To the editor:
My two cents’ worth.
When the Delta rec center was completed, it put three privately owned health clubs out of business in just a few months. Anyone with any business sense at all could see it coming. The private entities just did not have millions of dollars and a wonderful piece of prime real estate “allocated” (read – donated) for their use, fantastic parking, etc. The Delta rec center has certainly provided a far better facility than any of the private entities could hope to provide — as no doubt the Fruita facility has done as well. There is no doubt that in both cases, the public projects have improved the quality of life for their communities. They include great community programs for young people, families and seniors. These are things that private clubs are just not built to do.
Here is the problem: There were three entities in Delta that had been paying our massive commercial property taxes (that we all dearly love), personal property taxes on all that nice equipment and lots of sales taxes as well. The city and county of Delta never had one problem cashing those nice checks. However, when the opportunity came along to put them out of business, they never blinked, either.
Many of the readers of the Business Times are either business owners or managers and are very aware of how extremely difficult it is to find the capital to start a new enterprise. In fact, most small businesses are started with someone’s life savings, a major loan or a chance inheritance. The owners of the health clubs we are discussing will be lucky to sell off their equipment at a mere fraction of the purchase price. That will be their only reward walking away. They did not fail in business — they have had their businesses executed for the “good of the people.”
This is called “eminent domain” when we are talking about land. But I don’t think it is fair to think of these circumstances as different from a government exercising eminent domain.
Eminent domain: When a governmental entity establishes that it really needs “for the good of the people” to have a piece of land, they declare “eminent domain.” When a city does this, they are required to buy, at a fair market price (“just compensation”) that piece of land. This is done so that they don’t do exactly what has been done to these businesses. It is a constitutional right of all Americans to not be deprived of property by the government without “just compensation.” In this case, no compensation has been offered or paid. I believe that it was, in fact, the best thing for Delta and for Fruita to build these facilities and at a bare minimum the City of Fruita should repay the initial investment that was paid to start the health club since they have made a decision to put them out of business “for the good of the people.”
My two cents’ worth.