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.
(Source: Zahniser, David (2008, July 20). Firm boasts about ‘mining’ tax dollars to make big profits, Los Angeles Times online. Retrieved August 19, 2008, at http://www.latimes.com)
With Mary’s permission, I added the “source” link in parentheses to the article she cited. You may need to register with the LA Times to read the article, but unlike the Spokane losepaper, registration is free.
Comment by Bill — August 19, 2008 @ 11:27 am
Whoa! Wait a sec. There’s a newspaper in Spokane? You mean the Inlander? Did it go daily?
Comment by Dan — August 19, 2008 @ 12:54 pm
rumorama in spokane is the ss losepaper is about to go for another round of layoffs. ss is gloating about this we hear.
Comment by TheWiz — August 19, 2008 @ 4:06 pm
TheWiz,
I can’t imagine how the Review could reduce its manpower any more and still survive. It dares not reduce the number of reporters or require them to expand their coverage subjects. Technology can only go so far toward doing more with less. Its north Idaho reporting has deteriorated even more than when we stopped our subscription about a year ago.
Comment by Bill — August 19, 2008 @ 5:29 pm
they lost over 4,000 subs when they pulled their steve smith led retreat from north idaho. smith seems determined to gut the poor losepaper and leave it bleeding in the gutter. good on him!
Comment by TheWiz — August 19, 2008 @ 6:21 pm
The SR has shut down several of their blogs for lack of interest. This would include Smiths own “News is a conversation” [but only if you agree with me] blog. It is also interesting that the SR is no longer included in HBO’s newspaper links. I wonder whom is trying to distance their sphere away from the other on that deal?
Got to hand it to Hagadone. He had enough brains to can DFO before he could trash circulation. THe Cowles are letting him tank the whole paper. Then again maybe all the red ink gives them a tax deduction.
Comment by Wallypog — August 20, 2008 @ 7:34 am
Wally, it’s not DFO trashing the S-R, it’s Steve Smith. He should have his cranium scanned for prions.
Comment by Dan — August 20, 2008 @ 9:47 am
Hey, how did my column on URBAN RENEWAL get off on the tangent of the Spokesman Review? You guys could probably go for days on that subject, which is a waste of time.
Does anyone have ideas for revamping urban renewal in CdA? How about any comments on the urban renewal staff changes in Post Falls? There’s an opening at the Director’s position now that Luke Malek is going to law school.
Comment by mary — August 20, 2008 @ 10:39 am
Some basic thoughts on revamping urban renewal in Coeur d’Alene.
The city council must provide oversight/accountability of URA board actions including approval of all debt incurred and pre-approval of all property purchases made by LCDC.
Full disclosure of all LCDC board members of any possible conflict of interest.
Require the LCDC report to the city council during the next regularly scheduled council meeting the activities discussed during their regular monthly meetings.
Require Fiscal Impact Statements for both the Lake and River Districts stating their impact on all taxing districts on an annual basis or when boundaries change.
Limit use of tax increment financing to specific well defined infrastructure projects.
Require notice of the URD impact amount to voters on all taxing districts levy election ballots.
Amend the distribution formula of Idaho Code 50-2908(b)to take all tax revenue from bonds, overrides and plant facilities reserve funds away from the URD.
Eliminate Owner Participation Agreement financing on private improvement of real property and clearly delineate the difference between public use and private use.
Establish an allocation for affordable housing issues such as the 3% the LCDC earmarks for public art.
Public disclosure of individuals and companies who receive LCDC funding and the amount of this funding.
Most importantly require specific plans with a shorter duration to return the improved properties to the tax rolls sooner.
I submit that the strong leadership of Post Falls Mayor Clay Larkin and city council will help keep their Urban Renewal Agency on track with their stated mission and not allow it to morph into a “development corporation.” I haven’t seen a job posting for Luke’s position.
Comment by Jim Brannon — August 20, 2008 @ 1:58 pm
I think a standard of proven financial need by the applicant be required as well. This was discussed at a LCDC meeting a long time ago; however, I think it was not implemented.
By the way, LCDC did not approve the request by Messrs. Chamness and Amend to provide $75,000 for a signal at Golf Course and Ramsey Roads. They did suggest that they speak with both the county and fire department (also county) regarding the request.
Comment by Susie Snedaker — August 21, 2008 @ 6:41 am
Having read the SD 271 Long Range Planning minutes of September 26, 2005, in which the possible closure and sale of Sorensen/district office site was discussed, it occurred to me that someone had their eye on this beautiful block for future development. Now that it is included in the URD, the issue of perpetual ownership is raised. Should the district accept LCDC funds for ADA upgrades, what happens should they decide to sell the property?
Comment by Susie Snedaker — August 21, 2008 @ 3:18 pm
If Hazel Bauman wants to garner public support for future School District 271 expenditures, she needs to decline LCDC funding. One agency taking money from another doesn’t seem appropriate. ADA compliance has never been mentioned in past levies. I hope Superindent Bauman does the right thing and lets voters know what they need to run an efficient district. I believe support for the district will surprise quite a few. If the district accepts money from LCDC, the local URA will have succeeded in getting their claws into another public entity. The school district will lose the ability to be objective about LCDC matters much as the Coeur d’Alene Chamber of Commerce has been relegated to a cheerleader for Berns and Company. Tell them to keep their funds and find another local project if they can.
Comment by doubleseetripleeye — August 21, 2008 @ 6:17 pm
Jim Brannon–your suggestions for LCDC are great! I hope they are checking in here to see your positive, constructive comments. And it’s not even costing extra money. Who needs a PR Agency?… These are free suggestions from real citizens. (we don’t need stakeholders)
Comment by mary — August 21, 2008 @ 7:48 pm
Doublesee: I agree with you about the school district. If Hazel wants to confirm to the community that the leadership style at the district has actually changed, she will thank LCDC for the offer but decline taking the money. Then she’ll come forward to the communtiy, when it is time, with a levy or bond issue that will include the renovations needed for Sorenson and Winton. It’s clean, proper and the right way to do the district’s business.
If, on the other hand, the district takes the LCDC money, it will show the voters that nothing has really changed; it’s just the same good ‘ole stakeholder network where LCDC buys support from all kinds of public entities and they, in return, never say a negative word about LCDC, no matter how outrageous their actions.
Comment by mary — August 21, 2008 @ 7:53 pm
so no matter how many ‘good things’ a person or organization does, the moment they do something in conjunction with lcdc they automatically become ‘bad’? you have been praising hazel, but that only continues if she adopts an anti-lcdc attitude? shouldn’t a cas-by-case basis exist, or is it just all or nothing?
Comment by reagan — August 22, 2008 @ 7:56 am
reagan,
So if my pastor commits murder, that would be ok according to your statement.
Comment by concerned citizen — August 22, 2008 @ 2:31 pm
It can be argued that the LCDC’s pattern is predatory if it’s proved that they ask for things in return for their largess.
In the case of the CdA Chamber of Commerce, the LCDC gave them $250,000 for their new building downtown. (By the way, the “public benefit” of that building is that we can use the bathrooms.) But tell me if the Chamber has now or in the past ever opposed anything the LCDC has done? How did the Chamber come out for the last City Council elections? Are their views now skewed by the influence of that LCDC money? The same questions can be asked of any organization blessed with LCDC cash, and it will be asked of the schools should they accept the money and get into bed with the LCDC.
Comment by Dan — August 23, 2008 @ 9:08 am
The public benefit at Parkside Towers will be enjoyed soon by a friend of mine and her dog, Grafton as she joins me and my pug for coffee and sweets at the 3rd floor plaza paid for, in part, by public funds via LCDC.
Comment by yabetcha — August 24, 2008 @ 6:45 pm