boon·dog·gle: noun: a wasteful or impractical project or activity often involving graft; verb: to do work of little or no practical value merely to keep or look busy. (from the online Merriam-Webster dictionary)
In September of 2008, the State of Iowa opened the Honey Creek Resort, financing the project with $33.5 million in revenue bonds, which have escalating payments through to 2036. After presenting the project to potential developers for years, and having all of them decline due to perceived financial risk, the state decided in 2005 that it knew better and went into the hotel business. The state believed that the revenues from the resort would pay off both the bonds and the costs of managing the resort, and therefore no taxpayer money would be put at risk. Unfortunately, as was announced earlier this week, the resort has not been able to meet their bond payments due to their expense commitments continually exceeding their operating revenues. So, the DNR has now asked governor Branstad to commit taxpayer money to payoff the remaining $27 million of revenue bonds. So much for the whole “if you build it, they will come” argument.
So why did the state decide to move forward on a project that not only went outside the Constitutional purpose of government, but went against sound financial investment principles? Simple. They thought showcasing their green agenda of sustainability was more important than protecting the public purse. The Honey Creek Resort consists of a lodge, cottages, a water park, a golf course and a restaurant on Lake Rathbun. It boasts of “eco-friendly and sustainable practices [which] include aggressively managing energy and water usage, collecting water runoff for irrigation, growing low maintenance native plantings, reducing waste, an active recycling program campus-wide, and soon, a food composting program”. They have a wind turbine to provide electricity, solar panels to heat their water and high efficient appliances.
While all these things may have merit, they cost more money than traditional construction and energy use methods, so the final cost for the resort actually exceeded the initial budgeted numbers by 80%. And unfortunately, Honey Creek has been running in the red since they opened. In fact, in 2010 the DNR told lawmakers to expect it to continue to be in the red until 2015. Then in fiscal 2012, resort revenues could not cover bond payments and management fees for the resort, so the Iowa DNR was forced to shift nearly $1.3 million from statewide conservation efforts to Honey Creek. This is over and above the more than $4.9 million in Resource Enhancement and Protection (REAP) funds that have already gone to Honey Creek to cover other shortfalls since 2008. Keep in mind, all of these infusions of money were from funds that taxpayers had designated for other things, not to divert and prop up the finances of a state-owned swanky luxury “green” resort.
I have no issue with private investors risking their own money to pursue their dream of a green agenda in building. They are accountable to their shareholders and their pocketbooks, so if they fail, they fail with their own money, not mine. This is not the case when government chooses to invest in something and fail, as now they are failing with my money. Not only that, but with such “investment” our government has created a taxpayer subsidized business in direct competition with other private businesses in that area. Honey Creek was given every tipped-scale opportunity to succeed. They had the government on their side with permits, easements, and ordinances. They don’t pay property taxes. They have been getting a continual infusion of state and federal taxpayer money to shore up their finances since they opened in 2008. Yet they still failed. What a waste of the fruit of taxpayer labor.
I know that some may claim that sales tax revenues and jobs have increased in the area due to Honey Creek. The problem with this is that any additional jobs or economic benefit to Appanoose County were merely shifted from other existing local private businesses and counties instead (What benefit does Madison county see?). And, this shift cost millions in taxpayer money. So, the same government that thought they knew better than private developers are now asking taxpayers to cover their butts and payoff the revenue bonds. I say no. I say that it’s time for government to get out of the hotel and green agenda business and stop wasting our money by trying (& failing miserably) to be “investment” bankers with our hard-earned income. Let’s tell Governor Branstad to stop the bleeding, sell this boondoggle to the private sector, pay off the bonds, and don’t engage in such frivolous, and not to mention unconstitutional, projects again.
The federal government is up to 33 failed green investment boondoggles already. Why should Iowa be part of that idiot parade?