HomeMy WebLinkAboutOrdinance No. 2882-2016T
Sponsored by: Administration
CITY OF KENAI
ORDINANCE NO. 2882 -2016
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, WAIVING A SALE
RESTRICTION IMPOSED BY KENAI MUNICIPAL CODE SECTION 21.05.010(B) WITH
RESPECT TO LOT 1, BLOCK 1, GUSTY SUBDIVISION (KPB PARCEL NO. 04327008)
LOCATED WITHIN THE AIRPORT RESERVE; AUTHORIZING THE SALE OF LOT 1,
BLOCK 1, GUSTY SUBDIVISION TO RONALD AND SHIRLEY SMITH; AND
DETERMINING THAT LOT 1, BLOCK 1 GUSTY SUBDIVISION IS NOT NEEDED FOR A
PUBLIC PURPOSE.
WHEREAS, the City of Kenai received Quitclaim Deed through the Federal Aviation
Administration (FAA) on December 1, 1963, to nearly 2,000 acres of land subject to
certain restrictions, including that no property shall be used, leased, sold, salvaged, or
disposed of for reasons other than for airport purposes; and,
WHEREAS, on August 20, 1970, the FAA executed a Deed of Release for an area of land
subject to the Quitclaim Deed allowing for the lease, sale, or disposal of certain airport
lands by the City; and,
WHEREAS, Lots 1, 2, and 3 located in Gusty Subdivision were subject to that Deed of
Release; and,
WHEREAS, the City previously sold Lot 2 in Gusty Subdivision; and,
WHEREAS, the City has received an unsolicited offer to purchase Lot 1 in Gusty
Subdivision; and,
WHEREAS, the Property is located within the City's Airport Reserve; and,
WHEREAS, KMC 21.05.010(b) states that no City-owned land within the Airport Reserve
shall be sold or otherwise conveyed out of City ownership for any purpose, except as
provided in a lease executed by the City before the effective date of the ordinance codified
in that section; and,
WHEREAS, although the Property is within the City's Airport Reserve, the City has
studied the Property, the Airport Layout Plan, and the existing and future land needs of
the Kenai Municipal Airport and has determined that the Property is not identified as
needed for aviation purposes or for future expansion of the Kenai Municipal Airport;
and,
WHEREAS, the Airport Commission unanimously recommended the sale of the Property
to Ronald and Shirley Smith subject to certain conditions contained in documents of
title governing the City's use and ownership of the Property.
New Text Underlined; [DELETED TEXT BRACKETED]
Ordinance No. 2882 -2016
Page 2 of 3
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA, as follows:
Section 1. Classification: That this is a non -code ordinance.
Section 2. Statement of Ownership: That the City of Kenai is the owner of Lot 1,
Block 1, Gusty Subdivision (the Property).
Section 3. Public Purpose and Best Interest Findings: That the Property is not
needed for future public municipal or airport purposes. Under the Airport Layout Plan,
the Property is designated for non - aviation commercial or light - industrial uses. The
sale of the Property is in the best interests of the City and Airport as it serves a purpose
of continuing commercial growth and investment in the City.
Section 4. Waiver of Ordinance Requirements: That the Kenai City Council waives
the following provision of the Kenai Municipal Code as it pertains to sale of the property
only: KMC 21.05.010(b), Airport Reserve, otherwise prohibiting the sale of city-owned
land within the Airport Reserve except as provided in certain lease agreements executed
by the City.
Section S. Authorization of Sale: That the Kenai City Council hereby authorizes the
City Manager to sell of the City-owned lands described as Lot 1, Block 1, Gusty
Subdivision, under the procedures and terms established for the sale of airport lands
and otherwise the Manager shall follow the procedures set for the sale of airport lands
outside of the Airport Reserve as set forth in KC 21.15.180 et seq. and subject to the
following additional essential terms and conditions of sale:
(a) The sale will be made through a negotiated sale to Ronald and Shirley Smith for
a sum not less than $170,000; and,
Section 6. Title: That title shall be conveyed by quitclaim deed. Any instrument
conveying title to the Property shall include the following restrictions, promises, and /or
covenants:
(a) that the City of Kenai reserves unto that the grantee expressly agree for itself and
its heirs, executors, administrators, successors, transferees, and assigns, for the use
and benefit of the public a right of flight for the passage of aircraft in the airspace above
the surface of the Property, together with the right to cause in said airspace such noise
as may be inherent in the operation of aircraft, now known or hereafter used, for
navigation of or flight in the said airspace, and for use of said airspace for landing on or
at and for taking off from or operating on Kenai Municipal Airport; and,
(b) that the grantee expressly agree for itself and its heirs, executors, administrators,
successors, transferees, and assigns to restrict the height of structures, objects of
natural grown, and other obstructions on the Property to a height of not more than 242
New Text Underlined; [DELETED
Ordinance No. 2882 -2016
Page 3 of 3
above mean sea level; and,
(c) that the grantee expressly agree for itself and its heirs, executors, administrators,
successors, transferees, and assigns to prevent any use of the Property which would
interfere with landing or taking off of aircraft at the Kenai Municipal Airport, or
otherwise constitute an airport hazard; and,
(d) that all covenants heretofore stated shall run with the land and shall inure to the
benefit of, and be binding upon the heirs, executors, administrators, successors,
transferees, and assigns of the parties to the contract for sale and conveyance.
Section 7. Proceeds of Sale: That should a sale of the Property be finalized, all
revenues from the sale shall be deposited in the Airport Land Sale Permanent Fund for
use in the development, improvement, and operation of the Kenai Municipal Airport and
as otherwise required in that Deed of Release recorded on November 19, 1973 at Book
74, Pages 325 -327, Kenai Recording District.
Section S. Effective Date: That pursuant to KMC 1.15.0700, this ordinance shall
take effect one month after adoption.
ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 16th day of March,
2016.
PAT PORTER, MAYOR
Introduced: March 2, 2016
Failed: March 16, 2016
Reconsidered & Enacted: April 6, 2016
Effective: May 6, 2016
New Text Underlined; [DELETED TEXT BRACKETED]
.I.
Municipal Airport
Memo
To:
From:
Date:
Subject:
"S erv(*iWdA&Qreater Ke *wL&PeYLU4 W
305 N. WLLOW ST. SURE 200 KEN4 ALASKA 99611
TELEPHONE 907,2837951
FAX 907- 2833737
Rick R. Koch - City Manager V
Mary Bondurant — Airport Manager
February 12, 2016
Proposed sale of Airport Property, Kenai Peninsula Borough
Parcel ID 043 - 270 -08, Lot 1 Block 1 Gusty Subdivision
An item of new business discussed at the February 11, 2016 Airport Commission meeting was
the proposed sale of the above airport parcel.
After your presentation and further discussion on the value of selling the property versus holding
and leasing the property, the Airport Commission agreed that the sale of this parcel was in the
best interest of the airport.
The Commission also remarked that any structures built on the property be in accordance with
FAA and airport rules and regulations and not interfere with airport operations.
The Airport Commission recommends that Council move forward with the sale of Kenai
Peninsula Borough ID 043 - 270 -08, Lot I Block I Gusty Subdivision.
Attachment
www.kenaiairport.com.
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"Village with a Past, Gi with a Future
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014 I I III
the u a '
1992
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MEMO:
KIFROM: TO: City Council
Rick Koch, City Manager
DATE: March 10, 2016
SUBJECT: Proposed Sale of Airport Property, Kenai Peninsula Borough Parcel
ID 043 - 270 -08, Lot 1 Block 1 Gusty Subdivision
The purpose of this correspondence is to transmit information regarding a proposed
sale of the above referenced Airport property.
Following a meeting with the City Manager, Mr. Ronald Smith submitted, by e -mail, an
unsolicited offer to purchase this property for $170,400. The most recent appraisal,
dated February 18, 2015, established a raw -land value for the property of $142,600
(Exhibit A).
A more detailed purchase agreement was submitted to the City Manager on January
29, 2016. The purchase price offered remained $170,400 (Exhibit B)
In response to this offer the City Manager has analyzed the value of selling the property
versus holding and leasing the property over a fifty -year period. This analysis is
attached (Exhibit C).
Based on this analysis the City Manager determination is that it is in the best financial
interest of the Airport to accept this unsolicited offer to purchase this property.
The Council should consider, at a minimum, the following actions:
1. Vote to Adopt Ordinance 2882 -2016 which determines that the property is not
needed for a public purpose and authorizing the City Manager to sell Lot 1,
Block 1, Gusty Subdivision.
2. Vote to Oppose Ordinance 2882 -2016.
Vote to postpone action on Ordinance 2882 -2016, to time certain, and direct
the City Manager to provide public notice to determine if there are additional
parties interested in the purchase of Lot 1, Block 1, Gusty Subdivision. This
option would probably include a provision allowing for the party making the
initial unsolicited offer to match any subsequent offer.
Thank you for your attention in this matter.
attachments
MacSwain Asso��
& Valuation: Kenai Spur Zone
Parcel Identification KS Parcel Nos.:
30 -35, 37, 38
Zone Map
Zone Photograph
EXFIfB1T /�
15 -2793: Fair Market Value of 97 City of Kenai Parcels
48
MacSwain Associates LLC
Kenai Spur Zone Parcel List
�81S20 0 x fS °r - 141, 600
•i
15 -2793: Fair Market Value of 97 City of Kenai Parcels
043- 270 -08
28,520 SF V
$5.00
30
043 - 270 -10
26,870 SF
$5.00
31
32
Unleased
043 - 270 -14
25,144 SF
$5.00
33
043 - 270 -15
25,663 SF
$5.00
34
Unleased
043- 270 -19
29,219 SF
$5.00
35
Unleased
043 - 270 -20
29,219 SF
$5.00
043- 270 -28
35,851 SF
$5.00
37
38
Unleased
043 - 270 -29
49,399 SF
$5.00
�81S20 0 x fS °r - 141, 600
•i
15 -2793: Fair Market Value of 97 City of Kenai Parcels
PURCHASE AGREEMENT
AND /OR
EARNEST MONEY RECEIPT
Received from — Sm, � � f { CF "t ti hereinafter called
PURCHASER, the sum of 5 C 0. — in the form o
payable to r% �Yre.�t. �A ,gyp 4 gdZ (cash, check etc.)
(escrow co., title co., bank or other than seller if applicable) in Trust for
v , hereinafter called SELLER, as Earnest Money on
I 1 (date) , in part payment of the purchase price of the following described real property:
Legal Description: cl
in the e kel Recording District, Third Judicial District, State of Alaska.
The total purchase price is $ i % t� 1QO payable as follows:
a. Seitz �Lt�a2 C7t l inn o
b.
C.
THE CLOSING COSTS are to be paid between Seller and Purchaser as follows:
Indicate: (S) = Seller / (P) = Purchaser / (50/50) = Split equally between Seller and Purchaser.
S Owners Title Insurance
°) 5i> Escrow Closing Fee
5n Recording Fees
S Delinquent Property Taxes
Pending/Levied Assessments
_ Clear Existing Liens
WARNING: IT IS BUYER'S AND SELLER'S RESPONSIBILITY TO SEEK AND CONSULT WITH THEIR OWN
INDEPENDENT LEGAL ADVISOR, TAX ADVISOR, BUILDING & SOIL INSPECTOR, LAND SURVEYOR, WATER &
SEWER ENGINEER FOR THIS TRANSACTION AND AT THE SOLE COST TO THE PARTY REQUESTING SUCH
SERVICE(S) UNLESS OTHERWISE STATED ABOVE.
r c'
The title is to vest and read: x (hd sbandf and wife !ynaa�ed)
2. Seller agrees to furnish and deliver to Purchaser as soon as procurable a purchaser's policy of title insurance. If the
title cannot be made clear as aforesaid within 10 days from the issuance of a preliminary title report, the Purchaser may cancel this
agreement and the Seller must iefund the earnest money. It is also agreed that the Purchaser may waive defects or require the price to
be renegotiated to cover any defects or encumbrances at the Purchaser's sole discretion without loss of the earnest money refund.
3. If title is made good on or before closing and the Purchaser neglects or refuses to complete the purchase, the earnest
money may, at Seller's sole option, be forfeited as liquidated damages, which shall not preclude any other remedy available at law or
in equity, if any.
4. The property shall be conveyed by WARRANTY DEED free of encumbrances EXCEPT:
(If none then State None)
a.
b.
C.
AND Rights reserved in federal patents or state deeds, building or use restrictions general to the district, and building or zoning
regulations and provisions shall not be deemed defects nor encumbrances. Any defects or encumbrances may be discharged at closing
out of the purchase money.
EXHIBIT "
page—�
Pagel oft
Purchase Agreement and /or Eamest Money Receipt
Continued...
Prorate Property Taxes / Assessments / HOA Dues to
Seller responsible to pay all utilities prior to the day of closing. Purchaser shall place all utilities into Purchasers
names on or before closing and outside of closing.
6. Possession will occur on k joo c
7. Purchaser offers to purchase the property on the terms noted its present condition and this agreement is issued
subject to:
a.
b.
C.
(If none then State None)
8. The sale shall be closed in the offices of J( �� ([ y e 2 with an escrow or closing agent
on or before �tr,2, 2 0 � O t (p (date).
9. The Purchaser and the Seller will, on demand of either, deposit in escrow with the closing agent all instruments and
monies necessary to complete the purchase.
10. There are no verbal or other agreements which modify or affect this agreement. Time is of the essence of this
agreement.
WHEREFORE the Seller and Purchaser being in accord do bind themselves hereto by their signatures hereunder:
PURCHASER:
SELLER:
i
Af
Via'- fe'(`-- ✓Date:I -Y'��
Signature
Date:
Signature
Telephone: ; " `f G/ 7
Telephone:
Fax:
Fax:
Address:
_
Address:
�1 �L1x4 Lam, A DDate: /
Signature T
Date:
Signature
/
Telephone: *7 - 3 �cl 5-
Telephone:
Fax:
Fax:
Address: ti U (9 - - h 1�2 (Z
Address:
�lTt'/ i�ct ii q-7661?
E) HiBIT
Page 2 of 2 Page Z. 01 (L
Financial Analysis
Sale vs Lease
Kenai Peninsula Parcel ID 043 - 270 -08
Property Appraisal (Raw Land)
Annual Estimated Lease Income (8 %)
Purchase Price Offered
Estimated Year Lease Begins (1-50)
Estimated Year Lease Terminates (1 -50)
Appraisal Increase Each 5 -Year Period
Assumed Rate of Return
Future Value of Lease Payments
Future Value of Sale
Gain or (loss) by Sale
$ 142,600.00
$ 11,408.00
$ 170,400.00
10
50
5%
5%
$ 1,882,356.00
$ 1,860,998.00
$ (21,358.00)
fIBIT C
Page 1 of 2
Estimated
Estimated
Estimated
Accumulative
Estimated
Annual Lease
Potential Lease
Accumulative
Time Value of
Accumulative Value
Year
Income
Income
Income
Income @ 5%
of Sale @ 5%
Difference
1
$
$
11,408.00
$
$
$
170,400.00
$
170,400.00
2
$
$
11,408.00
$
$
$
178,920.00
$
178,920.00
3
$
$
11,408.00
$
$
$
187,866.00
$
187,866.00
4
$
$
11,408.00
$
$
$
197,259.00
$
197,259.00
5
$
$
11,408.00
$
$
$
207,122.00
$
207,122.00
6
$
$
11,978.00
$
$
-
$
217,478.00
$
217,478.00
7
$
$
11,978.00
$
$
-
$
228,352.00
$
228,352.00
8
$
$
11,978.00
$
-
$
-
$
239,770.00
$
239,770.00
9
$
$
11,978.00
$
-
$
-
$
251,759.00
$
251,759.00
10
$
11,978.00
$
11,978.00
$
11,978.00
$
12,577.00
$
264,347.00
$
251,770.00
11
$
12,577.00
$
12,577.00
$
24,555.00
$
26,412.00
$
277,564.00
$
251,152.00
12
$
12,577.00
$
12,577.00
$
37,132.00
$
40,938.00
$
291,442.00
$
250,504.00
13
$
12,577.00
$
12,577.00
$
49,709.00
$
56,191.00
$
306,014.00
$
249,823.00
14
$
12,577.00
$
12,577.00
$
62,286.00
$
72,206.00
$
321,315.00
$
249,109.00
15
$
12,577.00
$
12,577.00
$
74,863.00
$
89,022.00
$
337,381.00
$
248,359.00
16
$
13,206.00
$
13,206.00
$
88,069.00
$
107,339.00
$
354,250.00
$
246,911.00
17
$
13,206.00
$
13,206.00
$
101,275.00
$
126,572.00
$
371,963.00
$
245,391.00
18
$
13,206.00
$
13,206.00
$
114,481.00
$
146,767.00
$
390,561.00
$
243,794.00
19
$
13,206.00
$
13,206.00
$
127,687.00
$
167,972.00
$
410,089.00
$
242,117.00
20
$
13,206.00
$
13,206.00
$
140,893.00
$
190,237.00
$
430,593.00
$
240,356.00
21
$
13,866.00
$
13,866.00
$
154,759.00
$
214,308.00
$
452,123.00
$
237,815.00
22
$
13,866.00
$
13,866.00
$
168,625.00
$
239,583.00
$
474,729.00
$
235,146.00
23
$
13,866.00
$
13,866.00
$
182,491.00
$
266,121.00
$
498,465.00
$
232,344.00
24
$
13,866.00
$
13,866.00
$
196,357.00
$
293,986.00
$
523,388.00
$
229,402.00
25
$
13,866.00
$
13,866.00
$
210,223.00
$
323,245.00
$
549,557.00
$
226,312.00
26
$
14,560.00
$
14,560.00
$
224,783.00
$
354,695.00
$
577,035.00
$
222,340.00
27
$
14,560.00
$
14,560.00
$
239,343.00
$
387,718.00
$
605,887.00
$
218,169.00
28
$
14,560.00
$
14,560.00
$
253,903.00
$
422,392.00
$
636,181.00
$
213,789.00
29
$
14,560.00
$
14,560.00
$
268,463.00
$
458,800.00
$
667,990.00
$
209,190.00
Page 1 of 2
Year
30 $
31 $
32 $
33 $
34 $
35 $
36 $
37 $
38 $
39 $
40 $
41 $
42 $
43 $
44 $
45 $
46 $
47 $
48 $
49 $
50 $
Financial Analysis
Sale vs Lease
Kenai Peninsula Parcel ID 043- 270 -08
Estimated
4nnualLease Potential Lease
Income Income
14,560.00 $ 14,560.00 $
15,288.00 $ 15,288.00 $
15,288.00 $ 15,288.00 $
15,288.00 $ 15,288.00 $
15,288.00 $ 15,288.00 $
15,288.00 $ 15,288.00 $
16,052.00 $ 16,052.00 $
16,052.00 $ 16,052.00 $
16,052.00 $ 16,052.00 $
16,052.00 $ 16,052.00 $
16,052.00 $ 16,052.00 $
16,855.00 $ 16,855.00 $
16,855.00 $ 16,855.00 $
16,855.00 $ 16,855.00 $
16,855.00 $ 16,855.00 $
16,855.00 $ 16,855.00 $
17,698.00 $ 17,698.00 $
17,698.00 $ 17,698.00 $
17,698.00 $ 17,698.00 $
17,698.00 $ 17,698.00 $
17,698.00 $ 17,698.00 $
Page 2 of 2
C 2 � 2
Estimated
Estimated
Accumulative
Estimated
Accumulative
Time Value of
Accumulative Value
Income
Income @ 5%
of Sale @ 5%
Difference
283,023.00
$
497,028.00
$
701,390.00
$
204,362.00
298,311.00
$
537,932.00
$
736,460.00
$
198,528.00
313,599.00
$
580,881.00
$
773,283.00
$
192,402.00
328,887.00
$
625,977.00
$
811,947.00
$
185,970.00
344,175.00
$
673,328.00
$
852,544.00
$
179,216.00
359,463.00
$
723,047.00
$
895,171.00
$
172,124.00
375,515.00
$
776,054.00
$
939,930.00
$
163,876.00
391,567.00
$
831,711.00
$
986,927.00
$
155,216.00
407,619.00
$
890,151.00
$
1,036,273.00
$
146,122.00
423,671.00
$
951,513.00
$
1,088,087.00
$
136,574.00
439,723.00
$
1,015,943.00
$
1,142,491.00
$
126,548.00
456,578.00
$
1,084,438.00
$
1,199,616.00
$
115,178.00
473,433.00
$
1,156,358.00
$
1,259,597.00
$
103,239.00
490,288.00
$
1,231,874.00
$
1,322,577.00
$
90,703.00
507,143.00
$
1,311,165.00
$
1,388,706.00
$
77,541.00
523,998.00
$
1,394,421.00
$
1,458,141.00
$
63,720.00
541,696.00
$
1,482,725.00
$
1,531,048.00
$
48,32100
559,394.00
$
1,575,444.00
$
1,607,600.00
$
32,156.00
577,092.00
$
1,672,799.00
$
1,687,980.00
$
15,181.00
594,790.00
$
1,775,022.00
$
1,772,379.00
$
(2,643.00)
612,488.00
$
1,882,356.00
$
1,860,998.00
$
(21,358.00)
Page 2 of 2
C 2 � 2
Sandra Modigh
From: Rick Koch
Sent: Monday, April 04, 2016 8:45 AM
To: Bob Molloy; Brian G. Gabriel, Sr.; Henry Knackstedt; hknackstedt @hotmail.com; Mayor
Porter; Mike Boyle; Bob Molloy; Pat Porter; Mayor Porter; 'terry@bookeyforkenai.com'; Tim
Navarre; Tim Navarre (timnavarre @gmail.com)
Cc: Sandra Modigh; Christine Cunningham; Scott Bloom
Subject: Gusty Subdivision, Proposed Re- consideration of Land sale
Good morning,
Below is what I received from Mr. Ron Smith in response to my request for a development plan. Sorry it didn't make it into
the packet, it will be provided as a lay -dow,
Rick R. Koch
City Manager
City of Kenai
210 Fidalgo Ave.
Kenai, AK 99611
(907)283 -8222
(907)398 -0190
- - - -- Original Message---- -
From: Christine Cunningham
Sent: Monday, April 04, 2016 8:21 AM
To: Rick Koch
Subject: FW: Gusty
- - - -- Original Message--- -
From: Ron Smith [mailto:alaska.scrap @ gmail.com]
Sent: Wednesday, March 30, 2016 8:57 AM
To: Christine Cunningham
Subject: Gusty
REVIEWED BY COUNCIL /
NO ACTION TAKEN
Date: L41 U f IV — h A
I am going to try again Rick My intentions for the property is to possibly expand existing building or demo and start over
and put in a drive through food place and on front of property put in 1 /or2 ice vending machines like I have on the
corner.of K beach and east poppy Thank u. Ron Smith
Sent from my iPhone