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As the Idaho Department of Lands auctioned off 20 state-owned lake cabin sites on Payette Lake today, the auction was marred by a clash between a cabin owner and a competing bidder. “There was a lessee who was upset that someone had bid against him,” said Sharla Arledge, department spokeswoman. “The lessee did win the bid, but afterward, he confronted the person who bid against him and tried to exchange words with him. And that person was unresponsive, and the incident was over.”
“In all honesty, it was just a moment,” she said; it came during a break midway through the auction. “There was an announcement that was made shortly after that, announcing that intimidation and collusion was not allowed and was not acceptable, and just asking people to be professional.” And the auction proceeded without further incident, she said.
The cabin site in question went for $31,000 over the appraised price of $60,000, as a result of the competitive bidding. Four other lots also drew competitive bidding, but only one of those was currently leased; that site went to a bidder who wasn’t the current lessee, for $11,000 over the appraised price. Lessees have built and owned their cabins on the lots and paid rent to the state for the ground underneath; that’s led to years of lawsuits and disputes over how to charge fair-market rent in that situation. Now, the state is moving to get out of the cabin site renting business, auctioning off the sites in favor of higher-paying investments for the state endowment.
In total, the endowment made $6,982,500 from today’s auction. Because of the specific endowments that own these particular cabin sites, the proceeds will go to the endowments for State Hospital South and for teacher education at Idaho State University and Lewis-Clark State College. Fifteen of today’s successful bidders were the current lessees of the property; 14 of those went for the appraised price, which ranged from $55,000 to more than $1 million.
One lot wasn’t bid on by the current lessee, and sold to another bidder for the appraised price of $1,215,000.
Three currently unleased lots sold for big margins over the appraised value. One valued at $124,000 sold for $170,000; another valued at $1,055,000 sold for $1,300,000; and the third, valued at $1,135,000 sold for $1,625,000.
“Since 2011, including today’s auction, Idaho has sold 189 lots or more than a third of its leased cottage site lots at Priest Lake and Payette Lake,” said state Lands Department Director Tom Schultz. “The cottage site sales have generated more than $79 million for the endowment funds that support Idaho’s public schools, State Hospital South in Blackfoot, and teacher education programs at Idaho State University and Lewis-Clark State College. The Idaho Department of Lands is successfully implementing the direction from the Land Board to divest of the cottage sites and reinvest in assets that generate higher financial returns for the beneficiaries we serve.”
More auctions are planned over the next few years.
Here’s a news item from the Associated Press: BOISE, Idaho (AP) — The Idaho Department of Lands has auctioned off 32 more lots at Payette Lake in northern Idaho as it continues its plan to divest itself of the lucrative but difficult-to-manage assets. The agency says the auction Saturday in Boise generated $13.5 million for education and State Hospital South, a psychiatric inpatient treatment facility for adults and adolescents. The agency says 29 incumbent lease holders submitted winning bids. Only one lot had competitive bidding and that sold for $8,000 above the appraised value. Three unleased lots were auctioned for about $2.1 million, about $73,000 above the appraised value; three other unleased, vacant lots didn’t attract any bids. The state has now sold 127 cottage site lots at Priest Lake and Payette Lake, about a fourth of the lots to be sold.
Welcome back, everyone. Hope you had a relaxing holiday weekend. This image here is from Payette Lake on Saturday.
This morning's state Land Board agenda included a recommendation to approve a stipulation to settle the title for some property on the shore of Payette Lake on which a 1942 deed had incorrectly identified the property lines, including part of the lakebed, which the state owns. The owner, who acquired the property in 1981, filed a “quiet title” action, resulting in the stipulation to make the correction. But when it came time to vote, Gov. Butch Otter, who chairs the Land Board, said, “For the record, the chairman will not vote.” Secretary of State Ben Ysursa responded, “I had a hunch.” The property owner? Otter's ex-wife, Gay Simplot.
Idaho's state Land Board voted unanimously today to impose restrictive covenants on state-owned cabin sites at Priest Lake, to ensure that the land use there doesn't change as some or all of the lots move to private ownership in the future. A few Priest Lake cabin owners whose cabins are on the state lots objected to the move, saying they didn't want a homeowner's association to enforce restrictions in the future, but most backed them; here, Land Board members hear comments from Priest Lake State Lessees Association President Denny Christensen, who spoke in favor. Kaari Burrows Davies, a dissenter, told the board, "We don't need to now put a homeowners' association in place that's going to cause division or wreck a good system that really is working." Several other cabin owners submitted emails to the board; one, from Neil Maris, said, "Please do not let the voices of a few disgruntled lessees influence your decision. They DO NOT speak for us!"
The state is moving toward possible land exchanges to rid the state endowment of the lakefront cabin sites after years of struggle to charge appropriate rents; the endowment is required by the Idaho Constitution to be managed for maximum long-term returns to its beneficiaries, the largest of which is the state's public schools. The Idaho Supreme Court recently overturned as unconstitutional a state law that protected the cabin sites from conflict auctions when leases come up.
The board, which consists of the state's top elected officials, held a special meeting today, after it put off the issue at its last regular meeting to request a formal legal opinion from Attorney General Lawrence Wasden. That opinion was delivered, and it found that the board has the authority to impose restrictive covenants on the land; it doesn't need leaseholders' consent to do so; and the standard that should govern the board's actions is its fiduciary responsibility to the endowment's beneficiaries. State consultants and Land Board staffers said covenants would protect the value of remaining state endowment land in the area once some cabin sites change ownership.
Idaho Secretary of State Ben Ysursa made the motion to approve the staff's recommendation to impose covenants on the cabin lots, citing the constitutional requirement to maximize long-term income for the beneficiaries. "In my humble opinion, I think CC&R's will do that," he said. His motion passed unanimously, with all five Land Board members present; in addition to Ysursa, they include Wasden; state schools Superintendent Tom Luna; acting state Controller Brandon Woolf; and Gov. Butch Otter, who chairs the board.
As Idaho moves toward transferring hundreds of state-owned cabin sites on scenic Priest Lake to private owners through land exchanges or auctions, the state wants to protect the value of the land - and nearby state endowment land - through restrictive covenants. Most Priest Lake cabin owners who now own their cabins, but not the land, are on board with the idea, but some are objecting.
The restrictions would keep in place current regulations limiting the sites to single-family homes, rather than condos, resorts or commercial development; ban mobile homes; require earth tones and "unobtrusive" construction; and require erosion control and defensible space to cut wildfire risk. Restrictive covenants aren't being proposed for similar cabin sites on Payette Lake to the south, but that's because those cabin sites are within the McCall city area of impact, subjecting them to restrictive zoning regulations. That's not true of the Priest Lake sites, where Bonner County's current zoning regulations could permit a variety of changes if the land became privately owned.
Gov. Butch Otter requested a formal legal opinion from Attorney General Lawrence Wasden on the matter today; once the board receives that in a week or so, it'll set a special meeting to decide on the covenants. You can read my full story here at spokesman.com.
Owners of cabins at Priest Lake, like this 1930s one that retired school teachers Jim and Myrna Brown spent years renovating in the hopes that it could be a family legacy, are facing increased uncertainty after the Idaho Supreme Court decision overturning a state law that protected state-owned cabin site leases from conflict bidding. The ruling affects 354 cottage sites at Priest Lake and 167 at Payette Lake. S-R reporter Sara McMullen takes a look at the issues here; cabin owners, who own their cabins but not the state-owned ground underneath, already are in the midst of working with the state in the Land Board's effort to "unify" ownership of cabin sites, through land exchanges and other steps.
The Idaho Supreme Court ruled that leases of state-owned cabin sites, like those on Payette and Priest lakes, are subject to competitive conflict auctions when the leases come up, striking down a state law that exempted the cottage sites. You can read the court's full decision here, and click below for a full report from AP reporter John Miller.
Owners of cabins on state-owned lots at Payette Lake will be offered the option of an appraisal to determine the land value on which their lease rates are based, or sticking with assessments set by Valley County, under a new process approved unanimously by the state Land Board this morning. The appraisal process would be similar to that used to set rents for state-owned cabin sites at Priest Lake. "We received a letter from the Payette association, they want to do that," said Secretary of State Ben Ysursa. He noted that it'll be at the option of the lessee.
Cabin owners who opt to stay with the county assessment won't need to do anything; those who want to switch to appraisals would need to sign a lease adjustment before Aug. 1. The state Department of Lands would then contract with an outside appraiser during the fall of 2012, with the new appraisals used to calculate 2013 rent.