The borough has traded 27 acres along the Spur Road, facing the Back Channel, to a state agency which plans to subdivide the land and offer the parcels for sale to the public as early as summer 2028.

In exchange for transferring the vacant land to the Alaska Mental Health Trust Authority, the borough will receive title to about 240 acres of Trust land at several locations on the island adjacent to borough property.

The Trust Land Office on Feb. 20 issued a best-interest finding to proceed with the land swap, and the borough assembly voted unanimously on Feb. 24 to authorize the trade.

The Trust plans to start the subdivision process by next year, selling the land either by competitive bid or in an over-the-counter fixed-price sale. The 27 acres are just south of the golf course, with road access and electricity, but no sewer or water lines.

“Subdivision work in Wrangell remains a priority for the Trust Land Office, and we are committed to moving it forward at the earliest practical opportunity,” said Jusdi Warner, executive director of the Trust Land Office.

The land facing the Back Channel “is an excellent candidate for subdivision,” and likely will raise more for the Trust than the $1.65 million appraised value, according to a report prepared by Trust Land Office staff.

The report called the property “a high-value waterfront parcel.”

The state agency, which manages, leases and sells its land holdings to raise revenues for mental health services across Alaska, started formal work with the borough toward the Wrangell land swap in January 2025.

The borough’s 27-acre parcel was appraised at $1.65 million, while the 240 acres being transferred to the municipality were valued at $1.621 million, so Wrangell will receive a payment of $29,000 to cover the difference, “to ensure compliance with the state’s requirement for a value-for-value exchange,” Borough Manager Mason Villarma reported to the assembly.

The borough has no immediate plans for any of the 240 acres it will receive.

The Trust-owned parcels that will be transferred to the borough include about 141 acres parallel to the Spur Road (Ishiyama Drive) just east of the ballfields; 73 acres uphill from Zimovia Highway about midway between Shoemaker Harbor and the former 6-Mile mill site; and about 25 acres near Pats Creek Road.

“The borough will incorporate the acquired Trust parcels into its land inventory to support municipal land-use priorities, including development, infrastructure coordination and mitigation of slope stability concerns,” Villarma said in his report.

The state transferred ownership of the parcels to the Trust Land Office in 1996, as the agency was rebuilding its portfolio of lands to generate revenues.

“Throughout the past 30 years, timber harvest has taken place on several of the parcels that contained high-value economic timber,” but no timber sales are underway or planned for any of the parcels, the agency said in its best-interest finding that supports the trade with Wrangell.