Juneau County Guarantees Woodside Ranch Disaster.Well almost. The Juneau County Board voted 12-7 with one abstention on Tuesday March 20 topass a resolution guaranteeing Midwest Disaster Area Bonds of up to $8 Million to to be issued to Woodside Ranch for a sports complex. This is a special category of tax free bonds authorized by the Federal government, that can be used to fund private development. The resolution also requires a personal guarantee from Damien Grunwald the owner of Woodside; that the money only be doled out as needed to complete the project; and that WHEDA (Wisconsin Housing and Economic Development Authority) guarantee up to $2.1 Mil
lion. Other provisions include that the sports complex be put up forcollateral for the loan, that the bonds can be sold at no more than 7%, and that an escrow account of one year's worth of payments be established.One supervisor asked if the whole of Woodside Ranch was to be included as collateral, but the corporate counsel for the county answered that the sports complex would be surveyed and platted off ofthe main property, and only the sports complex area would be held as collateral.Proponents tout the plan to build multiple sports fields and arenas for various sports, with the idea thatsports camps for youth, and tournaments will be held there. It is said that up to 750 participants will be there at any given time, when fully developed, and that some 780 jobs will be created.
While it appears that the county board put in a number of sensible guarantees, one audience member
later observed that the whole Woodside Complex should be collateral, as it would be unlikely that any
part of the $8 Million could be realized in a distressed property sale. On that I agree. While the county
attorney and others said that the risk is vanishingly small, why not eliminate the risk to the taxpayer
altogether? The 12 county board members who favor this could have co-signed the note themselves,
eliminating risk to taxpayers.
I talked to several board members about this, and all I talked to favored the proposal, said it had
been studied by two separate firms, and was very close to a sure thing. One need not look far for
economic “sure things” that failed. There is a grocery store in Necedah that is partially built, after
about $340,000 in subsidies from taxpayers. On the edge of Necedah there is a golf course that
taxpayers invested $5 Million in, and at least 2 of its owners gone bankrupt. And mark my words,
the heavily subsidized ethanol plant just south of Necedah will soon become a pile of scrap metal, as
state and federal ethanol subsidies have expired. The current prevailing winds of the economy and
politics are not conducive to renewal of these subsidies, and the political forces against them are now
considerable, so income to the ethanol business will greatly decrease.
Numerous other subsidized failures could be cited, but one I want to draw attention to is the Blue
Harbor project in Sheboygan WI. This is a “sure fire” resort/convention center/water park near
Lake Michigan in the downtown area that is a financial failure despite approximately $20 Million in
subsidies. Not only that, Great Wolf Resorts Inc, owner of the original Great Wolf Resort in Wisconsin Dells, various other Great Wolf resorts throughout the Midwest and one time owner of Blue Harbor is in financial difficulty. It seems that if you build it, they may still not come.
interference to see that, overall, we have created an unsustainable disaster, whatever marginal successes there may have been. Our economy is weaker as various levels of government have spent more in the name of “economic development.” How do we know that this is the best or most efficient use of these funds? It may be that 100smaller firms each getting $80,000 subsidized loans would create more wealth, more jobs than Woodside. Moreover, as the pool of investment money is limited, there will likely be fewer funds, more competition for the remaining pool of capital, and a higher price for those who do not get the guarantees that Woodside is getting.
Another consideration is that by granting this first guarantee, we are opening up a veritable Pandora's
Box. Will other firms, seeing the success of Woodside, come and lobby their case and get similar
grants, subsidies and guarantees? And then there is the potential for corruption. When I lived in
Tempe Arizona, a man named Harry Mitchell was the mayor. He often talked about the many
improvements to the city since he was first elected. I look at his list of donors, and found that the
top 3 developers in the community were also among his top donors. These developers had benefited
mightily from below market land sales from the city, the use of eminent domain to take property they
wanted, and fortuitous placement of infrastructure, such as roads placed in ways that favored their
properties. There were also significant campaign donations from the principles of firms that contracted
with the city. So did these folks just reward Harry for being so civic minded? Or was there a virtually
unprovable quid pro quo, tit for tat arrangement going on? The fact that Harry never had a serious
challenger made all this even more suspicious.
There was one episode though, that I found either revealing, or especially suspicious. At one time, a
couple young fellows bought a commercial lot and wanted to build a fast food, hamburger restaurant.
It was shot down, ostensibly because of residential neighbor complaints, competition to an existing
nearby restaurant (since when is it the business of government to protect one business from competitionof another?) and because there were law enforcement issues with folks who hung out at the existing restaurant. The conditional use permit for the new restaurant was denied, and the young entreprenuers either sold or lost the property. Two years later, a nearly identical proposal made by different businessmen sailed through without objection. After it passed, I used the public comment section to question what the difference was that made the new proposal so much better than the old? Were there other factors in the decision? Or did someone get PAID to vote differently this time? My questions were not answered, at least not verbally, as a number of council members looked down, not making eye contact, and looking to me rather sheepish. The more government involves itself in enterprise, the more likely that there will be this type of corruption. The primary purpose of government should be to protect our lives, liberty and property.
The more it ivolves itself in business, the greater the opportunity for corruption, the more likely it
violates one or more of our basic rights. For all these reasons, and because government involvement
almost always means negative consequences on at least some peosome forseeable, and others not,
because government participation ALWAYS skews the marketplace, the business of government is not, should not be business.~KEN Van Doren
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