- Associated Press - Monday, February 2, 2015

BOISE, Idaho (AP) - The Idaho Department of Lands has auctioned off 32 more lots at Payette Lake in northern Idaho as it continues its plan to divest itself of the lucrative but difficult-to-manage assets, state officials said.

The auction Saturday in Boise generated $13.5 million for education and State Hospital South, a psychiatric inpatient treatment facility for adults and adolescents.

The agency said 29 incumbent leaseholders submitted winning bids. Only one lot had competitive bidding, and that lot sold for $8,000 above the appraised value.

Three unleased lots were auctioned for about $2.1 million, about $73,000 above the appraised value. Three unleased lots didn’t receive bids. The bids must be at least the appraised value of the lots.

The state has now sold 127 cottage-site lots at Priest Lake and Payette Lake, about a fourth of the lots to be sold. For decades, state policy protected cabin owners, who own the structures they have built on land leased from the state, from competitive auctions when the lease expires.

But the state and the State Board of Land Commissioners have been trying to get out of the cabin-site rental business, especially after the Idaho Supreme Court ruled that the policies set up to protect leaseholders are unconstitutional.

The court ruled that because the land around Priest and Payette lakes is owned by the state’s endowment, the state has the obligation to manage the property for maximum long-term returns to the endowment’s beneficiaries, including public schools.

One Priest Lake leaseholder challenged the rules for the process, but a 1st District Court judge concluded that cabin owners who lease state land have no right to continue leases once they expire.

In December, the Land Board approved auctioning another 180 leased lots at Priest Lake and Payette Lake before the end of 2017.

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