Published: June 30, 2008 09:16 am         

A war of words

A battle is brewing between Brazos River Authority and PK Lake land lessees – with BRA officials claiming some statements being made are simply not true.

By Libby Cluett
lcluett@mineralwellsindex.com

POSSUM KINGDOM - When the Possum Kingdom Lake Association asked a crowd of almost 400 to donate toward the association's admitted “war” against the Brazos River Authority, it stirred some ire across the state.

PKLA speakers shared their thoughts “on our side,” according to lessee and PKLA board member Jay Turner, regarding several issues with the BRA at the June 21 meeting that dealt with the growing battle between land lease holders and landowner Brazos River Authority, which is being forced to divest itself of its land holdings at Possum Kingdom Lake.

The growing battle is over how divestiture will take place, to whom and for how much.

The BRA would like what it considers fair market value for their land holdings, while the lessees – many of whom built very expensive lake homes on land they do not own – want the opportunity to buy the land at a price lower than what BRA wants while also trying to avert any attempt by BRA to make an all-inclusive sale to a third party.

BRA representatives consider some of the PKLA group's assertions as untrue.

At the end of the meeting, Turner and PKLA president Monte Land asked members to donate money to pay for attorneys and lobbyists. They told the crowd that the association had already helped lessees by thwarting a potentially immediate 6 percent rate based upon land value.

Turner told the audience, “If we had done nothing, we could be looking at 6 percent.” He followed this soon after with the comment, “Get your checkbook out.”

Land said that the lease rate increase to 6 percent of the land value came from two BRA-commissioned studies, performed by the Tennessee Valley Authority in 2000 and the Staubach Company in 2006.

“Staubach and the TVA both recommended they go immediately to a 6 percent lease fee,” he said.

Their comments stirred many of the 375 people in attendance, and $20,000 in donations was received. But some of those comments - whether intentional or not - were not true, according to BRA Board Secretary and former Mineral Wells resident Wade Gear.

“That is a false statement,” Gear said of the PKLA claim of an immediate jump to a 6 percent lease rate. “We [the BRA board] knew the ramifications would be so drastic for lessees; we never considered going to 6 percent immediately as a viable option.”

On Friday, the Index asked Land and Turner about their previous statements to the association's members.

“That could very well be true,” Turner said in reference to BRA's position it never considered an immediate lease hike. “The fear was some of the uncertainty of the language in the lease and the impact it could have on the financial situation of many lessees.”

“There was so much fear and uncertainty as to what the BRA was going to do with leases and lease rates,” said Turner.

“The report from the Staubach Company recommended for consideration a 6 percent lease rate and a 6 percent transfer fee to the board,” said Turner. “Although that was not adopted by the board, it certainly got the attention of the lessees that significant changes were being considered.

“That is what began to get everyone alarmed. There were different scenarios of different rate increases over a period of time. None of those were acceptable to the lessees.

“As best as I can remember, [Staubach] told the BRA they had to get more of a return on their assets [including land at PK Lake],” said Land.

“BRA started talking about jumping the lease rate up to 6 percent of the land value. That's what I remember,” he added.

Gear said it's incorrect to tell people Staubach and the TVA both recommended the BRA go immediately to a 6 percent rate as Land did last week. “Both of those studies suggested we gradually increase to achieve that percentage.”

In 2001, the BRA board heard the TVA recommendation and instead voted to implement 6 percent of county assessed values over a 20-year period beginning in 2002, BRA Public Information Officer Judi Pierce offered in a previous request by the Index.

A few years later, the Staubach Report indicated that the PK Lake property lease rates were low and offered the BRA solutions to raising lease rates.

“Staubach had multiple recommendations as options,” said Gear. “The one that they actually recommended to the board was a gradual increase based on appraised values. We amended it to go to a gradual increase based on assessed values. Staubach identified that assessed values would come in lower than appraised values based on historical data.”

BRA staff confirmed that the board never adopted a lease rate methodology that went immediately to 6 percent.

“The assertion that everyone would be paying 6 percent immediately is not true,” said Government and Customer Relations Manager Matt Phillips. “The TVA study in 2000 recommended that we adopt incremental lease rate increases, which would not have reached 6 percent until 2018. The methodology adopted by the BRA board after the 2006 Staubach report was for an incremental lease rate increase of 1 percent every five years that would not have reached 6 percent until 2028.

“The most recent lease rate methodology adopted by the BRA board does not reach 6 percent until 2033,” added Phillips.

Phillips pointed out that the BRA has responded to lessees.

“The statement that the BRA over the last few years, has been responsive to lessees concerns is true,” he said in response to Land's statement at the meeting that the BRA changed its tack when PKLA members spoke up. “The BRA does listen to the public and has changed its lease rates to be fair to the lessees. Our historical record clearly reflects that.”

“I know in my heart and my opinion that if people at the lake hadn't raised hell, [the BRA] would have increased lease rates,” Land told the Index Friday.

Both he and his wife, Carolyn, described how they chartered buses on two occasions so PK lessees could sit in on BRA board meetings. “At one meeting we had over 150 people,” he said.

“We also had senators and representatives write to slow down and reconsider,” added Land. “In my heart I feel they were headed to 6 percent as quickly as they could get there.”

“Sure they'll deny it,” Land said about an immediate 6 percent rate.

Other contentions

The PKLA made other assertions against the BRA leading up to the meeting and at the meeting.

Gear responded to statements printed on postcards the PKLA had at the meeting for attendees to sign and send to legislators. The message included, “For more than six years, the BRA has acted behind closed doors, spending millions of dollars on consultants to find a way to sell beautiful lakefront property to politically powerful land developers.”

“The BRA has to comply with the open records and open meetings act,” Gear responded. “A violation of this act has serious consequences. The assertion that we act behind closed doors is incorrect. The only times our meetings are closed are when we are consulting with attorneys on legal matters or when discussing personnel issues.”

The PKLA also criticized the BRA for its action in a special meeting on May 20. In addition to passing a resolution, which guaranteed lease and purchase protections for leaseholders of BRA property, the BRA board also approved a temporary moratorium on extending leases beyond one year.

Land told the Index he knows of older people at the lake who planned to sell their homes and now they cannot.

Gear emphasized the moratorium on leases is temporary.

“Whether we're looking at selling to a third party or a lot-by-lot sale, renewing leases and extending leases decreases the property's fair market value,” said Gear.

“This was evidenced and supported by the recent attorney general's opinion, which stated that the market value has to be based on the lease rate,” he added.

“It is a process of our continuing to develop a divestiture policy,” Gear added about the temporary moratorium.

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For more information on the PKLA, visit www.pklakeassn.org For information on BRA, visit www.brazos.org or call 1-888-922-6272.