We are very sensitive to the price of the asset that we’re buying when we go in. If the only reason people have that their property is worth more from last year to this year is that it was in an Opportunity Zone, that's a good reason for us to pass and move on.”
And though Murray won’t set rates of these new apartments downtown, he expects they’ll be fairly affordable.
“They’ll go for market rate," he says, "which still in Twin Falls is not too high — $1.00, $1.15 a square foot, depending on the units and finishes.”
Tyler Davis-Jeffers, who runs Summit Creek Capital, says afforability is also on his mind. He says the apartments will be "workforce housing."
Truax of the Galena Fund says he envisions people working at plants like Chobani to be target renters.
Overall, the Urban Renewal Agency hopes more people will want to live and work downtown as a result of this new building.
"Creating an environment where we people can live here and work 24 hours a day just increases the demand for activities and service," Murray says. "And while it may be harder to find a parking space at times, in the long run I think it benefits this area."
He hopes this project might serve as an example that Twin Falls is ready for investment.
Find reporter Rachel Cohen on Twitter @racheld_cohen
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