After 31 months of work, the Idaho Land Board says it needs one more month to complete work on a new rental scheme for 521 cottage lots at Priest and Payette lakes that support state endowment funds.
The board did order the Department of Lands to study and report by January 2011 on a plan to consolidate ownership of cottage sites and the improvements built upon them, including consideration of sale or land exchanges. But the five members were unable to reach consensus Tuesday on rents for the next decade.
After almost five hours of testimony and discussion, Secretary of State Ben Ysursa withdrew his motion to increase rents. Instead, the board will meet again on March 16 to resolve the issue.
“I’m putting you on notice,” Gov. Butch Otter said before the vote to postpone action, “I’m not going to delay it another month.”
Otter, the chairman of the Land Board and one of its five members, said he would have voted for Ysursa’s proposal to increase annual rent from 2.5 percent of assessed or appraised value to 4 percent based on a 10-year rolling average, phased in over five years.
Ysursa chaired a subcommittee formed in June 2007 to resolve the issue. Ten-year leases expire Dec. 31 of this year and current leaseholders must apply for renewal by April 30.
The subcommittee also included Superintendent of Public Instruction Tom Luna. At first, Luna seconded Ysursa’s motion to adopt the subcommittee’s report for the rent increases. But by the end of the meeting, Luna said he was uncomfortable with one aspect of the motion, which would increase “premium rent” from 10 percent to 50 percent over five years.
Premium rent is collected when lessees sell their homes. Now, sellers pay 10 percent of the “leasehold value” to the state, representing the amount paid by the new owner to assume an existing lease. In the past five years, sellers have retained 90 percent of leasehold value, while state endowments, including public schools and higher education, have received only $2.7 million.
That represents below-market annual rents, but Luna said his goal is to get annual rents high enough that premium rent will decline or disappear.