HomeMy WebLinkAboutResolution No. 2015-50Suggested by: Administration
CITY OF KENAI
9 NO. 2015 -50 SUBSTITUTE
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING
THE PURCHASE OF THE FOLLOWING SEVEN PARCELS OF REAL PROPERTY:
GOVERNMENT LOT 15, SECTION 7, TOWNSHIP 5 NORTH, RANGE 11 WEST, SEWARD
MERIDIAN; LOTS 1, 2, 3, AND 4, DRAGSETH SUBDIVISION, ACCORDING TO PLAT KN
77 -56; AND LOTS 5A AND 6A DRAGSETH SUBDIVISION NO. 2 ACCORDING TO PLAT
KN 91 -33, ALL IN THE KENAI RECORDING DISTRICT, THIRD JUDICIAL DISTRICT,
STATE OF ALASKA, INCLUDING ALL IMPROVEMENTS THEREON, FROM ARK
PROPERTIES, LLC FOR THE PURPOSE OF CONSTRUCTING IMPROVED PUBLIC
ACCESS TO THE CITY'S SOUTH BEACH.
WHEREAS, each year tens of thousands of visitors participate in the dip net fishery in
the City of Kenai; and,
WHEREAS, the City does its best to accommodate the visitors and fishery and mitigate
the impacts to local residents, sensitive environmental areas and City infrastructure;
and,
WHEREAS, managing physical access to the fishery poses particular challenges that
affect local property owners and City lands; and,
WHEREAS, the City Council has previously, unanimously appropriated through
Ordinance 2771 -2014, a State Grant for one million nine hundred thousand dollars
($1,900,000) for the purpose of designing and constructing a new roadway for access to
the South Beach and related improvements; and,
WHEREAS, the City has held numerous meetings with affected property owners and
state agencies weighing alternatives for improved South Beach Access; and,
WHEREAS, the City has explored obtaining permitting for building a new road across
wetland areas and alternatively purchasing select parcels of unimproved property; and,
WHEREAS, after review from permitting agencies and negotiations for property
acquisition, the City's apparent best option for providing new beach access to the dip
net fishery on the South Beach is the purchase of the following seven parcels of property:
Government Lot 15, Section 7, Township 5 North, Range 11 West, Seward Meridian,
Kenai Recording District, Third Judicial District, State of Alaska; Lots 1, 2, 3, and 4,
Dragseth Subdivision, according to Plat KN 77 -56 filed in the Kenai Recording District,
Third Judicial District, State of Alaska; Lots 5A and 6A Dragseth Subdivision No. 2
according to Plat KN 91 -33 filed in the Kenai Recording District, Third Judicial District,
State of Alaska; and,
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Resolution No. 2015 -50 Substitute
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WHEREAS, the purchase of these properties with State grant funding will enable the
City to construct a new road with minimal habitat disturbance, eliminate permitting
requirements and allow for utilization of existing roads while accomplishing the goals of
providing improved access that alleviates existing conflict between fishery participants
attempting to access the fishery and local property owners; and
WHEREAS, the City does not need all seven parcels or the improvements for road
construction, however, purchasing all seven properties including improvements was the
only option accepted by the properties' owner and the City intends to re- subdivide the
properties and sell the improvements and land no longer needed for a public purpose
as soon as reasonably possible; and,
WHEREAS, the granting agency, the Department of Commerce, Community and
Economic Development has reviewed the City's proposed plan and does not object to
the use of grant funds for the purchases of all seven parcels up to the purchase price of
one million six hundred thousand dollars ($1,600,000) as long as the City provides all
sale proceeds of the anticipated future sale to the State to be credited to the Grant (15-
DC -0078) for use towards project completion, with unused funds, if any, at the end of
the project returned to the State; and,
WHEREAS, consistent with the intent of the project and State requirements for use of
the Grant funds, the Properties will be acquired in trust for the residents of the City of
Kenai and Dip Net Participants to be used consistent with the Grant and proceeds of
any future sale of properties will not go into the General Fund Land Sale Permanent
Fund.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA:
Section 1. That the City Manager is authorized to enter into an agreement to
purchase the following several parcels of real property including all improvements
thereon and certain pieces of personal property as identified in the attached Purchase
and Sales Agreement:
Government Lot 15, Section 7, Township 5 North, Range 11 West, Seward
Meridian, Kenai Recording District, Third Judicial District, State of Alaska;
Lots 1, 2, 3, and 4, Dragseth Subdivision, according to Plat KN 77 -56 filed in the
Kenai Recording District, Third Judicial District, State of Alaska; and
Lots 5A and 6A Dragseth Subdivision No. 2 according to Plat KN 91 -33 filed in
the Kenai Recording District, Third Judicial District, State of Alaska,
for the price of one million six hundred thousand dollars ($1,600,000) plus closing costs
allocated in the Purchase and Sales Agreement Attached hereto and complete the
purchase subject to a professional appraisal provided to Council that supports the
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purchase price, title reports, surveys and satisfactory results of any other relevant due
diligence inquiries the City Manager may make.
Section 2. That the seven properties described above shall be acquired in trust for
the residents of Kenai and Kenai River Dip Net Participants with the condition that
proceeds from the subsequent sale of any of the acquired properties be returned to the
State to be credited towards the Grant.
Section 3. That the City Council shall approve any future subdivision of the lands
and sale of associated properties.
Section 4. That this resolution takes effect immediately upon passage.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 16th day of
September, 2015.
PAT PORTER, MAYOR
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REAL ESTATE PURCHASE AND SALE AGREEMENT
THIS REAL ESTATE PURCHASE AND SALE AGREEMENT (this "Agreement ") is made
as of , 2015 (the "Effective Date "), by and between ARK Properties LLC, an
Idaho limited liability company, whose address is 11204 N. Bar 21 Drive, Glenns Ferry, Idaho 83623
(referred to as "Seller "), and the City of Kenai, an Alaska municipal corporation, whose address is 210
Fidalgo Ave., Kenai, Alaska 99611 (referred to as "Buyer "). Seller and Buyer (individually, a "Party"
and collectively, the "Parties ") hereby agree as follows:
1. Proverty. Seller hereby agrees to sell to Buyer and Buyer hereby agrees to purchase from Seller,
subject to the terms, conditions and provisions set forth in this Agreement, all of Seller's right, title, and
interest in and to the real property located in the Kenai Recording District, in the Third Judicial District of
the State of Alaska, consisting of approximately 11.67 acres, and legally described on Exhibit A attached
hereto and the items of personal property described on Exhibit B (the "Property "). The term "Property"
as used in this Agreement includes all of Seller's privileges and easements appurtenant to the said real
property, including, without limitation, all of Seller's right, title, and interest, if any, in and to all
minerals, oil, gas, and other hydrocarbon substances in, on, and under the property; all development
rights, air rights, and water rights owned by Seller relating to the property; and all easements, rights of
way, or other appurtenances of Seller used in connection with the beneficial use and enjoyment of the
property. The personal property owned by Seller shall remain on the Property until the earlier of (a)
written notice by Buyer to Seller to remove the personal property, issued not prior to forty five (45) days
prior to final date for removal of personal property, or (b) two (2) years from date of Closing. The
personal property to remain on the Property, as provided in the prior sentence, shall not include any of the
personal property of Seller's tenant located on the Property.
2. Purchase Price, Deposit.
2.1 Purchase Price. The total purchase price for the Property is One Million Six Hundred
Thousand Dollars ($1,600,000) (the "Purchase Price "), which Buyer shall pay in cash at Closing,
including the receipted Deposit which shall be credited toward the Purchase Price.
2.2 De osit. On or before the Effective Date, Buyer shall deposit with an escrow agent
selected by Buyer ( "Escrow Agent"), an earnest money deposit in the amount of Twenty Five Thousand
Dollars and No /100 Dollars ($25,000.00) (the "Deposit "), in the form of a check or wire transfer.
Escrow Agent shall deposit the Deposit in its trust account and any interest earned thereon shall be
credited to Buyer's account and deemed to be part of the Deposit.
2.2.1 In the event of the consummation of the purchase and sale of the Property as
contemplated hereunder, the Deposit shall be paid to Seller and credited against the Purchase Price on the
"Closing Date" (as defined in Section 5.1 below).
2.2.2 hi the event the sale of the Property is not consummated because of (a) a Seller
Default as defined in Section 9.3, or (b) the termination of this Agreement by Buyer in accordance with a
right to so terminate as provided herein, then the Deposit shall be immediately and automatically returned
and paid over to Buyer by Escrow Agent without the need for any further action by either Party hereto.
2.2.3 In the event the sale of the Property is not consummated because Buyer fails to
complete this transaction without legal excuse, or fails to close for any of the reasons set forth in Section
9.2 below, the Deposit shall be immediately and automatically paid over to Seller without the need for
any further action by either Party hereto and shall be retained by Seller in accordance with Section 9.2.
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Purchase and Sale Agreement
3. Title Matters.
3.1 Approval of Preliminary Report. Within five (5) days of the Effective Date, Buyer
shall procure a Preliminary Report for American Land Title Association ( "ALTA" ), standard or extended
coverage for the Property ( "Preliminary Report") from a title company selected by Buyer (the "Title
Company "). As provided in Section 3.2 below, during the Contingency Period Buyer may procure a
Survey and deliver the same to Seller and the Title Company.
3.2 Delivery of Title Notice. Buyer shall give written notice (a "Title Notice ") to Seller
objecting to any matters shown in: (a) the Preliminary Report, any reissued Preliminary Report, or any
supplemental title report (collectively, the "Title Report") issued after the Effective Date of this
Agreement, within five (5) days of receipt of a report; and (b) any survey(s) obtained by Buyer, at
Buyer's sole cost and expense (a "Survey "), within five (5) days of receipt of the Survey, which give rise
to exceptions other than reservations in patent, platted easements and restrictions, zoning ordinances,
property assessments, and general taxes for the year 2015, which are disapproved by Buyer
( "Disapproved Exceptions ").
3.2.1 Seller warrants the property is free and clear of all liens and encumbrances.
3.2.2 Any deed(s) of trust, delinquent taxes or assessments, mechanic's or judgment
liens, or any other consensual or non - consensual liens contained in the Title Report (unless caused by or
resulting from Buyer's Activities as defined in Section 4.2); any gap in title; or any right of a third party
to use or occupy the Property beyond the Closing Date (excluding recorded easement rights) shall
collectively be deemed Disapproved Exceptions, and Buyer shall have no obligation to give Seller notice
of such defects. Seller shall not enter into any new encumbrance, deed of trust, mortgage, or lien or allow
any other new deemed Disapproved Exceptions to be filed or recorded against the Property after the
Effective Date of this Agreement.
3.3 Seller's Response to Notice of Defect. Within ten (10) days following receipt of a Title
Notice, Seller shall notify Buyer of what action, if any, Seller proposes to take to remove or otherwise
satisfy the Disapproved Exception(s) (the "Seller's Notice "). Seller shall provide in Seller's Notice its
proposed steps to remove the Disapproved Exception(s) and an estimated timeline to accomplish the
same. Within five (5) days after receiving a Seller's Notice, Buyer shall notify Seller if it does not agree
that Seller's proposed steps are sufficient, and the alternative steps which Buyer believes are necessary.
Thereafter, the Parties shall use their best efforts to agree on a procedure for Seller to remove any
Disapproved Exception(s) that Seller agrees to remove. Notwithstanding the foregoing, should Seller
take the steps which have been agreed upon or otherwise not objected to by Buyer and diligently pursue
the same, and should the Disapproved Exception(s) not have been removed from title by the Title
Company prior to the Closing Date through no fault of Seller, such failure shall not be a breach of Seller
under this Agreement, and Buyer may elect by written notice to Seller to: (a) waive the Disapproved
Exception(s), in which case Seller shall inform Buyer of where it is in the process of removing the
Disapproved Exception(s), and shall provide Buyer with all materials regarding the removal, and, in the
case of a quiet title action, after Closing, allow Buyer to substitute counsel in such action; (b) extend the
Closing Date to a date which is not more than thirty (30) days after such Disapproved Exception is
removed; or (c) terminate this Agreement in which case Seller shall retain the Deposit.
3.4 Permitted Exceptions. All exceptions noted on the Title Report which are not
Disapproved Exceptions shall be the Permitted Exceptions"
3.5 Disapproved Exceptions. Except as specifically provided in Section 3.3. when Seller
has taken the steps which have been agreed upon or otherwise not objected to by Buyer and diligently
Purchase and Sale Agreement
pursues the same, and the Disapproved Exception(s) have not been removed from title by the Title
Company prior to the Closing Date through no fault of Seller, if Seller fails to remove and/or satisfy any
Disapproved Exceptions affecting title to the Property that Seller has been notified of on or before the
Closing Date, Buyer may terminate this Agreement and Buyer shall be entitled to return of the Deposit.
4. Property Condition Inspection.
4.1 Entry. From the Effective Date until the earlier of termination of this Agreement or
Closing, Buyer and its duly authorized agents or representatives shall have the right to enter onto the
Property to conduct the Activities set forth in Section 4.2 below to determine that the Property is suitable
for Buyer's intended project and use ( "Buyer's Use "). Buyer shall indemnify Seller, defend Seller, and
hold Seller harmless from and against all costs, expenses, liabilities, liens, charges, or claims arising out
of or directly related to the exercise by Buyer of its entry right and the conduct of its Activities, or the
negligent misconduct of any employee, agent, contractor, or invitee of Buyer, except to the extent arising
out of Seller's negligence, gross negligence, or willful misconduct. Buyer and its duly authorized agents
or representatives shall be permitted to enter upon the Property after not less than seven (7) days' notice
to Seller, provided that Seller shall have the right to require Buyer to be accompanied by a representative
of Seller. Buyer shall not allow its entry onto the Property or its Activities to be performed in a manner
that unreasonably interferes with the current existing use or enjoyment of the Property by Seller.
4.2 Contingency Period. Buyer shall have until 11:59 p.m. Alaska Standard/Daylight Time
on the date that is sixty (60) days after the Effective Date (the "Contingency Period ") to terminate this
Agreement in Buyer's sole discretion (the "Contingency "). During the Contingency Period, Buyer or its
representatives, consultants, agents, or contractors may: (a) investigate the size and suitability of the
Property; (b) review the status of the title to the Property as provided in Section 3 above; (c) investigate
the physical condition of the Property and improvements (including, but not limited to, any activities
required to obtain a Phase 1 or Phase 2 Environmental Assessment, or any other tests deemed reasonable
or necessary by Buyer); and (d) perform tests, inspections, Surveys and feasibility studies on the Property
related to investigating the Property, including, without limitation moving equipment onto the Property,
boring test holes, sampling soils or other materials present on the Property, removing vegetation,
installing monitoring wells and equipment, and otherwise making such use of the Property as is
commercially reasonable for Buyer to conduct its investigation on the Property (collectively, the
"Activities "). Buyer shall be responsible for all costs and expenses incurred by Buyer in conducting its
Activities on the Property. All Activities shall be conducted in compliance with all applicable federal,
state, and local statutes, regulations, and ordinances. Buyer shall leave the Property in substantially the
same condition that existed prior to its Activities, as is practicable given the scope of the Activities.
Upon Seller's written request, Buyer may provide to Seller, without representation or warranty, a
copy of all completed reports prepared in connection with the Activities (each, a "Study "). Buyer shall
have no liability for any errors or omissions in any Study delivered to Seller, and Buyer expressly
disclaims any liability for any and all defects or deficiencies contained in the Study. If any person is
required to make any report to any governmental agency as the result of any Activities conducted by
Buyer, such report shall be submitted solely by Seller; provided, however, if Seller fails to timely submit
a required report, Buyer shall have the right to submit a report and deliver any Study to such
governmental agency as may be legally required of Buyer.
At any time on or before the last day of the Contingency Period (as it may be extended under this
Agreement), Buyer may notify Seller of its election to terminate this Agreement. Upon Seller's receipt of
such notice, this Agreement shall terminate, Buyer shall not be entitled to purchase the Property, Seller
shall not be obligated to sell the Property to Buyer, and the Parties shall be relieved of any further
obligation to each other with respect to the Property except for the Post - Termination Obligations. Upon
Purchase and Sale Agreement
receipt of Buyer's termination notice, Escrow Agent shall, without any further action required from any
Party, return all documents, to the Party who deposited same, return the Deposit to Buyer as required
under this Section 4.2, and no further duties shall be required of Escrow Agent. If, on or before the
expiration of the Contingency Period, Buyer does not notify Seller in writing as provided in this Section
4_2, then Buyer shall be deemed to have waived its right to terminate this Agreement pursuant to this
Section 4.2.
5. Closing.
5.1 Closing. The sale of the Property shall be consummated through the Escrow Agent on a
date selected by Buyer, which is no later than fifteen (15) days after the expiration of the Contingency
Period ( "Closing Date "), with the consummation of this transaction on the Closing Date referred to as the
"Closing." Buyer shall give Seller notice at least five (5) business days prior to the Closing Date. At
Closing, both Parties will deposit with the Escrow Agent all funds and instruments necessary to complete
the transaction in accordance with the terms of this Section 5 including the Deed (as defined in
Section 5.31. This Agreement shall constitute the joint escrow instructions between the Parties, with such
further consistent instructions as Escrow Agent shall require in order to clarify its duties and
responsibilities. If Escrow Agent shall require further escrow instructions, Escrow Agent may prepare
such instructions on its usual form. Such further instructions shall, so long as not inconsistent with the
terms of this Agreement, be promptly signed by Buyer and Seller and returned to Escrow Agent within
three (3) business days after receipt thereof. In the event of any conflict between the terms and conditions
of this Agreement and any further escrow instructions, the terms and conditions of this Agreement shall
control.
5.2 Conditions to Closing/Title. As a condition to Buyer's obligation to purchase the
Property, (i) Seller shall convey the Property to Buyer subject only to the Permitted Exceptions; (ii) Buyer
shall receive an ALTA Standard Policy of Title Insurance and any curative endorsements, which shall be
in a form and with terms of coverage acceptable to Buyer, with coverage in an amount not less than the
Purchase Price (the "Title Policy "); and (iii) there shall not have been any breach of the representations,
warranties, or covenants of Seller contained in this Agreement.
5.3 Deed. Seller shall convey title to the Property to Buyer by statutory warranty deed (the
"Deed "), subject only to the Permitted Exceptions. Seller will also execute a Bill of Sale, if required by
Buyer, for the transfer of any personal property. Buyer shall have possession of the Property as of the
Closing Date.
5.4 Closing Costs. Buyer shall pay all reasonable and customary Closing costs, including
the cost of the Title Policy.
5.5 Prorations/Real Property Taxes. The real property taxes for the Property shall be
prorated as of the Closing Date, and Buyer shall be responsible for real property taxes and assessments on
the Property as of and after the Closing Date. All assessments shall be fully satisfied by Seller at Closing.
5.6 Non - Foreign Affidavit. In connection with Buyer's obligation under Section 1445 of
the Internal Revenue Code of 1986, as amended (the "Code "), to withhold tax if the seller of real property
is a foreign person, at Closing Seller shall deliver to Buyer a separate affidavit as to Seller's non - foreign
status which complies with the provisions of Section 1445(b)(2) of the Code, and any regulations
promulgated thereunder, and any revenue procedures or other officially published announcements of the
Internal Revenue Service or the U.S. Department of the Treasury in connection therewith (the
"FIRPTA ").
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Purchase and Sale Agreement
6. Representations. Warranties, and Covenants
6.1 Representations and Warranties of Seller. Seller makes the following representations
and warranties set forth below to Buyer, as of the Effective Date and as of Closing:
6.1.1 Title. Seller holds fee simple title to the Property, subject to the Permitted
Exceptions. Except as may be shown on any Preliminary Report or in any document provided to Buyer in
the Due Diligence Items, there are no outstanding rights of first refusal, rights of first offer, rights of
reverter, purchase options, or other similar rights or options relating to the Property or any interest
therein.
6.1.2 Organization and Authorization. Seller is a limited liability company duly
formed and validly existing under the laws of the State of Idaho and prior to Closing will be registered as
a foreign limited liability company in the State of Alaska. Seller has full power and authority to enter into
this Agreement, to perform its obligations under this Agreement, and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement and all documents
contemplated hereby by Seller have been duly and validly authorized by all necessary action on the part
of Seller, and all required consents and approvals have been duly obtained and will not result in a breach
of any of the terms or provisions of, or constitute a default under, any indenture, agreement or instrument
to which Seller is a party or otherwise bound. This Agreement is a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, subject to the effect of applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws affecting the
rights of creditors generally.
6.1.3 No Conflicting Agreements. The execution and delivery by Seller of, and the
performance of and compliance by Seller with, the terms and provisions of this Agreement do not:
(a) conflict with, or result in a breach of, the terms, conditions, or provisions of, or constitute a default
under, Seller's entity formation agreement(s), or any other agreement or instrument to which Seller is a
party or by which all or any part of the Property is bound; (b) violate any restriction, requirement,
covenant, or condition to which all or any part of the Property is bound; (c) constitute a violation of any
applicable code, resolution, law, statute, regulation, ordinance, or rule applicable to Seller or the Property;
(d) constitute a violation of any judgment, decree, or order applicable to Seller or specifically applicable
to the Property; or (e) require the consent, waiver, or approval of any third party.
6.1.4 No Third -Party Interests. Except as may be shown on any Preliminary Report or
in any document provided to Buyer by Seller prior to the expiration of the Contingency Period, there is no
option, refusal right, lease, license, or other third -party claim affecting the respective portion of the
Property or any interest therein that will not be terminated prior to Closing. All agreements, licenses, or
leases to use the Property will be terminated by Seller prior to Closing, and Seller will deliver physical
possession and title to the Property free and clear of all claims of third parties, including, but not limited
to, tenants and licensees under any User Agreement.
6.1.5 Liti ag tion. There are no actions, suits, or proceedings pending or, to the best of
Seller's knowledge, threatened against Seller and affecting any portion of the Property, at law or in
equity, or before or by any federal, state, municipal, or other governmental court, department,
commission, board, bureau, agency, or instrumentality, domestic or foreign.
6.1.6 BankMtcv. There is no bankruptcy, insolvency, rearrangement, or similar
action or proceeding, whether voluntary or involuntary, pending or, to Seller's knowledge, threatened
against Seller.
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Purchase and Sale Agreement
6.1.7 Violation of Law. There is no existing violation by Seller of any governmental
law, order, or regulation with respect to the Property.
6.1.8 Condemnation; Other Proceedings. Seller has no knowledge of any actual,
pending, or threatened special assessments, condemnation actions, lawsuits, or proceedings (including
land use proceedings) affecting the Property, and Seller has not received any notice of any such matters
being contemplated regarding the Property, other than the Approvals to be pursued by Buyer.
6.1.9 Defects. As permitted by 34.70.110, Seller and Buyer agree to waive the
requirements of AS 34.70.050. Buyer is purchasing the property as -is, except as expressly provided
otherwise in this Agreement.
6.1.10 Hazardous Materials and Environmental Condition. Seller has not received any
written notice from any governmental or quasi - governmental authority having jurisdiction over the
Property of any violation of any applicable Environmental Laws affecting the Property, and Seller has not
used the Property for the production, use, disposal, or storage of any Hazardous Materials (as defined
below). To Seller's knowledge: (a) there are no Hazardous Materials regulated under any federal, state,
or local law as toxic (including, without limitation, petroleum products, solvents, asbestos, and radon) or
infectious materials existing on, under, or about the Property; (b) there is no proceeding or inquiry by any
governmental authority (including, without limitation, the U.S. Environmental Protection Agency or any
state or local governmental agency having jurisdiction over the Property) with respect to the presence of
Hazardous Materials on, in, or under the Property or the migration thereof from or to any other property;
(c) there are and have been no underground or above - ground storage tanks located on the Property; and
(d) no Hazardous Material has been produced, used, handled, discharged, disposed of, or stored on, from,
or onto the Property or any lot or property adjacent thereto, except in strict compliance with applicable
Environmental Laws, and there is no proceeding or inquiry by any governmental body with respect
thereto. For purposes of this Agreement, "Hazardous Materials" shall include, without limitation, (i)
substances or materials that are toxic, corrosive, flammable, infectious, explosive, or ignitable; (ii) lead -
based paint, mold, asbestos, oil, petroleum and petroleum products, radioactive materials, hazardous
wastes, toxic substances, or related injurious materials; and (iii) substances defined by the terms, or terms
similar to, "hazardous substances," "hazardous materials," "toxic substances," "hazardous waste," "toxic
waste," "oil and petroleum products," or similar terms in 15 U.S.C. section 2601, et seq. (the Toxic
Substances Control Act), 33 U.S.C. section 1251, et seq. (the Clean Water Act), 33 U.S.C. section 2701,
et seq. (the Oil Pollution Act), 42 U.S.C. section 6901, et seq. (the Resource Conservation and Recovery
Act), 42 U.S.C. section 7401, et seq. (the Clean Air Act), 42 U.S.C. section 9601, et seq. (the
Comprehensive Environmental Response, Compensation, and Liability Act), 49 U.S.C. section 1801, et
seq. (the Hazardous Materials Transportation Act), or any other federal, state, or local statute, ordinance,
or regulation related to environmental protection or human health (collectively, "Environmental Laws ").
6.1.11 No Commitments. Except as previously disclosed to Buyer, to Seller's
knowledge, no commitments have been made to any governmental authority or other entity, group, or
individual which would impose an obligation upon the Property or any portion thereof or upon Buyer or
its successors or assigns to make any contribution or dedication of money or land, or to construct, install,
or maintain any improvements of a public or private nature on or off the Property.
6.2 Representations and Warranties of Buyer. Buyer makes the following representations
and warranties set forth below to Seller, as of the Effective Date and as of Closing:
6.2.1 Organization and Authorization. Buyer is a home rule Alaska municipal
corporation, duly organized and validly existing under the laws of the State of Alaska, and qualified to do
business in Alaska. Buyer has full power and authority to enter into this Agreement, to perform this
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Purchase and Sale Agreement
Agreement, and to consummate the transactions contemplated hereby. This Agreement is a legal, valid,
and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to the
effect of applicable bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar
laws affecting the rights of creditors generally.
6.2.2 Liti agation. Buyer is not a party to any litigation or civil or criminal proceedings
which, if adversely determined, could individually or in the aggregate interfere with the consummation of
the transaction contemplated by this Agreement; no petitions in bankruptcy have been filed by or against
Buyer; and none of Buyer's assets are currently subject to any insolvency, receivership, or foreclosure
proceedings.
6.2.3 No Conflicting Agreements. The execution, delivery, and performance of this
Agreement will be duly and validly authorized by all necessary action on the part of Buyer, and will not
result in a breach of any of the terms or provisions of, or constitute a default under, any indenture,
agreement, or instrument to which Buyer is a party or is otherwise bound.
6.3 Covenants of Seller. Seller makes the following covenants set forth below to Buyer, as
of the Effective Date and as of Closing:
6.3.1 No Further Encumbrance/Transfer. Seller shall not, directly or indirectly,
alienate, grant, encumber, transfer, option, assign, sell, transfer, or convey the Property or any portion
thereof or interest therein except to Buyer or its assignee or designee pursuant to this Agreement, so long
as this Agreement is in force.
6.3.2 Hazardous Materials — Indemnity. Seller shall release, indemnify, defend with
counsel chosen by Buyer, and hold harmless Buyer and each of its managers, agents, consultants,
contractors, principals, successors, and assigns from and against any and all costs, expenses, liabilities,
liens, charges, or claims, including attorneys' and consultants' fees, arising out of or related to any breach
of Seller of its representations and warranties in Section 6.1.10.
6.3.3 Condition of the Property. Seller will maintain the condition of the Property
through the Closing Date to the condition in which it currently exists.
6.3.4 Exclusivity. Until the Closing Date or the date that this Agreement is terminated,
Seller shall not enter into any contract, or enter into or continue any negotiations, to sell the Property to
any person or entity other than Buyer, nor will Seller solicit proposals from, or furnish any non - public
information to, any person or entity other than Seller's agents, attorneys, and lenders and Buyer regarding
the possible sale of the Property.
6.3.5 Insurance. Seller will maintain any liability insurance Seller has obtained in
force with respect to the Property.
6.3.6 Notice of Proceedings. Seller will promptly notify Buyer in writing of any
litigation or governmental proceeding to which Seller becomes a party or which affects the Property or
any part thereof. Seller will promptly provide Buyer with copies of all written notices received by Seller
after the Effective Date which assert any material breach of laws, rules, regulations, covenants, or permits
applicable to the Property.
7. Assignment. Seller shall not assign its right, title, claim, or interest in or to this Agreement.
Buyer may not assign or otherwise transfer any interest in this Agreement, voluntarily, involuntarily, or
by operation of law, without the prior written consent of Seller in each instance except as follows: Buyer
7
Purchase and Sale Agreement
shall have the right to assign this Agreement to a limited liability company, limited partnership, or any
other business entity in which Buyer, or the members of Buyer or their respective affiliates, hold an
interest, upon prior written notice to Seller but without Seller's consent. Upon any assignment pursuant
to this Section 71 the assignee shall assume all liabilities and obligations of Buyer as of the Effective Date,
and Seller shall release Buyer from any and all liabilities and obligations hereunder.
8. Required Actions of Buyer and Seller. Each Party will, whenever and as often as requested to
do so by the other Party, execute, acknowledge, and deliver, or cause to be executed, acknowledged, and
delivered, any and all such further conveyances, assignments, approvals, consents, and any and all other
documents and do any and all other acts as may be necessary to carry out the intent and purpose of this
Agreement.
9. Default — Failure to Close
9.1 Opportunity to Cure Defaults. Except for any Party's wrongful failure to close by
Closing, no Party shall be deemed in default under this Agreement unless any such Party is given written
notice of its failure to comply with this Agreement and such failure continues for a period of ten (10) days
following the date such notice is given. This Section 9.1 shall not be construed as extending the time by
which any notice must be given.
9.2 If Buyer Is in Default. If Buyer fails to complete this purchase without legal excuse
(such as Buyer's default hereunder, or any material breach of a representation or warranty by Buyer),
Seller shall have the right to retain the Deposit as liquidated damages, as its sole and exclusive remedy,
the Parties agreeing that such amounts represent a reasonable approximation of Seller's losses and that
such losses would be difficult to ascertain or quantify.
9.3 If Seller Is in Default. In the event that the transaction fails to close on account of a
breach of Seller, including, without limitation, a breach of any representation, warranty, or covenant, or
the inability to close as required by this Agreement (a "Seller Default "), Buyer shall be entitled to the
termination of this Agreement and the return of the Deposit; or (b) specific performance. Alternatively,
Buyer may elect to waive the breach and close. If the breach is a title breach under Section 3 above, the
Deed executed by Seller shall not include a Disapproved Exception as an exception to title, but the Title
Policy may reflect such encumbrance.
10. Survival of Obligations. The Parties agree that (a) Buyer's obligation to pay the costs of all
Surveys, tests, Studies, and reports obtained by Buyer; to remove any liens and restore any Property
permanently damaged which resulted from Buyer's inspections, tests, or studies; and to indemnify Seller,
to the extent provided for in this Agreement; (b) Seller's obligation to indemnify Buyer, to deliver any
items to Buyer or the Escrow Agent, and to maintain the confidentiality of certain information, and those
obligations of Seller which specifically survive Closing, to the extent provided for in this Agreement (all
of such Buyer's and Seller's obligations being referred to in this Agreement as the "Post- Termination
Obligations "); and (c) the provisions contained in Sections 3, 4, 6 9, 11. 15, 17, and 18.1 through 18_12
hereof shall all continue in full force and effect notwithstanding any cancellation, termination, expiration,
or forfeiture of this Agreement or the Closing.
11. Confidentiality. Except with the consent of the Buyer, prior to Closing Seller shall not disclose
the Purchase Price, Deposit, or Extension Payments paid under this Agreement except: (a) as required by
any applicable laws, regulations, compulsory legal process, or order of any court of competent
jurisdiction or as may be necessary in its reasonable judgment in connection with any mediation,
arbitration, or litigation in connection with this Agreement; (b) to its respective trustees, members,
shareholders, partners, limited partners, beneficial owners, directors, officers, and employees, as
8
Purchase and Sale Agreement
necessary to carry out the terms of this Agreement; and (c) to such attorneys, accountants, and
representatives of either Party or of such Party's advisors who need to know such information for the
purpose of evaluating and consummating the transaction.
12. Brokeraee. Seller and Buyer each for itself represents and warrants to the other that it has not
contacted or entered into any agreement with any real estate broker, agent, finder, or any other party in
connection with this transaction which would result in any real estate broker's, finder's, or other fees or
commissions being due and payable to any party with respect to the transaction contemplated hereby,
Each Party hereby indemnifies the other Party and agrees to hold harmless the other Party from all costs,
expenses, liabilities, liens, charges, or claims resulting to the other Party by reason of a breach of the
representation and warranty made by such Party in this Section 12.
13. Section 1031 Exchange. Seller may consummate sale of the Property as part of a so- called like
kind exchange (an "Exchange ") pursuant to Section 1031 of the Code, provided that: (a) the Closing
shall not be delayed or affected by reason of the Exchange nor shall the consummation or
accomplishment of an Exchange be a condition precedent or condition subsequent to the Seller's
obligations under this Agreement; (b) the Seller shall effect its Exchange through an assignment of this
Agreement, or its rights under this Agreement, to a qualified intermediary; (c) Buyer shall not be required
to take an assignment of the purchase agreement for the relinquished or replacement property or be
required to acquire or hold title to any real property for purposes of consummating an Exchange desired
by the Seller; and (d) the Seller shall pay any additional costs that would not otherwise have been incurred
by the Buyer had the Seller not consummated the transaction through an Exchange and shall indemnify,
defend, and hold harmless the Buyer from and against all costs, expenses, liabilities, liens, charges, or
claims arising out of or as a result of the Exchange. Buyer shall not by this Agreement or acquiescence to
an Exchange desired by the Seller have its rights under this Agreement affected or diminished in any
manner or be responsible for compliance with or be deemed to have warranted to the Seller that its
Exchange in fact complies with Section 1031 of the Code.
14. Damage or Destruction. If the Property is damaged or destroyed by fire or any other casualty
( "Casualty ") during the Contingency Period, or if a Casualty occurs after Buyer delivers a Contingency
waiver to Seller pursuant to Section 4.2, or is deemed to have waived its contingency, but prior to the
Closing Date, then Seller shall promptly provide Buyer with written notice of such Casualty. After
receipt of Seller's notice of Casualty, Buyer may in its sole option elect to terminate this Agreement
unless Buyer receives a credit against the Purchase Price equal to the cost to fully restore the Property to
the condition it was in prior to such Casualty. In the event Buyer terminates this Agreement the Deposit
shall be returned to Buyer by Escrow Agent without any further action required from either Party, Buyer
and Seller shall each be liable for one -half (' /z) of any escrow fees or charges, and neither Party shall have
any continuing obligations hereunder. Any notice required to terminate this Agreement pursuant to this
Section 14 shall be delivered by Buyer to Seller no later than thirty (30) days following Buyer's receipt of
Seller's notice of Casualty.
15. Eminent Domain. If proceedings are commenced for the taking by exercise of the power of
eminent domain (a "Taking ") of all or a material part of the Property during the Contingency Period,
Seller shall promptly provide Buyer with written notice within three (3) business days after Seller
receives notice of the commencement of any Taking. If Buyer delivers a contingency waiver to Seller
pursuant to Section 4.2, or is deemed to have waived its Contingency, and prior to the Closing Date
proceedings are commenced for a Taking of all or a material part of the Property which, as reasonably
determined by Buyer, would render the Property unacceptable to Buyer or unsuitable for Buyer's Use,
Buyer shall have the right, by giving written notice to Seller within thirty (30) days after Seller gives
notice of the commencement of such Taking proceedings to Buyer, to terminate this Agreement, in which
event the Deposit shall be returned to Buyer by Escrow Agent without any further action required from
Purchase and Sale Agreement
either Party, Buyer and Seller shall each be liable for one -half ( %z) of any escrow fees or charges, and
neither Party shall have any continuing obligations hereunder. If Buyer elects to proceed to Closing,
Closing shall occur as provided in this Agreement except: (i) all collected Taking awards received by
Seller shall be credited against the Purchase Price, or (ii) if the Taking award has not been paid, Seller's
right to receive the Taking award shall be assigned to Buyer.
16. Notices.
16.1 Writing. All notices given or permitted to be given hereunder shall be in writing.
16.2 Delivery. Notice is considered given either: (a) when delivered in person to the recipient
named below; or (b) three (3) business days after deposit in the United States mail in a sealed envelope or
container, postage and postal charges prepaid, addressed by name and addressed to the Party or person
intended; or (c) when delivered by a nationally recognized overnight delivery service. Notices shall be
sent to the following addresses:
Notice to Seller:
ARK Properties LLC
11204 N. Bar 21 Dr.
Glenns Ferry, ID 83623
Attn: John B. McCallum
Notice to Buyer:
City of Kenai
210 Fidalgo Ave.
Kenai, Alaska 99611
Attn: Rick Koch
17. Indemnification. From and after Closing, Seller shall indemnify, defend and hold harmless
Buyer and Buyer's employees, agents, representatives, contractors and invitees from and against any and
all damage, loss or liability resulting from third -party claims for claims relating to the use, operation or
ownership of the Property attributable to periods at or before the Closing Date.
18. Construction of Agreement.
18.1 Governing Law. The laws of the State of Alaska shall govern the interpretation and
enforcement of this Agreement and the rights and covenants granted hereunder.
18.2 Venue. In any action brought to interpret or enforce any of the provisions of this
Agreement, the venue of same shall be laid in the Third Judicial District of the State of Alaska.
18.3 Interpretation. The Parties agree that the terms and provisions of this Agreement
embody their mutual intent and such terms and conditions are not to be construed more liberally in favor
of, or more strictly against, any Party.
18.4 Partial Invalidity. If any non - material term or provision of this Agreement, or the
application thereof to any person or circumstance, shall, to any extent, be illegal, invalid, or
unenforceable, a provision shall be added to this Agreement as similar in terns to such illegal, invalid, or
unenforceable provision as may be possible, and be legal, valid, and enforceable, and the remainder of
10
Purchase and Sale Agreement
this Agreement, or the application of such term or provision to persons or circumstances other than those
to which it is held invalid or unenforceable, shall not be affected thereby.
18.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this Agreement.
18.6 Time Is of the Essence. Time is of the essence in this Agreement as to each provision in
which time is an element of performance. Unless otherwise specified, in computing any period of time
described herein, the day of the act or event after which the designated period of time begins to run is not
to be included and the last day of the period so computed is to be included, except that if such last day
falls upon a Saturday, Sunday, or legal holiday under federal law or the Laws of the state(s) where the
Property is located, then such period shall run until the end of the next day that is not a Saturday, Sunday,
or legal holiday under federal law or the Laws of the state(s) where the Property is located. The last day
of any period of time described herein shall be deemed to end at 11:59 p.m. Alaska Standard/Daylight
Time.
18.7 Persons Bound. The benefits and obligations of the covenants herein shall inure to and
bind the respective heirs, executors, administrators, successors, and, to the extent permitted by this
Agreement, assigns of the Parties. Whenever used, the singular shall include the plural, the plural shall
include the singular, and the use of any gender shall include all genders.
18.8 Complete Agreement. This Agreement evidences the complete understanding of the
Parties with respect to the matters addressed herein. No agreement or representation, unless set forth in
this Agreement, shall bind any of the Parties.
18.9 Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which, when taken together, shall constitute one and the same instrument.
18.10 Attorneys' Fees. In the event that any suit or action is instituted to interpret or enforce
the terms of this Agreement, or in connection with any arbitration or mediation of any dispute hereunder,
the prevailing party shall be entitled to recover from the other Party or Parties such sum as the court,
arbitrator, or mediator may adjudge reasonable as attorneys' fees, including such fees as are incurred in
any trial, on any appeal, in any bankruptcy proceeding (including the adjudication of issues peculiar to
bankruptcy law), and in any petition for review, and all (not just statutory) reasonable costs and expenses
in respect thereto. Each Party shall also have the right to recover its reasonable (actual, not just statutory)
costs and reasonable attorneys' fees incurred in collecting any sum or debt owed to it by the other Party or
Parties, with or without litigation, if such sum or debt is not paid within fifteen (15) days following
written demand therefor.
18.11 Amendments and Waivers. No agreement, amendment, modification, understanding, or
waiver of or with respect to this Agreement, or any term, provision, covenant, or condition hereof, nor
any approval or consent given under or with respect to this Agreement, shall be effective for any purpose
unless contained in a writing signed by the Party against which such agreement, amendment,
modification, understanding, waiver, approval, or consent is asserted.
11
Purchase and Sale Agreement
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
SELLER:
ARK Properties L.L.C.,
By its Managing Member
Casa Del Norte L.P.,
By its General Partner
A.R.D. Trading, Inc.
LO
John B. McCallum, President
BUYER:
City of Kenai
Rick Koch
City Manager
12
Purchase and Sale Agreement
Alllt V
LEGAL DESCRIPTION OF THE PROPERTY
Government Lot 15, Section 7, Township 5 North, Range 11 West, Seward Meridian, Kenai Recording
District, Third Judicial District, State of Alaska; and
Lots 1, 2, 3, and 4, Dragseth Subdivision, according to Plat KN 77 -56 filed in the Kenai Recording
District, Third Judicial District, State of Alaska; and
Lots 5A and 6A Dragseth Subdivision No. 2 according to Plat KN 91 -33 filed in the Kenai Recording
District, Third Judicial District, State of Alaska.
13
Exhibit A
•no
PERSONAL PROPERTY LIST
Dining room table set (table and chairs)
Office desk in third floor tower room
14
Exhibit B
M
" "Villaye with a Past, City with a Future"
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
Telephone: 907 - 283 -7535 / FAX: 907- 283 -3014
MEMORANDUM
TO: Mayor Porter and Council Members
FROM: Scott Bloom, City Attorney
DATE: September 10, 2015
SUBJECT: Resolution No. 2015 -50 Substitute
The Substitute Resolution makes the following substantial changes as shown in the attached
edited version *:
1. Delete fifth Whereas clause as it is no longer needed pursuant to second from last
Whereas clause;
2. Amendments to third from last Whereas clause for housekeeping and clarity;
3. Add second from last Whereas clause to detail grant requirements for purchase as
provided by State of Alaska in attached letter form Janet Davis, Grants
Administration Manager with State of Alaska;
4. Add last Whereas clause to explain property acquired in trust by City for grant
purposes and avoid proceeds from any subsequent sale going into General Land
Sale Permanent Fund;
5. Amend Section 1 as shown as City has received attached non - objection letter
from granting agency;
6. Add Section 2 to specify compliance with granting agency requirements regarding
use of proceeds from any future sale; and
7. Add Section 3 to specify any subdivision or sale will need further Council
Approval.
The warranty deeds received by the City will contain the following clause granting the
property to the City as follows:
The Grantee: City of Kenai, whose address is 210 Fidalgo Avenue, Kenai, Alaska
99611, in trust for the purpose of complying with State of Alaska Grant 15 -DC-
0078, and then if no longer needed for such purpose, for any public purpose
consistent with the Charter and Ordinances of the City of Kenai.
Also attached for your review is the original grant from the State.
Your consideration is appreciated.
*Minor housekeeping changes are not discussed in detail.
Suggested by: Administration
CITY OF KENAI
RESOLUTION NO. 2015 -50 SUBSTITUTE
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING
THE PURCHASE OF THE FOLLOWING SEVEN PARCELS OF REAL PROPERTY:
GOVERNMENT LOT 15, SECTION 7, TOWNSHIP 5 NORTH, RANGE 11 WEST, SEWARD
MERIDIAN; LOTS 1, 2, 3, AND 4, DRAGSETH SUBDIVISION, ACCORDING TO PLAT KN
77 -56; AND LOTS SA AND 6A DRAGSETH SUBDIVISION NO. 2 ACCORDING TO PLAT
KN 91 -33, ALL IN THE KENAI RECORDING DISTRICT, THIRD JUDICIAL DISTRICT,
STATE OF ALASKA, INCLUDING ALL IMPROVEMENTS THEREON, FROM ARK
PROPERTIES, LLC FOR THE PURPOSE OF CONSTRUCTING IMPROVED PUBLIC
ACCESS TO THE CITY'S SOUTH BEACH.
WHEREAS, each year tens of thousands of visitors participate in the dip net fishery in
the City of Kenai; and,
WHEREAS, the City does its best to accommodate the visitors and fishery and mitigate
the impacts to local residents, sensitive environmental areas and City infrastructure;
and,
WHEREAS, managing physical access to the fishery poses particular challenges that
affect local property owners and City lands; and,
WHEREAS, the City Council has previously, unanimously appropriated through
Ordinance 2771 -2014, a State Grant for $1 -gone million nine hundred thousand dollars
f$ 1.900 0001 for the purpose of designing and constructing a new roadway for access to
the South Beach and related improvements; and,
ui
WHEREAS, the City has held numerous meetings with affected property owners and
state agencies weighing alternatives for improved South Beach Access; and,
WHEREAS, the City has explored obtaining permitting for building a new road across
wetland areas and alternatively purchasing select parcels of unimproved property; and,
WHEREAS, after review from permitting agencies and negotiations for property
acquisition, the City's apparent best option for providing new beach access to the dip
net fishery on the South Beach is the purchase of the following seven parcels of property:
Government Lot 15, Section 7, Township 5 North, Range 11 West, Seward Meridian,
Kenai Recording District, Third Judicial District, State of Alaska; Lots 1, 2, 3, and 4,
Dragseth Subdivision, according to Plat KN 77 -56 filed in the Kenai Recording District,
Ncw Text Underlined; DELETED TEXT
Resolution No. 2015 -50 Substitute
Page 2 of 3
Third Judicial District, State of Alaska; Lots SA and 6A Dragseth Subdivision No. 2
according to Plat KN 91 -33 filed in the Kenai Recording District, Third Judicial District,
State of Alaska; and,
WHEREAS, the purchase of these properties with State grant funding will enable the
City to construct a new road with minimal habitat disturbance, eliminate permitting
requirements and allow for utilization of existing roads while accomplishing the goals of
providing improved access that alleviates existing conflict between fishery participants
attempting to access the fishery and local property owners; and
WHEREAS, the City does not need all seven parcels or the improvements for road
construction, however, purchasing all seven properties including improvements was the
only option accepted by the properties' owner and the City intends to re- subdivide the
properties and sell e&the improvements and ei:cess-land no longer needed for a public
purpose as soon as reasonably possibleLand.:
Fund.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA:
Section 1. That the City Manager is authorized to enter into an agreement to
purchase the following several parcels of real property including all improvements
thereon and certain pieces of personal property as identified in the attached Purchase
and Sales Agreement
Government Lot 15, Section 7, Township 5 North, Range 11 West, Seward -- - - rotmetted 1M.t tert: 0.5°
Meridian, Kenai Recording District, Third Judicial District, State of Alaska;
Lots 1, 2, 3, and 4, Dragseth Subdivision, according to Plat KN 77 -56 filed in the- - Po —tted: W-t: Lett: V.
Kenai Recording District, Third Judicial District, State of Alaska; and
Lots 5A and 6A Dragseth Subdivision No. 2 according to Plat KN 91 -33 filed in— - Fortnatted: Mot: tee: 0 5
the Kenai Recording District, Third Judicial District, State of Alaska,
New Text Underlincvi; [DELETED TEXT aRACKE EO]
Resolution No. 2015 -SO Substitute
Page 3 of 3
for the price of one million six hundred thousand dollars ($1,600,000:&0) plus closing
costs allocated in the Purchase and Sales Agreement Attached hereto and complete the
purchase subject to a professional appraisal that supports the purchase price, title
reports, surveys and satisfactory results of any other relevant due diligence inquiries
the City Manager may make, and -!Ihieet le . the -naFr ai' f rU
Section 2.
State to be credited towards the Grant.
Section 3 That the CiV Council shall approve any hrture subdivision of the lands and _ - - Formatted: Foot: Bold
sale of associated properties.
Section 4. That this resolution takes effect immediately upon passage, _ _ _ _ _ _ _ _ -( Farmattea: Fonr. Bda —�
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 16th pad day of
September, 2015.
PAT PORTER, MAYOR
ATTEST:
Sandra Modigh, City Clerk
New Tmt Undcrlined; DELETED TEXT BRACKETED)
THE STATE
OfA_LASKA_ .
GOVERNOR BILL WALKER
September 4, 2015
Mr. Rick R. Koch, City Manager
City of Kenai
210 Fidalgo Avenue,
Kenai, AK 99611 -7794
Department of Commerce, Community,
and Economic Development
DIVISION OF COMMUNITY AND REGION V. AFFAIRS
Subject: Kenai Ricer South Beach Dip Net Access, Grant #15 DC -078
Dear Mr. Koch,
455 3 ' A.,enue. 9.ite 140
Foi: honks, AK 99701 -4639
Mot 907 451.2746
Fro9mrns fay. 907 4;.1,2742
This letter is in response to your correspondence dated September 2nd. You requested our
office's concurrence with the City of Kenai's plan to utilize $1.6 trillion in grant funds to
purchase properties, necessary to proceed with the construction of the access road to Kenai
River South Beach a� described in the grant agreement. The portions of the property
acquired that are not necessary for the construction of the new access road would
subsequently be sold.
We have reviewed your request and do not object to your proposed course of action
contingent upon the following:
The city will return to the state all proceeds made from the sale of the property. These funds
will in turn be credited to the grant (15 -DC -0078) and the city may then proceed to utilize
those funds towards project completion.
In addition, once the project is complete and all additional access road improvements have
been accomplished as identified in your letter, any remaining funds shall be returned to the
state.
Sincerely,
*et Davis
Grants Administration Manager
cc: Jolene Julian, Grants Administrator III
DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMIC DEVELOPMENT
DIVISION OF COMMUNITY AND RF.GTONAL AFFAIRS
Designated Legislative Grant Pr(*t T".' _ d? I E 3
Grant Agreernent
Gnm Agreement Number
Vendor Number
Amount of State Funds
15 -DC -078
CIK84891
$1,900,000.00
}encumbrance Number /AR /Lapse Date
Project Title
/99'5/06/30/2019
Kenai River South Beach )ip Net .Access
Grantee
Department Contact Persura
Name
Name
Cin• of Kenai
Robin Park
Street /PO Box
Tide
210 Fidalgo .Avenue
Grants Administrator II
City /Stare /Zip
Street /PO Box
Kenai, AK 99611
PO Box 110809
Contact Person
City /State /Zip
Rick Koch, Cire Manager
jtmeaq _ \K 99811 -0809
Phone Fax
Phone FIM
90°- 283 -8222 907 - 283 -3014
907465 -4731 907 -465 -5867
Email
Email
rkochla3ci.kenai.ak.us
robin.park@alaski.gov
AGREEMENT
The Alaska Department of Commerce, Community, and economic Development, Division of Community and Regional Affairs
('hereinafter 'Department') and j�i3; gf Kenai (hereinafter `Grantee) agree as set forth herein,
Section I. The Department shall pay the Grantee for the performance of the project work under the terms outlined in this
Agreement. The amount of the payment is based upon project expenses incurred, which am authorized under this Agreement. In
no event shall the payment exceed it 90ct.000 00.
Section II, The Grantee shall perform all of the work required by this Agreement.
Section III. The work to be performed under this Agreement begins _ my 1 2Q14, and shall he completed no later than June 3Q
a19.
Section IV.'rlie Agreement consists of this page and the folloairg:
,1rr \CI i\IPNTS
- "eirhment A: Scope of \Fork
1. Project Description
2. Project Budget
3. Project \Management
4. Reporting
Attachment B: Payment \iethod
ru....6....... .r C.....J....dn......._:___
Any fully executed amendments to tlds.kgrcemenr
A
Appendix A State Laws and Regulations
Rev. 5 ?CM
Orstguared LegisluGva Granr.Agreenlenl
Ret•iencd by:. —
Page ! of 13
t_I '
///p"pn1fe
Department
Signature
Signature
Printed Namc and Titi
Printed a
e and Title
Rick Koch, City Manager
olene J li
, Grants Admitristr III
Date II 3d q
b "I
Date
16 (n
Rev. 5 ?CM
Orstguared LegisluGva Granr.Agreenlenl
Ret•iencd by:. —
Page ! of 13
Attachment A
Scope of Work
1. Project Description
The purpose of this FY 2015 Designated Legislative Grant in the amount of 51,900,000.00 [plireziant to thepronitiao,r of
i13 j7.05.315, Grautt la llnnkoalilier, SI.9 2011, SB 119, Chapter 18, Section 1, Page 12, and Linc 3J is to provide
funding to City of Kenai for use towards Kenai River South Beach Dip Net Access. The objective of this project is
to detsga and construction of a new, roadway to provide access to the beach, and related improvements.
This project may include, but is not limited to:
• I)csign,
• Basement /land acquisition,
• Construction, and
• Equipment.
No more than five percent (5%) of the total grant award may be reimbursed fox Administrative expenses for
projects involving equipment purchase or repairs and no more than ten percent (10"o) of the total grant award
may be reimbursed for Administrative expenses for all other projects. To be reimbursed fur eligible
administrative costs, expenses must be reported on the Designated Legislative Grant Financial /Progress
Report form.
2. Project Budget
r Cost Cate o
g �— —
Project Funds —
[Administration
i Total Grant Punds
3. Project Management
This project will be managed by the Grantee.
Signatory authority for execution of the Grant Agreement and subsequent amendments is granted to the chief
administrator. For grants appropriated to a municipality, the mayor is the chief adrrtinistrator unless the
municipality operates a managerial form of government; then the city manager/administrator acts as the chief
administrator. For named recipients and unincorporated communities, the executive director or highest ranking
official will act as chief adm nistrator.
The chief administrator may delegate authority for executing the Grant .Agreement and amendments to ethers
within the Grantee's orgnni7ation via the Signatory Authority Form. The chief admitistrator also designates
financial and performance progress reporting authoriih via the Signatory -Authority Form. Such delegation is
limited to othera within the Grantee's organization unless otherwise approved by the Department.
The Grantee must establish and maintain separate accounting for the use of this Grant. The use of Grant funds
in any manner contrary to the terms and conditions of this Grant Agreement may result in the subsequent
R.r S.B1-1 A,signared 7.egivaiire Granl Afire. menr Page; of 13 —�
`(r
revocation of the Giant and any balance of funds under the Giant. It may also result in uhe Grantee being
required to return such amuunts to the State.
If applicable under state law, grantees must be registered and in good standing with the Dcpattment of
Commerce, Community and Economic Development's Division of Corporations, Business and Professional
Licensing.
4. Reporting
The Grantee shall submit a Designated Legislative Grant Financial /Progress Report Norm provided by the
Deparuent each month, or quarterly, with the concurrence of the Department, during the life of the Grant
Agreement. Grant Financial /Progress Report Forms are due thirty (30) days after the end of the month or
quarter being reported. The report period is the first of the month through the last day of the month. If
quarterly reporting is approved, the report period is the first day of the first month through the last day of the
third month of the quarter. The final Financial /Progress Reports must be submitted within thirty (30) days
following completion of the project.
Attachment B
Payment Method
1. Reimbursement Payment
Upon receiving and approving a Grantcc's Financial /Progress Report, the Department will reimburse the Grantee for
I
v pcndimres paid during the reporting period, in accordance with this Grant Agreement. The Department will not
rtinmburse without approved Financial /Progress Reports, prepared and submitted by the Grantee on the form provided
by the Department. Before approving the financial /progress report for payment, the Deparnmmuu may require the
Grantee to submit documentation of the costs reported (e.g., copies of vendor billings /invoices and proof of payment,
general ledger expenditure report).
2. Advance Payment
In most instances, the Department will make payment to a Grantee on a cost reimbursable basis. If cost reimbursement
significantly inhibits the Grantee's ability to implement the project, the Department may advance to the Grantce an
amount not to exceed a projected thirt (30) day cash need, or twenty percent (20%) of the amount in Section 1,
whichever is less.
Before the Department Mill issue an advance, the Grantee must submit a "Request for Advance Payment" form along
with documentation of costs associated with the advance. The `Bequest for Advance Payment" form can be obtained
from the Department electronically or in hard copy.
. \ll advances will be recovered kith the Grantee's next Financial /Progress Report form. Should earned payments during
the terms of this Grant : \greemcnt be insufficient to recover the full amount of the advance, the Grantee will repay the
unrecovered amount to the Department when requested to do so by the Department, or at termination of the Grant
Agreement.
3. Withholding of Ten Percent (10 %)
The Department may withhold ten percent (10 %) of the amount it, Section I until tlhc llepartmcnt determines that the
Grantee has satisfactorily completed the touts of thi, Grant Agreement, including all required reporting of the project.
- — - - - --
Her Snja lksiynnfaJ LegisliNp'� Grunt dgro.�meM
Page 4 nj 12 — _
Attachment C
Standard Provisions
Article 1. Definition
"Department" refers to the Department of Commerce, Community, and Fconoinic Development with the
State of Alaska.
Article 2. Indemnification
it is understood and agreed that this Grant Agreement is solely for the benefit of the parties to the Grant
Agreement and gives no right to any other party. No joint vcihture. or. partnership is furred as a result of the
Grant Agreement.
The Grautce, its successors and assigns, Will protect, save, and hold harmless the Department and the State of
Alaska and their authorized agents and employees, Cron, all claims, actions, coats, damages, or expenses of any
nature whatsoever by reason of the acts or omissions of die Grantee, its subcontractors, assigns, agents,
contractors, liceuses, invitees, employees, or any person whomever arising out of or in connection with any
acts or activities authorized by this Grant .Agreement. The Grantee further agrees to defend the Department
and the Start of Alaska and their authorized agents and employees in ally litigation, including payment of any
costs or attorney's fees for any claims or actions commenced thereon arising out of or in connection with acts
or activities authorized by this Grant ilgrecment. This obligation shall not include such claims, costs,
damages, or expenses which may be caused by the sole negligence of the Department of the State of Alaska
or their authorized agents or employees, provided, that if the claims or damages are caused by or result from
the concurrent negligence of (a) the Department and the State of Alaska and them agents or employees, and
(b) the Grantee, it, agents or employees, this indemnity provision shall be Naha and enforceable only to the
extent of the negligence of the Grantee, or Grantee's agents or employees.
Article 3. Legal Authority
I lic• Grantee ccrrifies that it possesses Icgal attthomy to accept grant fund, under the State of Alaska and to
execute the project described in this Grant Agreement by signing the Grant Agreement document. The
Grantee's relation to the Department and the Statc of 1laska shall be at all tunes as an independent Grantee.
Article 4. Waivers
No conditions or provisions of this Grant Agreement can be waived unless approved by the Department in
writing. The Department's failure to insist upon strict performance of any provision of the Grant agreement,
ur to exerei,c am right based upon a breach thereof, or the acceptance of any performance during such a
breach, shall not cunstitute a waiver of any right under this Grant Agreement.
Article 5. Access to Records
The Deparuncnt .end duly authorized officials of dx State of Alaska shall have full access and the right to
esammu, excerpt, or transcribe any pertinent documents, papers, rrcords, and books of the Grantee, and of
persons or nrganiza:ions with which the Grantee may contact, inN- olving transactions related to the pruject
and this Grant Agreement.
Article 6. Reports
I be Grantee, it such times and in such forms as the Department max require, shall flhrm,h the Department
with such periodic reporw as it may request pertaining to the activities undertaken pursuant to thi, Grant
Agreement, incutling the• final close -out report, the cults and obligations incurred in connection therewith,
and any other matters covered by this Grant .Agreement.
Rey. S'ZOl ; - si,Mild l egulaul, Gram Agrcvwm Page Tf 13
Article 7. Retention of Records
The Grantee shall retain financial and other records relating to the performance of this Grant Agicemcnt for
a period of six years from the date when the final financial status report is submitted to the Department, or
unul final resolution of any audit findings, claims, or litigation related to the grant.
Article 8. Assignability
•11tc Grantee shall not assign any interest Lt this Grant Agreement and shall not transfer any interest in the
same (whether by assignment or novabon).
Article 9. Financial Management and Accounting
The Grantee shall establish and maintain a financial management and accounting system that conforms to
generally accepted accounting principles.
Article 10, Program Income
Program income earned during the award period shall be retained by the Grantee and added to the fitnds
committed to the award and used for the purpose and under the co
fonds. ati eons applicable to the use of award
Article 11. Amendments and Modifications
The (;ranter or the Department may request an amendment or modification of this Grant agreement.
However, such amendment or modification shall not take effect until approved, in writing, by the
Department and the Grantee.
Article 12. Recordkeepittg
The Granter agrees to kctp such records as the Department 'nay require. Such records will include
information pertaining to grant awards and authorizations, obligation%, unobbgated balances, assets,1iabdiues,
outlays and income. They will also include information pertaining to project performance and effort: to
comply with the provisiuns of the Grant Agreement.
Article 13. Obligations Regarding Third -Party Relationships
None of the Work specified in this Grant Agreement shall be contracted by the Grantee without prior
approval of the Department. No permission for subcontracting shall create, between the Department or the
State of Alaska and the subcontractor, am: contract or any relationship.
The Grantee shall remain fully obligated under the provisions of this Grant Agrctment notwitltstantling its
designation of any third parry or parties of the undertaking of all or any part of the project described herein.
.iny subcontractor that is not the Grantee shall be required by the Grantee to comply with all the provisions
of this Grant Agreement.
the Grantee shall hind all subcontractors to each and every applicable Grant Agreement provision. Each
subcontract for work to be performed with funds granted under this Grant Agreement shall speci£rcally
include a provision that the Department and the State of Alaska arc• not Lable for damages or claims from
damages arising from any subcontractor's performance or activities under the terms of the subcontracts.
Article 14. Conflict of Interest
No officer or crnplo}•ce of the Department; no member, officer, or employee of the Grantee or its designees
or agents; no member of the governing body of the jurisdiction in which the project is undertaken or located;
and no other official of such locafitc or localities who exercises any functions or responsibili ties with respect
to the project during his or her tenure, shall have any personal or pecuniary gain or interest, direct or indirect,
in any connact, subcontract, or the proceeds thereof, for work to be performed it.. connection with the
project assisted under this Grant Agreement,
T r, i ;'QN - -- - Designated Legislative Grun7 :Igreen�en/ —_ - -- Paq.• h nJ13
The Grantee shall incorporate, or cause to incorporate, in all such contracts or subcontracts, a rovision
prohibiting such into rest pursuant to the purpose of this provision, p
Article 15. Political Activity
No portion of the funds provided hereinunder shall be used for ally partisan political activitP or to further the
election or defeat of any candidate for public office or influence the approval or defeat of any ballot issue
Article 16. Notices
'file Grantee shall comply with all public notices or notices to individuals required b,,• applicable state and
Federal laws and shall maintain a record of this compliance.
Article 17. Prohibition Against Payment of Bonus or Commission
The assistance provided under this Grant Agreement shall not be used in payment of ant, bonus or
commission for the purpose of obtaining approval or concurrence under this contract provided, however,
that reasonable fees of bona fide technical consultant, managerial, or other such services, other than actual
solicitation, are not hereby prohibited if otherwise eligible as project costs.
Article 18. Termination by Mutual Agreement
This Grant Agreement may be terminated, in whole or in part, prior to the completion of contract project
activities when both parties agree that continuation is not feasible or would not produce beneficial results
commensurate with the further expenditure of funds. The Department will determine whether an
environmental review of the cancellation is required under State and /or Federal law. The parties must agree
on the termination conditions, including effective date and the portion to be terminated. The Grantee shall
nor incur new obligations for the terminated portion after the effective date, and shall cancel as many
outstanding obligations as possible The Department shall make funds available to the Grantee to pay for
allow able expenses incurred before the effective date of termination.
Article 19. Termination for Cause
If the Grantee fails to comply with the terms of this Grant Agreement, or fails to use the grant for only those
purposes set forth herein, the Department may take the following actions:
A. Suspension — Aftcr notice in writing by certified mail to the Grantee, su,pcnd the grant and nithhold
any further payment or prohibit (he Grantec from incurring additional obligations of grant funds,
pending corrective action by the Grantee or a decision to terminate. Response must be received
within fifteen (15) days of receipt of the written notice.
B. Termination — 'rermtn:ue the grant in whole or in part, at any time before the final grant payment is
made. The Department shall promptly notify the Grantee in writing of its determination to
terminate, the reason for such termination, and the rffcetive date of the term nation. Payments made
to the Grantee or recoveries by the Department shall be in accordance with the legal rights and
liabilities of the parties.
Article 20. Withdrawal of Funds
In the event funding from the state, fcdcral, or other sources is withdrawn, reductd, or limited in any way
after the effective date of this Grant lgrcement and prior to normal completion, the Deparument mat
terminate the• agreement, reduce funding, or rc- negotiate subject to those new funding limitations and
conditi(.ns. A tcminauon under this article shall be implemented under the same conditions as a termination
under .Article 19 of this Attachment.
Article 21. Recovery of Funds
In the event of a default or vinlatiun of the terms of the Grant Agreement by the Grantee, the Department
ma) lnslirule actions to recover all or part of the project funds paid to the Grantce. Repayment by the
Grantee of grant find; under this recovery provision shall occur within thirty (30) days of demand.
Designn he CirmilA n•�mtnl _ —_ ___
g l'nge l of !J -'
Article 27
Article 28.
D. Professional Liability Insurance covering all errors, omissions or negligent acts of the contractor,
subcontractor or anyone directly or indirectly employed by them, made in the performance of this
contract wluch result in financial loss to the State. Limits required are per the following schedule:
ContractArnount Minimum Required Limits
Under $100,000 $100,000 per occurrence /annual aggregate
Subcontracts for Engineering Services
In the event that the Grantee subcontracts for engineering sen1ces, the Grantee will require that the
engineering firm certify that it is authorized to do business in the State of Alaska. In the event that the
engineering fuxn is also the project administrator, the Grantee shall requite that the bond or insurance shall be
for not less than the amount of the entire project.
Governing law
This Grant Agreement is governed by the laws of the State of Alaska. The Grantec shall perform all aspects
Of this project in compliance with the appropriate laws and regulations. It is die responsibility of the Grantee
to ensure that all permits required for the construction and operation of this project by the } cdcral, State, or
Local governments have been obtahied.
Article 29. Budget Flexibility
Notwithstanding the provisions of Article 11, Attachment C, the Grantee may revise the project budget in
Attachment A without a formal amendment to this agreement. Such revisions are limited within each line
item to a maximum of ten percent (10°•„) of the lute item or $10,000, whichever is less, over the entire term of
this agreement. Such budget revisions shall be limited to changes to cvsring budget line items. Budget
revisions ma% not be used to increase any budget item for project administrative expenses. Changes to the
budget beyond the limits authorized by this provision may only be made by a formal amendment to this
agreement.
Article 30. Equal Employment Opportunity (EEO)
The Grantee may riot discriminate against any employee or applicant for employment because of race,
religion, color, national origin, age, physical handicap, sex, marital status, changes in marital status, pregnancy,
or parenthood. The Grantee shall post in a conspicuous place, available to employees and applicants for
employment, a notice setting out the provisions of this paragraph.
The Grantee shall state, in all solicitations or advertisements for employees to work on state funded projects,
that it is an equal opportunity, employer (EEO) and that all qualified applicants will receive consideration for
employment uirhout regard to race, religion, color, national origin, age, physical handicap, sex, marital state,
changes in marital status, pregnancy, or parenthood.
The Grantec shall include the provisions of this EF.O article in every contract rdliring to this Grant
Agreement and shall require the inclusion of these. provisions in every agreement entered into by any of its
contractors, so that those provisions will be binding upon each contractor or subcontractor.
Article 31, Public Purposes
•f he Grantec agrees that the project to which this Grant agreement relates shall be dedicated to public
purpose -or its useful life The benefits of the project shall be made az,,tilable without regard to race, religion,
color, national origin, age, physical handicap, sex, marital status, changes in marital status, pregnant }, or
parenthood.
If tho Grantec is a non - :municipal enrin, and if monies appropriated umder this grant constitute the sole or
iprincipal funding source for the acquisition of equipment or facilities, the Grantee agrees that in the event a
i municipal corporation is Cornicd which possesses the power and jurisdiction to provide for such equipment
or facilities, the Grantee shall offer, without compensation, to transfer ownership of such equiment or
ifacilities to the municipal corporation. p
Rev. 5,1611 - -� Dosignw,!d ialalmr Grunt AgreemmW
F'ngc 9 oJl3
If the Grantee is a non -profit corporation that dissolves, the assets and liabilities from the grant project are to
be distributed according to statutor3 law, AS 10.22290- 10.20.452.
Article 32. Operation and Maintenance
throughout the life of the project, the Grantee shall be responsible for the operation and maintenance of any
facility, equipment, or other items acquired under this grant,
Article 33, Assurance
The Grantee shall spend monies awarded under this grant only for the purposes specified in this Grant
Agreement,
Article 34. Current Prevailing Rates of Wage
Certain grant projects are constrained by the provisions of AS 36. PUBLIC CONTRACTS. To the extent
that such provisions apply to the project Which is the subject of this Grant Agreement, the Grantee shall pay
the current prerailing rates of wage to employees as required by AS 36.05.010. The Grantee also shah require
any contractor to pay the current prevailing rates of wage as required by AS 36.05.010.
Article 35. Sevcrability
If any provision under this Grant Agreement or its application to anv person or circumstance is held invalid
by any court of rightful jurisdiction, this invalidity does not affect other provisions of the contract agreement
which can be gh en effect Without the invalid provision.
Article 36, performance
The Department's failure to insist upon the strict performance of any provision of the Giant Agreement or
to exercise any right based upon breach thereof or the acceptance of an) performance during such breach
shall not constitute a waiver of anv rights under this Grant Agreement.
Article 37. Sovereign Immunity
If the Grantee is an entity which possesses sovereign mmumh', it is a requirement of this grant that the
Grantee irrevocably waive its sovereign immunity with respect to state enforcement of this Grant .lgmcment.
The waiver of sovereign immunity, effected by resolution of the coutv's governing ha is herein
mcotporared into this Grant Agrecincnt.
Article 38. Audit Requirements
The grantee must comply with the audit requirements of the Alaska Adntitastrauve Code set forth in
2AAC45.010. AUDIT RP:QUIREMENTS, An entity that expends a cumulative or total, equal to the state
single audit threshold during the fiscal year is required to have a ,fate sing], audit. '\ COPY of the most current
2AAC45.010 adopted regulations is available at the Alaska Department of Administ-ration's State Single Audit
web <itc: bun: /ldoa alasl.agtrr dof�ssa index.lnnrl.
Current audit compliance supplements and guides specific to programs under AS 37.05.315 Grant> to
Municipalities, AS 37.05.316 Grants to Named Recipients, and AS 371.05.317 GrantS to Unincorporated
Communities can be found at lu _//dual_ In ka t�ov/doC';aa/3t1]•laudi si �hlhml #dt�ir(i8
Article 39. Close -Out
The Departrn,nt will advise the Grantee to initiate close out procedure, When the Department dctcnunines, in
consultation with the Grantee, that there arc no impediments to close -out and that the following criteria have
bCCi.` met or soon will be met:
I \. All costs to he paid with grant funds have been incurred with the exception of clo,c -out costs and
all,- unsettled third -party claims against the Grantee. Costs are incurred whin goods and services are
received or contract work is performed.
krv, 5?01J /�esignntrd fegislaliie Gm_nl.Igrvvn. nr Peg,, 10 of 13
Article 40.
B. The last required performance report has been submitted. 'Ibc Grantee's failure to subnut a report
will not preclude the Depar.ment from effecting close -out if it is deemed to be in the State's Interest.
Any excess grant amount that may be in the Grantee's possession shall be returned by the Grantee in
the event of the Granter's failure to finish or update the report.
C. Other responsibilities of the Grantee under this Grant Agreement and any close -out agreement and
npphcable laws and regulations appear to have been carried out sausfactorilv or there is no further
State interest in keeping the grant open for the purpose of securing performance.
Americans with Disabilities Act
The Americans with Disabilities Act (ADA) prohibits discrimination against pesuns with disabilities. Title I
of the AD 1 prohibits discrimination against persons with disabilities in employment and provides that a
reasonable accommodation be provided for applicants and employees. 'Title 11 of the Act prohibits public
agencies from discriminating against individuals with disabilities in the provision of services, programs, or
activities. Reasonable accommodation must be made to ensure or allow access to all services, programs, or
activities. 'ibis section of the Act includes physical access to public facilities and requires that public entities
must, if necessary, make modifications to their facilities to remove physical barriers to ensure access by
persous Ivith disabilities. All new construction must also be accessible to persons with disabilities. A public
entity's subgrantees or contractors must also comply with the ADA provisions. Grantees are responsible for
assuring their compliance with the ADA.
_ -- Ra._k14 — -- _ U:slpaied e,,&rrce Grnnr a�rrrrnrro
pay, lI of I
Appendix A
State Laws and Regulations and Permits
Grantees are responsible for all applicable state laws, regulations and permits; including but not limited to the following list
which most commonly affects Grantees.
Municipality Public Facility Operations and Maintenance —AS 37.05.315(c)
In accepting a grant under AS 37.05.315 for construction of a public Facilit, a municipalitt• covenants with the State that it
will operate and maintain the f cdity for the practical life of the facility and that the municipality will not look to the State
to operate or maintain the facility or pav for its operation or maintenance.'Ihis requirement does not apply to a grant for
repair or improvement of an existing facility operated or maintained by the State at the time the grant is accepted if the
repair or improvement for which the grant is made will not substantially increase the operating or maintenance costs to
the State.
Restriction on Use—AS 37.05.321
1 grant or earnings from a grant under AS 37,05.315 - 3- 05 317 may not be used for the purpose of influencing legislative
action. In this section "influencing legislative action" means promoting, advocating, supporting, modiifving, opposing, or
delaying or seeking to do the same with respect to any legislative action but does not include the provision or use of
information, statistics, studies, or analyses in wtitten m
or oral font or forat A grant or earnings from a grant made under
AS 37.05.315 - 37.05.317 nun not be used for purposes of travel in connection evith influencing legislative• action unless
pursuant to a specific request from a legislator or legislative committee.
Ifiring Preferences —AS 36.10
This chapter of the Alaska Statutes applies to grants for public works projects and requires compliance with the hiring
prcfercnct:s under AS 36.10.150-36.10-175 for employment generated by the grant.
Historic Preservation Act—AS 41.35
'Ibis chapter of the Alaska Stances applies to public construction of anv nature undertaken by the State, or by a
governmental agency of the State, or by a private person under contract vdth or licensed by the State or a governmental
agency of the State The Department of Natural Resources must be notified if the construction is planned for an
archaeological site. The Department of Natural Resources may stop the construction to determine the extent of the
historic, prehistoric, or archaeological values.
Fire Protection —AS 18.70
This chapter of the Alaska Statutes requires the Alaska Department of Public Safety (the State Fire Marshal) to adopt
repulauoits (currently in the form of Uniform Fire Cod -, as amended) establishing minimum sumdards For:
1 Fire dctectinn and suppression equipment,
2. Fire and life safety criteria in commercial, industrial, business, institutional, or other public buildings used for
residential purposes containing four or more dwelling units;
3. • lly activay in which combustible nr expansive materials arc stored or handled in commercial quantities;
-1. Conditions or acuvirics carried on outside a building described in (2) or (3) likely to cause injury to persons or
property.
Procurement Preference for State Agricultural and Fisheries Products —AS 29.71.040
This chapter of the Alaska Statutes applies to municipalities that use state funds to purdcase agricultural and fisheries
products. The law requires:
1. Whec agricultural products arc purchased, only such products harvested in the state shall be purchased whenever
priced no more than seven percent above products lian•ested outside the state, and of like quality compared with
agricultural product, han csted outside the state.
2. �Xhen fisheries products arc purchased, only fisheries products harvcstcd or processed within the jurisdiction of the
stue shall be purchased whenever priced no more than seven percent above products han•esred or processed outside
/trr 5 _U /{ Ocsig�utttd L. grslrmr Gram Agrv. mere !'ugt l: of /� _ -1
the jurisdiction of the state, available, and of like quality• compared with fisheries products har,ested or processed
outside the jurisdiction of the state.
Alaska Product Preferences —AS 36.15
I'his chapter of the Alaska Statures applies to projects financed by state money in which the use of timber, lumber, and
manufactured hunber products is required, only timber, lumber and manufactured lumber projects originating in this
state from local forests shall be used wherever practicable. The law requires the insertion of this clause ut calls for bids
and in all contracts awarded.
Permits and Environmental Procedures
The Alaska Department of Environmental Consenation (ADF,C) regulates all acrivitics in Alaska that might pollute the
air, water or soil. Thcre are doyens of ADEC permits related to constructing and operating public buildings The law
requires the following permits, including others designated by the commissioner. The following list is not intended to be
All-inclusive.
•
I
lieu. ? IUN
."it Emissions Permit
• Anadromons Fish Protection Permit
• Authorization for Tidelands Transportation
• Brine or Other Salt Water Waste Disposal Permit
Burning Permit during Nirc Season
• Coal Development Permit
• Critical IlabitatArea permit
• Dam Construction Permit
• DrivcwarPermit
• Encroachment Pennit
• Miscellaneous State Land Use Permit
• Mineral and Geothermal Prospecting Permits
• Uecupied Tide and Submerged land
• Open Bruning Permic
• Permit for Use of Timber or Nfuerials
• Pennit to Appropriate Water
• Pesticides Permit
• Preferred Use Permit
+ Rtght-of-Wiy and Rasement Permits
• Solid %Vaste Disposal
• Special Land Use Permit
• State Game Refuge Land Permit
• State Park incompatible Use Permit
• Surface Oiling Pcrmit
• Surface Use Permit
• "fide and Submerged Lands Prospecting Permit
• Tidelands Permit
• Tidelands Right -of -Wry or Easement Permit
• I Virg Permit
•
Waste \`rater Disposal Permit
• \C'ater Well Permit
—�� - -- - -_�— - - -- Jcsignurrd L;gtsln(ire Grnl lare.m:nr
P090 13 of 13
M
"'Villaye with a Past, C# with a Future"
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014 11111. IF
1992
MEMO:
TO: City Council
FROM: Rick Koch
DATE: June 30, 2015
SUBJECT: Resolution 2015 -50 — Purchase of Dragseth Subdivision Lots, 1, 2,
3, 4, 5A, 6A, and Gov't Lot 15 TSN, R11W, Sec. 7, S.M. Alaska
The purpose of this correspondence is to respectfully request Council adoption of the above
referenced Resolution.
The City received a grant in the amount of $1.9 million from the State of Alaska in the SFY 2015
budget for the purchase of property and construction of a new access roadway to the beach
south of the mouth of the Kenai River.
Initially, one of the property owners negatively affected by the traffic during the Personal Use
Fishery, ARK Properties, LLC, indicated they had an interest in selling a portion of their
properties to facilitate the construction of an access road which minimized or eliminated the
impact on wetlands.
After a number of discussions between myself, John McCallum -owner of ARK Properties, LLC
(ARK), Bruce Friend - representative for ARK, Scott Bloom, and engineers and attorneys
representing ARK, it became apparent that ARK had no interest in selling a portion of their
properties, or providing easements across their properties.
As time was of the essence to conduct a wetlands delineation study, and ARK would not grant a
right of entry for that purpose, the City moved forward with a wetlands delineation and design
for an access road traversing city -owned wetlands to the north of ARK properties. This
alternative, while technically possible, is frankly a less than attractive alternative. It bisects a
large area of wetlands affecting bird habitat, and requires the City to undertake a wetlands
mitigation program which may require placing up to four acres of other city -owned lands into
conservation easements. The project could reimburse the city for the loss of those lands.
Mr. McCallum had indicated an interest in selling all of ARK's properties. These include both
undeveloped and developed properties. Initially the proposed price was $2.5 million. Over time,
we have continued discussions and several months, prior to finalizing the City's 404 Permit and
mitigation plan for the project which would construct the roadway through city -owned
wetlands, I asked Mr. McCallum if he would agree to a sale price of $1.5 million for all of the
ARK properties. Mr. McCallum countered stating he would accept $1.7 million.After
negotiations, Mr. McCallum (ARK) has agreed to sell seven parcels of property, both
undeveloped and developed,to the City for $1.6 million.
Included in this packet of information is a Concept Financial Plan for a project in which the City
purchases all of ARK properties, maintains ownership of four properties needed to construct
the access road outside of wetland areas, and selling three properties, two of which are
developed with a single family residence and aircraft hanger.
This alternative is by far the most cost effective, eliminates impacts on wetlands, and eliminates
the need for a wetlands mitigation program in which the City must place lands under
permanent conservation easements.
If Council approves this Resolution, the City will immediately begin the process of re-
subdividing the properties, including the vacation of Dragnet Court, for the purpose of offering
for sale the southern portion of properties presently owned by ARK properties.
I realize that this is certainly not the norm, but it is similar to land /property acquisitions
conducted by ADOT /PF when they sell portions of properties that have been acquired through
a right -of -way acquisition process.
Please find attached the following exhibits:
Exhibit A — Proposed Roadway Alignment minimizing wetland Impacts and Eliminating
the Need for a USCOE 404 Wetland Permit and Mitigation Plan
Exhibit B — Identification of Properties and Kenai Peninsula Borough Assessments
Exhibit C — Kenai Peninsula Borough Property Reports (7 parcels)
Exhibit D — Concept Financial (Business) Plan
Exhibit E — Cost Estimate for New Roadway Construction
Thank you for your attention in this matter. If you have any questions, please contact me at
your convenience.
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Kenai Peninsula Borough
Property Report - 04910110
Thu Aug 27 2015 08:55:56 AM
Parcel Number:
Address:
Owner:
Tax Area:
Usage Code:
Acreage:
Land Value:
Improvement Value:
Assessed Value:
Taxable Value:
Legal Description:
04910110
2180 ROYAL ST
ARK PROPERTIES LLC
11204 N BAR 21 DR
GLENNS FERRY, ID 83623
30 - KENAI CITY
100 Residential Vacant
5.45
EN
DISCLAIMER: The data displayed herein is neither a
legally recorded map nor survey and should only be used
for general reference purposes. Kenai Peninsula Borough
$96,200 assumes no liability as to the accuracy of any data
displayed herein. Original source documents should be
$0 consulted for accuracy verification.
$96,200
$96,200
T 5N R 11W SEC 7 SEWARD MERIDIAN KN GOVT LOT 15
Number of Structures: t
Structure # Year Built Square Ft Structure Type
C
EXHIBIT
Kenai Peninsula Borough
Property Report - 04910113
Thu Aug 27 2015 08:58:09 AM
Parcel Number:
Address:
Owner:
Tax Area:
Usage Code:
Acreage:
Land Value:
Improvement Value:
Assessed Value:
Taxable Value:
Legal Description:
04910113
1206 DRAG NET CT
ARK PROPERTIES LLC
11204 N BAR 21 DR
GLENNS FERRY, ID 83623
30 - KENAI CITY
105 Residential Improved Land
1.28
&S
DISCLAIMER: The data displayed herein is neither a
legally recorded map nor survey and should only be used
for general reference purposes. Kenai Peninsula Borough
$57,600 assumes no liability as to the accuracy o, any data
displayed herein. Original source documents should be
$14,000 consulted for accuracy verification.
$71,600
$71,600
T 5N R 11 W SEC 7 SEWARD MERIDIAN KN 0770056 DRAGSETH SUB LOT 3
Number of Structures: 1
Structure # Year Built Square Ft Structure Type
C
Kenai Peninsula Borough
Property Report - 04910112
Thu Aug 27 2015 08:57:49 AM
Parcel Number:
Address:
Owner:
Tax Area:
Usage Code:
Acreage:
Land Value:
Improvement Value:
Assessed Value:
Taxable Value:
Legal Description:
04910112
1204 DRAG NET CT
ARK PROPERTIES LLC
11204 N BAR 21 DR
GLENNS FERRY, ID 83623
30 - KENAI CITY
100 Residential Vacant
0.51
r -1
NJ]
DISCLAIMER: The data displayed herein is neither a
legally recorded map nor survey and should only be used
for general reference purposes. Kenai Peninsula Borough
$12,300 assumes no liability as to the accuracy o f any data
displayed herein. Original source documents should be
$0 consulted for accuracy verification.
$12,300
$12,300
T 5N R 11 W SEC 7 SEWARD MERIDIAN KN 0770056 DRAGSETH SUB LOT 2
Number of Structures: 1
Structure# Year Built Square Ft Structure Type
IFXFOT C
Fol 3 (X -y-
Kenai Peninsula Borough
Property Report - 04910111
Thu Aug 27 2015 08:57:24 AM
Parcel Number:
Address:
Owner:
Tax Area:
Usage Code:
Acreage:
Land Value:
Improvement Value:
Assessed Value:
Taxable Value:
Legal Description:
04910111
1202 DRAG NET CT
ARK PROPERTIES LLC
11204 N BAR 21 DR
GLENNS FERRY, ID 83623
30 - KENAI CITY
100 Residential Vacant
0.54
& 'I
NI)S
DISCLAIMER: The data displayed herein is neither a
legally recorded map nor survey and should only be used
for general reference purposes. Kenai Peninsula Borough
$12,600 assumes no liability as to the accuracy of any data
displayed herein. Original, source documents should be
$0 consulted for accuracy verification.
$12,600
$12,600
T 5N R 11 W SEC 7 SEWARD MERIDIAN KN 0770056 DRAGSETH SUB LOT 1
Number of Structures: 1
Structure # Year Built Square Ft Structure Type
k4 :-
- r
Kenai Peninsula Borough
Property Report - 04910114
Thu Aug 27 2015 08:58:31 AM
Parcel Number:
Address:
Owner:
Tax Area:
Usage Code:
Acreage:
Land Value:
Improvement Value:
Assessed Value:
Taxable Value:
Legal Description:
04910114
1207 DRAG NET CT
ARK PROPERTIES LLC
11204 N BAR 21 DR
GLENNS FERRY, ID 83623
30 - KENAI CITY
100 Residential Vacant
1.07
g -1
NS
DISCLAIMER: The data displayed herein is neither a
legally recorded map nor survey and should only be used
for general reference purposes. Kenai Peninsula Borough
$52,800 assumes no liability as to the accuracy of any data
displayed herein. Original source documents should be
$0 consulted for accuracy verification.
$52,800
$52,800
T 5N R 11 W SEC 7 SEWARD MERIDIAN KN 0770056 DRAGSETH SUB LOT 4
Number of Structures: 1
Structure # Year Built Square Ft Structure Type
C
Kenai Peninsula Borough
Property Report - 04910119
Thu Aug 27 2015 08:58:55 AM
Parcel Number:
Address:
Owner:
Tax Area:
Usage Code:
Acreage:
Land Value:
Improvement Value:
Assessed Value:
Taxable Value:
Legal Description:
04910119
DRAG NET CT
ARK PROPERTIES LLC
11204 N BAR 21 DR
GLENNS FERRY, ID 83623
30 - KENAI CITY
110 Residential Dwelling - single DISCLAIMER: The data displayed herein is neither a
legally recorded map nor survey and should only be used
1.90 for general reference purposes. Kenai Peninsula Borough
$69,600 assumes no liability s to the accuracy of any data
displayed herein. Original source documents should be
$1,307,300 consulted for accuracy verification.
$1,376,900
$1,376,900
T 5N R 11 W SEC 7 SEWARD MERIDIAN KN 0910033 DRAGSETH SUB NO 2
LOT 5A
Number of Structures: 2
Structure # Year Built
Square Ft
Structure Type
R01 1989
7,556
2+ L FRAME
R01 1989
1,280
MACHINE
f
Kenai Peninsula Borough
Property Report - 04910120
Thu Aug 27 2015 08:59:17 AM
Parcel Number:
Address:
Owner:
Tax Area:
Usage Code:
Acreage:
Land Value:
Improvement Value:
Assessed Value:
Taxable Value:
Legal Description:
04910120
1201 DRAG NET CT
ARK PROPERTIES LLC
11204 N BAR 21 DR
GLENNS FERRY, ID 83623
30 - KENAI CITY
190 Residential Accessory Bldg
0.92
Number of Structures: 1
Structure # Year Built
Cot 1988
LN)]
DISCLAIMER: The data displayed herein is neither a
legally recorded map nor survey and should only be used
for general reference purposes. Kenai Peninsula Borough
$16,300 assumes no liability as to the accuracy of any data
displayed herein. Original source documents should be
$50,200 consulted for accuracy verification.
$66,500
$66,500
T 5N R 11 W SEC 7 SEWARD MERIDIAN KN 0910033 DRAGSETH SUB NO 2
LOT 6A
Square Ft Structure Type
2,064 HANGARS
of �•
South Beach Access
Land Purchase and Construction of Access Road
Concept Financial Plan
State of Alaska Grant
$
1,900,000.00
Expenditures to Date
$
(100,000.00)
Purchase of Seven Properties Owned by ARK Properties, LLC
$
(1,600,000.00)
COK Due Diligence, testing, etc.
$
(30,000.00)
Resubdivision of Seven Properties
$
(4,500.00)
Sale of Three Lots (include house)
$
900,000.00
Commissions
$
(60,000.00)
Construction of Access Road
$
(360,000.00)
Amount of Grant Remaining for Other PU Fishery Improvements
$
645,500.00
CITY OF KENAI
City Manager's Office
210 Fidalgo Ave. • Kenai, AK 99611
(907) 283 -8222 • Fax (907) 283 -3014
rkoch@ci.kenai.ak.us
SHEET
OF.
CALCULATED BY DATE
CHECKED BY DATE
CITY OF KENAI
City Manager's Office
210 Fidalgo Ave. • Kenai, AK 99611
(907) 283 -8222 • Fax (907) 283 -3014
rkoch@ci.kenai.ak.us
J08C65-f- 654Zlvtlk 41— CL4 Y41"
2
SHEET NO OF
CALCULATED BY
CHECKED BY
SCALE