Land banking program draws plenty of interest

The sprawling eastern Montana ranch holdings of Coffee Cattle Co. have long been dotted with thousands of acres of state land, but now the family owned business has a chance to own those pieces of pasture.

   The Miles City-area ranch is among about a dozen lessees of state grazing land taking advantage of a new program that allows government to sell select parcels in order to stockpile money for buying replacement land offering more public access to state property.

   The land banking program, a product of the 2003 Legislature and still in its infancy, already has about 115,000 acres suggested for sale by leaseholders interested in buying the land.

   Bill Coffee, vice president of Coffee Cattle, said his family wants to buy the 3,200 acres of leased state land scattered among the ranch property in order to end the uncertainty that occurs every 10 years when the leases come up for renewal.

   The worry is that a higher bid by someone else will take away the valuable land or that new requirements imposed by the state will drive up the cost of renting the range, he said. Owning the land would mean independence in deciding how best to manage the five 640-acre parcels, Coffee added.

   "The way we choose to manage our land may be different from the way Helena believes we should manage our land," he said.

   The land banking law requires the Department of Natural Resources and Conservation to sell 20,000 acres of state land before it can begin using proceeds to buy property.

   Mary Sexton, department director, said her agency expects to recommend about 25,000 acres for sale by the middle of next month. The additional 5,000 acres is necessary in the event some lessees lose interest in buying a particular parcels, perhaps because the price is too high, she said.

   Preliminary estimates of the targeted land indicate the state may make $4 million to $4.5 million from the sales, although formal appraisals have yet to be done, Sexton said.

   The state Land Board, which has the final say on disposal of state land, has tentatively authorized the department to go ahead with preparations to sell about 23,000 acres. Almost all the land is surrounded by private property with no public access.

   Another 2,000 acres will be submitted at the board's June meeting.

   Sexton said the process of appraising, setting minimum bids and soliciting competitive offers on the land will take most of this year. That means the state will not be ready to begin buying land until early 2006, she said.

   The agency plans to talk to real estate agents and brokers, land exchange specialists and other groups that can help identify land for possible purchase with money from the sales.

   Sexton said she's not surprised by the interest in the banking program. Farmers and ranchers see it as an opportunity to increase the value of their own land by eliminating interspersed state-owned acreage and want more stability in their operations, she said.

   Landowners also realize the pilot program ends in 2008 so they want to take advantage of this window while it's open, she said.

   Coffee said he has some concern with the eventual price tag for the state land his ranch wants to buy southwest of Miles City, but "we're willing to pay the price to get away from uncertainty. "If it wasn't in the middle of our ranch, we wouldn't buy it."

   Initial estimates put the price at $125 per acre, or $400,000.

BOB ANEZ, Associated Press Writer

Site Sponsors