- Associated Press - Tuesday, March 15, 2016

BOISE, Idaho (AP) - Idaho will have $160 million to invest from the sale of commercial real estate and other holdings over the next five years, and the state should use the rare opportunity to buy timberland and farmland, a financial consultant said Tuesday.

Gov. C.L. “Butch” Otter and Secretary of State Lawerence Denney said they support that option because it could mean better financial security for institutions such as public schools that benefit from the state’s endowment lands.

“They make a good point,” Otter said after the Idaho Land Board meeting. “I can tell you that land investment has always treated me much better than the stock market.”

The state Department of Lands is taking public comments on the plan and two other proposals on managing investments through April 15. The land board is scheduled to decide in May whether to adopt the guidelines.

The $160 million is the result of two upheavals in state endowment land holdings and commercial real estate investments.



Idaho has been selling hundreds of residential home sites as it gets out of the business of leasing that land. The move began amid concerns the state was not getting fair-market value for the leases.

In addition, the land board last month approved selling most of the commercial real estate managed by state after it became a political liability for some board members. Their election opponents contended that state-owned commercial property unfairly competes with businesses.

The financial consultant said the state would make more money selling the commercial properties in the current market than holding on to them. Attorney General Lawrence Wasden said that meant the board was meeting its constitutional requirement to maximize profit over the long term by approving the sale.

The sales were expected to wrap up in 2020, producing the $160 million.

“We are at a really unique time in the endowment’s history,” consultant Sally Haskins of Callan Associates told the five-member board. “We don’t see when you might have this amount to invest in land again.”

Denney, the secretary of state and a vocal critic of the land board’s investment in commercial property, said timberland and farmland falls into a different category because the state has a long history of such investments.

“I’m not opposed if we can get a good deal and get a good return,” he said. “I think for the long-term stability of the endowments, I think timberland, particularly, and farmland are good investments.”

Idaho received 3.6 million acres when it became a state and has 2.4 million acres left after divesting 1.2 million acres.

If the entire $160 million was used to buy timberland or farmland, the state could get back about 11 percent of that 1.2 million acres, or about 130,000 acres, Land Department Director Tom Schultz told the board.

Adding endowment land would mean more public land accessible to hunters, anglers and other outdoor enthusiasts, Schultz said after the meeting.

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