Idaho hits pause on leasing program near McCall as development questions linger

The Idaho Board of Land Commissioners is putting a pause on its leasing program around Payette Lake and McCall to step back and take a comprehensive look at how to bring maximum dollars into Idaho schools while protecting water quality and scenery.

The Land Board manages 2.4 million acres of state land, including timber, mineral, commercial and cottages sites under a constitutional mandate to “secure the maximum long-term financial return” to Idaho schools and other beneficiaries. The board, which includes Idaho Gov. Brad Little, Attorney General Lawrence Wasden, Secretary of State Lawerence Denney, Controller Brandon Woolf and Superintendent of Education Sherri Ybarra, have faced challenges to carry out this fiduciary obligation in the face of political pressures, environmental concerns and legal challenges.

Nowhere is their job harder than around McCall, a tourism and second home mecca on Payette Lake.

The board has managed timber there to protect the views of the people who have cabins located on state land, which keeps land values higher, meeting that constitutional mandate. But any additional development along the lakeshore on state land may present problems for preserving the lake’s purity and scenic views.

“You are obligated to maximize the return on real assets for the benefit of the state education system,” said Alan Shealy, a former Boise City Council member who spoke to the board on Tuesday. “But you are also expected to protect our waterways from threats that come from expanding residential development.”

Lease on state land canceled

A study was prompted by a 2019 decision to rescind a lease on a parcel of state land with a couple that was holding weddings there. Neighbors had complained that the lease was not publicized, so the state was not getting as much return as it should. Complaints also included the cutting down of trees, traffic and the potential to ruin scenic views — issues the board can’t consider.

Facing certain lawsuits and the view that the lease had constitutional issues, the Land Board reversed its decision and settled with the owners, paying out $355,000. The Department of Lands also changed its procedures by increasing advertising about its leases to maximize competition.

“In our review of this, I believe that we have to acknowledge there were some mistakes made in the processes employed,” Wasden said when the decision was made in 2019. “The best thing for us to do is to rescind the lease and then to engage in proper processes that meet the financial, legal and constitutional requirements for us to offer this said lease.”

The Department of Lands still has not leased that parcel and, in its review and appraisal, the department decided it needed to take a broader look.

One of the major reasons came out this month when the department revealed a Boise-based development company, Trident Holdings LLC, proposed exchanging timberlands in North Idaho for 28,000 acres of state land in and around McCall. Trident Holdings was established in January, according to its website.

Trident Holdings owner Alec Williams said he grew up in McCall, and his family has been there for 100 years. He said he wants to protect the area and increase the financial return for the state.

“Our other priorities include preserving the vast majority of these lands and preserving the public’s ability to access both the lake and the forested hillsides forever,” Williams told the board Tuesday.

Williams will make a detailed presentation to the Land Board in July.

The Department of Lands will do a parcel-by-parcel review of about 5,500 acres of state land within McCall’s area of impact and another 20,000 acres contiguous acres that spread from northeast of the lake south, around Little Payette Lake.

Existing leases and auctions will go forward, said the department’s Real Estate Services Bureau Chief Ryan Montoya.

Bigger study may be needed

One critic who has been waiting for more than a year to lease several parcels for setting up yurts to rent wants the board to reconsider its sales of land under cottages and commercial properties. Bruce Smith said his proposal will have only short-term impacts while the land sales and other leases have a permanent negative impact on the endowments.

Approximately 80% of cottage sites and commercial properties have been sold since 2011, he said. “Over 342 cottage sites at Payette and Priest lakes have been sold,” Smith said in a letter to the board. “The vast majority being sales at no more than the minimum appraised value to existing lessees.”

The decision to invalidate the wedding site lease raises questions about all its leases, Smith said.

“If you choose to suspend leasing, stop it all, not just some,” Smith said in an interview.

The department will present a timetable for its study in July. Little, acknowledging he had already met with Trident Holdings officials, urged the board to move carefully.

“This is a big, hairy piece of ground with all kinds of conflicting issues and a place that’s very special to lots of people, including me,” he said. “I have a conflict in the fact that I love McCall, so we want to do this right.”

This story was originally published June 21, 2020 at 4:00 AM.