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Leaders want to make sure Wyoming gets the most out of Kelly parcel

By
Zak Sonntag with the Casper Star-Tribune, via the Wyoming News Exchange

CASPER — The Kelly parcel — the colloquial designation for a 640 acre parcel of State Trust Lands in Teton County — became a household name in Wyoming and even caught the attention of national outlets after the Office of State Lands and Investment proposed auctioning it off earlier this year. 
 
The proposed auction set off a stir, captured in more than 9,000 written comments from residents who opposed the idea that a “crown jewel” parcel and swath of big game corridor might be subdivided into 35-acre trophy home sites. 
 
The fervor cooled two weeks ago at a Board of Land Commissioners meeting with a swift motion by Superintendent of Public Instruction Megan Degenfelder — one of the five elected officials who comprise the board — to table the topic until the fall of next year. 
 
“Our state is the state that we love for beautiful, wide open spaces such as the Kelly parcel.” said Degenfelder, who went on to say that though she would like to see the parcel end up in the hands of Grand Teton National Park, the prevailing public preference, she was nonetheless disinclined to give “a sweetheart deal to the federal government. 
 
“Our land and our people and our education are worth more than that,” she said. 
 
The superintendent’s insinuation was that the parcel — appraised at $62.4 million — is undervalued and selling it to the feds at that price would leave Wyoming with the short end of the stick. 
 
Yet the price was only one reason the board voted unanimously to table the auction, according to those familiar with proceedings, because what went unexpressed was the fear that the federal government would be outbid at auction. 
 
“A Saudi prince or somebody like that could spend $300 million to have a great view of the Grand Tetons and a major chunk of land right there. But the commercialization of the nice open space would detract from the overall view shed of the Jackson Hole Valley,” said Rep. Tom Walters, R-Casper, pointing out that the auction process requires the state to sell to the “highest responsible bidder.” 
 
Different from other state lands, trust lands, which were granted to Wyoming upon statehood, are meant to provide revenue in order to finance a variety of public institutions referred to as beneficiaries, with the single largest beneficiary the Wyoming state school system. 
 
The OSLI is legislatively obliged to optimize revenue returns on trust lands — which is why the Kelly parcel, currently generating less than $3,000 annually from grazing leases, has become a target for disposal. 
 
“That’s not my idea of a reasonable rate of return,” said Degenfelder. 
 
OSLI says profits from the sale of the parcel would generate more than $3 million annually once placed in its Common Schools Permanent Land Fund investment portfolio. However, many point out that the money is not necessarily needed, and that patience may better serve the state’s long term interest. 
 
“The state is not in need of funds currently. We have enough to operate the state government. So why sell it today when we don’t need the cash? It’s going to appreciate even faster, so if in 10 years the state is in a cash flow crunch, they can sell it then and capture the appreciation value,” said Rep. Walters, who sits on the House Appropriations Committee. 
 
Rather than put the parcel up for auction, Superintendent Degenfelder endorsed the concept of a land swap, with the goal of unlocking mineral developments on federal lands within Wyoming state lines. It would satisfy public interest in preserving the Kelly parcel’s wildlife migration and scenic functions while simultaneously delivering more money for public schools. 
 
That road, however, has been tried before to no avail. Administrators say that swapping the Kelly parcel will implicate a variety of land patches, agencies, and stakeholders, making for daunting bureaucratic negotiations. 
 
For instance, in the 2010’s, OSLI sought to swap its Teton county parcels for other federal lands, but because Grand Teton National Park park didn’t have tradeable lands of equal value, the state turned to sister agency Bureau of Land Management. But negotiations only got harder. 
 

 
 
“It’s extremely difficult to get two agencies within that Department of Interior umbrella to work for a common purpose. Each has their own mission to pursue. So getting two entities or two agencies within the Department to work collaboratively and collectively on an exchange of the parcels within Teton County was an effort,” said Jason Crowder, Deputy Director of OSLI. 
 
Part of the difficulty relates to how fair values for swap are established and how much weight to accord to a parcel’s potential subsurface mineral revenue. These were amongst the reasons the Interior Department discontinued swap negotiations in favor of a direct sale agreement. 
 
Following the Board of Land Commissioner’s decision to table the auction, pressure is building on state legislators to find a solution. And while a handful of representatives have expressed eagerness to tackle the problem, a legislative avenue has its own hurdles — including bad blood and ideological resistance. 
 
“I don’t think the legislature is feeling very much love from the federal government right now,” said Rep. Walters, citing battles over the Rock Springs RMP and denied oil and gas leases. “All those things are playing into this current situation. So I think there’s a sentiment of: why would we want to do anything to help the federal government or be friendly with the federal government?” 
 
It underscores a major shift since former Sen. Craig Thomas, R-Wyo., sponsored the Grand Teton National Park Land Exchange Act in 2003. That act authorized the Board of Land Commissioners to authorize the direct sale of Teton County trust lands to the park. 
 
In 2010, the board entered an agreement that gave the Interior Department five years to acquire four separate parcels. By the time the legislation expired in 2016, however, the DOI had only acquired three, leaving the Kelly parcel behind. 
 
Subsequent attempts by the legislature to reauthorize a direct sale in 2016 and again in 2020 both failed. 
 
“I think there are some leaders that feel like [price] doesn’t matter, and they’re ideologically predisposed to not want the federal government to own anything else, and they’re applying that ideology to Kelly parcel,” said Rep. Liz Storer, D-Jackson, speaking of the 2016 and 2020 failed conveyance efforts. 
 
Even though legislators are showing renewed interest in a direct sale solution, the topic is unlikely to be heard during the upcoming budget session, meaning a Kelly parcel bill wouldn’t come until 2025. 
 
“The likelihood of getting a [Kelly] bill through this session is pretty low because I think people are still all over the map,” Storer said. 
 
If the sale continues to be postponed, however, the price tag is certain to move higher — legislators have begun floating a $100 million figure — and the DOI could lose its appetite or decide to spend its acquisition allocations in other states. 
 
The DOI’s last Teton County acquisition of the Antelope Flats parcel in 2016 was enabled by a massive injection of private donations that came from the Grand Teton National Park Foundation, who helped raise as much as half of the total $46 million needed to purchase the parcel; without those private donations, the park would unlikely have picked up the parcel. 
 
As the sticker price moves northward on the Kelly parcel, the role of nonprofit donors like the GTNPF will become even more important. Though the foundation signaled its willingness to jump in and help convey the Kelly parcel, it still says resources are not unlimited. 
 
“People from across Wyoming voiced their opinion that it’s a really important parcel and hopefully we can make [a conservation status quo] happen. But there is a point at which too much is too much, and right now I don’t know what that number is,” said Leslie Mattson, president of the Grand Teton National Park Foundation. 
 
With a parcel surrounded on all sides by federal lands — including Bridger- Teton National Forest, Grand Teton National Park and the National Elk Refuge — the federal government will inevitably be party to whatever solution leaders decide on. 
 
“The people in the local and state offices of the BLM and the Forest Service have been good to work with. Obviously, they have mandates and processes given to them that they have to abide by, and that does create some hurdles, but we have a good working relationship with the individuals within the state offices,” Crowder said, speaking about the prospect of land swap negotiations.
 
This story was published on December 19, 2023. 

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