The Idaho Land Board’s gradual sale of about 500 lots at Payette and Priest Lakes worth about $200 million took another step Saturday with the “voluntary auction” of 21 vacation home sites at Payette Lake. All but one of the 21 sites was purchased by the incumbent leaseholder, repeating the pattern of earlier sales.
The sale raised $6.1 million for endowments benefiting education and for State Hospital South. Three of the 21 lots had competitive bids, bringing in $33,200 above appraised value, while 18 sold at the appraised value. Six lots were on the lakefront, 15 were upland sites.
About 150 people attended the auction in Eagle, according to an Idaho Department of Lands news release. So far, the board has auctioned lots only when the leaseholders volunteer for an auction and risk competitive bidding.
The one lot not bought by a current leaseholder is at 991 Rocky Shore Drive in McCall. Appraised at $37,000, it sold for $42,000. The buyer will have to pay $68,580 to the former leaseholder for the value a home and other improvements.
After years of struggling to balance the constitutional obligation to manage endowment lands to receive maximum long-term return with political pressure against raising rents, the Land Board voted in 2010 to gradually divest the state’s interest. Lots were to be sold or traded in a “market savvy” process.
Another voluntary auction for 74 lots at Priest Lake is expected later this year.
On Oct. 18, 10 lots were auctioned at Payette Lake, after lessees voluntarily applied. Incumbent lessees won all 10 auctions, also held in Eagle, bidding a total of $3.16 million. Nine of the lots sold for the minimum bid of appraised value. The tenth was appraised at $36,000 and sold for $47,860.
Three undeveloped lots also were auctioned. One sold for $1.1 million, 3 percent above appraised value; one for $1 million, 51 percent above appraised value; and one for $620,000, 6 percent above appraised value.
Saturday’s Payette auction and the forthcoming Priest auction was made up of lessees who were parties to cancelled land swaps that would have given them title to their lands. In October, the board cancelled the exchanges because of legal concerns.
One proposed trading cottage sites at both lakes for three commercial buildings in Idaho Falls, which the state said would double annual income to more than $2 million and an estimated 9.6 percent cash return. A second would have swapped 11 Payette sites for a Nampa office building.
After months of work by state employees and private parties, the Land Board rejected the exchanges after opposition from legislators concerned about the state competing in commercial real estate. County officials also complained about eroding property tax bases by converting private property to tax-exempt state property. Opponents also said the trades didn’t meet state law requiring exchanges be made for “similar lands of equal value, public or private.”
The board expressed regret for raising expectations, but Gov. Butch Otter said the “similar lands” provision left little room for maneuvering. Another pending exchange was canceled.
The “similar lands” impediment was removed by the 2014 Legislature, when it passed SB 1277 with just two dissenting votes.