Continued discontent from some Idaho lawmakers over the state’s purchase of a self storage property for a commercial venture prompted the introduction of a new bill on Tuesday that would set restrictions on what types of buildings the state Land Board can purchase in the future for investment purposes.
The legislation was spurred by the Idaho Land Board’s decision to purchase Affordable Self Storage for $2.7 million last summer. The Idaho Land Board is a group of elected officials dedicated to bringing in fiscal returns to the state treasury to invest in education, health and welfare, and other government programs.
The proposed bill by Nampa Republican Reps. Bob Schaefer and Rep. John Vander Woude is the result of some lawmakers’ opinions that it is unfair and inappropriate for the state to dabble in commercial ventures on a tax-exempt basis. The measure would require state-owned businesses using non-agricultural land be sold to private persons.
“They are running it in competition with all the other storage units in the state,” said Vander Woude. “I believe philosophically that the government should not be buying businesses and competing against the private sector.”
The venture has been an area of hot contention in the state with the Boise Guardian printing an editorial last October accusing the Idaho government to that of communist China, Vietnam, Cuba, as well as some autocratic governments in the Middle East.
The Department of Land, which oversaw last year’s August purchase, says it’s diversifying the traditional agricultural and timber land holdings in its endowment land portfolio in order to boost investment returns that benefit Idaho schools.
Other investments were considered by the Idaho Land Board, but self storage were considered the least risky and most stable, said Idaho Lands Department business analyst Jane Wright.
“Our priorities for new assets are to increase net cash flow, obtain all purpose legal access, diversify the asset type and reduce management costs,” she said in October. “Our number one priority is to increase net cash flow. This property, based on our financial analysis, did that.”
Hurst, Dustin. “Bill Would Limit Land Board Purchases, Prevent Accumulation of Businesses.” Idaho Reporter.com Feb. 22, 2011.
“Lawmaker Takes on Idaho Expansion into Storage Biz.” Bloomberg Businessweek. Feb. 22, 2011.
Kilpatrick, Kim. “Should State Governments Get Into the Storage Business? Public Reaction to Idaho’s New Self Storage Venture is Mixed.” Self Storage Industry News. Oct. 21, 2010.