New lake-site leases in Idaho unconstitutional

BOISE – Idaho Attorney General Lawrence Wasden won a preliminary injunction Wednesday blocking new leases for state-owned lake cabin sites, including 355 at Priest Lake, arguing that the state’s whole system for renting out cabin sites is unconstitutional.

Though Idaho owns the land underneath, it’s long allowed private owners to build and own cabins on the lots in exchange for annual rent; some have had the cabins for generations.

But with frequent controversy over the prospect of existing cabin owners being outbid when their leases came up for renewal, Idaho passed a law in 1990 to require the state Land Board to charge “market rents,” in exchange for eliminating the requirement that cabin-site leases be auctioned off to the highest bidder, like other state endowment land leases. Wasden argued that law is unconstitutional, and 4th District Judge Deborah Bail agreed.

“Clearly the Legislature was trying to balance some fairly sensitive issues, but the Constitution is plain and the interpretation of the Constitution is clear,” Bail declared. She ruled from the bench, granting the preliminary injunction on the spot.

“I believe that the public auction requirement of the Constitution can’t be negated by a statute,” the judge said. “I think it will require a constitutional amendment to negate that requirement.”

For now, the preliminary injunction freezes the status quo while the case proceeds. The state Land Board meets Tuesday, and already has on its agenda a plan to move away from state ownership of ground on which private owners build cabins.

“If we had unity of title, we wouldn’t be having the kind of problems that we’ve been having,” Wasden said. He noted that every member of the state Land Board supported moving that direction. But he said there likely will be a number of preliminary steps before the state can get there.

Wasden first went to the Idaho Supreme Court to try to stop the new leases, arguing that they violated the state Constitution’s requirement for maximum long-term returns from all endowment lands, to benefit the endowment’s beneficiaries – the largest of which is Idaho’s public schools. The high court rejected his bid, saying it should start first in a lower court.

In the meantime, leaseholders of the 167 state-owned cabin sites on Payette Lake in central Idaho sued in district court in Valley County, charging that the proposed rents under the new leases were too high. All the state’s cabin-site leases expire on Dec. 31. The proposed new leases would raise rents 9 percent a year for the next five years; rents have been frozen for the past three years at Payette Lake and the past two years at Priest Lake, and Land Board members have acknowledged they’re below market rates.

Idaho Secretary of State Ben Ysursa emerged from Wednesday’s hearing frustrated. He noted that if the current lease terms were frozen into 2011, the state would be collecting less than under the proposed new leases. Plus, he noted, “We gave people six months notice June 30, as required by law,” about the new rental rates. “We need leases in place.”