Four bids were received.
More than a century ago, the state gave land in West Texas to counties to use for the benefit of school districts. The yearly dividends of about $200,000 are divided among school districts wholely or partly in Upshur County.
The proposals were as follows:
• Calthan Cattle Co. LLC of Seymour split its bid into two parts, one on a 9,847-acre tract, and one on a 7,865-acre tract.
Rob Stewart of Calthan Cattle Co. said he divided his bid into two parts because “there is not presently any access to one of the two tracts.”
Stewart said that “in summary, the per annum offer per acre in each lease is $13.70 ($68.50 over the 5-year term), plus $3 per acre in guaranteed land improvements.”
Stewart also proposed to prepay not only the first year, but also one-half of the final year lease payment.
• Young Land and Cattle Co., Inc. of Seymour, proposed a total of $227,953 per year, which president Bob Young said in his proposal letter was more than a 22.5 percent increase.
They also bid $3 per acre per year in improvements, divided into three parts: ponds and tanks, fences, and brush and cactus removal or spraying.
The total rental over five years would be $1,139,767, with total land improvement payments of $265,680.
Young also proposed that, if at the end of the initial lease term conditions were met, they would have the option to renew the lease for an additional 5-year term for a 5 percent increase. If the lease is put up for bids, then they would have the last right of refusal to match a third-party offer.
They also stipulated that Upshur County would provide access to the 7,865-acre tract, known as the South Upshur County School Land, lying west of State Hwy. 283.
Young said that access to this tract, for more than 100 years, has been by a fenced 200-yard-long lane of Hwy. 283.
• Buffco Production, Inc. of Longview proposed $10.95 per acre per year for the 5-year lease with a 5-year option plus $5 per acre for a one-time, one-year seismic option, which would include the right to obtain an oil, gas and mineral lease within the option period for a bonus consideration of $25 per acre, a one-fifth royalty and other terms to be negotiated.
• Spade Ranches of Lubbock, the current lessee, divided its bid into two parts.
Wesley Welch, assistant manager of Spade Ranches, said that the 7,865-acre tract is “not as productive” as the larger tract, and bid $10.50 an acre for it. He bid $13.50 per acre per year for the 9,847-acre tract.
He also bid $3 per acre per year for improvements, with a representative of the court and of the ranch meeting annually to determine what improvements would be made in the following year.
Pct. 1 Comm. James Crittenden had urged the court to put off opening the proposals until District Attorney Billy Byrd could get an opinion from the Attorney General’s office on whether Spade Ranch, which leases neighboring land, could make good on its purported threat to deny access to any new lessee.
He was outvoted, and the proposals were opened.
Prior to that, Glenn Leach, a citizen who has been a critic of Spade Ranches for months, spoke to the court.
He said that at the last court meeting, “the court agreed to change the contract to remove he section that states that damages for the operations of the mineral lease and pipeline easements are to be paid to the lessee.”
He asked if all the potential bidders were notified of this change.
He said that Spade was late making its 2010 payment, and should have been assessed the 15 percent penalty provided for in the lease agreement.
(County Treasurer Myra Harris told The Mirror Thursday that in 2010, Spade’s payment, which should have been received June 1, arrived June 2 because the Memorial Day holiday delayed the mail. She said it was a non-issue. She said that Spade had been late with its 2004 payment, and was charged the 15 percent penalty at that time).
“I understand that Spade Ranch has informed other bidders that if they are awarded the lease, that they will not be granted access to the Upshur County School Lands across the Travis County School Lands (which Spade also leases),” Leach said. “Travis County is the owner of this access to Upshur County School Lands, not Spade Ranch.”
He said that he understood that two potential bidders did not submit a bid because of this “extortion threat” by Spade Ranch.
As he has in the past, Leach also questioned whether Spade Ranch had made $3 per acre per year in improvements to the land.
Action on the proposals was tabled until the next Commissioners Court meeting on March 15.