Sales of state land over the past year in the Kane Springs Canyon area seem to indicate outsiders value the property more than local residents, state land specialist Doug Fullmer says.
Fullmer became southeast area land specialist for the Moab office of State Lands and Forestry about a year ago and has conducted several auctions since then on hundreds of acres of school trust lands in Kane Springs that have been put up for sale.Application has been made for purchase of a total 4,869 acres in the area, Fullmer said. So far, about 500 acres have been sold.
At the auction this past week, a Salt Lake developer outbid eight others vying for 72 acres across the Colorado River from the potash plant.
John Holmes, who with partner Cecil Allen Saunders III is forming a new recreational development company called Desert Horizons, paid $27,000 for the land that fronts the Colorado River for half a mile on the east side.
"We plan to develop it as recreational property and spend time on it. We're avid mountain-bicyclists, and this is in the heart of an area we love to bike in," Holmes said.
"We're desiring to become locals, and so we bought our way in a little bit," he said.
The auction last Tuesday was the fourth the southeastern Utah office has conducted to sell off land in the "Kane Springs Disposal Block." Fullmer said the next auction has yet to be scheduled.
The process that placed the acreage on the market was initiated in February 1990 by local residents John Cortez and Todd McDougal.
"I don't know what motivated them to select that particular area," Fullmer said. "The only thing we know is, a request was made to sell, and it's going to be transferred to private ownership. As far as what is going to be (developed as), that's impossible to tell, because we don't know who's going to buy it."
If potential negative impacts appear in the application for purchase of school trust lands, that usually gets disclosed in the comment process, Fullmer said.
"What we mostly are concerned about here . . . is that we manage the properties for the highest economic return we can get," he said.
The acreage Holmes acquired in the latest auction begins about six miles southwest of Moab via the river road. It is accessible by a five-mile dirt road that Fullmer said would have to be upgraded before any significant development could take place.
Holmes said that eventually, his company would like to build a mountain-bike manufacturing plant and retail outlet in the Moab area.
Fullmer said money from the land sales is placed in a permanent trust fund for schools, which benefit from interest paid on the fund. He noted that all the land so far has been sold for more than the appraised value.
"I tell people asking what's the land selling for down here that we're selling it for more than appraised value, not usually less than $300 an acre. It's gone as high as $1,300 an acre," he said.
The latest parcel had been appraised by a private firm at $325 an acre. Fullmer said the final bid amounted to $372.88 an acre. One of the original applicants, Cortez was present at the auction but submitted the lowest bid of $50 an acre.
"So far the original applicant hasn't bought one (parcel). Outsiders come in and outbid them, which tells us people from the outside think it's more valuable than locals do," Fullmer said.
According to his records, a 160-acre parcel and a 40-acre parcel in the Kane Springs area have been sold to local residents over the past year.
Other sales have included 60 acres across U.S. 191 near the Hole 'n the Rock rest stop about 15 miles south of Moab. That property sold at $616 an acre to a Sandy couple who plan to build a private cabin, according to Fullmer.
He said a Colorado man who bought 228 acres in Kane Springs immediately turned around and put it back on the market for resale.
Terms of state sales include payment of 10 percent upon acceptance of the bid, a $100 application fee, and a $400 sales processing charge. The state accepts up to 20 installment payments on contract on the balance, at 12 percent interest.
The state also reserves mineral rights and rights of access to other state-owned lands across any parcel. Fullmer said the state Division of Water Rights usually will grant new landowners culinary and irrigation rights for up to an acre.
"That would allow you to buy a piece of land like this and go in and build a recreational homesite on it," he said.