March 24, 2010 in Idaho

A.G. sues, says Priest Lake cabin rents should be higher

By The Spokesman-Review
 
Documents

Download Idaho Attorney General Lawrence Wasden’s legal challenge to the cabin site lease rules and a brief filed in support.

BOISE - Idaho Attorney General Lawrence Wasden has filed a legal challenge with the Idaho Supreme Court over new lease rules for state-owned cabin sites - including rent increases - approved this month by the Idaho Land Board, contending the rental rates aren’t high enough to bring appropriate returns to the beneficiaries of the state’s school endowment.

“The approved plan is flawed because the rent is too low,” said Wasden, who was in the minority in the Land Board’s 3-2 approval of the plan.

The cabin sites include 355 at Priest Lake, on which private owners have built and owned their cabins, in some cases, for generations. The land is owned by the state endowment, and rents benefit public schools.

Wasden’s legal complaint seeks a “writ of prohibition” against the Land Board and the state lands director, to prevent them from renewing cabin site leases when they expire on Dec. 31, until the Land Board approves higher rents.

Idaho’s Land Board consists of Gov. Butch Otter, Wasden, Secretary of State Ben Ysursa, State Controller Donna Jones and state Superintendent of Schools Tom Luna, the top five elected state officials. Wasden and Jones voted against the new lease terms, which were backed by Otter, Ysursa and Luna.

“These leases were written to favor the current renters at the expense of public schools and other endowment beneficiaries,” Wasden said in a statement. “If allowed to take effect, the new leases will deprive the beneficiaries of six to ten million dollars annually.”

The state Land Board is required by the Idaho Constitution to manage state endowment lands for the maximum long-term return to the endowment’s beneficiaries, mainly public schools. State law also requires the board to charge “market rent throughout the duration of the lease” for state-owned cabin sites.

Ysursa, who chaired the Land Board subcommittee that developed the rent proposal, said he was disappointed at the legal challenge, which he said was unprecedented. “The Land Board is where this ought to be discussed and vetted, not in the Supreme Court,” he said. “I respect the attorney general and have for years and will continue to, but I think the Land Board and completely vetting the issue there rather than marching off into court would be a better way to do it.”

Ysursa defended the Land Board’s decision, which calls for rent increases of 54 percent over the next five years. The only reason the rents aren’t at full market value now, he said, is because the entire Land Board has repeatedly voted for one-year freezes in rents, amid complaints about fast-rising valuations. “To then turn around and hit ‘em with an astronomical increase in one year, I just did not think that was fair,” Ysursa said.

Attorneys for cabin owners at both Priest and Payette lakes objected to the new lease terms, which also include additional surcharges when the cabin sites change hands, and suggested they may sue to block them.

Gov. Butch Otter’s office issued this statement on Wasden’s legal challenge: “The Land Board followed an open process, and now the outcome of that process is in the hands of the courts. We’ll see how it plays out.”

Oddly, Wasden is, in a sense, suing himself, because he’s suing the Land Board, of which he’s a member. Bob Cooper, Wasden’s spokesman, said the attorney general filed the case not as a Land Board member, but as the state’s chief legal officer and pursuant to his “statutory duty to regulate charitable trusts.”

The Land Board approved the new lease terms last week; they include 9 percent increases in rent each year for the next five years, for a total increase of 54 percent over the five-year period.

A month earlier, Land Board members voted to look into possibly selling or trading the cabin sites to get the state endowment out of the business of renting lots on which people own buildings; the state Lands Department will report back with a plan in a year.

Said Ysursa, “Remember, we’re in a sale mode, sale and disposal - we all voted for that over a month ago.”

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