COEUR d'ALENE - The city of Coeur d'Alene and Washington Trust Bank will begin working on an annexation agreement and master plan for 22 acres of property recently annexed into the city.

Both sides said this week they will begin working on a plan after the holiday weekend.

An annexation agreement would outline contingencies for development on the property that sits in Mill River along the Spokane River. They're typically finished within six months.

"We're ready to go," said Sandi Young, Verdis president and principal partner representing WTB, the property owner.

The City Council unanimously approved annexation June 18, with a majority of the land zoned Commercial 17. The bank doesn't have plans to develop the property, but requested annexation to improve its marketability as it prepares to sell it.

Around 7 acres sit next to the Spokane River, while the remaining 14.82 acres are upland near Seltice Way. The properties are separated by a thin strip of abandoned railroad line owned by Burlington Northern Santa Fe Railway.

Part of an annexation agreement could be incorporating public access - possibly pedestrian trails connecting to the nearby Centennial and Prairie trails - into the property along the abandoned railroad line, city attorney Mike Gridley said.

"It gives us an opportunity for more connection and circuits," he said. "You could create some neat loops."

But to do that the city would have to take over the property from BNSF. The sides had been negotiating a deal years ago, but talks cooled off in 2008 when the economy crashed and the country fell into a recession.

But those talks should pick back up, Gridley said, though neither side has made an offer.

Washington Trust Bank took over the parcel of land from developer Marshall Chesrown and Mill Sites LLC., through a deed in lieu of foreclosure in May 2010, according to bank and Secretary of State records.

The 14.82-acre parcel is zoned Commercial 17, which allows duplex housing to commercial uses like mini-storage. The 7-acre piece on the river is zoned R-12, which allows residential development at 12 units per acre.

The annexation agreement will also include a Planned Unit Development plan for both parcels. If the bank sells the property, the new owner would work with the city on the agreements.

WTB has reached out to the city's urban renewal agency, Lake City Development Corp., to see if the property could be included in an urban renewal boundary. LCDC wrote a letter of support for the possibility.

If it's incorporated into an urban renewal boundary, it would mean LCDC's tax increment financing could be available to front some costs for developers looking to get a project off the ground there. LCDC's River District is near the site, and the parcel is contiguous to city limits, but the City Council would have to approve any modification to an urban renewal boundary change.