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Fri., March 26, 2010

State should get clear of landlord role at lakes

If Lawrence Wasden was expecting any barbecue invitations to Priest Lake this summer, he can probably forget it.

Wasden, Idaho’s attorney general, is taking legal action aimed at raising the rent for state-owned lots on Priest and Payette lakes because, he insists, increases approved last week by the state Land Board aren’t high enough to meet constitutional demands. The people who hold those leases would disagree, of course, but their opposition can’t trump the law and the Constitution.

The properties in question are state endowment lands, which the Constitution says must be managed for “maximum long term financial return” to the public schools, which are the beneficiary of the 355 “cottage sites” on Priest Lake. Endowment lands are managed by the state Land Board, consisting of the state’s five top elected officials, including Wasden. Last week the board voted 3-2 to hike rents 9 percent a year for five years, although even Secretary of State Ben Ysursa, who proposed the plan, agreed it won’t bring the rents up to market levels as state law demands.

As mentioned above, the Land Board members are all elected officials, who aren’t eager to look like greedy landlords in the voters’ eyes.

That helps explain the remarkably gentle treatment tenants have enjoyed from the Land Board and the Legislature. Real estate values have soared in recent years, but the leaseholders have been insulated from inflationary pressures, thanks to frozen rents and statutory protection from having to bid against others when leases are up for renewal.

A brief filed with the Supreme Court by Wasden’s staff put it pointedly: “The Board’s complicity in allowing rents to remain far below market for so many years cannot justify the current dereliction of its constitutional and statutory duties.”

Meanwhile, the schools are losing millions of dollars a year in desperately needed revenue.

Even if the Supreme Court halts the Land Board decision, the tension between fiduciary duty and a politically mobilized interest group will persist. This problem won’t be solved until the state sells or swaps those lands and shifts the endowment to less-emotion-laden assets.

Even as he voted for the rent plan – the one Wasden considers deficient – Gov. Butch Otter called for a program to “trade ourselves out of, auction ourselves out of, sell ourselves out of these lots.”

The sooner the better.

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