16th Section Lands appeal goes to Supreme Court

By BUSTER WOLFE,

An Oak Grove company has appealed a 10th District Chancery Court ruling involving a 16th Section Lands lease that allows the Lamar County School Board to charge fair market value for renting the property to the Mississippi Supreme Court, although the lease sets 60-day windows for reappraisals on the 10th, 20th and 30th anniversaries.

Oak Grove Marketplace, LLC is appealing the ruling by Chancellor Johnny Williams on May 7 that the language in the lease requires the School Board to charge the fair market value.

“Although the (School) Board did miss the 60-day window as set forth in the lease,” the ruling states, “the court finds that this does not constitute a waiver of the board's statutorily required obligation to adjust the rental according to fair market value. This 60-day window is more of a time period in which the board can begin to determine a dollar amount.

“Moreover, … this is a statutorily required clause, in order to derive the maximum amount of school revenue.”

The Lamar County School Board and Oak Grove Marketplace, LLC entered into a 16th Section Lands lease and contract on Aug. 5, 2002. The lease was approved and accepted by the county and through the Board of Supervisors on Aug. 12, 2002.

The Lease provides that Marketplace pay annual rent to the board in the amount of $8,450.20, on or before the Aug. 5 each year of the lease term. The board did not reappraise the subject property until April 2017. It sought to impose an adjusted rental rate effective August 2017.

“The statutory guidelines that have been put into place regarding the administration of 16th Section Lands are intended to ensure that the schools get the maximum dollar amount from these lands for the benefit of the children who attend,” Williams rules. “The Board has a fiduciary responsibility, and that responsibility cannot be waived. To lease 16th Section commercial property for less that the appropriate market value would be an abuse of the school board's statutory, constitutional and fiduciary duties.”

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