The state of Idaho auctioned off 59 more properties on Priest Lake, and once again most of the buyers already own cabins on the land.
The sites were auctioned off Aug. 18 and 19, with no competitive bidding – and all sold for their appraised value.
“I think it went well,” said George Nethercutt, the former Washington congressman who’s the immediate past chairman of the Priest Lake State Lessees Association. Nethercutt, like dozens of his fellow cabin owners, successfully bid on the land underneath his family cabin and purchased it.
Because so many of the cabin owners who leased state sites at the lake have bought their lots at auction over the past three years, the association voted last month to change its name to the Priest Lake Cabin Owners Association.
“They weren’t contested, and that’s a good thing,” Nethercutt said. “I’m glad for everybody. It was an anxious time for me, frankly, because I didn’t know if someone was going to come in with a lot of money and bid against me, or bid up the appraised value, which I thought was too high – I think everybody thought the appraised value was too high. But that’s life, you swallow hard, and you pay the bill, and you own the land.”
Appraised values for the land alone ranged from a low of $313,000 to a high of $707,000. If anyone other than the current cabin owner had the winning bid in the auction, that bidder would have had to pay the current lessee the appraised value for the buildings and other improvements, on top of paying the state for the land.
The state has been auctioning off the lakefront cabin sites it has long leased to private cabin owners for several years now. It’s part of a shift in investment plans for the state endowment aimed at greater returns for public schools, the main beneficiary of the endowment. Money from the sales will be reinvested into higher-earning timber and farm land.
The latest auction offered 61 lots. All but two sold, for a total of $29.1 million. All but four of the lots were leased to people who currently own cabins on them. Of the four unleased lots, two didn’t attract any bids.
Of the 57 lots that had been leased, 55 were purchased by the existing lessees. In the other two cases, the existing lessees didn’t bid.
With more and more of the cabin owners becoming landowners as well, Nethercutt said many are fixing up or even replacing their cabins. “There seems to be a lot of activity around the lake,” he said. “I was told by one contractor that he cannot find qualified people to serve as employees, and he said other contractors are in the same boat.”
The new landowners on the lake are also concerned about the assessed values of their lake places for property taxes. Some have been set by the county at amounts higher than the state appraisals, Nethercutt said, which could mean higher property tax bills down the line.
As lessees, the cabin owners have been paying lease payments to the state equal to 4 percent of the appraised value per year. For Nethercutt’s cabin, which his family bought in 1991 for $69,000 including a boat, the annual lease fees had gone up from the original $3,300 to about $16,000.
Property taxes likely will be about a quarter as much.
Nethercutt, 72, said he’s not planning on fixing up his cabin now that he also owns the ground under it – because he already replaced it four years ago, after a severe windstorm toppled a tree onto the small structure, demolishing it. He replaced it with a new three-bedroom, three-bath home that’s valued at more than $400,000.
“I did that for some protective reasons,” Nethercutt said. “I didn’t want to have a knockdown, a tear-down cabin that would attract possibly an opposing bidder.”
He said cabin owners believe the appraised values they paid for the land are too high.
“Then again, if you make them too low and you attract other bidders, it’s a two-edged sword,” Nethercutt said.
The former congressman said he’s relieved that his family now owns the cabin and the land.
“My wife and I will continue to use it as long as I can and then probably pass it on to our son, who’s interested in it,” he said. “We didn’t buy it with the idea of selling it.”
After the latest auction, the state has 151 leased cabin sites left at Priest Lake, down from the original 355. It plans to continue the auctions through 2019, and possibly beyond.
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