Business
M3 Spring Valley Development Has No Voters To Approve Financing Scam
October 24, 2011 
The DAILY PAPER ran a comprehensive story today about a planned development north of Eagle which plans to take advantage of a recently passed law that is nothing but a financial scam.
The law requires an election and approval of two-thirds of the resident property owners. According to the STATESMAN story, M3 Spring Valley is the ONLY property owner.
That may sound like a slam-dunk, but Idaho law defines QUALIFIED ELECTORS very clearly (18 years of age, citizen, resident, etc.) and there is NO PROVISION for any corporation to vote. In short–there are no voters if an election were to be held today to sell bonds.
IDAHO CODE 50-3102
(13) “Qualified elector” means a person who possesses all of the qualifications required of electors under the general laws of the state of Idaho and:
(a) Resides within the boundaries of a district or a proposed district and who is a qualified elector. For purposes of this chapter, such elector shall also be known as a “resident qualified elector”; or
(b) Is an owner of real property that is located within the district or a proposed district, who is not a resident qualified elector as set forth above. For purposes of this chapter, such elector shall also be known as an “owner qualified elector.”
Legal scholars we contacted agreed that provision 13(b) could face constitutional challenges in that it allows non-residents to vote if they own property.
M3 development calls this latest development project “Spring Valley” and the plan is to ask Eagle city council to create a “Community Infrastructure District” (CID) on 5,610 acres of mostly treeless high desert land in the foothills north of Eagle so they can build more than 7,000 homes.
The way a CID works, once the District is approved, the District can then sell bonds to finance the water, sewer, roads, etc. “WITH TWO-THIRDS APPROVAL OF THE QUALIFIED ELECTORS” at an election conducted by the governing authority–the city or county. The bond payments are tacked onto the property taxes supposedly with full disclosure. However, it’s difficult to have an election with no voters.
GROWTHOPHOBES will be watching this one closely because the whole scam is nothing more than a development loan to a single land speculator cloaked as a municipal finance deal. Look for them to split off some lots in order to “qualify” an elector or two.
The STATESMAN said M3 representatives told the Eagle council earlier this month the company anticipates issuing about $9 million in bonds annually over the development’s 20 years. The estimated annual Spring Valley CID payments on a $250,000 home would be $1,316…all other local taxes for schools, fire, county, and city would be added onto that figure.
We have had enough bad banking decisions in the past. Let’s hope they don’t fall for this ill conceived creation.
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Comments & Discussion
Comments are closed for this post.
Oct 25, 2011, 8:55 pm
Here we go again. I am truly surprised no one in Eagle has commented on this one. Looks like M3 will have its way with public monies due to apathy. The CID/LID is just another vehicle for elected officials to tell the electorate what is good for them. I was always curious how Eagle came to approve/disapprove M3. That area was part of Ada County P&Z jurisdiction unless creative annexation quietly took place. M3 Testified at public hearings in front of Ada P&Z on water issues (lack thereof mostly). If they are looking at a planned community, I would ask that they show me one in all of Idaho that has been successful and not fallen onto the tax payers shoulders to “fix” and pay for when the developer fails at producing a viable PC. Can you say Hidden Springs? Commercial district, trip capture,charter school, and Fire Department; all were left to the tax payers.
Oct 26, 2011, 10:17 am
Communities are so desperate for any kind of growth at any price they are willing to sell their souls and those of their residents to subsidize developers.
This is shameful behavior and they get away with it because residents are asleep and apathetic to what is going on in their own cities. The need to turn off FOX NEWS, CNN and other news-porn and start paying attention to what is happening on a local level. It is the local level where citizens take it in the shorts most frequently and the one place their vote really does count.
Oct 26, 2011, 11:52 am
Actually, Steve and Paul, there was quite a bit of testimony at Council last night on the CID.
Most of it centered on “proceed with caution” and the criticality of the CID board (3 Council members, per statute) having strong authority and a deep bench of independent advisors.
Several of us urged that the Council plan for worst case (see Avimor); that the 2007 M3 economic analysis be completely overhauled to reflect new reality (BEFORE the CID is authorized–to assess project viability); and that the M3-proposed buyer disclosure form be greatly expanded so SV buyers have some clue on their exposure.
Council was listening intently, plans to consult with a variety of others who’ve had experience with this sort of financing mechanism and will, I’m fairly confident, substantially modify the District Development Agreement proposed by M3. The public hearing is still open.
There’s still healthy interest and participation out here on the M3 plan and, importantly, this is an entirely different and much stronger Council than that which approved the entitlements in 2007.
We’ll see how it ultimately shakes out. It’s pretty clear several on Council, particularly John Grasser, are going to move very slowly–with a laser focus on protecting the City and the future residents of this development.
EDITOR NOTE–CJ, thanks for the report. You are welcome on the site anytime to share information with GUARDIAN readers.
Oct 26, 2011, 8:11 pm
CJ, Great news! My faith in the Eagle City Council is restored. I am thankful that cool heads prevailed and pointed questions were asked. I am also grateful that the council is proceeding with caution. Happy to hear of the turn out, in times such as these, many people are just making ends meet day to day and drop the extra effort to participate in community discussions.