Prepared by
The South Dakota Parks and Wildlife Foundation

October 25, 2000

The Assembled Exchange Program established by the Office of School and Public Lands was developed to facilitate the exchange of isolated tracts of School Lands located within private holdings for other parcels of private land. The general idea was to first purchase blocks of private land, then sell parcels of the private land to private parties who have already expressed a strong interest to exchange these parcels for equivalent sized parcels of school land located within their holdings. Why not simply sell the School Land? First, the Office of School and Public Lands is required to maintain a certain level of income that is dedicated to the schools of South Dakota. To do that they need to maintain their land base and their grazing and farming leases. Second, there is a pressing need in the state to provide public access areas for recreation, particularly hunting. These exchanges would maintain school funding and provide more access to publicly owned school lands.

The actual process through which these exchanges take place involves several critical steps. To facilitate the acquisition and sales process, the Office of School and Public Lands solicited, at no cost to the state, the assistance of the South Dakota Parks and Wildlife Foundation, a nonprofit corporation chartered in South Dakota in 1985. The involvement of the Foundation as a broker in the exchange process is required because the Office of School and Public Lands does not have the authority to purchase property with income derived from land sales. All income from land sales goes into the school fund and is unavailable for acquisition. Unfortunately, this stipulation also prevents the proper maintenance of the land base and contributes to an erosion of funding for schools.

The first step in the assembled exchange process begins with individual ranchers/landowners who have expressed a desire to purchase isolated School Lands that lay within or are in close proximity to their ranch unit. Most of these tracts have been leased by the landowners for several years. When the Office of School and Public Lands has identified a sufficient number of individual tracts to warrant an assembled exchange, they hire an independent appraiser to appraise the individual tracts and then they begin working with the Parks and Wildlife Foundation to identify the purchase of a suitable ranch or farm property from a willing seller.

By way of illustration, let’s say a sufficient number of interested landowners have been identified and the Parks and Wildlife Foundation has purchased a 1000 acre ranch from Mr. John Deere at the value established by an independent appraiser. Mr. M. Farmall, who leases 250 acres of School Land and has been identified as eager to own that land to fill in or square off his current holdings is contacted to let him know he can begin the exchange process. Mr. Farmall goes to the Foundation and negotiates a deal to purchase 250 acres of the (former) Deere ranch. Farmall pays the Foundation for the property. He then immediately exchanges that 250 acres (former Deere Ranch property) for the 250 acres of School Land he leases within his holdings. 250 acres of the (former) Deere ranch are now property of the Office of School and Public Lands. (Farmall’s land at the Deere ranch is exchanged for School Land he formerly leased) The cash Mr. Farmall paid the Foundation offsets one-fourth of the cost of the Deere property paid by the Foundation. No state or federal money is used in the transaction. This process is repeated four times, or however many it takes until the Office of School and Public Lands owns all the property. For financial management, a separate account has been established at Bankwest in Pierre, SD, where the Foundation also has its Sweep (checking) account. Interest in the account is used for closing costs and appraisal activities.

In this illustration there is no net gain or loss of public or private land. The (new) 1000 acres of School Land is leased to local rancher(s) for grazing or farming. The Office of School and Public Lands, in cooperation with the Department of Game, Fish and Parks, prepares a management plan that incorporates wildlife management into the overall grazing or farming management plan. The property is then available for public access and for hunting or designated recreation activities.

This entire process was precipitated by the difficulty the Office of School and Public Lands was having trying to manage all the scattered tracts of land they were responsible for, and the difficulty the public was having in gaining access to these scattered tracts. Although these parcels of land have always been available for public use, access has been a problem. Private landowners are not required to provide access to school lands located within their holdings. Only those parcels adjacent to public roadways have been available for public access. This process of Assembled Exchanges to consolidate the tracts is designed to solve both problems.

Another attractive feature of the Assembled Exchange Program is the willingness on the part of the Office of School and Public Lands to cooperate with the Department of Game, Fish and Parks in developing a management plan for the consolidated tracts. For the first time the Department will have the opportunity to coordinate wildlife habitat management planning with the grazing management that is usually the only designated use for school lands.

Currently, the Parks and Wildlife Foundation has facilitated the purchase of the McKenna Ranch in Perkins County and is in the process of doing the same for the Quaal Ranch, also in Perkins County. This immediate purchase of another large tract of land in Perkins County has caused some consternation among a small group of local landowners but generally, the response to the program has been positive. Numerous owners have been more than eager to purchase the isolated tracts and have supported the Assembled Exchange Program. As of this writing, over 20 individual owners/operators have participated in the program and more are coming in each day.

The general consensus among the agencies and landowners participating in the program is that this is a winning program for everyone involved. The Office of School and Public Lands is able to consolidate their holdings thereby allowing less travel for lease management while at the same time maintaining their land base for support of schools. The Department of Game, Fish and Parks is provided the opportunity to participate in the management of the properties thereby assuring enhanced wildlife habitat. Area owners/operators are provided the opportunity to bid on the consolidated properties for grazing leases, thus maintaining their standard of living and the local economy. Those ranchers who were involved in the Assembled Exchanges are spared the necessity of going through a continuous leasing process and better able to manage their holdings. And finally, the public is provided access to thousands of acres of heretofore inaccessible public land for hunting, fishing and other outdoor activities.

Based on the experience gained in the first 18 months of the Assembled Exchange Program, it is recommended that the Parks and Wildlife Foundation continue to participate as a facilitator in the exchanges. Several items to consider as the program matures are:

• Make a serious effort to locate willing sellers in a variety of places around the state. There has been some concern that Perkins County has been targeted for the exchange program. Although it was coincidence that produced two sales in one year, the perception of "targeting" persists.

• It may be more difficult but consolidated blocks of School Land in East River would be very valuable. Attention should be directed in the east if possible.

• As soon as payment is made and sales recorded, transfers need to be finalized and recorded, and management plans need to be developed.

• Keep the public apprised of the program and what it is intended to produce. Confront issues of concern on a timely basis and promote the positive benefits of the program.

This document serves as the boilerplate for program operation and management.