Surplus state parcel sought

BOISE – A Coeur d’Alene development company wants to build a new commercial center at an Interstate 90 offramp, and it has its eye on a slice of adjacent, publicly owned land.

But because that property is controlled by the Idaho Transportation Department, North Idaho legislators are trying to change state law so that the company can have first crack at buying the parcel.

North River LLC, which owns land along the intersection of North Ramsey Road and West Appleway Avenue, wants to create a “front door to the city of Coeur d’Alene” – a five- to eight-story office building with national chain restaurants and underground parking. Yet part of an old road runs through the planned site, and North River wants to buy it and surrounding land from the state for adequate space.

State transportation officials are not sure how much of the land they can legally sell. Also, a regional planning organization has a stake in the property because it’s considering it for a park-and-ride lot. Some state lawmakers also worry that the proposed legislation by Reps. Bob Nonini, R-Coeur d’Alene, and Phil Hart, R-Athol, would benefit private interests over the public good.

When the ITD sells surplus land, such as old highway rights-of-way, the law mandates that it look first to other public agencies that might buy it at a reduced price. If surplus property is appraised at less than $10,000, the department must first notify owners of adjacent land who could buy it for the appraised value. Otherwise, the land goes to public auction.

“We just think that’s not the right thing,” Nonini said.

The lawmakers’ proposal, House Bill 144, would strike the $10,000 requirement and give contiguous property owners a chance to buy the surplus land for the appraised value – a benefit for North River. Members of the House Transportation and Defense Committee this week voted to hold the bill because of concerns that sales to adjacent owners would fetch less money than a public auction.

North Idaho businessman Steve Ridenour, a part owner in North River, said he envisions that the commercial site, also being developed by Spokane-based GVD Commercial Properties, will feature a “class-A” building on par with those in Seattle. Interstate interchange development opportunities are a rarity, and developers want to take full advantage of this one, he said.

“We don’t want to squander the opportunity,” he said.

Currently, the commercial site owned by North River contains an art studio, a thrift store and a scuba shop. The developer has owned the land for about three years, Ridenour said. Without the ITD surplus land, the developers will have to drop one of the restaurants and will “miss the opportunity to do it right,” he said.

North River, also owned by Coeur d’Alene neurosurgeon Dr. Bret Dirks, has been heavily involved in Post Falls development, Ridenour said.

Without being attached to North River property, the surplus land has little value, he said.

“It’s a smaller piece, but smaller pieces in this town have a lot of value,” said Ron Harvey, an ITD right-of-way supervisor for District 1. “It’s certainly a decent piece of property.”

North River has tried to work with the ITD “to no avail,” Nonini told the committee this week.

Harvey said the ITD’s legal department is investigating who has rights to sell the land.

“Right now, we have a process in place, it’s just got a little tangled up,” he said. “We’ve given it all we’ve got. I just don’t think folks understand sometimes.”

The department has been looking into the property for about a year since receiving a request from the developer, Harvey said.

Nonini and Hart have worked to strike down an ITD rule for selling surplus land for the past two years, only to realize the department was following state law, Nonini said. This year, they aim to change that law.

But Rep. Leon Smith, R-Twin Falls, moved to hold the bill because giving primary sale rights to contiguous owners might deprive the state of money it could make at auction, he said.

Lynn Humphreys, chairman of the Kootenai Metropolitan Planning Organization, said he also has concerns about business interests superseding public benefit.

The ITD would get at least fair market value for the property under the change, though it might lose the potential from auctions, Harvey said. “So there is a chance that it could go for less, if that’s the case.”

But Ridenour said, “It’s easy to criticize when somebody’s trying to do something right.

“This is a legitimate endeavor,” he said. “It’s not just for our project because there’s plenty of application throughout the state.”

Humphreys said the KMPO is considering part of the potential surplus land for a park-and-ride lot to serve the CityLink bus system, a free service operated by the Coeur d’Alene Tribe. “It’s an excellent spot for a park-and-ride hub,” he said.

Ridenour said North River wants to work with the KMPO to create a park-and-ride facility better than what the KMPO would alone.

Although the committee rejected their first attempt, Nonini and Hart are working on a compromise. Options include increasing the $10,000 cap on when the ITD must sell to adjacent landowners.

Nonini said the legislation is beneficial because North River would be willing to build a park-and-ride lot and would add to the county’s tax base.