The City's Pulse Newsletter
Bamboozled by the "Ultimate Insider's Game"

Big cities like Los Angeles, San Francisco and Portland may look down on little Coeur d' Alene and think we're hicks from the sticks, but we're not.  We're just like the big boys and we're being bamboozled in big, sophisticated ways, just like they are. 

The LA Times newspaper published an article on July 20 about the enormous money being made by urban renewal projects using taxpayer subsidies.  It quotes one urban analyst as saying "The people of Los Angeles are the backdrop to a bunch of people who use the city as a way of enriching themselves."  Another went on to say, "It's the ultimate insider's game."

The method in question is one of using public tax subsidies to increase profits for private developers.  Here's a San Francisco example cited in the article, explaining the profits on one apartment building:  "City officials sold the site for $12 million below market value to ensure that 10% of the apartments would be reserved for lower-income residents..." The private development company later negotiated a high-end Whole Foods supermarket in place of the subsidized lower-income apartments.  "That project, when sold, gave investors a financial return of more than 42%", the article reports.

The Times details one private development firm that boldly brags in its sales brochure about its success at securing taxpayer subsidies, lenient parking requirements and higher densities for housing.  Notably, this development firm also donates heavily to the campaigns of local city officials, the article reports.

A concerned Neighborhood Council member in LA reacted by saying, "It confirms my worst fears...Whatever the developers propose, whatever subsidies they request, it's all rubber-stamped."  

This type of scheme is creating problems all over the country. Jeff Cogen, an elected Commissioner for Multnomah County near Portland, has a unique method of explaining the negative impacts of urban renewal.  He made a You Tube video where he compares urban renewal to a Monopoly game.  Jeff shows urban renewal piling most of the money and buildings onto only a few of the game's properties, while taking away dollars from the rest of the board.  That leaves the others without enough to compete, he explains.  He also points out that urban renewal siphons off money for buildings and property, leaving cities and counties short on cash for people and services.

Here in Coeur d'Alene we're not living up to our cultural heritage.  Our city's name means "sharp-hearted", earned by this area's Indian tribe for their shrewd business dealings with the French fur trappers. The tribe did not fall for fast talk or the promise of pretty trinkets, and neither should we. It's time for taxpayers to wise up to these private profit-making plans subsidized by public dollars.

The LA development company boasts it has a team assigned to "mine subsidies" at the city and elsewhere, the Times article states.  These money making lessons are learned quickly by savvy, sophisticated developers in big cities and right here in our wonderful town too. We need greater oversight by our Mayor and City Council, a re-evaluation of our urban renewal district boundaries and time lines, and a thorough review of project details.  

Coeur d'Alene is a natural treasure worth guarding from opportunists.  We may be hicks from the sticks, but we have a strong dose of common sense.  Let's use it to see through the slick talk. Public money should not fund private profit. That's an insider's high stakes Monopoly game where offenders should not advance to Go and should not collect any of our tax dollars.


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Dear Newsletter Readers, 
An alert reader sent me the following information, obtained from the Kootenai County Assessor's Office and reflects actual 2007 tax bills for 4 area properties.  I have the addresses and parcel numbers to back up this info.  These example properties show the small percentage of tax money that goes to our city & county, and how much goes to LCDC.  Remember that those of us living outside the LCDC districts pay more to offset the money the city and county are shorted by this operation.
Property 1:  Tax Bill=$9,100.    Dollars Paid to City/County=$347.   Tax Dollars to LCDC=$8,753.

Property 2:  Tax Bill=$14,795.  Dollars Paid to City/County=$7,363. Tax Dollars to LCDC=$7,432.

Property 3:  Tax Bill=$34,393.  Dollars Paid to City/County=$856.    Tax Dollars to LCDC=$33,537.

Property 4:  Tax Bill=$23,907.  Dollars Paid to City/County=$775.    Tax Dollars to LCDC=$23,132.

This impact is essential for all of us to understand.  LCDC gets the tax increment from every single building, old and new, in both of their huge districts, which cover downtown, NW Blvd, Riverstone, out Seltice to include Mill River and much more in between.  Look at the tax allocations above.  Then think of the vast number of buildings in the two districts... it's massive money that gets bigger every year.   Have a great week.  --Mary

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Mary Souza has been a concerned citizen of CdA for over 20 years. She's a local small business owner, former P&Z Commissioner and wrote an opinion column in the CdA Press on local issues.  Her opinions are her own.

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