The State Land Board approved the sale Tuesday of a 36-acre Redmond subdivision with 63 ready-to-build lots to a Bend homebuilding company.

Under the deal, Palmer Homes will pay $3.33 million in phases over 18 months for the Forked Horn Butte development, which the state acquired in a 2009 property exchange.

Palmer, builders of Bend housing developments including Foxborough, Braebern and Stonehaven, gets half of the developed lots immediately, according to the Land Board agenda. Within 18 months, Palmer will get the remaining lots and 19 additional acres of undeveloped bare land.

The entire 36 acres was valued at $2.75 million in 2009, according to the Land Board information. The state took ownership of Forked Horn Butte in a property exchange with Giustina Resources, a private timberland owner based in Eugene.

Giustina received 620 acres of forestland in Lane County, and the state got the subdivision, which is east of SW Helmholtz Way and south of SW Yew Avenue, about a half-mile north of Ridgeview High School.

Forked Horn Butte sits on a west-facing slope with unobstructed views of the Cascades, according to a state description. It has paved streets, sidewalks, streetlights and prepared home lots on 17 acres.

The Department of State Lands began exploring a sale of the subdivision in June. But after getting two widely different appraisals on the property’s value, the state decided to solicit proposals on the best way to sell the property and held a community meeting in December in Redmond.

In the end, the state decided to accept two types of offers: full cash or phased purchase.

Two cash offers were submitted, one at the 2009 appraised value and the other at $2.21 million, according to the Land Board information. Two other phased-purchase offers were also received. One was at a lower price, and the other called for a seven-year purchase timeline, according to the information.