Montana buys farm northwest of Miles City for $11.3M — its most expensive land buy to date
The State Land Board approved the most expensive land purchase in the state’s history on Feb. 20, the $11.3 million acquisition of almost 17,000 dryland acres 25 miles northwest of Miles City in Rosebud County.
The vote approving the purchase was 4-1 with Secretary of State Corey Stapleton the lone dissenter. The deal is set to close March 9.
The Angela Farm property was originally planned to be an even larger purchase. Another 6,900 acres that was supposed to be phase two — an additional $4.1 million acquisition — was dropped for not meeting the state’s rate of return criteria and due to a lack of funding.
“The second phase was contingent on funding falling into place,” said Chris Pileski, Miles City area manager for the Department of Natural Resources and Conservation. “We even appraised it in two phases for that reason.”
The phases were easily split by Highway 59 into the larger west parcel and the smaller one to the east.
Money for the property comes from the state’s Land Banking fund, cash acquired from the sale of other state parcels. As of December 2017, the state had sold more than 79,500 acres of land for $56.2 million since the fund was created in 2003. On the other side of the ledger the state had acquired in that same time period more than 71,000 acres at a cost of $36.5 million. The largest of those 20 acquisitions was the 18,500-acre Tongue River Ranch, south of Miles City, which was purchased in 2007. All of the state land purchased is accessible to the public.
The idea of the Land Banking system is to divest the state of lands that are less profitable and may be inaccessible and replace those with parcels that can earn more money while also providing access to the public for recreational activities and protecting wildlife habitat.
The Angela Farm property “supports antelope, deer, waterfowl and upland game bird hunting opportunities, as well as hiking and bird watching,” according to DNRC.
More than 10 miles of North Sunday Creek and Rock Springs Creek as well as numerous other streams flow through the property.
“There are some associated creek bottoms that definitely provide recreational values, but that’s in the eye of the beholder,” Pileski said. “It’s 17,000 acres of accessible ground, and there’s definitely wildlife there.”
Recreational access to the property will be managed by DNRC. A travel management plan will be created for recreationists and signs to denote walk-in only areas should be posted by August, Pileski said. The land buy also guarantees public access to another 1,280 acres of adjacent state land that was previously landlocked.
The purchased land will be divided into nine management units — eight for dryland crops and one grazing parcel — that will be leased in a competitive bid process.
“The intent was to provide opportunity to multiple producers with this acquisition,” Pileski said. “Before it was owned by a large corporation that had one tenant. Hopefully, now we can provide more opportunity for more people.”
Leasing out the land is expected to generate a minimum of $342,000 annually for the state school trust. That’s based on an annual rate of return of 3 percent, which would be three times the rate of return of the isolated parcels sold by the state to purchase the farm, according to John Grassy, DNRC spokesman. The average rate of return for state lands is 2.2 percent.
John Tubbs, DNRC director, told the Land Board at the preliminary hearing on the Angela Farms purchase in July that the good thing about buying agricultural land is that it generates income right away, unlike forest lands.
However, the state will not pay county property taxes, which with the entire two phases was $41,000 in 2015.
For eight years the land was owned by Jump Angela Farms LLC, which is registered in Delaware. Jump Trading LLC is a brokerage company with offices in Chicago, New York, London, Singapore and Shanghai.
There is no funding for the state to purchase the phase two parcel at this time, Grassy said, and some members of the public complained that the purchase was too big. Should the additional land still be available later, he said that decision may be reconsidered.
“My gut tells me it won’t be on the market very long,” Pileski said.