Trio file suit over NIC lease
COEUR d’ALENE — A trio of county taxpayers filed a lawsuit in First District Court Tuesday alleging that North Idaho College’s lease of the former DeArmond Mill property is unconstitutional and should be voided.
Co-plaintiffs Larry Spencer, Tom Macy and Bill McCrory claim in the court document that a July lease agreement between the college and the nonprofit North Idaho College Foundation violates the section of the Idaho Constitution that restricts the debt local taxing districts can take on.
Before public entities in Idaho can legally incur long-term debt, projects must either win two-thirds voter approval or a judge’s approval as ordinary and necessary expenses, according to the suit.
“This is about our belief that the Constitution must always be followed, and there is never a justifiable exception,” said Spencer, who lives in Bonner County but owns property in Kootenai County.
Macy lives in Post Falls, and McCrory resides in Coeur d’Alene.
Marc Lyons, NIC’s attorney, said he has not had a chance to analyze the suit yet, but that they intend to defend the transaction.
“It is a one-year lease and it is not, in our opinion, in violation of Article 8, Section 3 of the Idaho Constitution,” said Lyons.
The lease agreement does not obligate future boards, Lyons said.
The lawsuit calls for an injunction prohibiting NIC from making any further lease payments to the foundation until the financing is approved by voters or a judge.
The document further asks for a court order requiring the NIC Foundation to return all payments it has already received from the college.
The foundation, a nonprofit that supports the college in its fundraising and endowment efforts, purchased the mill site property on behalf of the college for $10 million in July, and is leasing the land to NIC until it is paid for. The college will acquire ownership of the land at the completion of the lease.
The 17-acre site sits between NIC and the city of Coeur d’Alene’s wastewater treatment plant. It is considered crucial to a joint effort between the city of Coeur d’Alene, NIC, the University of Idaho and Lewis-Clark State College to develop an education corridor along the Spokane River and Northwest Boulevard.
The lease between NIC and the foundation must be renewed annually. It provides for semiannual lease payments of $1.1 million beginning in February.
NIC has already paid $4 million to the foundation as prepayment of rent under the lease.
The foundation secured financing through Mountain West Bank to complete the $10 million purchase of the land from Mill Sites, LLC, owned by Marshall Chesrown, and Stimson Lumber Company.
The co-plaintiffs are representing themselves and are not seeking any damages other than legal fees should they need to hire an attorney in the future.
“If NIC puts this purchase to the voters, and they get two-thirds approval, this lawsuit becomes moot,” Spencer said. “They can still put it on the February ballot in time to have a result prior to their next payment date.”