This historic Boise street has changed a lot. Now it might become an urban renewal area.

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State Street is deteriorating.

Buildings are damaged, with cracked walls and peeling paint. The street itself has poor drainage and weeds in some sections. Some places have a “defective or inadequate street layout,” and some are unsafe, according to a consultant’s report to the Boise City Council.

But under new plans approved by the Boise City Council, that could start to change.

Boise’s urban-renewal agency, the Capital City Development Corp., or CCDC, is considering State Street for a new urban renewal area. That could mean big changes to a part of the city that some people feel doesn’t typically get a lot of attention, spurred by a method that many don’t love.

Urban renewal districts are designed to revitalize areas that are considered deteriorated. State Street qualifies because it “appears to represent a classic case of deterioration of the type found along arterial corridors when the transition from rural to urban has proceeded unevenly,” according to the report by Portland’s Leland Consulting Group. The proposed area runs along State Street from 27th Street to Horseshoe Bend Road.

The ultimate goal of the urban renewal area would be to support a mix of uses and densities in the area, as well as a well-developed transit system, but what would specifically come to the urban renewal area isn’t yet solidified. Leland’s report says the area appears “very likely to attract complementary private-sector investment” if it becomes a district but does not specify what would change.

During the years an area is an urban renewal district, existing taxing districts, such as schools, cities and counties, continue to collect whatever taxes they collected within the district’s territory when the district was formed but no more. The tax increment, which is any new property-tax revenue created by development or higher property values in the area, goes to the district to be spent on public improvements to foster development.

Boise has five such districts. Its first, which covered central Downtown, expired last year. The two newest districts were created in December. If two additional districts — the State Street district, as well as a proposed district on the Central Bench — are approved, the city will have seven.

City officials and many developers say Boise’s Downtown would be nowhere near as vibrant as it is today if not for urban renewal. The utility connections, streetscape improvements and other taxpayer-provided incentives are often the key to making tax- and job-generating construction economically feasible, they say.

But such districts have critics. Rebecca Arnold, president of the Ada County Highway District commission, sent in May a letter to Mayor David Bieter and CCDC Chairwoman Dana Zuckerman. The letter says ACHD believes “the current revenue allocation financing for CCDC’s urban-renewal areas violates Idaho law.”

Arnold contends that is because the tax revenues used to fund the urban renewal areas “are funds made available from property tax revenues levied by ACHD” that are intended for road construction and maintenance but are not being used for those purposes.

Sean Wyett is the owner of Black Cat Tattoo, a business at the corner of State Street and 31st Street, which could fall in the new urban renewal area. The parking lot of the building he rents was included in the consulting group’s report as an example of deterioration.

Wyett isn’t too worried about what a new district could mean for his business.

“I’m just going to have to wait and see,” Wyett said. “You’re not going to stop progress.”

He doesn’t expect his rent to rise because he says he’s been a good tenant in his time as a business owner. In 2018, however, the federal Department of Housing and Urban Development credited redevelopment in Downtown Boise, where one urban renewal district just closed and two others still exist, as one reason retail vacancy rates are low in that part of the city. Low retail vacancy can increase rents for stores, but it is not necessarily the only factor.

If he did need to move his shop, as either a result of high rents or dramatic changes to the area, it would be a matter of finding a space for his customers and clients that “isn’t out in Meridian,” he said.

Nadine Nicolayeff owner of Serendipity Boutique Consignment Clothing just down the road from Black Cat Tattoo, said having to relocate would cause a “real problem” for her business. Her store has been a consignment shop since 1973. Originally known as “Nearly Nu Shoppe,” Nicolayeff took over in 2013.

“The building I’m in could certainly use some renovation, and my parking lot could, too,” she said. “But if that makes my rent go up massively, that’s not good for me.”

Nicolayeff said she could see the desire for urban renewal in the area. If businesses are hurt or pushed out, however, she said that would harm the charm of the street.

She compared it to the Sugar House neighborhood of Salt Lake City, where she used to live. The neighborhood had “cute independent shops” that were pushed out in lieu of a corporate strip mall, Nicolayeff said. The change cost the neighborhood its appeal.

“We’re not just another street, like Overland. We have small businesses, many of which are historical,” Nicolayeff said. “We’re part of the charm of Boise. We’re part of what makes it quaint.”

The Boise City Council voted June 4 to approve preparation of plans for that district. A timeline for the creation of the urban renewal district shared with the City Council indicates the district could be established by the end of 2020.