SALEM — A proposed expansion of the Deschutes County Fair & Expo Center and development of a large-scale industrial complex near Redmond could take a major step forward at a state meeting Tuesday.

The Department of State Lands has recommended the State Land Board approve the submission of planning applications “to advance this long-anticipated project to final approval.”

Approval would be a turning point in the 10-year-long discussion on how to use approximately 945 acres the state obtained in 2008 from the federal Bureau of Land Management.

The board will consider plans to expand the urban growth boundary of Redmond to include what is called “The South Redmond Tract” at the southern end of the city limits, just east of U.S. Highway 97.

The agenda items include a draft of an annexation agreement between the state and the city of Redmond.

Under the plan, Deschutes County and the Oregon Military Department would acquire the most northerly 160 acres. The county would use its 140-acre parcel for the fairgrounds expansion. The remaining 20 acres would be used to develop a new Oregon Military Department “Readiness Center” that would allow the National Guard to relocate from the downtown Redmond Armory.

The remaining 785 acres would be zoned for Large Lot Industrial use.

The land has an estimated “as is” value of $8.1 million if the plans are approved. The state plans on spending $200,000 for permits and $2.6 million for basic infrastructure on the land.

The city of Redmond has committed to building a $2.5 million pump station to serve the property.

The county and Redmond are proposing to trade equal value industrially zoned land within the eastern portion of the existing Redmond urban growth boundary as compensation for the state. The state could then sell the land to private developers.

“This … makes them whole on land value,” said Deschutes County Commissioner Tammy Baney in an email Saturday. “They may actually come out ahead by being able to sell smaller parcels in East Redmond than large parcels in the newly annexed area.”

The project has its roots in a 1991 federal court decision that Oregon was owed about 5,200 acres of federal public domain land. The state and federal governments negotiated an “in lieu” settlement in 2008 to transfer 945 acres of Bureau of Land Management property near Redmond.

The State Land Board manages the property to benefit the Common School Fund, with revenues going to support K-12 education in Oregon.

Except for some military exercises, the land has remained unused over the past decade and does not have roads, electricity, irrigation or other infrastructure.

Redmond Mayor George Endicott and Redmond Economic Development Senior Director Jon Stark wrote a May 23 letter urging approval of Tuesday’s agenda items. Approving the land transfers and funding infrastructure is a key to using the land to attract companies that can offer higher-paying jobs to residents in the area.

“These efforts make this property attractive to traded sector family-wage jobs,” wrote Endicott and Stark. “But for that investment, the land will likely continue to sit underutilized and the region will miss the opportunity to advance our efforts to increase our average annual income, which sits well below $40,000.”

In a separate letter, the Deschutes County Commission said it hoped the process of the land transfers could be completed within a year.

The board said the projects were key to keeping pace with rapid growth in the region and the need for “economic success” moving forward.

“Although there is still work to be done, these projects are in the final stages and we are eager to bring them to completion,” said the letter signed by commissioners Tony DeBone, Phil Henderson and Tammy Baney.

— Reporter: 541-640-2750, gwarner@bendbulletin.com