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New land lease plan will raise rates

The latest step in Secretary of State Delbert Hosemann’s plan togenerate maximum revenue for schools from 16th Section lands willincrease the price of certain leases enormously and could put anend to residential leases on school land, officials said.

Lincoln County School District 16th Section Land Manager StanLong told the county school board Monday that payment methods forresidential and farm residential leases were to be converted from aper-acre rate to 5 percent of the land’s appraised value – atransition he said would cause some leases to increase as much as400 percent. Those holding farm residential leases will be allowedto convert those leases to agricultural leases in order to avoidthe coming increase, he said, though the conversion is not withoutrisks of its own.

“The residential people will just have to bite the bullet,” Longsaid.

According to Long’s most recent 16th Section land survey fromthis summer, the county has 42 residential and 40 farm residentialleases. 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 tolease the land. Long said the average value of 16th Section land isaround $2,000 per acre, so when that lease is renewed under theappraisal-based system, the yearly rent will climb to $2,300 peryear.

Farm residential lessees can escape the appraisal system bypaying the school district to have their land reclassified asagricultural, but doing so will not only move the land under a newset of guidelines, but force lessees to run the risk of losing theland all together. When a lease is reclassified, Long said, it willhave to be advertised for three weeks and others will have a chanceto bid against it.

“There’s no safety net,” he said. “The highest bidder receivesthe use of the property. This will get us out of the farmresidential business.”

Most residential lessees will have a while to digest the newinformation, Long said.

He the district signed most of its residential leases earlierthis year, and while some will come up for renewal off and onannually, the majority are set under the old per-acre system forthe next 10-15 years.