Proposed Brew Pub In State-Owned Building Illegal As Planned

Looks like the Oregon based brew pub set to go into a state-owned Boise commercial building has been cut off, at least temporarily. BOISE WEEKLY‘s Andrew Crisp has a good explanation.

The short version is existing state laws preclude brewers from owning retail outlets that import beer from other states and also selling retail. The so-called three tier system is aimed at preventing a brewer from dominating the market.

The law is a major obstacle for 10 Barrels Brewing which has already signed a 15 year lease with the Idaho Department of Lands on a building at 803 Bannock. The deal to lease the tax-free public building was done without bids. The state of Idaho’s department of lands sees the deal as a money maker for the public school endowment fund, but some folks question the wisdom or legality of the state going into the private business sector–in this case as landlord. The State has already begun “tenant improvements” on the property, incurring a major expense that officials claim will be recouped in future rental income.

For now the deal is a loser any way you cut it, but if the legislature agrees to amend the Idaho Code, the currently planned illegal arrangement could become legal. It will be 2013 before any changes can be made.

Another awkward consideration is the lease was likely approved by a deputy Attorney General assigned to the Land Board while another deputy AG represents the Alcohol Beverage Control division of the State Police which has pointed out the conflict with the Idaho Code.

Comments & Discussion

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  1. Well, I guess we can just leave it empty for the next several years and get ZERO money for it. I understand, but anything for the education system is better than ZERO.

  2. A simple solution is for the state of Idaho to sell the property. With a tenant already in place the space should fetch a good return. Oh and it will return the property back to the tax rolls where it should have been the last few years as it sat vacant.

    State of Idaho please get out of the commercial real estate business, and the storage business, and whatever private industry you are looking to get into next.

  3. It is amazing how every action (or inaction) of our leadership here in Boise almost never has any forethought.

  4. Have you noticed how many former business owners are now in government? This kind of stuff is why they are former business owners.

  5. Isn’t it because a politician will always make more money than the people that they are working for?

  6. I know, in a round about way the individuals that opened Crooked Fence brewery in Garden City. The aforementioned folks are one of a handful of locals that have opened local breweries and never had the oppurtunity to even apply for a lease on this space. Looks like the same old story for Boise as far as decisions go ie, the grove hotel, the wings at the airport and so on and so forth. Local artists and vendors should always have precedence or at least an oppurtunity to compete for local government support. These people pay local taxes on pre-existing businesses, their children attend our local schools and therefore have a vested interest in our community. Im not saying that makes them a shoe-in per se but regardless of lobbying capability that should certainly put them in a position to be looked at first. Then again maybe that would be socialism, haha.

  7. Ronin: I am not sure many politicians make too much more money than you or I, but they do not need to. The discounted mortgages, never pay for a lunch or dinner, free home remodel, free flights and free vacations allow them to live on less.

    That’s stage one of the career. After the drugs, booze, and prostitutes gets public, they have to take a higher paying job as TV commentators or lobyists. Again, free lunches and dinners.

  8. TRUTH- Would they of leased/bid this property if they had the chance? Pretty expensive per square foot price for a new start up.

    This seems confusing at best with the three tier system. Sounds like if 10 Barrel brewed all the beer they sold on premise, they would be okay. Or come to some agreement with a local distributor to “import” the bottled beer for them.

  9. the website for 10 barrels brew lists as staff a Boise brewmaster.

  10. This quirky law has come up before when the well financed distributors tried to pass legislation that would have enhanced their stranglehold a few years back to preclude in state brewers from selling retail and tried to pass a bill requiring all beer sold to pass through their greedy hands. Their bill would have required an instate brewer to sell their product to a distributor rather than selling it directly to the customer. Luckily that one was beaten down by common sense.

    EDITOR NOTE–We don’t care who sells beer, distributes it, or brews it. The real issue is how short sighted, ill advised, and downright stupid it is for the state of Idaho Land Board to enter into a 15 year lease for a brew pub the State Police Alcohol Beverage Control agency says is not allowed by current law. Now, we can look to attempts to change the law “for the children.” Meanwhile, the land board has “invested” in tenant improvements that will be state owned and tax exempt.

  11. I like the “for the children” thought, it is quite common for the Idaho government to say things like that when it is obviously done for their own greed.

  12. Interesting that these morons think they are looking out for us and we keep electing them.

  13. The Legislature creates the laws and can change the laws (or not).

    The Land Board should not be in competetion with private enterprise nor should they be funding tennant improvements at taxpayer expense.

    The project is even nuttier than the AFFORDABLE STORAGE blunder. I am wondering when or if the legislature can get the backbone to fix this mess as well as the monster called URBAN RENEWAL or as I like to call it TAXATION WITHOUT REPRESENTATION.

    There were plenty of people at the legislature testifying to the issues and opportunites with both the Land Board and URA laws and leadership made sure the fixes were held in committe and did not get a proper airing out on the floor of either house.

  14. Former IDL Dude
    Aug 15, 2012, 9:24 pm

    What is confusing to many is the difference between “endowment property” and other state property. The endowment properties are intended by the State constitution to generate money for the endowments. To generate a researched response instead of just blowing wind, please look at Idaho Code regarding endowments. The Idaho Dept. of Lands website has links to the sections you need. If it passed legal muster (which it apparently did not), then the brewpub would probably make a reasonable tenant for maximized income (a core endowment requirement).

    EDITOR NOTE–From our standpoint, we have a philosophical opposition to the IDL going into traditional private business. That issue aside, their own numbers show they are losing money on many of these ventures. They have refused a reader’s request for rental details and contracts based on “proprietary trade secrets,” a weak argument which can easily be overturned in court, but it takes time and money for citizens to go to court for public information which the IDL refuses to divulge. Secret government competing with business is common in communist states, it simply is wrong for Idaho.

  15. Former IDL Dude
    Aug 18, 2012, 7:37 am

    For the record, IDL is not “going into” traditional private business…it has owned and leased commercial properties for years (several downtown buildings), as well as leasing land interests (grazing, cell tower sites, etc). As for public records, they can (in most cases) be obtained by submitting a public records request to IDL rather than asking for it verbally. That goes to the top, rather than an over-protective employee just saying no. I don’t believe that anything in a commercial lease is proprietary or a trade secret. If they are hiding behind this smokescreen, then the Guardian is correct in questioning their processes.

    EDITOR NOTE- They are indeed refusing to provide the records…I have seen the request and the replyclaiming trade secrets.

  16. Paul hit it on the head, the legislature needs to change the law.

    Pencil pushers such as the Former IDL Dude are just doing their job. At what point did they go from leasing public land in rural areas to playing tax free monopoly with various commercial properties and businesses?

    The answer has to do with Kingdom building. If all the state did was lease vacation properties on ten year leases based on a fair assessed value formula there would not be much work to do. If all the state did was lease ranch land and work mineral and timber deals eventually the IDL would stop growing. How does a bureaucrat move up in a department that is not growing?

    The answer is to figure out a way to grow the department! Because the law was so poorly written the IDL can rationalize buying anything that makes money including storage businesses or commercial properties. The more properties the department buys the more money the endowment makes, the more money the endowment makes, the more you grow the kingdom. It’s time to put some limits on how big this kingdom can grow.

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