In a land deal billed as a holiday gift to the public, the city of Seattle announced yesterday it will expand Discovery Park by 23 acres with the purchase of property used for...

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In a land deal billed as a holiday gift to the public, the city of Seattle announced yesterday it will expand Discovery Park by 23 acres with the purchase of property used for Navy housing.

Once completed, the land deal will end all military presence on property that began as an Army fort at the turn of the 20th century. In return, for the first time since Discovery Park was created 30 years ago, it will be home to private residences.

Seattle Mayor Greg Nickels said the city will pay $9 million and give other city-owned property to private developer American Eagle Communities in exchange for the 23-acre parcel.

Under the agreement, American Eagle will be allowed to sell 26 historic houses elsewhere in the park to private owners. The homes are currently being used as Navy officer housing.

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The agreement states the 100-year-old Georgian revival houses must be preserved.

The Navy chose American Eagle, a Dallas-based developer, to privatize its housing. Under a 1996 federal law, the Navy is divesting itself of its housing for Navy personnel and their families in favor of housing to be built by American Eagle.

At Discovery Park, the Navy houses enlisted personnel in 66 modular homes on the 23-acre parcel known as the Capehart property. The Navy wants to move them closer to Naval Station Everett, where most work.

When the Navy first announced plans to sell the property, supporters of the park feared it would be developed into private residences. They wanted the land to be preserved as open space in a park regarded as the city’s crown jewel.

“It’s the closest thing we have to real wilderness in the city,” said Phil Vogelzang, a Queen Anne resident who has long done reforestation work at the park.

As chairman of the Discovery Park advisory council, Vogelzang staunchly fought against development of Capehart or any deal involving a land swap with property adjacent to the park.

At a news conference at the park’s Visitors Center yesterday morning, Vogelzang saluted city officials for listening to the community. U.S. Rep. Jim McDermott, D-Seattle, and King County Executive Ron Sims each pledged to find money from federal and county sources, respectively, to help the city raise the $9 million.

The land deal, signed yesterday as a memorandum of understanding, will be forwarded to Seattle City Council for approval. It stipulates that, within 18 months, the city must come up with the money and the city and American Eagle must identify and agree upon additional property.

City-owned property known as Bay Terrace, adjacent to Discovery Park, earlier had been on the table for a possible swap. But residents protested vehemently against the trade. Kathryn Thompson, managing director for American Eagle, acknowledged Bay Terrace was no longer an option.

Thompson said her company had already looked at some six to eight city properties but that they weren’t acceptable for a variety of reasons: environmental issues, zoning issues, market issues.

“We’re waiting to look at other inventory,” she said.

But in speaking about her latest inventory — the 26 historic homes — she predicted potential buyers would be “standing in line” for a chance to purchase one of the houses with sweeping views of Puget Sound.

Discovery Park, home to eagles, herons and mountain beavers, sits on a promontory overlooking Elliott Bay and the Olympic Mountains. At 534 acres — 557 once the deal is completed — it is the city’s largest park.

In 1895, Congress authorized an Army post on Puget Sound and a site on the Magnolia bluff was eventually deeded for what became Fort Lawton. When the fort became surplus property in the 1970s, some of the land was deeded to the city for Discovery Park.

Park officials envision a meadow where Capehart now stands.

Florangela Davila: 206-464-2916 or fdavila@seattletimes.com