IDL: Responds to critical letter

I am responding to a letter to the editor recently submitted by Orofino resident Julie Chenoweth.

Ms. Chenoweth’s comments focused on how the Idaho Department of Lands (IDL) reports the performance of commercial land assets that support public schools and other State institutions. In particular, she questioned how the agency came up with the value appreciation figure for commercial assets in the 2012 annual report.

The report shows the value appreciation of commercial assets was 21.27 percent in FY12. The figure was determined by a professional broker’s price opinion that compared the value of the buildings at the beginning of the year to their value at the end of the year after extensive value-adding renovations had taken place.

The IDL spent much of the past five years addressing maintenance needs on the buildings to increase their value and enhance leasing opportunities long-term. Cash returns currently are 1.2 percent but improving with the rest of the economy. Cash returns provide the short-term snapshot of the assets’ performance and have been low because of the economy and the money spent on the maintenance needs.

Fortunately, the market is on the uptick and investments in the buildings have been completed. The value appreciation figure in the annual report reflects these improved market conditions and value added to the buildings to show the long-term return on asset.

The IDL appreciates the opportunity to provide some context to help Idahoans understand how state endowment trust lands — including a small portfolio of commercial land assets — are managed to continue increasing revenues for public schools for generations.

EMILY CALLIHAN

IDL Public Info Officer