BOISE - Idaho’s state Land Board voted unanimously today to take public comments for the next three months on a plan to get the state out of the business of renting lots for lakefront cabins - and give the lessees a chance to buy the lots.
The plan, formulated by the state Lands Department and several consultants, called the cabin sites, which include 355 at Priest Lake, “underperforming assets” for the state’s endowment, which largely benefits its public schools, and called for Idaho to “dispose of the cottage sites in an orderly and expeditious manner.”
Current lessees would have three options: Join in a group land exchange, in which the state would trade away a group of cabin lots for “institutional-grade real estate assets” of equal value; enter a voluntary public auction for the lot, with credit for the value of the improvements and the opportunity for installment payments; or continue leasing - but at higher rates. The proposal calls for a 90-day public comment period to start this Thursday.
Idaho Secretary of State Ben Ysursa said the state may not want to get rid of all the lots. “I think some of those properties we ought to look at strategically, at retaining some of those, but not for leases,” he said. “I want to make it clear that we as a board have some more critical thinking to do.”
But Ysursa said it’s critical for the state to move away from the current “split estate,” in which the state owns the ground but private owners own the buildings. “This is a first step. … It is a step in the right direction,” he said.
The Land Board also voted 4-1, with state Superintendent of Schools Tom Luna objecting, to extend current lease rates and terms for one year, since a 4th District judge last week issued a preliminary injunction blocking proposed new 10-year leases. Luna said the proposed leases, which included phased-in rent increases over five years, would have brought in more money for schools.
The board, which consists of the state’s top five elected officials, then voted unanimously to set lease rates for remaining leases in 2012 and thereafter at 4 percent of current value - well above the current 2.5 percent rate.
Idaho Attorney General Lawrence Wasden praised the moves. He sued, first in the state Supreme Court and then in 4th District Court, to block the new leases, saying they didn’t meet the Idaho Constitution’s requirement to earn maximum long-term returns from state endowment lands.
Fourth District Judge Deborah Bail ruled that the 1990 state law under which Idaho agreed to end public auctions of cabin-site leases in exchange for charging “market rents” was unconstitutional, and issued a preliminary injunction blocking the new leases. That case still will proceed, to make a final determination on the constitutionality of the law.
“We’ve got a path forward, and that is a much more healthy place to be,” Wasden said. “I commend my colleagues on the Land Board for doing that.”
Bud Belles, president of the Priest Lake State Lessees Association, said, “It’s all about getting the money for the kids, and we’re not opposed to that. We just don’t want to pay a lot more money than the market value. … That’s what we’ve been saying all along.”
Belles, 69, whose family has owned his cabin since he was 8 years old, said, “I want to own my lot.”
Wasden said, “When you go back and look at the 80-year history of this problem, the real problem is not fluctuations in the market. The real problem is the lack of political will to get to a fair return.”
He said, “What we need is to have a unified political will to go forward - I think we’ve found that at this point.”
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