Idaho officials eye selling 10 commercial properties
BOISE, Idaho – State officials on Tuesday moved forward with a plan to get rid of politically contentious commercial real estate and use the money to buy timberland and agricultural land that the state uses to generate revenue to fund schools.
The Idaho Land Board voted 4-0 to advance a possible auction of 10 properties in December as it seeks to generate money from the state’s 2.4 million acres of endowment lands.
The Idaho Department of Lands recommended Nov. 3 as the date to auction the properties that include four in Boise, four in Meridian and two in Idaho Falls.
But Attorney General Lawrence Wasden wanted that delayed until a financial consultant completes a study analyzing what’s best for smaller endowments that benefit from the properties. The board expects to get that report by November.
The report “may say sell the stuff, it may say don’t sell the stuff,” Wasden said after the meeting. “We need to know what it says, one way or the other.”
The largest state endowment is K-12 public schools. But smaller endowments are also beneficiaries, including a state-operated mental health facility called State Hospital South, Idaho State University in Pocatello and Lewis-Clark State College in Lewiston.
The Land Board has been selling commercial real estate following complaints that state-owned businesses unfairly compete with private businesses. However, the Land Board is constitutionally mandated to manage land for the maximum financial return over the long term.
The report from financial adviser Callan Associates will offer guidance on whether it’s in the financial interest of the endowments for the Land Board to hold onto the properties or sell them.
Idaho Department of Lands Director Tom Schultz said after the meeting that a rough estimate of the value of the 10 properties is $8 million to $10 million.
At a previous auction for state-owned commercial real estate held in December, seven properties sold for $17.3 million, about $4.5 million more than the appraised value.
Of the ten properties currently being considered for auction, two were offered in that December sale but didn’t receive minimum bids of the appraised valued. A third property, an office building in Boise, was withdrawn by the Land Board from that previous auction at the request of Secretary of State Lawerence Denney. He said it could be in the state’s long-term financial interest to retain ownership of that building for state office workers rather than renting space.
The structure about a block from the Idaho State Capitol Building is worth around $1 million. The Idaho Department of Administration is expected to be a bidder, having received an appropriation from lawmakers that is above the appraised value of the property.
“We still don’t have a lot of confidence that we’ll be successful,” said Administration Director Bob Geddes. “Past auctions here have garnered more money than what the appraised value was.”
The state has also been selling residential cottage sites in recent years and, combined with the commercial real estate, is expected to raise about $160 million to buy timberland and agricultural land. State officials have already used some of the money to purchase timberland.
Idaho received 3.6 million acres of endowment land at statehood in 1890. Over the years, it has sold about 33 percent and now has about 2.4 million acres remaining.