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HomeMy WebLinkAboutResolution No. 2016-32Sponsored by: Gabriel and Knackstedt CITY OF KENAI RESOLUTION NO. 2016 -32 A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, APPROVING A POLICY FOR THE SALE OF TEN SPECIFIC AIRPORT OWNED LEASED LANDS WITH SUBSTANTIAL CONSTRUCTED LEASEHOLD IMPROVEMENTS. 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, the City has identified ten specific leases on Airport lands, as identified on Attachment A, that are now, or are intended to be outside the Airport reserve in the very near future, on which the Lessees have constructed substantial improvements; and, WHEREAS, the ten leased properties have been, or are available to be released for sale; and, WHEREAS, it is recognized that at least some Lessees anticipated an opportunity to purchase the subject properties and this assumption may have influenced their businesses decisions; and, WHEREAS, the City has sold leased properties to Lessees in the past; and, WHEREAS, the City recognizes the economic benefit and potential for increased business development within the City and around the Airport by providing for private ownership of certain Airport owned lands in certain circumstances; and, WHEREAS, it is in the best interest of the City, Airport and Lessees to approve a temporary policy that provides a window for an equitable and uniform method of sale of the ten subject leased properties, recognizing the expectations of certain Lessees, and need to move forward in a positive manner for the City, Airport and Lessees, while also recognizing the current and future income value of the land to Airport. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. That the following Policy is adopted for the specific ten Airport owned leased lands as identified on Attachment A attached hereto: New Text Underlined; [DELETED TEXT BRACKETED] Resolution No. 2016 -32 Page 2 of 2 POLICY FOR SALE OF SPECIFIC AIRPORT LEASED LANDS Purpose: To implement a policy regarding the sale of Airport owned property outside the Airport reserve currently leased with substantial leasehold improvements. This Policy is intended to provide an equitable and uniform purchase procedure for the current Lessees to purchase the specific ten Airport owned parcels identified in Attachment A. Disclaimer: This Policy does not provide for the sale of any specific property, but only a method for such sale, subject to the Ordinances of the City of Kenai. Any specific sale must be separately approved by the City Council, which may approve or disapprove any such sale, in its sole discretion. It is intended that this Policy remain in effect for a period of no more than five years, however, it is recognized by the City Council and Administration, and should be recognized by any affected Lessee, that the City Council of Kenai my amend, modify, or rescind this Policy, or applicable City Ordinances which could affect this Policy, at any time. Sale Conditions: A. If a sale is approved by the City Council of any one of the ten specified leased properties, the sales price acceptable to the City shall be 125% of a fair market raw land appraisal. In order for such sale to occur subject to this Policy, the following conditions must be met: 1. Lessee has constructed lease -hold improvements exceeding current value of airport property. 2. Lessee is current with all financial obligations with the City. 3. Lessee will pay the City to perform a survey (if required). 4. Lessee will pay for the City to obtain an appraisal. 5. Property is outside of the Airport Reserve Boundary. B. Any conflicting provision, procedure, law or policy provided in Kenai City Code has precedent over this Policy. Section 2. That this Resolution takes effect immediately upon passage. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 6th day of July, 2016. PAT PORTER, MAYOR Sandra New Text Underlined; [DELETED TEXT BRACKETED] m z k § § \ \ \ } § )/\ LQ IS ) \ \ } / 2 J R ± , $ > e ! - m a � � ■ k - k � § ( ' , ° § \ C ! Ln . ! ! » f $ !( & %( ( ) ( ) ( } % i§2l�� � ; § \` J: .626-6 2626\\\ \\ \\ \ /} 26\\\!26 ;! ■!lrar! \ } } } I ) \ ) } § § \ § § 7 % 2 § ; m z k § § y I T I 3 Y' A -gas SY f p n qe a� 1 • 1 ^ p. aL w 4 • s'- Q QCCi N C4- 4 N m U _ co f lafF�f.� a - T ' IIF AE wi_ � -•R f ' rt • I !uf ITAV qi ! 9 r V � - oydo - 0�1 9g r Lf� !• N � F IMy -.ff Zry c �f nxs r tf a M "Village with a Past, C# with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014 �IIIII 1992 MEMO: TO: Mayor Porter and City Council FROM: Vice -Mayor Gabriel and Councilor Knackstedt DATE: June 30, 2016 SUBJECT: Resolution 2016 -32, Approving a Policy for the Sale of Ten Specific Airport Owned Leased Lands The City Council and Administration have been involved in ongoing discussions regarding the sale of certain airport lands for most of the past year. What has become apparent in these discussions is that any analysis must encompass a number of elements to arrive at a solution that is fair to the Airport, its projected revenues, and to leaseholders who have supported the Airport and City through business operations. A number of issues have been raised as we have discussed this topic: 1. The City's past practices in regards to sale of leased Airport Lands. 2. The calculated loss of Airport revenues through the sale of income producing lease properties. 3. The fair - market appraisal representing the raw -land value of property on which leasehold improvements have been constructed. It is clear, that the revenue derived from the lease of these properties results in the property returning a greater revenue stream than if the properties were to be sold for the raw -land, fair - market, appraised value. It is also clear that the general past practice of the City was to allow for the purchase of airport lands, outside the Airport Reserve Boundary, at the raw -land, fair - market, appraised value, though no guaranteed right to purchase was included in the leases themselves. This practice was changed in 2006 based on the recommendation made in the Kenai Municipal Airport Supplemental Planning Assessment, performed by DOWL Engineers by Council Resolution 2005- 55. The purpose of this resolution is to define a policy that provides opportunity, certainty, and a process, so that the leaseholders of these ten specific properties are able to purchase the property, while also recognizing the component of the lease value to the Airport. The proposed policy only affects the ten leases which are outside the Airport Reserve Boundary (or are expected to be), released by the FAA for sale (or expected to be), and on which substantial improvements have been constructed. There are no other properties leased by the Airport that share similar attributes. Moreover, this proposed policy is for a determinant period of time, five - years. The proposed policy provides, in part, for the following: 1. The lessee is able to purchase the property for 125% of the raw -land, fair market value. 2. The policy is in effect for a five year period. 3. The lessee /purchaser, is responsible for the cost of a current appraisal. In summary, we believe this policy provides a balanced and fair compromise which recognizes the financial interests of the Airport and the lessee's investment in these Airport properties which may have been in -part supported by the City's past practices. We respectfully request your support of Council Resolution 2016 -32. V ""VI'�laye with a Past, C# with a Future" >, 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 j Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014 11111. 1992 MEMO: TO: City Council APPROVED BY COUNCIL Date: 101 -71 L S FROM: Vice -Mayor Brian Gabriel and Councilor Henry Knackstedt DATE: September 24, 2015 SUBJECT: Action /Approval Item, Providing Direction to the City Manager to Draft a Policy for Sale of Airport Fund and General Fund Lands for Council Consideration The purpose of this correspondence is to initiate discussion, and recommend that Council direct the City Manager to draft a policy, or policies, for the sales of Airport Fund and General Fund lands. Specifically Council direction to the City Manager would include, but not be limited to, the following: 1. Sales of Airport Lands within the Airport Reserve Boundary a. Lands currently under lease b. Lands not currently under lease 2. Sales of Airport Lands outside of the Airport Boundary a. Lands currently under lease b. Lands not currently under lease 3. Sales of General Fund Lands a. Lands currently under lease b. Lands not currently under lease While this is a topical issue, if the City adopts a policy, or policies, regarding the sale of Airport Fund and General Fund lands, it is important to fully investigate all aspects of sale of public properties, and in the case of Airport Fund properties for the City Manager to fully involve the City's Airport Commission in the discussion. We recommend that the City Council, by motion, direct the City Manager to draft a policy, or policies, for the sale of Airport Fund and General Fund Lands and provide the draft policy, or policies, to Council for review and consideration on or before the Council meeting of January 20, 2016. Thank you for your attention in this matter. If you have any questions, please contact me at your convenience.