Hobbs says lease issue can hurt city

Jeffrey Libby

Wednesday, Aug. 14, 2002 | 9:24 a.m.

A Boulder City land lease initiative scheduled for the September ballot could hurt city finances if passed, a leading economist said Tuesday.

The initiative, which would require a public vote for leases of more than 1 acre of city-owned land for more than 10 years, could jeopardize a significant revenue source for the city and cause cuts in services, said Guy Hobbs, who chairs the Governor's Task Force on Tax Policy.

Hobbs' remarks came as part of a presentation to the Boulder City Council on behalf of his firm, Hobbs, Ong and Associates. The city hired his firm to assess the city's 10-year fiscal future and to address impacts the land-lease initiative could have if passed.

"To clarify and make sure everyone understands," Boulder City Councilman Joe Hardy said, "you looked at the land-lease initiative and you feel it would not be to the city's benefit for it to pass."

"To paraphrase, it would be an unwise time to limit flexibility," Hobbs replied.

Even without a potential crimp in land-lease revenues, which today contribute close to $2.4 million annually, or about 17 percent of the general fund, Hobbs said the city could approach deficit spending by 2009.

By state law cities must run a balanced budget, so services would have to be cut or new revenue sources would have to be found, Hobbs said.

City Council members pointed to the example of Amerityre as proof that the initiative is already driving away new business and further endangering the city's fiscal health.

Amerityre, a light manufacturing company headquartered in Boulder City may relocate to Henderson rather than lease five acres for a new plant. The company employs 15, but plans to expand by the fall, adding another 50 employees.