At yesterday’s auction of state-owned Priest Lake cabin sites at the Coeur d’Alene Resort, many in the crowd were wondering if the state really was getting a better deal for the state’s schoolchildren – the beneficiaries of the Priest Lake state endowment lands – by divesting itself of the cabin sites. The 59 cabin-site renters are currently being charged rent at 4 percent of appraised value for the ground under their cabins, which came to a total this year of $1,070,857.
Last night, the state endowment’s take from the auction was $26,903,812. That’s more than 25 years’ worth of rent that it collected in a single night, at today’s rental rates. In the past year, the rent collected on the properties was actually significantly less, somewhere around $700,000, as the appraisals, on which the rents are based, were still in the process of going up. At that rate, last night’s take from the auction was a little over 38 years’ worth of rent payments.
As far as what Idaho’s endowment does with cash, its permanent endowment fund – the cash – is invested in the market and last year made a whopping 18.8 percent return. In the past five years, the cash fund has made an average of 14.7 percent a year; in the past 10 years, the average gain was 8.5 percent. Looking ahead, fund managers predict an average annual gain of 6.5 percent.
Aside from the cash, the state endowment’s biggest money-maker is its timber land. Last year, a record-high timber harvest of 347 million board-feet resulted in $53.5 million in profits for the endowment; the increased harvest was due in part to salvage logging of trees damaged by wildfires and insects. All cottage site rents statewide – the state started the year with 354 lakefront cabin sites at Priest Lake and 167 at Payette Lake, but has started selling them off now – came to a net of $4.2 million. Grazing land pulled in a paltry $775,000 after expenses. Oil and gas leases brought in $1.066 million for the endowment, a relatively new revenue source.
Idaho has now sold 95, or almost one-fifth, of its 534 cottage site lots at Priest Lake and Payette Lake. Plans call for another 36 lots at Payette Lake to be auctioned later this year, with the idea of shifting to assets with a better rate of return for the endowment.
Idaho Secretary of State Ben Ysursa called the Priest Lake auction “a step in the right direction for the state of Idaho,” saying, “We’re implementing a decision of the Land Board to the benefit of Idaho’s public schools while providing resolution for many families eager to move on from leasing the land beneath their homes.”