The state’s purchase of 1 million acres of land in southern Wyoming could generate a long-term return of about 7.25% if the state purchased the rights to trona in that land as well, a consultant told state officials Monday.
Becky Gratsinger, CEA and senior consultant with R.V. Kuhns, said if the trona was removed from the purchase, the purchase price would be lower and the long-term return could be higher, around 11%, but the risk for that return would be higher as well.
Gratsinger’s comments came as the State Loan and Investment Board held a public hearing to discuss the state’s possible purchase of 1 million acres of land currently owned by Occidental Petroleum, an potential investment referred to as “Project Bison.”
The board, made up of the state’s top five elected officials, took comments and heard reports on the proposal during a lengthy meeting. At around 2:30 p.m., members moved into an executive session and had not returned to open session by 4:30 p.m.
Wyoming officials are to decide by Wednesday whether they will submit a bid for the land, which also includes about 4 million acres of mineral rights.
State Treasurer Curt Meier, one of the state’s top five elected officials who make up the SLIB, said if the board members decided after Monday’s meeting to submit a bid, it would just be the start of a lengthy process that could end with the state’s purchase of the property.
“This is a non-binding bid, more or less,” he said. “This is just authorizing the process to start, not authorizing the process to finish.”
During the hearing, conducted via an onllne video conferencing app, almost 20 people commented on the purchase in their first opportunity to address the issue with the SLIB.
A number of those speakers criticized the board for what they said was a lack of transparency in examining the issue.
“You have dissembled, misdirected, stonewalled and hidden what you are doing,” said Larry Wolfe.
“At this time, many of us are in the dark about this deal and are shocked and disappointed at the lack of transparency and the enormity of the transaction,” said Julia Willis.
But Gov. Mark Gordon, chairman of the SLIB, said the state has been as open as possible in discussing the potential deal and noted that at least four more public hearings will be held to collect comments before any deal wins final approval if the state decides to proceed with the purchse.
Several others noted that the nature of a real estate purchase makes it necessary to keep some information confidential.
“Why would you present your bid documents,” said state Rep. Pat Sweeney, R-Casper. “That’s like handing your competitors the relevant knowledge that we have as a state.”
Current plans call for money for any purchase to come from the state’s Permanent Mineral Trust Fund and Common School Fund.
Officials said if the land is purchased, some of it might be leased to mineral producers.
Rep. Clark Stith, R-Rock Springs, said he was worried that the state’s ownership of the land could lead to political pressures being put on land managers.
“The temptation will be for the trona industry to come to the governor, the Legislature … and say ‘Give us a break on the rent of we’re going to have to lay people off,’” he said.
Other legislators said they supported the purchase as a wise investment for the state.
“This really is a once-in-a-lifetime opportunity for the state of Wyoming and all our citizens,” said Sen. Eli Bebout, R-Riverton.
Several speakers said they wondered why Wyoming officials believe the state can make money through mineral production on the land when mineral companies have been unable to do so.
“We have a history in Wyoming of thinking we can always outthink the mineral industry,” said Anne McKinnon. “That’s a temptation we’ve always had and it’s never proven to be a good idea. I worry about us taking this investment on thinking we can play with the big boys.”
Meier said he thought it was possible Wyoming would not have the successful bid for the land, but might get an opportunity to buy some of it from the successful bidder.