December 22, 2010 in Idaho

Land Board has plan for Idaho cabin sites

Agency wants public comment on options for state-owned lots
By The Spokesman-Review
 
Three options

Under the proposal, lessees could:

• 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.

BOISE – Idaho’s state Land Board wants public comments 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, calls the cabin sites, including 355 at Priest Lake, “underperforming assets” for the state’s endowment, which largely benefits its public schools, and calls for Idaho to dispose of them.

The proposal calls for a 90-day public comment period to start Thursday.

Idaho Secretary of State Ben 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. That’s led to years of political and legal battles over what’s fair rent.

“This is a first step. … It is a step in the right direction,” Ysursa 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.

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.”


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