County
Justice Center Unjust to Taxpayers
January 31, 2006 
EDITOR NOTE–THE FOLLOWING POSTING IS BY FORMER COUNTY COMMISSIONER SHARON ULLMAN. THE GUARDIAN HAS READ THE CONTRACT AND IT LOOKS TO US THAT ULMAN HAS IT RIGHT ON THIS ONE. THE COUNTY WILL PAY TAXES THEY SHOULDN’T PAY AND THERE IS NO VOTER APPROVAL FOR WHAT IS OBVIOUSLY A LONG TERM DEBT.
Ada County has leased – with an option to purchase – the Smith Building at Sixth and Myrtle Streets in downtown Boise, from a company that does not even own it.
The idea of a “Justice Center” – a one-stop shop for victims of rape and domestic violence – is a worthwhile idea. The problem with the project is the way Ada County legal beagle Greg Bower and Commishes Judy Peavey-Derr, Fred Tilman and Rick Yzaguirre have set up the financiing for the facility.
Ada County will dump $600,000 cash into “remodeling” the dilapidated Smith Building. Senator Mike Crapo (R-Idaho) helped secure a $1 million HUD grant, also public tax dollars, that will apparently offset some of the County’s costs for this project.
In addition to the up front money, the County is also paying Oaas and Laney $374,000 a year to lease the property. Oaas and Laney, in turn, have their own lease with an option to purchase the building from its true owners, Mutual Investments Company. Oaas and Laney are expected to put an estimated $1 million into the facility to complete agreed-upon improvements.
If the County does not exercise its Option to Purchase but continues to lease the facility, the $374,000 a year will increase 10 percent after five years and each five-year period after that.
This is a “triple net lease” requiring Ada County to pay all costs affiliated with the property including agreed-upon lease payments, taxes, assessments, insurance, utilities, repairs and maintenance. Even though the County does not own the building, the County has all the disadvantages of ownership (bearing all the costs) as well as all the disadvantages of leasing (making rent payments).
If the County exercises its Option to Purchase the facility, which it must do on or before December 31, 2010, developers Oaas and Laney will choose an appraiser and the County will pay the full-appraised value.
If the County exercises its option to purchase on or after March 2, 2007, the County will receive five percent off the full-appraised value.
The County gets no credit for lease money or other expenses paid and little return (just five percent of the full-appraised value) on the $600,000 initial investment in the property.
Taxpayers get to pay that $600,000 twice: once up front to improve the facility, and once again, when the County pays the appraised price of the improved facility to complete the purchase.
Imagine buying a house and saying, “Look, I’ll pay you rent, put a big chunk of money into remodeling your house, and pay all costs of living in the house including utilities and repairs if something goes wrong. If I decide I want to buy your house, then YOU choose an appraiser to determine the value of the house once it has been all spiffed up with my money, and I will pay you whatever the appraiser says the house is worth. And oh yeah, if I wait 15 months while paying rent and all the other expenses before I decide to buy the house, you’ll give me a big five percent discount on the price.”
This Lease with Option to Purchase deal is one time the County commissioners should have had enough business savvy and common sense to Just Say No! It is not unlike the courthouse deal.
For more information, call Ullman at (208) 362-0843 or send e-mail to [email protected]
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Comments & Discussion
Comments are closed for this post.
Feb 1, 2006, 10:58 am
Thanks for your opinion piece, Sharon, and thanks to Guardian for posting it. When can we throw out all the crooks and start over? Treva
Feb 2, 2006, 5:23 pm
Sounds, simply put, like a sweet heart deal between the county commissioners and the owners of the property and building. The only ones who will lose are the taxpayers who will be paying for the same thing ,multiple times. The County commission ( Judy P. Derr, R. Izaguirre) with the help of ” legal beagle”” Greg Bower are really showing their ” true colors” on this corrrupt deal. Thanks Guardian and Sharon for for letting the taxpayers know what’s going on here.
Feb 3, 2006, 7:58 am
By the way, make note of the rather large number of new commercial buildings in Ada County, many of which are sitting empty. Why would anyone suggest using taxpayers’ money refurbishing an old bulding? One would think there would be some really good deals out there.
Feb 6, 2006, 10:38 am
Who, excactly, is Mutual Investments Company?
To TJ: We had our chance. Yzaguirre, known to like to pay his bills with OPM (other people’s money) was reelected, largely with votes from Eagle.
Feb 6, 2006, 4:55 pm
In answer to Curmudgeon, on February 19, 1965 Mutual Investments Co., an Idaho Corporation, was founded by Melvin R. Smith, L. Lewis Campbell and Calvin L. Holtz. Current officers of the corporation are President Merrily Skinner, Secretary Beverly Pitkin and Director Robin Kindall. (Smith and the three current officers of Mutual Investments Co. have another Idaho Corporation called Engine Parts Co. He is the President, Skinner is the Secretary/Treasurer and Pitkin and Kindall are Directors.)
Also in 1965, Mutual Investments Co. purchased the property that the County is now leasing from intermediary Oaas and Laney to use as a Justice Center. Mutual Investments Co. took out a $579,000 loan on the property on April 30, 2002. This loan appeared to still be outstanding in late January 2006, EVEN AFTER the Ada County commissioners signed the Lease with Option to Purchase Agreement for the facility with Oaas and Laney.
Mutual Investments Co. is not the “bad guy” in this tale. The problem is with: 1) the middlemen, Oaas and Laney, who stand to make a lot of money off the Ada County taxpayers; 2) Ada County prosecutor Greg Bower who pushed for the deal; and 3) the Ada County commissioners who approved the ill-advised financial deal.
Feb 9, 2006, 12:19 pm
To: Curmudgeon
I am still stunned that Yzaguirre won. Is it too late for a recount? Don’t forget when Judy runs again that she was fully supportive of Yzaguirre’s “borrowing” public funds and has been quoted as say “it is a personal matter.”
Now I see that the commission has approved another obscene project to add to the burden of the taxpayers of Ada County – the infamous Avimor project, whose leader has, before even breaking ground, reminded us stupid Idahoans that we need to learn to conserve water so that hundreds of thousands more people moving here can have their share.
Feb 14, 2006, 9:53 pm
Idaho Code, Section 34-2001 (7), etitled “ELECTION CONTESTS OTHER THAN LEGISLATIVE AND STATE EXECUTIVE OFFICES,” “GROUNDS OF CONTEST,” provides for contesting an election of “any person to any public office…7. When the incumbent is in default as a collector and custodian of public money or property.” Had I known about this at the time, I would have loved to contest his election. Mike Wilson (who recently ran against Yzzy) has a lot more integrity in his little finger than Yzzy has ever even thought about having!