State Goes Into Direct Competetion With Private Enterprise

State Owns Tax-Exempt Commercial Storage, Competes With Private Business

Tuesday, October 19th by David R. Frazier

Politicos are fond of attempting to “run government like a business” in these hard economic times, but how about government flat out running a business?

The State of Idaho recently created a front company which discreetly operates a tax-exempt commercial public self-storage facility hiding behind the assumed name of “Affordable Storage” at 450 South Maple Grove in Boise.

The GUARDIAN was tipped off about the tax-exempt facility owned by the state because of our concerns with cities entering the commercial real estate speculation business at airports if HJR5–the proposed constitutional amendment–were to pass.

According to our confidential informants, the private facility was up for sale for several months and was sold in September for $2.68 million dollars. That effectively took about $40,000 out of the coffers of Boise and Ada County governments and the Boise School District. In addition, there will be a loss to the state of an estimated $16,000 in income taxes.

Jake Smith of Republic Storage said his firm owns 13,000 units at 17 locations in the Valley. “It’s damn difficult to do business when your competitor doesn’t pay income or property taxes,” said Smith.

Records at the Ada County Assessor show the current value is a mere $400, but at the first of the year it was appraised at about $2,000,000. We visited the site and it is a very modern and well maintained storage business consisting of several parcels including an office and what was once a manager’s residence.

The “True Name” of the business entity is listed at the Secretary of State as “State Board of Land Commissioners as trustee for the Idaho Endowments.” The profits from the commercial venture are destined to the state school endowment fund. Since the transaction was a “quit claim deed” and not a warranty deed, our experts figure it was some sort of land swap.

While it may be good business to diversify investments, it sure as heck isn’t good government to compete with private businessmen who are at a disadvantage coming out of the gate since they have to pay taxes and compete with their tax-exempt state government. Ironic that state wide elected officers are eager to crate jobs during this election year, but quietly start their own LLC to compete with the private sector.

They may be well intentioned, but certainly ill advised. We were told this Limited Liability Corp. (LLC) is the first one attempted by the Land Board. It will probably be the last too.

At the risk of fanning the flames, we note that Communist China, Vietnam, Cuba, and some Mideast sheikdoms are known to operate state-owned businesses. Just can’t imagine such a thing in a place like Idaho.