Fears grow for one of Boise’s largest construction projects as time runs out. Why?

Time is running out for one of Boise’s largest construction projects.

Developers are beginning to jettison and shift previously announced plans for a new downtown Boise YMCA, over 400 new apartments and 30,000 square feet of commercial space in response to a looming deadline and high costs.

The ever-shrinking time frame for the project has been on the radar of the developers — Edlen & Co., deChase Miksis, Elton Cos. and the YMCA — for at least the past year, though this is the first major acknowledgment that they won’t be able to complete all of their plans. The Y is, as of yet, safe from the fallout.

“Despite their best efforts, our partners are not prepared to move forward with these projects under (the development agreements),” said Alexandra Monjar, the development’s project manager for the city’s urban renewal agency, during an Aug. 12 meeting. “Both projects are not feasible under the current (development agreements).”

The agency, the Capital City Development Corp., has led the charge on the redevelopment. But the urban renewal district the site is in is set to expire in September 2026, meaning the money the agency is putting into the district for improvements like sidewalk upgrades could dry up.

The redevelopment of the three blocks south of Boise High School is at a major juncture for downtown — right on the commuter-heavy State Street corridor and a few blocks from the Capitol.

“The outset was really focused on a couple very specific things, mostly bringing workforce housing to the market, which is not easy,” Dean Papé, partner at DeChase Miksis, told the agency’s board Aug. 12. “Our focus has really … gone away from what we really intended, which was a focus on the impact this could have on our community and the impact on the people.”

So, what was the plan?

The plan called for the developers to demolish the YMCA at 1050 W. State St. and build a new Y across State. The YMCA would stay in use until the new location is finished to give members continuous service.

The southern half of the block with the new Y was to become the home of a 15-story building filled with ground-floor businesses, six floors of parking and eight floors of market-rate apartments totaling 185 units

The developers planned a second, seven-story building catty-corner to the current Y on the northern half of the block that now houses the Lock Stock & Barrel steak house and Boise Vintage furniture store. The new building would leave those businesses in place.

Plans for the seven-story building included more ground-floor retail and 228 apartments. Of those, 155 were meant to qualify as workforce housing and be reserved for those making 80% to 120% of the area median income.

For a two-person household in Boise, 80% of the area median income is $62,750, while 120% is $94,797. Homes that qualify as workforce housing have rents capped at 30% of those incomes. So, rent for a two-person household earning 80% of the area median income would be capped at $1,569, and at 120% would be capped at $2,370.

What happened?

While hopes were high for the development, both the urban renewal agency and the developers have spent the last year on the verge as difficult economic conditions including high interest rates, a labor shortage and expensive construction materials have pummeled Boise’s commercial development sector.

“If you start looking at interest rates, they have doubled since our initial submission of this project,” Papé said. “Construction costs, although nationally we have seen them come back slightly, locally have not, mostly due to larger projects in the area.”

Developers have long expressed concern with a dwindling labor pool as Meta’s $800 million Kuna data center and Micron’s $15 billion expansion in Boise have kicked into high gear . Their fears are coming to pass as those projects vacuum up both the region’s manpower and material, such as concrete and drywall, Papé said.

The developer’s financial partner for the 15-story building also recently pulled out, Papé said.

“All of those have impacted our ability to be successful on the originally proposed projects,” Papé said.

So what’s the new plan for downtown Boise?

The developers proposed massive changes during CCDC’s Aug. 12 meeting, including scrapping the 185 apartments for the 15-story building. They would keep the first seven-stories though — the ground floor commercial and six floors of parking.

It’s not clear if the apartments could be added later, though Papé said it didn’t seem likely in the near future.

The developers have about three months to submit new design plans to the city for that half-block south of the new Y and to show proof that they have secured financing. Construction crews are expected to start work next summer with the aim of finishing before the September 2026 expiration of the urban-renewal district and its taxpayer-financed help.

Changes are also on the horizon for the seven-story building across 11th Street, including partnering with the Boise City Ada County Housing Authorities to make it financially viable, according to Jill Sherman, cofounder of Edlen & Co.

Deanna Watson, executive director of the Boise City Ada County Housing Authorities, did not return a call requesting comment.

“We essentially would have an agreement with the housing authority to provide the development services as well as the ongoing asset management of the project,” Sherman said.

Partnering with the Boise City Ada County Housing Authorities would help the developers secure lower-interest rate loans, which would make the workforce housing more feasible, Sherman said. The Boise City Ada County Housing Authorities would assume ownership of the building.

Parking garages, such as the one the developers proposed next to the Y, are generally easier to finance with less complicated design and less upkeep.

Crews would build the two buildings at the same time, though they would complete the garage faster than the apartments, Sherman said. The YMCA still intends to start construction on its new home this year, Papé said.

Several commissioners were concerned over the time crunch and changes so late in the process, but they approved the developers’ request for a 60-day time extension to figure out how to make it pencil out.

“We agree that it’s aggressive, but it’s also kind of what we need to do to be able to move the project forward,” Sherman said.

Ready for a new real estate landscape, Idaho? Changes in homebuying are coming fast

Idaho Supreme Court issues surprise ruling in sale of Boise’s ITD campus to developers

A big change may be coming near Push & Pour and The STIL on the Boise Bench

ACHD may spend $31M on a mile-and-a-half stretch of road. Why, and where?