State auctions off 51 Priest Lake cabin sites for $25.6 million
The Idaho Department of Lands successfully auctioned off 51 state-owned lake cabin sites on Priest Lake over the weekend for nearly $25.6 million, $625,500 over the appraised value.
The money goes into a “land bank” for the state endowment, to be reinvested into timber and farm land, which are expected to be better investments for the state endowment.
Forty-six of the lots were purchased by the cabin owners who currently lease them.
After the weekend auction, Idaho is down to 102 state-owned cabin sites on Priest Lake in North Idaho, and 26 on Payette Lake. That’s just 128 all told — down from more than 500 between the two lakes just five years ago.
The state Land Board decided to move out of the awkward business of renting lots to people who build and own their lake homes on them after the decades-old practice sparked multiple lawsuits over the years over escalating rents, questions over fair market values, constitutional questions and concerns from longtime lessees about losing their family cabins to competitors at auction.
The Land Board is required by the Idaho Constitution to manage its state endowment lands for maximum long-term returns to the endowment’s beneficiaries, the largest of which is the state’s public schools. The board, which is chaired by the governor and includes the Attorney General, Secretary of State, state controller, and state schools superintendent, decided to reinvest the state’s current holdings in cabin sites into more lucrative land investments.
Idaho Attorney General Lawrence Wasden, who long has pushed for the board to ensure it’s getting the constitutionally required returns from the land — and even went to court in 1999 to block favorable new leases that his board colleagues were proposing for cabin owners — said Monday, “Over 100 years, the Land Board had proven that it lacked the political will to obtain the maximum long-term financial return, and what was certain is that we would never gain that. … So that’s why we have been selling those properties.”
In June, the state Department of Lands auctioned off nine lots at Payette Lake; they went for $3.87 million, $382,500 more than the appraised value.
The state plans to auction off most of the remaining lots between now and 2024. It also has been auctioning some additional, unleased lots; one of those was included in the weekend auction, and sold for its appraised value of $342,000.
The hottest bidding was for one Priest Lake lot that went for $1.025 million — $415,000 over the appraised value. The current lessee, who had obtained the lot in a conflict auction from the former longtime lessee in 2014 and begun construction of a modern-style home, bid repeatedly against a competitor, venture capitalist and retired professional basketball player John Hummer, who owns property next door. Hummer had the winning bid after the current lessee stopped at $400,000 over appraised value.
When someone other than the lessee has the highest bid for the ground at auction, that successful bidder has to pay the lessee appraised value for the buildings on the property. In this case, the competitor will pay the lessee $1.23 million for the partially finished, contemporary style home there, in addition to paying the state more than $1 million for the ground beneath it.
Five of the lots that were auctioned drew competitive bidding; the rest all sold for their appraised value, which was the minimum bid. That ranged from $342,000 to $630,000 for the land only.