Controversial 2012 property swap may bring more regulations to Idaho Land Board trades

POST REGISTER (IDAHO FALLS)October 29, 2013 

1029 BI LandBoard building.JPG

The Idaho Department of Lands stands behind the initial appraisal and the building's price tag. “We still are confident in the value figures used in the land exchange,” spokeswoman ­Emily Callihan says.

MONTE LAORANGE — mlaorange@postregister.com

White numerals “595” differentiate this building from other gray- and red-trimmed buildings around it.

The one-story, 32,000-square-foot office building sits on 3.14 acres along University Boulevard in Idaho Falls. It has 133 parking spaces and comprises private offices, a data room — where unauthorized entry is not allowed — and some conference rooms. The building houses the national and Homeland Security employees of Battelle Energy Alliance, the contractor in charge of the Idaho National Laboratory.

Last year, the building was swapped for a 14-acre property on Payette Lake in McCall. The swap exempted the building from Bonneville County property taxes — about $36,000 per year — and added to the state's portfolio of endowment-trust lands not subject to local property taxes.

The Idaho Department of Lands manages more than 2.4 million acres of land under a constitutional mandate to produce maximum long-term financial returns for public schools and other beneficiary institutions. The trade was considered an even one, with each property valued at $6.1 million.

But what makes this mysterious building worth that much? The Integra appraisal, it seems.

That appraisal — and the land swap based on it — has become hotly contested by entities such as the Tax Accountability Committee, a citizens’ activist group; and state Reps. Grant Burgoyne of Boise and John Vander Woude of Nampa, who believe the state paid about $1.6 million too much.

The overpayment estimate is based on a second appraisal conducted by Scott Erwin of Erwin Insurance and Appraisal Services, which valued the property at $4.5 million.

The Department of Lands stands behind the initial appraisal and the building's price tag.

“We still are confident in the value figures used in the land exchange,” spokeswoman Emily Callihan said.

Burgoyne is concerned, however, that more questions may go unanswered as the board considers three more Battelle-leased buildings for a swap with 58 cottage sites on Priest and Payette lakes. Such a swap would remove $134,000 from Bonneville County's property taxes each year.

The Land Board rejected the proposed exchange Oct. 15. The Lands Department will try to address board member concerns about the swaps in time for the board's November meeting, Callihan said.

Burgoyne is not saying the original appraisal is wrong, but he has some questions that need be answered, such as:

Æ Why is the Bonneville County assessor's assessment — $2.2 million — so much lower than the value Integra placed on the property?

Æ Why did Integra compare this property to properties in other states rather than those in Idaho?

Æ How could the McCall property and the building rented by BEA be worth exactly the same amount?

These are a few reasons Burgoyne, a Democrat, and Vander Woude, a Republican, plan to introduce a bill in the Legislature requiring a second appraisal of Department of Lands land swaps.

“I think that as the department engages in further land exchange transactions to acquire commercial real estate, questions are going to continue,” Burgoyne said. “I'm not making an allegation that what was done was wrong, (but) we think this is a better, more businesslike way to approach these transactions.”Alex Stuckey: astuckey@postregister.com, (208) 542-6755

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