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BOISE — Despite a move by the Idaho House to spend nearly $2 million from the state general fund to buy back a bank building that the state sold to a private investor for $1,475,000 in December 2016, it won’t happen this year — because the Senate killed the bill on the final day of the legislative session.

“I don’t know what the next steps are,” said House Speaker Scott Bedke. “We’re out of session, so it’s going to take some executive action at this point to tie it up or whatnot. I don’t think we can do anything. I think it was short-sighted of our colleagues.”

Gov. Brad Little’s press secretary, Marissa Morrison, said Friday, “Governor Little’s administration has no plans specifically related to this issue.”

The Senate’s rejection of the bill came during a bitter last-day dispute with the House, right after the Senate killed a bill to spend millions to renovate the state Capitol to give all House members private offices, and right after the House had hijacked the must-pass “drop dead bill” formalizing both houses’ earlier actions on administrative rules to tack on a House-passed bill that the Senate didn’t support to change the rules-review process.

The Senate then unanimously passed a “clean” rules bill and sent it to the House; the House killed it.

Sen. Steve Bair, R-Blackfoot, co-chair of the Legislature’s joint budget committee, told the Senate, “I’d like to kindly ask this body to separate themselves from any political anger that they have in their hearts right now, and use your good common sense. It is good and appropriate for the state of Idaho, when good properties are available to purchase those properties to become part of the Capitol Mall. Property in the Treasure Valley is short, and it is pricey, and in my opinion it was a mistake for the state to divest itself of that property several years ago when we will have a future need for it. And therefore I would request your support to expand and maintain the integrity of our Capitol Mall.”

Sen. Jim Guthrie, R-Inkom, said, “If we had divested of this property 20 years ago and then things had changed,” he’d consider it. “But we did this two or three years ago.” And it happened at a time when the state was buying the former H-P campus in West Boise, with the idea that growing state offices would move out there, rather than locate downtown. “So now to come and buy this back at a half-million-dollar premium, I just can’t support it,” Guthrie said.

The bill died on a 12-18 Senate vote.

Though the bill didn’t specify it, the building in question was the former Home Federal Bank building, which is kitty-corner across State Street from the state Capitol. It was sold at auction by the Idaho Department of Lands and purchased by AGS Properties LLLP, a Boise partnership of several members of the Simplot family, nearly three years ago. For much of the past year, it served as Gov. Brad Little’s campaign headquarters as he ran for governor; he rented it from the Simplots.

Josh Jordan, spokesperson for the J.R. Simplot Co., said, “That building is actually owned by Adelia Simplot and is not related to company activities. I did touch base with her. She has listened to a few serious inquiries about the building and will continue to do so. She has no comment related to the state’s participation or lack thereof in commercial real estate.”

In 2016, the state Land Board had decided that the state endowment should divest itself of commercial properties that it owned around the state Capitol and elsewhere, including a self-storage business, after drawing political criticism for competing with private-sector landlords. The endowment also is getting out of state-owned lakefront lots on which private owners have built lake cabins; the proceeds from selling off those properties are being reinvested into income-earning timber and agricultural land.

On Dec. 1, 2016, the state Lands Department auctioned off seven commercial properties for $17.3 million. They included the bank building, three properties on Bannock Street including the location of 10 Barrel Brewing, the Idaho Public Utilities Commission’s former office building on Washington Street near the Capitol; Affordable Storage; and a parking lot in Idaho Falls.

The state had the properties appraised, and the starting bid was set at the appraised price. In the case of the bank building, that amount was just $830,000. Amid competitive bidding, the selling price ended up considerably higher, at $1,475,000, which the state lauded at the time as a windfall for the endowment, whose earnings fund public schools and other state institutions.

The House wanted to buy it back for $1,955,000 — $480,000 more than the state sold it for in 2016. That’s the asking price for the property.

Bedke said, “Fifty years from now, there is going to be a future Legislature and governor that’s going to rue the day that that got out of the state’s hands. Now I understand why they did it.” But, he said, “When it came up for sale again, even though it had appreciated in value, it was still, I thought, a smart investment to buy the ground, because it’s adjacent to the Capitol. And who knows what the next 100 years will bring, but one thing I’m sure of is that it won’t bring additional ground around the Capitol.”

He said, “In my mind, it was short-sighted not to acquire that. Maybe we’ll get a chance to do it in the future, but we should’ve done it this year.”

Betsy Z. Russell is the Boise bureau chief and state capitol reporter for the Idaho Press and Adams Publishing Group. Follow her on Twitter at @BetsyZRussell.

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