Leaseholders Fear Being Priced Out

One by one they came before the Land Board at its February meeting to tell a story they share in common – a story which will be heard more often as soaring land and property values in western Montana cause skyrocketing prices for long-standing cabin-site leases on state lands.

 

 

 

 

 

 

 

 

 

Betty Baldwin, a member of Friends of Beaver Lake, put it succinctly: "Mostly we are retired people, living on fixed incomes, and not wealthy. We have all been good Montanans, good stewards of the land, and have treated this area with respect. We are now faced with the unreasonable lease fees and a lot of us will be unable to continue to retain our leases."

Beaver Lake sits in the Stillwater State Forest and is surrounded by summer cabin sites. In Baldwin's case, as she told the Board: "The lease on Lot #1 has been in our family for over 45 years and has been enjoyed by five generations. We have had family picnics, quiet weekends, and the excitement over the years of watching our children, grandchildren, and great-grandchild catch their first fish – or their quiet times sitting on the porch or at the picnic table watching the deer going to the lake for their evening drink. To me, this is part of their Montana heritage. I would like very much to be able to keep this for them."

Baldwin's desire to maintain the lease on her half-acre lot, however, is caught between the Department of Revenue's appraisals, which estimate the value based on fee-simple ownership, and the concurrent DNRC lease formula, which is 5% of the appraised value. As Baldwin related, during the 2003 property reappraisal, the value of her family's lot went from $20,330 to a whopping $108,000 – an $87,700 increase. In turn, she said, that will drive their state lease to $5,405 annually.

In his testimony, Friends president Robert Warren explained that while such a fee might be warranted in a fully-developed area, the Beaver Lake lots have "no utilities within three miles and the roads are not maintained for winter travel, rendering these as seasonal-use cabins by default."

In illustrating how far off base the leaseholders felt the DOR values were compared to actual conditions at their sites, Warren told the Board that "200 acres with over three-fourths of a mile of lakefront on Beaver Lake" was purchased in 2002 by a single individual. The "updated taxable value of the holding as of September 2005 was $279,000." In contrast, Warren said the 18 cabin sites, comprising less than 30 acres with less than half of the lake frontage of the larger parcel, came to a "combined assessed value of over $1.2 million."

Moreover, Warren said the 200 acres was "part of a larger acquisition of three times that size," all adjoining lands, by the same individual who Warren said "has, in a few short years accrued the largest number of violations on record for shoreline, wastewater, sewage, and viewshed infractions in our valley. And that's saying a lot. Fines are currently our only tool against such abuses, but fines are meaningless when wealth is limitless."

As Friends member June Munski-Feenan added: "For thirty-five years my family has served as stewards of this property in addition to being simply lessees. This stewardship role is a significant contribution to the Beaver Lake area, both in terms of water quality and the overall health and well-being of the overall ecology." She went on to detail how her family and the other Friends members had "clipped 20 garbage bags of wooly worms, eggs and larvae...eradicated noxious weeds on our lease and in the area" and "kept records for the Flathead Basin Commission on a variety of issues related to Beaver Lake."

The leaseholders asked the Board to "establish a fair and transparent valuation process that recognizes the distinction between fee-simple estate values and lease estate values" and "direct DNRC to place an immediate freeze on the phase-in of the new appraisal values for the time necessary for any subsequent recommendations of the Land Board arising from our request to be reported to and acted upon by the Legislature."

Backing the proposal before the Board were both Rep. Mike Jopek (D-Whitefish), who offered to carry any bill the agency could come up with to rectify the problem, and Sen. Dan Weinberg (D-Whitefish), who told the Board: "If we continue to raise leases and force folks like this off their land, it will eventually be bought up by out-of-staters. Montana has lots of needs, but let's not fill those needs on the backs of regular folks who have used these lands for generations – that's just plain wrong."

Board members requested DNRC legal counsel to "clarify authority with regards to our ability to impact some of these fee-related processes" and asked if "DNRC can address specific suggestions in the appraisal process" in order to develop a response. Given the intensity and rapidly-increasing land values, it is likely this issue will be back in front of the Board many more times in the near future.