HomeMy WebLinkAbout2017-07-13 Airport Commission PacketKENAI AIRPORT COMMISSION
JULY 13, 2017
KENAI CITY COUNCIL CHAMBERS
210 FIDALGO AVE., KENAI, AK 99611
http://www.kenai.city
REGULAR MEETING –6:00 P.M.
1. CALL TO ORDER
a. Pledge of Allegiance
b. Roll Call
c. Agenda Approval
2. SCHEDULED PUBLIC COMMENTS (Public comment limited to ten (10) minutes per
speaker)
3. UNSCHEDULED PUBLIC COMMENT(Public comment limited to three (3) minutes
per speaker; thirty (30) minutes aggregated)
4. APPROVAL OF MEETING SUMMARY
a. June 8, 2017
5. UNFINISHED BUSINESS
a. Discussion/Recommendation – Master Plan Phase 3 Report
6. NEW BUSINESS
a. Discussion/Recommendation - Ordinance No. 2968-2017, Appropriating
General Fund Balance Funds into General Fund Land Administration-Lands
Fund for the Purchase by the City of Kenai’s General Fund of Airport
Property Outside the Airport Reserve Constituting Approximately 16.49
Acres of Real Property Described as S1/2 S1/2 SW1/4, Section 33,T6N,
R11W, Seward Meridian, Commonly Referred to as ‘Lawton Acres’ and
Deed Restricting the Future Use Of the Property to Parks and Recreational
Uses to be Retained by the City for a Public Purpose.
7. REPORTS
a. Airport Manager
b. City Council Liaison
8. NEXT MEETING ATTENDANCE NOTIFICATION – August 10, 2017
9. COMMISSIONER COMMENTS AND QUESTIONS
10. ADDITIONAL PUBLIC COMMENT
11. INFORMATION ITEMS
a. June 2017 Airport Managers Report
b. Procedures for Commissions, Committees and Council on Aging
c. June 2017 Alaskan Region Airports Division News
12. ADJOURNMENT
KENAI AIRPORT COMMISSION
June 8, 2017 – 6:00 P.M.
KENAI CITY COUNCIL CHAMBERS
CHAIR GLENDA FEEKEN, PRESIDING
MEETING SUMMARY
1. CALL TO ORDER
Chair Feeken called the meeting to order at 6:00 p.m.
a. Pledge of Allegiance
Chair Feeken led those assembled in the Pledge of Allegiance.
b. Roll was confirmed as follows:
Commissioners Present:
Commissioners Absent:
G. Feeken, J. Zirul, J. Bielefeld, C. Henry, K. Dodge, D. Pitts
P. Minelga
Staff/Council Liaison Present: Airport Manager M. Bondurant, Airport Assistant E. Shinn,
Council Member H. Knackstedt
A quorum was present.
c. Agenda Approval
MOTION:
Commissioner Henry MOVED to approve the agenda with the addition of new business item d.
special use permit for Reddi Towing and Commissioner Zirul SECONDED the motion. There
were no objections; SO ORDERED.
2. PERSONS SCHEDULED TO BE HEARD – None.
3. UNSCHEDULED PUBLIC COMMENT
Teea Winger spoke in favor of the landscaping site plan draft ordinance noting she supported
increased requirements and retaining buffer zones on privately owned land.
4. APPROVAL OF MEETING SUMMARY
a. May 11, 2017
MOTION:
Commissioner Zirul MOVED to approve the meeting summary from May 11, 2017 and
Commissioner Henry SECONDED the motion. There were no objections; SO ORDERED.
Page 2 of 88
Airport Commission
June 8, 2017
Page 2 of 3
5. UNFINISHED BUSINESS
a. Discussion– Master Plan Update
It was reported that the city was waiting for the review of documents and it was anticipated the
plan would be on the agenda for the commission to review at the July meeting.
b. Discussion- T-33 Maintenance Plan
It was reported that staff was waiting on quotes for painting and decals.
6. NEW BUSINESS
a. Discussion/Recommendation – Benton Lease Renewal
It was noted that it was favorable to extend the lease; would be up for renegotiation in 3 years.
It was suggested that the term of the lease be 8 years, as 3 seemed too short.
MOTION:
Commissioner Bielefeld MOVED to approve the lease for another 8 years and Commissioner Pitts
SECONDED the motion. There were no objections; SO ORDERED.
b. Discussion– Landscaping Site Plan Draft Ordinance
City Planner Kelley provided information on a draft ordinance amending landscaping/site plan
regulations. It was noted that the amendments pertained to new construction including new
development on the airport.
MOTION:
Commissioner Henry MOVED to recommend to Council that the Airport Light Industrial Zone be
exempted from residential zoning requirements and that the airport provide a noise abatement
buffer zone between the Airport Light Industrial and Residential Zones. Commissioner Bielefeld
SECONDED the motion.
VOTE:
YEA: Zirul, Feeken, Pitts, Bielefeld, Henry, Dodge
NAY:
c. Discussion/Recommendation – Special Use Permit to Pacific Star Seafood
It was noted that Council approved the Special Use Permit on June 7 contingent on commission
approval. It was also noted the permit was effective June 9.
MOTION:
Page 3 of 88
Airport Commission
June 8, 2017
Page 3 of 3
Commissioner Bielefeld MOVED to approve the Special Use Permit to Pacific Star Seafood and
Commissioner Henry SECONDED the motion. There were no objections; SO ORDERED.
d. Discussion/Recommendation – Special Use Permit to Reddi Towing
It was noted that the special use permit was for Reddi Towing’s impound lot.
MOTION:
Commissioner Bielefeld MOVED to approve the Special Use Permit to Reddi Towing and
Commissioner Zirul SECONDED the motion. There were no objections; SO ORDERED.
7. REPORTS
a. Airport Manager – reported on the following:
• Airport Marking Project ongoing;
• Camera project was focusing on a new access control system for automated
gates;
• 17th Annual Kenai Peninsula Air Fair, June 10.
b. City Council Liaison – reported on various actions at recent Council meetings.
8. NEXT MEETING ATTENDANCE NOTIFICATION – July 13, 2017.
Commissioner Bielefeld noted he would be unable to attend the meeting.
9. COMMISSIONER COMMENTS AND QUESTIONS
Commissioner Bielefeld expressed concern with the appraisal of Lawton Acres.
10. ADDITIONAL PUBLIC COMMENT – None.
11. INFORMATION ITEMS – None.
12. ADJOURNMENT
There being no further business before the Commission, the meeting was adjourned at 7:41 p.m.
Meeting summary prepared and submitted by:
_____________________________________
Tawni Eubank
Administrative Assistant
Page 4 of 88
Page 5 of 88
Page 6 of 88
Sponsored by: Council Member Boyle
CITY OF KENAI
ORDINANCE NO. 2968-2017
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, APPROPRIATING
GENERAL FUND BALANCE FUNDS INTO GENERAL FUND LAND ADMINISTRATION-LANDS
FUND FOR THE PURCHASE BY THE CITY OF KENAl'S GENERAL FUND OF AIRPORT
PROPERTY OUTSIDE THE AIRPORT RESERVE CONSTITUTING APPROXIMATELY 16.49
ACRES OF REAL PROPERTY DESCRIBED AS S1/2 S1/2 SW1/4, SECTION 33,T6N, R11W,
SEWARD MERIDIAN, COMMONLY REFERRED TO AS 'LAWTON ACRES' AND DEED
RESTRICTING THE FUTURE USE OF THE PROPERTY TO PARKS AND RECREATIONAL
USES TO BE RETAINED BY THE CITY FOR A PUBLIC PURPOSE.
WHEREAS , the City obtained the 16.49 acre parcel (Lawton Acres) from the Federal Aviation
Administration (FAA) in 1964, via a Quit Claim Deed generally restricting the use of the property
to development, improvement, operation or maintenance of the Airport; and ,
WHEREAS, pursuant to a request by the City on April 20 , 1983, the FAA issued a Deed of
Release for Lawton Acres containing a Reverter Clause similar to the original Quit Claim Deed
that provides that if the terms and conditions of the conveyance document are not followed , the
property will revert to the federal government at its option ; and ,
WHEREAS, in accepting the Deed of Release, the City Council passed Resolution 83-48
providing that proceeds from any sale or lease of the property would be devoted to the Airport for
development, improvement, operation or maintenance; and ,
WHEREAS , Lawton Acres is not needed by the Airport for Airport purposes; and ,
WHEREAS , the funds utilized for the purchase will not leave the City, but transfer from the
General Fund to the Airport for Airport uses; and ,
WHEREAS, Lawton Acres is currently and has historically been zoned as Conservation allowing
for Parks and Recreational uses; and ,
WHEREAS , the City's 2016 Comprehensive Plan provides for Lawton Acres to be parks ,
recreation and open space; and,
WHEREAS, historic and recent efforts by the City to sell Lawton Acres for development purposes
has been met with public opposition in favor of maintaining the ex isting uses; and,
WHEREAS, the City Council and majority of public comments reflect a desire for a permanent
resolution for the property eliminating future uncertainty and conflict; and,
WHEREAS , there is significant public support, expressed in writing and orally at public meetings,
for the purchase of La wton Acres by the General Fund to allow for preservation of property; and ,
New Text Underlined ; [DELETED TEXT BRACKETED)
Page 7 of 88
Ordinance No . 2968-2017
Page 2 of 4
WHEREAS, preserving the property in its current state or allowing limited Parks and Recreational
development will maintain the sanctity of the surrounding residential neighborhoods and provide
separation from industrial and commercial areas; and,
WHEREAS , at least parts of the 16.49 acres, which specifically includes the 'Field of Flowers ,' is
already used as a publi c park ; and,
WHEREAS , the City's General Fund has sufficient funds to purchase the property without
significant negative implications ; and ,
WHEREAS, KMC 21.15.080-Appraisal , requires that Airport land be appraised within the last 12
months prior to a sale, and KMC 21.15 .180-Sale, requires the sale to be at fair market value ; and ,
WHEREAS , KMC 22 .05 .135-Acquisition of Property, allows the Council to authorize the purchase
of property for a public use, after a qualified appraiser has appraised the property; and ,
WHEREAS, it is in the best interest of the City to purchase the property at its appraised value for
the public use of preserving the property in its current state or allowing limited Parks and
Recreational development to maintain the sanctity of the surrounding residential neighborhoods
and provide separation from industrial and commercial areas and create public parks and
recreational opportunities for all residents of the City; and,
WHEREAS , placing a deed restriction on the property restricting its use in perpetuity for parks
and recreational uses, will accomplish the public purpose in the property acquisition .
NOW, THEREFORE , BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA,
as follows :
Section 1. Form: That this is a non-code ordinance.
Section 2. Statement of Ownership : That the City of Kenai , on behalf of the Airport is the
Owner of the real property described as S 1/2 S 1/2 SW 1/4, Section 33 , T6N , R11W, Seward
Meridian .
Section 3. Public Purpose and Best Interest Findings: That the Kenai City Council further
finds the acquisition of the subject parcel to be in the best interests of the citizens of the City of
Kenai and that the public interest shall be served by its acquisition for the total purchase price as
established by a fair market value appraisal, in accordance with the rec itals above which are
incorporated herein . That it is further found that the property is not needed for Airport purposes .
Section 4. Authorization of Pu rchase : That the Kenai City Council hereby authorizes the City
Manager to purchase the real property described as S 1/2 S 1/2 SW 1/4 , Section 33, T6N , R11W ,
Seward Meridian , for the total purchase price as appraised, on a form approved by the City
Attorney, to be retained by the City for public use and restricted as provided below.
New Te xt Underlin ed ; [DELETED TE XT BRACKETED)
Page 8 of 88
Ordinance No . 2968-2017
Page 3 of 4
Section 5. That estimated revenues and appropriations be increased as follows :
General Fund
Increase Estimated Revenues -
Appropriation of Fund Balance:
Increase Appropriations:
Land Administration -Land :
Section 6. Title: That Title shall be conveyed by a Quit Claim Deed . Any instrument
conveying Title to the property shall include the following restrict ions, 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 ex pressly 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 above
mean sea level ; and ,
(c) th at 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 in perpetuity, the use of the property shall be restricted for public park,
recreation; and ,
(e) that all covenants heretofore stated , shall run wi t h the land and shall inure to the
benefit of, and be binding upon the heirs , executors , administrators, su ccessors ,
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, impro vement , and operation of the Kenai Municipal Airport and as otherwise
required in that Deed of Release e xecuted on April 20 , 1983 and recorded at Book 209 , Pages
30-3 1, Kenai Recording District.
Section 8. Severability: That if any part or provision of this Ordinance or applica t ion thereof
to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such
judgment shall be confined in its operation to the part, provision , or application directly involved
in all controversy in whi c h this judgment shall have been rendered , and shall not affect or impair
the validity of the remainder of this Title or application thereof to other person s or circumstances .
The City Counc il hereby declares that it would have enacted the remainder of this Ordinance ev en
w ithout such part, provision , or application .
New T ext Underli ned ; [DELETED TEXT B RACKET ED ]
Page 9 of 88
Ordinance No . 2968-2017
Page 4 of 4
Section 9. Effective Date : That pursuant to KMC 1.15.070(f), this ordinance shall take effect
30 days after adoption. ·
ENACTED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA, this 21st day of June, 2017 .
ATTEST :
City Clerk
BRIAN GABRIEL SR., MAYOR
New Text Un derl ined ; [DELETED TEXT BRAC KETED]
Introduced : June 7, 2017
Enacted : June 21 , 2017
Effective: July 21, 2017
Page 10 of 88
'll/fftije «11'tli a PaJ'~ ft~ «11'tli a Fat~"
210 Fidalgo Ave, Kenai, Alaska 99611-7794
Telephone : (907) 283-7535 I Fax: (907) 283-3014
www.kenai.city
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
Mayor Brian Gabriel and Kenai City Council
Council Member Boyle
June1,2017
Ordinance No. 2968-2017 regarding Lawton Acres
Ordinance 2968-2017 proposes to purchase Lawton Acres utilizing General Fund , Fund Balance
and deed restrict the property for Parks and Recreational uses. The funds utilized for the
purchase will stay within the City and will be utilized for the benefit of the City's Airport. This
direction is consistent with historic and recent public testimony and provides a final solution and
direction for Lawton Acres .
Kenai Municipal Code requires that the property be appraised and the purchase price reflect fair
market value. There is not a recent appraisal on the property. This Agenda includes an Action
Approval item authorizing the City Manager or City Attorney to obtain an appraisal. It is my
understanding that an appraisal can be accomplished by June 19, 2017. This would allow the
Council to know the purchase price of the property prior to voting on enactment of this Ordinance
at Council 's June 21, 2017 meeting.
Your consideration is appreciated.
Page 11 of 88
Compromise Between City Residents and The City of Kenai: Lawton Acres.
Background:
A: The area known as Lawton Acres (see attachment)-a stretch of land in the City of Kenai, Alaska -running along
the Kenai Spur Highway from Walker Lane to Rogers Road on the North side and from Walker Lane to Rogers
Road along Lawton Drive on the South side -continues to resurrect itself for consideration by the City
Council/Planning and Zone Commission for rezoning, conditional use considerations, and potential sale .
B. It would seem to make sense to reach a permanent solution versus revisiting the issue over and over.
Note: The land is currently drawn up by the City as four tracts (A-D) (see the attached drawing). Starting on at Tract A
on the Walker Lane side, the lot may be 150 feet deep, but there is only 100 feet of tree cover. For Tracts A and B, one
can see the Spur Hwy through the trees already. Lack of an adequate buffer is a paramount issue with the area's
residents. The Walker Lane end of Lawton Acres (Tracts A and B) appears to be too narrow to allow a realistic -
commercial to residential-transition. A 30 feet buffer at Tract A and B is just too thin in width!
Tract C (Field of Flowers) is a former fire training ground and is plagued with contamination .
Option:
1. Deem Tracts A, B, and C as not being commercially viable -using the rational of narrowness (lack of
adequate buffer) of Tracts A & B and contamination of Tract C. Petition the FAA to deed over to the
City without charge and without land sale requirements due to the costly process to make a vi able
and acceptable buffer or to remediate contamination. The three tracts would then be added to the
City Parks systems and would be under the care of Parks and Recreation.
2. With input from the Lawton Acres affected residents, sell, via an acceptable competitive offer, the
property (Tract D) from Rogers Road to the beginning of Tract 3 (Field of Flowers) as LIMITED Light
Commercial conditional use property-allowing such development as a Professional Office Building,
Medical(Doctor's Office) or Dental Office . Require using a Spur Highway entrance, or possibly Rogers
Road entrance and with limited reduction in trees toward the Lawton Drive side. Proceeds would go
into the Airport Fund to further support the Kenai Airport. NOT ALL COMMERICAL USE ZONE
BUSINESSES OR STRUCTURES WOULD BE ALLOWED. Stipulations would be made of the purchaser
to provide development that has the esthetics and design to be the least conspicuous. Strict
adherence to submitted site and building plans would be required. The Lawton Drive/Rogers Road
buffer zone could be 150-200 feet! Since once trees are cut down it is impossible to replace them,
close scrutiny is required by City Inspectors or designated personnel in the property Landscape
phase .
THOUGH IN A PERFECT WORLD, HAVING EVERYTHING STAY THE SAME MIGHT BE IDEALISTIC, THIS COMPROMISE
WOULD ALLOW THE AREA TO GET THIS ISSUE BEHIND US.
Attachments -Lawton Acres -Tracts A, B, C, and D.
Page 12 of 88
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NOTES:
1) Gu service is avaif1t>Jt to 111 paruls from the K~1I Spur Hwy.
2) Ettctrlc service is avallible to 1fl parcels from t he Kenai Spur Hwy .
3) Wettr set"\ilce ls avaltaf:llefrom Walker Ln .• Lawton Dr ., ind Rogers Rd .
4) Sewtr 1ervtu Is ~vailob~ from W1lke-r Ln., Uwton Or., and Ro1ers Ref.
5) Thf Ke nai Penlnsul1 8 oro14h rtcommended a 20' riiht of way
drdlatlon of Uwtori Or. alone the south bound1ry of Uwton Acrrs to
provide for 1 total ri cht or WIY width of 10'.
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Page 13 of 88
Jamie Heinz
From: Peter 0 . Hansen <pohansen@alaska.net>
Thursday, June 15, 2017 9:58 PM Sent:
To: Jamie Heinz
Subject: Testimony in Support of Ordinance No. 2968 -2017
Dear Miss Heinz,
My wife and I are aware the Kenai City Council is planning to hold a public hearing Wednesday June 21, 2017 on
Ordinance No . 2968-2017 regarding Lawton Acres.
We strongly support and favor the passage of this ordinance for the following reasons; since we will be out of state that
evening we are asking for this information to be submitted as our testimony during the Public Hearing and read into the
minutes of it.
• Our home at 418 Rogers Road is one of about 80 residences in the Inlet View Subdivision which are effected by
noise from the traffic rolling into and out of Kenai. Even though we live a block south of Lawton Street we often
hear the Semi-truck tractors starting up from the Wal-Mart traffic light as well as other heavy traffic as they pick
up speed leaving town . Preserving Lawton Acres for recreational purposes as it is with the flora and fauna it has
helps keep a sound buffer even though it is not perfect for residences south of the highway.
• Lawton Acres in its natural state provides a buffer for Inlet View and Central Heights Subdivisions from north
winds.
• There are an increasing number of children living in Inlet View as well as the many young folks living in Central
He ig hts Subdivision which has probably another 60 homes and there is no City Park ground for these kids and/or
their families to play in other than the middle school and hi gh sc hool playground a half mile away, and often
these playgrounds have restrictions.
• A portion of Lawton Acres has been used for Oil Fire Training which we have observed in the past and this land is
contaminated.
• Back in the 1970's we and many of our neighbors petitioned the Kenai City Council to have Lawton Acres
preserved for, we believe, Conservation, in order for it to remain a natural habitat for plants and animals. If
one looks at the area surrounding Lawton Acres, it is the last acreage of forested area on the Southeast side the
City Center and shopping areas to serve this purpose.
• The portion of Lawton Acres known as Flower Park is utilized by many citizens of the Central Peninsula. We
frequently walk thru this park and meet people who are visitors there from surrounding communities. The park
serves as an attraction for these individuals with their families to come and shop in Kenai, thus raising sales tax
for the City.
• Lawton Acres , preserved and dedicated by the City for Parks and Recreation, could further the quality of life for
all Kenai's citizens by uniquely developing winding trails throughout parts of it for hiking, biking, skiing,
skateboarding, and families pushing strollers ...... trails thru the trees.
• We appreciate th e time and consideration Kenai Council persons put in on resolving this issue, which keeps
returning every few years, and it would be nice to see it resolved which this ordinance would do for the benefit
of Kena i's citi ze ns.
Peter and Karolee Han se n
418 Roger s Road
Kenai, Alaska 99611
Home phone: 907 -283 -46 15
1
Page 14 of 88
HEAR YE!
HEAR YE!
WHAT TO DO ABOUT LAWTON ACRES
DATE: June 21, 2017
To : Kenai City Council
Re : Agenda Item D4. Ordinance No. 2968-2017 – Appropriating General Fund Balance Funds into
General Fund Land Administration-Lands Fund for the Purchase by the City of Kenai City Council
Meeting Page 2 of 4 June 21, 2017 Kenai’s General Fund of Airport Property Outside the Airport
Reserve Constituting Approximately 16.49 Acres of Real Property Described as S1/2 S1/2 SW1/4,
Section 33,T6N, R11W, Seward Meridian, Commonly Referred to as ‘Lawton Acres’ and Deed
Restricting the Future Use Of the Property to Parks and Recreational Uses to be Retained by the City
for a Public Purpose.
Considering the testimony of the people from the public at the work session on January 24th and June
15th, it would seem in order to NOT go ahead with the development of the property.
This desire of the people most effected by this decision is not new. They have been saying NO
DEVELOPMENT for 25 years or longer. The whole city voted on this at least twice and said NO
DEVELOPMENT.
The council was elected to represent all citizens, not just the business community.
Let the citizens vote on it. At least three councilors support this. Why do some members of the council
fear letting the people decide?
At the work session in January some of the residents present seemed to respond positively to Dr.
Sorhus’s development proposal. Put it to the voters to buy all 16 acres, then sell to Dr. Sorhus. The rest
will then be made into a green strip or park. The airport will get the total value of the 16 acres and the
city could partially offset the cost by selling to Dr. Sorhus.
This is a win-win-win solution. Not everyone gets totally what they want, but everyone gets a fair
share. And the fate of Lawton acres will be settled.
Bob McIntosh
PeninsulTownCrier.com
bobmkenai@gmail.com
907-953-7995
Page 15 of 88
MacSwain Associates LLC
4401 Business Park Boulevard, Suite 22, Anchorage, Alaska 99503
APPRAISAL REPORT
Appraisal of Three Properties in Lawton Acres, Kenai, Alaska
Property 1: 16.49-Acre Parcel (Property ID 045-01-003)
Property 2: 4.10-Acre Parcel (Proposed Tract D)
Property 3: 5.80-Acre Parcel (Proposed Tracts A & B)
Effective Appraisal Date: June 15, 2017 File No. 17-3078
Submitted To:
Scott M. Bloom, City Attorney
City of Kenai
210 Fidalgo Avenue
Kenai, AK 99611
N
Property 1
16.49± Acres
(red boundary)
Property 3
5.80± Acres Kenai Spur Highway
Lawton Drive
Lawton Drive
Rogers Road
Property 2
4.10± Acres
Proposed Tracts A&B Proposed Tract C Proposed
Tract D
Page 16 of 88
17-3078: Three Properties in Lawton Acres, Kenai, Alaska
MacSwain Associates LLC
4401 Business Park Blvd., Suite 22
Anchorage, Alaska 99503
Phone: 907-561-1965
Fax: 907-561-1955
s.macswain@macswain.com
June 30, 2017
Scott M. Bloom, City Attorney
City of Kenai
210 Fidalgo Avenue
Kenai, AK 99611
Re: Appraisal of Three Properties in Lawton Acres
Kenai, Alaska
Dear Mr. Bloom:
We have prepared an Appraisal Report that analyzes three properties located in Kenai,
Alaska. Property 1 is a 16.49± acre parcel known as Lawton Acres, which fronts the south
side of the Kenai Spur Highway and the north side of Lawton Drive, between Walker Lane
and Rogers Road. Property 2 is a proposed tract of land (Tract D) situated on the east end
of Lawton Acres, containing 4.10± acres. Property 3 is a proposed tract of land (Tracts A
& B) on the westerly half of Lawton Acres, containing 5.80± acres. Because Properties 2
and 3 are proposed, it is an extraordinary assumption of these appraisals that they will be
subdivided and the plat will be approved by the Kenai Peninsula Borough. We analyzed
each property independently, but present our findings bound in one report. Listed below
are property identification numbers or legal descriptions, sizes, and market value estimates
for each property appraised. The property rights appraised is the fee simple interest. The
report is prepared in accordance with the Uniform Standards of Professional Appraisal
Practice (USPAP).
Based on the data, reasoning, and analysis that follow, we are of the opinion that the
market value of each subject property, as of June 15, 2017, is as follows:
Legal Description Size Market Value
Property 1 – Property ID 045-01-003 16.49± Acres $600,000
Property 2 – Proposed Tract D 4.10± Acres $275,000
Property 3 – Proposed Tracts A & B 5.80± Acres $250,000
We invoke an extraordinary assumption for the appraisals of Property 2 and Property 3,
that they will be subdivided as indicated by the proposed plat, and the plat will be
approved by the Kenai Peninsula Borough. If found to be false, the market value estimates
could be affected.
Page 17 of 88
17-3078: Three Properties in Lawton Acres, Kenai, Alaska
MacSwain Associates LLC
Your attention is specifically directed to the Assumptions and Limiting Conditions and
Extraordinary Assumption of this report. We hope the appraisal report assists your
evaluation of the appraised property. If you have any questions regarding this report,
please contact our office.
Respectfully submitted,
Steve MacSwain, MAI
State of Alaska Certificate No. 42
Page 18 of 88
17-3078: Three Properties in Lawton Acres, Kenai, Alaska
MacSwain Associates LLC
Appraiser Certification
The undersigned certifies that to the best of their knowledge and belief:
The statements of fact contained in this report are true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are our personal, impartial, and unbiased
professional analyses, opinions, and conclusions.
We have no present or prospective interest in the property that is the subject of this report,
and no personal interest with respect to the parties involved.
We have no bias with respect to the property that is the subject of this report or to the
parties involved with this assignment.
MacSwain Associates, LLC appraised Property 1 as part of a project appraisal for the City
of Kenai in 2015. We have not performed any other services as an appraiser or in any other
capacity, regarding the property that is the subject of this report, within the three-year
period immediately preceding acceptance of this assignment.
Our engagement in this assignment was not contingent upon developing or reporting
predetermined results.
Our compensation for completing this assignment is not contingent upon the development
or reporting of a predetermined value or direction in value that favors the cause of the
client, the amount of the value opinion, the attainment of a stipulated result, or the
occurrence of a subsequent event directly related to the intended use of this appraisal.
The reported analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the requirements of the Code of Professional Ethics and
Standards of Professional Appraisal Practice of the Appraisal Institute.
The reported analyses, opinion, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
Alex Kleinke inspected the appraised properties on June 15, 2017. Steve MacSwain, MAI
is familiar with the property from previous assignments in Kenai.
Alex Kleinke provided significant real property appraisal assistance including
photography, research, data gathering, and analytical support to the person signing this
certification.
As of the date of this report, Steve MacSwain, MAI, is a certified General Real Estate
Appraiser in the State of Alaska and has completed the education requirements through
June 2019.
6/30/17
Steve MacSwain, MAI
State of Alaska Certificate No. 42
Date
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Table of Contents
Title Page
Transmittal Letter
Appraiser Certification
Table of Contents
Appraisal Summary 1
Chapter 1: Definition of the Appraisal Problem 3
Chapter 2: Location and Neighborhood Summaries 7
Chapter 3: Property 1 – Property ID 045-01-003 10
Property Photographs 13
Highest and Best Use Analysis 16
Property Valuation 18
Chapter 4: Property 2 – Proposed Tract D 23
Property Photographs 26
Highest and Best Use Analysis 28
Property Valuation 30
Chapter 5: Property 3 – Proposed Tracts A & B 35
Property Photographs 38
Highest and Best Use Analysis 40
Property Valuation 42
Assumptions and Limiting Conditions 47
Extraordinary Assumption 48
Addenda
Appraiser Qualifications
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Appraisal Summary
Property 1 – Property ID 045-01-003
Property Type: Vacant land
Property Rights Appraised: Fee simple interest
Physical Address: 10095 Kenai Spur Highway, Kenai, AK
Parcel ID Number: 045-010-03
Legal Description: S½ S½ SW¼, Section 33, Township 006N, Range 011W,
Seward Meridian, Lying South of Kenai Spur Highway
Zoning: C, Conservation
Site Size: 16.49± acres or 718,304± square feet
Shape: Long and narrow
Vegetation: Majority treed with partial clearing for flower field
Wetlands: Riparian wetlands bisect center of property
Highest and Best Use: Subdivision with mixed-use development
Extraordinary Assumption: None
Effective Appraisal Date: June 15, 2017
Market Value Opinion $600,000
Property 2 – Proposed Tract D
Property Type: Vacant land
Property Rights Appraised: Fee simple interest
Physical Address: 10095 Kenai Spur Highway, Kenai, AK
Parcel ID Number: N/A
Legal Description: Proposed Tract D
Zoning: C, Conservation
Site Size: 4.10± acres or 178,596± square feet
Shape: Trapezoidal
Vegetation: Heavily treed with spruce and birch
Wetlands: None
Highest and Best Use: Commercial development in accordance with allowable
conditional uses under current zoning
Extraordinary Assumption: Property will be subdivided as indicated by the proposed
plat, and that the plat will be approved by the Kenai
Peninsula Borough
Effective Appraisal Date: June 15, 2017
Market Value Opinion $275,000
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Property 3 – Proposed Tracts A & B
Property Type: Vacant land
Property Rights Appraised: Fee simple interest
Physical Address: 10095 Kenai Spur Highway, Kenai, AK
Parcel ID Number: N/A
Legal Description: Proposed Tracts A & B
Zoning: C, Conservation
Site Size: 5.80± acres or 252,648± square feet
Shape: Narrow rectangle
Vegetation: Heavily treed with spruce and birch
Wetlands: None
Highest and Best Use: Commercial development in accordance with allowable
conditional uses under current zoning
Extraordinary Assumption: Property will be subdivided as indicated by the proposed
plat, and that the plat will be approved by the Kenai
Peninsula Borough
Effective Appraisal Date: June 15, 2017
Market Value Opinion $250,000
Proposed Plat
Provided By: City of Kenai
N
Kenai Spur Highway
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Chapter 1: Definition of the Appraisal Problem
We prepare an Appraisal Report that analyzes Lawton Acres in Kenai
Alaska. Our assignment values Lawton Acres under two scenarios.
Under the first scenario, we appraise the entire 16.49± acre parcel,
referred to as Property 1. The second scenario considers the proposed
subdivision of Lawton Acres. Under this scenario, we appraise
Proposed Tract D (Property 2) and Proposed Tracts A & B (Property
3). We analyze each property independently, but present our findings
bound in one report. Listed below are chapter and page numbers, and
identification of each parcel appraised. The report is prepared in
accordance with the Uniform Standards of Professional Appraisal
Practice (USPAP).
Chapter Property Page
3 Property 1 – Property ID 045-01-003 10
4 Property 2 – Proposed Tract D 23
5 Property 3 – Proposed Tracts A&B 35
Lawton Acres
Market value
City of Kenai
The intended use of this appraisal report is to assist the client with an
investment decision involving the subject properties.
The intended user of this appraisal report is the City of Kenai.
Overview
Property Name
Value Type
Client
Intended Use of
Appraisal Report
Intended User of
Appraisal Report
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June 15, 2017
June 15, 2017
June 30, 2017
Lawton Acres is situated on the south side of Kenai Spur Highway,
0.8± mile southeast of Kenai’s Municipal Airport.
The type of value estimated is market value. Market value is defined
as follows.
The most probable price, as of a specified date, in cash, or in terms
equivalent to cash, or in other precisely revealed terms, for which the
specified property rights should sell after a reasonable exposure in a
competitive market under all conditions requisite to a fair sale, with
the buyer and seller each acting prudently, knowledgeably, and for
self-interest, and assuming neither is under undue duress.1
The property rights appraised is the fee simple interest, which is
defined as follows.
Absolute ownership unencumbered by any other interest or estate,
subject only to the limitations imposed by the governmental powers of
taxation, eminent domain, police power, and escheat.2
The appraised properties are legally defined in each of their respective
chapters.
1 Appraisal of Real Estate, Fourteenth Edition (2013), by the Appraisal Institute,
p. 58.
2 Appraisal of Real Estate, Fourteenth Edition (2013), by the Appraisal Institute, p.
5.
Property Inspection
Date
Effective Appraisal
Date
Date of Report
Location
Value Type
Property Rights
Appraised
Legal Description
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Public records indicate the owner of the property is the City of Kenai.
The 16.49± acre parcel has been assessed for $478,100 for the past ten
years. This equates to $28,993 per acre or $0.67 per square foot. As
the parcel is owned by the City of Kenai, it is exempt from paying
property taxes.
We employ the sales comparison approach to estimate the market
value of the property, because neither the cost nor the income
capitalization approaches provide meaningful analysis for vacant land
similar to the subject. Additionally, we found sufficient land sale data
to develop our opinion of value. Comparable land sale data was
obtained from private parties, real estate brokers/agents, market
participants, appraisers, and company files. The appraisal report is a
summary of the appraiser’s data, analyses, and conclusions with
supporting documentation retained on file.
The scope of the appraisal is summarized as follows.
Inspected the appraised properties on June 15, 2017;
Discussed the appraised properties with Paul Ostrander, City
Manager, and Scott Bloom, City Attorney with City of Kenai;
Reviewed Kenai Peninsula Borough (KPB) land use ordinance
pertaining to zoning, permitted uses, and conditional uses, and
conditional use permits;
Collected data from the City of Kenai, KPB Assessor’s Office, and
State of Alaska Recorder’s Office regarding ownership,
assessments, and general property information;
Reviewed City of Kenai and KPB mapping and aerial imagery
pertaining to ownership, land use, and wetlands;
Performed a land use analysis;
Determined the highest and best use of each property;
Interviewed real estate agents active in the Kenai market district
regarding sale activity, current market trends, and anticipated
market trends;
Collected and analyzed MLS data and statistics regarding all types
of property sales located in Kenai;
Property Ownership
Real Property
Assessment
Appraisal Report
Overview
Scope of Appraisal
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Collected data pertaining to the dynamics of the real estate market
district;
Collected, verified, and analyzed comparable land sales;
Inspected and photographed the primary sales relied upon in the
comparative analysis; and
Developed the sales comparison approach to arrive at estimates of
market value for each subject property.
MacSwain Associates LLC has completed numerous appraisals of
properties in Kenai and surrounding communities in the Kenai
Peninsula Borough. A summary of the appraiser’s experience and
professional qualifications are located in the addenda. Steve
MacSwain, MAI has the knowledge and experience required by the
competency provision of USPAP to complete this assignment credibly.
We have collected and analyzed market and economic data that
projects real estate trends and activity for commercial and residential
properties. Discussions with Brokers and analysis of similar property
sales indicate that a period of approximately one year prior to our
effective date of value is a reasonable exposure period.
Statement of
Competency
Exposure Time
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Chapter 2: Location and Neighborhood Summaries
Due to the knowledge of the reader, we do not include a detailed
demographic and economic summary of the Kenai Peninsula Borough
(KPB) or City of Kenai. The reader is referred to the map below and
on following pages that illustrate the location and assist in the
description and analysis.
Location Map
Kenai is located on the western coast of the Peninsula, and is often
associated with Soldotna, which is located 11± miles to the southeast.
These two cities have become known as the “twin cities,” sharing an
integrated economy, while maintaining their independence. Kenai is a
home rule city with a population of 7,098. In the summer months, the
area benefits from tourists fishing the Kenai River. Kenai is also the
center for the oil and gas industry on the Peninsula, providing services
and supplies for Cook Inlet’s oil and natural gas drilling and
exploration. Nikiski, which lies north of Kenai, has two refineries that
process oil from the Cook Inlet oil platforms and the Swanson River
oil fields. There are numerous oil field support businesses located in
the area as well as the refineries. Kenai has the largest airport on the
peninsula, the Kenai Municipal Airport, which has scheduled flights
to/from Anchorage and other communities in the region.
Overview
City of Kenai
Summary
Kenai
Cook Inlet
SoldotnKenai River
N
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The subject is located within a mixed-use neighborhood, with
commercial and institutional development to north, east, and west, and
residential development to the south. Development in the immediate
neighborhood includes Kenai Central High School to the east, Home
Depot, Safeway, Three Bears, and Aspen Hotel to the west, Walmart
to the north, and a residential subdivision to the south. The prime
commercial district in Kenai is just to the west of the appraised parcel.
Neighborhood Development
Neighborhood Zoning Map
Neighborhood
Description
N
Safeway
Home Depot
Three Bears
Walmart
Aspen Hotel
Kenai Spur Hwy
Kenai
Central HS
Subjects
N
Subjects
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Sale activity remains relatively scarce with assemblage, expansion, or
special-purpose use representing the principal components of demand.
After analysis, we determined commercial property values have been
relatively stable over the past decade.
Conclusion
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Chapter 3: Property 1 – Property ID 045-01-003
The appraised property is a vacant parcel, which is partially cleared
and planted with a flower field. We summarize the subject property in
a summary format. The inserted exhibits and photographs that follow
help illustrate our descriptive analysis.
KPB Aerial Imagery
Review of public documents indicates the property is legally defined
as follows.
S½ S½ SW¼, Section 33, Township 006N, Range 011W, Seward Meridian,
Lying South of Kenai Spur Highway
Location: South of Kenai Spur Highway between Walker
Lane and Rogers Road, fronting north side of
Lawton Drive, Kenai, Alaska
Physical Address: 10095 Kenai Spur Highway, Kenai, Alaska
Current Use: Primarily vacant with flower garden on portion
of parcel
Property Overview
Legal Description
Identification of Real
Estate Appraised
N
Property 1
Walker Lane
Kenai Spur Highway
Rogers Road
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Fee simple interest
There are no known sales of the property in the past three years.
Analysis of land describes the characteristics that enhance or detract
from its utility or marketability. We base the site description and
analysis our appraisal inspection on June 15, 2017 and review of the
KPB assessor map and other available mapping. The following
assessor map and aerial imagery on the previous page assist in the
description and analysis of the site.
KPB Assessor Map
Parcel Shape
and Land Area:
Long and narrow parcel containing 16.49± acres
(718,304± square feet) per City of Kenai
Vehicular
Access:
Current access via Lawton Drive, paved two-lane
road
Frontage and
Exposure:
2,605± feet on Kenai Spur Highway and Lawton
Drive, 490± feet on Rogers Road, 170± feet on
Walker Lane
Topography: Mostly level with undulation near riparian
wetlands, which bisect property from north to
Property Rights
Appraised
Three-Year Sale
History
Site Description
N
Kenai Spur Highway
Subject
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south near center of property
Vegetation: Primarily treed with partial clearing for flower
field
Public Utilities: All public utilities available to parcel
Zoning: C, Conservation
Easements and
Restrictions:
None noted
Encroachments: None
Flood Hazard
Conditions:
Federal Emergency Management Agency (FEMA)
Community Panel No. 02122C0140E, dated
October 20, 2016, indicates the site is located in
Zone D, an area in which flood hazards are
undetermined, but possible.
Environmental
Considerations:
The appraisers were not provided an
environmental assessment. The existence of any
hazardous material or other type of environmental
contamination, which may or may not be present
on the property, was not observed by the
appraisers nor do the appraisers have any
knowledge of the existence of such substances. A
search of the Department of Environmental
Conservation Contaminated Sites Database
yielded no results. Our value conclusion assumes
that the property is free of environmental and
hazardous contaminants.
Soil and
Subsurface
Conditions:
A soil report was not provided to the appraisers.
The soils are consistent with undeveloped land in
the area and consists of a good gravel base.
Site
Improvements:
Partial clearing for flower field
Site Utility: The parcel benefits from substantial Kenai Spur
Highway frontage, availability of public utilities,
and good gravel based soils
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Property 1 Photographs
Taken By: Alex Kleinke Date: June 15, 2017
Westerly view of subject along south boundary
Westerly view of subject along north boundary
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Taken By: Alex Kleinke Date: June 15, 2017
Northerly view taken from Kenai Spur Highway
Easterly view of Lawton Drive frontage
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Taken By: Alex Kleinke Date: June 15, 2017
Westerly view of Kenai Spur Highway frontage
Easterly view of Kenai Spur Highway frontage
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Highest and Best Use Analysis
Highest and best use is a market-driven concept rather than a
subjective conclusion based on the experience of the appraiser or
property owner’s needs. The Dictionary of Real Estate Appraisal
(Sixth Edition) defines highest and best use as follows.
The reasonably probable use of property that results in the highest
value. The four criteria that the highest and best use must meet are
legal permissibility, physical possibility, financial feasibility, and
maximum productivity.
Physically Possible: The subject parcel contains 16.49± acres or
718,304± square feet. A location within Kenai’s commercial core,
substantial Kenai Spur Highway exposure, and availability of public
utilities enhance commercial development potential. The large size
limits demand from a single user, and increases the likelihood for
subdivision. Thus, physical character enhances the potential for
commercial use, with subdivision to accommodate multiple users.
Legally Permissible: Zoning is C, Conservation Zone, “intended to
apply to areas which should be preserved primarily as open areas and
as watersheds and wildlife reserves. Airport and related uses have
been included in this zone to allow for the reservation of aircraft
approach zones. It is intended that this zone shall apply mainly to
publicly owned land.”3
In addition to this zoning district’s intended permitted uses, many
residential, institutional, and commercial uses are allowed as
conditional uses. The Kenai Municipal Code states “the conditional
use permit procedure is intended to allow flexibility in the
consideration of the impact of the proposed use on surrounding
property and the application of controls and safeguards to assure that
the proposed use will be compatible with the surroundings.”4
Surrounding development includes commercial and institutional to the
north, west, and east, on properties with Kenai Spur Highway
frontage. Residential development to the south of the subject is
evident, as this area lacks highway frontage. Because of the subject’s
3 Kenai Municipal Code, Chapter 14.20 Kenai Zoning Code, City of Kenai,
Ordinance 2943-2017, effective May 5, 2017
4 Kenai Municipal Code, Chapter 14.20.150 Conditional Use Permits, City of
Kenai, Ordinance 2943-2017, effective May 5, 2017
Overview
Highest and Best Use
as Vacant
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highway frontage, conditionally allowed commercial use appears to be
compatible with surrounding development.
Financially Feasible and Maximally Productive: As discussed,
commercial uses are evident along the Kenai spur Highway.
Proximity to Kenai’s commercial core further encourages commercial
development. The subject’s zoning, and the requirement to obtain a
conditional use permit increases risk; however, commercial uses as
allowed under Kenai’s land use table for conditional uses conform
with the neighborhood development pattern. Thus, analysis indicates
commercial development represents the only permissible financial
option that is physically possible. This type of development
maximizes the return to the land. Due to the large size of the property,
subdividing the parcel will increase demand. Thus, the highest and
best of the appraised parcel, as vacant, is commercial development
after subdivision.
Highest and Best Use As Vacant Subdivision and
Commercial
Development
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Property 1 Valuation
The sales comparison approach is a market-based analysis that
develops a land value estimate by analyzing and comparing similar
land sales to the subject property. Our market research revealed
sufficient market activity of land in Kenai and surrounding areas. Due
to the imperfect nature of the market, we use a qualitative comparison
technique that rate elements of comparison as superior, inferior, or
similar. Explanation of the elements of comparison, and analysis of
the primary land sales follows.
The first step of the market analysis is to determine what elements of
comparison cause land sale prices to vary. We found that location,
frontage, wetland inundation, topography, size, shape, utilities, and use
(zoning) influence market behavior and the price paid for vacant land
in Kenai.
As discussed, the subject is zoned C, Conservation, which limits
development potential. While certain commercial and residential uses
are allowable with a conditional use permit, the extent of allowable
development is less than the comparable properties’ zoning districts.
Further, the requirement to file a conditional use permit increases
property risk. Thus, Conservation zoning puts downward pressure on
demand, requiring an adjustment to the comparables for their superior
zoning characteristics.
Regarding market conditions, Kenai’s land values remained relatively
stable for the past 10 years, so we do not make an adjustment for time.
Quantifying the identified adjustments is difficult due to the limited
sale data; therefore, qualitative techniques are used to measure
differences between the comparable sales and the subject.
Importantly, the transactions offer similar highest and best use
potential and are the best market data available.
Researching the Kenai market for conservation zoned land sales
revealed no transactions, requiring us to expand our search to include
land in other zoning districts with similar utility. Listed on the
following page are four transactions we rely upon to facilitate our
comparative analysis. Additional details of the comparable land sales
are retained on file.
Overview
Elements of
Comparison
Comparative Market
Analysis
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Comparable Land Sales
No Location Zoning Sale
Date
Sale Price Size $/SF
$/Ac.
1 East side of Kenai Spur Highway near Mile
20
None 1/14 $207,130 902,258 SF
20.71 Ac.
$0.23
$10,000
2 West side of Marathon Road, north of Kenai
Spur Highway
CG 9/07 $1,650,000 649,991 SF
14.78 Ac.
$2.56
$111,607
3 East side of Kenai Spur Highway at corner of
Ross Street
LC 7/16 $75,000 326,700 SF
7.50 Ac.
$0.23
$10,000
4 South side of Lawton Drive, just east of
Walker Lane
RS 8/14 $225,000 591,980 SF
13.59 Ac.
$0.38
$16,556
South side of Kenai Spur Highway
between Walker Lane and Rogers
Road (Subject)
C -- -- -- -- 718,304 SF
16.49 Ac.
-- --
Land Sale Map
N
Subject
4
1
2
3
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Comparative Land Analysis:
Land Sale 1 is the January 2014 sale located on the east side of Kenai
Spur Highway, near Mile 20 at Robert Walker Avenue. This 20.713-
acre (902,130 SF) parcel sold for $207,130 or $10,000 per acre.
Located outside of Kenai city limits, the trapezoidal-shaped parcel was
heavily treed at the time of sale with generally level to gently rolling
topography. Access is provided by Robert Walker Avenue, a gravel
road. Public natural gas, electricity, and telephone are available to the
property. The intention of the sale was for development of a storage
yard for an oil-support related business. Subsequently, the property
was purchased by Alaska LNG at an undisclosed price. By
comparison, this sale is superior due to shape and lack of wetlands,
which expand its developable footprint. Further, lack of zoning allows
for greater development potential and reduces risk. Overriding these
superiorities is inferior location away from Kenai’s commercial core,
lack of public water and sewer, and access via a gravel road. Overall,
Land Sale 1 is rated inferior, indicating a unit value greater than
$10,000 per acre for the subject.
Land Sale 2 is the September 2007 sale located on the west side of
Marathon Road, just north of Kenai Spur Highway. This 14.78-acre
(649,991 SF) parcel sold for $1,650,000 or $111,607 per acre. Zoned
General Commercial (CG), the irregular-shaped parcel was heavily
treed at the time of sale. Access is provided by Marathon Road,
paved, two-lane, and all public utilities are available. The property
was purchased by Lowe’s Home Improvement Warehouse to construct
a retail warehouse. By comparison, this sale is rated superior in terms
of use (zoning), lack of wetlands, level topography, and shape. While
lacking direct Kenai Spur Highway frontage, it has good exposure and
linkage to Kenai’s commercial core. After analysis, Land Sale 2 is
rated significantly superior, indicating a unit value substantially less
than $111,607 per acre for the subject.
Land Sale 3 is the July 2016 sale located on the east side of Kenai
Spur Highway near Mile 5 at Ross Street. This 7.50-acre (326,700 SF)
parcel sold for $75,000 or $10,000 per acre. Zoned Limited
Commercial (LC), the trapezoidal-shaped parcel is heavily treed and
approximately 50% inundated with low-lying wetlands per KPB
Wetland Mapper. According to the Broker, the property is dry due to
the State rerouting drainage two years ago. Dual access is provided by
Kenai Spur Highway, a paved, two-lane highway, and Ross Street, a
gravel road. Natural gas and electricity are at the parcel. The Broker
stated the buyer had no immediate plans to develop the property, and
intended to hold for future commercial development. The parcel was
listed for sale for most of the last five years, originally at $129,000
before dropping to $79,900. We make downward adjustments for
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zoning, superior size differential, and lack of wetland inundation at the
time of sale. Conversely, we make upward adjustments for inferior
location away from Kenai’s commercial core, and lack of public water
and sewer, which increases development costs. Overall, Land Sale 3 is
rated inferior, indicating a unit value greater than $10,000 per acre for
the subject.
Land Sale 4 is the August 2014 sale located on the south side of
Lawton Drive, just east of Walker Lane. This 13.59-acre (591,980 SF)
parcel sold for $225,000 or $16,556 per acre. Located immediately
south of the subject in a Suburban Residential (RS) zone, the irregular-
shaped parcel is heavily treed. Riverine wetlands encroach onto the
east boundary of the parcel. Access is provided by Lawton Drive, a
paved, two-lane road. The Broker indicated public water, sewer,
electricity, and telephone are available to the property. The parcel was
exposed to the market for 291 days, originally listed at $295,000. We
make a downward adjustment for superior RS zoning, which allows a
wider array of permitted and conditional uses than the subject’s
zoning. Conversely, an upward adjustment is required to account for a
lack of highway frontage / exposure, significantly reducing demand
from commercial users. Overall, Land Sale 4 is rated inferior,
indicating a unit value greater than $16,556 per acre.
Reconciliation of Comparative Market Analysis: Presented below is a
rating grid and analysis of the land sales used in comparative analysis.
Land Sale $/Acre Rank Net Adjustment
2 $111,607 Significantly
Superior
Subject -- -- -- -- -- --
4 $16,556 Inferior
1 $10,000 Inferior
3 $10,000 Inferior
Before adjustments, the comparable land sales indicate a wide unit
value range from $10,000 to $111,607 per acre. Land Sale 2 is rated
superior indicating a unit value significantly less than $111,607 per
acre. Conversely, Land Sales 1, 3, and 4 are rated inferior indicating a
unit value greater than $16,556 per acre. After comparative analysis
and making the necessary adjustments, a unit value of $30,000 to
$40,000 per acre is market-supported and developed on the following
page.
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16.49 acres × $30,000/acre = $494,700
16.49 acres × $40,000/acre = $659,600
Reconciliation and Conclusion of Land Value: Based on the
foregoing, the market value via the sales comparison approach ranges
from $495,000 to $660,000 after rounding. In conclusion, we
correlate with an estimate of land value at $600,000, which
approximates $36,000 per acre.
Market Value Estimate – Property ID 045-01-003
$600,000
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Chapter 4: Property 2 – Proposed Tract D
The appraised property is a vacant parcel on the southwest corner of
Kenai Spur Highway and Rogers Road. We summarize the subject
property in a summary format. The inserted exhibits and photographs
that follow help illustrate our descriptive analysis.
KPB Aerial Imagery
As this is a proposed tract, we refer to the subject’s legal description as
“Proposed Tract D”.
Location: Southwest corner of Kenai Spur Highway and
Rogers Road, fronting north side of Lawton
Drive, Kenai, Alaska
Physical Address: 10095 Kenai Spur Highway, Kenai, Alaska
Current Use: Vacant land
Property Overview
Legal Description
Identification of Real
Estate Appraised
N
Walker Lane
Kenai Spur Highway
Rogers Road
Property 2
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Fee simple interest
There are no known sales of the property in the past three years.
Analysis of land describes the characteristics that enhance or detract
from its utility or marketability. We base the site description and
analysis our appraisal inspection on June 15, 2017 and review of the
proposed subdivision plat provided by the client, the KPB assessor
map, and other available mapping. The following proposed plat and
aerial imagery on the previous page assist in the description and
analysis of the site.
Proposed Subdivision Plat
Parcel Shape
and Land Area:
Trapezoidal-shaped parcel containing 4.10± acres
(178,596± square feet) per proposed plat
Vehicular
Access:
Information provided by the client indicates access
via Rogers Road, paved, two-lane road
Frontage and
Exposure:
470± feet on Kenai Spur Highway and Rogers
Road, 450± feet on Lawton Drive
Topography: Generally level, near access grade
Property Rights
Appraised
Three-Year Sale
History
Site Description
N
Kenai Spur Highway Rogers Road Subject
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Vegetation: Heavily treed with spruce and birch
Public Utilities: All public utilities available to parcel
Zoning: C, Conservation
Easements and
Restrictions:
None noted
Encroachments: None
Flood Hazard
Conditions:
Federal Emergency Management Agency (FEMA)
Community Panel No. 02122C0140E, dated
October 20, 2016, indicates the site is located in
Zone D, an area in which flood hazards are
undetermined, but possible.
Environmental
Considerations:
The appraisers were not provided an
environmental assessment. The existence of any
hazardous material or other type of environmental
contamination, which may or may not be present
on the property, was not observed by the
appraisers nor do the appraisers have any
knowledge of the existence of such substances. A
search of the Department of Environmental
Conservation Contaminated Sites Database
yielded no results. Our value conclusion assumes
that the property is free of environmental and
hazardous contaminants.
Soil and
Subsurface
Conditions:
A soil report was not provided to the appraisers.
The soils are consistent with undeveloped land in
the area and consists of a good gravel base.
Site
Improvements:
None
Site Utility: The parcel benefits from a corner location, Kenai
Spur Highway frontage, availability of public
utilities, and good gravel based soils
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Property 2 Photographs
Taken By: Alex Kleinke Date: June 15, 2017
Northwesterly view towards Kenai Spur Highway of northeast corner
Southerly view of Rogers Road frontage
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Taken By: Alex Kleinke Date: June 15, 2017
Southwesterly view of Kenai Spur Highway frontage
Westerly view of subject from Rogers Road
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Highest and Best Use Analysis
Highest and best use is a market-driven concept rather than a
subjective conclusion based on the experience of the appraiser or
property owner’s needs. The Dictionary of Real Estate Appraisal
(Sixth Edition) defines highest and best use as follows.
The reasonably probable use of property that results in the highest
value. The four criteria that the highest and best use must meet are
legal permissibility, physical possibility, financial feasibility, and
maximum productivity.
Physically Possible: The subject parcel contains 4.10± acres or
178,596 square feet. A corner location within Kenai’s commercial
core, Kenai Spur Highway exposure, and availability of public utilities
enhance commercial development potential. Thus, physical character
enhances the potential for commercial use.
Legally Permissible: Zoning is C, Conservation Zone, “intended to
apply to areas which should be preserved primarily as open areas and
as watersheds and wildlife reserves. Airport and related uses have
been included in this zone to allow for the reservation of aircraft
approach zones. It is intended that this zone shall apply mainly to
publicly owned land.”5
In addition to this zoning district’s intended permitted uses, many
residential, institutional, and commercial uses are allowed as
conditional uses. The Kenai Municipal Code states “the conditional
use permit procedure is intended to allow flexibility in the
consideration of the impact of the proposed use on surrounding
property and the application of controls and safeguards to assure that
the proposed use will be compatible with the surroundings.”6
Surrounding development includes commercial and institutional to the
north, west, and east, on properties with Kenai Spur Highway
frontage. Residential development to the south of the subject is
evident, as this area lacks highway frontage. Because of the subject’s
highway frontage, conditionally allowed commercial use appears to be
compatible with surrounding development.
5 Kenai Municipal Code, Chapter 14.20 Kenai Zoning Code, City of Kenai,
Ordinance 2943-2017, effective May 5, 2017
6 Kenai Municipal Code, Chapter 14.20.150 Conditional Use Permits, City of
Kenai, Ordinance 2943-2017, effective May 5, 2017
Overview
Highest and Best Use
as Vacant
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Financially Feasible and Maximally Productive: As discussed,
commercial uses are evident along the Kenai spur Highway.
Proximity to Kenai’s commercial core further encourages commercial
development. The subject’s zoning, and the requirement to obtain a
conditional use permit increases risk; however, commercial uses as
allowed under Kenai’s land use table for conditional uses conform
with the neighborhood development pattern. Thus, analysis indicates
commercial development represents the only permissible financial
option that is physically possible. This type of development
maximizes the return to the land. Thus, the highest and best of the
appraised parcel, as vacant, is commercial.
Highest and Best Use As Vacant Commercial
Development
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Property 2 Valuation
The sales comparison approach is a market-based analysis that
develops a land value estimate by analyzing and comparing similar
land sales to the subject property. Our market research revealed
sufficient market activity of land in Kenai and surrounding areas. Due
to the imperfect nature of the market, we use a qualitative comparison
technique that rate elements of comparison as superior, inferior, or
similar. Explanation of the elements of comparison, and analysis of
the primary land sales follows.
The first step of the market analysis is to determine what elements of
comparison cause land sale prices to vary. We found that location,
frontage, clearing/grading, topography, size, utilities, and use (zoning)
influence market behavior and the price paid for vacant land in Kenai.
As discussed, the subject is zoned C, Conservation, which limits
development potential. While certain commercial and residential uses
are allowable with a conditional use permit, the extent of allowable
development is less than the comparable properties’ zoning districts.
Further, the requirement to file a conditional use permit increases
property risk. Thus, Conservation zoning puts downward pressure on
demand, requiring an adjustment to the comparables for their superior
zoning characteristics.
Regarding market conditions, Kenai’s land values remained relatively
stable for the past 10 years, so we do not make an adjustment for time.
Quantifying the identified adjustments is difficult due to the limited
sale data; therefore, qualitative techniques are used to measure
differences between the comparable sales and the subject.
Importantly, the transactions offer similar highest and best use
potential and are the best market data available.
Researching the Kenai market for conservation zoned land sales
revealed no transactions, requiring us to expand our search to include
land in other zoning districts with similar utility. Listed on the
following page are four transactions we rely upon to facilitate our
comparative analysis. Additional details of the comparable land sales
are retained on file.
Overview
Elements of
Comparison
Comparative Market
Analysis
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Comparable Land Sales
No Location Zoning Sale
Date
Sale Price Size $/SF
$/Ac.
5 West side of K Beach Road near Mile 19.5 None 9/16 $120,000 80,150 SF
1.84 Ac.
$1.50
$65,217
6 Southwest corner of N. Forest Drive and
Second Avenue
CG 4/15 $83,000 52,272 SF
1.20 Ac.
$1.59
$69,167
7 South side of K Beach Road near Mile 17.2 None 10/15 $404,500 223,114 SF
5.12 Ac.
$1.81
$79,004
8 Northwest corner of Kleeb Loop and
Turnbuckle Terrace Road
C1 9/16 $160,000 97,139 SF
2.23 Ac.
$1.65
$71,749
Southwest corner of Kenai Spur
Highway and Rogers Road (Subject)
C -- -- -- -- 178,596 SF
4.10 Ac.
-- --
1. Commercial (C) zoning by City of Soldotna
Land Sale Map
N
Subject
8
5
6
7
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Comparative Land Analysis:
Land Sale 5 is the September 2016 sale located on the west side of
Kalifornsky Beach Road near Mile 19.5. This 1.84-acre (80,150 SF)
lot sold for $120,000 or $65,217 per acre. Located outside of Kenai
city limits, the rectangular-shaped lot was heavily treed at the time of
sale with generally level topography. There is access from
Kalifornsky Beach Road. Natural gas and electricity are available,
however the site is not served by public water and sewer. The lot was
purchased by the owner of the adjacent property to the north, which is
developed with a veterinary clinic. By comparison, this sale is
superior due to size differential. Further, lack of zoning allows for
greater development potential and reduces risk. Overriding these
superiorities is inferior location away from Kenai’s commercial core
and lack of public water and sewer. Overall, Land Sale 5 is rated
marginally inferior, indicating a unit value slightly greater than
$65,217 per acre for the subject.
Land Sale 6 is the April 2015 sale located on the southwest corner of
N. Forest Drive and Second Avenue, just north of Kenai Spur
Highway. This 1.20-acre (52,272 SF) site sold for $83,000 or $69,167
per acre. Zoned General Commercial (CG), the L-shaped site
contained three lots, but was replatted into a single lot subsequent to
the sale, gaining additional square footage due to vacated Coolidge
Lane. The property was exposed to the market for approximately a
year and a half, listed at $90,000. By comparison, this sale is rated
superior in terms of use (zoning), size differential, and
clearing/grading. Conversely, the site lacks direct Kenai Spur
Highway frontage and is located slightly west of Kenai’s commercial
core. After analysis, Land Sale 6 is rated marginally superior,
indicating a unit value slightly less than $69,167 per acre for the
subject.
Land Sale 7 is the October 2015 sale located on the west side of
Kalifornsky Beach Road near Mile 19.5. This 5.12-acre (223,114 SF)
site sold for $404,500 or $79,004 per acre. Located outside of zoning
districts, the rectangular-shaped site consisted of five lots, but was
replatted into a four-lot site subsequent to the sale. The site was
primarily cleared, level, and graded at the time of sale with sparse
vegetation. There is access from Kalifornsky Beach Road at the
northwest corner. Natural gas and electricity are available, however
the site is not served by public water and sewer. The parcel was listed
for over a year, originally at $439,000. We make a downward
adjustment for clearing / grading. Further, lack of zoning allows for
greater development potential and reduces risk. Partially offsetting
these superiorities are lack of public water and sewer and a location
away from Kenai’s commercial core. Overall, Land Sale 7 is rated
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superior, indicating a unit value less than $79,004 per acre for the
subject.
Land Sale 8 is the September 2016 sale located on the northwest
corner of Kleeb Loop and Turnbuckle Terrace Road, situated just
north of Sterling Highway, 0.7± northeast of the “Y”. This 2.23-acre
(97,139 SF) parcel sold for $160,000 or $71,749 per acre. Access is
provided by Kleeb Loop, a paved frontage road of the Sterling
Highway. Public electricity, natural gas, and telephone are available
to the property, however public water and sewer are not connected.
Reportedly, there is a 120-foot well on the property, but it is not
sufficient to support a commercial operation. The property contained
an older home site with several ancillary improvements, however the
Broker indicated the seller would remove the structures. The property
was exposed to the market for over 2.5 years, originally listed at
$349,400 and reduced to $224,000. We make downward adjustments
for superior site clearing, size differential and commercial zoning,
which allows a wider array of permitted and conditional uses than the
subject’s zoning. Conversely, an upward adjustment is required to
account for a lack of public water and sewer. Overall, Land Sale 8 is
rated superior, indicating a unit value less than $71,749 per acre.
We analyzed the sale of the 1.87-acre (81,636 SF) AlaskaLanes
property located just west of the subject fronting Kenai Spur Highway.
The property was purchased from the City of Kenai for $450,000, with
the land contributing to the entirety of the property value. The buyers
intend to rehabilitate the improvements, which are in disrepair.
Comparatively, this sale is superior in all respects, including size
differential, use (zoning), clearing/grading, and direct access from
Kenai Spur Highway. We analyze this sale due to locational
similarities, but relegate it to secondary consideration due to the
number of irregular factors involved in the transaction.
Additional Data
Considered
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Reconciliation of Comparative Market Analysis: Presented below is a
rating grid and analysis of the land sales used in comparative analysis.
Land Sale $/Acre Rank Net Adjustment
7 $79,004 Superior
8 $71,749 Superior
6 $69,167 Marginally
Superior
Subject -- -- -- -- -- --
5 $65,217 Marginally
Inferior
Before adjustments, the comparable land sales indicate a unit value
range from $65,217 to $79,004 per acre. Land Sale 5 is rated
marginally inferior indicating a unit value slightly greater than
$65,217 per acre. Conversely, Land Sales 6 through 8 are rated
superior indicating a unit value slightly less than $69,167 per acre.
After comparative analysis and making the necessary adjustments, a
unit value of $66,000 to $69,000 per acre is market-supported and
develops the following.
4.10 acres × $66,000/acre = $270,600
4.10 acres × $69,000/acre = $282,900
Reconciliation and Conclusion of Land Value: Based on the
foregoing, the market value via the sales comparison approach ranges
from $271,000 to $283,000 after rounding. In conclusion, we
correlate with an estimate of land value at $275,000, which
approximates $67,000 per acre.
Market Value Estimate – Proposed Tract D
$275,000
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Chapter 5: Property 3 – Proposed Tracts A & B
The appraised property is a vacant parcel on the southeast corner of
Kenai Spur Highway and Walker Lane. We summarize the subject
property in a summary format. The inserted exhibits and photographs
that follow help illustrate our descriptive analysis.
KPB Aerial Imagery
As this is a proposed tract, we refer to the subject’s legal description as
“Proposed Tracts A & B”.
Location: Southeast corner of Kenai Spur Highway and
Walker Lane, fronting north side of Lawton
Drive, Kenai, Alaska
Physical Address: 10095 Kenai Spur Highway, Kenai, Alaska
Current Use: Vacant land
Property Overview
Legal Description
Identification of Real
Estate Appraised
N
Walker Lane
Kenai Spur Highway Rogers Road
Property 3
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Fee simple interest
There are no sales of the property in the past three years.
Analysis of land describes the characteristics that enhance or detract
from its utility or marketability. We base the site description and
analysis our appraisal inspection on June 15, 2017 and review of the
proposed subdivision plat provided by the client, the KPB assessor
map, and other available mapping. The following proposed plat and
aerial imagery on the previous page assist in the description and
analysis of the site.
Proposed Subdivision Plat
Parcel Shape
and Land Area:
Narrow parcel containing 5.80± acres (252,648±
square feet) per proposed plat
Vehicular
Access:
Information provided by the client indicates access
via Walker Lane, paved, two-lane road
Frontage and
Exposure:
1,290± feet on Kenai Spur Highway and Lawton
Drive, 150± feet on Walker Lane
Topography: Generally level, near access grade
Vegetation: Heavily treed with spruce and birch
Property Rights
Appraised
Three-Year Sale
History
Site Description
N
Kenai Spur Highway Walker Lane Subject
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Public Utilities: All public utilities available to parcel
Zoning: C, Conservation
Easements and
Restrictions:
None noted
Encroachments: None
Flood Hazard
Conditions:
Federal Emergency Management Agency (FEMA)
Community Panel No. 02122C0140E, dated
October 20, 2016, indicates the site is located in
Zone D, an area in which flood hazards are
undetermined, but possible.
Environmental
Considerations:
The appraisers were not provided an
environmental assessment. The existence of any
hazardous material or other type of environmental
contamination, which may or may not be present
on the property, was not observed by the
appraisers nor do the appraisers have any
knowledge of the existence of such substances. A
search of the Department of Environmental
Conservation Contaminated Sites Database
yielded no results. Our value conclusion assumes
that the property is free of environmental and
hazardous contaminants.
Soil and
Subsurface
Conditions:
A soil report was not provided to the appraisers.
The soils are consistent with undeveloped land in
the area and consists of a good gravel base.
Site
Improvements:
None
Site Utility: The parcel benefits from a corner location, Kenai
Spur Highway frontage, availability of public
utilities, and good gravel based soils
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Property 3 Photographs
Taken By: Alex Kleinke Date: June 15, 2017
Westerly view of Lawton Drive frontage
Northerly view of path through center of parcel
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Taken By: Alex Kleinke Date: June 15, 2017
Westerly view of north boundary of property
Northerly view of Walker Lane frontage near southwest corner
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Highest and Best Use Analysis
Highest and best use is a market-driven concept rather than a
subjective conclusion based on the experience of the appraiser or
property owner’s needs. The Dictionary of Real Estate Appraisal
(Sixth Edition) defines highest and best use as follows.
The reasonably probable use of property that results in the highest
value. The four criteria that the highest and best use must meet are
legal permissibility, physical possibility, financial feasibility, and
maximum productivity.
Physically Possible: The subject parcel contains 5.80± acres or
252,648± square feet. A corner location within Kenai’s commercial
core, Kenai Spur Highway exposure, and availability of public utilities
enhance commercial development potential. Thus, physical character
enhances the potential for commercial use.
Legally Permissible: Zoning is C, Conservation Zone, “intended to
apply to areas which should be preserved primarily as open areas and
as watersheds and wildlife reserves. Airport and related uses have
been included in this zone to allow for the reservation of aircraft
approach zones. It is intended that this zone shall apply mainly to
publicly owned land.”7
In addition to this zoning district’s intended permitted uses, many
residential, institutional, and commercial uses are allowed as
conditional uses. The Kenai Municipal Code states “the conditional
use permit procedure is intended to allow flexibility in the
consideration of the impact of the proposed use on surrounding
property and the application of controls and safeguards to assure that
the proposed use will be compatible with the surroundings.”8
Surrounding development includes commercial and institutional to the
north, west, and east, on properties with Kenai Spur Highway
frontage. Residential development to the south of the subject is
evident, as this area lacks highway frontage. Because of the subject’s
highway frontage, conditionally allowed commercial use appears to be
compatible with surrounding development.
7 Kenai Municipal Code, Chapter 14.20 Kenai Zoning Code, City of Kenai,
Ordinance 2943-2017, effective May 5, 2017
8 Kenai Municipal Code, Chapter 14.20.150 Conditional Use Permits, City of
Kenai, Ordinance 2943-2017, effective May 5, 2017
Overview
Highest and Best Use
as Vacant
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Financially Feasible and Maximally Productive: As discussed,
commercial uses are evident along the Kenai spur Highway.
Proximity to Kenai’s commercial core further encourages commercial
development. The subject’s zoning, and the requirement to obtain a
conditional use permit increases risk; however, commercial uses as
allowed under Kenai’s land use table for conditional uses conform
with the neighborhood development pattern. Thus, analysis indicates
commercial development represents the only permissible financial
option that is physically possible. This type of development
maximizes the return to the land. Thus, the highest and best of the
appraised parcel, as vacant, is commercial.
Highest and Best Use As Vacant Commercial
Development
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Property 3 Valuation
The sales comparison approach is a market-based analysis that
develops a land value estimate by analyzing and comparing similar
land sales to the subject property. Our market research revealed
sufficient market activity of land in Kenai and surrounding areas. Due
to the imperfect nature of the market, we use a qualitative comparison
technique that rate elements of comparison as superior, inferior, or
similar. Explanation of the elements of comparison, and analysis of
the primary land sales follows.
The first step of the market analysis is to determine what elements of
comparison cause land sale prices to vary. We found that location,
frontage, clearing/grading, topography, size, utilities, and use (zoning)
influence market behavior and the price paid for vacant land in Kenai.
As discussed, the subject is zoned C, Conservation, which limits
development potential. While certain commercial and residential uses
are allowable with a conditional use permit, the extent of allowable
development is less than the comparable properties’ zoning districts.
Further, the requirement to file a conditional use permit increases
property risk. Thus, Conservation zoning puts downward pressure on
demand, requiring an adjustment to the comparables for their superior
zoning characteristics.
Regarding market conditions, Kenai’s land values remained relatively
stable for the past 10 years, so we do not make an adjustment for time.
Quantifying the identified adjustments is difficult due to the limited
sale data; therefore, qualitative techniques are used to measure
differences between the comparable sales and the subject.
Importantly, the transactions offer similar highest and best use
potential and are the best market data available.
Researching the Kenai market for conservation zoned land sales
revealed no transactions, requiring us to expand our search to include
land in other zoning districts with similar utility. Listed on the
following page are four transactions we rely upon to facilitate our
comparative analysis. Additional details of the comparable land sales
are retained on file.
Overview
Elements of
Comparison
Comparative Market
Analysis
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Comparable Land Sales
No Location Zoning Sale
Date
Sale Price Size $/SF
$/Ac.
3 East side of Kenai Spur Highway at corner of
Ross Street
LC 7/16 $75,000 326,700 SF
7.50 Ac.
$0.23
$10,000
4 South side of Lawton Drive, just east of
Walker Lane
RS 8/14 $225,000 591,980 SF
13.59 Ac.
$0.38
$16,556
6 Southwest corner of N. Forest Drive and
Second Avenue
CG 4/15 $83,000 52,272 SF
1.20 Ac.
$1.59
$69,167
7 South side of K Beach Road near Mile 17.2 None 10/15 $404,500 223,114 SF
5.12 Ac.
$1.81
$79,004
Southeast corner of Kenai Spur
Highway and Walker Lane (Subject)
C -- -- -- -- 252,648 SF
5.80 Ac.
-- --
Land Sale Map
N
Subject
6
7
3
4
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Comparative Land Analysis:
Land Sale 3 is the July 2016 sale located on the east side of Kenai
Spur Highway near Mile 5 at Ross Street. This 7.50-acre (326,700 SF)
parcel sold for $75,000 or $10,000 per acre. Zoned Limited
Commercial (LC), the trapezoidal-shaped parcel is heavily treed and
approximately 50% inundated with low-lying wetlands per KPB
Wetland Mapper. According to the Broker, the property is dry due to
the State rerouting drainage two years ago. Dual access is provided by
Kenai Spur Highway, a paved, two-lane highway, and Ross Street, a
gravel road. Natural gas and electricity are at the parcel. The Broker
stated the buyer had no immediate plans to develop the property, and
intended to hold for future commercial development. The parcel was
listed for sale for most of the last five years, originally at $129,000
before dropping to $79,900. We make a downward adjustment for
zoning. Conversely, we make upward adjustments for inferior
location away from Kenai’s commercial core, and lack of public water
and sewer, which increases development costs. Overall, Land Sale 3 is
rated inferior, indicating a unit value greater than $10,000 per acre for
the subject.
Land Sale 4 is the August 2014 sale located on the south side of
Lawton Drive, just east of Walker Lane. This 13.59-acre (591,980 SF)
parcel sold for $225,000 or $16,556 per acre. Located immediately
south of the subject in a Suburban Residential (RS) zone, the irregular-
shaped parcel is heavily treed. Riverine wetlands encroach onto the
east boundary of the parcel. Access is provided by Lawton Drive, a
paved, two-lane road. The Broker indicated public water, sewer,
electricity, and telephone are available to the property. The parcel was
exposed to the market for 291 days, originally listed at $295,000. We
make a downward adjustment for superior RS zoning, which allows a
wider array of permitted and conditional uses than the subject’s
zoning. Conversely, upward adjustments are required for size
differential and to account for a lack of highway frontage / exposure,
which reduces demand from commercial users. Overall, Land Sale 4
is rated inferior, indicating a unit value greater than $16,556 per acre.
Land Sale 6 is the April 2015 sale located on the southwest corner of
N. Forest Drive and Second Avenue, just north of Kenai Spur
Highway. This 1.20-acre (52,272 SF) site sold for $83,000 or $69,167
per acre. Zoned General Commercial (CG), the L-shaped site
contained three lots, but was replatted into a single lot subsequent to
the sale, gaining additional square footage due to vacated Coolidge
Lane. The property was exposed to the market for approximately a
year and a half, listed at $90,000. By comparison, this sale is rated
superior in terms of use (zoning), size differential, and
clearing/grading. Conversely, the site lacks direct Kenai Spur
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Highway frontage and is located slightly west of Kenai’s commercial
core. After analysis, Land Sale 6 is rated superior, indicating a unit
value slightly less than $69,167 per acre for the subject.
Land Sale 7 is the October 2015 sale located on the west side of
Kalifornsky Beach Road near Mile 19.5. This 5.12-acre (223,114 SF)
site sold for $404,500 or $79,004 per acre. Located outside of zoning
districts, the rectangular-shaped site consisted of five lots, but was
replatted into a four-lot site subsequent to the sale. The site was
primarily cleared, level, and graded at the time of sale with sparse
vegetation. There is access from Kalifornsky Beach Road at the
northwest corner. Natural gas and electricity are available, however
the site is not served by public water and sewer. The parcel was listed
for over a year, originally at $439,000. We make a downward
adjustment for clearing / grading. Further, lack of zoning allows for
greater development potential and reduces risk. Partially offsetting
these superiorities are lack of public water and sewer and a location
away from Kenai’s commercial core. Overall, Land Sale 7 is rated
superior, indicating a unit value less than $79,004 per acre for the
subject.
Reconciliation of Comparative Market Analysis: Presented below is a
rating grid and analysis of the land sales used in comparative analysis.
Land Sale $/Acre Rank Net Adjustment
7 $79,004 Superior
6 $69,167 Superior
Subject -- -- -- -- -- --
4 $16,556 Inferior
3 $10,000 Inferior
Before adjustments, the comparable land sales indicate a unit value
range from $10,000 to $79,004 per acre. Land Sales 3 and 4 are rated
inferior indicating a unit value greater than $16,556 per acre.
Conversely, Land Sales 6 and 7 are rated superior indicating a unit
value less than $69,167 per acre. After comparative analysis and
making the necessary adjustments, a unit value of $40,000 to $45,000
per acre is market-supported and develops the following.
5.80 acres × $40,000/acre = $232,000
5.80 acres × $45,000/acre = $261,000
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Reconciliation and Conclusion of Land Value: Based on the
foregoing, the market value via the sales comparison approach ranges
from $232,000 to $261,000. In conclusion, we correlate with an
estimate of land value at $250,000, which approximates $43,000 per
acre.
Market Value Estimate – Proposed Tracts A & B
$250,000
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Assumptions and Limiting Conditions
This appraisal is subject to the following assumptions and limiting conditions.
No responsibility is assumed for the legal description provided or for matters pertaining to
legal or title considerations. Titles to the properties are assumed to be marketable unless
otherwise stated.
The properties are appraised free and clear of all liens or encumbrances unless otherwise
stated.
The information furnished by others is believed to be reliable, but no warranty is given for its
accuracy.
All maps, plot plans, and other illustrative material are believed to be accurate, but are
included only to help the reader visualize the properties.
It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or
structures that render it more or less valuable. No responsibility is assumed for such
conditions or for obtaining the engineering studies that may be required to discover them.
It is assumed the properties are in full compliance with all applicable federal, state, and local
environmental regulations and laws unless the lack of compliance is stated, described, and
considered in the appraisal report.
Possession of this report, or a copy thereof, does not carry with it the right of publication.
The appraisers, by reason of this appraisal, are not required to give consultation or testimony
or to be in attendance in court with reference to the properties in question unless
arrangements have been previously made.
Neither all nor any part of the contents of this report shall be disseminated to the public
through advertising, public relations, news, sales, or other media without the prior written
consent and approval of the appraisers.
The existence of any hazardous material or other type of environmental contamination, which
may or may not be present on the properties, was not observed by the appraiser nor does the
appraiser have any knowledge of the existence of such substances. However, the presence of
these substances may affect the value of the properties. Therefore, the client is urged to
retain an environmental assessment for discovery and evaluation.
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Extraordinary Assumption
This appraisal is subject to the following extraordinary assumption.
It is an extraordinary assumption of the appraisal of Properties 2 and 3 that they will be
subdivided and the plat will be approved by the Kenai Peninsula Borough.
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MacSwain Associates LLC
4401 Business Park Boulevard, Suite 22, Anchorage, Alaska 99503
Appraiser: Steve MacSwain, MAI
Member of Appraisal Institute - No. 5700
State of Alaska, Certified General Real Estate Appraiser - No. 42
Professional Experience: 1986 to Present - MacSwain Associates LLC
1976 to 1986 - Appraisal Company of Alaska - President
1970 to 1975 - Real Estate Services Corporation – Appraiser
1969 to 1970 - State of Alaska Department of Highways - Right of Way Agent
Real estate appraiser and consultant of all property types throughout Alaska including commercial, industrial,
subdivisions and special-purpose properties. Appraisals have been performed for financing, leasing, insurance,
condemnation, taxation, property damages, investment analysis, and buy-sell decisions. Appraisals include
valuation of both real property and business enterprises. Professional experience totals 45 years.
Education: Bachelor of Business Administration, Finance (1969), University of Alaska Fairbanks
Appraisal Education: The following is a list of completed appraisal courses and seminars.
2017 – Residential & Commercial Valuation of Solar by the Appraisal Institute
2017 – Right of Way Acquisition for Pipeline Projects by the International Right of Way Association
2016 – Uniform Standards of Professional Appraisal Practice – Update by the Appraisal Institute
2015 – Litigation Appraising: Specialized Topics and Applications by the Appraisal Institute
2015 – Business Practices and Ethics by the Appraisal Institute
2013 – Complex Litigation Appraisal Case Studies by the Appraisal Institute
2013 – Uniform Appraisal Standards for Federal Land Acquisitions (Yellow Book) by the Appraisal Institute
2012 – Appraisal Curriculum Overview by the Appraisal Institute
2010 – Reviewing Appraisals in Eminent Domain by the International Right of Way Association
2010 – Commercial Appraisal Engagement and Review Seminar for Bankers and Appraisers by the Appraisal Institute
2009 – The Appraiser as an Expert Witness: Preparation and Testimony by the Appraisal Institute
2009 – Attacking and Defending an Appraisal in Litigation by Whitmer Education
2008 – Uniform Standards of Professional Appraisal Practice by the Appraisal Institute
2007 – Business Practices and Ethics by the Appraisal Institute
2007 – Eminent Domain Law for Right of Way Professionals by the International Right of Way Association
2007 – Appraisal Review for Federal Aid Programs by the International Right of Way Association
2007 – Analyzing Operating Expenses by the Appraisal Institute
2007 – Forecasting Revenue by the Appraisal Institute
2007 – Case Studies in Highest and Best Use by the Appraisal Institute
2002 – Uniform Standards for Federal Land Acquisitions: Practical Applications for Fee Appraisers by the Appraisal Institute
2002 – Legal Aspects of Easements by the International Right of Way Association
1969-2001: Numerous appraisal classes pertaining to principles, income capitalization, cost analysis, sale
comparison approach, and highest and best use analysis by the Appraisal Institute, Society of Real Estate
Appraisers, International Right-of-Way Association, International Association of Assessing Officers, and Marshall
Valuation Service
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Membership and Organizations: Member of Appraisal Institute – No. 5700
Member of International Right of Way Association
Member of Building Owners and Managers Association (BOMA), Anchorage
Public Service: Past Chairman of the State Board of Certified Appraisers
Past member of Board of Equalization, Municipality of Anchorage
Past member of National Experience Review Committee of the Appraisal Institute
Past member of Regional Ethics and Counseling Panel of the Appraisal Institute
Past president of Alaska Chapter 57 of the Appraisal Institute
Significant Assignments:
Appraised the Trans-Alaska Pipeline System, an 800-mile common carrier crude oil pipeline from Prudhoe Bay
to Valdez, operated by Alyeska Pipeline Service Company.
Appraised Calais Company, Inc., a real estate holding company consisting of 39 commercial parcels in
Anchorage.
Principal real estate consultant and expert witness for all lands affected by the Exxon Valdez oil spill. Project
involved over 2,000,000 acres of remote land and nearly 2,000 private property owners.
Appointed as a representative of a three-member panel that analyzed and valued over 1,000,000 acres and 8,000
parcels for the Mental Health Lands Settlement.
Contract assessor for the North Slope Borough, Kodiak Island Borough, City of Nome, and the City of Valdez.
Represented Seibu Alaska, Inc. (Alyeska Resort and Alyeska Prince Hotel) in preparing of their property tax
appeal with the Municipality of Anchorage that resulted in a $65 million reduction in assessed value.
Appraised submerged tideland parcels and wetlands parcels located in Womens Bay on Kodiak Island for the
purpose of an exchange between Koniag, Inc. and U.S. Fish and Wildlife Service
Appraised Common Carrier Pipeline right-of-ways leased and operated by BP Transportation Alaska and
ConocoPhillips Alaska.
Appraised 3,600 acres consisting of the former Adak Naval Air Station and Submarine Base conveyed to the
City of Adak and the State of Alaska.
Appraised and/or provided consulting services on properties throughout Alaska including numerous financial
institutions, Native corporation lands, and real estate holding companies both public and private.
Expert Witness Experience: Steve MacSwain is qualified as an expert witness in both the United States Federal
Court and the State of Alaska Superior Court. Steve has testified as an expert witness in State and Federal courts.
In addition, Steve has testified as expert witness in numerous Alaskan municipal tax courts, public hearings, and
depositions on matters related to real property.
Arbitrator Experience: Appointed a Master by the Superior Court of Alaska and Municipality of Anchorage to
serve as an arbitrator in determining just compensation.
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