Lake Leases: Political Reality Butts Heads With The Law

Predictably, the five state officials on the Idaho Land Board have bowed to public pressure and backed off plans to sharply increase payments by people leasing state land around Payette and Priest lakes.

It’s happened before.

And it probably will happen again.

The board simply can’t stand the heat from long-term tenants, who face the prospect of giving up the leases because they’ve become too pricey.

This past week’s Land Board meeting was a reprise of innumerable clashes between two familiar antagonists: A state legally required to get full market value for the taxpayers and fewer than 600 leaseholders - hundreds living in other states - claiming the rent hikes are exorbitant.

Ron Dube and his family are a good example.

Last year, the family held a ceremony to commemorate 50 years at their Priest Lake vacation cabin. Dube and his wife, who live in Spokane, got the lease in 1946 at $10 per year.

Through the years, there have been modest increases in the state rent. But under a 1992 decision by the Land Board, his rent went to just over $3,000 this year. In June, the board hiked it to $7,011 starting next January.

Dube said that for his family of school teachers, it’s getting too expensive. Yet they’re reluctant to give up a family tradition of Priest Lake vacations.

They will decide by the end of the year whether to surrender the lease.

It may take the Land Board much longer to declare its policy. And even when it does, the past indicates it will only be temporary.

Five years ago, the Land Board voted to raise rents to 2.5 percent of the 1992 lot value - a substantial hike in a large number of cases. But it decided to phase in the increase, limiting the annual increase toward reaching the 2.5 percent level to just over 5 percent.

In some cases, it would have taken more than a decade to reach the level.

The result was that this year’s rent for lakefront lots was $3,915 at Priest Lake and $3,900 at Payette Lake.

In the meantime, the values of the lots have soared from the 1992 level. Lakefront property reportedly was going for up to $5,000 per lakefront foot, or $500,000 for a lot with 100 feet of frontage.

Leaseholders claim increases in land values, 60 percent in the last four years at Priest Lake, are caused by the state, not “real” market conditions.

With the state and federal government holding most of the land around Priest Lake, there is very little deeded property for sale. That drives the price up, they say, and the values used to set rental rates along with it.

The same thing is happening at Payette.

After the June vote to bring all rents up to 2.5 percent immediately and update the lot value annually, the Land Board got more than 350 letters of protest, and nearly 100 people attended its meeting, many to complain in person.

Charles Lempesis, attorney for Priest Lake leaseholders, hinted that 240 leaseholders there could file protests and force Land Board hearings on their lot valuations if something wasn’t done.

The Land Board took no final action because Secretary of State Pete Cenarrusa was called out of the meeting and later informed that his son, Joe, had just been killed in an airplane crash.

But the board’s sentiment is clear. Despite the months of study that went into the June decision, the Land Board probably will try to phase in the increases and possibly try to come up with new rules on determining “market rent” and land values.

It won’t be done quickly, though the board could adopt temporary rules.

And phasing in rent increases over several years doesn’t meet the legal requirement that the state receive full market value. Some Land Board members privately acknowledge they’re on shaky legal ground by charging anything less.

But politically, they’re being forced to come up with yet another plan to temper the heat they’re getting from leaseholders over the last one.