State of Idaho looking to sell exclusive resort island at public auction 

An ‘exclusive’ island, owned by the state and situated on a mountain lake in the resort town of McCall, appears to be finally hitting the auction block later this summer even as county officials object. 

The Idaho State Board of Land Commissioners voted unanimously on June 21 to sell off Cougar Island, which is located on Payette Lake, to the highest bidder at auction. The island is located in the resort and recreation community of McCall, where thousands of people enjoy Payette Lake in the summer and every winter and snowboarders and skiers descend Brundage Mountain. 

Idaho Department of Lands officials told Land Board members Cougar Island is an underperforming asset that is currently divided into five leased sites, four of which are unleased. The Land Board is made up of Idaho’s governor, attorney general, superintendent of public instruction, secretary of state and state controller. The Land Board advises the Idaho Department of Lands on how to manage more than two million acres of state endowment lands.

Idaho Department of Lands real estate bureau chief Josh Purkiss recommended selling the island while the real estate market is still hot to generate financial returns that will benefit public schools and other state programs.

He said last year Cougar Island generated $32,400, while it has been appraised in the past at $4.8 million.

Cougar Island “is a very unique island that is an underperforming asset for the endowment, returning only .6%,” Purkiss told Land Board members. “So we would like to see this sold here in early September.” 

On May 9, Valley County commissioners wrote a letter to Idaho Department of Lands officials opposing auctioning off Cougar Island, which is a source of drinking water for the community.

“Cougar Island exists as one of the most iconic features of Payette Lake and Valley County Commissioners do not view its private sale as a benefit to residents and visitors of Valley County and the City of McCall,” commissioners wrote.

“Selling such beloved lands — enjoyed by generations of Idahoans — would be a permanent and irreversible black mark in our state’s decorate history of conserving special places so that future generations can share those same places and experiences. The weight of losing the island will not just be carried by those lucky enough to be elected leaders, but by all future generations of Idahoans,” commissioners added in the letter.

Valley County Commissioner Sherry Maupin followed up on the letter and asked Land Board members to delay or cancel the auction. Instead, she asked Land Board members to consider entering into a long-term agreement that would allow Valley County or another public entity to buy the land over a period of 20 years, as opposed to all at once at auction, or consider a land exchange. 

“The need to allocate public funding for an undetermined purchase price makes it extremely difficult for public entities to participate in the auction process,” Maupin told Land Board members. 

“This is historical to Payette Lake,” Maupin added. “Having housing out there would be a huge change so we are just asking for some time to try and find mitigating, something to do that we can do together for the future.”

Why did Idaho officials vote to auction off an island in the mountains?

During the Land Board meeting last week, Idaho Attorney General Lawrence Wasden told Maupin he was interested in her ideas and wanted to see if Valley County officials had made a formal application or had an estimate for the returns any of her deals would generate.

Maupin said she didn’t and reiterated that it is difficult for government entities to participate in auctions because the price is unknown until a winning bidder is selected.

“​​We are trying to raise funds as fast as we can,” Maupin said.  

Wasden said several times during the meeting his responsibility is to do whatever it is that will generate the most money from the island.

​​”I am interested in the market,” Wasden said. “That is actually what our decision making basis is, and that our objective is to obtain the maximum long-term financial return.”

When Idaho became a state, the federal government granted, or endowed, land to the state under the condition that the endowment lands be held in a trust to produce maximum long-term benefits to a series of beneficiaries, the largest of which is public schools. The state now has over 2 million acres of endowment lands, including the land on Cougar Island. 

Wasden asked Purkiss for his advice on how to get the most money out of it.

Purkiss recommended selling this fall, while the market is still active and before interest rate increases and other factors slow things down.

“Now is the right time; I don’t think waiting for the next cycle is prudent,” Purkiss said. “This, again, is not generating very much revenue and getting it sold is in the best interest of the endowment.”

Hasn’t the state wanted to sell Cougar Island for years?

This isn’t the first time that the Land Board has voted to sell off Cougar Island or other cottage sites around Payette Lake. 

In 2010, the Idaho Land board directed the Idaho Department of Lands to “unify” 523 cottage sites on state endowment lands, according to state records provided in connection with the June 21 meeting. As part of the process, the state created five parcels of land on Cougar Island and set up a process to allow interested leaseholders of the land to participate in voluntary auctions for ownership.

On July 17, 2018, the Land Board voted to approve the voluntary auction for ownership for leased sites at Payette Lake, including Cougar Island. Then, in 2020, the Idaho Department of Lands staff created the Payette Endowment Land Strategy, or PELS, plan, which identified Cougar Island as a “tier one” property that should be sold within one to five years, Purkiss said. 

Because of the potential windfall from a sale and four of the five sites on Cougar Island being unleased, Purkiss and officials advise selling. 

Boise Dev reported in April that the state was again looking to move forward with an auction of Cougar Island. 

Jim Laski, an attorney who resides in Bellevue, has held the lease for the one leased site for the past 10 summers. He’s said he is interested in buying his leased site and urged Land Board members to move ahead with auction in July, a date he said state officials previously agreed to before recently calling him and telling him the auction would be delayed to allow for more marketing of the island and inspections of whether septic systems could be put in on any of the other unleased sites.

Laski said he has an appraisal and financing commitments in hand that would likely expire if the auction is delayed past July.

“It is not fair to me nor the interest of maximizing return to the endowment to allow a controversy over whether or not the newly created lots should be developed to remove me or delay me from my ability to participate in the auction,” Laski told the Land Board. 

After about 45 minutes worth of testimony and discussion, Land Board members voted unanimously to reaffirm the 2018 decision to sell Cougar Island at auction. Purkiss said a bidder would be able to buy the entire island, but it could also be divided up for auction.

“We will offer it in various ways, and whichever one generates the most revenue at auction will be the winner,” Purkiss told the Land Board. 

On Thursday, Idaho Department of Lands spokesperson Sharla Arledge told the Idaho Capital Sun the auction is tentatively for Sept. 8. The island is being marketed by the real estate marketing firm Corbett Bottles.

Idaho Capital Sun is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Idaho Capital Sun maintains editorial independence. Contact Editor Christina Lords for questions: [email protected] Follow Idaho Capital Sun on Facebook and Twitter.

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