Idaho’s top elected officials voted Tuesday to auction nine state-owned commercial properties, five of them in downtown Boise near the Capitol – even as another state official warned the state will be sorry someday.
Consultants recommended to the state Land Board that the agency get out of investments in commercial property in Idaho. Among the properties to be auctioned in December are Affordable Storage, a 7-acre property with a thriving self-storage business in central Boise, and commercial and office buildings in Idaho Falls.
The rest are all individual properties within a block or two of the state Capitol. State Department of Administration Director Bob Geddes said two in particular would be suitable for future expansions of state offices in the Capitol Mall, the area surrounding and including the Capitol.
“I’ve been in this debate with the governor that in all likelihood, we’re going to continue to grow as a state, the population’s growing,” Geddes said. As head of the Department of Administration, he said, there’s not a week that goes by without a state agency contacting his office about its need for more office space.
“I personally think those would have been great properties for the state to hold onto, but if you can’t justify it as meeting the fiduciary duty of the endowment, there’s no way to do it,” Geddes said. Still, “we’ll wish someday that those properties would have remained in some way or another in state ownership.”
A third property that Geddes identified, a former bank building at Sixth and Washington streets that’s now leased to an accounting firm, was knocked off the auction list by the Land Board. Idaho Secretary of State Lawerence Denney argued that the remodeled brick office building, which also comes with 31 parking spaces, might be more suitable for inclusion in the state Capitol endowment.
The state has seven endowments, the largest of which benefits public schools. Denney said the state should explore a possible land exchange between endowments.
After lots of questions, the rest of the board – including Gov. Butch Otter, Attorney General Lawrence Wasden, state Controller Brandon Woolf and state schools Superintendent Sherri Ybarra – backed Denney’s proposal unanimously.
The endowment’s acquisition of Affordable Storage in 2010, when the Land Board was moving into commercial property investments with the idea that they could be more lucrative for the endowment than its timber and grazing lands, stirred a backlash. Opponents complained the state was unfairly competing with private business.
Michael Finch of Century Pacific, a commercial real estate consultant to the Idaho Department of Lands, told the board, “I can tell you the market’s very strong right now.”
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