This Fourth may be bittersweet for many cabin owners on Priest Lake.
A Sandpoint District Court judge on Friday rejected their effort to have new assessments of the land beneath their vacation havens used as the basis for auctions of their properties or leaseholds later this year. The assessments are about 80 percent higher than those that have been used as the basis for lease rates for many years.
If they cannot get a higher court to overturn that opinion, many will be bidding for properties they or their families have leased for decades.
Relief is unlikely, and justifiably so. Since Attorney General Lawrence Wasden in 2012 prevailed in a suit against the Idaho Board of Land Commissioners – of which he is a member – the writing has been whittled into those rustic cabin walls.
Wasden convinced the Idaho Supreme Court the board was not meeting its state constitutional obligation to maximize lease or sale revenues for the benefit of the state’s schools. Lease rates had been on autopilot for years while the value of recreational properties soared. The recession deflated that market, but terms were still a steal.
For example, the judge noted, the annual lease on one lot was all of $96 from 1969 to 1978, and $395 for the next 10 years. In 1990, the properties were exempted from competitive bidding by other prospective leaseholders. The board voted in 2010 to allow rates to rise 9 percent a year for five years.
Although the leases remained screaming deals, cabin owners around Payette Lake near McCall rashly sued the Land Board, insisting they had a contractual right to renew their leases at the old rates for another decade.
Wasden went to court because those bargains came at the expense of Idaho’s schoolchildren, who were supposed to be the beneficiaries of an endowment funded with lease revenues. Over the years, they were shorted millions of dollars.
The Idaho Constitution says state lands should be managed for maximum return, and the Land Board has been negligent in fulfilling that duty.
In April, the board auctioned 21 Payette sites voluntarily offered up by the owners, who bought all but one of the sites for a total $6.1 million. If not purchased by the owner, the buyer also has to pay for the cabins and other improvement. An October voluntary auction of 10 properties netted $3.2 million, and another sale is scheduled for later this year.
All of the 500-odd available properties at the two lakes, many of which are undeveloped, could be worth an estimated $200 million.
At Priest Lake, owners have repeatedly challenged their property assessments, including those the Land Board approved in February. Their fundamental argument is this: We have a constitutional right to renew the leases. The court ruled the leaseholds are not property rights.
This has been a painful fight, but the land belongs to Idaho. The cabins and the memories belong to the families. We hope they can hang on to both, but not at the expense of Idaho’s kids.
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