Do you sometimes feel stupefied by the news? As if you can’t believe the lack of common sense or rational thought behind the actions of our officials?
Well, today’s newspaper reports the NIC Foundation has “sealed the deal” for the purchase of the DeArmond Mill site. It’s not surprising that a college would buy some nearby land for future expansion. Not until you look beyond the face of it and see the astounding audacity of its behavior.
There are so many details amiss in this transaction that I cannot possibly address them all in one newsletter, so let’s review the top three, starting with the the appraisal.
There was no appraisal on the property. The college planned to buy this land for $10 million taxpayer dollars, but they had no appraisal before the price was established. After a great deal of public outcry two years ago, the college finally agreed to get an appraisal. The problem is they got only one and it was from a very compromised source.
NIC has a professional services policy which requires multiple bids before they choose accountants, lawyers and other such assistance. But for the appraisal on the $10 million dollar land purchase, they asked only one opinion. Out of the many qualified commercial appraisers in our area, the NIC Board of Trustees chose an appraiser who is a frequent, documented business associate of NIC Trustee Judy Meyer and her husband Steve.
(What? There’s no conflict of interest there...don’t be ridiculous! He’s a nice guy and people around town know him.)
His appraisal came in close to $13 million, which is exactly what I predicted beforehand because it made the deal look like a bargain.
(We should really thank the big developer who somehow inserted himself between the Mill owner and the college, even though the college says they’ve been looking to buy this property for 20 years, so he could “help” the deal along and then the public could never see the actual purchase or cleanup details because it’s a private transaction.)
The second slap in the face for every taxpayer in Kootenai County is the price tag on this property. The $10 million dollar total was set more than two years ago, before the appraisal, at the peak of the runaway real estate market. It’s 17 acres next to the sewage treatment plant. That’s $588,000 per acre!
The local market has now plummeted in value, with assessments down 15-30% and banks dropping another 15% off most valuations because they consider the county’s assessments unreliable in this economy. The appraisal is no longer valid. But did NIC negotiate the price of the property down at all? No. And now they’ve signed the deal for the full amount.
(It’s only taxpayer money, afterall.)
But it’s not just taxpayer money, it’s additional taxpayer money, over and above what we’ve all been paying for NIC. And we didn’t get any say in the decision.
The third insult to the public is the NIC Foundation shell game. The NIC Board of Trustees represents the college. The NIC Foundation is a 501(c)(3) charity which gathers donations for scholarships and such. The Foundation is a private entity. It is not part of the college and does not have to tell the public about its transactions. Its members include Mayor Sandi Bloem, NIC Trustee Mic Armon, NIC Trustee Judy Meyer's husband Steve Meyer, and many other closely connected people.
Before a meeting more than a year ago, I privately asked one of the main NIC Trustees why they didn’t just run a public bond issue for the purchase of the land, and let the taxpayers vote on the issue. He told me they wouldn’t do that because “we’ve been told it wouldn’t pass”.
So what they’ve done instead is a roundabout-backdoor deal with the Foundation. The Foundation got a bank loan for the money and the Foundation is buying the property. The college will lease the property from the Foundation until the college gathers enough of our additional foregone taxes---an extra $2.4 million per year from now on--- to pay for the deal. Then the Foundation will give or sell or somehow get the property over to the college.
(It’s called “how to avoid the voters but still take their money”)
What happens if the NIC Trustees fail to make repayment to the NIC Foundation? And how can it be proper for the same attorney represent both NIC and the Foundation?
(Oh, and don’t be surprised that the bank which is financing this deal is Mountain West Bank, where NIC Trustee Judy Meyer and her husband Steve have deep ownership interest. But there’s no conflict of interest there because this morning’s paper said the college asked for competitive bids. And we all know the Meyers don’t have conflicts, even though Steve Meyer employs CdA councilman Mike Kennedy, full-time, as president of his electronic communications company. It’s a position Mike was given after he won election to the council in 2005. Mike had no background in that industry but was brought in as president of the company. And did I mention that Steve Meyer, Judy’s husband, is also a long-time business partner with Charlie Nipp in a real estate development company? Charlie was the chairman of LCDC until a year ago when he gave up his leadership title but retained his board membership after the State Attorney General started looking into possible conflicts of interest because Charlie signed 6 loans between the LCDC and Mountain West Bank without divulging his business relationship as a board member of the bank.)
Astounded. Disappointed. Disenfranchised.
It’s not the purchase of the property, it’s the irresponsible process by which it was achieved. The voters and taxpayers of Kootenai County were not well served in this course of action, and this end certainly does not justify the means.