To the Editor
I attended Monday's City Council meeting where the fate of the old JC Penney building across from Radio Shack was decided. I didn't really know much about the proposal before I got there and still don't claim to know much more about it after hearing arguments from both sides. But here at least are the impressions I came away with overlaid with, what I like to think is, common sense.
It was apparent from their demeanor and body language that the council was predetermined to spend the money (more than half a million tax dollars) on the project regardless of how good an argument the opposition made against it and indeed in the end, I heard only one dissenting vote. Knowing the outcome in advance made the rest of the meeting feel almost ritualistic. The speakers from both sides were impressive and I found my opinion being swayed back and forth between them.
Now, after having slept on it and with the clarity each new day brings, I think I've digested enough information to comment on the project: Most importantly, it's purely speculative. That was driven home over and over in the meeting by its proponents - I guess to serve as a disclaimer in case someone ever tries to hold their feet to the fire. There's no guarantee that anything positive will come of it. It's something new, unlike anything the city has ever tried before. In fact, using the town's own best examples and if seeing is truly believing, the odds of success are pretty slim. That's the sum of what both sides seemed to agree on. Speaking from considerable experience, I can honestly say that a proposal such as this wouldn't stand a chance in a corporate boardroom, where an actual return on investment is expected.
One problem I noticed right off was that the city introduced the project as an "either/or" proposition - comparing the cost of demolishing the old building to the cost of renovating it as though there were no other options. It supposed the present owners will default on their property taxes if the city doesn't agree to pay for the building's renovation. Now right here was where logic fails me. Ordinarily when a property owner doesn't pay his taxes, the treasurer holds a tax sale. That's the way it's done all over the country. Why is the city getting in between that process? If nobody assumes the tax debt, isn't that the more appropriate time for the city to decide what to do about it? The old JC Penney building was purchased for $17K just three months ago by the Estherville Industrial Development Corporation (EIDC) Estherville's former mayor. Lyle Hevern, President. Why is the city so fearful Lyle won't pay the taxes?
Now there are generally 2 reasons people don't pay their property taxes: Either they can't afford to pay them or they don't think the property is worth the cost of owning it. Didn't EIDC take either of those things into account before it bought the building last October? If EIDC doesn't think the building is worth its taxes, why did it buy it and what possible reason could the city have for throwing over a half-million tax dollars at it? And by the way, that sounded to me like an obscene amount of money for the work being proposed. What's even more disconcerting is that no one at the meeting sounded the least bit optimistic about ever seeing a positive return on the city's investment. Granted there was some talk of an upstairs tenant but not the type (a telemarketer) with a track record of staying in one place for long or creating long-term, good-paying jobs - and not one that would pay enough rent to offset the building's monthly costs.
The nicety of preserving an historic old building was brought up. If you ask me, the old JC Penney building is depressingly ugly and will still be depressingly ugly even after it's restored. That could be one of the reasons the building hasn't seen much action over the years. I've never once seen or heard anyone admire it, in fact, most of the people I know don't even know where it is almost like it's invisible.
The other thing I noticed was the cost it kept going up. When the meeting started, the renovation cost was $400,000. Soon afterwards it drifted to over $500,000 and then to over $600,000 with no certainty where the figure might eventually top out. "In for a penny, in for a pound", I thought. No one challenged these projections. No one even challenged the suggestion that the building could never hope to pay for itself or that it had a strong potential of becoming an albatross around the city's neck. I would have also appreciated it if the speakers would have offered us full disclosure as to their financial interest in project. Unfortunately the City Council didn't ask them to do that nor did any recuse themselves from the vote.
In short, I heard absolutely nothing that would induce a corporate board member to support the expenditure. After all, the city was talking about buying a bill not a building. And that's when I knew the City Council would approve it. Why else would this proposal still be on the agenda? A measure to pour more than half a million dollars into a private property, alleged by its landlord not to be worth the value of its tax liability, should not be getting airplay in the City Council - but yet it was. Where so much money is at high risk, it's hard to understand the city's motives. I was thinking about some of the business owners in the room and on the council. How would they respond if someone pitched a business proposal like this to them? So it seems Estherville is now officially in the "bailout" business for landlords who are NOT too big to fail and do NOT provide jobs to the community. New territory indeed - territory not even the feds have so far dared to explore!