County to consider submitting application for easement on school trust land
After about five years of discussions between a local group and the Montana Department of Natural Resources and Conservation, the county is planning to submit an application for a conservation easement for about 80 acres of school trust land on Fox Farm Road.
During their March 14 meeting, County Commissioners will consider submitting the application to DNRC, an action that will start the formal process.
Commissioner Joe Briggs said the action doesn’t mean the county is committing to owning the easement, and is contingent on the private group raising the funds to purchase the easement and an agreement between the county and the private group for the long-term management of the property.
The action is a “long time in coming,” Briggs said.
Andy Burgoyne at DNRC said that once the application is received, the agency will start the process for a new appraisal.
Burgoyne said that timeline depends on the procurement process and availability of the selected appraiser.
He said one to three months is a conservative estimate for getting the new appraisal, but it could take longer.
Al Rollo, of the local group Missouri River Open Lands, said that that they have raised more than $100,000, but some has gone toward a survey and some will go toward the appraisal costs.
To obtain an easement, a public entity would have to pay fair market value for the land.
In 2018, the land was appraised at $1.2 million, but that appraisal has expired and the entity wanting the easement would have to pay for a new appraisal, according to DNRC.
Burgoyne told The Electric in 2022 that he doesn’t anticipate the property value to have decreased.
The appraisal is good for one year to establish the property value and then DNRC sets deadlines of completion of incremental steps in the process as soon as the application is received and deemed complete, Burgoyne said.
In 2018, DNRC began considering options for the land since it wasn’t generating revenue for the school trust, which is the agency’s mandate, Burgoyne said.
“The first purpose of state trust land is to generate revenue, this isn’t generating hardly any revenue,” Burgoyne said. “Our mission doesn’t allow us to just let land sit vacant.”
The local group expressed an interest in obtaining an easement to keep the primarily vacant land as open space, but has yet to raise the funds required or get the appropriate agreement from either the city or county, as the land can’t be held by a non-profit or private entity, according to DNRC.
In April 2020, County Commissioners unanimously voted to send a letter to DNRC expressing their interest and willingness to obtain an easement for the school trust land. The property is two parcels totaling about 80 acres.
Burgoyne said they had received that letter in 2020, but had yet to receive an application for an easement.
If the county pursues an easement, it would have to fill out an application and go through the state land board approval process. If approved, they’d have one year to raise the fair market value payment, according to DNRC.
If the county was granted the easement, it would also become responsible for maintenance and management of the property, which could include weeds, mowing, pest control and law enforcement, according to Burgoyne.
According to DNRC, state trust lands were granted to the state by the federal government under the Enabling Act at the time of Montana’s statehood in 1889.
The future of the land is in question because state law mandates that the land generate revenue for the state’s school trust fund.
The property is currently vacant other than a radio communications tower on the southern end that is under a commercial lease and generating about $3,000 annually for the Montana School Trust Land program, according to DNRC.
The mandate for school trust lands is that the properties make money for the school trust. The property on Fox Farm benefits the University of Montana.
Since the property isn’t generating anything near its value, DNRC began looking several years ago at options to add conservation options, develop or sell a portion of the land.
Conservation options are considered first, but if none are proposed through a letter of intent, commercial, residential or industrial development will be considered. No matter the proposed use, the department is required to get fair market value for the land.
DNRC staff said that the agency will work with the community to develop conservation options if there’s interest from local groups or individuals.
The property is located outside the city limits and is bounded by Fox Farm Road on the west, 45th Avenue Southwest on the south, Grizzly Drive on the north, and the Missouri River and Island View Drive on the east.
The Fox Farm property is divided into two lots. The northern portion of the parcel is roughly 43 acres with 1,500 feet of Missouri River frontage. The southern portion is about 39 acres with no river frontage.
The north half can’t be sold because of the river frontage, but it could be exchanged for a parcel that is equal or more valuable. That has been interpreted to mean equal or more riverfront on a similar river, DNRC told The Electric in 2019. Past experience has shown there’s a high bar for such a trade.
The north line is the city-county boundary with major utilities stubbed at this line. The property is currently in the county.
“The lands were granted for the sole purpose of generating income for support of the common schools and other public institutions. The Enabling Act mandated that the lands, along with their proceeds and income, would be held in trust for the beneficiaries. As a means of generating revenue, a stipulation in the Enabling Act prohibited the state from disposing of an interest in these lands unless fair market value is received. ‘Disposal of an interest’ is considered to be the sale or exchange of the lands, or the granting of any use of them through issuance of a lease, license or easement, if such use is deemed to have a compensable value. Recreational use has been deemed to have a compensable value,” according to a DNRC fact sheet.
Originally, Sections 16 and 36 of every township were granted as school trust lands, but some of those sections couldn’t be acquired because they were already homesteaded, were within Indian Reservation boundaries, etc., according to DNRC.
The state was able to acquire other lands in lieu of those that couldn’t be acquired. At one time, the Department of State Lands made loans on private lands and held the deed as collateral. If the private landowner defaulted on the loan payments, the state acquired the deed to those lands, so the state trust now holds more than the original sections, according to DNRC.
The state received land to the north and east of the property and sold those parcels around 1920. Those areas are now residential.
DNRC staff identified the tract as having significant development potential about 10 years ago and held a public meeting to gauge interest. At that time, a group of local landowners emerged who were interested in maintaining the parcel as open space, but a formal proposal never materialized and the entire project fell by the wayside, according to DNRC.
Commercial leases are available for up to 99 years and are subject to a competitive bid process. All trust land sales are subject to public auction and Land Board approval, according to DNRC.
A shopping center that includes Cabela’s was opened in recent years on DNRC school trust land through a long-term commercial lease.