Sometimes, the best way to get a good lease value for a unique parcel of state trust land to take a different approach. A distinctive combination of sloughs, access points, production capabilities, and rental history led to DNR’s decision to offer a 200-acre parcel of Common School State trust land for lease under four separate lease parcels. What’s also unusual is that these parcels are on Puget Island, which lies within the Columbia River channel between Cathlamet, Washington, and Clatskanie, Oregon.
Historically, these trust lands were grazed and hayed. An adjacent trust land parcel was leased for hybrid poplar production. While watching the hybrid poplar potential, DNR used an interim strategy of single-year livestock permits for the 200-acre parcel. The short-term nature of the permits led to the land and fences becoming weary. The compromised land condition, coupled with the decision to shy away from the cyclical hybrid poplar industry, led to the decision to offer ten-year term livestock based leases because it would give an operator the time and incentive to plow resources into the land. The goal is to improve the overall ecological conditions and productivity (including operator profitability) of this unique parcel of state trust land.
Given the unique nature of the land, a sealed bid public auction was offered with several cropping and acreage options to a wide range of potential bidders. The auction was designed to allow prospective leasees the opportunity to:
- Bid on anywhere from one to all four parcels;
- Designate for each parcel bid upon, the number of acres in livestock grazing (at a set rent per acre) and the number of acres in dryland crops (at another set rent per acre);
- Submit a plan of operations for each parcel (and use(s)) bid upon; or
- Submit a bonus bid for each parcel bid upon.
The array of auction bid options worked. The response to DNR’s public lease auction was several bid packets from well qualified, experienced operators. The total monetary bids were very competitive and surprisingly close to one another, generating good immediate, as well as long-term, income to the Common School trust beneficiaries for this small and unique farm land. The final results were: one parcel leased as a combination of grazing and dryland agriculture; another parcel leased for dryland agriculture only; and the other two parcels awarded to a single bidder and combined under a single grazing and dryland agriculture lease.
Leasing Manager, Pacific Cascade Region