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Land Board will not consider plan to renovate two cabin sites in McCall

Land Board will not consider plan to renovate two cabin sites in McCall

Idaho Freedom Foundation staff
July 16, 2013
[post_thumbnail] Rep. John Vander Woude, R-Nampa, is adamant that the Land Board should not invest in properties in competition with the private sector.

The Idaho Department of Lands has assembled an elaborate plan to take the state government of Idaho into the business of renting vacation homes. However, as of Monday, the decision was made to not review that plan at the Tuesday, July 16, scheduled meeting of the department’s board of directors.

“After further discussion with Land Board members the item was requested to be withdrawn,” said Emily Callihan, spokesperson for the department. The plan says that land in McCall that is already owned by the department might decline in value if it is left vacant. Thus, the intent that is expressed in the document is to build upon that land.

Despite the department’s plans for renovating vacation cabins in McCall, at the request of Lawrence Wasden, attorney general, the board will not consider the plan at the Tuesday meeting. “The attorney general’s office requested that the agenda item be pulled from the July agenda to allow more time to study the proposal,” Callihan told IdahoReporter.com. She added that the plan will not be reviewed at all this year.

“Because there is an intention to continue to generate endowment trust revenue at this location, it
is expected that a vacant site over the long term presents risks to land value, including the value
of adjacent sites due to dispersed recreation and the inevitable trespass and site degradation,” the plan states in its introductory section.

“These risks can be mitigated through use of private security firms, but enforcement can be costly. Again, it is incumbent upon IDL (Idaho Department of Lands) to preserve the site by some means and protect the land value,” according to the plan document.

The plan specifies two separate property locations in McCall, and details a strategy to re-build two specific cabin facilities there.

Within the plan is a proposal from a Boise-based architectural firm, Platform Architecture Design, detailing a precise strategy for construction upgrades at cabin properties located at 990 Syringa Ave., and 2030 Payette Dr., in McCall. The proposal estimates that the construction upgrades will cost between $280,000 and $295,000 per each cabin.

Elsewhere in the department’s plan, estimates suggest that once the construction projects are completed, the cabins will potentially rent for $700 per night during the summer months, and $500 per night during the winter, spring and fall months. Return on the Syringa site during a 10-year period is estimated from 6.97 percent to 8.07 percent. For the Payette location, the 10-year average return ranges from a low of 7.37 percent to a high of 8.92 percent.

The Idaho Department of Lands was created to manage the original land endowed from the U.S. government at the time of Idaho’s founding. It is governed by a board consisting of the statewide constitutional officers—the governor (Butch Otter), secretary of state (Ben Ysursa), state superintendent of public instruction (Tom Luna), state controller (Brandon Woolf) and the attorney general (Wasden).

In recent years the Land Board has been criticized for investing in commercial properties and operating businesses that compete with the private sector. Board members maintain that the Idaho Constitution stipulates that the public lands must be managed “in such manner as will secure the maximum long term financial return to the institution to which granted,” and this is said to imply a “fiduciary responsibility” for the board members.

The Land Board has sought to uphold this fiduciary responsibility by taking funds derived from the sale of public lands and using them to purchase for-profit business entities and commercial properties. IdahoReporter.com reported in late 2010 that the Land Board had voted unanimously to purchase the Affordable Storage business in Boise.

At that time, Jane Wright, an analyst with the department, was asked by the Idaho Statesman: “Could Idaho eventually become the landlord of other types of properties like fast food restaurants or hotels?” Wright replied “that has been at least considered, but the risk is likely too high. Burger joints come and go. A storage facility is more stable.”

Later in June of 2011 during an exclusive interview with IdahoReporter.com, Otter decried the purchase of the storage business. “I think that was a mistake. But, I’m the first to admit it,” he said at the time. “I sat right there and asked a bunch of questions about it. And, it’s not a mistake we’re ever likely to make again.”

In 2012 the Land Board purchased a commercial building in downtown Boise and arranged a lease agreement with 10 Barrel Brewing Company of Bend, Ore.

In recent months, several members of the Legislature have become quite vocal about their disapproval of the department’s propensity for buying and operating for-profit businesses.

“I’m definitely displeased with their (the Land Board’s) behavior,” Rep. John Vander Woude, R-Nampa, told IdahoReporter.com last month. “In my opinion, they are a government organization trying to compete against the private sector, and that’s wrong. For one thing, they don’t know how to run a business, but they also have all kinds of unfair advantages over actual businesses.”

Vander Woude, along with Rep. Grant Burgoyne, D-Boise, unsuccessfully sought to legislatively reign in the board’s commercial property purchase behavior during the 2013 legislative session.

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