COEUR d'ALENE — Coeur d'Alene's urban renewal agency could lose its tax exemption on 11 pieces of property following a re-interpretation of a state statute by Kootenai County officials.

At an assessment appeal hearing Wednesday afternoon, ignite cda Executive Director Tony Berns challenged a recent decision by Kootenai County Assessor Mike McDowell to remove the exemption on properties controlled by the agency that are currently being leased to private entities. Berns told the Kootenai County Board of Commissioners, who oversaw the hearing, that ignite cda was surprised to receive notice the agency’s properties are no longer exempt because the properties’ tax-exempt status has been in place for more than a decade.

"No change has occurred in the statute," Berns added. "It's just the position that the assessor is taking that our ownership of these properties is not tax exempt and we disagree with that. We are holding these properties for redevelopment purposes, we have not disposed of any of them to a non-public entity. All we are doing is generating interim income on these properties until a project materializes."

However, McDowell told the commissioners, during an annual conference of Idaho assessors in August 2015 he realized Kootenai County is the only county in the state providing tax exemptions to urban renewal properties. Interpretation of one sentence of the Idaho statute, which reads "Provided, that such tax exemption shall terminate when the agency sells, leases or otherwise disposes of property in an urban renewal area for redevelopment to a purchaser or lessee which is not a public body entitled to tax exemption with respect to such property," McDowell said, led to the county giving ignite cda tax exemption.

"Should we have had assessed values this whole time?" asked Commissioner Dan Green, during Wednesday’s hearing.

"Yes, our prior decision was in error," McDowell replied.

The commissioners agreed with McDowell's assessment of the statute, and unanimously denied the appeal from ignite cda. After the meeting, Berns told The Press the financial impact of the decision to the urban renewal agency won't be clear until ignite cda receives its property tax assessment from McDowell's office.

Ignite cda also has the ability to challenge the local decision in front of the Idaho State Tax Commission.

Idaho state Sen. Mary Souza, R-Coeur d'Alene; and Rep. Kathy Sims, R-Coeur d’Alene, attended the hearing. Souza and Sims both served on an Interim Legislative Committee last summer tasked with studying urban renewal efforts in the state. Souza told The Press after the meeting she thought it would be helpful to hear testimonies from both sides as the Legislature continues to mull reforms to urban renewal law.

Souza also said she approached McDowell and the county commissioners with an offer of obtaining an opinion from the Idaho Attorney General's Office on the matter. However, she added she doesn't believe it will be necessary moving forward.

One sentence of an Idaho statute, Souza said, can often have multiple interpretations, as was the case in Wednesday's hearing.

"It can really make a big difference and this was re-interpreted after many, many years," Souza said. "I do think though, it was quite revealing and surprising when Assessor McDowell shared that information that after last year's state meeting he came to the realization that the 36 other counties were interpreting that sentence the same way, and that it was opposite of what we've been doing."

Souza added she wants to add the statute in question to a growing list of items that should be studied and potentially addressed by the Legislature in the next few years.