90% Of Priest Lake Cottage Leases Held By Non-Residents, 90% of Payette Sites Are Held By Idahoans

We got this note recently from a North Idaho reader following the Idaho Supreme Court decision which calls for open bidding on state owned cottage sites around North Idaho’s Priest Lake and Payette Lake near McCall.

The Statesman and other media have reported frequently and rather sympathetically about lease rates being raised to a level closer to market rates and most recently about the possibility that long-time lessees might lose their leases in auctions which would guarantee highest returns to Idaho Schools as the Constitution intended.

Omitted from all media reports is the fact that fewer than 40 of the 354 cottage
leases on Priest Lake are held by Idaho residents. All of the remaining 300 or more are held by non-residents and 90% of them by folks from Eastern Washington, primarily Spokane.

The State Land Board faces a difficult problem in dealing with these long-time
lessees, but surely the primacy of the needs of Idaho school children and other residents who value the recreation values of Priest Lake should overshadow the interests of Washington residents.

Turns out at Payette Lake the opposite is true. Most of those cottage sites are owned by Idaho folks and they are no doubt the ones who lobbied to give breaks to locals. And that law was overturned by the Supremes.

Comments & Discussion

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  1. North Idaho is part of Washington or Montana… where the money is.

  2. No one lobbied for a break for locals. They asked for leases to be based on a fair market value. It would be nice if someone would research how many leases have been turned back in McCall and how much that is costing the endowments. We turned our lease back at $35,000 as did quite a few others around us. Auctions that have been held have not met the States exorbitant reserves. There is a lot to this story….the Land Board acts at their own free will with no regard
    to the law.

  3. Interesting differences between the two areas on ownership. The other difference has to determining the lease value. I believe Payette Lake leasees are allowed to use an appraisal or the county assesement.

    Also Maggie brings up a good point. I have heard similar stories of leases not selling. Not many people are lining up to rent property for $3,000/month. My family sold our Payette lease before the real estate boom as we saw the writing on the wall with lease rates.

    I do not think there are any villains in this story as others would lead you to believe.

  4. Clancy wrote: “My family sold our Payette lease before the real estate boom as we saw the writing on the wall with lease rates.”
    The above is exactly the problem:sold our LEASE.
    Lease holders have sold their IMPROVEMENTS (for big $$$) which is all they OWN because the lease is attached, as long the yearly fee is paid. The property sold for much higher prices because the fees were so low. Now with fees getting somewhat closer to market rates, the improvements are not worth nearly the premium price they once brought. Cry me a river. It was never your land, you were renting it at much too low a fee and cheating Idaho students out of deserved funding.

  5. “….cheating students out of deserved funding.” Or paid our dues(taxes, leases, sewer and improvements) for 50+ years, so the state can now sell at exponentially higher price than in 1943.

    Did you know Idaho is the only state to take a premium (10%) at the time of sale?

  6. On every day of every year, you could have turned back your lease.
    Do you think the citizens should have paid for your septic system? Or maybe you should have been free from taxes on the improvements?
    You were lucky or smart. You sold before the larceny was made very public. You got your premium price because you found a sucker who did not know about how corrupt the system was.
    The fact remains.Pay up or try to sell your improvements to next person who agrees to the LAND lease terms. Or you can move your cabin to a new lot that you actually PAY FOR.

  7. Clancy–I am glad your family got out before this whole debacle! My fanily turned our leased lot back to the State at the end of last year. You are so right about the taxes etc. that we paid over the last 50 years, that never seems to count. Also, this money is not going to the public K-12 schools but to 2 Idaho colleges. With the leases turned back the school funding is losing a substantially greater amount of money

  8. I am not surprised that Priest Lake is a big draw for out state residents. I have fond memories of swimming there as a kid … no sharp drop off and you could walk along ways without worrying about it.

  9. Maggie – Where do you get the idea that the money goes to two colleges? K-12 schools are the primary beneficiary.

    “This mandate was codified in Article IX Section 8 of the Idaho Constitution, which states that the lands are to be managed, “…in such manner as will secure the maximum long term financial return to the institution to which granted.” Chief among the beneficiaries are the public schools, which received two sections of every township in the state (1/18 of the total land base). Other institutions include the University of Idaho, the Agricultural College, the Normal Schools, Penitentiary, Charitable Institutions, State Hospital South, School of Science and Public Buildings (now Capitol).”

  10. What difference should it make that you have paid taxes on property for 50 years? Real Estate taxes are YEARLY taxes. The tax was on your property, the improvements.
    You paid no tax on the land because every Idaho citizen including me owns that land.
    The fact that you “turned back” your lease just proves you only wanted to play the game when you were paying $100 for something worth $1000. (arbitrary numbers for an example)

  11. Priest Lake lots were leased to Spokane residents initially because that was the only population center nearby and largely blue collar North Idaho folks couldn’t even afford the meager rates then.

    With the liberal lease extension rules few Idahoans were ever able to acquire a lease.

  12. Richard–We have a leased lot and a deeded lot. We have attended multiple Land Board meetings that were a 3 ring circus. The leases paid go to Lewis and Clark and CSI Gooding depending on whether you have a lot on the East or the West side of the lake. But I am sure you know much more about it than I do simply because you say so.

  13. Maggie – My quote shown in full above is from the State Land Board website.
    One part of it is:
    “Chief among the beneficiaries are the public schools”

    That is certainly not “because I say so”

    You on the other hand produce nonsense: What is “CSI Gooding”?

    Did you mean CSI -College Of Southern Idaho in TWIN FALLS, or did you mean Idaho School for the Deaf and the Blind which is in Gooding?

    Good golly Miss Maggie, do you have any idea what you are talking about? Or are you just repeating inaccurate laments propagated by those who hate paying up now because they got away with screwing all of us for so long?

    What could fairer than simply auctioning the leases each 5 years or so? I personally would rather sell the whole collection of lake lots one at a time to the highest bidder an auction that would draw at least national, if not international bidding.

  14. Richard,
    Please read page 16 of the State Trust Asset Management plan. Specific acreage is managed for each of the beneficiaries, including ISU,LCSC and the School for the Deaf and Blind.

    I believe there is a State auction coming this fall for several Cottage leases. It will be interesting to see the results as recent transaction are non existent.

  15. Richard:

    CSI has an off campus location in Gooding, CSI North Side Center.


    Teh Google is a wonderful thing. Embrace it.

  16. Thanks Clancy. That is indeed an interesting article.
    Now what Idaho and Montana need to do is post multiple signs on each lot that is not being leased stating that this property is public land and is open to use by the public.
    I bet half of those 80 lots that were “turned back” are still being used by the folks that built the improvements and consider it THEIR property.

  17. Here is a local realtor’s take on the lease situation.

    For those worried about the leesee’s making too much money. Leasehold values have dropped to almost nothing.

    $63,000 for a small cabin, state rent probably $25-30,000/year.

    2 similar cabins on IDL land. 1 lake front, the other second tier with similar sales prices.

    2011 Lakefront rent- $31,278

    2011 2nd tier rent- $4456/year

  18. As to the value of leased lots with improvements, check out Vacation Rentals by Owner (VROB) website and look at what modest (3bdrm) lakefront cabins on Priest and Payette Lakes are renting for.
    $1500-$3500 per week.

  19. Subleasing of State Cottage leases is not allowed without approval.

    Subleasing or Assignment – Lease Section E.
    The lease prohibits the subleasing (rental) or assignment of the cottage site
    without the prior written consent of the lessor.
    Procedures for gaining approval to sublease;
    1. Written request to the department accompanied by Fifty dollar, $50)
    processing fee.
    2. Lease must be in good standing. All rent, late payment fees, interest, must be
    paid in full.
    3. Sublease subject to terms of the lease.
    4. No Sublease will act as a release of lessees’ obligations.

  20. Yes Richard I do know what I am talking about. I have been involved with this issue for years.

  21. Solve this issue by putting the land up for sale?

  22. Funny how quiet Richard got when he got his butt (or other word) handed to him.

  23. Butt handed to me?
    Where did you learn logic Snoop?
    The majority of the income from public land goes to k-12 schools. That fact is inescapable.

    However, what difference does that make? If I am renting a house to you, and I spend the rental income on wine, women, and a Mercedes convertible, is that any business of yours? Should you demand lower rent because you think I am using the rent money in a manner that you do not approve of?

    The lease holders continue to come up with specious argument issues because they want to dictate the rent on property that belongs to others.

    EDITOR NOTE–Since this is an older post, you children can continue to fight, but don’t make me stop the car and come back there or you will all regret it! 🙂

  24. Don’t want to dictate the rent…just want it based on a fair value. Not one lease holder I know thinks that they should get the land for nothing. The Land Board however is setting the rate based on values from when the market was at its highest. Would it be fair if they based your current property taxes on values 5 years ago when property was at a premium?

  25. Also we don’t care what the money goes towards but quit using “the children” as a sympathy point or an election ploy.

  26. Maggie, I totally agree with you. I don’t think anyone is looking for a free ride. Unfortunately most of the lease holders aren’t the original ones that leased the ground and are being priced out of the market. This only allows for more out of state money to come in and less use. With regards to ALL of Richard’s comments, that is simply a case of the “have not’s” trying to dictate to the “have’s”. We are seeing that across the country, too many people signing the backs of checks and not enough signing the fronts.

  27. Logic is not your area of genius, Snoop.
    The people you describe as “haves” are the HAVE NOTS. They do not have a lake lot, and apparently do not have the money to purchase one. The people you call the “have nots” are the HAVES. We jointly own land that is managed for best return by the Land Board.
    Why is it “unfortunate” that many of the current lease holders are not the original lease holders? What possible difference should that make in setting the lease rates for current use and value?
    Your last sentence is right on the money. You insinuate that my comments put me in the “back of the check” group. I assure you that I have provided for myself since I was 10 years old. Logic would help you realize that it is the lease holders who are looking for a subsidy. They simply want a lower rate of rent now because they enjoyed a below market rate in the past. Try that logic thing sometime soon snoop.

  28. On commercial properties, IDL charges market rent not the return on the rest of portfolio. Cottage sites are being rented at the return rate of the entire portfolio. Rents should be based on what is happening on the lake and not the rest of the state.

  29. Late to the party here. If it is true that 90% of the state leases at Priest Lake are owned by people outside of Idaho, isn’t that a good thing? They pay lease payments to the state and taxes to the county for their improvements, and sales tax to the state for any purchases they make while they are in the state. Call it tourism if you want and all ststes try to increase tourism as it boosts their economies. And, as for the school kids, I have a feeling that few know that the leases collected at Priest Lake account for 1/10th of 1% of the school budget (that number is about 4 to 5 years old so it could be marginly more or less now. I believe that all leases collected by the state currently account for 1% of that budget. It is too bad that the media hasn’t pointed this out and asked the question as to how much the state is spending and has spent on 1% of the school budget.

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