Posts tagged: Priest Lake
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 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.
Four cabin owners on state-owned leased land at Priest Lake, and one at Payette Lake, have drawn conflict bidders who want to bid against them in the fall for the right to continue leasing the ground under their cabins. It’s the first time in decades that Idaho has faced that situation on its state-owned cabin sites on scenic Priest and Payette lakes; for years, a state law has protected the lessees from conflicting bids at lease renewal time, but the Idaho Supreme Court overturned that law in July as unconstitutional.
“The high bidder, if it’s not the current lessee, would have to pay the value of the improvements before they left the auction,” said Tom Schultz, director of the Idaho Department of Lands. “The current lessee could be the high bidder, or the conflictor could be the high bidder.”
After years of struggle over whether the rents charged for the lake cabin sites met the state’s constitutional requirement to manage its land endowment for the maximum long-term return to the endowment’s beneficiaries – the largest of which is Idaho’s public schools – the state’s moving toward getting out of the cabin-site business. But it still has 354 at Priest Lake and at least 150 at Payette Lake, and every one of those has its lease expiring Dec. 31.
As of Tuesday’s deadline – 5 p.m. Boise time – 343 of the 354 lessees at Priest Lake had applied to renew their leases, or 97 percent; and 134 of the 150 at Payette Lake had done the same, at 89 percent. The fate of the 11 other lots at Priest Lake and the 16 at Payette Lake is uncertain, but Schultz said some of those involve lessees who already were behind on their rent or otherwise in default on their leases.
Over the coming years – and even as soon as this summer - the state will look at land exchanges, auctions and other moves to protect endowment income and get the state out of the business of being a landlord for people’s longtime lake houses. That could allow some of the existing lessees to buy the land under their cabins. But for now, a small number of them could face competitors to keep the plots. “If you’re a lessee, you probably don’t look at it as a good thing,” Schultz said. “If you’re the state, it says at least on those sites, at that value, someone is willing to want to acquire that for that value. To me that’s a positive.”
The five cabin owners who are the targets of the conflict bids haven’t yet been identified; the state will begin notifying them Wednesday. If they successfully complete land exchanges or voluntary auctions to remove the lots from state ownership by October, they could avoid the conflict auctions. Otherwise, the conflict auctions for the right to lease those lots will be scheduled in the fall. Bids start at $1,000 for the right to take over the lease at the existing lease rate; the high bidder wins. You can read my full story here at spokesman.com.
Here's a news item from the Associated Press: SANDPOINT, Idaho (AP) — Three lawsuits on behalf of 353 lease holders of cabin sites on Priest Lake in northern Idaho have been filed to prevent Idaho officials from increasing annual rent payments. The Bonner County Daily Bee reports (http://bit.ly/17Qkb7i) the lawsuits were filed Thursday and Friday in 1st District Court. A lawsuit filed Friday by the Priest Lake State Lessees Association represents 320 lease holders, and another lawsuit on Friday includes 17 more. A lawsuit filed Thursday includes 16 lease holders and names the Idaho Department of Lands, the Land Board and its five members, including Gov. C.L. “Butch” Otter. That lawsuit contends the appraisals by the Idaho Department of Lands are flawed and inaccurate. Rates are set to skyrocket as the state seeks to maximize its profit from state endowment land as it is required to do by law.
The clock is ticking for state-owned cabin sites at Priest and Payette lakes; current lessees must apply by April 30 if they want to continue to lease the land under their cabins from the state of Idaho next year. That’s also the deadline for conflict bidders who want to bid against the current lessees, whose leases all expire Dec. 31. Meanwhile, the state Land Board will let cabin owners on the Priest Lake sites flag factual errors in their new, much higher appraisals if they do so before the 30th.
“We’ve got a Supreme Court decision that we have to go with,” said Gov. Butch Otter. “That’s where we are.”
A court decision last summer removed protections the state had granted lake cabin-site renters from competitive auctions when their leases come up. At the same time, the state is in the process of moving to get out of the cabin-site rental business, either through land exchanges, auctions or other moves that will keep income flowing to the state’s endowment. In the midst of all that, new state appraisals on the 354 Priest Lake cabin sites came in an average of 84 percent higher for next year, with some more than doubling.
The Idaho State Land Board is required by the state Constitution to manage state endowment lands for the maximum long-term return to the endowment’s beneficiaries, the largest of which is the state’s public schools. Much of the state’s endowment is timber land on which logging brings in annual income; the cabin sites bring in far less.
“Obviously these people have enjoyed these cottage sites for generations, in some cases, and I certainly can see that,” Otter said. “I understand the anxiety that it’s caused, but it doesn’t lessen our obligation.” You can read my full story here at spokesman.com.
For the first time ever, the state of Idaho is opening up every state-owned cabin site on Priest Lake to conflict bidding – meaning others could bid against the current cabin owners when the 354 leases come up Dec. 31; the same is true for the 165 cabins at Payette Lake. At the same time, new state-commissioned appraisals have come in a whopping 84 percent higher for next year for the land values on the Priest Lake state lots, which are used to calculate annual rents; the Payette Lake lots actually declined slightly in value in the news appraisals. Some Priest Lake cabin owners who were in the midst of negotiating for land exchanges to get ownership of the land under their cabins now are finding out they can’t afford it.
“It will have an effect,” said state Lands Director Tom Schultz. He’s guessing that anywhere from 8 percent to 30 percent of the 354 Priest Lake cabin owners may default on their leases, walking away from cabins that in some cases have been in their families for generations. “I’m not going to make false promises and say that it’s going to be OK, because for some of those folks, it may not be OK,” said Schultz, who will travel north to the Spokane Valley for a meeting with cabin owners on Wednesday night. “What I’ve found is that people would rather hear the truth and be given options for dealing with the truth.” You can read my full story here at spokesman.com.
S-R reporter Scott Maben has a rather amazing story today: A fisherman on Priest Lake hauled in a large lake trout on Sept. 11, and when he began cleaning it, he found what looked like a human finger. It's since been positively identified - it's one of four digits a Colbert, Wash. software developer lost in a wakeboarding accident on the lake back in June, when a looped line sheared off part of two fingers and all of two others. A sheriff's detective reported that the finger was in remarkably good condition; you can read Maben's full story here at spokesman.com.