Two Cheers For The Isla Del Sol Causeway
As first appearing in Lake News Online:
The condo development on Hawaiian Island, a.k.a. Atlantis Island Condos, a.k.a. Isla Del Sol, at the Lake of the Ozarks, has had a checkered history. Atlantis Island Condos failed after completing only a third of the condos it originally planned, giving the island the feel of a low-budget horror movie set. Rockwood Bank now owns the island and hopes to bring viability to the project by building a 300-foot causeway – which will replace a costly and inconvenient ferry service that connects the island to the mainland. To provide long-term funding, the bank persuaded the Miller County Board of Commissioners to approve a Community Improvement District (CID).
I am skeptical about the use of CIDs to raise funds for public improvements. Too often, CIDs sidestep and subvert the normal democratic process. Under the banner of public goods, special taxing districts of this kind may be used to extract resources from both willing and unwilling property owners. An extreme example is a CID in Lake Lotawana (near Kansas City) that was designed to build sewer lines and other area improvements. Due to egregious mismanagement and questionable transparency, the CID ran out of money and caused a subdivision to go bankrupt.
Despite my overall skepticism toward CIDs, the Isla Del Sol CID makes a lot of sense on several counts. First, it appears the causeway is cost-efficient and a much-needed improvement in terms of resuscitating the stalled condo development.
Second, the Isla Del Sol CID is tightly defined so that only the properties on the island, and a small parcel on the mainland, will pay a new property tax (amounting to close to $1,000 for condos worth approximately $150,000). The property tax will fund the causeway’s construction and maintenance in perpetuity. Should the CID fail to repay Rockwood Bank (which will provide initial funding for the causeway), other taxpayers in Miller County would not have to pay.
Third, of the 53 properties owners that voted on the CID all assented. That may not mean that every property owner agreed (some may not have voted), but it does indicate the strong level of support for the tax from those who will pay for it. In this case, there is no question of a dissenting minority of property owners who are forced to participate in a foolhardy project.
With its clear purpose, narrowly defined tax base, and broad property owner support, the Isla Del Sol CID stands out as tightly defined and well-managed. It is an exception to the rule that special interests are all too likely to capture special tax districts to procure public assistance for private gain.
Joseph Miller is a policy researcher at the Show-Me Institute, which promotes market solutions for Missouri public policy.