HomeMy WebLinkAboutOrdinance No. 2933-2016EHe cih of
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CITY OF KENAI
ORDINANCE NO. 2933 -2016
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING
AN AMENDMENT TO EXTEND THE TERM OF LEASE TO 2035 OF CERTAIN CITY -
OWNED LAND, IDENTIFIED AS A PORTION OF LOT 3, BLOCK 17, ORIGINAL
TOWNSITE OF KENAI AND THE BUILDING KNOWN AS THE "FINE ARTS CENTER-,
TO THE PENINSULA ART GUILD, INC, WITHOUT A CURRENT APPRAISAL AND
DECLARING AN AMENDMENT TO THE LEASE IS IN THE BEST INTEREST OF THE
CITY.
WHEREAS, since December 1991 and until the Lease was assigned to the Peninsula
Arts Guild, Inc., on September 8, 2000, the City has leased the Fine Arts Center to the
Kenai Arts & Humanities Council for one dollar ($1.00) per year to provide a building
to house the Fine Arts Center for the benefit of the local community; and,
WHEREAS, the Fine Arts Center is currently in need of general repair and updating;
and,
WHEREAS, the current Lease is scheduled to expire on December 31, 2020, and the
Peninsula Art Guild, Inc., has requested an extension of the Lease until December 31,
2035 under the same terms and conditions as the existing Lease in order to obtain
grant funding for a substantial repair, renovation, and upgraded of the premises; and,
WHEREAS, Kenai Municipal Code 22.05.055 requires lease terms to be based on the
durability of the proposed use, the amount of investment proposed and made, the
nature of the improvement proposed, and the time required to amortize the
investment; and,
WHEREAS, Kenai Municipal Code 22.05.050 requires that prior to renewal of a lease,
there must be an appraisal within the last twelve (12) months to determine a fair
market lease rate; and,
WHEREAS, it is in the best interest of the City to waive KMC 22.05.050 and 22.05.055
as a fair market lease is not sought and such appraisal would result in the
unnecessary expenditure of funds and the City owns the improvements; and,
WHEREAS, the directors of the Peninsula Art Guild, Inc., have requested that City
Administration expedite its request to Execute an Extension of Lease in order to obtain
available grant funding; and,
WHEREAS, Kenai Municipal Code 22.05.070 and 22.05.125 allow the City Council to
deviate from the principles and policy of lease rates in the best interest of the City and
for Non - Profits; and,
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Ordinance No. 2933 -2016
Page 2 of 3
WHEREAS, the Planning and Zoning Commission reviewed this Ordinance at its
December 14, 2016 regular meeting and recommended the City proceed with the lease
extension; and,
WHEREAS, an extension of the current lease to the Peninsula Arts Guild under the
same terms and conditions of the existing lease at a rate of one dollar ($1.00) per year
is in the best interests of the City.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI
ALASKA, that:
Section 1. Form: That this is a non -code ordinance
Section 2. Wavier of Code Requirements: That the Council of the City of Kenai
waives the following provisions of the Kenai Municipal Code as it pertains
to the lease renewal, a portion of Lot 3, Block 17, Original Townsite of
Kenai and the building known as "The Fine Arts Center," to the
Peninsula Art Guild, Inc. only:
(a) KMC 22.05.050 to allow for a renewal of lease without an appraisal
within a twelve (12) month period prior to the beginning of the term of
the renewal lease.
(b) KMC 22.05.055 to allow for the term of the lease not to depend upon
the durability of the proposed use, the amount of investment in
improvement proposed and made, and the nature of the improvement
proposed with respect to durability and time required to amortize the
proposed investment.
Section 3. Best Interest Finding: That it is in the best interest of the City to deviate
from the principles and policy of lease rates to provide for a lease renewal
to the Peninsula Art Guild, Inc. for an annual rental rate of one dollar
($1.00) per year to support the Kenai Arts Community.
Section 4. That the purpose of the lease amendment is to extend the term of the
Lease to December 31, 2035.
Section 5. That the City Manager is authorized to enter into a lease amendment and
extension with the Peninsula Arts Guild, Inc. consistent with the terms of
this Ordinance.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 4th day of
January, 2017.
BRIAN GABRIEL, MAYOR
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Ordinance No. 2933 -2016
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Introduced: December 7, 2016
Enacted: January 4, 2017
Effective: January 4, 2017
THIRD AMENDMENT TO LEASE
THIS Third Amendment to Lease is made as of the day of
2016, by and between the CITY OF KENAI (City), a municipal corporation whose address
is 210 Fidalgo Avenue, Kenai, Alaska 99611, and PENINSULA ART GUILD, INC.
(Lessee), whose address is P.O. Box 2311, Kenai, Alaska 99611 -0703.
WITNESSETH
WHEREAS, on May 23, 1995, the City entered into a lease with the Kenai Arts &
Humanities Council for City -owned lands identified as a portion of Lot 3, Block 17,
Original Townsite of Kenai and the building known as the Fine Arts Center, which lease
was recorded at Book 464 Pages 768 -776 on June 13, 1995, in the Kenai Recording
District, Third Judicial District, State of Alaska (the Lease); and,
WHEREAS, since May 23, 1995, the rights under the Lease have been assigned to
the Peninsula Arts Guild; and,
WHEREAS, an Amendment to Lease recorded at Book 486 Pages 465 -466 on
June 13, 1996 extended the term of the Lease to June 30, 2015 and required the Lessee to
submit to the City Council, for approval, any proposed construction plans for the property;
and,
WHEREAS, a Second Amendment to Lease recorded on December 26, 2013,
under Document Number 2013 - 012032 -0, extending the term of the Lease until December
31, 2020 and to amend the purpose to provide a building to house the Fine Arts Center for
the benefit of the local community; and,
WHEREAS, the parties have agreed to extend the term of the Lease to December
31, 2035.
NOW THEREFORE, the parties agree as follows:
1. The term of this Lease has been extended until December 31, 2035.
Except as expressly modified or stated herein, all other terms and conditions
of the Lease (as amended) remain in full force and effect.
Third Amendment to Lease — Peninsula Art Guild, Inc. Page 1 of 3
CITY OF KENAI
BY:
Rick R. Koch
Its: City Manager
PENINSULA ART GUILD
Its:
ACKNOWLEDGMENTS
State of Alaska
ss
Third Judicial District
The foregoing instrument was acknowledged before me this day of 2017,
by Rick R. Koch, City Manager for the City of Kenai.
Notary Public of Alaska
My Commission Expires:
State of Alaska )
) ss
Third Judicial District )
The foregoing instrument was acknowledged before me this _ day of , 2017,
by (Name), (Title), on behalf of
PENINSULA ART GUILD, INC, a Alaska Corporation, on behalf of the Corporation.
Notary Public of Alaska
My Commission Expires:
Third Amendment to Lease — Peninsula Art Guild, Inc. Page 2 of 3
Approved as to form:
Scott Bloom
City Attorney
1- \QUR
CITY OF KENAI
210 Fidalgo Avenue
Kenai, AK 99611 -7794
Third Amendment to Lease — Peninsula Art Guild, Inc. Page 3 of 3
'Villaye with a Past, C# with a Future
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 �
Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014 111111
1992
MEMORANDUM:
�^ TO: Rick Koch, City Manager
FROM: Matthew Kelley, City Planner
DATE: November 30, 2016
SUBJECT: Ordinance No 2933 - 2016
Peninsula Art Guild, Inc. Request for Lease Extension
Lease of City Lands, Portion of Lot 3, Block 17, Original Townsite of Kenai
The purpose of this communication is to provide additional information in support of Ordinance
No. 2933 - 2016, which authorizes an extension and amendment of the above referenced Lease
of City Lands without a current appraisal. Furthermore, the finding that it is in the best interest
of the City to deviate from the principles and policy of lease rates to allow for a lease renewal
at an annual rate of $1.00 per year.
The subject parcel and building have been leased at an annual rate of $1.00 per year for the
purpose of providing a building to house the Fine Arts Center for the benefit of the local
community since 1991. Prior to 1991, the purpose for which the Lease was issued was as a
,.meeting place and display area for crafts." On December 18, 2013, the City Council approved
an extension and amendment of the subject Lease to December 31, 2020. The current request
is to extend the Lease to December 31, 2035 under the same terms and conditions in order to
justify future building maintenance and repair expenditures, satisfy multi -year grant funding
requirements, and pursue future funding opportunities.
The City's principles and policy of lease rates as outlined in Kenai Municipal Code require a fair
return to the City's General Fund. The ensure a fair return, lease rates are based on fair market
value as determined by a qualified independent appraiser and are 8% of fair market value. In
absence of an appraisal, the best available information on the value of the land area and building
improvements is the Kenai Peninsula Borough Assessment, which is approximately
$195,451.50 (see attached). Based on this value, the annual lease rate would be approximately
$15,607.32.
Thank you for your consideration.
Attachment: Resolution No. 2016 -47
Calculation of Pro -Rated Peninsula Borough Assessments for Parcel
No. 047 - 101 -05, 816 Cook Avenue
Land Value
Improvement Value Total KPB Assessed Value
Total Parcel 047 - 101 -05
$187,600.00
$187,800.00 $368,400.00
Land Area
Pro -Rated Assessed
Area (SF)
Value
Area #1- City Playground
44,400
$96,089.71
Area #2 - Kenai Historical Society
17,400
$37,656.78
Area #3 - Peninsula Art Guild Inc.
24,884
$53,853.52
Totals
86,684
$187,600.00
Pro -Rated Assessed
Building Improvements
Area (SF)
Value
Area #1- City Playground
0
Area #2 - Kenai Historical Society
960
$46,561.98
Area #3 - Peninsula Art Guild Inc.
2,912
$141,238.02
Totals
3,872
$187,800.00
Total Pro -Rated
Assessed Value
Area #1- City Playground
$96,089.71
Area #2 - Kenai Historical Society
$84,218.76
Area #3 - Peninsula Art Guild Inc.
$195,091.54
r
NOV 1 b RECD
November 6, 2016
Mr Koch:
I am writing on behalf of the Peninsula Art Guild. We hold the lease for the property, known as the
Fine Arts Center, located at 816 Cook Avenue. The lease is set to expire in 2020.
The building is in need of repairs and renovation, therefore we would like to extend the lease through
2035 to pursue possible grants. This would show potential funders that we intend to remain in this
location and the city approves of us as lessee.
Sincerely,
Benjamin Jackinsky
Secretary, Peninsula Arts Guild
Box 2311
Kenai, Alaska 99611
"'Villaye with a Past, C# with a Future if
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
` Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014 11111.r 1992
V
MEMORANDUM:
TO: Rick Koch, City Manager
FROM: Matthew Kelley, City Planner ihG
DATE: December 27, 2016
SUBJECT: Ordinance No 2933 - 2016
Peninsula Art Guild, Inc. Request for Lease Extension
Lease of City Lands, Portion of Lot 3, Block 17, Original Townsite of Kenai
The purpose of this communication is to provide additional information in support of Ordinance
No. 2933 - 2016, which authorizes an extension and amendment of the above referenced Lease
of City Lands without a current appraisal. Furthermore, the finding that it is in the best interest
of the City to deviate from the principles and policy of lease rates to allow for a lease renewal
at an annual rate of $1.00 per year.
Pursuant to Kenai Municipal Code, Section 22.05.045 the subject Lease Extension was
approved by the Planning and Zoning Commission at their regular meeting of December 14,
2016.
Therefore, staff would like to recommend an amendment to Ordinance No. 2933 -2016 and a
replacement of 91h WHEREAS with the following:
WHEREAS, the Planning and Zoning Commission reviewed this Ordinance at its December 14,
2016 regular meeting and recommends the City proceed with the lease extension; and,
Thank you for your consideration.
CITY OF KENAI
PLANNING AND ZONING COMMISSION
RESOLUTION NO. PZ16 -42
A RESOLUTION OF THE PLANNING AND ZONING COMMISSION OF THE CITY OF KENAI,
RECOMMENDING AN ORDINANCE TO THE COUNCIL OF THE CITY OF KENAI,
CONSENTING TO AN AMENDMENT TO EXTEND THE TERM OF LEASE UNTIL 2035 OF
CERTAIN CITY -OWNED LAND, IDENTIFIED AS A PORTION OF LOT 3, BLOCK 17, ORIGINAL
TOWNSITE OF KENAI AND THE BUILDING KNOWN AS THE "FINE ARTS CENTER ", TO THE
PENINSULA ART GUILD, INC., WITHOUT A CURRENT APPRAISAL AND DECLARING AN
AMENDMENT TO THE LEASE IS IN THE BEST INTEREST OF THE CITY.
WHEREAS, since December 1991 and until the Lease was assigned to the Peninsula Arts Guild,
Inc., on September 8, 2000, the City has leased the Fine Arts Center to the Kenai Arts &
Humanities Council for one dollar ($1.00) per year to provide a building to house the Fine Arts
Center for the benefit of the local community; and,
WHEREAS, the Fine Arts Center is currently in need of general repair and updating; and,
WHEREAS, the current Lease is scheduled to expire on December 31, 2020, and the Peninsula
Art Guild, Inc., has requested an extension of the Lease until December 31, 2035 under the same
terms and conditions as the existing Lease in order to obtain grant funding for a substantial repair,
renovation, and upgraded of the premises; and,
WHEREAS, Kenai Municipal Code 22.05.055 requires lease terms to be based on the durability
of the proposed use, the amount of investment proposed and made, the nature of the
improvement proposed, and the time required to amortize the investment; and,
WHEREAS, Kenai Municipal Code 22.05.050 requires that prior to renewal of a lease, there must
be an appraisal within the last twelve (12) months to determine a fair market lease rate; and,
WHEREAS, it is in the best interest of the City to waive KMC 22.05.050 and 22.05.055 as a fair
market lease is not sought and such appraisal would result in the unnecessary expenditure of
funds and the City owns the improvements; and,
WHEREAS, the directors of the Peninsula Art Guild, Inc., have requested that City Administration
expedite its request to Execute an Extension of Lease in order to obtain available grant funding;
and,
WHEREAS, an extension of the current lease to the Peninsula Arts Guild under the same terms
and conditions of the existing lease at a rate of one dollar ($1.00) per year is in the best interests
of the City; and,
WHEREAS, pursuant to KMC 22.05.045, no leased land may be changed in use, nor may any
renewal lease be issued until the proposed use or renewal has been reviewed by the Planning
and Zoning Commission and approved by the City Council
NOW, THEREFORE, BE IT RECOMMENDED TO THE COUNCIL OF THE CITY OF KENAI,
ALASKA, THAT AN ORDINANCE BE ENACTED TO AMEND AND EXTEND THE TERM OF
LEASE UNTIL 2035 OF CERTAIN CITY -OWNED LAND, IDENTIFIED AS A PORTION OF LOT
3, BLOCK 17, ORIGINAL TOWNSITE OF KENAI AND THE BUILDING KNOWN AS THE "FINE
ARTS CENTER ", TO THE PENINSULA ART GUILD, INC., WITHOUT A CURRENT APPRAISAL
AND DECLARING AN AMENDMENT TO THE LEASE IS IN THE BEST INTEREST OF THE
CITY.
Resolution No. PZ16 -42
Page 2 of 2
PASSED BY THE PLANNING AND ZONING COMMISSION OF THE CITY OF KENAI,
ALASKA, this 14th day of December, 2016.
CHAIRPERSON: -=c
Jeff Twait, Chairp son
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