Predictions by leaseholder groups at Payette and Priest lakes that cabins would be abandoned in large numbers as the state moves to comply with an Idaho Supreme Court order to charge market rates haven’t yet come true.
All but 27 of 504 cabin owners applied to renew leases that expire Dec. 31, according to a report from the Spokesman-Review’s Betsy Russell.
At Payette Lake, 134 of 150 lessees reapplied by Tuesday’s deadline, as they face the prospect of auctions for first time since a failed pilot auction in the 1980s.
At Priest Lake, 343 of 354 cabin owners reapplied to lease the state land under their improvements.
In total, 5.4 percent of lessees are preparing to give up their cabins as annual lease rates have risen to comply with the constitutional requirement that state lands be managed to obtain the maximum long-term return for the beneficiaries, including public schools and higher education.
The number likely will rise by year’s end, when leases will be signed. But 27 lots is hardly the exodus forecast by leaseholders as Attorney General Lawrence Wasden pressed the Idaho Land Board, on which he sits, to comply with Article IX, Section 8 of the Idaho Constitution, which obligates the state to “secure the maximum long-term financial return” for endowments lands.
Only five cabin owners will face competition for their leases at auction, Russell reports, four at Priest Lake and one at Payette. Premium bidding will start at $1,000 on annual rent that averages $20,000.
About 85 percent of the Payette Lake lots and 10 percent of the Priest Lake lots are leased by Idaho residents.
Wasden ticked off plenty of people when he sued to overturn the board’s 3-2 vote to adopt compromise lease rates. After the Supreme Court agreed with Wasden on Article IX, Section 8, lease rates have jumped. Appraisals on Priest Lake are up 84 percent for next year, Russell reports.
The last time the Land Board held an auction was in 1987. With annual returns of just two-thirds of 1 percent, the board moved to raise rents and auctioned 22 lots at Payette Lake to establish marketvalues. But the auction was a failure for the state: All but one of 22 lots sold to existing leaseholders paying the minimum bid.
The only bidders to contest an existing leaseholder were a Boise couple, Al and Sharon Hutchins, whose bids were booed by the crowd at a school gym in McCall. They got the lot, however, paying $46,000, $11,000 over the minimum.
At the time, Idaho Superintendent of Public Instruction Jerry Evans said pressure from existing lessees “dampened any spirit of free and open competition.”
The Legislature subsequently banned auctions, finding they “have caused considerable consternation and dismay to the existing lessee at the prospect of losing a longtime lease.”
After the real estate boom in the 2000s, Wasden revived the fight over market rates in a 2009 opinion that said exempting cottage sites from public auctions violates the constitution and that the Legislature’s own words would provide proof for a court to overturn such special treatment. “Such findings establish that the Legislature’s intent was to provide relief to lessees, not to maximize endowment income,” he wrote.
The Land Board’s long-term strategy is to get out of the cabin site business.