November 13, 2013 in Idaho

Idaho drops plans for Priest Lake cabin-site exchanges

By The Spokesman-Review
 

BOISE – Planned land exchanges designed to let a fifth of the lake cabin owners at Priest Lake get ownership of the land under their cabins have been dropped.

The state land board had been working on land exchanges to help Idaho get out of the business of renting lakefront lots on which renters have built cabins. In some cases, those cabins have been in families for generations.

Land exchanges and auctions have been the two main routes the state’s been pursuing.

But last month, the board abruptly rejected two major land exchanges, after a handful of legislators and local officials raised legal and political questions about the moves.

Then on Tuesday, state Department of Lands Director Tom Schultz issued a notice that the department had suspended all land exchanges.

The nearly century-old practice of renting lakeside property has led to years of lawsuits and protests over what constitutes fair rent. Proceeds go to the state’s endowment, which largely benefits Idaho’s public schools.

Denny Christensen, president of the Priest Lake State Lessees Association, said members of his association are growing increasingly anxious about their situation.

“We’re trying to contain our lessees,” he said. “I would not be surprised if litigation occurs.”

Last month, the state auctioned 13 cabin sites on Payette Lake for a total of $5.88 million; all 10 that had current leases were purchased by the lessees.

But when the board was about to approve two major land exchanges last month, new legal questions were raised, including one about a section of state law that authorizes the board to exchange state endowment lands “for similar lands of equal value, public or private.” Those exchanges would have swapped 48 cabin sites on Priest Lake and 10 on Payette Lake for three commercial buildings in Idaho Falls, and 11 Payette Lake cabin lots for a Nampa office building.

Canyon County officials objected to losing local property tax revenues when the office building in Nampa moved into state ownership. But they also raised legal issues, arguing that lake cabin sites and the Nampa office building aren’t “similar lands.”

Schultz, the Lands Department director, said there are legal arguments that property with a lease on it that’s generating a return is similar to other such property. But another argument is that the characteristics of the two properties must also match – like exchanging timber land for timber land, or grazing land for other grazing land. And it turns out the state took that more restrictive position in the late 1990s.

Gov. Butch Otter said, “I feel bad that we went through all this before we finally figured out that we had a noose around our necks, and that noose was ‘like properties.’ … It leaves us very little … room to maneuver.”

The Idaho Constitution specifically says the Legislature can authorize the land board to exchange state land on an “equal value basis” with government or private companies or individuals. But Schultz said more clarification may be needed from the Legislature on the similar-lands question.

Prior to its closed-door session Tuesday, the land board voted unanimously to extend all cabin site leases now scheduled to expire Dec. 31 for one year at the current rental rates. That will allow all property owners – including those who had been signed up for exchanges – to get new appraisals completed, after earlier appraisals showing soaring values at Priest Lake were widely disputed.


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