HomeMy WebLinkAboutOrdinance No. 2998-2018theeilJef
KENAl,AWKA
"V"
Sponsored by: Administration and Legal
CITY OF KENAI
ORDINANCE NO. 2998-2018
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, REPEALING,
RENAMING AND RE-ENACTING KENAI MUNICIPAL CODE CHAPTER 21 .10-LEASING OF
AIRPORT RESERVE LANDS TO ENCOURAGE GROWTH, DEVELOPMENT AND A THRIVING
AVIATION COMMUNITY THROUGH RESPONSIBLE LAND POLICIES AND PRACTICES .
WHEREAS, the City's leasing program within the airport reserve has failed to accomplish the
City's goals of encouraging growth and development of the airport within the last several years ;
and,
WHEREAS , what few new leases that have been executed within the airport reserve have all
deviated from the City's existing code; and ,
WHEREAS, the city manager's office, the finance director, airport manager, planner and legal
department have worked together with consultants and reached out to airport leaseholders, users
and financiers for input into improving the City's airport reserve leasing program ; and,
WHEREAS, the working group has reviewed other airport leasing programs inside Alaska and in
other states, and the recommended program will provide a competitive environment to encourage
leasing within the airport reserve in compliance with FAA regulations and deed restrictions; and,
WHEREAS , many of the changes are focused on encouraging new leases through a more
competitive development schedule and incentives, reducing appeals and conflict between the City
and lessees, providing a defined process for beginning, renew ing, extend ing and ending leases,
balancing encouragement of new business with security for existing leaseholders, and providing
an improved mechanism for rent adjustments ; and ,
WHEREAS, this ordinance will provide an opportunity for existing leaseholders to convert to a
new lease ; and ,
WHEREAS, the Planning and Zoning Commission at its meeting of January 10, 2018 passed
Resolution No . PZ2018-01 recommending the City Council enact Ordinance No. 2998-2018; and ,
WHEREAS, the Airport Commission at its meeting of January 1 1, 2018 recommended the City
Council enact Ordinance No . 2998-2018.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA,
as follows:
Section 1 . Repeal and Reenactment of the Kenai Municipal Code : That Kenai Municipal
Code, Chapter 21.10 -Leasing of Airport Reserve Lands , is hereby Repealed in its entirety and
Re-enacted as follows :
New Text Und erlin ed ; [DELETED TEXT BRACKETED]
Ordinance No. 2998 -2018
Page 2 of 26
[21 .10 .010 AIRPORT RESERVE LAND.
(A) THIS CHAPTER APPLIES TO AIRPORT-OWNED LAND WITHIN THE AIRPORT
RESERVE.
(B) THE PROVISIONS OF THIS CHAPTER SHALL NOT ALTER OR AMEND THE
TERMS OR RIGHTS GRANTED UNDER LEASES EXISTING PRIOR TO THE EFFECTIVE
DATE OF THIS CHAPTER.
(C) PENDING LEASE APPLICATIONS FOR AIRPORT LAND FILED PRIOR TO THE
EFFECTIVE DATE OF THIS CHAPTER SHALL BE PROCESSED AND ISSUED UNDER
THE PROVISIONS OF KMC TITLES 21AND22 IN EXISTENCE IMMEDIATELY PRIOR TO
THE EFFECTIVE DATE OF THIS CHAPTER. OTHERWISE THE PROVISIONS OF THIS
CHAPTER SHALL APPLY. (ORD . 2180-2006)
21.10.020 LANDS AVAILABLE FOR LEASING .
(A) SUBJECT TO THE PROVISIONS OF THIS CHAPTER, CITY-OWNED LAND WITHIN
THE AIRPORT RESERVE MAY BE LEASED AS PROVIDED IN THIS CHAPTER UNLESS
THE LAND IS IDENTIFIED IN THE LATEST FEDERAL AVIATION ADMINISTRATION-
APPROVED AIRPORT LAYOUT PLAN FOR THE AIRPORT OR IN THE LATEST AIRPORT
LAND USE PLAN AS BEING REQUIRED FOR THE OPERATION OR SAFETY OF THE
AIRPORT, OR FOR THE CONSTRUCTION, PRESERVATION, FUTURE
CONSTRUCTION, OR FUTURE EXPANSION OF FACILITIES ON THE AIRPORT,
INCLUDING : -
(1) RUNWAYS, RUNWAY SAFETY AREAS, TAXIWAYS , APRONS , WATER
LANES , WATER TAXIWAYS , AND OTHER AIRCRAFT OPERATIONAL AREAS;
(2) ACCESS ROADS , PUBLIC STREETS , PARKING LOTS, AND OTHER
FACILITIES FOR USE BY MOTOR VEHICLES; AND
(3) PUBLIC TERM INAL BUILDINGS .
(B) NOTWITHSTANDING SUBSECTION (A) OF THIS SECTION:
(1) APRON SPACE MAY BE LEASED, BUT ONLY FOR AIRCRAFT FUELING,
LOADING, UNLOADING , PARKING AND MANEUVERING PURPOSES; AND
(2) LAND REQUIRED FOR THE FUTURE CONSTRUCTION OR FUTURE
EXPANSION OF AIRPORT FACILITIES :
(I) MAY BE LEASED FOR AN INTERIM PERIOD NOT EXTENDING BEYOND
THE DATE ON WHICH THE CITY MANAGER DETERMINES THE LAND WILL
BE REQUIRED FOR THE CONSTRUCTION OR EXPANSION, BUT
(II) MAY NOT BE LEASED IF THE CITY MANAGER DETERMINES THAT
GRANTING THE LEASE WOULD INTERFERE WITH , OR JEOPARDIZE, THE
SAFE OPERATION OF THE AIRPORT. (ORD . 2180-2006)
21.10 .030 QUALIFICATIONS OF APPLICANTS OR BIDDERS .
New T ext Underlined ; [DELETED TEXT BRACKETED)
Ordinance No. 2998-2018
Page 3 of 26
AN APPLICANT OR BIDDER FOR A LEASE IS QUALIFIED IF THE APPLICANT OR
BIDDER:
(A) IS AN INDIVIDUAL AT LEAST EIGHTEEN (18) YEARS OF AGE ;
(B) IS A GROUP, ASSOCIATION , OR CORPORATION WHICH IS AUTHORIZED TO
CONDUCT BUSINESS UNDER THE LAWS OF ALASKA; OR
(C) IS ACTING AS AN AGENT FOR ANOTHER AND HAS QUALIFIED BY FILING WITH
THE CITY MANAGER A PROPER POWER OF ATTORNEY OR A LETTER OF
AUTHORIZATION CREATING SUCH AGENCY. THE AGENT SHALL REPRESENT ONLY
ONE (1) PRINCIPAL TO THE EXCLUSION OF HIMSELF OR HERSELF. THE TERM
"AGENT" INCLUDES REAL ESTATE BROKERS AND AGENTS. (ORD. 2180-2006)
21.10.040 APPLICATIONS.
(A) ALL APPLICATIONS FOR LEASE OF LANDS SHALL BE SUBMITTED TO THE CITY
MANAGER ON FORMS PROVIDED BY THE CITY MANAGER, TOGETHER WITH THE
NON-REFUNDABLE FILING FEE AND ANY APPLICABLE DEPOSIT REQUIRED UNDER
KMC 21 .10 .050 . THE CITY MANAGER SHALL NOT ACCEPT AN APPLICATION THAT
THE MANAGER DETERMINES TO BE INCOMPLETE. UPON RECEIPT OF A COMPLETE
APPLICATION, FILING FEE , AND ANY APPLICABLE DEPOSIT, THE CITY MANAGER
SHALL CAUSE THE APPLICATION TO BE STAMPED WITH THE DATE AND TIME OF
ITS RECEIPT.
(B) WITH EVERY APPLICATION, THE APPLICANT SHALL SUBMIT:
(1) A DEVELOPMENT PLAN , SHOWING AND STATING:
(I) THE PURPOSE OF THE PROPOSED LEASE ,
(II) THE USE, NATURE, PROPOSED LOCATION ON THE PREMISES , AND
ESTIMATED COST OF IMPROVEMENTS TO BE CONSTRUCTED ,
(Ill) THE TYPE OF CONSTRUCTION ,
(IV) THE ANTICIPATED CONSTRUCTION BEGINNING AND COMPLETION
DATES (ORDINARILY TWO (2) YEARS), AND
(V) WHETHER THE INTENDED USE AND PROPOSED DEVELOPMENT
CONFORMS WITH THE:
(A) ZONING ORDINANCE OF THE CITY,
(B) COMPREHENSIVE PLAN OF THE CITY,
(C) LATEST FEDERAL AVIATION ADMINISTRATION-APPROVED
AIRPORT LAYOUT PLAN FOR THE AIRPORT, AND
(D) THE LATEST AIRPORT LAND USE PLAN;
(2) A BUSINESS PLAN, IF THE APPLICANT PROPOSES TO OPERATE A
BUSINESS ON THE PROPOSED PREMISES . THE PLAN MUST INCLUDE:
(I) A COMPREHENSIVE DESCRIPTION OF THE PROPOSED BUSINESS,
(II) THE NUMBER OF PEOPLE THE APPLICANT EXPECTS TO EMPLOY IN
THE BUSINESS DURING ITS FIRST FULL YEAR OF OPERATION ;
New Text Underline d; [DELETED TEXT BRACKETED]
Ordinance No . 2998-2018
Page 4 of 26
(3) A SITE PLAN, IF THE LAND THE APPLICANT DESIRES TO LEASE IS NOT A
PLATTED LOT OR TRACT. THE SITE PLAN MUST SHOW THE LOCATION AND
DIMENSIONS OF THE PROPOSED LEASE SITE, BUT NEED NOT BE PREPARED
BY AN ENGINEER OR SURVEYOR; AND
(4) A KPB TAX COMPLIANCE CERTIFICATE AND STATEMENT THAT THE
APPLICANT IS CURRENT WITH ANY CHARGES , FEES , RENTS, TAXES OR OTHER
SUMS DUE AND PAYABLE TO THE CITY.
(C) ANYTIME DURING THE PROCESSING OF A LEASE APPLICATION , THE CITY
MANAGER MAY REQUEST, AND THE APPLICANT SHALL SUPPLY, ANY
CLARIFICATION OR ADDITIONAL INFORMATION THAT THE CITY MANAGER
REASONABLY DETERMINES IS NECESSARY FOR THE CITY TO MAKE A FINAL
DECISION ON THE APPLICATION. (ORD . 2180-2006)
21 .10 .050 FILING FEE AND DEPOSIT.
(A) WHEN SUBMITTING AN APPLICATION FOR LEASE OF LAND , THE APPLICANT
SHALL PAY THE CITY THE FOLLOWING AS SET FORTH IN THE CITY 'S SCHEDULE OF
FEES ADOPTED BY THE CITY COUNCIL:
(1) PAY A NON-REFUNDABLE FILING FEE ; AND
(2) A DEPOSIT TO SHOW GOOD FAITH AND SECURE THE CITY IN PAYMENT
OF ANY COSTS, INCLUDING :
(A) AN APPRAISAL COST RECOVERY DEPOS IT, AND
(B) AN ENGINEERING , SURVEYING AND CONSUL TING COST RECOVERY
DEPOS IT.
(B) IF THE CITY DECIDES TO REJECT THE APPLICANT'S APPLICATION AND NOT
ENTER INTO A LEASE WITH THE APPLICANT THROUGH NO FAULT OF THE
APPLICANT OR FAILURE OF THE APPLICANT TO COMPLY WITH ANY REQUIREMENT
OF TH IS CHAPTER, ANY DEPOSIT MADE UNDER SUBSECTION (A)(2) OF THIS
SECTION SHALL BE RETURNED TO THE APPLICANT.
(C) IF THE CITY ENTERS INTO A LEASE WITH THE APPLICANT ANY DEPOSIT MADE
BY THE APPLICANT UNDER SUBSECTION (A) OF TH IS SECTION WILL BE APPLIED
TO THE CITY'S ENGINEERING , APPRAISAL , AND CONSUL TING COSTS RELATED TO
THE PROCESSING OF THE APPLICANT'S APPLICATION AND ENTERING INTO THE
LEASE. THE CITY WILL APPLY AN Y UNUSED BALANCE OF A DEPOSIT TO THE RENT
PAYABLE UNDER THE LEASE . IF THE CITY 'S COSTS EXCEED THE AMOUNT OF ANY
DEPOSIT, THE APPLICANT SHALL PAY THE SHORTAGE TO THE CITY AS A
CONDITION OF THE LEASE.
(D) IF THE APPLICANT FAILS TO COMPLY WI TH ANY REQUIREMENT OF THIS
CHAPTER, CAUSES INORDINATE DELAY, AS DETERMINED BY THE CITY MANAGER,
OR REFUSES TO SIGN A LEASE OFFERED TO THE APPLICANT, THE CITY MANAGER
WILL REJECT THE APPLICANT'S APPLICATION AND APPLY AN Y DEPOSIT MADE BY
THE APPLICANT UNDER SUBSECTION (A) OF TH IS SECT ION TO THE CITY 'S
APPRAISAL, ENGINEERING , AND CONSUL TING COSTS INCURRED IN CONNECTION
New Text Underlined ; [DELETE D TEXT BRA CKETED)
Ordinance No. 2998-2018
Page 5 of 26
WITH THE APPLICANT'S APPLICATION. IF THE CITY 'S COSTS FOR APPRAISAL,
ENGINEERING AND CONSUL TING COSTS EXCEED THE DEPOSITS, THE APPLICANT
WILL BE RESPONSIBLE FOR THESE COSTS . THE CITY WILL RETURN ANY UNUSED
DEPOSIT BALANCE TO THE APPLICANT. (OROS. 2180-2006, 2528-2011)
21 .10 .060 NO RIGHT OF OCCUPANCY-APPLICATION EXPIRATION.
(A) SUBMITTING AN APPLICATION FOR A LEASE DOES NOT GIVE THE APPLICANT
A RIGHT TO LEASE OR USE THE LAND REQUESTED IN THE APPLICATION.
(B) IF THE CITY DOES NOT REJECT THE APPLICATION , AN APPLICATION SHALL
EXPIRE ON THE EARLIER OF THE FOLLOWING :
(1) TWELVE (12) MONTHS AFTER THE DATE STAMPED ON THE APPLICATION
UNDER KMC 21 .10.040(A) IF THE CITY AND THE APPLICANT HAVE NOT, BY THAT
TIME, ENTERED INTO A LEASE , UNLESS THE COUNCIL FOR GOOD CAUSE
GRANTS AN EXTENSION FOR A PERIOD NOT TO EXCEED SIX (6) MONTHS ; OR
(2) THE DEADLINE DATE ESTABLISHED UNDER KMC 21 .10.140, INCLUDING
ANY EXTENSION OF TIME GRANTED THEREUNDER. (ORD. 2180-2006)
21 .10.070 APPLICATION PROCESSING PROCEDURE.
(A) INITIAL APPLICATION REVIEW BY:
(1) ASSISTANT TO THE CITY MANAGER (FOR APPLICATION COMPLETENESS;
CONFORMANCE WITH TITLE 21 );
(2) AIRPORT MANAGER (FOR CONFORMANCE WITH THE AIRPORT LAND USE
PLAN , AIRPORT LAYOUT PLAN, AIRPORT MASTER PLAN, FAA REGULATIONS,
AIP GRANT ASSURANCES, AND AIRPORT OPERATIONS);
(3) CITY PLANNER (FOR CONFORMANCE WITH THE AIRPORT LAND USE
PLAN, COMPREHENS IVE PLAN, MUNICIPAL ZONING , AND FUTURE AIRPORT
IMPROVEMENT PROJECTS); AND
(4) CITY MANAGER (FOR ADEQUACY OF THE APPLICANT'S BUSINESS PLAN
AND CONSTRUCTION FINANCING PLANS).
(B) THE ABOVE STAFF SHALL PRESENT TO THE CITY MANAGER THEIR JOINT
RECOMMENDATION FOR ACTION ON THE APPLICATION, SUCH AS REJECTION,
APPROVAL, OR APPROVAL OF A STAFF ALTERNATIVE.
(C) IF THE CI TY MANAGER CONCURS WITH THE STAFF RECOMMENDATION , THE
MANAGER WILL:
(1) ISSUE A REJECTION LETTER, STATING THE REASONS FOR REJECT ION ;
OR
(2 ) REFER THE APPLICATION TO THE AIRPORT COMMISSION AND THE
PLANNING AND ZONING COMMISSION FOR REVIEW AND COMMENT,
TOGETHER WITH THE MANAGER'S RECOMMENDATION FOR APPROVAL OR
APPROVAL OF THE STAFF ALTERNATIVE; AND
(3) INFORM THE CITY COUNCIL OF THE MANAGER 'S RECOMMENDAT ION .
New Text Underlined ; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 6 of 26
(D) IF THE CITY MANAGER REFERS THE APPLICATION TO THE COMMISSIONS,
THE CITY MANAGER WILL CONSIDER THE RECOMMENDATIONS OF THE
COMMISSIONS, AND:
(1) ISSUE A REJECTION LETTER , STATING THE REASONS FOR REJECTION;
OR
(2) APPROVE T H E APPLICATION OR STAFF ALTERNATIVE , AND DIRECT THE
STAFF TO ISSUE THE LEASE ; AND
(3) INFORM THE CITY COUNCIL OF THE MANAGER'S DECISION TO APPROVE
OR REJECT THE APPLICATION; OR
(4) OBTAIN THE CITY COUNCIL'S CONCURRENCE IF THE MANAGER'S
DECISION TO APPROVE OR REJECT THE APPLICATION IS CONTRARY TO THE
RECOMMENDATIONS OF THE COMMISSIONS.
(E) AN APPLICANT WHOSE APPLICATION IS REJECTED BY THE CITY MANAGER
MAY APPEAL TO THE CITY COUNCIL WITHIN FIFTEEN (15) DAYS FOLLOWING THE
DATE ON WHICH THE MANAGER'S REJECTION LETTER WAS HAND DELIVERED OR
PLACED IN THE U.S . MAIL.
(F) IF ANOTHER COMPLETE AND OTHERWISE APPROVABLE APPLICATION FOR
LEASE OF THE SAME PROPERTY IS SUBMITTED BY A DIFFERENT APPLICANT
BEFORE THE CITY MANAGER ENTERS INTO A LEASE WITH THE FIRST APPLICANT,
THE CITY MANAGER WILL FORWARD THE APPLICATIONS, THE MANAGER'S
RECOMMENDATION AND THE COMMISSIONS ' RECOMMENDATIONS TO THE CITY
COUNCIL FOR APPROVAL OF THE APPLICATION ANTICIPATED TO BEST SERVE THE
INTERESTS OF THE CITY. THE COUNCIL MAY APPROVE ONE OF THE APPLICATIONS
OR DIRECT THE CITY MANAGER TO AWARD A LEASE OF THE PROPERTY BY
SEALED BID.
(G) GROUNDS FOR THE CITY MANAGER TO REJECT AN APPLICATION INCLUDE:
(1) THE APPLICANT'S FAILURE TO PROVIDE ANY CLARIFICATION OR
INFORMATION REQUIRED UNDER THIS CHAPTER;
(2) THE APPLICANT'S PROPOSED DEVELOPMENT OR USE OF THE LAND IS
INCONSISTENT WITH :
(A) THE ZONING ORDINANCE OF THE C ITY,
(B) THE COMPREHENSIVE PLAN OF THE CITY,
(C) THE LATEST FEDERAL AVIATION ADMINISTRATION-APPROVED
AIRPORT LAYOUT PLAN FOR THE AIRPORT,
(D ) ANY OBLIGATION OF T HE CITY UNDER THE AIRPORT SPONSOR
GRANT ASSURANCES TO THE FEDERAL AVIATION ADMINISTRATION ,
(E) THE LATEST AIRPORT LAND USE PLAN , OR
(F) A REGULATION OF THE FEDERAL AVIATION ADMINISTRATION
APPLICABLE TO THE AIRPORT;
New Text U nd erlined ; [DELETED TEXT BRACKET ED]
Ordinance No. 2998 -2018
Page 7 of 26
(3) THE APPLICANT'S PROPOSED DEVELOPMENT OR USE OF THE LAND
WOULD VIOLATE A FEDERAL , STATE, OR LOCAL LAW, INCLUDING AN
ORDINANCE OR REGULATION OF THE CITY;
(4) THE APPLICANT'S FAILURE TO REASONABLY DEMONSTRATE THE
FINANCIAL VIABILITY OF THE APPLICANT'S PROPOSED DEVELOPMENT
OR OF THE BUSINESS THE APPLICANT PROPOSES TO OPERA TE ;
(5) THE APPLICANT IS IN DEFAULT OF AN Y CHARGES , FEES , RENTS , TAXES ,
OR OTHER SUMS DUE AND PAYABLE TO THE C ITY;
(6 ) THE APPLICANT IS IN DEFAULT OF A REQUIREMENT OF ANY LEASE OR
CONTRACT WITH THE CITY;
(7 ) THE APPLICATION IS REJECTED BY THE C ITY COUNCIL IN FAVOR OF
ANOTHER APPLICATION FOR THE SAME LAND UNDER SUBSECTION (F) OF
THIS SECTION ;
(8) THE CITY COUNCIL DECIDES , UNDER SUBSECTION (F) OF THIS SECTION ,
TO REJECT ALL APPLICATIONS AND AWARD A LEASE OF THE LAND BY SEALED
BID; AND
(9) THE CITY MANAGER OR THE CITY COUNCIL DETERMINES THAT
APPROVAL OF THE APPLICATION IS NOT IN THE BEST INTEREST OF THE CITY.
(H) THE CITY COUNCIL MAY WAIVE PROVISIONS OF THIS CHAPTER TO LEASE
PROPERTY OR INTERESTS IN REAL PROPERTY WITH THE UN ITED STATES, THE
STATE OR AN ALASKA POLITICAL SUBDIVISION WHEN IN T H E JUDGMENT OF THE
COUNCIL IT IS ADVANTAGEOUS TO THE MUNIC IPALITY TO DO SO.
(ORD . 2180-2006)
21.10 .080 LEASE AMENDMENT OR RENEWAL.
(1) AN APPLICATION SUBMITTED BY AN EX ISTING TENANT FOR AN AMENDMENT ,
TERM EXTENSION , OR RENEWAL OF THE TENANT'S LEASE SHALL BE SUBJECT TO
THE REQUIREMENTS AND PROCEDURES OF KMC 21 .10.010 THROUGH 21.10.070,
EXCEPT THAT:
(A) KMC 21 .10.040(B)(1 ), (2) AND (3 ) SHALL NOT APPLY TO AN APPLICATION
THAT DOES NOT INCLUDE A PROPOSAL TO CONSTRUCT NEW IMPROVEMENTS
ON THE PREMISES;
(B) KMC 21.10.040(B)(3) SHALL NOT APPLY TO AN APPLICATION THAT DOES
NOT INCLUDE A PROPOSAL TO ADD , DELETE, OR ALTER A BUSINESS
AUTHORIZED UNDER THE LEASE ;
(C) THE APPRAISAL DEPOSIT UNDER KMC 21 .10 .050(A)(2)(1) SHALL NOT BE
REQUIRED FOR AN APPLICATION . FOR A LEASE AMENDMENT THAT, IF
APPROVED , WILL NOT ALTER THE SIZE OR VALUE OF THE PREMISES; AND
(D) THE DEPOSITS UNDER KMC 21 .10 .050(A)(2)(1 ) AND (II) SHAL L NOT BE
REQUIRED FOR AN APPLICATION FOR A LEASE AMENDMENT THAT, IF
APPROVED, W ILL MAKE ONLY ADMINISTRATIVE CHANGES IN THE LEASE AND
New Text Und erli ned ; [DELETED TEXT BRAC KETED]
Ordinance No . 2998-2018
Page 8 of 26
WILL NOT ALTER THE AUTHORIZED USE, SIZE, OR VALUE OF THE PREMISES
OR IF THE CITY MANAGER DETERMINES THE CITY WILL NOT INCUR ANY
ENGINEERING, SURVEYING OR CONSUL TING COSTS .
(2) NOTWITHSTANDING SUBSECTION (1) OF THIS SECTION, THE COUNCIL MAY BY
RESOLUTION GRANT A LESSEE THE CONTRACTUAL RIGHT TO A LEASE RENEWAL
UPON SUCH TERMS AND CONDITIONS AS IT DETERMINES ARE IN THE BEST
INTERESTS OF THE CITY. (OROS . 2180-2006, 2227-2007)
21.10 .090 LENGTH OF LEASE TERM .
(A) UNLESS THE CITY DETERMINES A SHORTER LEASE TERM IS IN THE BEST
INTEREST OF THE CITY, THE LENGTH OF TERM FOR A LEASE GRANTED FOR LAND
WITHIN THE AIRPORT RESERVE WILL BE BASED ON THE AMOUNT OF INVESTMENT
THE APPLICANT PROPOSES TO MAKE IN THE CONSTRUCTION OF NEW
PERMANENT IMPROVEMENTS ON THE PREMISES DURING THE FIRST TWENTY-
FOUR (24) MONTHS FOLLOWING THE BEGINNING DATE OF THE LEASE OR LEASE
EXTENSION.
(B) UNLESS THE CITY DETERMINES A SHORTER LEASE TERM IS IN THE BEST
INTEREST OF THE CITY, THE LENGTH OF TERM FOR A LEASE RENEWAL SHALL BE
BASED ON A CITY-APPROVED APPRAISAL OF THE VALUE OF THE PERMANENT
IMPROVEMENTS ON THE PROPERTY AS SET FORTH IN THE TABLE IN SUBSECTION
(0)(1) OF THIS SECTION. THE APPRAISAL SHALL BE PERFORMED BY AN
INDEPENDENT APPRAISER CERTIFIED UNDER ALASKA STATUTE 8.87 WITH
EXPER IENCE APPRAISING AIRPORT IMPROVEMENTS. THE APPRAISAL SHALL BE
PAID FOR BY THE LESSEE.
(C) IF THE APPLICANT PROPOSES TO MAKE LESS THAN ONE HUNDRED
THOUSAND DOLLARS ($100,000.00) IN NEW PERMANENT IMPROVEMENTS ON THE
PREMISES , THE MAXIMUM TERM OF A NEW LEASE SHALL BE FIVE (5) YEARS .
(D) IF THE APPLICANT PROPOSES TO INVEST ONE HUNDRED THOUSAND
DOLLARS ($100,000.00) OR MORE IN NEW PERMANENT IMPROVEMENTS ON THE
PREMISES:
(1) THE MAXIMUM TERM OF A NEW LEASE OR A RENEWAL OF AN EXPIRING
LEASE SHALL BE DETERMINED ACCORDING TO THE FOLLOWING TABLE :
APPLICANT'S INVESTMENTNALUE MAXIMUM TERM OF
(IN U.S. DOLLARS) IS AT LEAST YEARS
LESS THAN $100,000 5
$100 ,000-$199,000 15
$200, 000-$299,000 20
$300' 000-$399,000 25
$400,000-$500,000 30
MORE THAN $500,000 35
New Text Underlined; [D ELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 9 of 26
(2) THE MAXIMUM TERM EXTENSION FOR AN EXISTING LEASE SHALL BE ONE
(1) YEAR FOR EACH TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) OF
ADDITIONAL INVESTMENT, PROVIDED THAT THE TOTAL OF THE REMA INING
LEASE TERM AND THE EXTENSION SHALL NOT EXCEED THIRTY-FIVE (35)
YEARS .
(3) A BONA FIDE THIRD PARTY PURCHASER OF AIRPORT IMPROVEMENTS
MAY GET AN EXTENSION FOR AN EXISTING LEASE ACQUIRED WITH
IMPROVEMENTS BASED ON A CITY-APPROVED APPRAISAL OF THE
IMPROVEMENTS PURCHASED . UN LESS THE CITY DETERMINES A SHORTER
LEASE TERM IS IN THE BEST INTEREST OF THE CITY, THE EXTENSION S HALL
BE BASED ON THE TABLE IN SUBSECTION (D)(1) OF THIS SECTION PROV IDED
NO EXTENSION SHALL EXTEND A LEASE TERM PAST THIRTY-FIVE (35) YEARS .
THE APPRAISAL SHALL BE PERFORMED BY AN INDEPENDENT APPRAISER
CERTIFIED UNDER. ALASKA STATUTE 8.87 WITH EXPERIENCE APPRAISING
AIRPORT IMPROVEMENTS . THE APPRAISAL SHALL BE PAID FOR BY THE
LESSEE.
(E) IN THE LEASE GRANTED TO THE APPLICANT, THE CITY MANAGER W ILL
INCLUDE A PROVISION REQUIRING THE APPLICANT TO SUBSTANTIALLY
COMPLETE THE PROPOSED PERMANENT IMPROVEMENTS WITHIN A REASONABLE
PERIOD OF TIME , CONSIDERING THE COST AND NATURE OF THE IMPROVEMENTS.
PROVIDED HOWEVER, THAT THE TIME ALLOWED SHALL NOT ORDINARILY EXCEED
TWENTY-FOUR (24) MONTHS AFTER THE EFFECTIVE DATE OF THE LEASE.
(F ) IN THE LEASE EXTENSION GRANTED TO THE APPLICANT , THE CITY MANAGER
WILL INCLUDE A PROVISION REQUIRING THE APPLICANT TO COMPLETE THE
ADDITIONAL PROPOSED PERMANENT IMPROVEMENTS WITHIN A REASONABLE
TIME PERIOD, CONSIDERING THE COST AND NATURE OF THE IMPROVEMENTS
PROVIDED THAT THE TIME PERIOD SHALL NOT ORDINARILY EXCEED TWENTY-
FOUR (24) MONTHS AFTER THE EFFECTIVE DATE OF THE LEASE EXTENSION .
(G) THE CITY MANAGER WILL INCLUDE A PROVISION IN A LEASE OR LEASE
EXTENSION REQUIRING THE LESSEE TO PROVIDE A PERFORMANCE BOND,
DEPOSIT, PERSONAL GUARANTEE, OR OTHER SECURITY IF THE MANAGER
DETERMINES SECURITY IS NECESSARY OR PRUDENT TO ENSURE THE
APPLICANT'S COMPLETION OF THE PERMANENT IMPROVEMENTS WITHIN THE
TIME PERIOD SET UNDER SUBSECTIONS (E ) OR (F) OF THIS SECTION . THE CITY
MANAGER WILL DETERMINE THE FORM AND AMOUNT OF THE SECURITY
ACCORDING TO THE BEST INTEREST OF THE CITY, CONSIDERING THE NATURE
AND SCOPE OF THE PROPOSED IMPROVEME NTS AND THE FINANCIAL
RESPONSIBILITY OF THE APPLICANT.
(H) THE APPLICANT SHALL, WITHIN THIRTY (30) DAYS AFTER COMPLETION OF
THE PERMANENT IMPROVEMENTS , SUBMIT TO THE CITY MANAGER WRITTEN
DOCUMENTATION THAT THE IMPROVEMENTS HAVE BEEN COMPLETED AS
REQUIRED UNDER SUBSECTION (E) OR (F ) OF T HI S SECTION .
New Text Underlined; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 10 of 26
(I) IF THE APPLICANT SHOWS GOOD CAUSE TO THE CITY MANAGER, AND THE
MANAGER DETERMINES THE ACTION IS NOT INCONSISTENT WITH THE CITY'S BEST
INTEREST, THE MANAGER MAY GRANT AN EXTENSION THAT IS SUFFICIENT TO
ALLOW FOR THE COMPLETION OF THE PERMANENT IMPROVEMENTS OR FOR
SUBMISSION OF DOCUMENTATION THAT THE PERMANENT IMPROVEMENTS HAVE
BEEN COMPLETED UNDER THIS SECTION . NO EXTENSION OR COMBINATION OF
EXTENSIONS GRANTED WILL EXCEED TWELVE (12) MONTHS.
(J) IF, WITHIN THE TIME REQUIRED UNDER SUBSECTION (E) OR (F) OF THIS
SECTION, INCLUDING ANY EXTENSION GRANTED UNDER SUBSECTION (I) OF THIS
SECTION, THE APPLICANT FAILS TO COMPLETE THE REQUIRED PERMANENT
IMPROVEMENTS, THE CITY MANAGER WILL EXECUTE THE FORFEITURE OF THE
PERFORMANCE BOND, DEPOSIT, PERSONAL GUARANTEE, OR OTHER SECURITY
POSTED BY THE APPLICANT UNDER SUBSECTION (G) OF THIS SECTION TO THE
EXTENT NECESSARY TO REIMBURSE THE CITY FOR ALL COSTS AND DAMAGES,
INCLUDING ADMINISTRATIVE AND LEGAL COSTS, ARISING FROM THE APPLICANT'S
FAILURE TO COMPLETE THE REQUIRED IMPROVEMENTS, AND INITIATE
CANCELLATION OF THE LEASE OR REDUCE THE TERM OF THE LEASE TO A PERIOD
CONSISTENT WITH THE PORTION OF THE IMPROVEMENTS SUBSTANTIALLY
COMPLETED IN A TIMELY MANNER ACCORDING TO THE BEST INTERESTS OF THE
CITY.
(K) THE CITY MANAGER SHALL REVIEW RATES, CHARGES AND THE
INVESTMENTNALUE IN THE CHAPTER EVERY FIVE (5) YEARS TO SEE IF
ADJUSTMENTS SHOULD BE MADE.
(L) WHEN USED IN THIS SECTION , THE FOLLOWING TERMS SHALL HAVE THE
MEANINGS GIVEN:
(1) "EXPIRING LEASE" MEANS A LEASE WITH LESS THAN ONE (1) YEAR OF
TERM REMAINING;
(2) "EXISTING LEASE" MEANS A LEASE WITH AT LEAST ONE (1) YEAR OF TERM
REMAINING;
(3) "PERMANENT IMPROVEMENT" MEANS A FIXED ADDITION OR CHANGE TO
LAND THAT IS NOT TEMPORARY OR PORTABLE;
(I) "PERMANENT IMPROVEMENT" INCLUDES;
(A) A BUILDING, BUILDING ADDITION, RETAINING WALL, STORAGE
TANK, EARTHWORK, FILL MATERIAL, GRAVEL, AND PAVEMENT, AND
(B) REMEDIATION OF CONTAMINATION FOR WHICH THE APPLICANT
IS NOT RESPONSIBLE;
(II) "PERMANENT IMPROVEMENT" EXCLUDES ITEMS OF ORDINARY
MAINTENANCE, SUCH AS GLASS REPLACEMENT, PAINTING, ROOF
REPAIRS, DOOR REPAIRS, PLUMBING REPAIRS , FLOOR COVERING
REPLACEMENT, OR PAVEMENT PATCHING. (ORD. 2180-2006)
New Text Underlined; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 11of26
21.10.100 RENTAL RATE DETERMINATION.
(A) BEGINNING IN 2007 AND AT INTERVALS OF APPROXIMATELY FIVE (5) YEARS
THEREAFTER, THE CITY MANAGER SHALL RETAIN THE SERVICES OF AN
INDEPENDENT, QUALIFIED REAL ESTATE APPRAISER CERTIFIED UNDER ALASKA
STATUTE 8.87 TO DETERMINE A ZONE-BASED SQUARE FOOT LEASE RATE FOR ALL
LAND WITHIN THE AIRPORT RESERVE THAT IS UNDER LEASE OR AVAILABLE FOR
LEASE BASED ON THE FAIR MARKET VALUE OF THE PROPERTY AND THE
APPROPRIATE MARKET LEASE RATE FOR PROPERTY WITHIN THE AIRPORT
RESERVE. LEASE APPLICATIONS FILED AFTER THE EFFECTIVE DATE OF THIS
CHAPTER BUT PRIOR TO COMPLETION OF THE INITIAL LEASE RATE
DETERMINATION SHALL HAVE A RENTAL RATE OF EIGHT PERCENT (8%) OF FAIR
MARKET VALUE UNTIL THE FIRST JUNE 30 AFTER THE ZONE-BASED SQUARE FOOT
LEASE RATE IS ESTABLISHED UNDER THIS SUBSECTION, AFTER WHICH THE LEASE
RATE SHALL BE AS ESTABLISHED IN THE ZONE-BASE SQUARE FOOT METHOD
DESCRIBED ABOVE.
(B) FOLLOWING THE DATE ON WHICH THE CITY MANAGER ACCEPTS THE
DETERMINATIONS MADE UNDER SUBSECTION (A) OF THIS SECTION, THE
MANAGER SHALL ESTABLISH RENTAL AMOUNTS FOR LEASES AS FOLLOWS:
(1) FOR EACH NEW LEASE GRANTED BY THE CITY UNDER THIS CHAPTER,
THE RENTAL SHALL BE AS DETERMINED UNDER SUBSECTION(A) OF THIS
SECTION; AND
(2) FOR LEASES IN EXISTENCE PRIOR TO THE EFFECTIVE DATE OF THIS
CHAPTER , THE LEASE RATE SHALL BE DETERMINED AS PROVIDED IN THE
LEASE.
(C) UNDER THIS SECTION, WHEN DETERMINING THE FAIR MARKET VALUE OF THE
PREMISES OF AN EXISTING LEASE, AN APPRAISER SHALL APPRAISE THE
PROPERTY:
(1) IN ITS CONDITION AS OF THE INCEPTION OF THE LEASE ;
(2) PLUS ANY IMPROVEMENTS OR AMENITIES SUBSEQUENTLY PROVIDED BY
THE CITY; BUT
(3) EXCLUDING ANY IMPROVEMENTS OR AMENITIES PROVIDED BY THE CITY
UNDER KMC 21 .10 .110, IF LESSEE HAS REIMBURSED THE CITY, OR ENTERED
INTO AN AGREEMENT TO REIMBURSE THE CITY, FOR THE COST OF THE
IMPROVEMENTS OR AMENITIES . (ORD . 2180-2006)
21 .10.110 REIMBURSEMENT FOR CITY-CONSTRUCTED IMPROVEMENTS .
(A) THE CITY MANAGER MAY INCLUDE IN A LEASE A REQUIREMENT FOR THE
LESSEE TO REIMBURSE THE CITY FOR THE CITY'S COST OF :
(1) LAND CLEARING, GRAVEL FILL, UTILITY EXTENSIONS AND OTHER
IMPROVEMENTS OR AMENITIES ON OR IN DIRECT CONNECTION WITH THE
PREMISES , CONSTRUCTED BY THE CITY PRIOR TO THE EFFECTIVE DATE OF
THE LEASE ; OR
New Text Underli ned; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 12 of 26
(2) LAND CLEARING, GRAVEL FILL, UTILITY EXTENSIONS AND OTHER
IMPROVEMENTS OR AMENITIES ON OR IN DIRECT CONNECTION WITH THE
PREMISES, WHICH THE CITY AGREES TO CONSTRUCT AS A CONDITION OF
THE LEASE, SUBJECT TO CITY COUNCIL APPROVAL.
(B) THE LESSEE SHALL REIMBURSE THE CITY FOR THE CITY'S COST OF
CONSTRUCTING THE IMPROVEMENTS IN TEN (10) EQUAL ANNUAL PAYMENTS,
PLUS INTEREST AT EIGHT PERCENT (8%) PER YEAR ON THE UNPAID BALANCE OR
UNDER SUCH TERMS AND CONDITIONS AS THE COUNCIL MAY SET BY
RESOLUTION. IF THE LEASE IS FOR LESS THAN TEN (10) YEARS, THE RE-PAYMENT
SCHEDULE MAY NOT BE LONGER THAN THE TERM OF THE LEASE. THE LESSEE
MAY PAY THE ENTIRE REMAINING BALANCE TO THE CITY AT ANY TIME DURING THE
TERM OF THE LEASE. (OROS. 2180-2006, 2355-2008)
21.10.120 LEASE UTILIZATION.
LEASED LANDS SHALL BE UTILIZED FOR PURPOSES WITHIN THE SCOPE OF THE
APPLICATION, THE TERMS OF THE LEASE AND IN CONFORMITY WITH THE ORDINANCES
OF THE CITY, AND IN SUBSTANTIAL CONFORMITY WITH THE COMPREHENSIVE PLAN
AND AIRPORT MASTER PLAN. UTILIZATION OR DEVELOPMENT FOR OTHER THAN THE
ALLOWED USES SHALL CONSTITUTE A VIOLATION OF THE LEASE AND SUBJECT THE
LEASE TO CANCELLATION AT ANY TIME. FAILURE TO SUBSTANTIALLY COMPLETE THE
DEVELOPMENT PLAN FOR THE LAND SHALL CONSTITUTE GROUNDS FOR
CANCELLATION. (ORD . 2180-2006)
21.10.130 BIDDING PROCEDURE.
WITH THE APPROVAL OF THE CITY COUNCIL, THE CITY MANAGER MAY DESIGNATE
A SPECIFIC LOT OR LOTS TO BE LEASED THROUGH COMPETITIVE SEALED BID. IN A
SEALED BID OFFERING , THE CITY MANAGER SHALL AWARD THE LEASE TO THE
QUALIFIED BIDDER THAT OFFERS THE HIGHEST ONE (1) TIME PREMIUM PAYMENT, IN
ADDITION TO THE LEASE RENT ESTABLISHED UNDER THIS CHAPTER. PROVIDED
HOWEVER, THAT HIGH BIDDER AND THE BIDDER'S LEASE PROPOSAL SHALL BE
SUBJECT TO ALL PROVISIONS OF LEASE APPLICATION REVIEW AND APPROVAL UNDER
THIS CHAPTER. (ORD. 2180-2006)
21.10.140 LEASE EXECUTION.
WHEN ISSUING A LEASE TO AN APPLICANT, THE CITY MANAGER SHALL HAND
DELIVER OR MAIL THE DOCUMENT TO THE APPLICANT. THE APPLICANT SHALL HAVE
THIRTY (30) DAYS FROM THE DATE ON WHICH THE LEASE IS HAND DELIVERED TO THE
APPLICANT OR DEPOSITED IN THE U.S. MAIL WITHIN WHICH TO EXECUTE AND RETURN
THE LEASE TO THE CITY MANAGER. IF THE APPLICANT SHOWS GOOD CAUSE TO THE
CITY MANAGER, AND THE MANAGER DETERMINES THE ACTION IS NOT INCONSISTENT
WITH THE CITY'S BEST INTEREST, THE MANAGER WILL GRANT AN EXTENSION NOT
EXCEEDING THIRTY (30) DAYS FOR THE APPLICANT TO EXECUTE AND RETURN THE
LEASE. UPON THE FAILURE OF THE APPLICANT TO TIMELY EXECUTE AND RETURN THE
New Text Underlined; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 13 of 26
LEASE AGREEMENT, THE CITY MANAGER SHALL WITHDRAW THE OFFER OF THE LEASE
IN WRITING . (ORD. 2180-2006)
21.10.150 FORM OF LEASE .
(A) WHEN LEASING LAND UNDER THIS CHAPTER, THE CITY MANAGER SHALL USE
A STANDARD LEASE FORM THAT IS :
( 1) DRAFTED TO:
(I) PROVIDE A REASONABLE BASIS FOR THE LESSEE'S USE OF THE
PREMISES,
(II) FOSTER THE SAFE, EFFECTIVE, AND EFFICIENT OPERATION OF THE
AIRPORT,
(Ill) CONFORM WITH THE APPLICABLE REQUIREMENTS OF THE KMC,
INCLUDING THIS CHAPTER, ALASKA STATUTES, FEDERAL AVIATION
ADMINISTRATION REGULATIONS, AND OTHER APPLICABLE FEDERAL
LAW , AND
(IV) PROVIDE FOR THE BEST INTEREST OF THE CITY.
(2) APPROVED AS TO FORM BY THE CITY ATTORNEY; AND
(3) ADOPTED BY RESOLUTION OF THE CITY COUNCIL.
(B) THE CITY MANAGER MAY ENTER INTO A LAND LEASE THAT DEVIATES FROM
THE STANDARD FORM ADOPTED UNDER SUBSECTION (A) OF THIS SECTION, IF :
(1) THE MANAGER BELIEVES THE ACTION IS IN THE BEST INTEREST OF THE
CITY;
(2) THE LEASE IS APPROVED AS TO FORM BY THE CITY ATTORNEY; AND
(3) THE LEASE IS APPROVED BY RESOLUTION OF THE CITY COUNCIL.
(ORD . 2 180-2006)
21.10.160 RE-EVALUATION OF RENT.
(A) BEGINNING IN 2007 AND EVERY FIVE (5) YEARS THEREAFTER, THE CITY
MANAGER SHALL INCREASE OR DECREASE THE RENT CHARGED IN THE LEASE TO
THE AMOUNT DETERMINED UNDER KMC 21 .10.100 .
(B) THE CITY MANAGER SHALL CHANGE THE RENT IN A LEASE BY GIVING THE
LESSEE WRITTEN NOTICE AT LEAST THIRTY (30) DAYS IN ADVANCE OF THE
EFFECTIVE DATE OF THE CHANGE.
(C) THE "FAIR MARKET VALUE " OF THE PREMISES SHALL BE EQUAL TO THE THEN-
FAIR MARKET RATE FOR SIMILAR COMMERC IAL PROPERTY IN THE CITY OF KENAI ,
ALASKA (THE "RELEVANT AREA"). CITY SHALL GIVE NOTICE TO LESSEE OF CITY'S
ESTIMATION OF THE FAIR MARKET VALUE NOT LATER THAN THIRTY (30 ) DAYS
PRIOR TO THE EXPIRATION OF THE THEN-APPLICABLE FIVE (5) YEAR PERIOD , AS
EVIDENCED AND SUPPORTED BY THE ZONE-BASE SQUARE FOOT LEASE RATE
APPRAISAL DONE UNDER KMC 21 .10.1 OO(A). IF LESSEE DISAGREES WITH SUCH
New Text Underlined; [DELETED TEXT BRACKETED]
Ordinance No . 2998-2018
Page 14 of 26
ESTIMATE, IT SHALL ADVISE THE CITY IN WRITING THEREOF WITHIN NINETY (90)
DAYS OF LESSEE 'S RECEIPT OF SUCH ESTIMATE, AS EVIDENCED AND SUPPORTED
BY THE WRITTEN OPIN ION OF A REAL ESTATE APPRAISER CERTIFIED UNDER
ALASKA STATUTE 8 .87 WITH EXPERIENCE IN APPRAISING AIRPORT PROPERTY
(SELECTED AND PAID FOR BY LESSEE) FAMILIAR WITH THE RELEVANT AREA (THE
"SECOND APPRAISER"). THE PARTIES SHALL PROMPTLY MEET TO ATTEMPT TO
RESOLVE THEIR DIFFERENCES BETWEEN THE FIRST APPRAISER AND THE
SECOND APPRAISER CONCERNING THE FAIR MARKET VALUE OF THE PREMISES.
IF CITY AND LESSEE CANNOT AGREE UPON SUCH VALUE THEN, WITH ALL
DELIBERATE SPEED, THEY SHALL DIRECT THE FIRST APPRAISER AND THE
SECOND APPRAISER TO EXPEDITIOUSLY AND MUTUALLY SELECT A THIRD
QUALIFIED REAL ESTATE APPRAISER CERTIFIED UNDER ALASKA STATUTE 8.87
WITH EXPERIENCE IN APPRAISING AIRPORT PROPERTY (SELECTED AND PAID FOR
JOINTLY BY THE PARTIES) FAMILIAR WITH THE RELEVANT AREA (THE "THIRD
APPRAISER"). WITHIN THIRTY (30) DAYS AFTER THE THIRD APPRAISER HAS BEEN
APPOINTED, THE THIRD APPRAISER SHALL DECIDE WHICH OF THE TWO (2)
RESPECTIVE APPRAISALS FROM THE FIRST APPRAISER AND THE SECOND
APPRAISER MOST CLOSELY REFLECTS THE FAIR MARKET VALUE OF THE
PREMISES. THE FAIR MARKET VALUE OF THE PREMISES SHALL IRREBUTTABL Y BE
PRESUMED TO BE THE VALUE CONTAINED IN SUCH APPRAISAL SELECTED BY THE
THIRD APPRAISER, AND THE RENT SHALL BE REDETERMINED BASED ON SUCH
VALUE. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, RENT SHALL
CONTINUE TO BE PAID AT THE THEN-APPLICABLE RATE UNTIL ANY SUCH NEW
RENTAL RATE IS ESTABLISHED, AND LESSEE AND CITY SHALL PROMPTLY PAY OR
REFUND, AS THE CASE MAY BE , ANY VARIANCE IN THE RENT, WITHOUT INTEREST
THEREON ACCRUING TO THE EXTENT TO BE PAID/REFUNDED IN A TIMELY
FASHION. (ORD. 2180 -2006)
21 .10.170 ANNUAL MINIMUM RENTAL.
(A) ANNUAL MINIMUM RENTALS SHALL BE COMPUTED FROM THE APPROVED
APPRAISED MARKET VALUE UTILIZING THE METHOD AS DESCRIBED IN KMC
21 .10.100, 21 .10 .110, AND 21 .10 .160.
(B) UPON EXECUTION OF THE LEASE, THE LANDS BECOME TAXABLE TO THE
EXTENT OF ITS LEASEHOLD INTEREST AND LESSEE SHALL PAY ALL REAL
PROPERTY TAXES LEVIED UPON SUCH LEASEHOLD INTEREST IN THESE LANDS,
AND SHALL PAY AN Y SPECIAL ASSESSMENTS AND TAXES AS IF HE OR SHE WERE
THE OWNER OF THE LAND .
(C ) RENT SHALL BE PAID ANNUALLY IN ADVANCE. THE PAYMENTS SHALL BE
PRORATED TO CONFORM TO THE CITY OF KENAl 'S FISCAL YEAR BEGINNING JULY
1 AND ENDING JUNE 30 . IF THE EQUIVALENT MONTHLY PAYMENT EXCEEDS TWO
HUNDRED DOLLARS ($200 .00), THEN THE LESSEE SHALL HAVE THE OPTION OF
MAK ING PAYMENTS ON A MONTHLY BASIS.
(D) LESSEE SHALL BE RESPONSIBLE FOR ALL SALES TAXES APPLICABLE TO ITS
OPERATIONS OR DUE ON PAYMENTS UNDER THE LEASE. (ORD. 2180 -2006)
New Text Underlined; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 15 of 26
21 .10.180 USE PERMITS.
SUBJECT TO THE APPROVAL BY THE CITY COUNCIL OF THE TERMS AND RENT, THE
CITY MANAGER MAY, WITHOUT SUBJECTING THE PROPERTY TO APPRAISAL OR
COMPETITIVE PROCESS, GRANT A PERMIT FOR THE TEMPORARY USE OF REAL
PROPERTY OWNED BY THE CITY FOR A PERIOD NOT TO EXCEED ONE (1) YEAR AND
FOR ANY PURPOSE NOT IN CONFLICT WITH THE ZONING OF THE LAND. (ORD. 2180-
2006)
21.10 .190 ACQUISITION OF REAL PROPERTY.
(A) THE CITY, BY AUTHORIZATION OF THE CITY COUNCIL, EXPRESSED IN A
RESOLUTION FOR SUCH PURPOSE, MAY PURCHASE, ACQUIRE AN INTEREST IN OR
LEASE REAL PROPERTY NEEDED FOR A PUBLIC USE WITHIN THE AIRPORT
RESERVE ON SUCH TERMS AND CONDITIONS AS THE COUNCIL SHALL DETERMINE,
BUT NO PURCHASE SHALL BE MADE UNTIL A QUALIFIED APPRAISER HAS
APPRAISED THE PROPERTY AND GIVEN THE COUNCIL AN INDEPENDENT OPINION
AS TO THE FULL AND TRUE VALUE THEREOF;
(B) BECAUSE OF THE UNIQUE VALUE OF REAL PROPERTY, THE CITY NEED NOT
ACQUIRE OR LEASE REAL PROPERTY BY COMPETITIVE BIDDING. (ORD . 2180-2006)]
Chapter 21.10 LEASING AND ACQUISITION OF AIRPORT RESERVE LANDS
21.10 .010 Lease of Airport Reserve Land.
(a) This chapter applies to City-owned land within the Airport Reserve .
(b) The provisions of this chapter shall not alter or amend the terms . obligations or rights
granted under leases existing prior to the effective date of this chapter.
21.10.015 Definitions.
When used in this Chapter. the following terms shall have the meaning given below:
(a) "Aeronautical Use" means any use within the Airport Reserve that involves. makes
possible. or is required for the operation of aircraft or that contributes to or is required for
the safety of such operations. It includes, but is not limited to: Air taxi and charter
operations; Scheduled or nonscheduled air carrier services; Pilot training ; Aircraft rental
and sightseeing ; Aerial photography; Crop dusting; Aerial advertising and surveying;
Aircraft sales and serv ice; Aircraft storage ; Sale of aviation petroleum products; Repair
and maintenance of aircraft; Sale of aircraft parts; Parachute activities; Ultralight
activities; Sport pi lot activities; and Military flight operations.
(b) "Airport Market Analysis " means an analysis that is conducted by a qualified general real
estate appraise r and determines the gross changes that have occurred in the local market
since the previous airport-wide appraisal as well as conducting a Lease Rate Analysis .
(c) "Airport Reserve" means the City-owned land reserved from sale and designated under
KMC 21.05.010 and 21 .05.020 .
(d) "Annual Rent" means an amount paid to the City annually according to the terms of the
lease.
( e ) "City" means the City of Kenai, its elected officials , officers. employees or agents.
(f) "Consumer Price Index (CPI)" means the CPI for all Urban Consumers (CPl-U) for
Anchorage , Alaska
New Text Underlined; [DELETED TEXT BRACKETED)
Ordinance No. 2998-2018
Page 16 of 26
(g) "Existing Lease" means a lease with at least one (1) year of term remaining .
(h) "Expiring Lease " means a lease with less than one (1) year of term remaining .
(i) "Fair Market Value" means the most probable price which a property should bring in a
competitive and open market as determined by a qualified independent appraiser. or the
value as determined by the latest appraisal adjusted by the change in Consumer Price
Index from the date of the latest appraisal.
U) "Lease Extension " means extending the term of an existing lease.
(k) "Lease Rate Analysis" means an analysis of data collected from other land leases to
determine whether the City's lease rate percent reflects the market.
(I) "Lease Rate Percent" means a percentage when applied to the fair market value of land
will establish a rate of rent commensurate with rental rates prevalent in the local area as
determined by a qualified real estate appraiser.
(m)"Lease Renewal " means a new lease of property currently under lease to an e xisting
lessee or a purchaser.
(n) "Non-Aeronautical Use" means any use of airport land that is not an aeronautical use .
(o) "Permanent improvement" means a fixed addition or change to land that is not tempo rary
or portable;
(1) "Permanent improvement" includes a building , building addition. retaining wall.
storage tank. earthwork. fill material, gravel, and pavement. and remediation of
contamination for which the applicant is not responsible .
(2) "Permanent improvement" excludes items of ordinary maintenance . such as glass
replacement. painting , roof repairs , door repairs. plumbing repairs, floor covering
replacement. or pavement patching.
(p) "Professional Estimate of the remaining useful life of the principal improvement" means
an estimate of the number of remaining years that the principal improvement will be able
to function in accordance with its intended purpose prepared by a Qualified Real Estate
Appraiser, engineer, or architect licensed in Alaska .
(q ) "Qualified Independent Appraiser'' means a general real estate appraiser certified by the
State of Alaska under AS 08.87, with experience in appra is ing airport property.
(r) "Site Development Materials" means materials used for preparing a lease site for building
construction or to provide a firm surface on which to operate a vehicle or aircraft; "Site
Development Materials" include geotextile, fill. gravel, paving, utilities and pavement
reinforcement materials .
(s) "Site Preparation Work" means work on the leased premises to include clearing and
grubbing, unclassified excavation. classified fill and back fill. a crushed aggregate base
course and utility extensions .
21 .10.020 Lands Available for Leasing.
City-owned land within the Airport Reserve may be leased as provided in this Chapter unless :
(a) The land is identified in the latest Federal Aviation Administration-approved Airport Layout
Plan as being required for the operation o r safety of the Airport or for the construction .
preservation . future construction. or future expansion of facilities on the Airport . including :
( 1) Runways, runway safety areas. ta xiways. aprons . water lanes. water taxiways. and
other aircraft operational areas;
(2) Access roads. public streets. parking lots . and other facilities for use by motor
vehicles; and
(3) Public terminal buildings.
New Tex t Underlined; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 17 of 26
21.10.025 Special Use Permits.
Airport Reserve Land unavailable for lease may be utilized under a Special Use Permit approved
by the City Council. A Special Use Permit may provide for temporary activities such as aircraft
fueling, parking. loading and unloading, temporary cargo staging and handling. and maneuvering
purposes. Subject to the approval by the City Council of the terms and rent. the City Manager
may, without subjecting the property to appraisal or competitive process. grant a Special Use
Permit for the temporary use of real property owned by the City for a period not to exceed one (1)
year.
21.10.030 Qualifications of Applicants or Bidders .
An applicant or bidder for a lease is qualified if the applicant or bidder:
(a) Is an individual at least eighteen (18) years of age;
(b) Legal entity which is authorized to conduct business under the laws of Alaska; or
(c) Is acting as an agent for another and has qualified by filing with the City a proper power of
attorney or a letter of authorization creating such agency.
21.10.040 Initial Lease Application.
(a) All applications for lease of lands must be submitted to the City on an approved application
form provided by the Citv. Applications will be dated on receipt and payment of the non-
refundab le application fee as set forth in the City's schedule of fees adopted by the City
Council.
(b) The application form must include the following information:
(1) The purpose of the proposed lease;
(2) The use. nature. type and estimated cost of improvements to be constructed;
(3) The dates construction is estimated to commence and be completed (ordinarily a
maximum of two (2) years); and
( 4) A comprehensive description of the proposed business or activity intended .
(c) Applications which propose a subdivision shall require the applicant to be responsible for
all costs associated with the subdivision, including but not limited to any new appraisal.
engineering services. surveying and consulting costs. unless in the sole discretion of the
City Council. the City Council determines that the subdivision serves other Airport
purposes . If the Council determines that other Airport purposes are served by the
subdivision. the City Council may choose in its sole discretion that the City will share in
the subdivision costs with the applicant in whatever amount the City Council determines
is reasonable given the benefit to the Airport.
(d) Anytime during the processing of a lease application. the City may request. and the
applicant must supply, any clarification or additional information that the City reasonably
determines is necessary for the City to make a final decision on the application.
21.10.050 No Right of Occupancy -Application Expiration.
(a) Submitting an application for a lease does not give the applicant a right to lease or use the
land requested in the application.
(b) The application shall expire twelve (12) months after the date the application has been
made if the City and the applicant have not. by that time . entered into a lease . unless the
City Council for good cause grants an extension for a period not to exceed six (6) months .
21.10.060 Lease Application Review
(a) Applications shall be reviewed by City staff for:
(1) Application completeness;
(2) Conformance with Municipal Ordinances;
New Text Underlined ; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 18 of 26
(3) Conformance with the Airport Layout Plan, Airport Master Plan. Federal Aviation
Administration regulations applicable to the Airport, Airport Improvement Projects.
Airport Sponsor Grant Assurances to the Federal Aviation Administration. and
Airport regulations and operations; and,
(4) Conformance with the Comprehensive Plan.
(b) Based on the initial review and staff recommendation for action . if the City Manager
determines the application is complete. the application shall be referred to the Airport
Commission and the Planning and Zoning Commission for review and comment. together
with the City Manage r's recommendation for approval or rejection .
(c) Notice of applications for new leases. renewals or extensions must be published in a
newspaper of general circulation within the City. The notice must contain the name of the
applicant, a brief description of the land and the date upon which any competing
applications must be submitted (thirty (30) days from the date of publication).
(d) The recommendations of the City Manager. Airport Commission and Planning and Zoning
Commission shall be brought to the City Council. The decision whether or not to lease
land or authorize a lease extension or renewal rests in the sole discretion of the City
Council.
(e) The City Council may waive provisions of this Chapter to lease property or interests in real
property with the United States . the State of Alaska or an Alaska political subdivision when
in the judgment of the City Council it is advantageous to the City to do so.
(f) If the applicant is in default of any charges. fees. rents . taxes. or other sums due and
payable to the City or the applicant is in default of a requirement of any lease or contract
with the City a lease shall not be entered into until the deficiencies are cured .
21 .10.070 Application for Lease Amendment, Extension or Renewal.
(a) A request from an existing lessee for a lease amendment. extension o r renewal of the
lease must be submitted to the City on an application form provided by the City.
Applications must be complete and dated on receipt and payment of the non-refundable
application fee as set forth in the City's schedule of fees adopted by the City Council.
(b) An application for an amendment must include the following information :
( 1) The purpose of the proposed amendment;
(2) The proposed change in use or activity; and
(3) A comprehensive description of the proposed business. if applicable.
(c) An application for a lease extension must include the following information:
(1) The use. nature . type and estimated cost of additional improvements to be
constructed;
(2) The dates new construction is estimated to commence and be completed
(ordinarily a maximum of two (2) years).
(d) An application for a lease renewal must include the following information :
(1) For a lease renewal of an existing lease:
(A) The use , nature. type and estimated cost of additional improvements to be
constructed ;
(B) The dates new const ruction is estimated to commence and be completed
(ordinarily a maximum of two (2) years).
(2) For a lease renewal of an expiring lease:
(A) A professional estimate of the remaining useful life of the principal
improvement on the property, paid for by the applicant; or
(B) A market value appraisal of the principal improvement on the property. pa id
for by the applicant; or
New Text Underlined ; [DELETED TEXT BRA CKETED]
Ordinance No . 2998-2018
Page 19 of 26
(C) The purchase price of improvements. as certified by the current lessee and
the proposed purchaser. to be in the bill of sale. to be executed at closing
of the transaction; and
(D) The use. nature, type and estimated cost of additional improvements to be
constructed. if applicable.
(E) The dates new construction is estimated to commence and be completed
(ordinarily a maximum of two (2) years) if applicable.
( e) Applications for amendment. extension or renewal shall be processed in accordance with
the Lease Application Review provisions of this Chapter. The City has no obligation to
amend , renew or extend a lease and may decline to do so upon making specific findings
as to why a lease renewal. extension. or amendment is not in the best interest of the City.
21.10.075 Competing Applications.
If another complete and otherwise approvable application for a new lease. extension or a renewal
is received for the same property within thirty (30) days from the notice of application publication
date by a different applicant. City staff shall process the application and forward the application,
the City Manager's recommendation and the Commissions' recommendations to the City Council
for approval of the application anticipated to best serve the interests of the City. The City Council
may approve one of the applications . reject all the applications or direct the City Manager to award
a lease of the property by sealed bid. An applicant for a renewal or extension may withdraw an
application for a renewal or extension at any time prior to a decision by the City Council whether
or not to approve such a renewal or extension.
21.10.080 Length of Lease Te rm.
(a) The length of term for an initial lease shall be based on the amount of investment the
applicant proposes to make in the construction of new permanent improvements on the
premises as provided in the application. The City Council may offer a shorter lease term,
if the City Council makes specific findings that a shorter lease term is in the best interest
of the City .
(b) The maximum term of an initial lease shall be determined according to the following Term
Table:
New Text Underlined ; [DELETE D TEXT BRACKETED]
Ordinance No. 2998-2018
Page 20 of 26
TERM TABLE
Applicant 's Investment/Value ............ Maximum Term of Years
$ 7,500 .................................................. 5
15.000 .................................................. 6
22,500 .................................................. 7
30,000 .................................................. 8
37,500 .................................................. 9
45,000 ................................................. 10
52,500 ................................................. 11
60.000 ................................................. 12
67,500 ................................................. 13
75,000 ................................................. 14
82,500 ................................................. 15
90,000 ................................................. 16
97,500 ................................................. 17
105,000 ................................................ 18
112.500 ................................................ 19
120 ,000 ................................................ 20
127.500 ................................................ 21
135,000 ................................................ 22
142.500 ................................................ 23
150.000 ................................................ 24
157.500 ................................................ 25
165,000 ................................................ 26
172,500 ................................................ 27
180.000 ................................................ 28
187,500 ................................................ 29
195,000 ................................................ 30
202,500 ................................................ 31
210,000 ................................................ 32
217,500 ................................................ 33
225,000 ................................................ 34
232,500 ................................................ 35
240,000 ................................................ 36
247,500 ................................................ 37
255,000 ................................................ 38
262,500 ................................................ 39
270,000 ................................................ 40
277,500 ................................................ 41
285 ,000 ................................................ 42
292,000 ................................................ 43
300,000 ................................................ 44
307 ,500 ................................................ 45
(c) The length of term for a lease extension shall be determined according to the Term Table
and based on the total amount of the investment provided in the initial lease application
and the estimated cost of additional permanent improvements as provided in the
New Text Underlined ; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 21of26
application for lease extension and provided no extension shall extend a lease term past
forty-five (45) years .
(d) The length of term for a lease renewal of an existing lease shall be determined according
to the Term Table and based on the total amount of the investment provided in the initial
lease application and the estimated cost of additional permanent improvements as
provided in the application . The renewal term of an existing lease pursuant to a transaction
between the current lessee and a new buyer and prospective lessee will be determined
by the purchase price of permanent improvements. as certified by the current lessee and
the proposed purchaser. to be in the bill of sale, to be executed at closing of the
transaction. and the proposed additional permanent improvements. if any. The term for
renewal of an existing lease canno t exceed 45 years.
(e) The length of term for a lease renewal of an expiring lease shall be determined according
to a professional estimate of the remaining useful life of the principal improvement on the
property. paid for by the applicant or the Term Table and based on the following :
( 1) The purchase price of real property improvements. as cert ified by the current
lessee and the proposed purchaser. to be in the bill of sale, to be executed at
closing of the transaction ; or
(2 ) A market value appraisal of the principal improvement on the property, paid for by
the applicant; and
(3) The estimated cost of any additional investment the applicant proposes to make in
the construct ion of permanent improvements on the premises as provided in the
application .
( 4) The term for renewal of an expiring lease cannot exceed 45 years.
(f) Before the City approves or extends the term of a lease. permit. concession, or other
interest for any use of a premises that the City has determined in writing will be needed
for airport development in the future . the City will first estimate when the premises will
likely be needed for airport development. A term or a term extension for use of those
premises may not run beyond the time that the City estimates the premises will become
needed for airport development and is subject to further extension only to the extent that
need does not arise or is otherwise satisfied or deferred by the City.
(g) If the initial lease. term extension , or lease renewal granted to the appl icant requ ires
construction of permanent improvements. the lease or term extension shall be subject to
the follow ing conditions:
( 1 ) The lessee to complete the proposed permanent improvements with in a
reasonable period of time set by the City, cons idering the cost and nature of the
improvements . Provided however. that the time allowed shall not ordinarily exceed
twenty-four (24) months after the effective date of the lease, renewal, or extension.
(2 ) The lessee to provide a performance bond , deposit. personal guarantee. or other
security if the City Council determines security is necessary or prudent to ensure
the applicant's completion of the permanent improvements required in the lease.
renewal, or extension . The City Council shall determine the form and amount of
the security accord ing to the best in terest of the City . after a recommendation by
the City Manager considering the nature and scope of the proposed improvements
and the financial respons ibility of the app li cant.
(3 ) At no expense to the City, the lessee must obtain and keep in force during the term
of the lease. insurance of the type and limits required by the City for the activities
on the premises.
( 4 ) Within thirty (30) days after completion of the permanent improvements. the lessee
shall submit to the City written documentation that the improvements have been
New Text Underlin ed ; [DELETED TE XT BRACKETED]
Ordinance No. 2998-2018
Page 22 of 26
completed as required . The City Manager shall make a report to the City Council
of completion as soon as reasonably practical.
(5) If the applicant shows good cause to the City Council. and the City Council
determines the action is in the best interest of the City, the City Council may grant
an extension of the time allowed to complete permanent improvements by
Resolution that is sufficient to allow for the completion of the permanent
improvements or for submission of documentation that the permanent
improvements have been completed . No extension or combination of extensions
granted shall exceed twelve ( 12) months or cause the total time allowed to
complete permanent improvements to exceed thirty-six (36) months .
(6) If. within the time required the applicant fails to complete the required permanent
improvements the City shall:
(A) If the application is for a new lease or lease renewal, execute the forfeiture
of the performance bond. deposit. personal guarantee, or other security
posted by the applicant under subsection (2) of this section to the extent
necessary to reimburse the City for all costs and damages. including
administrative and legal costs. arising from the applicant's failure to
complete the required improvements . and initiate cancellation of the lease
or reduce the term of the lease to a period consistent with the portion of the
improvements substantially completed in a timely manner according to the
best interests of the City.
(B) If the application is for a lease extens ion. the City shall term inate the
amendment extending the term of the lease or reduce the term of the
extension at the City 's sole discretion .
21.10.090 Principles and Policy of Lease Rates.
(a) Annual rent sha ll be computed by multiplying the fa ir market value of the land by the lease
rate percentage for each parcel inside the airport reserve . The annual rent for each parcel
inside the airport reserve shall be published in the City 's schedule of fees adopted by the
City Council; and
(b) The City shall determine the Fair Market Value of all land within the Airport Reserve
annually based on the latest appraisal conducted for the City by a qualified real estate
appraiser and adjusted annually based on the rate of inflation determined by the
Consumer Price Index; and
(c) The C ity shall conduct an A irport Ma rket Analysis once every ten (10) years to determine
whether a market adjustment in either fa ir market value or lease rate percentage is in the
best interests of the City; and
(d) If the City determines from the Airport Market Analysis that a market adjustment to the
lease rate percentage is in the best interests of the City, the new lease percentage shall
be utilized to compute annual rents for the next fiscal year; and
( e) If the Airport Market Analysis or extraord i nary circumstances determine a fair market value
adjustment is in the best interests of the City. the City shall retain the services of an
independent. real estate appraiser certified under Alaska state statutes with experience in
appraising airport property to determine the Fair Market Value of all land within the Airport
Reserve and shall use these values to compute annual rents for the ne xt fiscal year.
(f) The City shall adjust the annual rent of a lease by giving the lessee written no t ice at least
th irty (30) days in advance of the expiration of the previous adjustment period; and
(g ) The annual rent of any individua l lease may not increase by more than 50% based on CPI
in any given five (5) year time period for leases for aeronautical purposes. The annual rent
New Text Underlined ; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 23 of 26
may be adjusted by an Airport Market Analysis or Appraisal resulting in an increase greater
than 50 % in any given five year period for all leases; and
(h) If a lessee disagrees with the proposed change in rent. (excluding CPI determinations.
which cannot be appealed) and cannot informally resolve the issue with the City the lessee
must:
(1) Provide notice of appeal in writing within ninety (90) days supported by the written
appraisal of a qualified real estate appraiser. selected and paid for by lessee (the
"Second Appraiser"); and
(2) The City and the lessee shall promptly meet to attempt to resolve their d ifferences
between the First Appraiser and the Second Appraiser concerning the fair market
value of the premises or lease rate percentage; and
(3) If the City and lessee cannot agree upon such value then. with all deliberate speed,
they shall direct the First Appraiser and the Second Appraiser to expeditiously and
mutually select a third qualified real estate appraiser. paid for jointly by the parties
(the ''Third Appraiser''); and
(4) Within thirty (30) days after the Third Appraiser has been appointed, the Third
Appraiser shall decide which of the two (2) respective appraisals from the First
Appraiser and the Second Appraiser most closely reflects the fair market value or
lease rate percentage of the premises; and
(5) The fair market value or lease rate percentage of the premises shall irrefutably be
presumed to be the value contained in such appraisal selected by the Third
Appraiser. and the rent shall be re-determined based on such value; and
(6) Notwithstanding anything to the contrary herein . rent shall continue to be paid at
the then-applicable rate until any such new rental rate is established. and lessee
and the City shall promptly pay or refund. as the case may be. any variance in the
rent, without interest thereon accruing to the extent to be paid/refunded in a timely
fashion .
2 1 .10 .100 Temporary Development Incentives
(a) The City Council may include in a lease a temporary rent incentive to encou rage
investment as follows:
(1) A credit may be applied toward rent for a maximum of five (5) years. The credit
may only include the value of site preparation work on the leased premises to
include clearing and grubbing , unclassified ex cavation. classified fill and back fill ,
a crushed aggregate base course and utility extensions.
(2 ) An estimate of the value of the work. including a scope of work. prepared by a
qualified engineer licensed to work in Alaska must be provided to the City and
accepted prior to work being performed .
(3) Any changes to the estimate of the value of the work or scope of work must be
provided to the City and accepted prior to work being performed .
(4) For the credit to be applied . t he approved scope of work must be completed .
(5) A certification from a qualified engineer that the accepted scope of work has been
completed must be provided to the City and accepted at the completion of the site
preparation work .
(6) Credit will be limited to original qualified engineer's estimate unless another
amount is accepted by the City in advance of work being completed .
(7) Once the work is completed as proposed and the qualified engineer's certificati on
of completion has been received, a credi t shall be applied to the lease payments,
prorated as necessary for a maxi mum of five (5) years .
New T ext Underlined; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 24 of 26
21.10.105 Ownership of Improvements.
(a) Permanent improvements on the premises, excluding site development materials ,
constructed . placed . or purchased by the lessee remain the lessee's property as long as
a lease for the premises remains in effect with the lessee, including renewals, any period
of extension approved by the City pursuant to the provisions of this Chapter. or any period
of holdover.
(b) Unless otherwise provided in a land lease. at the expiration. cancellation. or termination
of a lease that is neither extended nor followed by a successive lease. the departing lessee
may do one or more of the following:
(1) remove lessee-owned permanent improvements from the premises. remediate
any contamination for which the lessee is responsible, and restore the premises to
a clean and neat physical condition acceptable to the City within 90 days after the
expiration, cancellation, or termination date of the lease; or
(2) sell lessee-owned permanent improvements to the succeeding lessee. remove all
personal property, remediate any contamination for which the lessee is
responsible , and leave the premises in a clean and neat physical condition
acceptable to the City within 60 days after notice from the City that the City has
approved an applicat ion for a lease of the premises by another person or such
longer period specified in the notice, but in no event more than 180 days after the
expiration. termination . or cancellation date of the lease;
(c) If the lessee does not timely remove or sell the lessee-owned permanent improvements
on a premises in accordance with the requirements of this section, any remaining
permanent improvements and any remaining personal property of the departing lessee
will be considered permanently abandoned . The City may sell, lease. demolish. dispose
of. remove. or retain the abandoned property for airport use as the City determines is in
the best interest of the City. The lessee shall. within 30 days after being billed by the City,
reimburse the City for any costs reasonably incurred by the City, including legal and
administrative costs. to demolish, remove, dispose. clear title to. or sell the abandoned
property and to remediate and restore the premises .
(d) Site development materials that a lessee completes or places on a premises become part
of the City-owned realty and property of the City upon completion or placement. The
lessee
(1) Must maintain the site development work and site development materials
throughout the term of the lease or successive lease. including any extensions and
periods of holdover; and
(2) May not remove the site development materials unless the City approves in writing .
21 .10.110 Lease Utilization.
Leased lands shall be utilized for purposes within the scope of the application . the terms of the
lease and in conformity with the ordinances of the City, and in substantial conformity with the
Comprehensive Plan and Airport Master Plan . Utilization or development for other than the
allowed uses shall constitute a violation of the lease and subject the lease to cancellation at any
time.
21.10.120 Bidding Procedure.
With the approval of the City Council, the City Manager may designate a specific lot or lots to be
leased through competitive sealed bid. In a sealed bid offering. the City Manager shall award the
lease to the qualified bidder utilizing a procurement procedure which may consider qualitative
New Text Underlined ; [DELETED TEXT BRACKETED]
Ordinance No. 2998-2018
Page 25 of 26
factors in addition to the amount of any one ( 1) time premium payment to be paid by the successful
bidder. Provided however, that high bidder and the bidder's lease proposal shall be subject to all
provisions of lease application review and approval under this chapter.
21 .10.130 Lease Execution.
When issuing a lease to an applicant. the City shall hand deliver or mail the document to the
applicant. The applicant shall have sixty (60) days from the date on which the lease is hand
delivered to the applicant or mailed within which to execute and return the lease to the City
Manager. If the applicant shows good cause to the City Manager, and the Manager determines
the action is not inconsistent with the City's best interest, the Manager shall grant an extension
not exceeding sixty (60) days for the applicant to execute and return the lease. Upon the failure
of the applicant to timely execute and return the lease agreement. the City Manager shall withdraw
the offer of the lease in writing.
21.10.140 Form of Lease.
(a) When leasing land under this chapter, the City Manager shall use a standard lease form
that is:
(1) Drafted to:
(A) Provide a reasonable basis for the lessee's use of the premises.
(B) Foster the safe, effective, and efficient operation of the airport,
(C) Conform with the applicable requirements of the KMC, including this
chapter, Alaska statutes . Federal Aviation Administration regulations, and
other applicable Federal law. and
(D) Provide for the best interest of the City.
(2) Approved as to form by the City Attorney; and
(3) Adopted by resolution of the City Council.
(b) The Citv Manager may enter into a land lease that deviates from the standard form adopted
under subsection (a) of this section. if:
( 1) The City Manager believes the action is in the best interest of the City;
(2) The lease is approved as to form by the City Attorney; and
(3) The lease is approved by resolution of the Citv Council.
2 1.10.150 Payments.
(a) Upon execution of the lease, the lands become taxable to the extent of its leasehold
interest and lessee shall pay all real property taxes levied upon such leasehold interest in
these lands, and shall pay any special assessments and taxes as if the lessee was the
owner of the land .
(b) Rent shall be paid annually in advance. The payments shall be prorated to conform to the
City of Kenai 's fiscal year beginning July 1 and end ing June 30. The lessee shall have the
option of making payments on a monthly basis.
(c) Lessee shall be responsible for all sales taxes applicable to its operations or due on
payments under the lease.
21.10.160 Acquisition of Rea l Property.
The City, by authorization of the City Council, e xpressed in a resolution fo r such purpose. may
purchase, acquire an interest in or lease real property needed for a public use within the airport
reserve on such terms and conditions as the Council shall determine. but no purchase shall be
made except for Fair Market Value as determined by an appraisal performed by a qualified real
estate appraiser.
New Text Underlined; (DELETED TEXT BRACKETED)
Ordinance No . 2998-2018
Page 26 of 26
Section 2. Leaseholders of existing leases may within two years of the effective date of this
Ordinance convert their current lease to a new lease form approved by the City Council and
governed by the Kenai Municipal Code enacted by this Ordinance, except that the existing lease
terms will not be extended only by virtue of the lease conversion.
Section 3. Severability: That if any part or provision of this ordinance or application 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 which 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 persons or circumstances .
The City Council hereby declares that it would have enacted the remainder of this ordinance even
without such part, provision, or application.
Section 4. Effective Date: That pursuant to KMC 1.15.0?0(f), this ordinance shall take effect
30 days after adoption.
BRIAN GABRIELSR ,AYOR
Introduced: January 3, 2018
Enacted: January 17, 2018
Effective: February 16, 2018
New Text Underlined; [DELETED TEXT BRACKETED]
the city a f�
KENAI, ALASKA
MEMORANDUM
-;l1fla� Past c� w;il� o f two
210 Fidalgo Ave, Kenai, Alaska 99611-7794
Telephone: (907) 283-7535 1 Fax: (907) 283-3014
www.kenai.city
TO: Mayor Brian Gabriel and Kenai City Council
COPY: Paul Ostrander, City Manager
FROM: Scott Bloom, City Attorney 5's
DATE: January 3, 2018
SUBJECT: Leasing of Airport Reserve Lands/Ordinance No. 2998-2018
This Ordinance is the product of an effort by City administration to develop a leasing program at
the airport designed to encourage growth, development and a thriving aviation community. The
City manager's office, finance department, planning department, airport administration and legal
department worked closely with Steve Pavish, an airport consultant, and a team from the
McDowell group throughout the process. The team received input from leaseholders, financial
institutions, airport users, City commissions, and the Council.
Some of the specific main goals the working group tackled included:
1. Making the leasing program more competitive with other airports to attract new leases
and retain existing lease holders;
2. Reducing large changes in rental rates from year to year;
3. Developing a process for rent increases that reduced controversy and appeals;
4. Simplifying the application process;
5. Standardizing the leasing process and providing transparency; and
6. Providing an exit process for leaseholders.
These goals were addressed as follows:
1. Reducing development requirements, increasing the length of potential leases,
allowing ownership of improvements, providing development incentives, and allowing
current lessees to convert to new leases;
2. Establishing a process of rental increases based on a consumer price index and
implementing a cap on rent increases for aviation related leases;
3. Eliminating a zone based appraisal process on a five year cycle and moving to a
market analysis approach based on a regular ten year cycle;
Page 2 of 5
Subject
4. Eliminating application deposit fees, simplifying the review process and providing clear
instruction;
5. Codifying expectations and opportunities, improving readability of the code, providing
definitions of key terms;
6. Providing for lessee ownership of improvements and improving/ simplifying renewal
and extension provisions.
If Ordinance No. 2998-2018 is enacted by the Council, the sponsors of the Ordinance will bring
additional legislation forward appropriately revising the City's fee schedule and a new lease form
for approval. This Ordinance has been scheduled for review and recommendation by the Planning
and Zoning Commission on January 10, 2018 and the Airport Commission on January 11, 2018.
The Ordinance repeals and re-enacts the Chapter as a whole because the proposed amendments
are so numerous and sections are reorganized in a manner that makes standard line by line
legislative formatting almost impossible to follow. Below is a comparative analysis between the
new Chapter 21.20 proposed by Ordinance No. 2998-2018 and the existing code:
• The title of the Chapter which now reads "Leasing and Acquisition of Airport Reserve
Lands" was amended to include the word "acquisition" as the last section of the Chapter,
section 21.10.160 provides for City acquisition of airport reserve lands.
• 21.10.010- Lease of Airport Reserve Lands, is amended in the title to reflect that it applies
to leasing of airport reserve lands. Section (a) is amended to reflect that the City owns the
property, not the airport independently, consistent with the deeds from the FAA that
transferred the land to the City for airport purposes. Section (b) was amended to clarify
that the code does not alter terms, obligations or rights under existing leases enacted
before the effective date of the ordinance. The prior section (c) was deleted in its entirety
as conversion of existing leases is addressed in the Ordinance itself (Section 2), and the
legal department's preference is not to codify provisions that are only relevant for a short
time period.
• 21.10.015 — Definitions, as proposed in the Ordinance is a new section organizing and
providing important definitions that did not previously exist in the code. This is intended to
provide transparency and clarity for all users.
• 21.10.020- Lands Available for Leasing, is primarily just re -worded for clarity and
readability.
• 21.10.025- Special Use Permits, is a new section of code addressing special use permits.
Use permits were previously addressed in 21.10.180 at the end of the Chapter. The new
code section provides additional details on what special use permits are intended for, such
as fueling, parking, unloading, and maneuvering. Special use permits cannot exceed one
year.
• 21.10.030 — Qualifications of Applicants or Bidders, is materially the same as the existing
code providing for qualifications of applicants or bidders for airport reserve leases with
minor housekeeping amendments. Consistent with other changes in the proposed
Ordinance this section is amended to not require submission material to be provided
directly to the City Manager, (power of attorney documents in this case) but instead to the
"City" as lease application forms will designate what departments in the City will receive
specific documents.
Page 3 of 5
Subject
• 21.10.040 — Initial Lease Applications, addresses initial lease applications. The title is
amended from the current code section to clarify that it governs only initial lease
applications, as opposed to applications for renewal or extension.
- Subsection (a) deviates from the existing code primarily in that it removes
references to the City Manager, provides for fees to be paid as provided in the
City's fee schedule, does not include an initial review for completeness, and
does not require a deposit. Providing for fees in the City's fee schedule instead
of in the code allows fees to be adjusted without having to enact a code
amendment. An application deposit was removed because it provides a barrier
to the application process that is not necessary.
- Subsection (b) which governs what must be submitted in the initial lease
application requires less information than what is in the existing code. Much of
the information required previously, such as conformance with various
planning documents will be verified by staff during the review process.
Similarly, the new section does not require verification of a business's good
financial standing at the lease application submittal stage.
- Subsection (c) provides guidance when a subdivision is needed for a lease.
This new section provides more detail as to the process for a subdivision then
what was previously included in 21.20.040. Rather than requiring a deposit for
a subdivision as required in the old KMC 21.10.050, this section makes the
lease applicant directly responsible for the costs of the subdivision unless the
City Council chooses to share in the cost of a subdivision that has a greater
benefit to the Airport.
- Subsection (d) puts the applicant on notice that the City can request further
information or clarification on any subject as needed.
• 21.10.050 — No Right of Occupancy — Application Expiration, was previously titled "filing
fee and Deposit" in the existing code and addressed filing fees and application deposits.
This section is no longer needed because filing fees are in the fee schedule and
application deposits are not required. 21.10.050 in the proposed Ordinance addresses
application expirations and occupancy rights during the application period as provided in
21.10.060 in the existing code. The differences in 21.10.050 as proposed and 21.10.060
in the current code are relatively minor, with the exception that additional time beyond the
12 months and 6 month optional extension is not provided based on time for the applicant
to sign as provided for in the new section addressing lease execution 21.10.130.
• 21.10.060- Lease Application Review, in the proposed ordinance is similar to 21.10.070
in the existing code. The section which addresses review of lease applications has been
renamed "Lease Application Review" from "Application processing procedure." Changes
were made to simplify and improve clarity in the process so all parties understand what to
expect. Major changes include:
- The new section does not specify who in the City reviews specific documents.
- The new section does not provide for the City Manager to be able to reject
complete applications, but instead provide a recommendation for approval or
rejection to the Planning and Zoning Commission and Airport Commission.
- The new section provides for publication of lease applications with a date
provided for which any competing applications must be provided.
Page 4 of 5
Subject
The new section provides for the leases to be brought to the City Council for
approval or rejection along with the City Managers Recommendation and the
Commission's recommendations.
- The section maintains a waiver provision in the existing code for leases to other
governmental entities.
• 21.10.070 - Application for Lease Amendment, Extension or Renewal, is similar to the
existing code provision 21.10.080 "Lease amendment or renewal." This new section is
much more comprehensive than the existing code and breaks each proposed action out
individually. This new section makes a distinction between a renewal of a lease that only
has less than one year and renewals with more term remaining. For an expiring lease, a
new term can be granted based not only on additional investment, but on the estimated
remaining useful life of the property, a market value appraisal or the purchase price of the
improvements from a proposed purchaser. The concept is to avoid unnecessary
expensive appraisals if possible, and to provide security to an existing lessee who has
maintained their property.
• 21.10.075 — Competing Applications, is a new section of code addressing the procedure
for dealing with competing applications. This is more relevant now that all lease
applications will be advertised and open to competition. This allows the City to consider
better opportunities for the airport during times of renewal or extension, but also provides
security to existing lessee's in that they can withdraw their application prior to any decision
by Council if they feel they are in jeopardy of losing their existing rights to a new competing
application.
• 21.10.080 - Length of Lease Term, replaces the existing 21.10.090 addressing the length
of lease terms. The new proposed terms are significantly less onerous on developers.
Previously a $99,000 development would only provide a five year lease, under the new
proposed terms a developer could get a 17 year lease for the same investment.
Additionally, terms of 45 years are offered which comply with FAA requirements, while
previously a 35 year lease was the most a developer could receive. A 45 year lease under
the proposed table would require an investment of $307,500, while under the old table
$500,000 or more is required for a 35 year lease. The new term table is competitive with
other airport leasing programs, whereas the prior term table was one of the most onerous
in the state. The new section of code is intended to be more comprehensive and easier to
follow for all parties. It specifically addresses various options for new leases, extensions
and renewals.
• 21.10.090 — Principles and Policy of Lease Rates, addresses lease rates in comparison
to the existing 21.10.100. Rather than basing lease rates on an appraisal completed every
five years, as provided in the existing section, this new section establishes a rate and
makes annual adjustments based on Anchorage CPI with a market analysis once every
ten years to determine whether adjustments need to be made. This new process is
intended to provide more certainty to lessees while providing a reasonable rate of return
to the airport. The new process is intended to avoid large rate changes once every five
years. The process allows for irregular market analysis's or even an appraisal should
market conditions indicate that such an examination is warranted. For example, if the LNG
project happens and the market changes dramatically, the City could study the market
and make necessary changes to the lease rates to reflect market conditions. There is also
a cap in place for aviation related leases as allowed by the FAA (non -aviation leases are
required to be at fair market value.) However, the cap only applies to CPI increases and
Page 5 of 5
Subject
not adjustments that are made when warranted by extraordinary market changes. This
new section of code also provides an appeal process when a change to the rent is made
by a market analysis or appraisal. A change based on CPI cannot be appealed as it is not
a rate developed by the City.
• 21.10.100 — Temporary Development Incentives, is a new section of code providing for
temporary development incentives. It essentially allows the lessee to earn up to five year
of lease credits for site preparation work based on the value of the work as determined by
an engineer. Similar opportunities have been offered in recent leases but are not codified.
There is an existing code provision, KMC 21.10.110 that addresses the lessee paying the
City for certain development costs that the City makes, but this was not carried forward in
the new code, as it was not utilized and is less favorable to the City and increases costs
for the lessee.
• 21.10.105 — Ownership of Improvements, is a new provision which provides that
ownership of improvements stays with the lessee and addresses how improvements are
disposed of at the end of a lease. The procedures are modeled after the State's leasing
program and have been included in the City's most recent leases but have not been
codified. This is another example of lease terms that are more favorable to lessees and
make the City of Kenai's leasing program more competitive with other airports.
• 21.10.110 - Lease Utilization, is similar to the existing code section 21.10.120 with the
same title. The new section is materially the same as the existing, except for that the last
sentence of the existing section is dropped in the new section because cancellation based
on failure to complete development is addressed elsewhere in code.
• 21.10.120 -Bidding Procedures, is substantially the same as what is currently in
21.10.130, with the exception that the new code section allows for evaluation of bids based
on qualitative factors other than just price. This change allows for selection of a project
that might otherwise be in the best interest of the City or airport even if the direct financial
gain to the Airport is less.
• 21.10.130 -Lease Execution, is substantially the same as the existing 21.10.140 other
than the time allowed for the applicant to sign the leas is extended by 30 days, from 30 to
60, as it is counterproductive to terminate a lease opportunity based on a matter of days
if there is a willing lessee. The time period to complete the lease process from application
to executions is still subject to a one year limitation with a possible extension based on
21.10.050 (Application Expiration).
• 21.10.140 -Form of Lease, is materially the same as the existing section 21.10.150 and
provides guidance while allowing for flexibility in the actual lease documents.
• Existing code sections 21.10.160 -Re-evaluation of rent, and 21.10.170 -Annual minimum
rental, are deleted in the proposed Ordinance as the relevant parts of these sections are
incorporated into the new 21.10.090- Principles and Policy of Lease Rates, as applicable.
Parts of 21.10.170 are incorporated into the new 21.10.150 —Payments, addressing the
taxability of leasehold interests, sales taxes and lease payment timing.
• 21.10.160 -Acquisition of Real Property, which provides procedures for purchasing airport
reserve land is similar to existing section 21.10.190 of the existing code with the same
name, other than subsection (b) of the existing code is dropped going forward as it does
not appear to add any value or direction.
CITY OF KENAI
PLANNING AND ZONING COMMISSION
RESOLUTION NO. PZ2018.01
A RESOLUTION OF THE PLANNING AND ZONING COMMISSION RECOMMENDING THE
CITY COUNCIL ENACT ORDINANCE 2998-2018 REPEALING, RENAMING AND RE-
ENACTING KENAI MUNICIPAL CODE CHAPTER 21.10 -LEASING OF AIRPORT RESERVE
LANDS TO ENCOURAGE GROWTH, DEVELOPMENT AND A THRIVING AVIATION
COMMUNITY THROUGH RESPONSIBLE LAND POLICIES AND PRACTICES.
WHEREAS, the Planning and Zoning Commission reviews and makes recommendations for
new leases on City land within the Airport Reserve; and,
WHEREAS, the Planning and Zoning Commission supports changes to the Airport Reserve
leasing program that encourages growth and development of the airport and make it a more
competitive environment for new businesses to locate; and,
WHEREAS, the Planning and Zoning Commission supports changes to the leasing program
that assists current lessee's by reducing large changes in rent from year to year, allows for
conversion to leases and ownership of improvements by the lessee at the end of the lease; and,
WHEREAS, the Planning and Zoning Commission supports amendments to KMC Chapter
21.10 that provide transparency and consistency in the leasing program; and,
WHEREAS, Ordinance 2998-2018 maintains the role of the Planning and Zoning Commission in
the leasing program on the airport reserve; and,
WHEREAS, Ordinance 2998-2018 is consistent with the goals of the Planning and Zoning
Commission for the Airport.
NOW, THEREFORE, BE IT RECOMMENDED TO THE COUNCIL OF THE CITY OF KENAI,
ALASKA,
That the City Council enact Ordinance 2998-2018.
PASSED BY THE PLANNING AND ZONING COMMISSION OF THE CITY OF KENAI,
ALASKA, this 101" day of January, 2018.
\� "?/Item wid a Past, ct� w&4 a Ftt� Af
210 Fidalgo Ave, Kenai, Alaska 99611-7794
Telephone: (907) 283-75351 Fax: (907) 283-3014
the cdy of www. kenai.city
MEMORANDUM
TO: Mayor Brian Gabriel and Kenai City Council
FROM: Scott Bloom, City Attorney
DATE: January 17, 2018
SUBJECT: Amendment Memorandum for Ordinance No. 2998-2018 — Leasing of
Airport Lands
This memorandum provides recommended amendments to Ordinance 2998-2018. 1 request
Council move the following amendments:
1. Amend second to last WHEREAS clause to read:
WHEREAS, the Planning and Zoning Commission at its meeting of January 10, 2018
passed P&Z Resolution 2018-01 recommending the City Council enact Ordinance 2998-
2018; and,
2. Amend last WHEREAS clause to read:
WHEREAS, the Airport Commission at its meeting of January 11, 2018 recommended the
City Council enact Ordinance 2998-2018.
3. Amend section 21.10.015(a) on page 15 of 26 of the Ordinance by removing the word "land"
in the first sentence as follows:
21.10.015 Definitions.
When used in this Chanter, the following terms shall have the meaning given below:
(a) "Aeronautical Use" means any use4apA—within the Airport Reserve that involves, makes
possible, or is required for the operation of aircraft or that contributes to or is required for the
sales and service: Aircraft storage: Sale of aviation petroleum products: Repair and
New Text Underlined; [DELETED TEXT BRACKETED]; Revised Text Bold
Page 2 of 2
Leasing of Airport Lands
maintenance of aircraft: Sale of aircraft parts: Parachute activities: Ultralight activities: Sport
pilot activities: and Military flight operations.
4. Amend section 21.10.105(b) on page 24 of 26 of the Ordinance by removing the following
words "or the department otherwise directs under (f) of this section" in the first sentence as
follows:
21.10.105 Ownership of Improvements.
(a) Permanent improvements on the premises, excluding site development materials,
constructed, placed, or purchased by the lessee remain the lessee's property as long as a
lease for the premises remains in effect with the lessee, including renewals, any Period of
extension approved by the City pursuant to the provisions of this Chapter, or any period of
holdover.
(b) Unless otherwise provided in a land lease
sestien, at the expiration, cancellation, or termination of a lease that is neither extended nor
followed by a successive lease, the departing lessee may do one or more of the following:
Your consideration is appreciated.
Al
` 71111ap w1d a Past, 0wit% a F taee
210 Fidalgo Ave, Kenai, Alaska 99611-7794
Telephone: (907) 283-7535 1 Fax: (907) 283-3014
\the ciy of www. kenai. city
V
IJi1:4 Ji10 WIN
TO: Mayor Brian Gabriel and Kenai City Council
FROM: Scott Bloom, City Attorney
DATE: January 17, 2018
SUBJECT: Amendment Memorandum for Ordinance No. 2998-2018 — Leasing of
Airport Lands
This memorandum provides recommended amendments to Ordinance 2998-2018. 1 request
Council move the following amendments:
1. Amend second to last WHEREAS clause to read:
WHEREAS, the Planning and Zoning Commission at its meeting of January 10, 2018
passed P&Z Resolution 2018-01 recommending the City Council enact Ordinance 2998-
2018; and,
2. Amend last WHEREAS clause to read:
WHEREAS, the Airport Commission at its meeting of January 11, 2018 recommended the
City Council enact Ordinance 2998-2018.
3. Amend section 21.10.015(a) on page 15 of 26 of the Ordinance by removing the word 'land"
in the first sentence as follows:
21.10.015 Definitions.
When used in this Chapter. the followina terms shall have the meanina aiven below
(a) "Aeronautical Use" means any use4and—within the Airport Reserve that involves, makes
possible, or is required for the operation of aircraft or that contributes to or is required for the
safety of such operations. It includes, but is not limited to: Air taxi and charter
operations; Scheduled or nonscheduled air carrier services: Pilot training: Aircraft rental and
sightseeing; Aerial photography; Crop dusting; Aerial advertising and surveying; Aircraft
sales and service: Aircraft storage; Sale of aviation petroleum products; Repair and
New Text Underlined; [DELETED TEXT BRACKETED]; Revised Text Bold
Page 2 of 2
Leasing of Airport Lands
maintenance of aircraft: Sale of aircraft parts: Parachute activities; Ultralight activities: Sport
Pilot activities: and Military flight operations.
4. Amend section 21.10.105(b) on page 24 of 26 of the Ordinance by removing the following
words "or the department otherwise directs under (f) of this section" in the first sentence as
follows:
21.10.105 Ownership of Improvements.
(a) Permanent improvements on the premises excluding site development materials
constructed, placed, or purchased by the lessee remain the lessee's property as long as a
lease for the premises remains in effect with the lessee, including renewals any period of
extension approved by the City pursuant to the provisions of this Chapter, or any period of
holdover.
(b) Unless otherwise provided in a land lease OF the deORFtMeRt Athep ose diFeGtS UR^ �: •"'�
sestiea, at the expiration, cancellation, or termination of a lease that is neither extended nor
followed by a successive lease, the departing lessee may do one or more of the following:
Your consideration is appreciated.