COEUR D'ALENE, Idaho — It was a deal the Idaho Department of Lands couldn't refuse, reports the Coeur d'Alene Press.
When the state had a chance to bid on almost 18,050 acres of timberland spread across the five northern counties, officials didn't hesitate.
“Adding an additional 18,000 acres of timberland to the endowment portfolio increases future revenue for the beneficiaries while also supporting Idaho’s broader economy,” IDL director Dustin Miller said.
The land included in the bid package was offered as a package deal and offers good quality timberland, IDL public information officer Sharla Arledge said. Proceeds from the sale of endowment cottage sites and commercial real estate were used to pay for the properties.
Beyond generating ongoing revenue for endowment beneficiaries, IDL officials said the purchase keeps working forests working, supports Idaho's forest products industry, and preserves recreation opportunities for the public. The purchase was authorized by the State Board of Land Commissioners in November 2022.
In the $50.4 million deal, IDL acquired 6,222 acres in Shoshone County, 4,563 acres in Benewah County, 4,005 acres in Bonner County, 3,216 acres in Boundary County and 40 acres in Kootenai County on behalf of the Public School, Normal School and State Hospital South endowments. Almost 84% of the land acquired benefits Idaho’s public schools, IDL officials said in a press release.
The timberland was managed by Molpus Woodlands Group, LLC, an investment management company before being made available through a public offering and sold through a competitive sealed bid process.
"The acquisition aligns with Land Board direction to reinvest in timberland that meets the investment hurdle rate and to focus on acquisitions that increase working forests in Idaho," Arledge said.
Including this acquisition, the endowments have acquired over 54,000 acres of productive timberland by reinvesting $99 million of Land Bank funds, IDL officials said. The expected 4.1% net real rate of return from the acquisitions exceed the reinvestment hurdle rate set by the Land Board by nearly 25%.
IDL officials said the newly acquired lands will boost long-term timber sale volumes and revenue. The lands features younger trees, which means more mature trees on endowment lands can be harvested while allowing the agency to increase future timber sales volumes.
The impact on endowment timber sale volume and revenue will be modeled in 2024, IDL officials said.
While endowment timberland makes up 6% of the state's forests, it contributes 25% of the sawlogs and fiber harvested in Idaho. The forest products industry contributes $2.5 billion to Idaho’s economy annually.
“This timberland acquisition supports industry in our northern counties with a reliable supply of raw materials,” added Miller. “In turn, industry provides stable, good paying jobs for the citizens of Benewah, Bonner, Boundary, Kootenai and Shoshone counties.”
While endowment land is not subject to taxation, impact of the acquisition on the five counties is limited. IDL officials said records show property taxes on the parcels totaled just over $46,138 in 2022, or about $2.56 per acre. In Benewah County, taxes totaled $14,080.60; in Bonner County, $8,607.60; in Boundary County, $6,778.78; in Kootenai County, $87.81 and in Shoshone County, $16,583.58.
“Given IDL’s long-term commitment to maximizing revenue from endowment land, the revenue we generate from this newly acquired forestland will far exceed tax receipts through increased cash distributions to our public schools and other beneficiaries,” Miller said.
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