June 9, 1996 in Nation/World

On A Short Pier Lots Riding As State Considers Ways To Profit From Its Priest Lake Property

By The Spokesman-Review

Dale and Sandy Peringer just spent their first winter in their 1947 lakefront cabin.

They’re spending part of their retirement nest egg on an addition so they can live the rest of their days here, picking huckleberries and drinking in the remote scenery.

Or “until we can’t afford it anymore,” Sandy Peringer qualifies.

Peringer and 354 other residents of state-owned lots on Priest Lake stand to lose in the quest to find more revenue for Idaho’s school system.

Like many summer residents and retirees, Dale Peringer Jr. inherited his cabin from his parents, who built on state land.

Now the land is worth more than anyone dreamed back in the 1940s, and state officials are questioning whether they’re getting the best return on the waterfront investment.

Some residents fear people will be priced out of their lakefront cabins, and the pristine lake will become the exclusive playground of the rich, if the state moves forward with suggestions to raise the rent drastically.

At a state Land Board meeting last week, citizens testified - and some land board members agreed - that the rent the state charges for its lots on Priest and Payette lakes is much too low. The Land Board’s job is to manage state lands in a way that maximizes income to the school endowment fund.

Critics believe the lessees, many of whom are from out of state, are getting an unbelievable deal at the expense of schoolchildren.

Gov. Phil Batt has even suggested that selling the lots and “going to cash” would be more profitable than continuing the lease program.

Last year, the state’s Priest Lake waterfront property was assessed at more than $79 million. The rents raised $823,969. The rent money goes into an endowment fund that primarily benefits schools.

The leases make 1 percent of the land value annually, but are supposed to bring in 2.5 percent under the Land Board’s rental policy, which was established in 1992.

Since 1992, the value of the state’s Priest Lake property has increased from 17 percent to 21 percent each year.

Peringer and his wife, Sandy, sold their farmhouse in Rosalia, and followed a lifelong dream when they moved to Priest Lake permanently last year.

They are among a few lessees who live year-round at the lake. Most people only visit in the summer.

“The social environment up there, I would characterize as a second neighborhood,” says Chris Hugo, a Spokane city employee whose family history at Priest Lake goes back to 1906.

“It’s a place where I made some of my most important lifelong friendships,” Hugo says. “Priest Lake is a society, which is something the Land Board fails to realize.”

If the state doubles or triples Hugo’s lease, he might have to give up the cabin, he says. Hugo’s lease is about $3,000 a year. On top of the lease, he pays utilities and property taxes for the cabin. All for about 12 weekends a year.

“I’m not highly paid,” he says.

Preserving the social diversity of Priest Lake or Payette Lake is not among the Land Board’s duties. Yet, some critics of the lease system say state officials have paid too much attention to the concerns of the leaseholders, many of whom aren’t even Idaho residents.

Only 10 percent to 12 percent of Priest Lake’s lessees are from Idaho.

“Why should the lessees be exempt from market forces when the rest of us who pay property taxes aren’t?” asks Sally Trott of Stop the Swap Coalition, which formed to protest a land exchange involving cabin sites on Payette Lake.

“The key issue for me is that no one is above the law,” Trott says. The particular law she refers to is a 1990 statute that requires the Land Board to charge fair market rents.

The Land Board established 2.5 percent of the assessed property value of a cabin site as that target rent. But through negotiations with lessees, the board adopted a 10-year policy in 1992 that won’t achieve that target.

If lessees at Priest Lake were paying the target rent, in 1995 the state would have made $1.9 million - more than twice what it actually received.

That represents about 5 percent of the $35.2 million distributed from the state endowment fund. The portion of the state Department of Education’s budget that comes from the endowment fund is 4.7 percent.

Once money from the cabin leases makes its way to the Coeur d’Alene School District, the fair-market leases would contribute enough money for one administrator’s salary.

Coeur d’Alene schools Superintendent Doug Cresswell, who also happens to be the president of the Priest Lake Lessee’s Association, thinks the current arrangement is fair.

If leases are raised too much, “it will drive the local cabin owners out,” he says. “The people who have leased the cabin sites for years have a lot of ownership and care for the lake.”

Peringer doesn’t mind paying a fair price for his lease, but he agrees with Cresswell.

And if the state decides to sell the lots, then “most people couldn’t afford it,” he says. As for himself, he’d probably have to subdivide in order to keep his home, he guessed.

Then the state shoreline would start to resemble the private shoreline, where “they crowd ‘em up more,” Peringer says.

Aside from visual pollution, Peringer fears the pristine lake may start to suffer other kinds of pollution from overcrowding.

Overall, Peringer thinks the state has done a good job of managing the lake.

“Up till now, they’ve wanted to preserve the lake,” he says. “I like that idea myself.”

, DataTimes ILLUSTRATION: 2 Color Photos

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