Posts tagged: Cabins
Here’s a news item from the Associated Press: SANDPOINT, Idaho (AP) — An Idaho judge says the state can use its most recent appraisals to set lease payments and minimum bids for the sale of cabin sites around Priest Lake. A group of more than 70 lessees sued the state in April seeking to bar it from using the higher appraisal amounts. The lessees argued they had a constitutionally protected property right to renew their cottage site leases. The Bonner County Daily Bee reports (http://bit.ly/V7IkUY) District Judge Barbara Buchanan ruled Friday that the Supreme Court has made it clear the Idaho Constitution prohibits recognition of any property right in a lease of state endowment land. The court also ruled the state is obligated to manage the property for maximum long-term returns to the endowment's beneficiaries, including public schools.
You can read Buchanan’s full ruling here. Idaho Department of Lands spokeswoman Emily Callihan said the ruling leaves the department free to continue with its plans to sell a group of the cabin sites at public auction in late August, with the disputed appraisals serving as the minimum bid price.
Seventy-six cabin owners on Priest Lake who rent the land under their cabins from the state of Idaho have filed a lawsuit, charging that the state is claiming ownership of improvements including access roads, utility lines and more that the renters actually installed with their own money. As a result, the latest appraisals for the state-owned cabin sites – which will be used both as minimum bids for possible public auctions and as the basis for future rents for continuing leases – have ballooned by up to 80 percent, they charge, pushing them out of many lessees’ price range.
“The appraisals are objectively wrong,” the cabin owners argue in court documents; they’re seeking an injunction to stop the state from using the new appraised values, and return to last year’s values plus a 1.6 percent inflationary increase. But the state says that would mean a loss to the state’s endowment, which benefits public schools, of nearly $2 million next year. You can read my full story here at spokesman.com.
More than 150 people attended an auction over the weekend at which the state Department of Lands auctioned off 21 cabin sites at Payette Lake on which renters have built cabins or homes; 20 of the 21 sold to the current renters. The other lot sold for $42,000, or $5,000 above the appraised value of the land; the purchaser also will be required to pay the appraised price for the improvements to the former renter.
The auctions were for the land only; they took in a total of $6.07 million for the state endowment fund, which benefits state institutions including schools. All but three of the lots sold for appraised value to the current renter with no competitors bidding; the competitive bidding on the other three brought in an additional $33,200 over the appraised values. You can read a full announcement here from the state Department of Lands. The renters of the 21 lots voluntarily joined the auction in hopes of getting title to the property under their cabins, though they also risked being outbid; the state is trying to get out of the cabin-site renting business and into more profitable investments for the endowment. The lots auctioned included six on the lakefront.
In a special meeting today, Idaho’s state Land Board, which consists of the five top elected state officials and is chaired by Gov. Butch Otter, voted to accept new values for state-owned cabin sites at Priest and Payette lakes on which renters have built and own their own cabins. New appraisals were done on 361 Priest Lake cabin sites and 16 at Payette Lake.
“As we’re all painfully aware, the 2013 valuations came in 84.9 percent higher than IDL’s 2012 valuations,” Denny Christenson, president of the Priest Lake State Lessees Association, told the board. “Lessees were astounded to see their values increase by that much during a time when their other real estate investments were declining in value.” But the new appraisals, he said, are 79 percent higher than the 2012 appraisals. That’s left lessees, he said, “with the same question they asked last year – how can these values be 79 percent higher than 2012 in a down market?”
The 2014 values vary considerably, and Christenson said the appraisers’ qualifications were much better this time around. Still, he said, “A large number of lessees continue to believe the appraised values are much too high and would not be supported on the open market.” Many will appeal, he said.
The values matter because they’re the basis for calculating rent on the land, and also are a starting point for auctions or other transactions in which cabin owners – or others – could have the opportunity to buy the land under the cabins from the state. The state has been working for several years to get out of the cabin-site renting business, in favor of other land investments that bring greater earnings to the beneficiaries of Idaho’s state endowment, the largest of which is the state’s public schools.
Lands official Patrick Hodges said based on the results of a meeting between the department and the Priest Lake lessees, “We’ve opened a two-week window after the appraisal numbers are approved by this board, to allow lessees to submit factual corrections.” That will be for errors in measurements and the like, he said, and such corrections will be made without having to go through a full appeal process.
On unanimous votes, the state Land Board has agreed to offer the 74 cabin site renters at Priest Lake and the 21 at Payette Lake who had been signed up for now-cancelled land exchanges an opportunity to go to public auction on their lots; you can read my full story here at spokesman.com. The Payette Lake auction likely will be held in late February in Eagle; the Priest Lake lots will be auctioned at the Coeur d'Alene Resort on two dates to be set before the end of the summer, and will be subject to new 2014 land appraisals that are now in progress.
“We have ready, willing and able buyers,” said Kathy Opp, deputy director of the state Department of Lands. “We believe the endowments could benefit from another voluntary auction cycle that captures current buyer interest while motivation is high.”
The state would be guaranteed to get at least the appraised value for the lots, which would be the minimum bid. If someone other than the current lessee for the land was the successful bidder at the auction, they would have to pay the current lessee appraised or assessed value for the improvements, including the buildings on the property. When the state held a similar auction for 13 Payette Lake cabin sites in October, all 10 that had current lessees went to those current lessees; the other three were vacant, unleased lots.
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.
A North Idaho judge has ruled against a family that challenged the auction of its state-owned leased cabin site at Priest Lake, saying cabin owners who rent their ground from the state have no right to continue their leases or to appeal their appraisals prior to a conflict auction. The opinion issued by 1st District Judge Barbara Buchanan doesn’t mention the oddest part of the case – that the remains of five of the family’s ancestors, dating back nearly a century, are interred on the cabin site, and permanent memorials to the five are located there.
Spokane attorney J. Scott Miller said that turned out to be more of emotional issue than a legal issue in the case. “I’m surprised it wasn’t an issue for the individual who bid against the family,” he said. “But … really there’s no legal grounds that I’m aware of.”
Buchanan found that cabin owners have no right to continue their leases once they expire. “The plain terms of the 2012-2013 lease provided that any renewal of the lease was entirely at the discretion of the Land Board,” she wrote. Plus, she found, “Even if the lease could be construed to provide a right of continuation past the expiration of the lease, such right is unenforceable as a matter of law given the Idaho Supreme Court’s recent determination that the Idaho Constitution prohibits the Board from offering a lease renewal to a cottage site lessee without first making the lease available for public auction.” You can read my full story here at spokesman.com.
Two Priest Lake cabin owners were outbid for their leases on the state land under their Idaho cabins on Thursday - including one who has at least five ancestors' remains buried on the site. The family is hoping to overturn the results of the auction through its pending lawsuit, and their Spokane attorney said he was surprised the state went ahead with the auction; state lands officials said there was nothing legally to stop it.
“Because there was no injunction filed, there was nothing that would preclude it moving forward,” said Idaho Department of Lands spokeswoman Emily Callihan. “We have a legal obligation to put expiring cottage site leases up for advertisement. If somebody other than the current lessee emerges who’s interested in acquiring that, we have to hold the auction.” You can read my full story here at spokesman.com.
Two Priest Lake cabin owners have been outbid for the right to keep their leases on the state land under their lake cabins, meaning they’ll lose them, and the successful bidders will have to pay them for the appraised value of the improvements. Denver resident Peter Mounsey was the successful bidder for a cabin site that had been held by Jan Nunemaker in the Powerline subdivision; he bid $2,000, while she bid only the minimum $1,000 to keep the lease. Mounsey will have to pay Nunemaker the $38,500 appraised value of her cabin. He also had to pay the first year’s rent for the ground, $22,880, to the state in advance.
In the other auction, James Hollingsworth outbid relative Graham Sharman in a bidding war over a cabin site in the Pinto Point subdivision; Hollingsworth’s winning premium bid was $30,000 to secure the lease. Hollingsworth will have to pay Sharman the $132,000 appraised value of the cabin; the annual rent for the ground underneath it is $21,720, which Hollingsworth was required to pay the state in advance.
A third conflict auction also was held this week for a cabin site at Payette Lake in McCall; there, too, the current lessee was outbid. Brady Peterson of Eagle won that auction with a premium bid of $6,000, after current lessee and Oregon resident Michele Cahill stopped at $5,000. In that case, the improvements were found to have zero value, so Peterson won’t have to pay Cahill. He paid the first year’s rent of $920 to the state in advance; the lot, in the Agate subdivision, isn’t on the lakefront like the Priest Lake sites.
Land exchanges designed to let a fifth of the lake cabin owners at Priest Lake get ownership of the land under their cabins – while trading the state higher-yielding commercial property – are likely dead, mired in legal and political problems; you can read my full story here at spokesman.com. “We share the angst and frustration of the lessees, the board does,” Idaho Secretary of State Ben Ysursa said after the state Land Board held an hour-plus closed-door session on the situation Tuesday, but took no action. Last month, the board abruptly rejected two major land exchanges involving lots at Priest and Payette lakes, after a handful of legislators and local officials raised legal and political questions about the moves.
A subdued Tom Schultz, director of the state Department of Lands, said, “The board did not take any action to reconsider the ones that weren’t approved. My understanding is that legally, auctions are the most defensible route forward.” Legal issues raised about exchanges, he said, likely require some clarification from the Legislature.
The state’s been working to get itself out of the business of renting lakefront lots on which the renters build their own cabins; the nearly century-old practice has led to years of lawsuits and protests over what constitutes fair rent in that situation. Proceeds go to the state’s endowment, which largely benefits Idaho’s public schools.
Idaho's state Land Board has rescheduled its special meeting, originally set for yesterday, to Nov. 12 - next Tuesday - at 10:30 a.m. in room WW53 of the state Capitol. The agenda is identical to the one posted for yesterday's cancelled meeting: Extending cottage site leases on Priest and Payette lakes for one year at current rates, and an executive session on potential litigation related to the cottage sites.
Idaho’s state Land Board had been scheduled for a special meeting this afternoon, but now it’s been canceled. The reason: Attorney General Lawrence Wasden raised concerns about inadequate notice of the meeting; it likely will be rescheduled soon. There were only two items on the agenda: Extending all state-owned lake cabin site leases now scheduled to expire on Dec. 31 for one more year at current rates, allowing time for re-appraisals of land values; and an executive session on potential litigation related to cabin sites.
Last month, the Land Board unexpectedly rejected two major land exchanges intended to swap cabin sites at Priest and Payette lakes for commercial property in southern Idaho, potentially doubling the proceeds to the state endowment. The state’s been working to get itself out of the business of renting lakefront lots on which the renters build their own cabins; the nearly century-old practice has led to years of lawsuits and protests over what constitutes fair rent in that situation.
But the two big swaps were questioned by a handful of state lawmakers and local officials, who noted among their concerns that their counties would lose property taxes on the commercial land when it switched to state ownership, and ideological opposition to the idea of the state owning commercial property, on grounds that the state shouldn’t compete with private business.
However, the state endowment, which operates as a trust, long has owned commercial timber and grazing lands on which it’s issued leases, and in recent years has increasingly expanded into other types of property investments, including office and commercial buildings; its constitutional mandate is to bring in the maximum long-term financial return for the trust’s beneficiaries. The state still could bring back up the land exchanges, but at this point, the prospects are unclear.
Idaho’s state Land Board has voted to reject all three proposed land exchanges, at least for now. The swaps sought to exchange state-owned cabin sites on Priest and Payette lakes for commercial property in Idaho Falls and Nampa. Attorney General Lawrence Wasden first moved to delay consideration of the exchanges, based on concerns raised today by state legislators and local officials, to allow more review, and also to allow the cabin site lessees involved a chance to get their appraisal values reviewed, something they waived to get into the exchanges. But then state schools Supt. Tom Luna said he wanted to split the questions, because he favored moving forward with the Idaho Falls exchanges, but not the Nampa one.
“I have concerns about the predicament that we have put any number of individuals in that have been, at least in my opinion, following this board’s lead as we’ve moved toward this exchange today,” Luna said. “I understand that people have given up their right to appeal their appraisals, we’re going to address that. But I think at best that’s a Band-Aid to the predicament that we’ve put them in. … Although I have strong issues with acquiring commercial properties and I’ve expressed those before so I won’t say it again … this board has already decided that this is a path we would go down and people followed us down that path,” he said.
But he was the only one to vote in favor of a motion to proceed with the two Idaho Falls exchanges; it died on a 4-1 vote. The Nampa exchange then was rejected by a unanimous vote, and a motion to allow involved cabin-site lessees to get their appraisals reviewed passed unanimously.
Click below for a report from AP reporter John Miller.
Before this morning’s Land Board meeting, Eye on Boise queried board members about the upcoming conflict auction of a Priest Lake cabin site that includes generations of human remains from the extended family that’s had its cabin on the state-owned property there, under a state lease, since 1933.
“That’s our property,” said Secretary of State Ben Ysursa. “We had no idea, but conflict auctions are conflict auctions.”
Gov. Butch Otter said he didn’t know about the remains. “We’ll have to have to make sure this doesn’t become issue for confiscation,” he said. Attorney General Lawrence Wasden noted that the state hasn’t yet been formally served with the lawsuit over the auction. “We’ll take a look at it once we receive the documents,” he said.
The Starlin family stands to lose a lot more than the lake cabin their great-grandfather hand-built on leased state land back in 1933 when Idaho auctions off the parcel next month. They could be leaving behind generations of family members whose remains have been buried there, too.
Marissa Olsson still remembers the moving ceremony in which 30 extended family members shared memories of her grandmother, then each placed a handful of her ashes in a spot that held special memories of her; she took hers to the beach where she made her grandma mud pies, and her grandma obligingly pretended to eat them, a spot the two had dubbed the “Priest Lake Cafe.” Now, the family’s modest cabin is one of four set for conflict auctions next month, and the family has filed a lawsuit against the state of Idaho challenging the process, joining another cabin owner also facing a conflict auction.
After an Idaho Supreme Court decision last summer overturned a state law protecting cabin leases from conflict auctions, bids were solicited. Three Priest Lake cabin sites and one at Payette Lake drew conflict bids, meaning someone else wants to bid against the existing cabin owner for a chance to take over the lease. If the outsider wins the bid, the existing cabin owner must be paid for the value of their improvements at the appraised price.
Among the concerns raised in the lawsuit: Though the state is allowing every other cabin owner at Priest Lake a shot at a new appraisal for their cabin site, after the latest ones were challenged as inaccurate, those facing conflict options weren't allowed to object; they also weren't allowed to join land exchanges to try to get ownership of their cabins before the conflict auction. Appraisals determine the yearly rent that cabin-site lessees pay; the family’s rent for the site in question was $7,223 in 2011; it’s proposed to go to $22,880 next year.
But the most eye-catching item in the lawsuit, filed late last week in Bonner County, is the human remains. The cabin site is the final resting place not only for Olsson’s grandmother, but also for her great uncle, her step-grandfather, and two cousins, including a little girl who was stillborn in 1939. Permanent memorials to all five are located on the site. “The whole family is very upset about it,” said Olsson, now an attorney in Seattle; her aunt, Jan Nunamaker, holds the lease now. State Lands Department Deputy Director Kathy Opp said Monday that she knew nothing about the human remains and hadn’t yet seen the lawsuit; you can read my full story here at spokesman.com.
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.
Idaho has dropped plans to auction off three undeveloped lakefront cabin sites on Priest Lake this summer, and instead will look at possibly auctioning up to three other lots on the lake next year. “Those three were not the ideal locations, after on-site review,” Thomas Felter, the state Lands Department’s manager of commercial and residential real estate, told the state Land Board this morning. Plus, he said, the department’s appraiser said it would take six to 12 months to properly market lakefront lots for auction.
The auction, initially planned for August or September, was designed to give the state a better sense of the true market value of bare lots on the lake, as it moves toward trading away or auctioning off existing cabin sites on the lake. You can read my full story here at spokesman.com.
Idaho will auction off three new undeveloped cabin sites on Priest Lake this year, partly to get a sense of the true bare-land values as the state moves toward divesting itself of the numerous state-owned lots there on which renters have built and owned cabins for years. The state Land Board approved the auction plan this morning; the auction will take place in late August or early September. The three lots, all contiguous and lakefront, will be marketed nationwide.
“Although historically there have been 354 cottage sites associated with Priest Lake, an additional 17 have been platted and are unleased and undeveloped at this time,” Thomas Felter, the state Lands Department’s manager of commercial and residential real estate, told the board, which consists of the state’s top elected officials. “We believe a sale auction would help determine the market value for vacant and unimproved lots.”
The state had planned to allow some voluntary auctions of existing cabin sites this year where the lessees wanted to go that route – and perhaps bid against competitors to keep their cabin sites, or get paid for their improvements if a competitor won the bidding - but the need to reappraise all the existing sites has slowed that process down. Felter said none of the existing Priest Lake cabin sites will be ready for voluntary auctions before 2014; you can read my full story here at spokesman.com.
Priest Lake cabin owners who object to new Idaho appraisals that showed the state-owned land under their lake homes ballooning in value this year by an average 84 percent can request new appraisals, the state Land Board decided Tuesday, and if they object to the new values, they can appeal. The catch: Once the new values are set, the leases for the cabin sites again would be offered up for potential conflict bids from others. And for those cabin owners who are already part of pending land exchanges aimed at trading other ground to the state so they can gain ownership of the land under their cabins, new appraisals might not be ready in time.
“People are going to have to decide what’s in their best interest,” said Chuck Lempesis, attorney for the Priest Lake State Lessees Association. But he called the Land Board’s unanimous decision “a very positive step forward” that provides “options for our lessees who are in difficult positions.” You can read my full story here at spokesman.com.
Here’s some interesting historical perspective from Idaho Statesman reporter Dan Popkey: The last time Idaho held a conflict auction for state-owned cabin site leases was in 1987, when the state Land Board auctioned off 22 lots at Payette Lake in an effort to establish market values. It was a failure for the state; all but one of the 22 lots sold to existing leaseholders who paid the minimum bid, Popkey reports.
Plus, he reported, “The only bidders to contest an existing leaseholder were a Boise couple, Al and Sharon Hutchins, whose bids were booed by the crowd at a school gym in McCall. They got the lot, however, paying $46,000, $11,000 over the minimum.” You can read Popkey’s full report here.
Times have changed since then. In 1990, the state had scheduled a cottage-site conflict auction, but it was canceled, after then-Gov. Cecil Andrus signed into law new legislation protecting cabin-site lessees from conflict bids. In July of this year, the Idaho Supreme Court overturned that law as unconstitutional.
Back in 1990, then-Superintendent of Public Instruction Jerry Evans noted that the whole legality of the new law rested on charging market rents for the lots, an issue the state would struggle with over the following years, repeatedly backing off from proposed big rent increases after protests from longtime cabin owners, who own the cabins they’ve built on the state land. In fits and starts, though, rents rose substantially.
Popkey also notes that 85 percent of the state-owned cabin sites at Payette Lake are leased to Idaho residents, but the figure at Priest Lake is just 10 percent. Many of the Priest Lake lessees are from the Spokane area, which is the largest population center near the lake. For Payette Lake, that population center is Boise.
In 2007, Idaho tried to auction off two new lakefront cabin sites at Priest Lake with a lease rate double what others then were being charged, 5 percent of value vs. 2.5 percent. It was a flop; no one bid. About 50 existing lease holders attending the auction at the Coeur d’Alene Inn burst into cheers. Now, lease rates are set at 4 percent of value per year; the state is required by the Idaho Constitution to manage its endowment land – including the cabin sites – for the maximum long-term return to the endowment’s beneficiaries, the largest of which is the state’s public schools.