Cabin Site Lease Rates Increasing

About 800 families who lease lots on state land are facing higher rates. 

I visited lessees who live on their lots permanently.  They say the new assessments are too high and will force them to lose their life savings.

83 year old Ray Cebulsi has lived on his lot in Seeley for 10 years and had planned to be here the rest of his life, but says the 2009 property reappraisal for lots on state school trust land is too high for his fixed income.  Ray and his wife started paying $1,100 a year when they bought their home 10 yeas ago and the rate is now increasing to $4,000 a year, with yearly increases after that. 

Ray Cebulski/10 Year State Land Lessee:   "You can understand a modest increase in taxes or leases, but not big jumps like this."

The Montana Department of Natural Resources and Conservation says property is reassessed every six years. 
Lessees say the state ignored the downed real estate economy with the latest assessments and made faulty comparisons to deeded land.

Jerry Allen/Seeley State Land Lessee:  "...but if we have a state lease, it's worth double.  I don't understand."

The DNRC disagrees and says the state adjusted for a high 2009 appraisal by studying the average yearly increase spanned out over the last 25 years, and combining that into an alternative formula for finding the current value. 

Mary Sexton:  Director, DNRC:  "We are going to be looking at the CPI as well as the Real Estate Index to calculate our next set of leases, so we are trying to take into consideration that the economy is certainly flattened out."

In Western Montana, average fees are going from $2,400 a year to $3,300 a year.  The value of sites differ, however.  Some lessees tell us their rates are more than doubling.   One waterfront lessee told us her family's rate is going from $4,000 a year to $10,000 a year.

People I spoke with in the Seeley Lake area say they are on fixed incomes and live in their homes permanently, but that it will be a hardship to stay even two more years with the new rates.

Gary Ikerd/Seeley State Land Lessee:  "If these keep going up, we're going to have to just..... walk away."

Many lessees have tied their life's savings into their homes and say that no banks or buyers will touch them.  One house we visited has been on the market for three years.

Jerry Allen/Seeley State Land Lessee:  "If you haven't got between 25 - 30 thousand to have it moved and you don't have another piece of property to move it on, you're just going to have to walk away, I guess."

Though these people live in their homes permanently, the DNRC says they are a small fraction of the 800 lessees across the state; that most people use the lots as second, vacation properties.  The DNRC says state law, and court orders require full market returns for state school trust land.

Joe Lambert/DNRC:  "The DNRC is required to manage those land so that we generate full market value returns for the school trust."

The state says it will work with hardship cases by giving them up to four years to sell their homes and improvements, and help provide section 8, low income housing assistance for lease payments. The state says, because of measures like these, it doesn't expect to see a large turnover in cabin site lease holders.

Mary Sexton:  "We will give people all opportunities to sell their cabin sites.  I think as the new formula's implemented, because the increases will be less dramatic, that many people will stay with their lease sites.  We don't anticipate a high turnover as some have predicted."

As for Ray and his wife, Barb, their life savings is tied to a house they say they can't afford, and can't sell.

Bark Cebulski/10 year State Land Lessee:  " If we have to just walk off, we've lost everything and this is what they're forcing you into."

...but before they walk away, the Cebulskis, and many others I spoke with, say they will fight first.  They will take part in any appeals or lawsuits the association representing them will bring before the state.

The State Land Board approved the increases in October and sent them on for rule making.  The board will look at the rules in December, hold a public comment period, then finalize the rules in March. 

In the meantime, the new billing cycle begins in January.  All lease holders will be phased in by 2015.