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Panel waits to act on Priest Lake rent relief

BOISE – Idaho’s top elected officials voted Tuesday to freeze cabin-site rents on Payette Lake for one year, but they made no change in Priest Lake cabin-site rents.

“We were hoping we would get a little relief, but not expecting it,” said Bud Belles of Nine Mile Falls, president of the Priest Lake State Lessees Association.

Belles and other Priest Lake cabin owners were pleased, however, that the Idaho Land Board also committed to launch a working group to come up with more appropriate lease terms before leases for all the state-owned cabin sites, on both Payette and Priest lakes, come up for renewal at the end of 2010.

“That’s what we were hoping for, that we can get into a very productive session so that we can work out a good lease,” Belles said. “We got that, essentially. They’re going to work with us. … So while we didn’t get some financial break, I think it’s more important to have a good lease in place.”

Idaho owns prime sites on the two lakes, which it leases to people who build and maintain cabins on them. The land is part of the state’s school endowment, which the state must manage for maximum long-term financial returns. The state tried to do that by tying rents to market values for the lakefront land, but in recent years, that has prompted huge rent spikes. At Payette Lake, lakefront lots were projected to see average rent increases next year of 47 percent, and secondary lots a whopping 88 percent. Priest Lake lots are projected to have a 15 percent rent increase in 2008.

About 150 people showed up at a Priest Lake association meeting in Spokane on Monday night, Belles said, out of concern about the situation.

In October, Idaho tried to auction off two new lakefront cabin sites on Priest Lake at double the rents it charges existing cabin owners. But no one bid. Existing cabin owners were thrilled, as the outcome supported their contention that fair market rents shouldn’t be that high.

At Payette Lake, some cabin owners have seen their land rents jump to as much as $50,000 or $60,000 a year. Two dozen cabins on state land there are on the market, but none has sold in the past year.

State Land Board members said uncertainty over rent and lease terms has killed a market they rely on to bring the state school endowment nearly $4 million a year.

“I’m seriously concerned that our participation in this marketplace has disrupted the market activity and undermined our long-term ability to obtain the maximum return from these properties,” Attorney General Lawrence Wasden said.

Taking a short break, perhaps a year, to study the issue “is in our best interest long-term,” Wasden said.

Said state Superintendent of Schools Tom Luna, “These are unstable leases. Nobody would enter into an agreement where you could not predict within any certainty that your rent is not going to double, or increase by even 25 percent – that’s not marketable.”

Belles said Priest Lake cabin owners feel like they’ve won a series of small victories, from the failed auction to the dropping of proposals for even higher rents. “Now we’re getting the good news that they’re willing to work with us, which is really what we wanted,” he said.