State auctions lakefront property

It’s a rare opportunity to own a sliver of Montana paradise. 

Eight state-owned lakefront properties are set to go on the auction block in February.

The properties on Beaver Lake west of Whitefish, Echo Lake near Bigfork and Lake Rogers west of Kila range in sizes from one to four acres, and some are developed with cabins and other improvements. Minimum bids start at $110,000 for 1.2 acres on Rogers and go up to $430,000 for 1.8 acres on Echo Lake. Four cabin sites area available on Beaver Lake.

Montana Department of Natural Resources and Conservation director John Tubbs describes the auction as a unique opportunity to purchase “some outstanding waterfront properties.”

“We hope to see people take advantage of this program,” Tubbs said.

The auction is part of an ongoing effort by the state to resolve longstanding disputes over the state cabin site leasing program.

About 756 people hold multi-year leases for the state cabin sites, which are mostly located on Western Montana lakes.

Leaseholders were jarred following a 2009 reappraisal of these properties that resulted in annual fees that were to double or triple in some cases. A law passed in 2011 aimed to soften the financial impacts on leaseholders, but it was challenged by a lawsuit that argued the state constitution demands a full market value return on state trust properties.

A 2015 settlement ultimately voided the law and decided that the state must lease the land for 5 percent of its value, or $800, whichever is higher.

With the increased fees, many cabin-site leaseholders wanted to get out of their contracts, or have the option to purchase the property outright.

Leaseholders were given the option to do just that through a voluntary sale program implemented by the 2013 Legislature.

While leaseholders don’t know how much is being bid, they do know if bids are being placed, and ultimately, they have the right to match the highest bid. If they are outbid, leaseholders can sell their improvements to the next tenant.

The State Land Board sets the minimum bid for the lease lot and sets the maximum amount that improvements can be sold for.

The state puts proceeds from the sale in a special land banking account and the revenue can be used only for the acquisition of other property that provides equal or higher revenue for the public trusts.

According to Emily Cooper with the DNRC, about 200 leaseholders have expressed interest in opting into the sale program. Over the next two years, 80 sites across the state will go up for auction.

“More will be coming up on Beaver Lake over the next two years,” she said.

During a pilot sale program in 2014, four of five nominated properties were sold, generating $730,000 in revenue for several trusts, including Montana Tech, Montana State University and the Pine Hills School in eastern Montana.

Prospective bidders interested in the next auction set for Feb. 3 must complete an Offer to Purchase and submit it to the DNRC’s Headquarters in Helena by 5 p.m. on Jan. 14.

Along with the Offer to Purchase, participants are required to submit a bid deposit in the form of a cashier’s check or other certified funds made payable to DNRC; personal checks are not accepted. The deposit amount will equal five percent of the minimum bid for a given property, and will be refunded if the bidder is unsuccessful.

Photographs of each property and more details, including open house dates, are available on the DNRC website at http://dnrc.mt.gov/divisions/trust/real-estate/cabin-home-site-sale.