(Idaho Department of Lands Press Release, January 19, 2023)
Boise, ID – Idaho Department of Lands (IDL) announced it purchased almost 18,050 acres of timberland spread across five north Idaho counties. Beyond generating ongoing revenue for endowment beneficiaries, this acquisition keeps working forests working, supports the forest products sector of Idaho’s economy and preserves recreation for the public. This purchase was authorized by the State Board of Land Commissioners (Land Board) in November of 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.
The timberland was managed by Molpus Woodlands Group, LLC, an investment management company and sold through a competitive sealed bid process.
IDL expects the newly acquired lands to positively impact its long-term timber sale volumes and revenue. “The new lands feature a younger age-class of trees which means more of the endowment’s mature timber can be harvested in the near term while also allowing us to increase our timber sale volumes into the future,” said IDL director Dustin Miller. The full impact on future endowment timber sale volume and revenue across all endowment timberland will be modeled in 2024.
“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,” said Miller.
Endowment timberland accounts for 6% of Idaho’s forests but contributes 25% of the sawlogs and fiber harvested in the state. 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.”
This land acquisition also preserves recreational opportunities for the public, allowing for activities such as hunting, fishing and camping. “The Land Board allows recreation on endowment lands as long as those activities do not damage the land or disturb revenue generating or land management activities,” said Miller.
While endowment land is not subject to taxation, the impacts of the acquisition on affected counties are limited. Records show property taxes on the acquired lands totaled $46,138 in 2022, or about $2.56 per acre. “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,” concluded Miller.
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The land was acquired using Land Bank funds which are the result of selling endowment cottage sites and commercial real estate. Including this acquisition, the endowments have acquired over 54,000 acres of productive timberland by reinvesting $99 million of Land Bank funds. 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%.
Also, to date nearly $130 million of Land Bank funds have been transferred to the permanent fund for investment by the Endowment Fund Investment Board. Approximately $66 million remains in the Land Bank, with about $17 million of that obligated to the University of Idaho Center for Agriculture, Food and the Environment. Cottage site sales are expected to continue in future years, although at a slower pace.
Acquisition maps for: