The $51.8 million deal to sell and redevelop the coveted 44-acre Idaho Transportation Department property along State Street in Boise narrowly survived two bills in the Idaho Legislature that would have canceled its sale.
The two budget bills, House bills 723 and 726, would have revoked the Department of Administration’s ability to sell the property and directed ITD to instead renovate the State Street campus after a 2022 flood. But after nearly two hours of debate, the Idaho Senate in a 13-16 vote rejected the bills Thursday.
With extensive damage from the flood, ITD chose to sell the property and move the majority of its operations to the former Hewlett-Packard campus at 11311 W. Chinden Blvd. Sen. Kevin Cook, R-Idaho Falls, argued that selling the property and moving ITD to the Chinden campus would cost the state more than renovating the State Street property. Even though ITD had followed all the proper rules to sell the property, it would have deprived the state of future potential uses for the 44-acre property, Cook said.
Meanwhile, Senate President Pro Tem Chuck Winder, R-Boise, strongly opposed the budget bills and said revoking the deal would conflict with state laws, since developers followed the proper procedure for the deal.
“This is a hill I want to die on if I have to,” Winder said on the floor. “I’m going to fight this tooth and nail because it is so far out of line.”
The Senate votes, for now, kept aloft developers’ dreams to build over 2,000 homes and around 150,000 square feet of commercial space at the site.
But the House, which voted to block the sale, and the Senate will still need to agree on next steps for the ITD budget. All state agencies’ budgets must be approved by lawmakers before they can end the legislative session. The roiling debate on the Senate floor came a day before lawmakers expected to adjourn for the year — all but ensuring that they won’t complete their business on time.
Thousands of State Street homes on the line
The Department of Administration selected the winning bid for the ITD campus from two Idaho-based developers, Hawkins Cos. and The Pacific Cos., and Utah-based FJ Management, in September to redevelop the property.
The property sale has repeatedly come under attack this legislative session, with several bills introduced to renege on a sale that developers thought was a done deal. Brian Huffaker, CEO of Hawkins Cos., previously told the Idaho Statesman that the developers were considering legal action if the state canceled the sale.
“This is about more than the state going back on its word and existing statute and is bigger than one real estate deal,” Huffaker wrote in a statement to the Statesman on Wednesday. “This is about returning 44 acres of premier property to the tax rolls to generate income for Idaho and provide much-needed housing options to a rapidly growing region of our state.”
The deal also allows the state to fully use the Chinden campus, for which the state already spent $110 million to consolidate state agencies, Huffaker said.
Jessica Flynn, CEO of public relations firm Red Sky, representing Hawkins, in a statement said the company expects the construction of the buildout to provide $150 million in salaries and wages and 3,800 local jobs, and expects the development to provide an ongoing $52 million in salaries and wages and 1,300 jobs.
Idaho lawmakers float proposals to cancel ITD sale
The two bills were not the first time this legislative session that lawmakers tried to scrap the sale.
Attempts to mothball the deal were originally spearheaded in January by House Speaker Mike Moyle, R-Star, who introduced a bill to get rid of rules allowing the Department of Administration to manage the sale of state property.
Moyle opposed the sale and said it would deprive the state of property it may need in the future and funnel money to the city’s urban renewal agency, the Capital City Development Corp.
Urban renewal agencies collect increases in property tax revenue within their districts and use that money to fund more projects. Increases in property tax revenue from the development of the ITD campus property, which falls within CCDC’s newest State Street district, would go to CCDC through 2042 when the district expires. The House passed that bill, but senators never moved it forward for a Senate vote.
Documents disclose what developers envision for ‘prime’ ITD site on Boise’s State Street
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ITD’s former HQ campus in Boise was to get new housing. Then the Legislature stepped in
New ITD headquarters further imperiled by Idaho lawmakers’ efforts to block sale
Members of the Idaho Legislature’s Joint Finance-Appropriations Committee are attempting to block the $51 million sale of Idaho Transportation Department’s flooded former State Street headquarters in Boise – calling on the department to refurbish the building, not sell it.
JFAC’s budget decision appears to represent a major policy reversal of the Idaho Transportation Department’s board’s decision to sell the 45-acre campus at 3311 W. State St., which formerly served as the Idaho Transportation Department headquarters.
In January 2022, the Idaho Transportation Department’s State Street headquarters flooded and was contaminated with asbestos after an HVAC pipe broke, the Idaho Press reported. After the flood, Idaho Transportation Department officials relocated to a different state campus located on Chinden Boulevard. The Idaho Transportation Department’s board then voted to surplus the flooded State Street campus and sell it off, the Idaho Press reported.
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In November, state officials told JFAC members that the state sold the State Street property in September for $51.3 million to a joint venture between The Pacific Companies, The Hawkins Companies and FJ Management, one of the companies that owns Pilot Flying J convenience stores, the Idaho Capital Sun previously reported.
But Sen. Kevin Cook, R-Idaho Falls, said in an interview Friday at the Idaho State Capitol that the sale has not been finalized after all and money has not yet been exchanged.
“In November, the perception I got out of that was it was a done deal, it’s been sold and the contract’s been signed,” Cook told the Sun. “But as we came back (for the legislative session), we realized, well no. There was no earnest money. There was no contract signed and in fact the company, the buyer, was waiting for a rezoning or something from Boise.”
Budget committee members express regret about selling State Street property
Before the 2024 legislative session began, JFAC members visited the Idaho Transportation Department’s old State Street campus in November, where some JFAC members expressed frustration they weren’t involved in the discussions to surplus and sell the State Street campus but were being asked to approve a $56.3 million request to relocate Idaho Transportation Department’s campus to Chinden Boulevard and furnish it.
On Friday, JFAC members declined to provide the $56.3 million to relocate and then furnish the Idaho Transportation Department’s headquarters.
Instead, JFAC approved $32.5 million to renovate the flooded State Street building.
“We looked at three options,” Cook said. “One is to move forward with the sale and move to the Chinden campus. Another was to stay put and refurbish the existing building. And the third was stay put, rip the building down and build new. So we looked at that, and we came to a conclusion as a subgroup that we felt it was more fiscally responsible to stay put and refurbish what we had.”
For months, some JFAC members have expressed regret about the state selling the State Street campus, saying that the state would never be able to afford to buy back the desirable parcel of land that borders Esther Simplot Park and is located close to the Boise River Greenbelt and downtown.
“I’m not a real estate agent, I’m a computer geek, but it sounded like to me this property is worth a lot more,” Cook told the Sun. “I’m kind of new here, but everything I have heard is any time the state has sold some property, two or three years later they go, ‘well, we shouldn’t have done that’ and they’ve actually tried to buy some of it back.”
“But I think that is a good piece of property,” Cook added.
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Sen. Rick Just, D-Boise, cast the lone vote against that budget on Friday, which provided funding for the renovation but not relocating the campus..
“The reason I will be voting against this is because the State Street campus is in my district and we consider ITD a good neighbor and we would like to see them close by,” Just said during Friday’s meeting.
Four JFAC members also voted against budget language that specifically revoked the state’s authority to sell the State Street campus.
“I was informed a week ago that we don’t do policy (decisions) in this committee, and reading this (budget) language it looks a lot like policy,” Sen. Ben Adams, R-Nampa, said during Friday’s meeting “I would love to see a policy bill come forward to address this issue.”
Even with Adam’s objection, JFAC voted 14-4 to approve the budget language revoking the state’s authority to sell property.
Efforts to reach Idaho Transportation Department officials were not immediately successful Friday. It was not immediately clear what the next steps would be for the department and the State Street campus following JFAC’s budget action Friday.
The fiscal year 2025 enhanced budget for the Idaho Transportation Department’s transportation services division that JFAC set Friday still needs to pass the full Idaho House of Representatives and Idaho Senate and avoid Gov. Brad Little’s veto stamp in order to take effect.