Posts tagged: McCall science campus
Idaho's state Department of Lands is defending a 2012 land exchange in which it traded the University of Idaho's McCall Science Campus property for office property in Idaho Falls that houses the lead contractor for the Idaho National Laboratory; the deal came under fire this week from two state lawmakers who've joined with a group called Tax Accountability Committee, or TAC, to criticize it. The lawmakers, Reps. John Vander Woude, R-Nampa, and Grant Burgoyne, D-Boise, and TAC commissioned their own review appraisal on the Idaho Falls property that found it was worth just $4.5 million, not the $6.1 million the state's appraiser settled on; they contended that means the private owner involved in the exchange, who then sold the McCall property to the University of Idaho for $6.1 million, profited in the amount of the difference. The Lands Department is standing by its appraisal and says the review appraisal that TAC commissioned overlooked various significant factors; the state endowment's annual rental revenue from the property more than doubled as a result of the exchange.
Meanwhile, Gov. Butch Otter was asked yesterday, at the close of the state Land Board meeting, about the TAC allegations and Vander Woude and Burgoyne's announced intention to introduce legislation requiring review appraisals in all such land exchanges in the future. “They are expensive,” the governor said, noting that it's not clear yet “whether or not I would accept it, whether or not they could override a veto.” Said Otter, “Is the Legislature prepared to spend the money? If they want to insist on it,” they'd need to fund it, he said. “I think all these things need to be weighed.” That said, he noted that he'd not yet had a chance to review the TAC letter to the Land Board, which was sent Monday; Otter spent that day with First Lady Lori Otter, who underwent successful but unexpectedly extensive shoulder surgery. Otter said she's recovering.
Click below for the three documents related to this: The full AP article by John Miller on the dispute; a TAC statement in response to a Lands official's comment in the AP article; and a statement on the appraisal issues from the Department of Lands.
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's state Land Board has voted unanimously in favor of a land exchange to trade the University of Idaho's McCall Outdoor Science School property for a 32,138-square-foot office building in Idaho Falls that houses Battelle Energy Alliance, the contractor for the Idaho National Laboratory. The office building, known as Education Research Center 1, has an existing lease with Battelle that runs for another seven years, and annual base rent is $538,312. That compares to the $248,000 that UI is currently paying to lease the McCall property, which is adjacent to Ponderosa State Park.
The university plans to buy the McCall property from the office building owner for its appraised value, $6.1 million. UI has leased the McCall property from the state endowment for 65 years; this year, the annual lease payment went up fivefold. Land Board members had several questions before their unanimous vote, noting that the two properties being exchanged have equal value and the rate of return to the state endowment will substantially increase.
“I want to thank the staff for the background information that they provided that showed the impact this would have on the property tax base in Bonneville County and also historically the impact that state owned lands has had on the property tax of Bonneville County,” said state Superintendent of Schools Tom Luna. “It was helpful for me, it answered my questions.” Lands Department staff reported that Bonneville County collected $36,000 in property tax in 2011 from the office building, and once it becomes state endowment property, it'll generate no local property tax, meaning the rest of property taxpayers in the county make up the difference. However, since statehood, 64,669 acres of endowment land has been sold to private parties in Bonneville County, an estimated $45 million in property value that generated nearly $550,000 in local property taxes in 2011.
Click below for a statement from the University of Idaho about the transaction involving “one of the most beautiful and pristine settings in the world,” its McCall outdoor science campus.