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New land lease plan will raise rates
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| By: ADAM NORTHAM, DAILY LEADER Staff Writer |
August 04, 2009 |
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The latest step in Secretary of State Delbert Hosemann's plan to generate maximum revenue for schools from 16th Section lands will increase the price of certain leases enormously and could put an end to residential leases on school land, officials said.
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Lincoln County School District 16th Section Land Manager Stan Long told the county school board Monday that payment methods for residential and farm residential leases were to be converted from a per-acre rate to 5 percent of the land's appraised value - a transition he said would cause some leases to increase as much as 400 percent. Those holding farm residential leases will be allowed to convert those leases to agricultural leases in order to avoid the coming increase, he said, though the conversion is not without risks of its own.
"The residential people will just have to bite the bullet," Long said.
According to Long's most recent 16th Section land survey from this summer, the county has 42 residential and 40 farm residential leases. Most of the residential leases are five acres and below, but the biggest residential lease is 23 acres.
At $12.50 per acre per year, the lessee pays $187.50 per year to lease the land. Long said the average value of 16th Section land is around $2,000 per acre, so when that lease is renewed under the appraisal-based system, the yearly rent will climb to $2,300 per year.
Farm residential lessees can escape the appraisal system by paying the school district to have their land reclassified as agricultural, but doing so will not only move the land under a new set of guidelines, but force lessees to run the risk of losing the land all together. When a lease is reclassified, Long said, it will have to be advertised for three weeks and others will have a chance to bid against it.
"There's no safety net," he said. "The highest bidder receives the use of the property. This will get us out of the farm residential business."
Most residential lessees will have a while to digest the new information, Long said.
He the district signed most of its residential leases earlier this year, and while some will come up for renewal off and on annually, the majority are set under the old per-acre system for the next 10-15 years.
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©The Daily Leader 2009
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