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Idaho prepares to sell off or trade away lake cabin sites

Tue., May 17, 2011, 3:32 p.m.

BOISE - Idaho will start surveys and other groundwork in early June to prepare to sell off or trade away some or all of its 521 leased lakefront cabin sites, including more than 350 at Priest Lake.

Top state officials warned, however, that it’s not likely to be a quick process. “It’s not going to be done immediately,” said Idaho Secretary of State Ben Ysursa. “No one wants to get out of this thing faster than I do. But I also have a duty of undivided loyalty to the beneficiaries. We need to do it in a manner where we will get as much as we can.”

The beneficiaries of Idaho’s state endowment - both endowment lands, which include cottage sites, timber land and more, and the state’s permanent endowment fund - are Idaho’s public schools and other institutions like the University of Idaho, with the schools holding the largest part of the endowment. Idaho’s state Land Board, which consists of the state’s top elected officials and is chaired by the governor, is charged by the state constitution with managing the land and fund for the maximum long-term financial return for the beneficiaries.

That’s part of the reason Idaho’s looking to get out of the business of renting lake cabin sites on which lessees build and own their own cabins. Charging sufficient rents has been tough without forcing out longtime cabin owners, but the endowment suffers if returns don’t come in.

On Tuesday, the Land Board voted unanimously to move forward with the plan, which calls for spending about $1.48 million to conduct surveys and otherwise prepare for the transactions. State lands strategic business analyst Kate Langford said that may sound like a lot, but it’s “less than 1 percent of that total estimated value, on a conservative level.”

A December 2010 consultant’s report put the combined value of the state-owned cottage sites at $252 million - $152 million at Priest Lake, and $100 million at Payette Lake.

If all 521 lots were sold or traded away and went from state to private ownership, Langford said it’d be a big boost to the property tax base of Bonner County in North Idaho, which has the Priest Lake cabins, and Valley County in central Idaho, which has Payette Lake. “This is huge potential for both of those counties,” Langford told the board.

Under the state’s plan, in most cases, the lake cabin owners who now lease their ground from the state would have three options: Voluntary participation in consolidated land exchanges, voluntary participation in rolling auctions for sale of the lots, or continuing to lease the land from the state.

“We’re going to be leasing lots for the next foreseeable future, quite a while, because we’re not going to get rid of them in that quick a time frame,” Ysursa said.

The state might choose to retain some of the lots; in those cases, it might buy out the cabin owners.

Bud Belles, president of the Priest Lake State Lessees Association, said he’s disappointed by the time frame. “This is going to stretch out for years if they do it their way, and it doesn’t have to,” he said. “If the values go up and nothing happens, a lot of us won’t be able to afford our lots … we’re going to get kicked off our lots, essentially.”

Belles, 70, a retired computer consultant from Nine Mile Falls, said he wants to buy the land under his cabin, which has been in his family since he was 8 years old.

Langford said the first lots should be ready for sale or auction in the first quarter of 2012, and the state should have finished the surveying and other work on all the lots by the end of 2012.

Still, Ysursa said of the cabin owners, “I don’t want to get their hopes up falsely and then crash them. It’s going to be, for them, I’m sure, a slow, deliberative process. But we want to do it right.”

Tuesday’s vote came as both the state and cabin owners are facing off in court in multiple lawsuits over rental rates for this year and following years; on Friday, 4th District Judge Michael McLaughlin issued a written ruling calling for a rent freeze to match 2011 rents to 2010 levels. The Land Board then filed a motion for reconsideration on Monday, saying if it had to match rents for 2011 through 2013 to 2010 levels, the state endowment - and Idaho’s schools - would lose close to $6 million.

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