CHEYENNE — A pristine 640 acres of land in Teton County, Wyoming, known as the Kelly Parcel is coming to the end of its days as a political football.
The State Board of Land Commissioners approved by a 3-2 vote a $100 million sale of the state-owned land to the federal government and Department of Interior at its meeting Thursday. The land will be incorporated into Grand Teton National Park.
The sale of the Kelly Parcel will be predicated on the governor’s final record of decision for the BLM’s Rock Springs Resource Management Plan, which is expected to be released very soon. The $100 million from the sale also may be used to buy mineral-rich federal land in the Powder River Basin.
Voting in support of the sale were Gov. Mark Gordon, State Treasurer Curt Meier and State Auditor Kristi Racines. Voting against was Secretary of State Chuck Gray and Superintendent of Public Instruction Megan Degenfelder.
Rob Wallace, the former assistant secretary of the Interior for Fish, Wildlife and Parks, told Cowboy State Daily that it will be the most expensive land purchase ever made out of the federal government’s Land and Water Conservation Fund since it was created in 1965.
The major push to sell the state land is so that a much larger sum of money can be generated from it to support Wyoming’s schools than what it now produces in leasing revenue, which is less than $3,000 a year.
Degenfelder Wanted Trade
Degenfelder and Gray warned that the sale was rushed and that Wyoming needs to further explore getting mineral opportunities in exchange for the sale of the Kelly Parcel.
Degenfelder made a number of attempts to try and block the sale based on her belief that it should be tied to a land exchange for mineral extraction opportunities in the Powder River Basin, an effort she has been trying to lead for nearly a year.
After having an encouraging meeting with the BLM’s Wyoming leadership about a possible exchange, Degenfelder said she became confident this route could be a realistic solution.
The land board voted to delay making a decision on selling the land and to explore opportunities for a land exchange with the federal government at its meeting in December 2023.
Degenfelder clarified Thursday that she doesn’t want the Kelly Parcel to be developed under any condition, but believes the possibility of exchanging the land for mineral rights in another part of Wyoming represents the state’s best financial opportunity. She believes the state needs to seek the highest revenue possible for its land and unequivocally support continued energy production.
“My only mission here today is to not sell Wyoming short,” she said. “Nothing worthwhile is ever easy.”
Buy More Land
She brought an amendment to condition the sale with the purchase of at least 100,000 acres of land in the Powder River Basin. That amendment was rejected on a 3-2 vote with Gordon, Racines and Meier voting against it.
Meier said the state isn’t giving up on a future land exchange by moving forward with the deal and stressed that it needs to take advantage of a guaranteed deal that’s on the table in order to facilitate the board’s duty to provide the most benefit to the people of Wyoming.
Earlier in the day, the State Board of Land and Investments, which is made up by the same members, ruled that proceeds from the Kelly Parcel sale be used toward the potential purchase of federal lands identified in the Powder River Basin.
With the Kelly Parcel sale money received, Wyoming would then have up to $162 million at its disposal to use for that purpose when combined with the money of other state lands it has already sold.
Degenfelder also attempted an amendment that the sale be predicated on an updated appraisal on the Kelly Parcel. No official appraisal has been done on the land since 2022.
Meier spoke against this, saying it could still be as long as seven years down the road until the sale is complete, which would lead to a much higher value on the land and likely complicate the negotiating process.
The amendment was also rejected on a 3-2 vote.
Timing Of The Election
Many people who spoke in favor of the sale Thursday expressed urgency in completing the sale and warned that it’s an opportunity that could soon go away.
Former President Donald Trump’s administration spurred the most recent progress on the Kelly Parcel, allocating funds for the purchase of the land within the 2020 Great American Outdoors Act.
Wallace was working in the Trump administration when this passed. If the Kelly Parcel deal isn’t performed quickly, he warned that the money set aside for it by the federal government could easily be snatched up for the purchase of national park land somewhere else.
Holding out for a land swap, Wallace said, can also be a difficult process that sometimes takes decades to complete.
Even with a potentially more Wyoming-friendly Republican majority taking over the executive and legislative branches, Wallace said it would still be no guarantee the sale would remain on the table forever. Doing a sale based on the contingency of another sale, he said, would be a more fruitful approach.
A number of environmental advocates also spoke in support of the sale Thursday.
Josh Metten, a member of the Theodore Roosevelt Partnership, pointed out that broad bipartisan support exists for the sale of the Kelly Parcel to the Department of the Interior. When the issue went out for public comment late last year, about 10,000 public comments were made, almost all advocating against selling the land to a private buyer.
Gray Criticizes Gordon
Gray told Cowboy State Daily in a statement that selling the Kelly Parcel before President Joe Biden leaves office doesn’t make any sense.
“This poorly timed, rushed sale to the Biden/Harris administration is just another example of Governor Gordon being unable to negotiate a good deal in the interests of Wyoming citizens,” he said.
Gray said during the meeting he’s felt left out of negotiations with the federal government to finalize the sale, a process which state Sen. Mike Gierau, D-Jackson, said he’s been helping spearhead. He said the governor didn’t inform him the matter would be going before the board until 4:52 p.m. last Friday.
“I think that’s a source of some disappointment," he said.
Gray also specifically accused Gordon of working with Racines and Meier on the sale without including him and Degenfelder.
Gordon said this isn’t true and informed the board as soon as progress had been made on the issue late last week.
Gray also questioned the timing of changes on Powder River Basin aspects of the sale, which he described as “interesting” when considering the presidential election that occurred on Tuesday.
“We’re six years into this governor’s administration and we haven’t seen any question on it?” Gray asked of Gordon.
Degenfelder agreed about the “interesting timing.” She spearheaded a task force this year to explore the possibility of exchanging lands in the Powder River Basin for the Kelly Parcel.
Gordon said any insinuations about him having an ulterior motive are “skewed” and inaccurate.
“For anyone who has doubts about a nefarious intent here, there’s no nefarious intent,” he said.
Gray also accused Gordon’s administration of missing numerous opportunities on energy deals since taking office and that approving the sale Thursday would be too rushed.
“You have to have good timing and have to be able to know when to negotiate tough,” he said.
Meier and Rep. John Bear, R-Gillette, pointed out that Trump taking over as president again in January, a change they believe will make a Kelly Parcel sale easier.
Rock Springs Connection
An interesting part of the Kelly Parcel sale involves its connection to a region of land hundreds of miles away in Rock Springs that has become embroiled in a previously unrelated political matter.
As a result of legislative action last spring, the purchase of the Kelly Parcel is predicated on the BLM not moving forward with its “Alternative B” in its Resources Management Plan for the Rock Springs area, a plan that has been highly contested throughout Wyoming.
The BLM has indicated it’s not moving forward with this option and has offered more of a compromise when it comes to mineral development, but that process is still not complete, which Gray specifically noted.
Meier initially said he saw this action as a directive from the Legislature, but Degenfelder said she saw it as an “if” Wyoming moves forward with the sale, not an order to perform a direct initiation of the sale.
A significant amount of discussion followed on whether this action from the Legislature was a binding order or not. The state attorney general’s office clarified that it was not.
Gray said he doesn’t understand why Wyoming would want to encourage President Joe Biden’s administration to make a final order on the Rock Springs RMP, which he believes moving forward with the Kelly Parcel sale will do.
“Why on Earth would we want to speed up a Record of Decision?” he questioned. “This whole notion … is really problematic to me.”
Racines disagreed that facilitating the sale would amount to giving Biden leverage over the Rock Springs RMP and said completing the deal as is has been more of a chore.
Senate President Ogden Driskill, R-Devils Tower, and Meier also said the Record of Decision will likely be complete no matter what before Biden leaves office, and state Sen. Mike Gierau, D-Jackson, told Cowboy State Daily he expects it to be released later this month around Thanksgiving.
Racines compared the board’s approval of the sale Thursday to the purchase of a house, in that although a final contract is signed, it doesn’t mean the seller or buyer can’t back out of the deal if inspections don’t go well.
The governor would have the final go-ahead on the sale once that record of decision is finalized, which Gordon stressed Thursday he will scrutinize. Closing on the purchase would be within 60 days, but could be extended upon mutual agreement by all involved parties.
The Legislature also put stipulations on the sale requiring the land be sold for at least $100 million and continue to be leased for livestock grazing and kept open for hunting opportunities.
Should I Stay Or Should I Go?
Gierau said voting to approve the sale simply keeps the process moving forward while voting against could have led to Wyoming missing out on a valuable opportunity.
Bear disagreed that the requirements put forth by the Legislature on the resource management plan have been met as no final record of decision has been made. Gordon said he would be willing to wait until this happens to make a sale.
Bear also described the recent developments on the Kelly Parcel “a rushed event” taking place under a “lame duck administration,” and said more time should be considered for a land exchange.
He and Sen. Bob Ide, R-Casper, argued that selling the Kelly Parcel directly to the federal government comes in contradiction to a recent amicus brief Gordon and legislators like Ide filed in a Utah lawsuit fighting the BLM’s ownership of lands in Utah.
“We’re rushing through a deal and not getting the best deal for the state of Wyoming,” he said.
The sale of the Kelly Parcel has been a topic of discussion since at least 2003 and came on the land board’s docket in 2010.
Sweetwater County Commissioner Taylor Jones, husband of Sen. Stacy Jones, R-Rock Springs, urged the board to take its time on the sale and wait for the record of decision. He believes the Kelly Parcel is the state’s last “bargaining chip” for the RMP.
Others like Casper resident Chris Peterson disagreed, who said he finds using the Kelly Parcel as a bargaining chip as off-putting when considering the very different nature of it and the RMP.
Rep. Sandy Newsome, R-Cody, also spoke to the money that Wyoming could lose out on by delaying the sale further. The state only made $2,845 off leasing and temporary use permit revenues on the Kelly Parcel in 2023 compared to the $6.4 million in annual revenue the proceeds of the sale could generate off investment gains.
At a rate of 6.4% interest, the land would be expected to appreciate $22 million to $42 million over the next 10 years, in addition to $64 million in interest earnings. These revenues would go toward supporting Wyoming’s schools.
Meier said this investment could eventually reach $1.6 billion in the near future.
Driskill said he sees the sale of the Kelly Parcel as a once-in-a lifetime opportunity Wyoming and an opportunity to “have our cake and eat it too.”
The fact the Legislature put on a number of conditions to the sale, yet the federal government still wants to purchase it, Driskill finds incredible.
“This is a great opportunity to do something for education in Wyoming,” he said.
As part of the sale, the Grand Teton National Park Foundation will chip in $38 million of the cost to assist the federal government with the purchase.
Leslie Mattson, president of the Grand Teton National Park Foundation, warned that delaying the sale could put her organization at risk of losing the $38 million it has offered up as part of the sale.
She said planning for the Kelly Parcel has delayed many other projects the Foundation has wanted to tackle for Grand Teton.
Auctioning To Exchanging
In 2023, the Office of State Lands and Investments (OSLI) recommended selling the Kelly Parcel in a public auction, which Gray argued was “inappropriately” put on the state lands disposal list at that time. This proposal was met with large public opposition and led to the board delaying making a decision on the parcel.
Racines made a motion to formally reject the auction proposal at Tuesday’s meeting, which the board unanimously approved.
After the Kelly Parcel sale, OSLI will use the proceeds to pursue possible purchase of federal lands with potential for minerals development.
About 120,000 acres of continuous land were identified by Degenfelder’s task for state-run mineral leasing that haven’t been used for mineral development yet.
OSLI Interim Director Jason Crowder said it’s unknown what the full mineral leasing potential of this land would be, which Degenfelder agreed is a common scenario for energy production.
Leo Wolfson can be reached at leo@cowboystatedaily.com.
