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Caldwell Forgets Ada Courthouse Fiasco

 August 6, 2008 ⋅  Post a comment

BY THE CALDWELL GUARDIAN
Paul Alldredge

THE CALDWELL GUARDIAN attended the Chamber of Commerce Lunch at the College of Idaho yesterday and learned about plans for a Treasure Valley Community College (of Ontario, Oregon) campus to be built in Caldwell…before the voter-approved College of Western Idaho has even opened its doors.

The plan to get this Oregon based campus up and running in Caldwell is a financial maze of convoluted ownerships, leases and lease purchase agreements. To the best of our knowledge here is the scoop:

1. The East Caldwell Urban Renewal District owns the land for the proposed project.

2. Norfleet Development LC (Butch Gilliland) will build the building and improvements on the urban renewal property and lease the building back to the urban renewal district.

Typically, these contracts have a clause that any taxes will be passed through to the leasee should the issue arise. There WILL be taxes due on the PRIVATE COMMERCIAL RENTAL building under Idaho Law–A very good deal for the developer as he will potentially get a guaranteed rent for his building and a guaranteed buyer, TAX FREE during the life of the lease arrangement.

3. TVCC will lease the building at a highly reduced rate while the urban renewal district (funded by property taxess) does the heavy financial lifting on this deal with full “lease/purchase” payements to Norfleet for the building and improvements.

4. At the end of the East Urban Renewal District life there will be a baloon payment to Norfleet of several millions of dollars for the balance due on the cost of building/s and improvements. A long term debt by any other name is still a LONG TERM DEBT.

5. Concurent at the end of the urban renewal district life, a deed for the property, buildings and improvements will be handed over to the city of Caldwell. A PURCHASE WITHOUT PERMISSION OF CITIZENS. Caldwell will then become the landlord to TVCC.

6. Mayor Nancolas has assured THE CALDWELL GUARDIAN this is a simple annual lease and the urban renewal/city can walk away at the end of any years renewal time on the lease (known as a “non-appropriation clause). However, the lease payments apply to the purchase price, so this is in reality a “purchase”. Think Canyon County Decider’s and the Jerome property “lease deal” and the mess the Commishes found themselves in over this deal.

Questions arise about how Article 8 section 3 of the Idaho Constitution (no long term debt without voter approval) applies to this project and long term debt for taxpayers. It also appears public assets are being pledged as security for the lease.

Who owns the land once the building is built?

If the developer owns the building then he is liable for property taxes under Idaho Law without regard to who occupies the property. (Same situation happened in Boise with some Fire Stations under the Brent Coles Administration.) The entity holding title is on the hook for property taxes–unless both parties agree have the “leasee” (urban renewal, city, and TVCC) pay the taxes.

If there should be a default by either the urban renewal district or the developer, who will own the land/buildings/improvements?

This project has all the earmarks of the Ada County Courthouse on it. Property taxpayer’s are going to be on the hook if and when this deal tanks.

The real question here is ..why is this not getting put up for a bond election? The GUARDIAN can think of no school project that has been built without a bond election. Secondly, how does the yet to be opened voter-approved approved College of Western Idaho fit into the scheme of things?

Right now TVCC, the Oregon institution- is fully funded by student tuition fees. The murkiness of this comes into play with the financial arrangements and cross ownerships and lease underwriting by the city of Caldwell and the “alter ego” of the city, known to you as the Caldwell East Urban Renewal District.

THE GUARDIAN welcomes and will provide space to the “Decider’s” of this project if we have any of this incorrect. The GUARDIAN was offered the contract AFTER it was signed–which is far too late to shed the light of public scrutiny on a convoluted financial deal worthy of Fannie, Freddie, Idaho Housing and Finance Association, and the big city of Boise and Ada County politicos.

JUST TELL IT TO THE VOTERS AND LET THEM DECIDE!

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