A real estate auction firm that ran a successful auction of 13 state-owned cabin sites at Payette Lake in October is recommending that the state consider another big auction for cabin sites at both Priest and Payette lakes, with the Priest Lake cabin-site auction to be held at the Coeur d’Alene Resort. “It’s a nationally recognized venue,” Brian Rallens of Bottles Corbett Real Estate told the state Land Board this morning, and would draw attention to Priest Lake, “really a gem that’s not that well-known.”
Owners of dozens of cabins on state ground at the two lakes had been signed up for land exchanges, designed to swap the state-owned sites for higher-yielding commercial property while letting the cabin owners buy the ground under their cabins, but the exchanges were canceled amid legal questions. Those cabin sites would be good candidates for another auction, Rallens said. “Really the best time to sell is when you’ve got buyers,” he told the board – buyers who have already lined up financing and had been ready to move. “At the end of the day we really feel that there’s an opportunity for a fiduciary benefit for the endowment.”
With the turmoil and uncertainty revolving around the state lots at Priest Lake, as many as 30 percent of the current lessees may default, as they face steep increases in their rental rates for the ground under their cabins, Rallens said. That would force land values there down and saturate the market with vacant properties, he said.
At Payette Lake, 10 of the lots that were placed on the auction block already had lessees who had built their cabins on the lots and were leasing the ground from the state; all 10 of them were the successful bidders, with all but one purchasing the lots at their appraised value. The 10th one sold for $11,000 over its appraised value. At the same time, three vacant, unleased lots were auctioned, and they went for well over the appraised values: $1 million for a lot that was appraised at $662,400; $620,000 for one appraised at $585,000; and $1.1 million for one appraised at $1.066 million.
“It will drive prices up over time,” Rallens said. “Especially at Priest Lake we feel it’s an opportunity to preserve values.” He said, “From an expectation standpoint, I would say most will probably sell for appraised value.”
The Land Board is scheduled to vote later today on proposals to hold voluntary auctions in the coming months on 74 lots at Priest Lake that had been scheduled for land exchanges, and 21 at Payette Lake. Anyone could bid; if someone other than the current renter won an auction, the winning bidder would have to pay the current renter appraised value for the improvements.