The property is part of the San Marcos River recharge lands and is known as the Elsik tract. If the application is approved, funding would be provided through the $75 million POSAC bond approved by voters in 2020.
Council Member Shane Scott was the lone vote against the resolution. He also attempted to postpone the item indefinitely, which had a July application deadline, but received no support.
"They need to have city backing in order to ... possibly get the funding," Council Member Melissa Derrick said. "If it's going to have a chance to even succeed, then we have to get it done in time for them to apply to POSAC."
Mayor Jane Hughson proposed an amendment to remove a section from the resolution about possible transfer of ownership of the land to the city, which could include development, management and maintenance of the property.
The amendment followed remarks made by Scott, who was concerned the foundation would attempt to sell the land to the city for a profit.
A split City Council voted 4-3 in favor of the amendment. Hughson and Council Members Alyssa Garza, Mark Gleason and Scott passed the measure. Council Members Max Baker, Saul Gonzales and Derrick voted the other way.