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Real Estate Lease Billing Scenarios
Alternative 3B has been selected by the Land Board as the way residential lease fees will be calculated. Lessees will have the option of signing a supplemental lease agreement (the 2010 SLA) and be charged according to the terms of Alternative 3B. Without a 2010 SLA, lease fees will be calculated per the Current Method (i.e. per the terms of the lease, without phase-in).
Current Method No Phase-in: Reflects bill amounts if the department continues to use the current method for calculating lease fees (5% of the 2009 DOR appraised value, without a phase-in). The forecasted lease fees under this alternative are based on the assumption that land values will appreciate at a rate of 6.5% annually.
Alternative 3B: This method uses the 2003 DOR appraised value, but increases the 2003 DOR value by 6.53% annually to arrive at the adjusted 2009 appraised value. The adjusted 2009 appraised value would then be multiplied by the 5% lease rate to establish a base rent for 2010. There would be no phase-in as not all leases are currently at 5% of the 2003 appraised value though they are expected to all be at 5% of the 2003 DOR appraised value by 2013. After leases attain their 2003 full base fee, lease fees will be based off the 2010 base rent and increase annually by a Lease Fee Indicator, which is limited to no less than 3.25% and no greater than 6.5% annually. Because the LFI varies from year to year, the column below indicates the 3.25% minimum and 6.5% maximum range of the lease fees.
Because the LFI varies from year to year, the column below indicates the 3.25% minimum and 6.5% maximum range of the lease fees, as illustrated below.
Competitive Bidding Method: reflects projected annual rents if you won the bid at 2% of the 2009 DOR Appraised Parcel Value, effective in 2013. Rents in following years will increase by the CPI - these data use the CPI forecast from the Congressional Budget Office. The rents shown in this column are the minimum estimate, as the rate charged would increase with any bidding above the minimum bid. Rents would adjust every 6 years based on the DOR reappraisal cycle; the forecasted lease fees under this alternative are based on the assumption that land values will appreciate at a rate of 6.5% annually.
To see the payment for your particular cabin or homesite lease using either the current method or the Alternative 3B method, enter your lease agreement number below. You will be provided with the predicted annual lease payment for the next 15 years. If the 2003 DOR appraised value used in the calculator is not accurate, please contact your lease manager in your local DNRC office.
