Posts tagged: Idaho state Land Board
Idaho’s state endowment is expecting to make at least $30 million later this month from an auction of state-owned cabin sites on Priest Lake - an estimate state officials call “conservative” - and another $13 million from another auction at Payette Lake in December. Currently, proceeds from sales of state endowment land go into a Land Bank Fund for up to five years, where they can be used for other land acquisitions; after that time, they transfer to the permanent endowment.
A subcommittee of the Land Board looking at the issue reported today that the Land Bank currently has a $12.5 million balance, and while the Department of Lands is looking at possible purchases of timber land and road right-of-way, none of those purchases are likely to occur within the next four months. Funds in the Land Bank are invested by the state treasurer as part of the state’s idle pool, where they earn about 0.4 percent interest annually. But the permanent endowment fund last year made 18 percent in investment earnings.
“We certainly know that there will be some money coming into the Land Bank in amounts that really should be sent into the permanent funds,” said Idaho Secretary of State Ben Ysursa, who chairs the subcommittee. So the Land Board voted unanimously today to transfer the current $12.5 million balance from the Land Bank Fund to the permanent endowment. The board also voted to consider consultants’ analyses at its December meeting on how to handle future balances in the Land Bank fund and when to make transfers, including possibly limiting the land bank fund to $10 million, with all proceeds above that going directly to the permanent endowment fund.
Firefighting costs for the Idaho Department of Lands are up significantly this year, the state Land Board was told this morning, coming to $24.4 million to date. An estimated $2.1 million of those costs will be reimbursed to the state Lands Department from other agencies, for a net cost of about $22.34 million. That’s far above the 20-year average of about $7.5 million. The reason: Though this hasn’t been the worst fire season statewide, more than a quarter of the fires have been on land for which the state has fire-protection responsibility. “As a percentage of the 200,000 acres being suppressed this year, we’re more than 25 percent of those,” said Tom Schultz, state lands director.
Two years ago, wildfires in the state were far more extensive, but burned largely on federally protected land.
“It has been a very active fire season for the Department of Lands on our protection districts,” state forester David Groeschl told the board. “We’ve had a lot of fire activity.” Four fires required Type 2 management teams in the past two weeks, he said; all are now contained. “Mop-up is occurring on those,” Groeschl said. The largest, the Big Cougar Fire, has burned 65,000 acres. The state’s costs include $1.8 million for fixed aircraft costs for the season.
“As of right now, August is predicted to be warmer than normal with normal precipitation, which isn’t much for August,” Groeschl said. “Given those predictions, we expect still a very active fire season right now. We’ve got some recent precipitation which is good, helps slow things down right now, but we’ll see what happens throughout the rest of August and early September.”
Schultz said this year’s state firefighting price tag could end up four times the 20-year average, saying it’s been a “very difficult, very expensive fire season so far for us.”
The state Land Board, which consists of the state's top five elected officials and is chaired by the governor, has sent out an opinion piece to Idaho news media hailing the endowment's record earnings in the past year, from the record 18.8 percent return on investments in the endowment fund to a 14-year high of $102 million from state endowment lands. That included the take from a record 347 million board feet of timber that was logged from the endowment lands, part of it consisting of trees that had been damaged by wildfire or insects, and from a hotly bid-for $1 million lease to use state lands to recreate Evel Knievel’s 1974 attempt to jump the Snake River Canyon near Twin Falls. “Together with our state land managers and the fund managers who invest the revenues they work hard to generate, we’re showing Idahoans that active management of State endowment trust lands and prudent investment of financial assets benefit us all,” the board said in the piece; you can read it in full below.
Idaho's endowment chiefly benefits the state's public schools, which are the beneficiary for 85 percent of the state's endowment land. The other beneficiaries, which like the schools were designated at statehood, are the agricultural college (U of I); charitable institutions (a catch-all that includes Idaho State University, industrial training school, State Hospital North, Idaho veterans homes, and the School for the Deaf and Blind); normal school (covers ISU Department of Education and Lewis-Clark State College); penitentiary; school of science (U of I); mental hospital (State Hospital South); University of Idaho; and the Capitol endowment.
Idaho auctioned off 13 state-owned cabin sites at Payette Lake in 2013, 10 of them previously leased and three vacant. Now, with the first such voluntary auction – cabin owners who rent the lots under their cabins can decide whether they want to participate – coming up at Priest Lake on Aug. 28, the state has approved a second round of auctions at Payette Lake for later this year.
The state Department of Lands has received applications from 30 Payette Lake cabin site renters who want to go to auction; it’s proposing putting those 30 plus six vacant sites up for auction. The state Land Board voted unanimously this morning to go ahead with the auction of the 36 lots, to be held in November or December.
At the first Payette auction, all 13 sites sold, with a total selling price of $5.88 million. The 10 previously leased lots all were purchased by the owners of the cabins on them; only one saw competitive bidding, pushing the price up to $11,000 above the appraised value, which is set as the minimum bid. The three vacant lots all saw competitive bidding. All three sold for more than their appraised values, with one appraised at $662,400 selling for $1 million.
Idaho’s state endowment fund earned 18.8 percent on its investments in the past year, investment manager Larry Johnson told the state Land Board this morning. He said that’s the second-highest earnings year in its history; the fund is now worth $1.736 billion, a new record. The endowment fund’s earnings mainly benefit the state’s public schools, along with other institutions. The Endowment Fund Investment Board will meet in mid-August to finalize its recommendations on distributions to the schools and other beneficiaries in fiscal year 2016; that recommendation will come to the Land Board in September. Distributions to schools are likely to rise slightly, from $31.3 million a year to $31.5 million, now that reserves have reached the target level.
“Likely the fund will earn between 6 and 7 percent over the next 10 years,” Johnson said, saying he can’t promise a continuation of the recent very strong earnings. Over the past five years, the fund’s returns were 14.6 percent; over the past 10 years, 8.5 percent.
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.
The rain that’s falling this morning in Boise – and the unseasonable June snow in the mountains – is actually very, very good news for Idaho’s upcoming fire season, according to a briefing the state Land Board received yesterday. “You shorten the window that’s available for your fire season,” Jeremy Sullens, wildland fire analyst for the National Interagency Fire Center, told the board. “So precipitation events in June … are a significant factor in decreasing the fire season.” Other good news: Cool temperatures have kept much of the state’s snowpack in place, and it’s “coming off the landscape more slowly … in large portions of Idaho. That’s going to provide a lot of moisture for fuels to take up. … Snowpack across the state looks very good at this point.” That combination means longer waits before higher-elevation timber wildfires can break out between now and the advent of wet weather in the fall, Sullens said, and is good news all around.
Plenty of precipitation earlier wasn’t necessarily as promising, because when it occurs during the seasonal “green-up,” it can spur more growth of grasses and other material that can later dry out and serve as fuels for wildfires. Forecasts call for Idaho to see slightly above-normal temperatures along with above-normal precipitation as it moves into summer, Sullens said. “So really, Idaho’s not looking too bad from a forecast perspective.” There are two exceptions, he noted: Areas with sage grouse habitat in southwestern Idaho, and areas in eastern Idaho that saw heavy fire activity last year, including the Hailey area. Those two spots are seeing more drought-like conditions than the rest of the state. Sullens said a “finger of drought runs up through there,” tied to the dryness that’s been experienced across Nevada and Utah.
Meanwhile, 250 ranchers across the state are now trained to help fight fires, as a result of the formation of five Rangland Fire Protective Associations. The ranchers get training and help with equipment to enable them to quickly jump on wildfires that start near them, before state or federal firefighters can get to the scene.
Gov. Butch Otter, who chairs the state Land Board, said at a recent Western Governors Association meeting he attended, other western governors expressed interest in the idea and want to emulate Idaho’s move.
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.
There’s a substantial crowd of folks gathered in the garden-level hallway of the state Capitol this morning, as two state boards – the Idaho Land Board, and the state health insurance exchange board – hold closed-door executive sessions at the same time, in meeting rooms directly across from each other. The Land Board is discussing potential litigation relating to state-owned lakefront cabin sites, while the exchange board is discussing a newly completed independent review of the now-canceled contract awarded to a former exchange board member, Frank Chan. The exchange board plans to reconvene in public session to discuss the probe after the closed-door talk of personnel matters related to it. It’s unclear whether the Land Board will have further public business after its closed-door session.
There was a full house for this morning’s special Land Board meeting, with just two items on the agenda: A one-year extension of current cabin site leases, at current rates, to allow time for reappraisals; and the executive session. The extension comes in the wake of the board’s sudden rejection last month of two major land exchanges, designed to swap cabin sites for higher-yielding commercial property in southern Idaho.
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.
The state Land Board is locked in debate today about three major land exchanges, which would swap state-owned cottage sites at Priest and Payette lakes for commercial property, including buildings in Idaho Falls that house operations related to the Idaho National Laboratory, and in Canyon County. If the swaps were to go through, nearly 15 percent of the state-owned lake cabin sites on state endowment lands would transition to private property; state Lands Department officials estimate that the long-term income to the state endowment would sharply increase as a result of the deals.
Not everyone is convinced. State Rep. John Vander Woude, R-Nampa, complimented the Land Board for its recent hotly contested auction for the landing site for a re-attempt at Evel Knievel’s unsuccessful jump across the Snake River Canyon in 1974; that auction drew five bidders and in the end will gain more than a million dollars for the school endowment. But he objected to the land swaps.
“I understand the process of what we’re trying to do to get rid of the lakefront properties,” Vander Woude told the Land Board. “My problem is I don’t think we’re getting value. I think we can do better. … I would urge the Land Board to table this ‘til we can get some better answers.”
Gov. Butch Otter responded, “Who’s gonna give us the better answers, John? We’ve gone to the experts and poked and prodded. … We have gone through this and gone through this, and now you say delay this just a little bit longer and study it more.”
Kathy Alder, Canyon County commissioner, told the board her commission opposes the Canyon County exchange. “This is so important for our tax base,” she said. “Even though it’s only $33,000, that’s a lot of money to Canyon County.” The board meeting is continuing, and may include some discussion in a closed executive session prior to the vote.