Support broadens against Land Board’s commercial property acquisitions

Support broadens against Land Board’s commercial property acquisitions

by
Idaho Freedom Foundation staff
October 15, 2013
Idaho Freedom Foundation staff
Author Image
October 15, 2013
[post_thumbnail]Rep. Robert Anderst R-Nampa, left. spoke with members of the Tax Accountability Committee during a luncheon meeting addressing upcoming land transactions by the Idaho Department of Lands.

An Idaho citizens’ activist group is garnering increased attention and support from elected officials across the state in making a case for its concerns about the Idaho Department of Lands (IDL) policy to acquire and operate more commercial property.

“We had serious doubts about the IDL’s appraisal of the properties, so we ordered up our own appraisal,” said Larry Rincover at a meeting Monday of the Tax Accountability Committee (TAC), a loosely organized group of individuals from around the state. The group assembles periodically to discuss and analyze the many ways in which the Idaho state government spends the public’s money.

The lunch-hour gathering at a Nampa restaurant focused on a land swap that the IDL orchestrated involving land in McCall, described as “endowment lake front property,” and a commercial office in Idaho Falls.

The IDL determined that both properties were valued at precisely $6.1 million, so the department traded off the McCall land and acquired the commercial complex in Idaho Falls. The TAC believed these appraisals to be suspicious, so it hired its own independent appraiser earlier this year and determined that the Idaho Falls property was approximately $1.3 million less than the IDL had determined it to be.

“They (the IDL) didn’t respond to the independent appraisal data we put in front of them,” Rincover said at Monday’s lunch meeting. “Instead, they responded by simply attacking our appraiser.”

Now, TAC’s concerns have begun to resonate not only with members of the Legislature, but with elected officials within county governments as well. In an Oct. 9 letter signed by all three of its elected members (Roger Christensen, Lee Staker and Dave Radford), the Bonneville County Board of Commissioners wrote to IDL Director Tom Schultz that they, too, were concerned about the IDL’s acquisition of commercial buildings in Idaho Falls, which is the largest city in Bonneville County.

When the IDL, a state agency, takes control over property that was once privately owned, the city and county where the property is located can no longer collect taxes on that property. The commissioners noted this concern to Schultz in the case of the Idaho Falls commercial complex that the IDL purchased.

“This particular exchange raises some concerns in Bonneville County that we hope you will consider,” the commissioners noted in the letter. “We recognize that we are dealing in an area that is a new way of doing business for trust lands,” the letter states. The commissioners are requesting that the IDL delay the finalization of the transaction.

Meanwhile in Canyon County, commissioners are questioning a proposed land swap between several properties operated by the IDL near Payette Lake in Valley County, and a commercial office complex in the city of Nampa. “As we understand the proposal, it would take tax revenues out of Canyon County and put that revenue in Valley County,” said Canyon County Commissioner Craig Hanson, speaking at TAC’s Monday meeting.

“They (the IDL) don’t really care about this tax revenue shift,” Rep. John Vander Woude, R-Nampa, commented. “I spent about an hour discussing this with the secretary of state (Ben Ysursa, an IDL board member) and he sees this purely as a state thing. He thinks these property acquisitions are good for the state, and that they’re good for everybody, and he’s not concerned about what they do to individual county governments.”

Following the TAC meeting, Rep. Robert Anderst, R-Nampa, told IdahoReporter.com that “TAC’s concerns are absolutely valid. We (the Legislature) have a lot of work to do to improve the procedures of the IDL.”

During the past several months the TAC has found support for its concerns from some members of the Legislature. Last month Reps. Grant Burgoyne, D-Boise, and Vander Woude held a joint press conference at the Capitol with TAC, where they called on the IDL to handle its transactions with the appropriate and requisite transparency and public disclosure. They also announced that they would seek legislation next year that would require the IDL to implement an appraisal review process before selling and buying lands.

“The public policy issues involved in the swap of lands between urban areas and more rural areas are very complicated,” Burgoyne told Idaho Reporter.com. “What can we do to protect these larger urban areas from these shifts? I don’t understand why the IDL didn’t anticipate these problems and discuss them with the stakeholders. We need to study that and we need to figure this out.”

In recent years, the board members of IDL have been criticized for investing in commercial properties and operating them in competition with the private sector. Consisting of the statewide constitutional officers (the governor, attorney general, secretary of state, state superintendent of public instruction and state controller), the current board members of IDL have stipulated that the Idaho Constitution requires them to manage the public lands that were granted to Idaho at the time of statehood “in such manner as will secure the maximum long term financial return to the institution to which granted.” This, according to IDL board members, is said to imply a “fiduciary responsibility” for the board members.

The IDL has sought to uphold this fiduciary responsibility by taking funds derived from the sale of public lands, using them to purchase for-profit business entities and commercial properties.

For example, IdahoReporter.com reported that in late 2010 the IDL had voted unanimously to purchase Affordable Storage, a commercial storage business in Boise.

Months later in 2011, Otter told IdahoReporter.com that this purchase was a “mistake,” while Tom Luna, state superintendent of public instruction, expressed regrets as well. The three other members of the Land Board—Attorney General Lawrence Wasden, Secretary of State Ben Ysursa and then-Controller Donna Jones—all stood by their “yes” votes.

In October of 2012, when Otter appointed Brandon Wolf to fulfill Jones’ term as state controller (Jones resigned for personal health reasons), Wolf told IdahoReporter.com that although he had not previously been a member of the board of directors for IDL, he nonetheless supported the controversial purchases of commercial properties and businesses. “Had I been on the Land Board at the time … I would have voted as Controller Jones did,” he said in an exclusive telephone interview.

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