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The state Board of Natural Resources has approved a controversial land exchange in Spokane that could lead to as many as 1,000 new homes on an undeveloped tract southwest of the city’s downtown.��

The Department of Natural Resources will transfer the nearly 200-acre parcel to a private real estate developer, which has plans to build housing, a park and a civic center. In exchange, the state will receive a commercial plot in Bellingham that is the site of a Haggen grocery store.

The board’s unanimous decision Tuesday came despite pushback from Spokane residents, city leaders and other state agencies who say the plan would eliminate some of the last open space in Spokane and that the surrounding infrastructure is not ready for such heavy development.

The agency, on the other hand, says the parcel is no longer generating money for the state — when managing lands. It has not produced timber revenue since 2009 and has been designated for residential use by the city. Funding from state lands helps pay for schools and some local government services.

“We have a piece of property here that’s been underperforming for decades, generating no revenue and, moreover, costing our agency and our schools,” Commissioner of Public Lands Hilary Franz said Tuesday. “We are all very aware of the dire straits our schools are in.”��

The plot, known as the Thorpe property, is located in the city’s Latah Valley. The department’s plan is to transfer the 192-acre plot to Redmond-based , which ��

The Bellingham property is a 4-acre parcel with a Haggen grocery store and parking lot. The state expects it would get about $900,000 of yearly revenue from the Haggen lease.��

The exchange, which has been in the works for years, sparked controversy across the region. Nearby residents and local leaders argue the Latah Valley lacks enough roads, fire departments, schools, water and other resources to handle so much new housing. They also point out concerns that the area is becoming increasingly susceptible to wildfires.��

Greg Figg, transportation planner at the state Department of Transportation, told board members Tuesday that developing the Thorpe property could lead to $80 million to $90 million in infrastructure costs to accommodate additional traffic.��

“None of that is in any form of the WSDOT or local agency budgets,” Figg said. “Nor would it be likely that private development could fund that magnitude of improvements.”��

Kirsten Angell, a Spokane resident, called the process leading up to the land exchange “extremely disingenuous.” She criticized the department for not being open to alternative options and said there are still unanswered questions about the deal.

“If this exchange is approved today, the trust the community has for this institution will be mightily and irreparably damaged,” Angell said.

At Tuesday’s meeting, Franz said there was still a window for the local community to preserve the land in some way. Although the state is transferring the land to Blue Fern, the developer could still choose to transfer their rights to the city directly, which could work to preserve it. In exchange, Blue Fern could receive another property not located in the Latah Valley.

Despite the concerns, the exchange had support from board members and school director leaders.

Franz, who is leaving office next week, said it fits under the department’s efforts to deal with their “transition lands,” or parcels scattered across the state that are unsuitable for logging.��

Martin McElliot, the exchange project manager, said the agreement helps address “longstanding funding shortfalls” for 51�ԹϹ��� schools and reduces the costs for the state.

“We’ve waited long enough for this property to generate revenue for the trust,” said Russ Pfeiffer-Hoyt, chair of the 51�ԹϹ��� State School Directors’ Association’s School Trust Lands Advisory Committee.