Sometimes when you want to get your way, more money helps.
The state’s Joint Appropriation Committee passed a budget amendment Thursday, urging the State Board of Land Commissioners to sell the Kelly Parcel in Teton County for no less than $100 million directly to the federal government.
The Kelly Parcel is a pristine 640 acres of state land in Teton County that has been recommended for public auction by the Office of State Lands and Investments (OSLI).
The purpose of the budget directive is to help the state guarantee that the federal government ends up as the buyer of the parcel.
There was significant outcry throughout the state after OSLI made its proposal for a private auction, in that it could lead to a private developer casting the winning bid for the land and then using it for luxury home development.
The land itself has been appraised at $62.5 million, which is roughly the amount the federal government has specifically appropriated out of the Land and Water Conservation Fund to buy it.
The money from the sale would be placed in the state's Common School Permanent Land Fund, and at $100 million, would generate about $4 million per year in income, far more than the $2,800 in annual leasing revenue it generates.
But sold in a private auction, there's no guarantee a private buyer wouldn't still pay more.
With a minimum $100 million benchmark 160% above the appraised value, private philanthropists would have to pitch in the difference above its appraised value to help the federal government buy it.
Rob Wallace, former assistant secretary of the Interior for Fish and Wildlife and Parks and a major advocate for direct disposal of the parcel to the federal government, said raising the $37.5 million would be a challenge, but doable.
“It would be a huge lift for philanthropy,” he said.
In 2016, private philanthropy raised $23 million, roughly half the cost of another state parcel sold to the federal government.
Strategic Proposal
If the proposal passes, which would still need to be approved by both chambers of the Legislature in the upcoming budget session, it gives legislative direction to the State Board of Land Commissioners to dispose of the Kelly Parcel directly to the federal Department of the Interior.
Instead of being considered as a standalone bill, the proposal is being lumped into the 2025/2026 biennial budget and would only require a majority vote for approval instead of the two-thirds needed on standalone bills during a budget session.
Although there is much doubt that the Board of Land Commissioners could directly sell a piece of land to any buyer, state Rep. Liz Storer, D-Jackson, said there is universal agreement that the Legislature can.
It did it in 2016 for the Antelope Flats parcel that private philanthropists assisted with.
How the Board of Land Commissioners would receive this directive remains to be seen.
In December, the State Board of Land Commissioners unanimously voted to delay taking action on the Kelly Parcel to explore options for a potential land exchange that frees up mineral rights in other parts of the state.
The board is made up by Gov. Mark Gordon, Secretary of State Chuck Gray, Superintendent of Public Instruction Megan Degenfelder, Treasurer Curt Meier and State Auditor Kristi Racines.
Close Win
The proposal passed the Appropriations Committee on Thursday on a 7-5 vote.
Voting for the sale were state Sens. Tara Nethercott, R-Cheyenne; Jim Anderson, R-Casper; and Mike Gierau, D-Jackson; and Reps. Bob Nicholas, R-Cheyenne; Clark Stith, R-Rock Springs; Trey Sherwood, D-Laramie; and Tom Walters, R-Casper.
No votes were cast by state Sens. Tim Salazar, R-Riverton; and Dave Kinskey, R-Sheridan; and Reps. Lloyd Larsen; R-Lander, Bill Henderson; and R-Cheyenne, Dave Zwonitzer, R-Cheyenne.
Gierau, who brought the proposal, drew a visible sigh of relief after it passed.
Nicholas, the Appropriations co-chair, originally didn’t vote on the issue but did after being prodded by Kinskey for not doing so.
“You know Mr. co-chair, they say the hottest places in hell are for those who reserve their neutrality,” Kinskey chided with a smirk.
This swayed Nicholas to vote “aye.”
Stith said he voted to support the proposal to advance the issue to a full Legislature to decide on.
"I would like to hear more evidence about the pros and cons," he said.
Stith also said he would also like the Legislature to consider trading the parcel for valuable land along I-80 in order to prevent the government from shutting down economic activity in the Rock Springs area. This is in reference to a proposed Resource Management Plan of the BLM that many have criticized for shutting down economic activity with environmental protections.
Anderson questioned if the $100 million would be limited to the DOI or any prospective buyer. Gierau said the money could only be used toward facilitating a direct sale to the government.
Kinskey then spoke against the proposal, although he did compliment the Kelly Parcel as “beautiful.”
“I still remain convinced a public sale is going to generate a lot of money for the schools,” he said. “I think we have a fiduciary obligation not to limit what our opportunities are.”
Leo Wolfson can be reached at leo@cowboystatedaily.com.
