HomeMy WebLinkAboutOrdinance No. 3026-2018_____________________________________________________________________________________
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Sponsored by: Administration
CITY OF KENAI
ORDINANCE NO. 3026-2018
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, DETERMINING THAT
REAL PROPERTY DESCRIBED AS LOT SIX (6) A, BLOCK ONE (1), GUSTY SUBDIVISION,
ACCORDING TO PLAT 86-76, CITY-OWNED AIRPORT LAND LOCATED OUTSIDE THE
AIRPORT RESERVE, IS NOT NEEDED FOR A PUBLIC PURPOSE AND AUTHORIZING THE
SALE OF THE PROPERTY TO PINGO PROPERTIES, INC. AND GEOFFREY M. GRAVES.
WHEREAS, the City of Kenai received a quitclaim deed from the Federal Aviation Administration
(FAA) on December 1, 1963, to nearly 2,000 acres of land subject to certain restrictions, including
that no property shall be used, leased, sold salvaged, or disposed of for reasons other than for
airport purposes; and,
WHEREAS, on May 11, 2018, the FAA executed a Deed of Release, for an area of land subject
to the Quitclaim Deed allowing for the lease, sale, or disposal of Lot 6A, Block 1, Gusty
Subdivision, according to Plat 86-76, for other than airport purposes; and,
WHEREAS, the City has received a request to purchase Lot 6A, Block 1, Gusty Subdivision,
according to Plat 86-76 (the Property) from the current Lessee; and,
WHEREAS, KMC 21.15.010 – Airport Land Outside of the Airport Reserve, provides that the City
may sell land outside the Airport Reserve when in the judgement of the City Council, such lands
are not required by the City for a public purpose; and,
WHEREAS, the Property is leased to Pingo Properties, Inc. and Geoffrey M. Graves and
developed for private commercial use and is not needed for a public purpose; and,
WHEREAS, Resolution No. 2018-12 amended the City’s Policy for sale of specific Airport Land
Lots and is property is one of the properties addressed in the policy; and,
WHEREAS, the sale of this property is in the best interest of the City and Airport and encourages
new development and/or improvements to the property; and,
WHEREAS, KMC 21.15.180 – Sale, allows for a negotiated sale at not less than fair market value.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA,
as follows:
Section 1. Statement of Ownership: That the City of Kenai is the owner of Lot 6A, Block 1,
Gusty Subdivision, according to Plat 86-76 (the Property).
Ordinance No. 3026-2018
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Section 2. Public Purpose and Best Interest Findings: That the Property is not needed for
future public municipal or airport purposes. Under the Airport Layout Plan, the Property is
designated for non-aviation commercial or light-industrial uses. The sale of the Property is in the
best interests of the City and Airport, as it serves a purpose of continuing commercial growth and
investment in the City.
Section 3. Authorization of Sale: That the Kenai City Council hereby authorizes the City
Manager to sell the City-owned lands described as Lot 6A, Block1, Gusty Subdivision, according
to Plat 86-76, under the procedures and terms established for the sale of airport lands outside of
the Airport Reserve, as set forth in KMC 21.15.180 et seq. and subject to the following additional
essential terms and conditions of sale under the Policy for Sale of Specific Airport Leased Lands
approved by City of Kenai Resolution No. 2018-12:
(a) The sale will be made through a negotiated sale to Pingo Properties, Inc. and
Geoffrey M. Graves for a sum not less than the fair market value of the land
excluding lessee-constructed improvements as determined by an appraisal and a
minimum new investment in the construction of new permanent improvements on
the premises equal to 25% of the fair market value of the land within three (3) years
of sale.
Section 4. Title: That title shall be conveyed by quitclaim deed. Any instrument conveying
title to the Property shall include the following restrictions, promises, and/or covenants:
(b) that the City of Kenai reserves unto that the grantee expressly agree for itself and
its heirs, executors, administrators, successors, transferees, and assigns, for the
use and benefit of the public a right of flight for the passage of aircraft in the
airspace above the surface of the Property, together with the right to cause in said
airspace such noise as may be inherent in the operation of aircraft, now known or
hereafter used, for navigation of or flight in the said airspace, and for use of said
airspace for landing on or at and for taking off from or operating on Kenai Municipal
Airport; and,
(c) that the grantee expressly agree for itself and its heirs, executors, administrators,
successors, transferees, and assigns to restrict the height of structures, objects of
natural grown, and other obstructions on the Property to a height of not more than
242 feet above mean sea level; and,
(d) that the grantee expressly agree for itself and its heirs, executors, administrators,
successors, transferees, and assigns to prevent any use of the Property which
would interfere with landing or taking off of aircraft at the Kenai Municipal Airport,
or otherwise constitute an airport hazard; and,
(e) that all covenants heretofore stated shall run with the land and shall inure to the
benefit of, and be binding upon the heirs, executors, administrators, successors,
transferees, and assigns of the parties to the contract for sale and conveyance.
Section 5. Proceeds of Sale: That should a sale of the Property be finalized, all revenues from
the sale shall be deposited in the Airport Land Sale Permanent Fund for use in the development,
improvement, and operation of the Kenai Municipal Airport and as otherwise required in the Deed
of Release dated May 11, 2018.
Ordinance No . 3026-2018
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Section 6. Effective Date : That pursuant to KMC 1.15.0?0(f), this ordinance shall take effect
30 days after adoption.
ENACTED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA , this 20 day of June, 2018 .
~· AJ_
BRIAN GABRIEL SR, MAYOR
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Introduced: June 6, 2018
Enacted : June 20, 2018
Effective: July 20, 2018
MEMORANDUM
TO: Mayor Brian Gabriel and Kenai City Council
THROUGH: Paul Ostrander, City Manager
FROM: Christine Cunningham, Assistant to City Manager/ HR Specialist
DATE: May 29, 2018
SUBJECT: Ordinance No. 3026-2018 – Determining Lot 6A, Block 1, Gusty
Subdivision is Not Needed for a Public Purpose and Authorizing Sale
of the Property
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The City has received a request to purchase the above City-owned leased land outside the Airport
Reserve with substantial constructed leasehold improvements pursuant to the City’s Policy for
Sale of Specific Airport Leased Lands, approved by Resolution No. 2018-12.
Pingo Properties, Inc. and Geoffrey M. Graves is the current lessee of Lot 6, Block 1, Gusty
Subdivision, which was entered into on April 4, 1985 for the purpose of operating a restaurant
and office space. The purpose of the lease was amended to allow for its current use as a dry
cleaning and laundry business and learning center in two separate buildings and doing business
as Summit Drycleaners and Adventures in Learning. The 55-year lease term expires on June 30,
2039 and is in good standing.
On May 11, 2018, the Federal Aviation Administration (FAA), released the property for sale for
other than airport purposes, allowing the property to be sold at fair market value. All revenues
from the sale would be deposited in the Airport Land Sale Permanent Fund for use in the
development, improvement, and operation of the Kenai Municipal Airport as required by the Deed
of Release.
The City’s Policy does not provide for the sale of any specific property, but only a method for such
sale, subject to the Ordinances of the City of Kenai. The policy is in effect until July 6, 2021. Any
specific sale must be separately approved by the City Council, which may approve or disapprove
any such sale, in its sole discretion. Mr. Graves requests to purchase the property at its fair market
value excluding lessee-constructed improvements as determined by an appraisal and a minimum
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Ordinance No. 3026-2018
new investment in the construction of new permanent improvements on the premises equal to
25% of the fair market value of the land within three years of sale.
Mr. Graves submitted a good-faith deposit and the City ordered an appraisal to be performed on
the property as-if vacant. The fair market value of the property was determined to be $180,000
by an appraisal performed by Reliant, Advisory Services, LLC on May 6, 2018. Based on the
amount of the appraisal, Mr. Graves proposes to meet the minimum new investment requirement
equal to $45,000 on the premises through completion of a remodel of the outside of the Summit
Drycleaner building, landscape and asphalt improvements, and a small addition as well as other
repairs on both buildings. The City will verify the value of the improvements using an estimate
from a licensed contractor.
If the City Council approves the sale, City Administration may proceed with a sale.
Thank you for your consideration.
Attachment
cc: Pingo Properties, Inc. and Geoffrey M. Graves
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125 '
Date: 5/31/2018
The information depicted hereon is for graphic representationonly of the best available sources. The City of Kenai assumes no responsibility for errors on this map.
1 inch e quals 123 feet
Lot 6A, Block1,Gusty Subdivision
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