OGDEN — An aircraft manufacturer’s request for a city council resolution endorsing the authorization of as much as $22 million in industrial revenue bonds sailed to approval Tuesday night.What's clear from this article is that the Boss Godfrey administration is quite sensitive about the mountain of debt which Boss Godfrey has accumulated during his seven years on the Emerald City throne. Ace Reporter Schwebke thus slavishly adds the always-reliable Dave Harmer's assurance that this new bonding will not place the Emerald City taxpayers "on the financial hook," even in the event of a bond payment default:
Aero Ventures LLC sought the “inducement” resolution so it can begin the process of relocating from California’s San Fernando Valley to the Ogden-Hinckley Airport where it intends to purchase the Ogden Jet Center.
The city council must next adopt a final resolution that allows bonds to be sold. The bonds would be secured by a mortgage on the Ogden Jet Center property and the value of the project.
State law allows municipalities to issue taxable industrial revenue bonds without incurring any financial liability, said Dave Harmer, Ogden community and economic development director.Indeed, Utah law does contain special provision for industrial revenue bonding, pursuant to Utah Code Section 73-10d-5. On the face of it, Mr. Harmer is technically correct, provided Emerald City doesn't do an eleventh-hour "flip flop," and suddenly sweeten the underwriting pot with additional performance guarantees. Boss Godfrey has a history of doing that, of course, as long-time WCF readers will recall.
A lender will evaluate the credit worthiness and financial strength of Aero Ventures and decide whether to provide funding, said Harmer. If the company fails to repay its financial obligations, the lender has recourse against Aero Ventures not the city, he said.
Being the curious type, and wondering about the economic viability of the subject company, we did a little googling this morning on Aero Ventures LLC. This is what we found:
• According to the Utah Department of Commerce website, Aero Ventures LLC is a Utah-qualified Limited Liability Company, registered in December 2006.
• Business address: 3348 S 1575 W SUITE # 2, Ogden.
• Agent for service of process: This guy (Max Feiz). We note that Max "loves flying, too."
• According to a May 5, 2007 Std-Ex article, Aero Ventures, LLC is a subsidiary of Aero Visions International, which operates from the same above Ogden address. A visit to the AVI website reveals that the parent company has a "well-diversified" product line. The company evidently dabbles in everything from "scenic mouse pads" to "advanced experimental aircraft."
• Neither diligent googling nor an extended "prowl" of the AVI site yielded anything about existing "facilities in California," although such was also mentioned in today's, and the May 5 Std-Ex articles. The fact that we didn't find it of course doesn't mean it doesn't exist.
• The AVI site does provide a link to the SkyShark aircraft which is mentioned in today's Schwebke article, although it's unclear whether AVI has to date manufactured a single commercially-available airplane (or kit.) The photos of the aircraft on the site are obviously artists' renditions.
• Neither company seems to be publicly-traded, so public records are unavailable to determine either company's financial strength.
Does this fledgling aircraft manufacturer have the financial capacity to make this new bonding fly? Only time will tell, we guess.
Boss Godfrey and Dave Harmer believe this company is OK however, so we guess that ought to be good enough for us -- Right?
For our own part, we'll be watching this transaction closely.
And please don't let the cat get yer tongues.
Update 5/9/07 1:27 p.m. MT: Truly diligent readers interested in further general information on the subject of industrial revenue bonding (a unique sub-set of municipal bonding devices) can follow a couple of good links here and here.
47 comments:
I'm not an attorney, nor do I play one on TV, but it seems to me that selling kits to make your own airplane would be a venture that fairly screams, "SUE ME!"
I was at the study session before the Council meeting. I was gratified to hear many questions about this bonding process.
Does the city incur any liability? No
Is "our" credit impacted? NO
If this venture fails, do we incur any liability? No
It was explained and reiterated by Counsel Woods that this process is a way of telling the bonding company that Ogden thinks this is a good fit for the city and the airport, without liablility.
Believe me......if I had heard or had nay suspicions to the contrary, I'm sure I'd have been the first to stand and protest!
I hope this company does well and that Ogden and AeroVentures IS a very good fit.
I am very well acquainted with one of the principals, who actually pushed for the company to settle in Ogden.
The target buyers are execs who don't want or need a jet...(ala Travolta or Gore). These kits most likely will be assembled by an outfit of the purchaser's choosing. THEY will have to qualify with the FAA.
At a future time, the comapny is expecting to manufacture the completed project.
My late brother was a pilot and airplane buff. I'm sure he'd want one of these.
As long as the city isn't offering anything more than goodwill, I'm all for it!
Good point, Monotreme. Product liability lawsuits, and ensuing surge in insurance premiums nearly wiped out American general aviation manufacturers like Cessna, Piper and Beech from the eighties onward, thus stimulating the market for "home-builts."
Will the next wave of lawsuits similarly effect manufacturers like the upstart Aero?
Interesting language from this article: General Aviation - An Overview:
The general aviation market suffered from a number of problems. First, lawsuits against aircraft manufacturers escalated in the 1970s and 1980s. The costs involved with these lawsuits, especially those associated with purchasing liability insurance, pushed up the price of personal aircraft. Given that most of the technology included in these aircraft (their airframe and engines) had not advanced much since the 1950s and 1960s, the new, much higher prices proved particularly difficult to justify to potential buyers. The new prices also put these production aircraft out of the reach of all but a few. Despite Congressional efforts to help with the liability problem, the general aviation manufacturing industry still awaits recovery. Further, the number of licensed pilots in the United States peaked in 1980. Despite efforts by a number of groups to address the decline, it continued throughout the 1990s and to the present.
One bright spot, though, was the emergence of the homebuilt movement. Federal and state regulations in the late 1930s had all but made it impossible for individuals to build and fly (either from scratch or from kits) their own aircraft. In the early 1950s a group known as the Experimental Aircraft Association (EAA) formed to revive homebuilding. They were quite successful and though the factory production of aircraft has slowed considerably in the last twenty years, homebuilding has grown and thrived. The EAA also welcomes into its ranks individuals determined to keep the aircraft of the so-called golden age flying. By the 1980s and 1990s, hundreds of thousands of flight enthusiasts, both homebuilders and restorers, were making the annual pilgrimage to Oshkosh, Wisconsin, the home of the EAA, for the annual week-long convention.
Much of the history of general aviation has been shaped by the dreams and beliefs of the winged gospel. Though those dreams and beliefs have never been realized, they remain. Despite a reality that sometimes seemed to make the goals of the winged gospel all but impossible, the enthusiasm with which Americans have embraced aviation technology (similar to many other technologies) has kept the dreams alive. It remains to be seen whether they can survive into another century.
Query: Can the "winged gospel" survive the lawyers of the 21st century?
Sharon,
You are mistaken.
This project will be free from all local taxes, including county and school taxes. Thus, not only will Ogden be investing, but so will Weber County and the school district, although the last two will not get a say.
Staff was lying and you fell for it.
I swear, people never learn.
"Does the city incur any liability? No
Is "our" credit impacted? NO
If this venture fails, do we incur any liability? No"
One thing you forgot to mention...
Were their lips moving when they said these things?
;-)
Who owns the Ogden Jet Center now?
Is it a friend of Matt's? Is it Kemp? Who ever it is most likely will cut a fat hog in the ass if this screw ball deal gets to first base and they unload the center for big bucks to these amateurs!
An FBO in Ogden isn't even remotely in the cash league they are talking about here.
A $350,000 to $500,000 kit airplane? If you know anything about the airplane world you would know how utterly bizzar that idea is!
I want some of the same stuff these guys are smoking! Where the hell does Godfrey and Harmer keep coming up with these guys anyway?
If the city is not going to be on the hook in any way, then what the hell does it matter if the council signs off on it? Are big league bonding agencies going to be looking to the Ogden Council as some kind of aircraft industry experts and put a lot of faith in their endorsement?
The proposed aircraft isn't even remotely close to being designed yet and these guys are promising to hire 250 people in Ogden in two years! It takes a hell of a lot longer than that to design a plane and get it certified!
Look at Adam Aircraft. They are a pretty legit well financed and highly competent group of people and they are many years into their project. They incidentally also are way off the mark and schedule they set a couple of years ago when it comes to how many hundreds of people they will be employing in Ogden.
The main credentials this new wanna be company claims is that the boss and his wife built one small kit plane! That is like saying you are going to start General Motors with your only experience being the assembly of a kit car! But hey, in the Matt Godfrey fantasy world any looney idea is latched onto if it has the "sexy" element to it. And in the fine print nonsense on this almost non existant company's web site you will indeed see that the proposed plane will be able to hold skis in its luggage compartment!
I checked with several of my old friends and colleagues in the San Fernando Valley aircraft circles, and none of them have heard of these people or this company. I spent 6 years in the airplane biz at Van Nuys airport in the heart of the San Fernando Valley, and I can tell you that there are very few industries that have more crack pots and wild eyed dreamers and schemers than the airplane game.
This sounds like more stupid dream world crap from the Godfreyite movement. With the known lack of integrity in this movement, I would think that this deal has the potential to be very financially dangerous to the tax payers of Ogden. Beware when his lips are moving indeed!
And oh by the way, Maybe Gadi is the connection here? He lives and operates out of the San Fernando Valley, and this silly crap seem to be right up his alley!
The question here is what kind of tax subsidy is this new company receiving?
How does it affect property or sales tax revenue for Ogden City, Weber Count and the School Districts?
I am familiar with the Dilley business and property but the new manufacturing division of this company is an unknown quantity.
My vote would be "NO' if I had a vote on this idea.
Just because Utah does not have lawsuits regarding this type of funding by a municipality does not preclude Ogden's being the first city to be involved in one.
Ogden is getting nothing out of this except the promise of more jobs which create more costs for present taxpayers to absorb.
Those costs include roads and road maintenance for more persons employed, police costs, school costs,medical facility costs and on and on ad finitum.
We were just discussing what has happened to Riverdale so why does Ogden want to go down that same road?
The Ogden Jet Center was started by Col. Dilley who retired from Hil AFB in the 70's. It is being run by Greg Dilley and Col. Dilley's widow.
It is inside the airport and operates as a well run FBO selling aviation fuel.
The Dilley family also owns property outside the airport.
Greg and his mother probably are ready to retire and have gone looking for a buyer which turns out to be this start-up company.
I wish them well in their plans for retirement but Ogden is going to make a big mistake to o.k. this bond deal.
More interesting information on Col. Dilley.
After he started his business within the Airport he crossed swords with Ogden City and sued them and was awarded such a big pile of money that the court kept the amount awarded a secret.
This is the same kind of lawsuit Ogden Airport is presently involved in with OK3 Air because Ogden City government allowed the airport manager to play fun and games about putting OK3AIR put of business to benefit Mel Kemp and his operation.
That suit is still to go to court. Kemp settled his part of it with OK3AIR by buying their Ogden Airport operation.
Ogden City shenanigans are more tittilating than a dirty novel.
Provided Ogden is not on the hook for the bonds if the business fails... provided that... I don't see much of a problem. If the business succeeds, Ogden comes out ahead [more jobs, more tax revenues, more traffic at the municipal airport]. If the business fails, the investors lose the capital they put into it.
Who is involved, their experience in the business, etc. doesn't seem to me a major point for the city to consider [again, provided the city isn't on the hook for the bonds if the venture goes belly up]. Anyone, pretty much, is welcome to risk their own money in a venture they believe will succeed --- unless they're named Moyal of course.
Provided Ogden is not on the hook for the bonds if it doesn't work as planned.
curmudgeon-
There will be a subsidy of some kind..it will either be property tax or sales tax and this will affect the whole county.
Curm,
You miss the point.
The property is now taxable.
After this deal goes through it will not be taxable for 20-30 years regardless of how this company comes out.
Ogden will be subsidizing this business vis-a-vis all other businesses, so will be the county and school district.
If they fail those entities will be out the tax revenue for 20 years.
If they succeed, those entities will be out the tax revenue for 20 years.
What makes them so special?
Nothing. It only creates bragging rights for politicians. And we pay for it. After all, someone will have to pay for the services that company will demand - someone other than themselves.
Well, guys, I'm with Curm.
I don't get your arguments...but, please enlighten us.
Danny:
Are you sure the business and propety will not taxable? Did they get a straight tax-waiver for two decades? And I didn't see anything in the paper's report about these being tax-increment funded bonds. Were they?
As a matter of principle [assuming again the city is not on the hook for the bond and is not subsidizing the operation with tax funds], it is not the Council or the Administration's business to assess the viability of an investment or business plan for a company moving to Ogden. That is exclusively the business of the investors who are putting their money into the project. If they are right, they [and Ogden] prosper. If they are wrong, they and they alone lose the money they invested, or make less than they could have made with alternative uses of the money.
The problem with the Moyal property in the River Project RDA involves exactly this principle. The Administration doesn't think Mr. Moyal's business plan is a good one, and is refusing, apparently, to allow him to proceed unless he agress to substitute the Administration's business judgment for his own. That is wrong. Just plain wrong.
Same principle, seems to me, should apply to the air business investors we're discussing.
And, again, nothing I read in the press accounts said the bonds involved are "tax increment" bonds. Happy to be corrected if I got it wrong.
This language from the second update link is instructive, Curmudgeon. It explains the property tax exemption:
How do IRBs work? In an IRB transaction, the real and/or personal property comprising the IRB “project” is deeded from the benefiting company to the IRB issuer (either a municipality or a county). The issuer then simultaneously leases the project back to the company for the term of the bonds, with the company being obligated to purchase the project (for a nominal sum) at the bond maturity date. Since the project property is owned by a governmental entity during the bond term, the company essentially acquires the status of a governmental body with respect to that property. Thus, the project property is exempt from property taxation during the term of the bonds...
It's fairly esoteric...
But Danny is 100% right.
So Danny is right, and Harmer still gets up and with a straight face says that the city will never be responsible for the debt?
Reminds me of all the times that Godfrey said, also with a straight face, that the tax payers of Ogden would never be responsible for the $40 million plus debt of the Junction!
So if the company goes belly up does this mean that Ogden city will then own the busted out business. Does this mean that we will be in it for $22 million even tho the resulting broke company may really only be worth a tenth of that including the real property?
This is a fantasy deal at best, and if these so called leaders of Ogden buy into it, they should be prosecuted for crimes against the people.
As a Utah tax payer, I say if there is any remote risk to us then there should be no deal!
Lionel,
Ogden would not be responsible for the debt, it appears. But if and when Aero Ventures goes out of business, the land would still be TAX FREE for the life of the now-defaulted loan.
Sharon,
This is based on what I know about IRB's. If Utah's is different, fine, but I don't think it is. Do you really want to pay more tax, to make up for the lost taxes on that property? If so, why on Earth?
And Lionel, if there is a tax abatement and Harmer didn't mention it, then it is another example of why he should be fired. If I was on the council, his entire department would be eliminated to preclude such nonsense in the future. Those guys do nothing, NOTHING but cause trouble. Never mind the fact that it appears they are reliably dishonest.
You know, I wish you people would make an effort to attend the Council and RDA meetings. If your work schedule permits, then attend the Council study sessions. That's where Harmer laid this out.
At the CC meeting, anyone could've spoken out.
Sheesh!
Being on Ch 17 would be informative, but not interactive.
We didn't mention the fact, BTW, that the projected bond payments are supposed to be made from the project tax increment, Lionel.
From the taxpayers' viewpoint it's a double whammy, because under an arrangement like this, project tax increments are diverted from every local entity's tax revenue stream in the percentage proportions allowed under Utah law.
We'll speculate that this is the main point that Danny was hammering.
It's a sweet deal indeed for a company like Aero, if they can pull it off. The taxpayers get the shaft on the other hand, as per usual.
Sharon,
Indeed, many of us do attend meetings. But there is a 2 or 3 minute speaking limit for us, while no limit for the bureaucrats, and of course, we cannot attend all meetings.
But this is precisely why we so greatly value persons such as yourself who attend many meetings and tell us about them and why we value this blog, the posters, etc.
Perhaps there is still time to stop the Aero Ventures ripoff, if those friendly to the council could contact them and express their concerns.
All good works are very much valued and appreciated at all times, even thought we do not win all battles. But the battle is worth fighting because we do win some, and what we fight for, is worth fighting for.
Rudi:
Thanks for the clarification. One area of confusion left, for me: if the property is non-taxable until the company buys it back [technically] at the end of the bonding period, then what possible "tax increments" can be collected over the bonding period? How do you collect taxes on non-taxable land?
Yes, complex, but not so complex, it seems to me, that a good business reporter [not political reporter] couldn't have unscrambled it all in lucid prose for the SE's readers. Business financing, operations and relations with government are now so complex that at times, it takes a good business reporter --- someone who knows the territory --- to suss it all out and explain it for readers. Seems to me this was one of those occasions.
Who pays the bond payments if the deal goes bust like it almost certainly will?
This is a hokey deal being proposed by people with no experience in the field of aircraft design, certification and marketing.
What is the council doing even considering such a far fetched deal?
It smells like a real scam.
I must say that NONE of the concerns being expressed here, were dealt with by Harmer last nite. Other than assuring the council that all liabilty is on the bonding company and AeroVenture....taxes in any form were not mentioned. Not by Harmer, and not by any member of the council.
This was called an 'inducement' bond and explained that Ogden is asked by the bonding company to give a 'go ahead' or a good word for the project, but NO liability in any form.
So was Harmer lying thru his white teeth?
I ama not be the sharpest pin in the box, but I bot this just as the council did on the info given.
They asked questions, but apparently not the rite ones.
Perhaps if you really smart guys had been there, you might've passed a question or two to one of the council members to ask during their study period?
IF y'all are correct, what is the recourse?
Don't forget that an ordinance is still to be passed as I understand it. Cancel your poker nite and be there!
I had read that in the by-laws of the ogden foundation that the chair of the city council is to be on the board of directors. so why is that Jesse Garcia is not on this board or is he. does any one know?
to make things happen -
Where did you obtain a copy of the Ogden Community Foundation by-laws?
Please post on this blog if you have them.
Oboy, If you knew what I know, then you would be very surprized, upset, angry and ready to throw some bums out of office, they are the ones that give politians bad names, but I know of one that will clean this city up. He knows more than I do and that is a lot. I will send the by laws to the blog mister and maybe we could have a hey day with this.
but in again maybe we need to be patient with this, after all timing is every thing.!!!
what does that mean, 'make things...'??
are you waiting for hizzonah to return to our city?
Whatever the Council needs to know now in order to vote intelligently should be brought forth RIGHT NOW.
Don't try to be cute with timing.
Let me preface this with the fact that everything I know about IRB (Industrial Revenue Bonds) I know from this thread.
Now, Sharon, it doesn't sound like Harmer lied about the city having no liability for the repayment of the bonds. But it seems that perhapse he failed to fully inform the council the full extent of inducement the IRB have.
This actually sounds a little worse than an RDA for at least 2 reasons. First as Danny pointed out the taxes that won't get paid during the outstanding period of the bond that would have gone to the schools and county and other taxing entities get wiped out without them having any say at all. Second, not only the increase in value doesn't get taxed but the original value that is currently being taxed will get deleted from the tax rolls.
I probably wouldn't mind this if it were available to home owners. Think about it. You go to the mortgage broker and say OK I want to buy this house, qualify me. But since I have this deal with the city, they will hold title to the house and I will make my payments to them and they will in turn pay you. But you don't have to worry about an escrow account because I don't have to pay property taxes during the term of the mortgage.
But with a business it gets even better. In the homeowner example, since the homeowner isn't paying property taxes he doesn't get to deduct any property taxes from his income tax. But with the business owner it is true that he doesn't get to deduct any property taxes against his income taxes but he isn't paying principal and interest on a mortgage, he is paying lease payments to the city. If he were paying principal and interest on a mortgage only the interest would be deductable from his income, but this way the entire lease payment would be deductable from his income for federal and state income tax purposes.
So it sounds like there is an indirect liability to the city in the form of uncollected property taxes and that liability is also forced upon the other taxing entities without their permission. But the city is not liable for anything more than that.
"If the property is non-taxable until the company buys it back [technically] at the end of the bonding period, then what possible "tax increments" can be collected over the bonding period? How do you collect taxes on non-taxable land?"
Good question, Curmudgeon. In a typical industrial revenue bond situation, the bond issuing governmental entity will hold title until the bond is paid off, and then transfer title to the company. In this instance, there would be no tax increment, inamuch as there would be no property tax liability in the govenment-owned property.
Alternatively, the company could be deeded title to the property at the outset, in which tax-increment principles would apply, since there would be no over-riding governmental tax immunity.
Characterizing these two alternate scenarios as a "double" whammy was "cute" on our part, but created understandable confusion.
And you're right about Mr. Schwebke's meager reporting on this story, which has required us to make the assumption (reasonably we think) that the Aero Ventures transaction in this instance would be structured in the most commonly-practiced transfer-leaseback form.
That's our take, anywho.
The council at a minumum, needs to put this on hold until they understand it better, and until they receive input from the other public entities that this deal would harm.
For my part, I already know enough to say "No way, and why do we have to keep wasting our time on scams like this? Why do we pay people to come up with this stuff?"
Ain't capitalism grand? Governments do any thing they can to benefit the capitalists - in this instance, they don't have to pay taxes. Who has to make up the shortfall? The middle-class, as always.
And if I'm not mistaken, didn't Amer Sports and some of the other ski companies get deals on their taxes too in order to move to Ogden?
I guess this is just the price state and local governments have to pay in order to attract businesses.
I expressed some concerns to the city council, and I received this reply from Dave Harmer. I have a conflict tonight so I can't review it until tomorrow, but I thought the folks here might like to see it in the meantime. I assume I am not violating any confidences in posting it and that the parties would be happy for me to do so.
_____
Thank you for the opportunity to respond to your questions regarding the resolution in support of the issuance of Industrial Revenue Bonds on behalf of Aero Ventures. I think there are some misunderstandings about the proposed transaction that I hope I can clear up.
First of all, the interest on the IRB's will not be tax exempt. You are correct that often IRB's are tax exempt but this project does not qualify for tax exemption and therefore the interest on the bonds will be taxable.
Second, your understanding that the development agreement between the City and Aero Ventures creates a quasi-governmental entity that would be free from property or any other taxation is not correct. The Ogden Jet Center after the purchase by Aero Ventures will be a tax paying entity just as it is today. The only difference will be that the new investment at the site planned by Aero Ventures will result in additional tax revenues to the City, County and the schools.
The third item I would like to comment on is your concern that RDA and EDA districts in Ogden are reducing tax revenues available to the County, the City or the Schools and therefore requiring tax rate increases in order to compensate for that lost revenue. Ogden can not establish a RDA or EDA district without first obtaining the agreement of the Taxing Entity Committee. This Committee is made up of representatives from the County, the City, the Schools and any other taxing entity that receives a portion of the property taxes collected. Whenever a redevelopment area (RDA -- deals with blighted or rundown areas of the city that need to be rejuvenated) or an economic development area (EDA -- the intent is to improve the economic base and add jobs) the first requirement is that the taxing entities must continue to receive the same level of tax revenue from this area that they had been receiving in the past. So the tax revenues going to the various taxing entities will not decrease from the establishment of an RDA or EDA. The taxing entity committee then establishes terms and conditions that must be followed by the new RDA or EDA. Generally they require that new tax revenue created by bringing new investment into the area will be shared with a portion passing through to the taxing entities and the remainder being available to support the objectives of the RDA or EDA. So as new investment comes in the County, Schools and other taxing entities share in that increased revenue. Of course, when the life of the RDA or EDA expires then all of the new tax revenue created passes through to the taxing entities. So the County, City, Schools and other taxing entities are not hurt by the existence of RDA's or EDA's or they would not approve them. They recognize that it will benefit them to attract more investment into Ogden and thereby increase the property tax revenue both now and into the future.
I hope this answers your questions.
David Harmer
Director-Community and Economic Developmen
Harmer does not answer the question properly.
The whole plan is for property taxes to go up and the difference between what they presently are and the amount they will be with a new investment is the tax increment.
That increased tax increment goes to pay for rent or bond payments or what ever but it still cannot be used for taxpayers' benefit to pay for ordinary costs of government.
It is a giveaway no matter how Harmer wants to present it.
Don't forget that it is Harmer's job to make it look like taxpayers do not get hurt by any of this.
Remember the Ernest fiasco (gasp)? Because neither admin nor staff would give any info on Ernest to the brand new council...they were forced to ask questions of Brockette/Ernest in an open meeting.
So, there he stood, without portfolio and attempted to answer some very probing and APPROPRIATE questions put to him by the council.
They were polite in tone, but probing, nonetheless.
I think Roscoe Woods, the Chief Counsel for Aero Ventures should come before the council and tell one and all in an open meeting just what they are about.
The council should then question Woods, Harmer and anyone else THEY care to have on the agenda.
The public should speak for FIVE minutes before any action is taken by the council.
Sharon, This is an excellent suggestion.
No council person should vote yes for this if they don't completely understand the consequences.
But they should not trust Harmer or Bill Cook to give it to them straight.
Vote Neil Hansen in for Mayor of Ogden.
We'll for sure, see the much needed grace and tactcal development that is much needed. With out using our tax's going into the pockets of his rich buddies.
He is our New Mayor!
By the way. Has anyone heard what the Feds. are doing about Chief Senator Greiner; weather he violated the Hatch Act or not?
Here is my reply to Mr. Harmer. My intent was to follow up with him not to embarrass him in any way. I felt many of my concerns were not addressed.
-----
Mr. Harmer,
First let me express that I was a little perplexed by your email (below.) The bulk of it discussed RDAs and EDAs although I never mentioned either in my email. Rather, I was talking about the IRB for Aero Ventures. And while the email was “To” me there was no salutation. I’m not trying to be nit picky; I was just left wondering whether the email was intended to address my concerns or perhaps, someone else’s.
Second, you indicated that both the county and the school district are in agreement with the tax-related actions of Ogden City. I would observe that this does not appear to be accurate based on the statements of those entities, who have each been quoted as saying that Ogden City’s actions have reduced their tax revenue.
Since it seemed your letter got a little off track, let me restate my concerns below, in descending order of importance.
1. Tax Subsidy. All the instances of IRBs I have been able to find are specifically to provide a tax subsidy to the company in question. You said that “The Ogden Jet Center after the purchase by Aero Ventures will be a tax paying entity just as it is today,” but you didn’t specifically mention whether there will be tax subsidies applied. Call tax subsidies what you will, the question is whether the enterprise will be taxed in all cases at full rate with that money going to general fund purposes as for the vast majority of persons and businesses, or will some/all of that money be diverted to principally benefit Aero Ventures?
2. Liability. In the event that this new and highly speculative company fails, will Ogden City be on the hook for this in any way, or will be entirely a private matter?
3. Bond Interest. You indicated the bonds to be issued by Aero Ventures, assuming they can sell their bonds, will not be “tax exempt.” Will these bonds have any special advantages for Aero Ventures due to a relationship with the city, as compared to most private businesses? If so, why should there be this special advantage?
4. Cause for Action by the City. If the city is not entangling itself in any way with Aero Ventures, then why is a vote of the city council required to authorize Aero Venture’s bonds?
Rather than simply offer answers to these questions yourself, since it appears you are familiar with the legalities in question, if you could refer me to a convenient Internet link to the relevant state code, send me a copy of the relevant code, or refer me to someone in the state government who could officially and definitively answer these questions I would be happy to follow up in an expeditious manner, including forwarding my annotated findings to all interested parties. This would resolve all questions rather quickly.
Thanks.
David Smith
P.S. I may post some of this discussion on Weber County Forum to provide a chance for greater public input and discussion. I assume, and hope, no one will mind.
RE: Economist-
Socialism for the Rich, Capitalism for the Poor?
What seems to be missing in all this is that from the get go Ogden City, has been engaged in trying to create a monopoly for Mr. Earl Kemp. There were 3 fuel operations at the airport, if all this goes down successfully(?), there will just be Kemp. Look at the aid this administration has been so far in this endeavor, millions in subsidies, harrasment and pushing out one competitor and now, attempting to fund(via bond) the buyout of the final obstacle (Dilly) to Mr. Kemps monopoly. One more example of this new free enterprize system interpreted by "our" elected officials. CORRUPT.
bill c-
I don't think this is a ploy to help Mr. Kemp because the Ogden Jetway will still be continuing to operate on the Airport as an FBO.
The purpose of the bonds is to allow the new owners to get help in buying Jetway out by in effect guaranteeing the bonds by going through a City.
The logical person to call for these answers is the new head of the Governor's Office of Economic Development.
Jason P. Perry, the new Executive Director, has been hired from the U. S. Attorney's Office to look into economic development affairs and existing problems.
His Office Number is 801-538-8665
His Fax Number is 801-538-8888
E-mail address is jpperry@utah.gov
I think the Ogden City Council wuld be wise to run past him any questions having to do with Ogden's economic development situation or any ideas promoted by the present RDA employees that seem questionable.
He works for the Governor but he can certainly answer City government guestions. After all, he is the final expert on economic development in Utah.
Thank you, Dorothy.
You are always on the ball.
Any of the posters who have expressed the biggest concerns, and have a working knowledge of the IRB's and taxing entitities really need to follow your suggestion.
The COUNCIL needs to talk with Mr. Perry!
Not funneled through Cook and Harmer....but each could talk to him ....two or three could talk to him, at a time, via speaker phone...so that the Open Meeting Law isn't violated! Monday would be a good time to do that.
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