American Campus Communities (ACC), a private entity specializing in student housing projects, received approval from the Idaho House Thursday to build a new facility on the campus of Boise State University (BSU). The bill, if approved by the Senate, will exempt ACC from paying property taxes on the building while it is solely used for educational purposes.
Keith Saterlee, presenting on behalf of BSU at the committee hearing on the bill, said the university needs to address the lack of beds without putting additional burdens on the state by asking for an appropriation, a request which he admitted wouldn’t be granted anyway during the lean economic times. He said the university is already asking the students to carry a share of BSU’s developmental costs by paying for building construction out of student fees, and school officials are hesitant to ask more from students. That leaves a third option for solving the bed crisis, said Satterlee, which is the school’s partnership with ACC.
BSU and ACC have a plan in place to build a $50 million housing facility on the southern boundary of campus, which will provide an additional 854 beds for students. ACC will pay cash for the building and will be responsible for construction, as well as building maintenance upon completion of the project. Though the state owns the land for the project and will own the physical structure put in place by ACC, the company will have a 65-year agreement in which it has the right to rent living spaces to students. Once the terms of the lease are over, the state will then gain full control over the property and the renting program.
The problem with the project, Satterlee pointed out to committee members, is that Ada County is most likely required to tax ACC on the rental operation of the building. Idaho Code outlines that projects used solely for educational purposes at Idaho’s institutions of higher education can qualify for the tax exemption if the building remains in use only for those education purposes. The bill, sponsored by House Majority Leader Mike Moyle, R-Star, would grant ACC a tax-exempt status for its rental operations.
Moyle, on the House floor, reaffirmed the standards by which ACC must operate while in possession of the building to receive the tax exemption. Moyle told lawmakers that if ACC uses the building for anything other than education purposes, the tax exemption would be revoked and ACC would be subjected to property taxes.
Rep. Bill Killen, D-Boise, praised the bill, saying it is a "creative" way for the school to construct new dorm facilities. Killen said the measure contains appropriate "sideboards" which will prevent ACC from violating the tax exempt status.
The measure now heads to the Senate.
