Madison's thrift store relaunched this month as an entirely private, public-subsidy-free project. The private developers began demolition of the old Jensen building this week to make way for their downtown dream project.
But the thrift store has already received one significant public subsidy: they got the Jensen property for free from the Lake Area Improvement Corporation.
In a "sale" so fresh it hasn't entered the Lake County property tax database yet, the Madison Community Foundation acquired Lots 3 through 8, Original Plat Block 19, 213 through 219 South Egan Avenue. Here are the property tax records for those lots, still showing LAIC as the owner:
The sale record at the Lake County Courthouse indicates that the actual consideration exchanged for this property was none. LAIC exec Julie Gross confirms that the Madison Community Foundation acquired the old Jensen property for free.
Let's recall the cost at which the LAIC acquired this property. Back in 2008, the LAIC bought the above lots as well as the half-block across the street to the north from Rosebud Manufacturing for $500,000, as part of a deal to subsidize Rosebud's move out to the industrial park on the southeast corner of town. The City of Madison immediately gave LAIC $400,000 for the north part of that purchase, land that the city eventually sold to Inter-Lakes Community Action Program at a 66% loss. The LAIC, meanwhile, sold a piece of the southern half of its purchase for $35,500.
So the Jensen building and parking lot hung around the LAIC's neck at a cost of $64,500. And on March 5, the day the thrift store developers poked their heads out of their burrows and cast the shadow of their delayed thrift store back onto Main Street, the LAIC wrote off that cost and handed that property to the developers for free.
Now is that a public subsidy? It's hard to say. Julie Gross's LAIC predecessor, Dwaine Chapel, told me once that the LAIC is a quasi-public-private entity. It receives some money from private donations, but it also receives significant support from Madison and Lake County taxpayers. But like the meat and vegetables on your plate, those private and public donations all end up in the same pot. The money that bought the downtown property from Rosebud was partially public money. The loss that LAIC took on that land was thus partially a public donation... although the public never got to say anything about it.
Make no mistake: the LAIC really didn't give away much. The property has sat vacant for six years. Some developers have looked at it but decided that the building required more repairs and upgrades to its water pipes and infrastructure than would have been feasible for most business plans. Gross says that when she priced demolition of the building, she received estimates ranging from $80,000 to over $100,000. The location is great, but the building was a liability. The LAIC may be lucky that it didn't have to pay someone to take it.
But on paper, the thrift store has benefited from a giveaway, from a quasi-public purchase six years ago left to crumble until giveaway and demolition was the only viable option remaining.
Anyone care to lay odds on how soon the crumbling Masonic Temple at the other end of Main Street will meet the same fate?
Great reporting by Cory as usual. The numbers don't lie. The idea that this project isn't receiving public funds is just not the whole truth. ICAP, LAIC, and The Community Foundation are all benefiting from the City of Madison purchasing and shuffling these various properties around in the last five years. It was done with tax payer money, period.
We can debate the merits of the thrift store project after we get everyone to acknowledge the facts on how these properties were acquired and transferred.
Why can't we be honest about it and just acknowledge what it is? Let's stop the back room deals, secret meetings, and crony capitalism. http://www.AllenForMadison.com
-Ashley Kenneth Allen
I am a big fan of Thrift Stores in general. I fully support this one and hope to visit it. I will eat at the local Dairy Queen when I do and eat extensively. This is how your old town will make money with this sort of destination attraction, Mr. H.
stop the back room deals, secret meetings, and crony capitalism...? In 2008, one of [the] co-founders of Home Depot, it's former CEO Bernie Marcus, told a conference call that a law that would make it easier for workers to form a union "is how a civilization disappears," and that any CEOs who didn't give copious money to keep Republicans in the Senate "should be shot." 1% Fears, huffpo 3/20/14
Grudznick - I'm glad you appreciate the Madison DQ. It is without a doubt the best DQ in the state or nation, I'd be willing to bet. Always fresh!
A used clothing store hardly qualifies as a destination attraction. The local lakes and Prairie Village might, but people aren't going to travel to Madison to hit the local thrift store. Traveling miles to shop in a thrift store defeats the entire idea of "thrift."
When you consider the water quality of our local lakes, we might just want to rebrand those as thrift lakes, with the best third hand water around, now just wait till you see crazy days on our lakes, where we leave the green in your trunks. Unexpected indeed.
Wait for the other shoe to drop. Is the building still there? Watch as taxpayers fund the demolition of the building. LAIC probably threw that in to sweeten the pot when they convinced the developers to take the property for free. We'll give you the property for free and even clear it for you.
R, the developers have a crew demolishing the building right now. LAIC exec Julie Gross tells me that's all coming out of the developers' pockets, with no LAIC money. The thrift store got free land, but not free labor.
Just to toss it out there, the past property was an auto dealership/auto garage, likely to have underground tanks and soil contamination, is there anyone actually testing the ground before the new building is constructed in this haste to open the thrift store? Is the quick progress, and no conversation, and effort to forego environmental concerns of the property, which I have heard from several others within the community are a probability.
The Madison Community Foundation is the "financial funnel" for the local development of this project. Thus the invested funds(donations)are a viable tax deduction to the investors(contributors). Thus the project receives another source of public funds via the federal government.
Good point, Charlie! Tax deductions mean they divert money that otherwise would have supported public projects, and we have to make up the difference.