Our Voice: DNR land ownership hinders Pasco development plans
Our state’s Department of Natural Resources owns some prime real estate in Pasco.
You’ve likely seen the irrigation circles at the Road 68 and Interstate 82 interchange.
By state order, DNR has to sell the portion of the land it has owned since 1889 zoned for residential development.
The land’s value has outpaced its usefulness as an investment property. DNR will reinvest the proceeds in agricultural lands in Franklin County.
But the department can retain the Pasco land zoned for commercial use, and that’s where things get complicated.
The Department of Natural Resources was created to manage state trust lands for the people of Washington. Under the guidance of the elected commissioner of public lands, DNR manages seven specific trusts to generate revenue and preserve forests, water and habitat.
DNR manages 5.6 million acres of forest, range, agricultural, aquatic and commercial lands with more than $200 million in annual financial benefit for public schools, state institutions and county service, according to its website.
Part of the department’s portfolio is commercial property, which brings in a meager $9 million annually. It manages eight properties with commercial buildings and 26 ground leases where DNR owns and leases the underlying land, but lessees own the structures.
And that is the apparent plan for the commercial portion of the property in Pasco. But that arrangement poses certain challenges for those wanting to develop the property. Financing is a problem in particular. Those who want to build on land they can never own have to be cash rich in order to make the arrangement feasible. Financial institutions want to have a way to recoup their investment should something go awry.
Pasco officials say their discussions with commercial property developers have them shying away from the property because of the ownership by DNR and the challenges that poses. They say only companies with large pools of cash can find ways to build on state-owned properties, citing Costco and Lowe’s as two such examples.
The city is hopeful that DNR will ultimately decide to sell the commercial land as and clear the way for more traditional development arrangements.
Back in 2014, when the land sale was first discussed, Mayor Matt Watkins said, “If you look at Pasco, its irrigation circles that are smack dab in the middle of the city. It’s a much-belated development of property that should have been done a long time ago.”
That’s even more true today as Pasco continues to grow by leaps and bounds.
It only makes sense for the state to sell the land and reinvest the money elsewhere in Franklin County. Trying to persuade developers to build on the land is too burdensome and costly, especially for locally owned businesses.
This story was originally published July 8, 2016 at 2:52 AM with the headline "Our Voice: DNR land ownership hinders Pasco development plans."