BOISE, Idaho (AP) — Two lawmakers who have sought unsuccessfully to halt the Idaho Department of Lands’ expansion into commercial real estate are again criticizing the agency, this time over a 2012 property swap they contend may have cost state endowment lands $1.6 million.
The agency exchanged state endowment land on Payette Lake in McCall where the University of Idaho runs an outdoor science school for privately-owned Idaho Falls commercial property. Before the swap, Idaho’s assessor concluded that each property was worth $6.1 million.
On Monday, however, a group including Reps. Grant Burgoyne of Boise and John VanderWoude of Nampa says it commissioned a second assessment that concluded the Idaho Falls property was actually worth just $4.5 million. If correct, that means Idaho’s endowment holdings whose proceeds benefit public schools and other state institutions were shorted $1.6 million.
“I don’t think there’s ever been a lot of scrutiny on the land exchanges,” VanderWoude told The Associated Press. “Nobody’s ever really taken a look at it, and said, ‘Hey, are we getting value for value?”’
Burgoyne, a Democrat, and VanderWoude, a Republican, have long been among the Department of Lands’ most-vocal critics, contending that its expansion into properties, including a Boise self-storage business three years ago, puts Idaho government inappropriately in direct competition with the private sector.
They’re now concerned there’s too little oversight over land exchanges like this, putting Idaho’s endowment land at the mercy of managers eager to swap for commercial property. Consequently, they aim to propose a law during the 2014 Legislature to requiring Department of Lands to get a second assessment whenever it plans such a land swap.
Tom Schultz, director of the Idaho Department of Lands, wasn’t available for comment about the 2012 transaction — or the two lawmakers’ latest criticisms.
However, rent income figures provided by his agency on Monday indicate the endowment property in McCall would have generated only about $250,000 annually.
Meanwhile, the Idaho Falls building, whose tenants include contractors that run the federal U.S. Department of Energy’s Idaho National Laboratory, is now producing annual income of $538,000.
Idaho is required by its constitution to manage its 2.5 million acres of endowment land to reap the highest long-term financial returns. These holdings include timber in Idaho’s forested far north, grazing land along the Snake River and downtown Boise parking lots.
The University of Idaho has leased the McCall property for six decades from the endowment fund. But its annual lease payments were due to rise to nearly $250,000, from just $50,000.
Consequently, the school last year concluded it could finance the purchase of the property for less money.
Since Idaho rules blocked it from buying the property from the endowment fund directly, however, it worked with the Department of Lands, as well as the Idaho Falls property owner, to arrange the 2012 swap.
Once the McCall property was in the private owner’s hands, the Moscow-based school bought it for $6.1 million.
The Idaho State Board of Education and the Idaho Land Board, the endowment oversight panel whose members include Gov. C.L. “Butch” Otter, approved the transaction last November.