Florida men buy historic ranch
UNION CENTER, S.D. (AP)--With a barely perceptible nod of his camouflage hunting cap, Ike Rainey of Lady Lake, Fla., bought a historic West River ranch for what is probably a historic price, $6.8 million.
He outbid other individuals and groups for the Mattie Goff Newcombe ranch in an auction that lasted just under three hours and packed the Central Meade County Community Center at Union Center with about 400 bidders and spectators March 2.
Neighboring ranchers and others were curious, awed and, in some cases, worried about the $590 an acre that Rainey and his Florida partner paid for the 11,570-acre ranch begun in the late 19th century by the Goff and Newcombe families.
The ranch also includes grazing rights to 3,611 acres of Bureau of Land Management land and 616 acres of Homestake Mining Co. property.
"It will be the most historic land auction the West River area has ever seen," said Kenneth Wilson, who ranches about 20 miles up the Cheyenne River from the old Newcombe place.
But Wilson and others said they are worried that the increasing influx of big money from out-of-state hunting interests could make it more difficult for them to stay in ranching and for young people to get started in ranching.
"This is probably the beginning of the end for all of us," Wilson said during a break in the bidding, before the price per acre had climbed past $500 an acre.
Rainey, who owns a road construction company in Florida, said after the auction that he bought the property as an investment and for hunting.
He is a whitetail deer hunter and his partner, Mark Morse, likes to hunt mule deer.
He figured the rugged draws and breaks on the ranch, five miles of which lies along the Cheyenne River, will provide plenty of both.
Rainey said he hasn't hunted in South Dakota before, but he also has a ranch east of Billings, Mont.
The estate for Mattie Newcombe, who died last year, offered to sell the ranch as three separate tracts, or as a whole, whichever brought the highest total price.
Rainey said he intended to buy the entire ranch, although he was most interested in the two tracts that lie on both sides of the Cheyenne River.
Wilson and another neighboring rancher, Wally Hoffman, said they are worried that such high land prices could drive up property tax assessments for existing ranchers.
"If they start assessing us at what this property sold for, we'll be forced to sell out," Wilson said.
Hoffman, who ranches downriver east of the Newcombe place, said assessments for tax purposes have held steady so far.
"But they won't last now with these land sales."
Wilson said the only comparable price he's heard recently for West River land was about $545 an acre for a smaller ranch that had some farmland, which generally draws higher prices.
Greg Smeenk of Newell, a rancher and real estate broker, said young people trying to get started in ranching can't compete with wealthy, out-of-state people bidding on land for hunting.
"Outside money is driving the market," Smeenk said.
With an out-of-state buyer, Wilson said the best hope for neighboring ranchers is that they get a chance to lease the land for grazing.
Wilson and others said the $590-an-acre price is way beyond what is financially feasible for a cattle operation.
Jim Scull, who owns a Rapid City construction company, as well as a ranch near the old Newcombe place, estimated the land would support only about 450 cows and would generate only about $100,000 to $125,000 a year, not enough to pay taxes and interest. Scull said the carrying capacity of the ranch would warrant, at most, about $150 an acre.
"This is an investment sale, not a cattle sale," Scull said during a break in the bidding.
"They aren't interested in running cattle on it."
Scull said even adding pay hunting wouldn't pay for land at $500 an acre or more.
"This isn't about making money with the place," he said about Thursday's bidding.
He said he wasn't bidding.
"This is money beyond my comprehension, the money these people are willing to dump out here," Scull said, referring to out-of-state buyers.
Scull said land values have risen sharply in the last few years, even on remote West River ranchland.
Scull said an attorney called him on behalf of a potential buyer from out of state who wanted to know if the Newcombe ranch had enough flat ground to build an airstrip adequate for his Boeing 737.
"This is an enjoyment thing for people with way too much money and no place to park it," he said.
Scull said people from out of the area who buy ranchland for hunting also are raising the quality of the deer in the region.
"They'll kill only high-quality deer," he said, leaving younger deer alone so they can grow into trophy animals.
"This is changing the dynamics of the deer herd."
Scull said such high-priced land sales also are changing the dynamics of ranching.
"Ranching is a dying deal."