Among the State of Wyoming's many land holdings in Teton County is a 640-acre School Section that lies about a mile south of the Jackson Hole Mountain Resort at Teton Village. The Section has been leased for agricultural use for over 60 years to the Snake River Ranch, which owns the surrounding ranchland that extends north to the Teton Village boundary

Why is the State considering changing the use of this Section?

The agricultural lease on this Section produces only about $12,000 per year for the Wyoming School Trust. Two years ago the Land Board had the parcel appraised for $19.1 million. At that time, the appraiser noted that similar parcels of land in Teton County were appreciating at 1.4% per month. Applying this appreciation factor to the $19.1 million yields a value of approximately $26.1 million in today s dollars. The Section will be appraised again before the State makes a decision about what to do with the land.

What alternatives emerged?

Initially, the State received offers from various parties to lease the parcel for development, exchange it for equal value based on appraisal, and purchase it outright at public auction.

What did the State decide to do?

At first, the State seriously considered a proposal to lease the Section for development. However, State law prohibits the term of a state land lease to extend beyond twenty-five years, and the Legislature chose not to allow for longer term leases.

Would t the State get more money If it auctioned the School Section?

The least effective strategy would appear to be auctioning the Section and investing the proceeds with the Common School Trust Fund since State law restricts the type of financial instruments available to the School Trust. Thus, even with sound financial advice, the School Trust has returned an average of only 7.88% since 1987.

Why is the State being sued for pursuing a trade?

Merbanco, Inc., a merchant banking company, is contesting the State s decision to pursue an exchange. Merbanco insists that the Wyoming Constitution prevents the State from exchanging land. Merbanco would like to buy the parcel to develop a private golf course and 50 large homes, and claims that it is irreparably harmed because it "has been permanently excluded from bidding for the Teton Village School Section."

Is Merbanco right?

The court will decide this question, but Merbanco is taking a portion of the Wyoming Constitution and arguing it narrowly The court can take a broader view and uphold the ability to exchange state lands in order to allow the State flexibility.

State law specifically authorizes exchanging State land and lays out a process for doing so. The State has already completed numerous successful trades and is currently proposing to trade two sections within Grand Teton National Park for other federal holdings.

Why is flexibility important for the State?

The State is in a better position to optimize its options if it can consider exchange and auction in addition to leasing. Just as it would want to prevent any buyer from showing up at an auction and purchasing two large parcels within Grand Teton National Park, the State would also benefit from the ability to avoid allowing land that is in the middle of an active ranching operation to fall in the hands of international developers or other commercial operators. Without the flexibility to trade its holdings, disposition of State lands could allow widespread and haphazard development and would prevent communities from designing their best land use plans as Teton County has attempted to do.

What will this trade accomplish?

First and foremost, the trade gives the State the best opportunity to maximize the financial interest of the School Trust. The trade also enables: the completion of a major resort whose visitors provide significant income to the State through sales tax; the creation of critical affordable housing; the conservation of 1200 acres of open land on the approach to the resort and Grand Teton National Park; and the protection of a 70-year-old ranching operation. Our national parks and ranches are important components of Wyoming s tourist economy and their protection further enhances the financial viability of our State.

Why is the exchange important to the success of Teton Village?

The exchange process has served as a catalyst that has brought together SRA, the Jackson Hole Mountain Resort, Four Seasons Hotels and Resorts, and LDW Resort and Hotel Development. Together, these groups are planning to build a world class golf course at Teton Village that would complement the new Four Seasons Hotel that is scheduled for completion in December of 2003. This hotel project, currently underway, will bring an investment of $185 million to Wyoming and will be the State s largest construction project.

These same groups are also working with Teton County the Jackson Hole Chamber of Commerce, the Jackson Hole Conservation Alliance, and the Teton Village Association to plan an expansion to Teton Village that would create 255 units of affordable / employee housing, preserve significant open space and the resort s western character, and make the Village more economically sustainable.

Editor: Bill Schilling, President

Wyoming Business Alliance

145 S. Durbin Suite 101

E-mail: wyba@qwest.net