HomeMy WebLinkAboutResolution No. 2017-41CITY OF KENAI
RESOLUTION NO. 2017-41
Sponsored by: Administration
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, CONSENTING TO AN
ASSIGNMENT OF LEASE OF CERTAIN AIRPORT LANDS BETWEEN SIDNEY MORRIS AND
SCHILLING RENTALS (2016), LLC AND CONSENTING TO AN AMENDMENT CHANGING THE
ANNUAL LEASE RATE FROM TEN PERCENT TO EIGHT PERCENT OF THE EXISTING
LEASE ON REAL PROPERTY DESCRIBED AS LOT 1A, BLOCK 1, DESHKA SUBDIVISION.
WHEREAS, on November 3, 1975, the City entered into a Lease of Airport Lands or Facilities
with KONSTANTINOS DIMITRIOS MACHERAS, d/b/a PIZZA PARADISOS for City -owned lands
described as follows:
Lot One -A, Block One (1), Deshka Subdivision, according to the official
plat thereof, filed under Plat No. K-1577, Records of the Kenai Recording
District, Third Judicial District, State of Alaska; and
WHEREAS, said Lease of Airport Lands or Facilities, hereinafter referred to as Lease, was
recorded in Book 94 at Pages 359 - 370, on April 20, 1976, in the Kenai Recording District, Third
Judicial District, State of Alaska; and,
WHEREAS, the Lease was assigned to Charles J. Crabaugh and Robert J. Crabaugh, and
recorded on July 11, 1977 in Book 111 at Page 111; and,
WHEREAS, the Lease was assigned to Sid Morris, and recorded on July 16, 1990, in Book 368
at Page 407; and,
WHEREAS, there have been numerous Amendments of Lease amending provisions in the
original Lease and renegotiated rental payments; and,
WHEREAS, said Amendments to Lease were recorded July 25, 1977, in Book 111 at Page 377;
recorded on October 24, 1977, in Book 115 at Page 936; recorded on July 1, 1980, in Book 158
at Page 191; recorded on October 27, 1980, in Book 163 at Page 258; recorded on April 8, 1985,
in Book 258 at Page 778; recorded on July 2, 1990, in Book 367 at Page 813; recorded on
September 8, 1995, in Book 470 at Page 404; and recorded on October 19, 2011, under document
number 2011-010039-0; and,
WHEREAS, an Amendment to Lease recorded on October 24, 1977, in Book 115 at Page 936,
amending paragraph ten (10) of the original Lease to specify that "No annual lease rate
renegotiation under this provision shall be in excess of 10% of Fair Market Value, professional
appraisal, of the property at the time of re -adjustment; and,
WHEREAS, Kenai Municipal Code 21.15.120(a)(2) stipulates that the lease rate "shall be eight
percent (8%) of the fair market value"; and,
Resolution No. 2017-41
Page 2 of 2
WHEREAS, the Lessee, Schilling Rentals (2016), LLC has requested that the Lease be amended
to reflect that lease rate be adjusted from ten percent (10%) to eight percent (8%); and,
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA:
Section 1. That an Assignment of Lease be executed by Sidney Morris, Assignor, and
Schilling Rentals (2016), LLC, on certain Airport Lands described as Lot 1A, Block
1, Deshka Subdivision. Further, the City Manager is authorized to execute the
Consent to Assignment on behalf of the City on a form approved by the City
Attorney.
Section 2. That an Eleventh Amendment to Lease be entered into by the City of Kenai,
Lessor, and Schilling Rentals (2016), LLC, Lessee amending the lease rate from
ten percent (10%) to eight percent (8%), on certain Airport Lands described as Lot
1, Block 1, Deshka Subdivision. Further, the City Manager is authorized to execute
said Amendment on behalf of the City of Kenai on a form approved by the City
Attorney.
Section 3. This resolution takes effect immediately upon passage.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 21'' day of June, 2017.
ATTEST:
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MEMORANDUM
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210 Fidalgo Ave, Kenai, Alaska 99611-7794
Telephone: (907) 283-7535 1 Fax: (907) 283-3014
www.kenai.city
TO: Mayor Brian Gabriel and Kenai City Council
THROUGH: Paul Ostrander, City Manager'�7, o -
FROM: Wilma Anderson, Planning Assistant w�
DATE: June 14, 2017
SUBJECT: Consent to Assignment and Amendment of Lease of Airport Lands
or Facilities — Lot 1A, Block 1, Deshka Subd.
Sidney Morris has submitted a request to assign the Lessee's interest under that certain Lease of
Airport Land and Facilities on the above -referenced property to Schilling Rentals (2016), LLC.
The terms and conditions of the Amendment to the original Lease of Airport Lands stipulates as
follows:
"Lessee with City's written consent, which will not be unreasonably denied, may
assign, in whole or in part, its rights as Lessee (Leasehold Estate)"
The property is identified on the attached map and is Airport Lands located outside the Airport
Reserve. The particulars for said lease, are as follows:
Term: 55 years
Effective Date/Expiration Date: November 3, 1975/June 30, 2030
Purpose for which the Lease is issued: Convenience grocery store and other retail facilities
An Amendment to Lease of Airport Lands or Facilities executed on September 7, 1977, stipulates
that "no annual lease rate renegotiation under this provision shall be in excess of 10% of Fair
Market Value, professional appraisal, of the property at the time of re -adjustment."
Kenai Municipal Code 21.15.120(a)(2) stipulates that the lease rate "shall be eight percent 8% of
fair market value."
The Lessee has requested that the annual lease rate be adjusted to reflect eight percent (8%)
rather than the ten percent (10%) that Lessee has been paying. Given the discrepancy between
the late rate set forth in the lease and Kenai Municipal Code, it is reasonable to amend the lease
rate from ten percent (10%) to eight percent (8%).
Page 2 of 2
Assignment & Amendment of Lease
Lot 1A, Block 1, Deshka Subd.
The Lessee is currently paying an annual lease amount of Twenty-five Thousand and no/100
Dollars ($25,000.00). This amount is based on the 2015 appraised value of $250,000.00x 10%. If
the annual lease is amended to eight percent (8%), the annual lease payment would be the
amount of Twenty Thousand and no/100' Dollars ($20,000.00).
The current Lessee and prospective Lessee are in compliance with the City and the Kenai
Peninsula Borough. The City Attorney has reviewed the attached document and has no objection
to form for the consent. If Council approves the assignment, the Assignment of Lease and
Consent to Assignment may be executed by the Assignor and Assignee.
ASSIGNMENT OF LEASE
This ASSIGNMENT OF LEASE, entered into between Sidney Morris, whose address is
419 Frontage Rd. Kenai, AK 99611, hereinafter referred to as "Assignor," and Schilling Rentals
(2016), LLC, whose address is 47 Spur View Drive, Kenai, AK 99611, hereinafter referred to as
"Assignee."
Assignor does hereby assign, transfer and warrant to Assignee all of its interest in the
leasehold estate as evidenced by that certain Lease of Airport Lands or Facilities ("Lease
Agreement') with the City of Kenai, as lessor, dated November 3, 1975 (recorded at Book 94,
Page 359 records of the Kenai Recording District) and as amended September 7, 1977, and any
subsequent amendments, covering the following -described real property:
Lot IA, Block 1, Deshka Subdivision, according to Plat No. K-1577, in the
records of the Kenai Recording District, Third Judicial District, State of Alaska.
TO HAVE AND TO HOLD the same from the date hereof, for and during all of the
remainder yet to come of the term of said Lease Agreement;
Assignee agrees to comply fully with all the terms and provisions of the Lease
Agreement, and to hold the Assignor harmless from any liability arising thereunder.
Assignee takes the property "as is" and acknowledges that Assignor makes no warranties
with respect to the condition or suitability of the property or any structure located thereon.
Notwithstanding the foregoing, Assignor shall hold the Assignee harmless from and
against any loss, claim, damages or expenses incurred by or for which Assignee may become
liable as a result of environmental contamination on the property which occurred prior to the date
of delivery of possession to Assignee. Assignee shall hold the Assignor harmless from and
against any loss, claim, damages or expenses incurred by or for which Assignor may become
liable as a result of environmental contamination on the property which may occur after the date
of delivery of possession to Assignee.
This Assignment of Lease will only become effective upon approval by the City of Kenai.
If approval is not obtained from the City of Kenai, this Assignment of Lease will be void.
IN WITNESS WHEREOF, the Assignor and Assignee have heretofore executed this
Assignment of Lease this day of 2017.
[Signatures on following page]
Sidney Morris, Assignor
Sidney Morris
STATE OF ALASKA )
)ss.
THIRD JUDICIAL DISTRICT )
Schilling Rentals (2016), LLC, Assignee
IM
Dave Schilling, Member
The foregoing instrument was acknowledged before me this day of
2017, by the Dave Schilling, Member of said LLC.
NOTARY PUBLIC FOR ALASKA
My Commission Expires:
STATE OF ALASKA
)ss.
THIRD JUDICIAL DISTRICT
The foregoing instrument was acknowledged before me this day of
2017, by Sidney Morris.
NOTARY PUBLIC FOR ALASKA
My Commission Expires:
Assignment of Lease
Page 2 of 2
CITY OF KENAI
CONSENT TO ASSIGNMENT
The Assignment of that certain Lease of Airport Lands and Facilities entered into on
November 3, 1975, and recorded in Book 94 at Page 359, on April 20, 1976, in the Kenai
Recording District, from SIDNEY MORRIS whose address is 419 Frontage Road, Kenai,
AK 99611, to SCHILLINGS RENTALS (2016), LLC whose address is 47 Spur View Drive,
Kenai, AK 99611, covering the following -described property:
Lot 1A, Block 1, DESHKA SUBDIVISION, according to official plat thereof,
filed under Plat No, K-1577, in the records of the Kenai Recording District,
Third Judicial District, State of Alaska.
is hereby ACKNOWLEDGED AND CONSENTED TO, subject to the same terms and
conditions as contained in the above-described original Lease of Airport Lands, and any
and all amendments thereto.
This Consent is given by the City of Kenai without waiving any right or action, or
releasing the Assignor from any liability or responsibility under the aforementioned Lease,
and does not relieve the Assignee from the condition requiring the City's approval for any
subsequent sublease or assignment.
Dated this day of 2017.
Paul Ostrander
City Manager
ACKNOWLEDGEMENT
STATE OF ALASKA )
) ss
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this day of 2016, Paul
Ostrander, City Manager of the City of Kenai, Alaska, being personally known to me or
having produced satisfactory evidence of identification, appeared before me and
Consent to Assignment of Lease — Lot 1A, Block 1, Deshka Subd. Page 1 of 2
acknowledged the voluntary and authorized execution of the foregoing instrument on
behalf of said City.
Notary Public for Alaska
My Commission Expires:
Approved as to form:
7
Scott Bloom, City Attorney
Consent to Assignment of Lease — Lot 1A, Block 1, Deshka Subd. Page 2 of 2
ELEVENTH AMENDMENT TO LEASE
OF AIRPORT LANDS AND FACILITIES
THIS ELEVENTH AMENDMENT TO LEASE OF AIRPORT LANDS OR
FACILITIES is made as of the day of 2017, by and between
the CITY OF KENAI (City), a municipal corporation whose address is 210 Fidalgo
Avenue, Kenai, Alaska 99611, and SCHILLING RENTALS (2016), LLC, (Lessee),
whose address is 419 Frontage Road, Kenai, AK 99611.
WITNESSETH
WHEREAS, on November 3, 1975, the City entered into a Lease of Airport
Lands or Facilities with KONSTANTINOS DIMITRIOS MACHERAS, d/b/a PIZZA
PARADISOS for City -owned lands described as follows:
Lot One -A, Block One (1), Deshka Subdivision, according to the official
plat thereof, filed under Plat No. K-1577, Records of the Kenai Recording
District, Third Judicial District, State of Alaska; and
WHEREAS , said Lease of Airport Lands or Facilities, hereinafter referred
to as Lease, was recorded in Book 94 at Pages 359 - 370, on April 20, 1976, in the
Kenai Recording District, Third Judicial District, State of Alaska; and,
WHEREAS, the Lease was assigned to Charles J. Crabaugh and Robert J.
Crabaugh, and recorded on July 11, 1977 in Book 111 at Page 111; and,
WHEREAS, the Lease was assigned to Sid Morris, and recorded on July
16, 1990, in Book 368 at Page 407; and,
WHEREAS, on , 2017, Sidney Morris, Assignor,
assigned his interest in the Lease to Schilling Rentals (2016), LLC, Assignee, by
that certain Assignment of Lease, recorded on 2017
document number 2017- ; and,
WHEREAS, there have been numerous Amendments of Lease amending
provisions in the original Lease and renegotiated rental payments; and,
Eleventh Amendment to Lease — Schilling Rentals (2016) LLC Page 1 of 3
WHEREAS, said Amendments to Lease were recorded July 25, 1977, in
Book 111 at Page 377; recorded on October 24, 1977, in Book 115 at Page 936;
recorded on July 1, 1980, in Book 158 at Page 191; recorded on October 27,
1980, in Book 163 at Page 258; recorded on April 8, 1985, in Book 258 at Page
778; recorded on July 2, 1990, in Book 367 at Page 813; recorded on September
8, 1995, in Book 470 at Page 404; and recorded on October 19, 2011, under
document number 2011-010039-0; and,
WHEREAS, an Amendment to Lease recorded on October 24, 1977, in
Book 115 at Page 936, amending paragraph ten (10) of the original Lease to
specify that "No annual lease rate renegotiation under this provision shall be in
excess of 10% of Fair Market Value, professional appraisal, of the property at the
time of re -adjustment; and,
WHEREAS, Kenai Municipal Code 21.15.120(a)(2) stipulates that the lease
rate "shall be eight percent (8%) of the fair market value"; and
WHEREAS, the Lessee, Schilling Rentals (2016), LLC has requested that
the Lease be amended to reflect that lease rate be adjusted from ten percent
(10%) to eight percent (8%); and,
NOW THEREFORE, the parties agree as follows:
1. The lease rate shall be amended to eight percent (8%) of the fair
market value as set forth in Kenai Municipal Code 21.15.120(a)(2).
2. Except as expressly modified or stated herein, all other terms and
conditions of the Lease (as amended) remain in full force and effect.
CITY OF KENAI
Bv:
Paul Ostrander
Its: City Manager
SCHILLING RENTALS (2016), LLC
By:
Dave Schilling
Its: Member
Eleventh Amendment to Lease — Schilling Rentals (2016) LLC Page 2 of 3
ACKNOWLEDGMENTS
State of Alaska )
) ss
Third Judicial District )
The foregoing instrument was acknowledged before me this day of
2017, by Paul Ostrander, City Manager for the City of Kenai, being
personally known to me or having produced satisfactory evidence of identification,
appeared before me and acknowledged the voluntary and authorized execution of
the foregoing instrument on behalf of said City.
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 Dave Schilling, Member of SCHILLING RENTALS (2016),
LLC being personally known to me or having produced satisfactory evidence of
identification, appeared before me and acknowledged the voluntary and
authorized execution of the foregoing instrument on behalf of the limited liability
company.
Approved as to form:
Scott Bloom
City Attorney
Notary Public of Alaska
My Commission Expires:
AFTER RECORDING, RETURN TO:
City of Kenai
210 Fidalgo Ave.
Kenai, AK 99611
Eleventh Amendment to Lease — Schilling Rentals (2016) LLC Page 3 of 3
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