Idaho’s top elected officials have voted to auction off nine state-owned commercial properties, five of them in Downtown Boise near the Capitol.
The state Land Board is carrying out a plan to get land holdings of state endowments on track for maximum long-term gains. As part of that, consultants recommended the endowment get out of investments in commercial property in Idaho.
The nine properties are worth about $20 million. Among them are Affordable Storage, a 7-acre property with a thriving self-storage business at 450 S. Maple Grove Road in Boise; and commercial and office buildings in Idaho Falls.
The rest are all individual properties within a block or two of the Capitol. And state Department of Administration Director Bob Geddes says that as the state grows, two in particular would be suitable for future expansions of state offices in the area surrounding and including the Capitol.
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The two are the current home of the Idaho Public Utilities Commission, an office building two blocks from the Capitol at 5th and Washington streets, and a vacant former Home Federal Bank building diagonally across from the Capitol at the corner of 8th and State streets.
“We’ll wish someday that those properties would have remained in some way or another in state ownership,” Geddes said.
However, a third Downtown property that Geddes identified, a former bank building at 590 W. Washington St. that is now leased to the Travis Jeffries PA accounting firm, was taken off the auction list by the Land Board for a new evaluation.
Geddes said the property is across the street from two existing state parking garages. He’s even been eyeing it as an ideal location for the state’s Division of Purchasing.
The Idaho Constitution requires the Land Board to manage the state endowments for maximum long-term returns to the endowments’ beneficiaries, including public schools. The board members are Gov. Butch Otter, Attorney General Lawrence Wasden, state Controller Brandon Woolf, Secretary of State Lawerence Denney and state schools Superintendent Sherri Ybarra.
The state’s acquisition of Affordable Storage in 2010 stirred a backlash. The Land Board was moving into commercial property investments with the idea that they could be more lucrative for the endowment than its timber and grazing lands. Opponents complained the state was unfairly competing with private business.
Denney, then a legislator, was one of those critics. But at Tuesday’s board meeting, it was Denney, who succeeded the retiring Ben Ysursa on the board, who proposed delaying the Washington Street building’s auction for possible inclusion in one of the endowments the board manages.
Later, he acknowledged that his motion to hold on to a commercial property might seem out of character. But he said the building could ultimately end up being auctioned anyway, depending on what the evaluation determines.
Michael Finch of Century Pacific, a commercial real estate consultant to the Idaho Department of Lands, told the board a delay would not hurt overall long-term returns to the state.
“This is not a high-value asset; we’re talking under a million dollars,” he said. “I don’t see a lot of risk in hitting pause for the moment and making a broader evaluation.”
A live public auction is tentatively set for Dec. 2. Bidders will be required to post a nonrefundable deposit of 3 percent of the property’s value or $10,000, whichever is greater.
The Associated Press and the Idaho Statesman contributed.