Sequels rarely work. Often times the second will be okay, but the third installment and on tends to be a miss as often as it is a hit; for examples see the fourth Star Wars movie, the last Indiana Jones, and the last six or seven of the Friday the 13th series. Much like the Friday the 13th series, the story that has developed around the purchase of a self storage facility by the state of Idaho does not appear ready to go away anytime soon.
Back in 2010, the Department of Land for the State of Idaho purchased a self storage facility, Affordable Self Storage, for $2.7 million. As part of its duty to manage land endowments, the department has made several purchases in the past years (office space, parking lots, etc.), but never of a self storage facility.
There was an almost immediate outcry and controversy has surrounded the purchase ever since. Should a law recently introduced by State Representative John Vander Woude would require the Land Board to get out of the private sector and sell or lease all business operations currently in the endowment’s portfolio.
"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."
When it made the purchase in 2010, activists accused the government of meddling in the private sector. Many believed that a state-run self storage facility would have a competitive advantage over other local facilities. They also said that since state-owned facilities were tax-exempt that schools would lose some much needed funding.
The Land Department was quick to counter that argument by pointing out that while local schools would lose approximately $10,000 in taxes they would gain more than $20,000 in earnings from the land endowment.
“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...” said George Back, the director of the Department of Lands.
The controversy has caused some to question the judgment in making such a purchase. In the last year pair of state legislatures has said they changed their mind concerning the purchase as has Governor Butch Otter.
“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.”
The problem that will likely be discussed is that it is the job of the Land Board to try and get the highest returns when it comes to endowment properties in order to benefit schools the most. At this time the self storage industry happens to be one of the best investments in the market.
Sources Used:
“Under bill now in House, Idaho would have to sell self storage business.” The Republic.com; 07 February 2012.
“Idaho Self Storage Controversy Gets a Little More Interesting.” Self Storage Industry News; 13 December 2011.
“Boise schools will get more from storage business.” KTVB.com; 26 October 2010.