DESCRIPTION OF TWIN FALLS, IDAHO

GENERAL:

Twin Falls County, located in south central Idaho in an area known as the "Magic Valley", was established in 1907. The county seat is the city of Twin Falls. In 1980, the population of the county was reported at 52,927, as compared to the 1970 census which indicated a population of 41,807. This indicated a 26.6% increase in the number of inhabitants over that period. The 1990 census indicated that the county had a population of 53,580 which represents only a 1.2% increase. This was due, primarily, to the agricultural. recession that plagued the region for seven years. More recently, there has been a considerable inflow of population and currently, the county population is estimated at about 58,000 to 60,000.

The lack of new industry in the area had contributed to an out-migration of the population to other areas which had more job opportunities. Until the 1990's, the region had little success in diversifying its economic base. This resulted in limited economic and job expansion and, tied to the almost total reliance on agriculture, contributed to the areas recessionary posture in the early to mid 1980's.

The city of Twin Falls also experienced similar population trends over the same period. The U.S. Census indicated a 1970 population of 21,914 and a 1980 population of 26,209, this indicates a 19.6% increase. The 1990 census indicated the city population to be 27,591. However, according to the city, the current population indications support an estimate of approximately 30,000 to 31,000 inhabitants. This represents a considerable increase of approximately 3.5% to 4.5% per year. In it's history, the city has never experienced growth such as this. According to the City Economic Development Director, Dave McAlindin, it is likely that the growth rate in the future will more likely be 2% to 3% per year.

Many of the local inhabitants moved to this community from other smaller, rural villages which have fewer job options. The economic development director for the community indicated that in the next 12 months, there will be at least 100 new jobs created here and within the next 18 months, there is a 50/50 chance that an additional 75 jobs will be created. These jobs will run the gamut from minimum wage, part time to executive. Jobs are one of the main reasons for the recent population growth and it will likely continue for the foreseeable future.

The city of Twin Falls, the most populace city in the county, is located 12 miles southwest of Jerome; 124 miles southeast of the state capital, Boise; and 120 miles southwest of Pocatello. The junction of the East/West Interstate #84 and U.S. Highway #93 is located north of the city. Railroad service for the transportation of goods is via a branch line with a short line operator called Eastern Idaho Rail Road. The Twin Falls-Sun Valley airport is a regional facility with adequate runway length to handle larger jets. It is located approximately four miles to the south of the city core. Currently, the area is serviced by Skywest Airlines and Horizon Airlines, both of which are area commuter services utilizing twin engine, turbo prop aircraft. Also, there is a major bus line providing service in the area. No major air carrier currently provides service and none is expected to in the near future. The lack of jet service did not help in the recessionary posture of the area in the '80's. But, a new terminal, which is under construction, will be viewed in a positive light.

The altitude of the county is approximately 4,000 feet above sea level. The majority of the County is moderately level with gentle slopes, primarily to the north towards the Snake River Canyon. The climate is beneficial to the agricultural spectrum of the economy. Temperatures are moderate and the average temperature for the summer months is 80 degrees F. and the winter months usually average in the mid to upper 30's.

CULTURAL AND RECREATIONAL

The cultural and recreational needs of the county appear to be adequately met by various municipal and private facilities. Available to the populace are an assortment of swimming pools, skating rinks, ball diamonds, and tennis courts. Most of these are municipal facilities. Other recreational activities in the valley include hunting, camping, and fishing. Additionally, a number of private racquet ball courts and fitness centers are located within the area. Two private golf courses and one community 18-hole course provide summer recreation and two other golf courses are proposed. Winter sports are becoming a larger factor in the area. There are several ski areas that are within 45 minutes to 90 minutes from Twin Falls. Developed alpine ski areas include world famous Sun Valley, Solider Mountain, Pomerelle Mountain, and Magic Mountain. Some areas which cater to Nordic skiers are also being developed. Summer recreation in the area includes water skiing, swimming, fishing and boating. The majority of this activity occurs on the Snake River. Recreation and tourism are becoming more and more important to the local economy and this will undoubtedly continue.

Cultural facilities include Herrett's Museum, the C.S.I. Fine Art Center, Idaho Heritage Museum, and The Twin Falls County Museum. Each year the city of Twin Falls sponsors and promotes a City Band and there are several theatrical groups that are active in the area. The cultural and recreational aspects of the valley draw thousands of tourist annually and this is becoming a major portion of the economy.

GOVERNMENT

The county has two relatively major cities and several small towns. The major communities are Twin Falls and Buhl. Each of these cities are governed by a mayor and a city council and both have an area of impact relative to their respective city limits. These designated areas of impact will usually fall under city jurisdiction and must conform to the appropriate zoning ordinance.

Since each of the cities are within the jurisdiction of the county of Twin Falls, areas outside of a designated impact zone fall under jurisdiction of the county commissioners. A commissioner from each district serves on the commission and supposedly represents the various interest throughout the county.

Overall, both city and county governments appear to be adequate. The services provided are similar or superior to other communities in the Magic Valley.

ECONOMIC

The economic base for the county and encompassed cities is primarily agricultural in nature. The other major employing industries in the area are trade, services, food processing, and government. The agricultural recession in the Pacific Northwest is well documented and the Magic Valley did not escape it. Currently, like other areas of the economy, the agricultural spectrum is in the midst of comparably good times. In the early 1980's, farm and dairy foreclosures were on the increase and the low commodity price / high production cost ratio were severely out of balance. In the early '90's, however, commodity prices rose and interest rates became more acceptable. Both situations have helped propel the areas agricultural economic base into a recovery.

In the '80's, the area had little success in attracting new major employers. With the closure of the two major manufacturers, Tupperware and E.F. Johnson, over 600 people were put out of work. Recognizing the severity of the situation, city, county governments, and local chamber's of commerce offices began a move to attract industry. In several cases incentives were offered and both of the manufacturing plants noted were eventually sold and new employers moved into the valley. Other successes followed and several more major employers are eyeing the Greater Twin Falls area as a potential location. In the past, the inability to broaden the economic base created a medium of no growth and stagnation. However, if current trends continue the valley should continue to prosper. It is probable that the majority of the areas economy will be, for the immediate future, tied to agricultural pursuits. But this can be a plus if more food processing companies locate here. Retail jobs are increasing here as the city is the regional retail hub for approximately 170,000 individuals. Additionally, construction jobs are flourishing. This includes both commercial construction and residential building.

Twin Falls County is one of the most densely developed agricultural areas in the United States. here are approximately 250,000 acres of irrigated crop lands in the county. The largest portion of which is encompassed by the Twin Falls project, which provides irrigation water to 212,000 acres. Important crops raised in the area include: potatoes, corn, beans, sugar beets, peas, grain and alfalfa. Other portions of the local agricultural. industry include: commercial raising of cattle, and the support industries associated with beef production; food processing and limited manufacturing. The commercial aquaculture business has recently become a significant part of the economy and the Magic Valley is now the nations number one commercial aquaculture area.

Features attracting tourists to the area include Twin Falls and Shoshone Falls, the Perrine Bridge, unique rock formations, winter skiing, hunting, fishing, camping, hiking, and several national recreation areas. These items and activities attract thousands of people each year to the valley. This is an important aspect of the economy and tourism is being more heavily promoted.

Within the area are forty-three manufacturing plants, forty-one food processing plants, five cement processing companies, and five wood work and manufacturing shops. There are only minor industrial areas within the county and the major sources of employment are the farms, their support and marketing facilities, and food processing.

Financing can be obtained for commercial and residential purposes from several commercial banks and savings and loans. Mortgage and development funds can also be obtained from mortgage companies, insurance companies and some branches of nationally franchised finance companies. Currently, six banks and one savings and loan are located in downtown Twin Falls, This includes First Security Bank, Key Bank, West One Bank, Bank of America, Farmers National Bank, First Federal Savings, and FIB. With the exception of the FSB, FIB, and Key Bank facilities, these are all fairly new. However, both Key and First Security have recently been remodeled. There are several branches on Blue Lakes Boulevard as well. This includes and older branch of West One, a new Key Bank branch, a First Security Branch on a pad at the regional mall, a newer branch of D. L. Evans Bank and a neighborhood First Security in a center on Blue Lakes and Filer. Also found on Blue Lakes are Washington Federal Savings and Loan, First Federal Savings, and Home Federal Savings. On the Corner of Eastland and Kimberly road, is a branch of West One Bank. One thing that stands out about the locational aspect of the banks and S&L's is that all but the FSB branch at Filer and Blue Lakes are on corners and on the highest traffic streets in their respective districts.

Deposits in area banks have risen from approximately $273,000,000.00 in 1988 to approximately $360,592,000.00 as of 1994 which is the last year that data was available. I was not able to confirm S&L deposits. The neighboring graph demonstrates the deposit trends in the local economy:

There have been a number of office complexes constructed in the area in the last decade. Some of this activity centered near the Twin Falls County Court House and related to bank facilities and some build-to-suit structures. Recently, there have been new offices erected on Poleline Road, Falls Avenue, and on North College Road. Rents in the area have been, for the most part, increasing. New retail structures have been located primarily on Blue Lakes Boulevard North or Poleline Road West. These were usually malls, strip centers, or "big boxes". The majority of this type of commercial construction has been in Twin Falls but some limited activity has been noted in the smaller communities. It is the general consensus of area experts that all segments of the real estate market have experienced value increases over the last 3 years. This is likely true of rent levels but the data available for analysis is limited at this time.

PUBLIC TRANSPORTATION

Currently there is only limited public transportation and this is in the form of small busses. This, due to the relatively small city size, has no noted impact on values or desirability.

POLICE AND FIRE PROTECTION

Within the city, police and fire protection are provided by the Twin Falls City Department of Public Safety. Currently, the city indicates a total of 44 police personnel, which equates to 1.47 per 1,000 of population. There are 30 fire fighters which indicates 1.00 per 1,000 inhabitants. The fire insurance rating for the city is 3, which is one of the best in the state. There is little crime in this community and the police and fire departments are well trained.

TAXATION LEVELS AND TRENDS

Real estate taxes have tended to increase in Twin Falls, in spite of an increased population base. The assessors office is supposedly at market value, but it is more the exception than the rule that they are. The state mandates a five year rotation on reassessments, consequently assessed value tend to stay the same within a property type category for this period. The consolidated tax rates from 1984 are as follows: 1984, .017385; 1985, 018001; 1986, .019807; 1987, .019247; 1988, .020354, 1989, .021521, 1990, .022035, 1991 .022859; 1992, .022463; 1993, .021066547, 1994; .022018541, and .019595808 for 1995. While the 1992, 1993 and 1995 rates showed a decrease, the assessed value figures tend to trend upwards. This results in a higher tax burden. I have discussed this with the former and current County Assessors. They indicated that this will likely continue for the foreseeable future. Over the period shown, the straight line increase in actual taxes has been reportedly anywhere from between 1% to 4% per year depending on the property. This should slow, however, as the taxable base is increasing with the new construction. It hopefully should be in a more moderate 1% to 2% range.

COMMERCIAL AREAS

There are several major commercial locations in Twin Falls. Much of the new activity has been centered on or near Blue Lakes Boulevard, which is the only north/south access into Twin Falls. On this thoroughfare, there has been a regional mall constructed and several strip centers. Rents on Blue Lakes form the upper end of the range and tend to be between $6.00 and $13.00 per square foot for retail space. Some smaller retail space commands even more. A higher range was typically encountered for professional offices in the past. But, the difference between it and retail is becoming less pronounced. The latter of these is less common on Blue Lakes proper, but is now appearing on offshoot streets like Falls Avenue, Pole Line Road East, and North College Road. All of these are perpendicular to Blue Lakes and are heavily influenced by it, at least in terms of values and rent levels.

A second major commercial area is located in the original Townsite. Here, in 1970, a major urban renewal project was undertaken. This included razing old dilapidated buildings, construction of new parking lots, and remodel of many structures. This resulted in a relatively brief period of revitalization for the downtown that continued into the early 1980's. Rents increased and vacancy rates dropped and several new structures were erected. Unfortunately, however, the impact of the project proved to be a two edge sword. Basically, traffic was discouraged on Main Avenue and parking was limited there as well. Furthermore, both of the Second Avenues being one-way arterials, tended to push traffic through the Townsite and provided little or no exposure to businesses. Compounding the problem was the fact that even with exposure, only the less appealing rear entrances of the business were visible to traffic and these some distance from it due to 1/2 block parking lots. Clearly, over time, this was not particularly conducive to retail use. As traffic and population trends continued to change in the community, the downtown began to see rent levels slide and vacancy rates increase. No new retail buildings have been constructed in the downtown area for many years and this is due to the rent and value patterns that were experienced during the recession. Values in downtown dropped 30% from 1981 to 1983 according to my surveys. In 1983, it appears that further declines ceased but many larger retail companies relocated to Blue Lakes, usually in malls or centers.

Downtown rents and values eventually became recognized as bargains and the area started to see it's vacancy rates decline. Value levels and market rents finally were impacted in a somewhat positive manner but the current status is somewhat ambiguous. Recently, several auto dealers in downtown built new facilities on Blue Lakes Boulevard. While one still maintains a presence, it was reported that the owners recently purchased land in the north part of town and will likely move within the next two years. Currently, there are very few vacant retail or professional buildings. Few sales have occurred here that were specifically related to cash flow from rents. In most cases buyer's occupy the structures after purchase. This is true in most parts of the community. Some buildings in downtown have had major rehabilitation or addition work in the past few years. This should continue, but, at a relatively slow pace.

Several years ago, I completed a study of the downtown that indicated slightly less than 1,000,000 square feet of retail space is in place. Of this, approximately 15% was vacant. This steadily declined and is now a 5% to 10% level. While no survey has been done on the other areas, anecdotal data suggests that vacancy is at a minimum, likely less than 5%. The downtown core also has a fairly strong professional office market, more so than any other area in the community. Vacancy rates for these tend to parallel retail uses. All main branches for area lenders are located there as are most attorneys offices, title companies, the City Offices, and the County Courthouse. Additionally, a number of insurance firms are located here as are a considerable number of used car dealers. As was noted, however, the new car dealers appear to be leaving. The strong professional presence has contributed to a fairly healthy service sector locating in downtown.

The biggest negative, at least from a property owners perspective, in the Townsite is the rent/value structure. Categorically, rents on the north end, and consequently values are moving up. An obvious function of supply and demand. However, the downtown area has not fared as well. While vacancy rates are at a very reasonable level, rents here are still fairly low. Retail store fronts are generally bringing from $2.00 to $4.00 and offices pretty much peak at $10.00 to $12.00 on a modified gross basis. I'm afraid, until more traffic or interest is generated here, this will continue to be a problem.

The other major established commercial locations are centered on Addison Avenue and Kimberly Road, which are both east/west streets. These locations tend to have a strong retail presence but are not as appealing to the market as the north end of town. Also, portions of Filer Avenue have some commercial uses. As is the case for Kimberly Road and Addison, Filer is considered to be a secondary location relative to North Blue Lakes and it's environs.

It is likely, as Blue Lakes becomes fully developed, and more expensive, that Kimberly Road, Addison Avenue East, and to some extent, downtown, will experience new development or redevelopment. To some degree, that is already happening on Kimberly Road and Addison Avenue East. This is evidenced by recent remodel work on several structures and the awarding of a beautification certificate to a sign company located on Kimberly Road and construction of at least three new buildings with others planed there. Addison Avenue East has also had several new buildings built upon it with others planned. West Poleline Road is also beginning to see new commercial activity and this will continue, but, that is basically an off-shoot of Blue Lakes Boulevard. As a peripheral of Blue Lakes and as there becomes less land available there, Pole Line Road, which is perpendicular to Blue Lakes, has been experiencing new construction and has a similar value structure. This will likely continue, mostly in a Westerly direction. Also, North College Road is seeing new office construction. This too, is an arterial that is perpendicular to Blue Lakes and somewhat influenced by it.

According to the Thoresen-Peterson study, Twin Falls County is a strong performer for retail sales. They concluded that approximately 46% of all sales for the Magic Valley's eight counties occurs here and only two other counties in the region exceed 10%. Twin Falls County ranks first in this aspect of all major communities in the state. Interestingly enough, the city has approximately 50% of the county population but has 84% of the retail sales. Similarly, the community has 20% of the regions population but still is responsible for 38% of retail sales.

RESIDENTIAL TRENDS

While not completely relevant to the clients needs, I think that it is appropriate to discuss other sectors as these trends relate to the growth and health of the community. In the 1970's, there was a considerable number of homes built in the community. The most activity was in what is known locally as the northeast sector. However, there were subdivisions also developed in the eastern, southern, and northwestern sectors as well. However, the upper end tended to be in the northeast. Heavy building continued until the late 1970's and early 1980's. At that time, all of rural America was impacted by the agricultural recession as was Twin Falls. Values plunged, foreclosures increased, rents dropped and new construction in all sectors basically stopped. Until 1988 or 1989, this was the situation that all of Southern Idaho found itself in. However, all negative trends have reversed. Twin Falls now finds itself in the middle of a tremendous growth phase. New homes are being built at a strong pace, commercial construction is at it's highest level in years, and the population inflow continues. This has led to a considerable number of new subdivisions being developed and several more are planned. Many here feel that the housing shortage is now becoming critical and could threaten further growth. Thus it is likely that new subdivisions will continue to be developed and new home construction will trend upward unless interest rates continue to increase.

Based on recent population trends, one would expect the growth in residential building to likely continue. But this may not be true. As everyone is aware, interest rates are rising. The actual impact has not been measurable due to a typically slow season relating to winter months. Area lenders, Realtors, and appraisers are mixed in their collective feelings on this but there is an undertone that the growth for the coming years will not be as robust as the last few. Of course, this still remains to be seen.

MEDICAL AND PROFESSIONAL MARKETS

The bulk of medical facilities in the county are located within a close proximity to the Magic Valley Regional Medical Center in Twin Falls. Of all the communities in the county, only the city of Buhl has any probability of supporting additional doctor space. The majority of new doctors offices in Twin Falls will also tend to center around the Medical Center. There have been instances of doctors offices in other sections of the community but they are currently the exception and not the rule. There have been several offices built in the community over the last few years and this appears to be accelerating. It appears that currently, demand is increasing but it is curious to note that most sales involve owners or their business entities.

Rents for all professional offices fared fairly well considering the recessionary posture of the region in the 1980's. Most have apparently increased. This is true both of general professional offices as well as medical offices. It appears that medical rents are increasing and are eclipsing non medical facilities. Better quality offices, both doctor & general professional, tend to be close but the medical offices are now, in most instances, commanding higher unit rents.

Most of the older office space, both professional and medical, is unfunctional by today's standards. Also, they are frequently average to fair in their quality level. A trend of new construction and remodeling is now occurring. These tend to involve better quality and higher levels of functional utility. On Falls Avenue, near the College, several new good quality professional and dental offices have been built. Additionally, there is a top quality surgical center that was built on the corner of Falls and Washington Street. To date, there has been no sales of these and they tend to be owner occupied. Discussions with area experts indicate that there is a need for more doctors in this community. However, currently, there is little space available to accommodate them.

INDUSTRIAL AREAS

Originally, the industrial areas of the community were centered in the western sections of the original downtown Townsite. In the early years, this section was quite healthy and a considerable amount of construction occurred there. While still remaining viable, only limited new construction occurred from the 1950's on. This situation basically continued until the mid 1970's. At that time, perimeter industrial locations begin to develop. This included the western sections of the community, across the Rock Creek Canyon primarily. However, at about the same time, other areas to the east began to develop. These eastern locations eventually became more desirable in the markets eyes and therefore saw more new construction. In the last five years, the location of choice became the M-2 Zone located in the southeast portion of the community. This has been the location of most new construction that involved manufacturing or industrial buildings. The bulk of the these structures tended to be clear span, pre-engineered metal buildings that were mostly occupied by owners or their companies. It is likely that the trend to development in that section of the community will continue until developed land is used up. But, with the recent construction of the Victory Bridge and the replacement of the old Singing Bridge, both across Rock Creek Canyon, the western industrial district could see renewed interest.

Unfortunately, as the outlying areas developed, the old industrial section of the community became "Blighted." By contemporary standards, buildings there are typically unfunctional and mostly old. Furthermore, warranted or not, it is viewed as having access problems. These situations led to the recent Urban Renewal District being placed on that portion of the city. It's impact is now beginning to be felt and the City intends to spend between $3,000,000.00 and $4,000,000.00 in the next two year to redevelop that area. This will likely lead to more traffic on Blue Lakes Boulevard as it is the main arterial to the City Core.

It is somewhat difficult to tract the overall trends in values, vacancies, and rents on industrial type property because there are not a tremendous number of sales. But, given the general economy, it is probably safe to assume that they have, overall, been positive. In the mid to late 1980's values typically ranged from $10.00 to $15.00 per square foot. This was during the depths of the recession here. Current data suggest that values now are ranging from $20.00 to $40.00 per square foot with some even higher. Clearly, overall values are increasing. While no one has, to date, actually surveyed all available space here, there is very little vacant, likely less than 5%.

In the old part of Downtown, trends are hard to track due to a lack of demand. These are usually older facilities, and not very functional by today's standards. Again, there has not been a survey, however, anecdotal data suggests a vacancy rate there of approximately 30%. It is likely, overall, that industrial portions of the market are experiencing a vacancy rate of between 5% and 10%.

UTILITIES AND SERVICES

All the usual utilities and services are available throughout the county. In more heavily populated areas this includes U.S. West Communications Service, Intermountain Gas, Idaho Power, King Video Cable in some areas, and city sewer and water. In the more rural areas, utilities usually consist of power and phone only.

SCHOOLS

School enrollment in the county has kept pace with population trends. Within the county are numerous public and private primary education centers. Other learning opportunities are afforded at the two community junior highs and the one high school. Within the city of Twin Falls, higher education is available at the College of Southern Idaho, a standard junior college with a strong vocational technical curriculum. C.S.I. now offers baccalaureate degrees in conjunction with several State Universities.

A new grade school was recently built in south Twin Falls and a major expansion of the High School was also completed. This will alleviate, for now, crowding problems.

LOCAL ECONOMIC TRENDS

In spite of the recession that has hit the region in the '80's, Twin Falls fared fairly well. While housing starts declined, several major commercial projects were undertaken on Blue Lakes Boulevard and two new banks were constructed downtown. Rent and value levels peaked in the early 1980's and began to drop off until approximately 1983. However, as commodity prices rose and as new employers continued to be attracted to the area, the valley continued to see a stronger economy in all sectors. The state of Idaho Department of Employment indicates that per capita income has risen from $8,637.00 in 1980 to $16,006.00 in 1992 which is the last year for which statistics were available. The unemployment rate for the area is also at an acceptable level at approximately 4.5% to 6% according to the Times News and the Department of Employment.

In 1980, there were a total of 1,440 businesses in the community. In 1991, this had increase to 1,732. By most estimates, this pace is still being experienced. They provided for total employment of 27,803 in 1980 and 32,909 in 1992. This tracks with population trends and should continue if interest rate increases do not continue.

Several studies have been done on the community and the downtown area. All of these projected that Twin Falls will continue to grow at a moderate to accelerated pace and will continue to be the economic and retail hub of the eight county region. As spendable income increases and more people locate here, there will likely be a reasonably strong market for retail and commercial structures to serve the needs of the population. Industrial demand will probably relate to new construction and relocation of manufacturing here. Unfortunately for downtown, however, much of the retail will probably locate in the north end of town for the foreseeable future.

In the last few years, major commercial and industrial construction in and near Twin Falls included: $6 million expansion of Amalgamated Sugar, $4 million construction of commercial truck plaza north of town, $2.5 million new Sears store, $2.5 million sewer treatment plant, $2 million expansion of Universal Frozen Foods plant, $2 million expansion of the Twin Falls Clinic & Hospital, $1.7 million expansion of the Twin Falls Library, $1 million addition to the College of Southern Idaho Development Center, $1 million Keebler building in Jerome, and a $6 million cancer treatment center.

More recent projects include: Hennison's Cold Storage expansion at $9.1 million, the Target Store at $2.5 million, a new retirement center at $6.0 million, the Twin Falls Clinic Expansion at $2.0 Million, the State of Idaho Work Release center at $0.75 million, the Avonmore Jerome Cheese Plant at $35.0 million, the State Juvenile Detention Center at $1.2 million, and the State Health and Welfare Office Building at $1.5 million. Most of these projects are now complete and while they added construction jobs initially, they also added considerable permanent employment as well. Furthermore, there are other projects that may come on line. Tied to the surge in residential construction, the region has a high probability of prospering for many years to come. The only apparent downside is the possibility of continued drought and increasing interest rates.

EMPLOYMENT AND ECONOMIC BASE

As has been noted, the primary economic base relates, in one form or another, to agriculture. The revenues from crops sales, food processing, cattle sales, dairies, aquaculture, and on farm employment generate the bulk of the spending in the other sectors of the economy. The Chamber of Commerce indicates that roughly 26% of the areas civilian labor force is employed in either food processing or agriculture. This is only equaled by wholesale and retail trade which comprises approximately 27%. It should be pointed out, however, that a considerable portion of the wholesale/retail sector typically sells to both food processors and farmers.

Unemployment in the area varies from season to season. This also relates to agricultural pursuits. Typically it ranges between 4.5% and 6.0%. but averages over a year at, or near, 5%. The local labor analyst with the Department of Employment is predicting that the unemployment rate will likely fall in the next two years as more industries locate here. However, this will tend to be offset by an influx of new individuals into the community. I expect that the unemployment rate here will probably remain at or near its present level for the foreseeable future. It is also likely that wage levels and per capita earnings will continue to increase as they have in the past. This will translate into a willingness of the population to spend a larger portion of their disposable incomes, which in turn could lead to additional demand for retail space in the community. This, also should lead to more demand for office/professional facilities and to a limited degree, industrial type buildings. The latter will tend to involve new construction.

A negative aspect from the wage earner point of view is the fact that the pay level in the community is low in comparison to national averages. This is regarded as a plus, however, by major employers looking to locate here. The reality now is that wages are increasing.

CITY ORIGINS AND GROWTH PATTERNS

The city of Twin Falls was developed in conjunction with the water delivery systems built to irrigate the semi-arid desert plain upon which the community is located. The first section of the city to be occupied was the Twin Falls Townsite. This began after the Townsite was platted and designed in 1904. By 1912, the Townsite had a business district with several substantial buildings in place. Also many homes had been constructed over the same time period and all of these were centered around the downtown core. The western section of the Townsite began to buildup with a more industrial character.

As the population of the city increased, there was a need for other residential areas. The trend of development at that time was in a north and easterly direction, even though developable land was available in all bearings. To a limited extent, there was construction occurring to the south and west but not nearly to the degree that was taking place in the other directions.

The community continued to grow, as did agricultural pursuits in the valley. As new transportation links were developed, the growth pattern of the community followed them. In the 1930's and 1940's the city grew in all directions but the downtown still remained the primary commercial and retail center. In the 1950's however, other retail areas were taking shape. This included Blue Lakes Boulevard, Kimberly Road, and Addison Avenue. All of the these are arterials that are primary accesses into and out of the city.

In the '60's Blue Lakes began to rival downtown as a primary location. Residential construction tended to be towards it in a general northeasterly direction but some developments also occurred to the northwest. During this period, the first shopping center was developed and it was located on Blue Lakes. Shortly thereafter a second was built and from that time to the present Blue Lakes eclipsed the downtown in terms of rents and values. The most recent example of the desirability of this arterial was it's choice as the location for the new regional mall.

In the early 1970's, the city undertook a redevelopment of the downtown to limit the out migration of retail stores. It was considered a success at the time inasmuch as parking was increased, a park-like setting achieved, and vacancy rates declined dramatically. However, as the decade of the '80's began, downtown had problems. Values and rents declined and vacancy rates increased. This continued until approximately 1983 when a period of stability was reached, albeit one of fairly low values and fairly high vacancies. The industrial portion of the original Townsite now has a considerable vacancy problem. It is estimated that approximately 30% of the space is now vacant, or even possibly more. With the consolidation of bean and seed companies in the old district and movement to more modern facilities elsewhere, this will continue to be a problem. Only newer, more functional buildings in that district are really viewed as viable.

In summary, the city's growth tended to follow transportation links and has been in all directions, to some degree. More development has been in a northeasterly direction which contributed to the appeal of Blue Lakes as a premium location. However, the city's downtown commercial/retail area is still fairly popular but less valuable. The Business Improvement District (BID) conducted a survey of the areas population in regards to the city support of downtown. It revealed that 59% of the respondents felt that the city should help preserve the downtown area more than other commercial areas. 31% were opposed to this idea. With this in mind, the city, the BID and the Chamber of Commerce had several studies done to determine which course to follow in attempting to revitalize the city core. This includes the "Old Town" Urban Renewal Project". The fruits of this labor are only now becoming apparent.

CONCLUSIONS

Overall, the County and City have a prosperous appearance. Populations trends are on the upswing. Payrolls from industry and agricultural have increased as has spendable income. The primary choice for retail locations is now on Blue Lakes Boulevard and Pole Line Road but interest in the downtown commercial areas should remain due to favorably low rents and prices as well as the affection of the local population. Addison Avenue, Kimberly Road, and portions of Filer Avenue will continue to be viewed as somewhat secondary retail locations compared to the north end, but, will slowly continue to develop. This could change, however, due to affordability both from the perspective of owner occupancy and tenant occupancy. As population increases occur and the economic base is further broadened, all sectors of the real estate market in the community will profit. The area near the Regional Medical Center will continue to be the primary location for medical offices. New subdivision development and new home construction will continue, but at what pace is difficult to gauge due to the interest rate situation. Values, both rental and property, in all sectors should continue to increase. The southeast sector will continue to be the likely location for new industrial development. But renewed interest will probably be experienced in the western district across Rock Creek Canyon. The old industrial district will probably continue to decline until redevelopment becomes a viable alternative. The likelihood of more branch banks coming into the community will be limited for the near term but likely over the next ten years.

Detrimental factors which I observed are: [1] Lack of a main transportation link from the airport facility which does not have jet service; [2] The possibility of a major crop failure in the area from any cause; [3] The lack of high paying job opportunities; and [4] Lack of a broader based economy,