It has been over a year since the Idaho Department of Lands added a self storage facility named Affordable Self Storage to its portfolio for $2.7 million. Since the purchase was completed there has been an ongoing controversy on whether it is appropriate for the state to get involved in such a business enterprise that is in direct competition with so many privately held facilities.
The controversy recently took an interesting turn when Idaho Governor Butch Otter stated that he now feels that the state made a mistake in making the purchase.
“I think that was a mistake,” he told the Idaho Reporter. “But, I’m the first to admit it. I sat right there and asked a bunch of questions about it. And, it’s not a mistake we’re ever likely to make again.”
Last year, when the controversy began, he defended the purchase by saying that there are a number of properties that the state owns and collects rent off of making the purchase of a storage facility not any different. The Education Trust that the state operates and where the state got the funds from to make the purchase owns numerous office buildings and parking lots.
Many private citizens and advocates of fair competition where quick to see the difference between what the state already does and this situation; it puts the government in direct competition with private owners.
"They don't pay property taxes, they don't pay for any of the services like fire and police, and yet they still get it all," Representative John Vander Woude said. "My biggest fear is, they want to start trading off a lot of their forest ground and cottage sites, and put that into commercial."
The state Department of Lands director George Bacon responded to those concerns with,” Any investor or interested buyer could have submitted an offer. The state followed a traditional investor path of inquiry and ownership by submitting a letter of intent...”
Since then a pair of legislators that were in support of the purchase have reversed their position. House Bill 188 has been proposed as well by Woude and another state representative, Bob Schaefer. Should it pass it will limit the scope of activities of what the Education Trust can get into. Essentially, what it aims to do is keep the state from making purchases and not using them for a public purpose.
There has been no word on whether the state plans on selling the self storage property to a private owner(s) since the governor has conceded that the purchase was a mistake.
Sources Used:
“Governor Says Storage Purchase Was a Mistake.” SSA Globe; December 2011.
“Two Key Players in State-Purchased Self Storage Business in Idaho Reverse Stance.” Self Storage Industry News; 12 July 2011.