Oh my goodness, College President Priscilla Bell must be so thrilled at the news that $6 Million dollars should be refunded to NIC for the pre-paid rent on the Mill site property! She is desperate for money. She recently traveled to Boise to beg the legislature for more funding, and she even asked billionaire Warren Buffett to donate an important piece of railroad land near the Mill site, which Ms. Bell said the college could not afford to buy.
The newly discovered $6 Million refund could go a long way in helping these financial needs. Maybe now the college won’t keep raising our taxes in this tight economy when folks are already paying the inflated NIC taxes that jumped 32% when the college took Foregone taxes, they said at the time, in order to purchase the Mill site.
That happened back in 2008 but the increase is part of our taxes every year now. NIC planned to purchase the Mill site for $10 Million, and they held some public meetings but refused to put the purchase to a public vote. Instead of a vote, which State law requires for big items that require public debt, NIC decided to go around the voters and do what I call a “back door deal”.
Their sly deal went like this: NIC, which is a public institution, announced suddenly, after years of saying they were going to buy the Mill site, that they were not going to buy the property...the NIC Foundation would buy it instead. The Foundation is a private charity so it doesn’t have to follow the same State laws on public debt.
Then NIC took the Foregone tax money, along with some other funds, and they gave $4 Million to the Foundation as a down payment on the lease.
The Foundation and NIC created a Lease Agreement, whereby the college would lease the land until July of 2013 for just over $2 Million per year. The Foundation took the down payment, went to Mt. West Bank, got a $6 Million dollar loan and bought the land.
The Lease Agreement is a very interesting document because it does not read like any other lease agreement used in normal business dealings. It says that at the end of the lease term OR whenever the Foundation pays off the loan to Mt. West Bank, that the title to the land MUST be transferred to the college and that the college MUST accept the title. That’s weird.
So, shortly after the strange lease agreement was created, a small group of three citizens filed a lawsuit against the college. They claimed the lease agreement was improper; that it is really an installment purchase plan and, as such, requires a vote of the people. The citizens asked for no money in their lawsuit, only a public vote. ( And they paid for all the legal and court fees themselves.)
In all of the pre-trial hearings, motions and mountains of paperwork, the college and the Foundation always insisted, over and over, that this deal was NOT a purchase. It was only a lease. Year to year. That NIC could walk away from it at any time.
Judge John Mitchell allowed the NIC and Foundation attorneys to drag their feet and delay this case. It was never allowed to come to trial even though the case had substantial legal precedent in Idaho, with a similar case in southern Idaho recently decided by the State Supreme Court in favor of the voters.
And so the story gets even more twisted when just last December, with the citizen lawsuit on appeal to the Supreme Court, the NIC board hurried to purchase the land from the Foundation.
What was the rush? Well, the answer probably lies in the Supreme Court’s decision, handed down shortly after. The Court said the whole issue of the constitutionality of NIC’s actions is now a “moot” point; that it doesn’t matter anymore because it’s all done; they now own the land.
Lesson to other college or city officials: If you’re going to do something illegal, first try to hide it. But, if you get sued, tell your attorneys to drag out the process, make sure the judge never lets it come to trial and then hurry to fix the problem so the courts can call it “moot” and they never have to make a decision on it.
Yes, it makes me crazy too.
But we’re not done yet! There’s more insanity in this mess!
In order to “purchase” the land from the Foundation, NIC gave them advanced lease payments out to the end of the lease. You see, they were so arrogant, so disrespectful of the law, that they never even created a Purchase Agreement. There is none, there never has been one. So the only thing the money could possibly be is advanced payments on the Lease Agreement. It’s even referred to as such on NIC’s own web site description of their board meeting on 11/18/10.
Now NIC owns the land. You can’t lease land from yourself, right? So those extra lease payments made to the Foundation should now be refunded back to the college: That will be $6 Million dollars, please!
What a relief for President Bell. Now she doesn’t have to worry so much about money. And what a boon for other taxing officials. Now they have another proven method for getting around the Constitution, squashing citizen advocates and avoiding the voters. Ms. Bell and the NIC Trustees must be so proud.