St. Louis County may be on the way out of the business of leasing lakeshore lots to cabin owners after a directive this week by county commissioners.
The County Board has directed county staff to move ahead with a plan to get state permission to sell 278 lakeshore lots on 27 lakes across the county, from Third and Island lakes in the south to Elephant and Elbow lakes in the north.
The lots are part of the mass of tax-forfeited land the county takes care of for the state after the original private owners didn't pay the taxes in the first half of the 1900s. The county pushed the leases from the 1950s into the 1980s as a way to make a little money and to provide recreation property for county residents.
Cabin owners pay an annual lease fee to the county ranging from $395 to $958, in addition to property tax on the value of the building.
But county land and tax officials say property taxes paid on the land would be much higher if the lots were privately owned, and they say the system essentially subsidizes cheap leases for the 278 owners at the expense of other taxpayers who don't have the same access to waterfront lots.
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"The program does not reflect the true market values of the properties, nor does it provide the opportunity for the public to participate in the program," a draft resolution distributed at a County Board workshop Tuesday noted. "The fairness, commitment of administrative resources and continuation of such a program needs to be reconsidered."
Under a likely scenario, owners of cabins currently on the lots would be given the right of first refusal to buy the property. If they opted not to buy, the land would be sold at public auction.
Fred Love of Duluth has owned a cabin on a county leased lot on Elbow Lake near Cook since 1972. The small log cabin has been in his family since 1950, when his grandfather built it. Love said he supports the idea of selling the lots to the cabin owners.
"I'd be all for it. I'd probably end up paying more in taxes than the lease we pay now," Love said. "But it would be worth it so I can pass it on to my grandchildren so they can have the experiences I enjoyed."
The change to sell the lots will require action by the 2012 Minnesota Legislature, and commissioners moved Tuesday to start that process. They could formally vote in November to seek legislative approval for the sales but would have to vote again next year to approve any actual transactions.
"This keeps the process moving ahead and opens up the option" of selling the lots, said Gary Eckenberg, deputy county administrator. "There's a lot to be done first, including appraisals and surveys of the lots and getting abstracts done, all of which would be recovered in the sale price if that's the route the board decides to go."
The move would follow the state's action more than a decade ago to sell hundreds of leased lots. The goal was to sell the lots to the owner of the cabin, although in some cases those owners were out-bid for the land.
The National Forest Service, too, has been moving out of the leased lot business, allowing cabin and resort owners on leased lots to acquire and then trade undeveloped land to the federal government in exchange for the lots under their buildings.
