Tuesday, January 29, 2013

Airport City - A Scam On Taxpayers and Free Markets

Tomorrow when the Airport announces its multi-county effort to create an "airport city", I will be traveling.  I'll not be able to address for another week, their claims of being an economic development engine that we should all get behind.

However, I do know a lot about this airport city, as they have been moving it along a high speed track for a couple of years now.  I do have some things to say that will undoubtedly stand up to whatever outrageous claims they make tomorrow.

The basis of the airport city is that the Indianapolis Airport owns thousands of acres of land that they do not need for either aviation or security purposes.  The old terminal and old parking lot space along I-465 will be familiar to most folks in Indy.  The acreage has either outlived its utility for aviation, or was purchased with federal dollars through a noise abatement program.  The community has always been told these parcels would be bundled and returned to the tax rolls.  Now the Airport wants to keep them off the tax rolls, so that the Airport can get its fat cut.

I do hope they are asked how many acres are actually involved - specifically for each county.  I'd hazard a guess from maps that it is hundreds of acres in Marion County, approaching one thousand, if not reaching it.  And there are a thousand or two combined in Hendricks and Morgan Counties.

There are three reasons for all residents of our area to oppose this plan.

1) it keeps significant swaths of land off the tax rolls that could be contributing property taxes.  This would help reduce the average tax burden of current property owners AND, simultaneously, add much needed additional revenue to pay for basic services - schools, libraries, police and fire, to name a few.

2) the excess land is being kept so that the Airport can charge companies a 'lease payment' for the land upon which they would build.  This is why the Airport wants to do this airport city - to make tens of millions to hundreds of millions of dollars a year - without having to dirty their image by asking for a cut of property taxes.

3) it is very likely, if not guaranteed, that the lease payment will be less than a company would have to pay in property taxes on that land, had it been returned to the tax rolls.  This gives an unfair advantage to companies locating on airport property.  The Airport would also demand other tax incentives, undoubted, to lure tenants.  All taken together, the Airport would become a competitor to neighboring industrial parks who are trying to make it the American way - through the free enterprise system.

The Airport does not go through the regular zoning process, although the Courts have decided that they must.  They have no standards and really don't care what eyesores they create next to privately owned property.  Take for example, the travails of Dee Wilson.  Wilson owns property abutting the north east corner of the Airport, right near Washington Street.  He had interest in his parcel until the Airport let rust buckets of shipping/semi containers be stored next to his property.  All interest is gone and the Airport has offered less than 50 cents on the dollar.  Wilson has declined their 'offer'.

The Airport is currently offering buyers of the United Maintenance Facility bonds 10 cents on the dollar.  Even though the Airport made $75 million in cash profit last year, they have no conscience in low balling folks who thought they were trustworthy.

The Airport is trying to expand the footprint and role of local government, to create a local fiefdom - and taxpayers and the free enterprise system will pay the price.


Anonymous said...

Okay this is a question for the lawyers out there, why doesn't the land not needed for the airport return to the tax rolls? On one hand the airport litigates anyone who competes with them using tax payer funds, e.g. the car parking area near the airport. On the other hand they continue to use land for non-airport purposes like the solar array. And finally the businesses in the airport aren't paying property taxes because they are in the airport.

Paul K. Ogden said...

If the land is taken via eminent domain it has to be for a public purpose. Simply acquiring undeveloped land to later lease it as commercial space to companies is unlikely to be found to be a public purpose. Still you'd have to get into court on that issue. And many of those people may have sold their land without litigation ever taking place.

I am not aware of any law that says, if it later turns out that the land acquired via eminent domain isn't used for a public purpose, that it has to somehow be given back. I think you have to challenge it at the time the land is taken via the eminent domain proceeding, making the argument that they clearly do not need the land and that it will be used for commercial leases later. That's a hard thing to prove.

Paul K. Ogden said...

You actually asked why the property doesn't have to be returned to the tax rolls. Well who is going to pay the tax, the tax-exempt airport? You could hit them with a PILOT I supposed.

Anonymous said...

I believe I said why doesn't the land not needed for the airport return to the tax rolls. I think it should be taxable as it clearly isn't used as an airport.

Citizen Kane said...

This could slowly destroy some of the older industrial parks if they undercut them by enough and we through TIF money their way to build new industrial parks.

Oh, and the ratepayers are already paying for the airport's solar array for at least 15 years.

The airport owns the land;they bought it so they can do whatever they want with it.