Idaho’s state Lands Department is under fire from two different directions this morning: In a new lawsuit that charges it’s about to hold a conflict auction on a family burial ground, and from a bipartisan group of lawmakers who say an inadequate appraisal allowed a private party to benefit to the tune of $1.6 million on a state land exchange, instead of the state endowment’s beneficiaries.
The new lawsuit over Priest Lake state-owned cabin sites charges that two cabin-site lessees who will face conflict auctions in late October haven’t been allowed to challenge their appraisals, as all other lessees at the lake were allowed to do after big concerns were raised over the newly set values; that the two weren’t allowed to go into land exchanges to avoid the conflict auction, though the department had indicated earlier that would be allowed; and that one of the cabin sites has been held by the same family since its inception in 1933, and five family members' remains are located there, including scattered ashes and permanent memorials. “The earliest of these human remains has been on the property since at least 1939,” says the lawsuit, filed in Bonner County.
Lands Department Deputy Director Kathy Opp said she knew nothing about the graves and hadn’t yet seen the lawsuit; she confirmed that lake cabin lessees who were targeted with conflict bids this year – there were four, including three at Priest Lake and one at Payette Lake – aren’t being allowed to appeal their appraisals or join land exchanges until the conflict auctions have been held.
The land exchange issue involves the University of Idaho’s McCall Outdoor Science School Campus, which had been owned by the state endowment, but last year was traded for commercial property in Idaho Falls that houses Battelle Energy Alliance, LLC, the operating contractor for the Idaho National Laboratory. Both properties came in with identical appraisals of $6.1 million; after the swap, the private owner of the Idaho Falls property, IW4 LLC, sold the newly acquired McCall property to the university for $6.1 million. That left the university in control of the site, which had been the source of increasing tensions as the Lands Department considered big rent increases to match its constitutional requirement to maximize income from endowment lands.
But House Majority Caucus Chairman John Vander Woude, R-Nampa, and House Assistant Minority Leader Grant Burgoyne, D-Boise, have joined a new group with former GOP Rep. Bob Forrey and attorney John Runft, the Tax Accountability Committee, that commissioned its own review appraisal on the Idaho Falls property, and it came in at just $4.5 million. If that’s right, the private owner in Idaho Falls profited to the tune of $1.6 million, at the expense of the state’s endowment, something the TAC group dubbed “a travesty.” Vander Woude and Burgoyne, who held a Statehouse news conference this morning, say they’ll bring legislation requiring review appraisals in all future endowment land exchanges, along with more legislative scrutiny over such transactions. You can read the TAC letter to the Land Board here.
Opp said the department stands by its appraisals, and hasn’t routinely ordered review appraisals in addition. “It can be costly – you’re paying another appraisal fee,” she noted. Opp said the Idaho Falls property has been “performing as expected” as an endowment investment; it earns annual rent of $538,312, more than double the annual rent from the McCall science campus lease of $248,000. The series of transactions was approved by both the state Land Board and the State Board of Education.