[Vision2020] Closing Alturas

[Bill London]

 At the Urban Renewal Agency meeting on July 24, BJ Swanson provided this testimony.  Swanson, the present chair of the Gritman Medical Center Board, is the former President of the Moscow Chamber of Commerce and the former chair of the Latah Economic Development Council.  She has been a strong supporter of the Alturas development and an outspoken supporter of economic development in Moscow.  When she speaks out so forcefully and convincingly about the need to close Alturas and the role of the city in economic development, we need to pay attention to her message.  BL 
URBAN RENEWAL MEETING 7 24 08

B. J. Swanson:







I'd like to request that the URA commissioners revise the budget presented and adopt the goal to close the Alturas URA district as soon as possible. Based on the current tax receipts and expected lot sales, the Alturas URA district could be closed within the next two years. In two years, this action will return over $300,000 annually to benefit all property taxpayers in Latah County.




When the Alturas URA district was formed in 1996, the goal was to diversify the economy and broaden the tax base. It was originally set up to close in 7 years because we wanted to see the benefit to all as quickly as possible. That proved to be too optimistic so the timeline was revised to be 20 years. Now we're going on year 13. In year 15, or sooner, it could be closed. 




Alturas created jobs and economic value. It has been a success as there are ~150 jobs in Alturas and the tax increment generated last year was $267,176 that went entirely to the URA. Legacy Crossing needs to create jobs too. Create a tax base to benefit all. Legacy Crossing should NOT be a housing project. Housing and retail do not create economic value and will not pay the bills.




The Legacy Crossing URA District has its share of opposition. There is also opposition to a governmental entity hiring an Economic Development Director as evidenced by two recent editorials in The Daily News and several online comments. By showing good faith and closing Alturas early, I believe this will greatly reduce animosity with your partners and certainly build better rapport with all the taxpayers in Latah County.




The URA budget is divided into three parts: General Agency, Alturas and Legacy. However, the sole income source is entirely from Alturas. Legacy should stand on its own just as Alturas did. Alturas should not be used to fund Legacy Crossing.




Government certainly has a place in our society. Government is good at policy and regulation, but terrible at being efficient. Economic Development directors employed by governmental entities are extremely inefficient. That is why Lewiston and Pullman do not have economic development directors. 




The Urban Renewal Agency does not have a good track record in prudent management of projects. This is typical of governmental entities. Please don't buy into thinking a government employed economic development director will give any kind of return on investment. In private business, "Time is Money." In administration of the URA, this is not the case. For example:




The Alturas Phase II expansion was first talked about in 2003 with a preliminary budget of $180,000. As of your audit date 9.30.2007, the project was not yet complete and the price tag was over $575,000. That equals cost overruns of 220%. Today, you talked about the monuments still not being completed in Alturas Phase II. A private contractor would have finished this in 6 months; it took the URA 5 years. If a private project manager had taken 5 years and had 220% cost overruns, that person would have been fired for wasting time and money.




Another example: In 2005, the URA purchased 6.34 acres from the Thompson Family for $614,145. I believe this purchase price was based on "Unimproved Land values." The land had already been platted into 7 lots or about $87,735 per lot. Infrastructure to "improve" the 7 lots cost an additional ~$575,000. So, 7 lots with an investment of $1,189.145 or $169,877 per lot. It appears the first two lots were sold for around $80,000-$90,000 each. Not even enough to payback the "unimproved land" debt. Here is another example of poor decisions and unacceptable management. Obviously the unimproved land was purchased at "Improved Values," then more money was paid for improvements. Using URA tax receipts to pay premium prices for land and allow 200% cost overruns on improvements, is basically robbing the taxpayers of Latah County. If there had been prudent management of land and funds beginning in 2003, the Alturas URA could have been closed by now and all taxpayers of Latah County would be benefiting.




These are just two examples of why a governmental entity should not get involved in development. Your request for $40,500 for half of the government employed economic development director and $30,000 (a $5,000 increase over last year) for URA administration is wasting taxpayer money. You justify the $70,000 by talking about how many hours you spend on URA. Please look at it from the position of "What did we accomplish for $70,000, what was the return on our taxpayers investment?" Selling one lot in Alturas Phase II in the last year for less than your investment in the lot is not a great accomplishment.




Please revise the entire URA budget. Prioritize efficiency and return on investment. Eliminate all discretionary expenses, pay down debt and conserve cash to close this within 2 years or less. Please stick to policy and regulation. Leave development up to the private sector.



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