The DNR wants to swap 27 acres of trust land in Kitsap County for a privately owned parcel in Arlington on which a Bartell Drugs operates. (Washington State Department of Natural Resources)

The DNR wants to swap 27 acres of trust land in Kitsap County for a privately owned parcel in Arlington on which a Bartell Drugs operates. (Washington State Department of Natural Resources)

This state agency’s real estate deal would benefit schools

The Department of Natural Resources might swap 27 acres of trees for a commercial parcel in Arlington.

ARLINGTON — The state Department of Natural Resources is looking to swap 27 acres of trust land in Kitsap County for a smaller privately owned parcel in Arlington on which a Bartell Drugs operates.

Its goal is to secure an immediate stream of money for a statewide fund used to build public schools. To accomplish this, the agency would unload residential property not generating revenue and pick up commercial land with an existing tenant.

As proposed, the agency would exchange its forested acreage abutting Highway 303 near the Kitsap Mall for the 1.5-acre property at 7423 204th St. NE owned by the Evergreen Housing Development Group.

There could be some money changing hands as well. Once appraisals for both properties are completed, if the Arlington property appraises for more than the Silverdale property, the state agency can pay cash to balance the transaction, officials said.

If the state acquires the Arlington site it would manage the lease with the retail operator, bringing in $483,000 annually for the Common School Trust, which is used to help fund construction of public schools. The state agency now manages 26 such ground leases where it owns and leases the underlying land.

The 27 acres in Kitsap County have been held in trust since statehood in 1889. They are located in the urban growth area and zoned for urban high residential, according to the agency. Currently blanketed in trees, the area has not been harvested in more than 30 years and thus has not earned any income for the state.

“This land swap is a perfect way to take a property that hasn’t generated any money in a generation and turn it into a reliable source of revenue for school construction,” said Kenny Ocker, communications manager for the agency’s product sales and leasing division.

Evergreen Housing Development Group of Seattle contacted the state about a possible transaction. The firm’s focus is on building multifamily complexes such as apartments and town homes and not owning commercial real estate, said Andrew Brand, the company’s executive director of development.

Its portfolio includes a 195-unit undertaking in Lake Stevens on 20th Avenue east of Highway 9. Construction is under way and the first units could be leased out in the fall of 2020, Brand said.

When company officials became aware of the state-owned property in Kitsap County, and its zoning, he said, “It made sense to do the swap. We just think it is an underserved market for brand new multifamily construction.”

Agency officials will host an informational meeting at 6 p.m. Thursday in Silverdale. It will be in the community partner room of the Kitsap Mall, 10315 Silverdale Way NW, Silverdale.

Also, written comments are being accepted through 5 p.m. Sept. 27. They can be emailed to or mailed to PO Box 47014, Olympia, WA 98504.

The Board of Natural Resources is scheduled to consider the transaction in its November meeting.

Jerry Cornfield: 360-352-8623; jcornfield@herald Twitter: @dospueblos.

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