The Idaho Land Board voted May 17 to get back to its roots of managing timberland and agricultural land.
The unanimous vote by the five-member board to adopt a new strategic reinvestment plan calls for using money from the sale of commercial real estate and residential cottage sites to buy resource-producing lands.
Specifically, the vote authorizes the Idaho Department of Lands to start a pipeline of potential purchases with what is expected to be $160 million.
Gov. C.L. “Butch” Otter said during the meeting he’d like to see the state use the money to buy 100,000 acres of timberland to push the state timberland total to a million acres.
“In the forest, that’s what we’re good at and that’s where we make our money,” Otter said after the meeting. “Stick with what we know.”
The $160 million is coming from the ongoing sale of hundreds of residential home sites as the state gets out of the business of leasing that land. The move began amid concerns the state wasn’t getting fair-market value for the leases.
In addition, the land board in February approved selling most of the commercial real estate managed by the state after it became a political liability for some board members. Their election opponents contended that state-owned commercial property unfairly competes with businesses.
“We stepped out of character, I think,” Otter said, noting the commercial real estate purchases at the time were in line with the Land Board’s asset management plan then in place. “I don’t know that it (made the state money), but I know that it was the wrong thing to do,” he said.
With the sudden income from the sale of commercial and residential properties, state officials realized they had a unique opportunity and consulted with a financial planner. The advice this time is to buy timberland and farmland, and that’s what Land Board members opted to do with their votes on May 17.
By reinvesting the state will have steady income that’s being lost from cottage leases and commercial real estate. Money generated from state endowment lands goes mostly to public schools.
“Stability is always important for public schools,” State Schools Superintendent Sherri Ybarra, a Land Board member, said after the meeting. “Focusing on the timber sales is the way to do that.”
Adding 100,000 acres of timberland to state endowment lands would add about $6 million to $8 million in additional revenue annually, Idaho State Forester David Groeschl said. Tom Schultz, director of the Idaho Department of Lands, said the state is already eying potential purchases and was optimistic about buying opportunities over the next year.
The state received 3.65 million acres of endowment land at statehood in 1890 and over the years has sold about 33 percent, and now has about 2.44 million acres remaining. State officials say most of sales took place between 1900 and 1940.