A proposed land swap that would see 1,280 acres of Wyoming school trust land in Grand Teton National Park preserved has fallen behind schedule as the state questions a federal appraisal of the property.
Wyoming has received the appraisal and is reviewing it with federal representatives, said Jason Crowder, assistant director for Wyoming’s Office of State Lands and Investments. “They’ve completed their end of it,” he said. “It’s in our review.”
The updated appraisal is a necessary part of the exchange. The swap would exchange two mile-by-mile state school parcels in Grand Teton National Park for federal property of equal value elsewhere in the state.
“We’re still working through valuation and appraisal with the Department of Interior,” Crowder said. “It’s taking a while longer than we hoped. We need to make sure the valuation is right.”
The federal appraisal brought no major surprises, he said.
“We weren’t necessarily shocked,” Crowder said of the value, which he did not reveal. Discussions center on how that value was reached; “We’re talking about methodology.”
The parties have to make substantial progress by the end of this year to satisfy the Wyoming Legislature, which set a firm deadline at the end of 2016 to complete an exchange. If the swap falls through, Wyoming could sell the two environmentally sensitive parcels in Grand Teton National Park for development.
“I think we’re all very hopeful we can get it done,” Crowder said. “We do need to pick up the pace a little.”
Wyoming is required to maximize its income from state school lands for the benefit of education. It leases one of the Teton parcels for grazing and agriculture, but gets only $1,855.90 a year, scant return compared to the parcel’s last estimated value of $45 million. Together the two sections were valued at $91 million several years ago when a previous iteration of the swap stalled.
Agreeing on the method of valuing the school trust land in Grand Teton is one part of a complex deal that’s still in the making. The other half of the equation — what federal BLM property in Wyoming the U.S. government would give up — is being developed behind closed doors.
“Until we have a solid list, we’d like to keep them confidential,” Crowder said of federal parcels that Wyoming could acquire. Releasing a list now could unsettle people and businesses with interests — like grazing leases — and “make them unsure of the future,” he said.
Wyoming is looking for federal property — BLM land is most likely — that has both mineral and surface value, Crowder said.
“The Legislature was very clear,” he said. “We are looking at both and having both of those married together.” Parcels “would be widespread but isolated in areas that do have known mineral potential.”
Lots of BLM land would become school trust property
Because the school trust lands in the national park are so valuable, it will likely take a much larger acreage of federal property to consummate an exchange of equal values, Crowder said. It’s not as if Wyoming will receive three to 10 mile-by-mile sections in exchange for the two school sections in Grand Teton, he said.
“It’s going to be a considerable [amount] more than three to 10,” he said. “The ratio would be greatly skewed.”
First, however, the parties need to finalize the value of the school trust land in the national park. Then the Department of Interior would begin to value the federal land that Wyoming would receive elsewhere in the state.
“They could give us a general valuation in the beginning and then follow up once we massage the parcels into what we are interested in,” Crowder said.
A legislative oversight committee would preview the selection, Crowder said. A site for a Wyoming industrial park contemplated by legislators may be part of the mix.
“At this time we haven’t identified that as a use,” Crowder said. But if developing a “Heartland” type industrial complex optimizes revenue from school trust land, such an arrangement would be “very possible.”
Although the parcel selection is being conducted in secret, Wyoming residents will eventually have their say. “Once we have the parcels ID’d, we’ll have public hearings,” Crowder said. “Our process … as well as the federal process … involves hearings.”
All the moving parts make Sen. Phil Nicholas (R-Laramie), the legislative appointee to the Teton land swap oversight committee, uncertain.
“We have a very valuable piece of property in Teton County,” he said. “No point getting rid of it unless we get a better piece or something equivalent. My role on the committee is to make sure we understand the real value of the property … and we don’t surrender it for anything of less value.
“I’m skeptical they will find a package that will meet my scrutiny,” Nicholas said. “I’m happy to accommodate the park, but not at the expense of the schools.”
The school trust land in Grand Teton has been appreciating steadily, he said, and any land it is swapped for ought to have the same potential.
“It has tremendous speculative value,” Nicholas said of the school trust land. “I would expect the property we would get in return would [have] equal speculative value. If it doesn’t, we shouldn’t do the trade.”
Although the industrial park idea is not driving the exchange, legislators are looking to assemble a block of property that would take advantage of Wyoming’s natural resources. Water, natural gas, oil, coal, trona and helium could be harnessed to make products that companies in the state could sell at value-added prices.
“We’re looking for contiguous acreage with a lot of buffer,” Nicholas said. Because of the intended use, “the value of the land ought to be pretty low,” he said. “You’re not looking for that [site] for minerals. You’d want to have it near infrastructure and a number of things that would drive it to southwest Wyoming.
“That would be a piece of the package,” he said of potential industrial property. “That’s one of the things we’re considering.”
Nicholas expects to review the parcels Wyoming would get in an exchange as part of his duties, he said.
“My view of it is we ought to be getting surface and minerals and our evaluation should be the same price as you pay for surface,” he said. “I don’t think we should be paying for speculative mineral value.”
Laws govern disposal of federal property
But the federal government is bound by laws in the way it appraises and sells it’s own property, said Sharon Mader, Grand Teton Program Manager for the nonprofit National Parks Conservation Association.
“If you have an appraisal that’s done according to federal law, the state will have to work within those parameters,” she said. “I know there are people with a high level of expertise looking at that [methodology] question.”
“Everybody understands the need for fairness,” Mader said. “We have advocated at NPCA for a fair deal for Wyoming and a fair deal for the American people. The State of Wyoming could end up with some very valuable assets as well. There will still be a fair outcome for the state.”
NPCA is concerned that the schedule is tight. When the Legislature set the 2016 deadline “there was a lot of skepticism about the timeline,” Mader said.
Nevertheless, “commitments were made,” she said. Secretary of the Interior Sally Jewell visited the Grand Teton parcels “and said this would be completed under her watch. We’d like to see the Department of the Interior and BLM push this through on the fast track.”
“NPCA has designated this project as one of our Obama legacy projects,” Mader said. “We’re asking the administration to put resources [in place] to complete this.”
One aspect of the exchange that’s not been talked about much is how Wyoming residents’ outdoor pursuits on thousands of acres of BLM land would change once those areas become school trust property. Camping and building fires are not allowed on school trust property. Off-road travel is prohibited and the public can only recreate on parcels that are legally accessible.
“The main difference is BLM lands are mostly operated under a multiple-use framework where you try to balance competing interests,” said Ryan Lance, former director of the Office of State Lands and Investments. He is now an attorney at Crowell & Moring. “State trust lands are to generate revenue and other value for those trust-land beneficiaries,” he said. “The main objective as established at statehood is to generate revenue.”
Under state management, there won’t be federal-style environmental studies made for development proposals, studies like environmental impact statements that require extensive public involvement. “Its all the board of land commissioners [deciding] highest and best use,” Lance said. Wyoming’s top five elected officials — Gov. Matt Mead, Secretary of State Ed Murray, Auditor Cynthia Cloud, Treasurer Mark Gordon and Superintendent of Public Instruction Jillian Balow — sit on the board.
If there’s competition for a parcel, “the first rule of thumb is to accommodate both uses,” Lance said of state policies. If a proposed use trumps an existing one, “there are provisions for compensation for the lessee that gets ousted.”
When it comes to what uses will prevail on school trust land, “you’re really dealing with benefit to the trust beneficiaries,” Lance said. When he was director of the Office of State Lands and Investments, explaining the state’s obligations as it sets rules on school trust lands “was always an issue,” he said. “People assume all public land is the same and it is not.”
Wyoming residents shouldn’t be worried about a Teton land swap, Mader said. “There should be a high confidence in the state being able to manage those lands well and responsibly.”
She wants those involved in the exchange to keep focused, she said. “I hope that both the state and federal governments continue in that spirit of negotiation,” she said. “We see this as a legacy that these lands are preserved for our children and grandchildren. It would be remiss not to refer to the lands in Grand Teton as a spectacular resource. It really would be a travesty to have those lands developed as homes or commercial properties right in the middle of Grand Teton National Park.”