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Idaho judge blocks cabin rent plan

Wed., Dec. 15, 2010, 2:47 p.m.

BOISE - Idaho Attorney General Lawrence Wasden won a preliminary injunction Wednesday blocking new leases for state-owned lake cabin sites, including 355 at Priest Lake, arguing that the state’s whole system for renting out cabin sites is unconstitutional.

Though Idaho owns the land underneath, it’s long allowed private owners to build and own cabins on the lots in exchange for annual rent; some have had the cabins for generations.

But with frequent controversy over the prospect of existing cabin owners being outbid when their leases came up for renewal, Idaho passed a law in 1990 to require the state Land Board to charge “market rents,” in exchange for eliminating the requirement that cabin-site leases be auctioned off to the highest bidder, like other state endowment land leases. Wasden argued that law is unconstitutional, and 4th District Judge Deborah Bail agreed.

“Clearly the Legislature was trying to balance some fairly sensitive issues, but the Constitution is plain and the interpretation of the Constitution is clear,” Bail declared. She ruled from the bench, granting the preliminary injunction on the spot.

“I believe that the public auction requirement of the Constitution can’t be negated by a statute,” the judge said. “I think it will require a constitutional amendment to negate that requirement.”

For now, the preliminary injunction just freezes the status quo, while the case proceeds. The state Land Board meets on Tuesday, and already has on its agenda a plan to move away from state ownership of ground on which private owners build and own cabins.

“If we had unity of title, we wouldn’t be having the kind of problems that we’ve been having,” Wasden said. “That’s the ultimate answer.” He noted that every member of the state Land Board supported moving that direction. But he said there likely will be a number of preliminary steps before the state can get there.

Wasden first went to the Idaho Supreme Court to try to stop the new leases, arguing that they violated the state Constitution’s requirement for maximum long-term returns from all endowment lands, to benefit the endowment’s beneficiaries - the largest of which is Idaho’s public schools. The high court rejected his bid, saying it should start first in a lower court.

In the meantime, leaseholders of the 167 state-owned cabin sites on Payette Lake in central Idaho sued in district court in Valley County - charging that the proposed rents under the new leases were too high. All the state’s cabin-site leases expire on Dec. 31. The proposed new leases would raise rents 9 percent a year for the next five years; rents have been frozen for the past three years at Payette Lake and the past two years at Priest Lake, and Land Board members have acknowledged they’re below market rates.

Idaho Secretary of State Ben Ysursa emerged from Wednesday’s hearing frustrated. Ysursa chaired a Land Board subcommittee that’s been working for years, and heard hours of testimony, on the issue. “I think the key thing we have to figure out is what does that mean to our lease situation,” Ysursa said. “The bottom line is to get the leases done and get revenue for the endowment beneficiaries.”

He noted that if the current lease terms were frozen into 2011, the state would be collecting less than under the proposed new leases. Plus, he noted, “We gave people six months notice June 30, as required by law,” about the new rental rates. “We need leases in place.”

Attorney Merlyn Clark, who represented the Land Board in court on Wednesday, offered a separation of powers argument. “You do not have the power or authority to tell another branch of the government how to do their job,” he told the judge. “You have the power to declare the statute unconstitutional.” But, he said, “We don’t think you have the power to enjoin the board.”

Deputy Attorney General Clay Smith said Wasden’s proposal for a preliminary injunction wouldn’t enjoin the Land Board; it merely blocks state Lands Department Director George Bacon from entering into the new cabin-site leases. “That does not restrain the board from taking appropriate action at its next meeting, which is scheduled for Dec. 21,” Smith told the court.

Wasden said after the ruling, “We welcome the court’s decision. I certainly look forward to working with my colleagues on the Land Board to try and resolve these issues.”

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