Pasco officials are getting ready for almost 300 acres of state land in the fastest-growing part of town to become available for development.
The state Department of Natural Resources is required by a provision in the 2013 state budget to auction land southwest of the Interstate 182-Road 68 interchange -- now used for farming -- for residential development.
The department is allowed to keep some of the land fronting major streets, but must lease it for commercial use.
The auction is required to happen before June 30, 2015. The city plans to take the first steps in zoning the property for residential and commercial use later this month.
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"If you look at Pasco, it's irrigation circles that are smack dab in the middle of the city," Mayor Matt Watkins said. "It's a much-belated development of property that should have been done a long time ago."
Natural Resources has owned the land since Washington became a state in 1889, agency spokesman Bob Redling said. It is among 3 million acres the agency owns across the state, with most of the land east of the Cascades used for farming.
Four chunks of land are expected to be auctioned, Redling said. They could be purchased by one or multiple buyers.
State Senate Majority Leader Mark Schoesler, R-Ritzville, inserted the language requiring the Department of Natural Resources to make the residential land available into the 2013 capital budget.
Undeveloped property in Pasco's urban growth area is rare, Schoesler told the Herald.
"From the DNR standpoint, the land is worth a lot more money than what it's providing as farmland today," he said. "DNR has a chance to sell the property and leverage it. First and foremost, their job is to maximize revenue for their trust."
The land could hold hundreds of single-family lots, as well as hundreds of thousands of square feet for commercial use.
Pasco is surveying to determine where in the existing crop circles an extension of Chapel Hill Boulevard will be built, Rick White, the city's community and economic development director, said in a March 27 memo to the city planning commission.
Chapel Hill Boulevard is now broken between Road 84 to the west and Road 68 to the east. The city council recently set a goal at its biennial planning retreat to have the road complete by 2016.
Workers are also surveying for a potential extension of Road 76 from Argent Road in the south to eventually crossing under Interstate 182 to the north, White said.
Because city does not own the property for the roads, the city would likely negotiate with Natural Resources and/or the buyer, White said.
The city is looking at rezoning the area south of the expanded Chapel Hill Boulevard for residential, Deputy City Manager Stan Strebel said. Higher-density residential, commercial and office development would go in north of the new road.
The Pasco Planning Commission is expected to discuss the zoning May 15.
Pasco officials wish Schoesler had required the state to also sell the commercial land, instead of leasing it.
Smaller businesses may be willing to lease, like the Maverik convenience store that now leases property from Natural Resources at the existing southeast corner of Road 68 and Chapel Hill Boulevard, but grocery and "big box" stores want to own their land, Strebel said.
"It's the preference," Strebel said of commercial developers. "They want to be in control of their future. They prefer to buy property and develop their facilities rather than be at the mercy of a landlord."
Natural Resources also owns land for the Lowe's Home Improvement store, which it leases north of the interstate, Redling said.
Schoesler said he thought the commercial land was required to be sold in the budget provision.
"DNR needs to sell the property, get it on the tax rolls," he said.
But Natural Resources can make money directly for its school construction fund if it leases the 60 commercial acres, Redling said. Money from the sale of land can only go toward buying more land, which it can eventually sell again.
"The idea is that future generations still get the benefit of the trust," he said. "It's part of diversifying the portfolio a bit so we're not totally dependent on the timber economy."
The department plans to set an auction date for residential property before the 2015 deadline, and hopes to have the commercial land leased by then, Redling said.
"Commercial development just moves at its own speed," he said.
The Pasco School District will have the option to buy an additional 25 acres in the current crop circles.
The land would most likely be used for an elementary school as the district grows, said John Morgan, the school district's assistant superintendent of operations. About five acres would go toward a park for the city and school district to share.
"You get double use out of the park," he said.
-- Geoff Folsom: 509-582-1543; email@example.com; Twitter: @GeoffFolsom