The borough is looking to trade 27 acres of undeveloped land it owns between the Spur Road and the Back Channel, just south of the golf course, with a state office that would subdivide and develop the land for residential lots.

In exchange for giving the property to the Alaska Mental Health Trust Authority — which manages about 1 million acres statewide to generate revenues to fund services that benefit Trust beneficiaries — the borough would receive Trust-owned land of equal value on Wrangell Island.

A private appraisal of the 27 acres last year put the value at $1.65 million.

The Trust’s resource management committee in January recommended approval of the trade by the authority’s full board, which will meet Feb. 18-19 in Anchorage.

The list of a half-dozen Trust-owned parcels identified for the trade include 20 acres on Pats Creek Road, 133 acres parallel to Ishiyama Drive just east of the ballfields, 53 acres near the town’s water reservoirs, and 73 acres uphill from Zimovia Highway about midway between Shoemaker Harbor and the former 6-Mile mill site.

“We’d be getting land adjacent to borough property to enhance the value,” Borough Manager Mason Villarma said. The parcels include land next to trails and near the water reservoirs.

“We’re not going to do anything with the 27 acres” that would be traded to the Trust, Villarma said in an interview last month. “This will be the first of a series of exchanges we hope to do with them.”

The trade would further the borough’s goal of making more land available for residential development, at no cost to the community.

If the full board approves the land swap, the Trust would issue a best-interest finding and public notice that explains the trade and identifies the Trust lands selected, asking for comments on the deal, explained Jusdi Warner, executive director of the Trust Land Office.

If there are no public objections to the trade, the land swap could be completed this summer, she said.

A resolution to approve the land trade likely will be on the agenda for the Feb. 24 borough assembly meeting.

In the 1950s, Congress created the Alaska Mental Health Trust to manage lands later selected by the state to provide funding for mental health services in the new state. In addition to its million acres, the Trust has accumulated almost $830 million, which is invested to produce revenue for services for beneficiaries.

The Trust raises money from property sales, land leases, timber sales, mineral exploration and production, sand, gravel and rock sales.

The office owns about 4,000 acres on Wrangell Island.

“We don’t commonly exchange land,” Warner said. The last swap was several years with the U.S. Forest Service, she said.

The Wrangell deal started more than a year ago, when the borough and Trust Land Office signed a memorandum of understanding to coordinate efforts for cost-effective use of lands “to further mutual goals.”

The borough approached the office with the intent of exchanging parcels “that would be better suited” for ownership by the municipality or by the Trust Land Office, according to the staff report prepared for last month’s resource management committee meeting.

Land office and borough staff worked last summer to identify parcels for a possible trade. The borough’s 27-acre parcel facing the Back Channel “is an excellent candidate for subdivision,” and after it is subdivided for sale likely will raise more for the Trust than the $1.65 million appraised value, according to the staff report.

The report calls the property “a high-value waterfront parcel.” There is power to the highway along the 27 acres, but no water or sewer lines.

The land would be sold through the office’s competitive bid or over-the-counter land sales program, the staff report said.

The parcels the Trust is looking to trade to the borough are adjacent to the municipality’s own land holdings, and present “development challenges,” such as steep topography, which would make it difficult for the Trust to sell or lease the land for income.

In addition, the parcels identified for the swap have a minimal amount of timber, the staff report said, further diminishing their income value for the Trust. “The economic timber that can be safely harvested has already been harvested.”