HomeMy WebLinkAboutResolution No. 2019-13Sponsored by: Administration
CITY OF KENAI
RESOLUTION NO . 2019-13
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI , ALASKA, CONSENTING TO THE
DECLARATION OF PENINSULA HANGAR ASSOCIATION (A COMMON INTEREST
OWNERSHIP COOPERATIVE) AND SUBLEASE BETWEEN LEGACY ELECTRIC , LLC AND
THE PENINSULA HANGAR ASSOCIATION FOR LOT 2 , BLOCK 1, GENERAL AVIATION
APRON WITHIN THE AIRPORT RESERVE.
WHEREAS , Legacy Electric, LLC executed a lease with the City on January 12, 2015 to operate
a T-hangar complex on the airport with an initial term of 35 years; and ,
WHEREAS, Legacy Electric has requested the City consent to a sublease to the Peninsula
Hangar Association to operate the T-hangar complex as a common interest ownership
cooperative pursuant to Alaska Statute Title 34 Chapter 8 ; and ,
WHEREAS, Alaska Statute 34 .08 .140 requires the City's consent to the common ownership
interest cooperative as the lessor; and,
WHEREAS , it is in the best interest of the City to consent to the sublease and creation of the
common interest ownership subject to the terms of the City's Lease w ith Legacy Electric , LLC in
order to support the business plans of the City's Lessee on the airport reserve and encourage
use and development of the Airport.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA:
Section 1. That the City Manager is authorize to execute the attached Consent to Sublease
between Legacy Electric, LLC and The Peninsula Hangar Association and the Consent to
Establishment of a Leasehold Common Interest Community subject to the terms of the Lease
between the City of Kenai and Legacy Electric, LLC and a change to Article IV Section 12 -Lease
of Units to read :
Any unit owner may lease their unit to a third party, with prior written notice to the
Association and the Association must provide written notice to the City of Kenai Airport
Director. The City shall have the right to object to the lease within 30 days of receipt of
written notification for reasonable cause . Such a lease must be in writing and shall provide
that the failure to comply in all respects with the provisions of this Declara ti on, the
Association By laws , the City of Kenai Lease , or the unit owner's Proprietary Lease shall
be a default under the terms of the lease. A lessee of such a unit shall not have any rights
in the Association, and the unit owner shall retain all rights as owner, unless the owner
sells all their interest in the unit to the renter as allowed by this Declaration, and the renter
becomes a unit owner as defined in Article I, Section 3.
Secti on 2. That this resolution takes effect immediately upon adoption .
Resolution No . 20 19-13
Page 2 of 2
ADOPTED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA, this 201h day of February,
2019 .
B"RIAN GABRIEL SR , MAYOR
ATTEST :
Consent to Sublease – Legacy Electric, LLC Page 1 of 2
CITY OF KENAI
CONSENT TO SUBLEASE
The City of Kenai leased certain Airport Reserve Lands recorded on January 12,
2015, under document number 2015-002299-0, Kenai Recording District, to Legacy
Electric, LLC. The Sublease Agreement between Legacy Electric, LLC, and Peninsula
Hangar Association, whose address is 46113 Sather Court, Soldotna, AK 99669,
covering the following-described property:
Lot 2, Block 1, General Aviation Apron, located in the Kenai Recording
District, Third Judicial District, State of Alaska
Is hereby ACKNOWLEDGED AND CONSENTED TO, subject to the same terms
and conditions as contained in the original lease and any amendments thereto as
described above.
This Consent is given by the City of Kenai without waiving any right or action, or
releasing the Assignor from any liability or responsibility under the aforementioned
Lease, and does not relieve the Assignee from the condition requiring the City's
approval for any subsequent sublease or assignment.
Dated this _____ day of ______________, 2019.
_____________________________
Paul Ostrander
City Manager
Consent to Sublease – Legacy Electric, LLC Page 2 of 2
STATE OF ALASKA )
) ss
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this ____ day of _____________, 2019, the
foregoing instrument was acknowledged before me by Paul Ostrander, City Manager, of
the City of Kenai, an Alaska municipal corporation, on behalf of said City.
______________________________
Notary Public for Alaska
My Commission Expires: _________
APPROVED AS TO FORM:
________________________________
Scott Bloom
City Attorney
DECLARATION OF
PENINSULA HANGAR ASSOCIATION
(A Common Interest Ownership Cooperative)
THIS DECLARATION is made on the __ day of , 2019 by
LEGACY ELECTRIC, LLC, "Declarant" herein. It is also executed by PENINSULA HANGAR
ASSOCIATION as sublessee of LEGACY ELECTRIC, LLC and by the CITY OF KENAI as
owner of the real property.
PREAMBLE
(A) Declarant is the lessee of real property in the Third Judicial District, State of Alaska,
located on the airport, described as :
Lot 2, Block 1, General Aviation Apron , as shown on Exhibit A attached hereto .
The City of Kenai is the owner of the above property, leased to Legacy Electric under a lease
described more particularly in Article III of the Declaration. The rights of Declarant (and of any
sub lessees , successors, assigns, grantees, and owners of hangar units under proprietary leases) to
ownership and utilization of any improvements constructed by Declarant on the leased property
shall be subject to rights of the City of Kenai as set forth in the lease referred to above.
(B) It is the desire and intention of Declarant to submit the lease hold estate to the
provisions of AS 34.08 to create a cooperative. Pursuant to AS 34.08.070, Title 34, Chapter 8 of
the Alaska Statutes shall apply to this Common Inter est Community even though it is restricted
exclusively to non-residential use.
(C) Declarant hereby declares that all of the leasehold property is , and shall be, held,
conveyed, hypothecated, encumbered, leased, rented, used , occupied and improved subject to the
following limitations, restrictions, easements, conditions and covenants, all of which are declared
and agreed to in ftutherance of a plan for the protection, maintenance, improvement and sale of
the property for the purpose of enhancing the value and desirability of the property. All
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
provisions of this Declaration are hereby imposed as equitable servitudes upon the leasehold
property. All of the limitations, restrictions, easements, conditions and covenants herein shall
run with the land for the term of the lease and shall be binding upon and for the benefit of all of
the property and all parties having or acquiring any right, title or interest in the property or any
part thereof; subject to the rights of the City of Kenai as set forth herein.
ARTICLE I
DEFINITIONS
Section 1. PROPERTY
The "Property" shall mean all the real property interest of the leasehold estate described
above.
Section 2.
"Unit" shall mean and include the elements of a unit not owned in common with the
owners of other units in the property; each of the units in the airplane hangar structures, each
separately described and designated in Exhibit A which is attached and incorporated herein by
the reference, shall be a separate estate consisting of the space bounded by and contained within
the interior surfaces of the perimeter walls, floors, roof, windows and doors of each unit. In
interpreting deeds, proprietary leases, declarations and plans, the existing physical boundaries of
the unit, or a unit constructed in substantial accordance with the original plans thereof, shall be
conclusively presumed to be its boundaries rather than the description expressed in the deed,
proprietary lease, plan or declaration, regardless of settling or lateral movement of the building,
and regardless of minor variances between boundaries as shown on the plan or in the deed and
declaration and those of the building as constructed. A survey map and floor plan of the project
are attached to thi s Declaration as Exhibit A.
-Section 3. UNIT OWNER
"Unit Owner" shall mean the person or person holding an effective Proprietary Lease to a
unit.
"Project" shall mean the entire property divided into units, including all structures
thereon, the common areas, the limited common areas and the units within the property.
Section 5. COMMON AREAS
"Common areas" or "common elements" shall mean and include all areas on the property,
except the units and shall further include, for maintenance purposes of the Association, all gas,
water and sewer main lines , all ducts, chutes, conduits, wires and other utility installation of the
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
hangar structures wherever located (except the outlets thereof when located within the units), the
leasehold interest in the lot upon which the structure is located and the airspace above the
structure, all baring walls, columns, floors , the roof, slab, foundation, walkways, and stairways.
Section 6. HANGAR
"Hangar" shall mean and include a unit and any corresponding limited common areas
over which the unit owner has an exclusive easement as provided for herein.
Section 7. COMMON ASSESSMENT
"Common Assessment'1 shall mean the charge against an owner for his proportionate
share of the cost of maintaining, improving, repairing and managing the project and all other
common expenses, including reserves , lease costs, and operational costs for the common areas ,
which are to be paid by each unit owner to the Association for common expenses and charged to
his unit.
Section 8. 'SPECIAL ASSESSMENT
"Special Assessment" shall mean a charge against a particular unit owner and his unit,
directly attributable to the unit owner, equal to the cost incurred by the Association for corrective
action performed pursuant to the provisions of this Declaration, plus interest thereon as provided
for in this Declaration.
Section 9. CAPITAL IMPROVEMENT ASSESSMENT
"Capital Improvement Assessment'1 shall mean a charge against each unit owner and his
unit, representing a portion of the cost to the Association for installation or construction of any
capital improvements on any of the common areas or the limited common areas which the
Association may from time to time authori ze.
Section 10. ASSOCIATION
"Association" shall mean Peninsula Hangar Association.
Section 11. COMMON EXPENSES
ncommon expenses" shall mean the actual and estimated costs of maintenance,
management, operation, repair and replacement of the common areas and limited common areas
(to the extent not paid by the unit owner responsible for payment), including matters set forth in
Article VIII, Section I, and the costs of any other item or items so designated by the Association
for any reason whatsoever.
Section 12. MORTGATE-MORTGAGEE-MORTGAGOR
DECLARATION OF PENINSULA HANGAR ASSOCIATION
3
Reference in this Declaration to a mortgage shall be deemed to include a deed of trust;
reference to a mortgagee shall be deemed to include the beneficiary of a deed of trust; and
reference to a mortgagor shall be deemed to include the trustor of the deed of trust. All third
party liens must be approved by the City of Kenai or be in a second position to the City of Kenai.
Section 13. BOARD OF DIRECTORS
"Board of Directors" shall mean the Board of Directors of the Association.
Section 14. VOTES
Each unit shall have one (1) vote on each matter brought to a vote .
Section 15. OCCUPANCY AGREEMENT PROPRIETARY LEASE
An agreement with the Association pursuant to which a member is entitled to exclusive
possession of a unit in the cooperative, also termed a "Proprietary Lease ."
Section 16. COMMON INTEREST COMMUNITY
The Peninsula Hangar Association
Section 17 . COOPERATIVE
A common interest community as set forth in AS 34.08, in which the real property is
leased by an association, of whose members are entitled, by virtue of an ownership interest in the
association, to exclusive possession of a unit. The term "cooperative" is not intended to mean a
cooperative as s·et forth in AS 10.15.
Section 18. DECLARANT
Legacy Electric, LLC, or its' successor as defined in AS 34.08.990 (12).
Section 19. DECLARATION
This instrument, including any amendments.
Section 20 . SECURITY INTEREST
An interest in real estate or personal property, created by contract or conveyance, that
secures payment or performance of an obligation. The term includes a lien created by a
mortgage, deed of trust, trust deed, security agreement, contract for deed, land sales contract,
lease intended as security, assignment of lease or rents intended as security, pledge of an
ownership interest in an Association, and any other consensual lien or ti tle retention contract
intended as security for an obligation. Third party liens or security interests affecting City of
Kenai property must be individually consented to by the City of Kenai.
DECLARATION OF PENINSULA HANGAR ASSOCIATION
4
ARTICLE II
Section 1.
STATEMENT OF MAT TERS REQUIRED BYLAW
COMMON INTEREST OWNERSHIP ACT
Pursuant to AS 34.08.070, the Common Interest Ownership Act of Alaska, Title 34,
Chapter 8, shall apply to this cooperative project.
Section 2. MATTERS REQUIRED TO BE STATED BYLAW
The matters required to be set out by AS 34.08 .130 are as follows:
AS 34.08 .130(a)(l)
AS 34.08 .130 (a)(2)
AS 34.08.130 (a)(3)
AS 34.08 .130(a)(4)
AS 34.08. l 30(a)(5)
AS 34.08.130 (a)(6)
AS 34.08 .130 (a)(7)
AS 34.08 .130(a)(l 1)
'AS 34.08.130 (a)(l2)
This is a cooperative project, named Peninsula Hangar
Association.
The project is located solely in the Kenai Recording
District, Third Judicial District, State of Alaska.
The legal description is set forth in the Preamble.
The Declarant has created twelve units in Phase I,
The boundaries of each unit are as defined in Article I ,
"Unit" and as delineated on the attached Exhibit B and as
described in the attached Exhibit C.
There are a present no limited common elements, except
provided by statute .
No additional real estate will b e allocated as limited
common elements.
Each unit shall be allocated an equal interest in ownership
and responsibility for common expenses, and shall have
one vote in the Association. This formula shall apply
notwithstanding any differences in the square feet of floor
space in each unit as set forth in the attached Exhibit C.
Units shall be us e d only fo r th e pri vate storage of aircraft ,
or such other related uses as may be allowed by the City
of Kenai under the Lease described in Article III, or under
Article IV, Section 1, of this Declaration.
DECLARAT ION OF PENINSULA HANGAR ASSOCIATION
5
AS 34.08.130 (a)(l3) Units shall not be subject to any easements and licenses,
except as set forth in this Declaration and the City of Kenai
leasehold.
AS 34.08.130 (a)(14) Plats and plans are attached as Exhibits A and B.
No additional improvements will be located on the property as part of Phase I.
Declarant shall have sole control over the Association until thirty (30) days after
conveyance of the first five units, as provided in AS 34.08 .330(d).
The leasehold and subleasehold to which the common interest community is subject is
described in the following Article Ill.
ARTICLE III
LEASEHOLD AND SUBLEASEHOLD TO WHICH THE COOPERATIVE IS SUBJECT
Section 1. LEASEHOLD
Pursuant to AS 34.08.140, this common interest community is subject to a leasehold and
a subleasehold. Expiration or termination of the lease or sublease would terminate the common
interest community. Additional information required to be stated by AS 34.08 .1 40 (a) is as
follows:
A. The lease is with City of Kenai, Kenai Municipal Airport, Lease of Airport
Reserve Lands, executed by the Manager of the City of Kenai, Rick R. Koch on January
12, 2015 .
'B. The lease is scheduled to expire on August 30, 2049 unless terminated
earlier in accordance with its terms, and has options to extend for an additional 20 years .
A renewal thereafter may be made as agreeable to the City of Kenai and Lessee.
C. A copy of the lease is attached to this Declaration as Exhibit D. A legally
sufficient description of the real estate subject to the lease is as set forth on Page 2 of the
lease.
D . The unit owners do not have a right to redeem the reversion of the lease.
E. The unit owners do not have the right to remove improvements after the
expiration or termination of the lease .
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
F. The unit owners' rights to renew the lease are subject to renewal rights of
Legacy Electric, LLC as set forth in the lease referred to above.
Section 2 SUBLEASEHOLD
The common interest community is also subject to the following sublease.
A. The sublease is of the City of Kenai Municipal Airport lease referenced in
Section 1 above. Legacy Electric LLC is the sublessor and Association is the sublessee.
The sublease, together with the City's consent to the Sublease, was recorded in the Kenai
Recording District on the __ day of 2019.
B. The sublease is schedule to expire on termination of the City of Kenai
lease to Legacy Electric, LLC.
C. A copy of the sublease, together with the City of Kenai's Consent, is
attached hereto as Exhibit E. A legally sufficient description of the real estate subject to
the lease is set forth on Page 2 of the sublease.
D. The unit owners do not have a right to redeem the reversion of the
sublease.
E. The unit owners do not have the right to remove improvements after
termination or expiration of the sublease.
F. The unit owners do not have the right to renew the sublease, but if the
sub lessor extends or renews its lease from the City of Kenai, it shall offer to extend or
renew the lease to the Association on terms intended to be similar to the initial sublease,
with the same ratio of sublease rate to lease rate, and which may take into account any
other new terms in any lease extension or renewal from the City of Kenai.
G. The sublessee Association shall have the right to assume all interests of
Legacy Electric LLC under the lease from the City of Kenai, by obtaining the City of
Kenai's written consent to become the successor lessee, and provided that the City of
Kenai releases Legacy Electric LLC from any liability under the lease.
Upon any default by the Association to pay the annual sublease payment
or fulfill any other obligations of the sublease, the sub lessor may notify the Association
in writing and demand compliance with the sublease within thirty (30) days. The
DECLARATION OF PENINSULA HANGAR ASSOCIATION
7
sub lessor shall mail a copy of the notice to each unit owner. If the default is not cured
within the thirty-day period, the sublessor may terminate the sublease pursuant to Alaska
law.
Section 3. NOTICE AND RESERVATION CONCERNING CITY OF KENAI
Nothing in this Declaration alters or diminishes the rights of the City of Kenai
under its Lease described above. Allocation of interes ts in the hangar units and common
areas is a matter between the Association and unit owners, and is not a subdivision of the
leasehold as against the City of Kenai.
Purchase of a unit shall constitute agreement by each unit owner to be bound by
and comply with all terms of the City of Kenai Lease as if a Lessee thereunder (provided,
however, a unit owner does not personally assume or guarantee any amounts owed to the C ity of
Kenai under its Lease, except that the Member agrees to indemnify, defend, and hold harmless
the City of Kenai with respect to matters arising out the Member's use of the Member's unit).
Each unit owner acknowledges that a violation of the City of Kenai Lease by the Association, or
Declarant, or any unit owner may result in the termination of all rights under the City of Kenai
Lease and of all unit owners' rights under this Declaration and any deed or proprietary lease . In
the event of any default alleged by the City of Kenai under its Lease, the Association may take
whatever action is necessary or appropriate to cure the alleged default and avoid termination of
the City of Kenai Lease, consistent with the terms and conditions of the lease.
The sale, assignment, or sublease of any unit is subject to consent by the City of Kenai,
which shall not unreasonably withhold consent. The City of Kenai shall not be obligated to
consent if the City of Kenai Lease is in default.
Declarant's rights and reservations contained in this Declaration are subject to consent of
the City of Kenai.
ARTICLEN
HANGAR AND USE RESTRICTIONS
Section 1. HANGAR USE
(a) The use of the Peninsula Hangar Association hangars is exclusively for the non-
commercial storage of light aircraft (defi ned as up to by not including 42 foot wingspan) and
respective aircraft parts. All other uses incidental to an airport such as car rental agencies,
limousine service, restaurants, insurance sales, and other such incidental services not directly
related to the maintenance and operation of aircraft are prohibited.
DECLARATION OF PENINSULA HANGAR ASSOCIATION
8
(b) Only light maintenance will be performed (i.e., parts replacement, annual
inspections).
(c) No fueling or defueling will be conducted in the hangars.
( d) No spray ap p lications of any materials in connection with recovering or painting will
be permitted in the units .
(e) All flammable and combustible liquids shall be store in approved containers and
shall be stored in compliance with the quantity and manner of storage regulations of the Fire
Code.
(f) Contamin ants spilled or dripped on the floors shall be minimized by the use of
drip pans or other containment devices that intercept contaminants before they are allowed to hit
the floor.
(g) All spills of flammable or combustible liquids shall be cleaned up immediately by
using absorb pads or other material approved for the use intended. Such materials shall be
disposed of in a manner approved by the State Department of Environmental Conservation.
(h) There shall be no cleaning of engines, parts, floors or other materials in the hangar
units unless in an approved solvent tank or other containment vessel designed to prevent spills to
the floor.
(i) There shall be no welding allowed in any unit.
(j) No aircraft, vehicles, or other personal property may be stored permanently
outside of the hangars without the Airport Manager's approval in writing. Vehicles will be
parked in designated locations, or when aircraft is gone vehicles may be temporarily stored in the
hangars.
(k) The units shall not be used for any unlawful purpose of or for any purpose or use
that may constitute a nuisance or hazard to health, safety, or property. The units shall not be
used or occupied for any purpose in violation of any law, lawful order, or rule or regulation
concerning the operation or use of Kenai Municipal Airport.
Section 2. DESCRIPTION OF COOPERATIVE BUILING
There are two buildings in the project which is on the aforementioned survey map and
floor plan. They are one-level buildings which contain twelve (12) units. (six units each)
Section 3 . PARKING AND VEHICULAR RESTRICTIONS
No vehicle shall be left on the property subject to this Declaration, except for incidental
parking by unit owners in connection with use of their units which shall not interfere with the
DECLARATION OF PENINSULA HANGAR ASSOCIATION
9
access to or use of any other unit. There shall be no exposed storage deposited, accumulated or
preserved anywhere on the property;.
Section 4. NUISANCES
No noxious or offensive activities (including, but not limited to, the repair of airplanes
other than as approved by the Board of Directors) shall be carried on upon the project. The
Board of Directors of the Association shall have the right to determine if any noise or activity
constitutes a nuisance (but such determination shall not be binding on the City of Kenai). No
unit owner shall permit or cause anything to be done or kept upon the property which will
increase the rate of insurance thereon or which will obstruct or interfere with the rights of other
unit owners, nor will he commit or permit any nuisance on the premises or commit or cause any
illegal act to be committed thereon. Each unit owner shall comply with all of the requirements of
the local or state authorities and with all other governmental authorities with respect to the
occupancy and use of a hangar.
Section 5. SIGNS
No signs, posters, displays or other advertising devices of any character shall be erected
or maintained on, or shown or displayed from, the hangars without prior written approval having
been obtained from the Board of Directors of the Association; provided, however, that the
restrictions of this paragraph shall not apply to any sign or notice of customary and reasonable
dimension which states that the premises are for rent or sale. Address and identification signs
shall be maintained by the Association. The Board of Directors may summarily cause all
unauthorized signs to be removed and destroyed. This section shall not apply to any signs used
by Declarant or its agents in connection with the original construction and sale of the units.
Section 6. HOLD HARMLESS AND INDEMNIFICATION
Each unit owner shall be liable to the Association for any damage to the common areas or
any equipment thereon which may be sustained by reason of the negligence of said unit owner or
of his guests or invitees, to the extent that any such damage shall be removed within a reasonable
time upon completion of construction of the project.
Section 11. RUBBISH REMOVAL
No owner of a unit shall permit or cause any trash or refuse to be disposed of on any
portion of the project subject to this Declaration. No portion of the project shall be used for the
storage of building materials, refuse or any other materials other than in connection with
approved construction.
Section 12. LEASE OF UNITS
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
Any unit owner may lease his unit to a third party, with prior written notice to the
Association and consent by the City of Kenai, which consent shall not be unreasonably withheld.
Such a lease must be in writing and shall provide that the failure to comply in all respects with
the provisions of this Declaration, the Association By laws, the City of Kenai Lease, or the unit
owner's Proprietary Lease shall be a default under the terms of the lease. A lessee of such a unit
shall not have any rights in the Association, and the unit owner shall retain all rights as owner,
unless the owner sells all his interest in the unit to the renter as allowed by this Declaration, and
the renter becomes a unit owner as defined in Article I, Section 3.
ARTICLEV
ARCHITECTURAL PROVISIONS
Excepting the interior of units, no replacement, addition or alteration of the buil di ng,
structure, fence, drainage facility, common or limited common area landscaping or planting shall
be effected on any hangar other than by Declarant until the plans, specifications and plat plan
showing the location and nature of such replacement, addition, alteration or removal have been
submitted to , and approved in writing by the Board of Directors and, as may be applicable
pursuant to the City of Kenai Lease, the City of Kenai, nor shall any exterior painting or
decorative alteration be commenced until the board has approved the plans therefore, including
the proposed color schemes, design thereof, and the quality of materials to be used. All such
plans and specifications shall be prepared by an architect or landscape architect or licensed
building designer, said person to be employed by the init owner making applications at his sole
expense . Plans and resubmittals thereof shall be approved or disapproved within thirty (30)
days. The approval of the plans and specifications may be withheld not only because of
noncompliance with any of the specific conditions, covenants and restrictions contained in this
Declaration but also by reason of reasonable dissatisfaction of the Board with the location of the
structure, the elevation, color scheme, fini sh, design, proportions, architecture, shape, height,
style and appropriateness of the proposed structure or altered structure, the materials used
therein, or because of its reasonable dissatisfaction with any or all other matters or things which,
in the reasonable judgment of the Board, will render the proposed investment inharmonious or
out of keeping with the general plan of improvement of the property or with the improvements
erected on other hangars. If, after such plans and specifications have been approved, the
improvements are altered, erected or maintained upon the hangar other than as approved by the
Board such alteration, erection and maintenance shall be deemed to have been undertaken
without the approval of the Board having been obtained as required by this Declaration. After
the expiration of one (1) year from the date of completion of any improvement, said
improvement shall, in favor of purchasers and encumbrancers, in good faith and for value, be
deemed to comply with all of the provisions hereof, unless a notice of such noncompliance or
non-completion, executed by one member of the Board, shall appear of record in the Office of
the Recorder, Kenai Recording District, or legal proceedings shall have been instituted to enforce
compliance with these provisions. (Any such improvements shall not waive any rights of the
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
Municipality under its lease of the property.) The approval of the Board of any plans or
specifications submitted for approval as herein specified for use on any hangar shall not be
deemed to be a waiver by the Board of its right to object to any of the features or elements
embodied in such plans and specifications, if or when the same features or elements are
embodied in any subsequent plans and specifications submitted for approval as herein provided
for use on other hangars. No member of the Board shall be liable to any person for his decisions
or failure to act in making decisions as a member of said Board. The members of the Board shall
receive no compensation for their services performed pursuant to this Declaration. Upon
approval o f the Board, it shall be conclusively presumed that the location and height of any
improvement does not violate the provisions of this Declaration.
ARTICLE VI
REPAIR AND MAINTENANCE
Section 1. REP AIR AND MAINTENANCE DUTIES OF ASSOCIATION
The Association shall maintain, repair and make necessary improvements to, and pay for
out of the maintenance fund to be provided, all common areas and the building thereon; all
corrective architectural, landscaping and repair work within hangars, if the unit owner fails to
repair the areas subject to his control and duty to maintain. all metered utilities in common areas;
and all common parking areas , ramps, walks and other means of ingress and egress within the
project. To the extent not assessed to or paid by the unit owners, the Association shall pay all
real and personal property taxes and assessments levied upon the Cooperative's property,
including any portion of the units, common areas, or limited common areas. It shall further be
the affirmative duty of the Association to require strict compliance with all provisions of this
Declaration and to inspect the property for any violations thereof.
Section 2. REPAIR AND MAINTENACE BY UNIT OWNERS
Each unit owner shall maintain, repair, replace and restore all portions of his hangar,
including the interior walls, ceilings, windows, floors, doors and permanent fixtures and limited
common areas subject to his exclusive control, in a safe, clean, sanitary and attractive condition.
ACTICLE VII
DESTRUCTION OF IMPROVEMENTS
Section 1. DUTY TO RESTORE
A portion of the common interest community for which insurance is required under AS
34.08.440 of the Act or for which insurance carried by the Association is in effect, whichever is
more extensive, that is damaged or destroyed must be repaired or replaced promptly by the
Association unless:
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
(a) The common interest community is terminated and AS 34.08.260 applies;
(b) Repair or replacement would be illegal under a state statute or municipal
ordinance governing health or safety;
( c) Eighty percent (80%) of the unit owners, including every owner of an unit or
assigned limited common elements that will be rebuilt, vote not to rebuild
Section 2.
The cost or repair or replacement in excess of insurance proceeds shall be a common
expense, but subject to a unit owner's obligations under Article IV, Section 6 of this Declaration.
Section 3. PLANS
The common interest community must be repaired and restored in accordance with either
the original plans and specifications or other plans and specifications which have been approved
by the Board of Directors and a majority of the unit owners.
Section 4 . REPLACEMENT OF LESS THAN ENTIRE COMMON INTEREST
COMMUNITY
(a) The insurance proceeds attributable to the damaged common elements shall be
used to restore the damaged area to a condition compatible with the remainder of
the common interest community.
(b) Except to the extent that other persons will be distributees:
1. The insurance proceeds attributable to units and limited common elements
that are not rebuilt shall be distributed to the owners of those units and the
owners of the units which those limited common elements were allocated,
or to lien holders, as their interest may appear; and
2. The remainder of the proceeds shall be distributed to all the unit owners or
lien holders, as their interest may appear, in proportion to the common
expense liabilities of all the units.
( c) If the unit owners vote not to rebuild any unit, that unit's interest shall be
automatically reallocated as ifthe unit has been condemned under AS 34.08 .740
(a), and the Association shall promptly prepare, execute and record an amendment
to the Declaration reflecting the reallocation.
Section 5. INSURANCE PROCEEDS
The Board of Directors of the Association shall hold any insurance proceeds in trust for
the Association, unit owners and lien holders as their interests may appear. Subject to the
DECLARATION OF PENINSULA HANGAR ASSOCIATION
13
provisions set forth above, the proceeds shall be disbursed first fo r the repair or restoration of the
damaged property, and the Association, unit owners and lien holders are not entitled to receive
payment of any portion of the proceeds unless there is a surplus of proceeds after the common
interest community has been completely repaired or restored, or the common interest community
is terminated.
Section 6. NOTICE TO MORGAGEE
Upon request , the Board of Directors shall give any institutional holder of a first
mortgage on any unit, who is listed in the records of the Association, notice of any substantial
damage or destruction to a unit or the common elements. In any event, notice will be given
whenever the damage to the common elements exceeds $10,1000 or the damage to the individual
unit exceeds $1 ,000.
ARTICLE VIII
ASSESSMENT AND COLLECTION OF COMMON EXPENSES
Section 1. DEFINITIONS OF COMMON EXPENSES
Common expenses shall include:
(a) Expenses of administration, maintenance, utilities, and repair or replacement of
the common elements;
(b) Expenses declared to be common expenses by the Declaration, Bylaws of the
Association, or Alaska law,
( c) Expenses agreed upon as common expenses by the Association;
( d) Expenses to meet any City of Kenai or Kenai Peninsula Borough tax liability on
all the property constituting the common interest community;
( e) Expenses for the amortization of any security interest or interest encumbering the
common interest community as a whole;
(f) Any expenses with respect to insurance coverage on units and common elements,
including the deductible; and
(g) Such reserves as may be established by the Association, whether held in trust or
by the Association, for lease payments ; for repair, replacement or addition to the
common elements or any other real or personal property acquired or held b y the
Association; for blanket mortgage shortfalls; and for a working capital fund,
established as part of the operating reserve account.
Section 2. APPORTIONMENT OF COMMON EXPENSES
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
Except as provided in this Article, all common expenses shall be assessed against all
units equally.
Section 3.
(a)
COMMON EXPENSES ATTRIBUTABLE TO FEWER THAN ALL UNITS
Any common expense for services provided by t he Association to an individual
unit at the request of the unit owner shall be assessed against the unit which
benefits from such service.
(b) Any insurance premium increase attributable t o a particular unit shall be assessed
against the unit.
(c) Assessments to pay a judgment aga inst the Association may be made only against
the units in the common interest community at the time the judgment was entered,
in proportion to their common expense liabilit ies.
( d) If a common expense is caused by the misconduct of a unit owner, the
Association may assess that expense exclusively against the unit.
(e) Fees, char ges, late charges , fines , and interest charged against a unit owner by the
Association pursuant t o th is Declaration and the Act are enforceable as common
expense as sessments against the unit.
Section 4.
(a) The asso c iation has a statutory lien on a unit for an assessment levied against that
unit or fines imposed against its unit owner from the time the assessment or fine
becomes due. Fees, charges, late charges, fines and interest charged pursuant to
Alaska Statutes are enforceable as assessments under this section. If an
assessme nt is payable in installments, the full amount of the assessment is a lien
from the time the first installment becomes du e.
(b) A lien under this section is prior to all other liens and encumbrances on a unit
except (1) a lien and encumbrances which the A s sociation creat es, assumes, or
takes subject to; (2) a first security interest encumbering only the interest of the
unit owner and perfected before the date on which the assessment sought to be
enforced became delinquent; and (3) liens for real property taxes and o ther
governmental ass essments or charges against the unit. A lien, under this section,
is also prior to all security interests described in (2) of this subsection if t he
common ex pense assessments based on the periodic budget adopted b y the
Association would have b ecome due in the absence of acceleration during the six
months immediately preceding institution of an action to en force the lien. This
subsection does not affect the priority of mechanics or materialmen's liens, or the
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
priority of liens for other assessments made by the Association. A lien under this
is not subject to AS 09.38 .010 (Homestead Exemption).
( c) The recording of the Declaration constitutes record notice and perfection of the
lien. Further recordation of any claim of lien for assessment under this section is
not required.
( d) A lien for unpaid assessments is extinguished unless proceedings to enforce the
lien are instituted within three years after the full amount of the assessment
becomes due; provided that if an owner of a unit subject to a lien under this
section files a petition for relief under the United States Bankruptcy Code, the
period of time for instituting proceedings to enforce the Association's lien shall be
tolled until thirty days after the automatic stay of the proceeding under
Section 362 of the Bankruptcy Code is lifted.
(e) This section does not prohibit actions to recover sums for which subsection 9(a)
of this section creates a lien or prohibit the Association from taking a deed in lieu
of foreclosure.
(f) A judgment or decree in an action brought under this section is enforceable by
execution under AS 9-35-010. It shall include costs and reasonable attorney's fees
for the prevailing party.
(g) The Association upon written request shall furnish to a unit owner a statement
setting out the amount of unpaid assessments against the unit. The statement must
be furnished within ten business days after receipt of the request and is binding on
the Association, the Board of Directors, and every unit owner.
(h) Upon nonpayment of an assessment on a unit, a unit owner may be evicted in the
same manner as provided by law in the case of an unlawful holdover by a
commercial tenant, and the lien may be foreclosed under this section.
(i) The Association's lien may be foreclosed as a mortgage or as a deed of trust on
real estate is foreclosed or as a lien is foreclosed under AS 34.35.005.
(j) The unit may also be sold as, subject to the consent of the City of Kenai as
described in Article III, Section 3, above, as follows:
1. The Association, upon nonpayment of an assessment and compliance with
this subs ec tion, may sell the un it at public sale or by private negotiation,
and at any time and place; each aspect of the s ale, including the method,
advertising, time, place, and terms must be reasonable; the Association
shall give reasonable written notice to the unit owner and a lessee of the
unit owner of the time and place of the public sale or, if a private sale is
16
DECLARATION OF PENINSULA HANGAR ASSOCIATION
intended, of the intention of entering into a contract to sell and of the t ime
after which a private dispositi on may be made ; the same notice must also
be sent to any other person who has a recorded interest in the unit that
would be cut off by the sale, but only if the recorded interest was on
record seven weeks before the date specified in the notice as the date after
which a private sale may be made; the notices required by this subsection
may be sent to any address reasonable in the circumstances; sale may not
be held until five weeks after the sending of the notice; the Association
may buy at a public sale and, if the sale is conducted by a fiduciary or
other person not related to the Association, at a private sale .
2. Unless otherwise agreed, the debtor is liable for any deficiency in a
foreclosure sale under AS 09.45.170.
3. The proceeds of a foreclosure sale must be applied in the following order:
i. The reasonable expenses of sale;
II. The reasonable expenses of securing possession before sale
including holding, maintaining, and preparing the unit for sale,
payment of taxes and other governmental charges, premiums on
hazard and liability insurance;
m. Satisfaction of the lien of the Association;
iv . Satisfaction in the order of priority of a subordinate claim of
record; and
v. Remittance of any excess to the unit owner.
4. A good faith purchaser for value acquires the unit free o f the Association's
debt that gave rise to the lien under which the foreclosure sale occurred
and any subordinate interest, even though the Association or other person
conducting the sale failed to comply with the requirements of this section.
the person conducting the sale shall execute a conveyance or other
appropriate documents to the purchaser sufficient to convey the unit and
stating that it is executed after a foreclosure of the Association's lien by
power of sale and that the person conducting the sale was empowered to
make the sale;-signature and title or authority of the person signing the
conve yance as grantor and a recital of th e facts of non-payment of th e
assessment and of the giving of the notices required by this subsection are
authority of the person to sign; further proof of authority is not required
even if the Association is named a s grantee in the conveyance.
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
Section 5.
5. At any time before the Association has disposed of a unit in a cooperative
or entered into a contract for its disposition under the power of sale, the
unit owner or the holder of a subordinate security interest may cure the
default of the unit owner and prevent sale or other disposition by tendering
the performance due under the security agreement, including an amount
due because of exercise of a right to accelerate, plus the reasonable
expenses of proceeding to foreclosure incurred to the time of tender.
BUDGET ADOPTION AND IMPLEMENTATION
Not later than thirty (30) days prior to the beginning of each calendar year, the Board of
Directors shall estimate the total charges to be assessed against each unit. Written notice of the
annual assessments shall be sent to every unit owner subject thereto. Each owner thereof shall
thereafter pay to the Association his assessment in monthly, quarterly, or other installments as
established by the Board of Directors. In the event the Board of Directors shall determine that
the estimate of total charges for the current year is or will become inadequate to meet all
expenses of the property for any reason,, it shall immediately determine the approximate amount
of such inadequacy and issue a supplemental estimate of the total charges to be assessed against
each unit.
Each installment of an assessment shall become delinquent if not paid on or before thirty
(30) days from the date upon which it becomes due. All annual common assessments shall be
paid according to the percentage of ownership in the common areas as set forth in Exhibit C. All
excess funds remaining in the general operating reserve fund over and above the amounts used
for the operation of the project shall be returned to the unit owners in a proportion equal to their
individual contributions or may be retained by the Association and applied to the following
year's assessments. In a voluntary conveyance of a unit, the grantee of the same shall be jointly
and severally liable with the grantor for all unpaid assessments by the Association against the
latter for his share of the common expenses up to the time of the grant or conveyance, without
prejudice to the grantee's right to recover from the grantor the amounts paid by the grantee
therefore.
From and after the date of recordation of a Proprietary Lease to the first owner of each
unit in the project, the unit owner may be required by the Board to establish an assessment
reserve fund with the Association, in the amount of $1,000. In addition, the unit owner shall pay
to the Association the regular assessments as provided herein, the purpose being to have
available at all times for the Association an assessment reserve fund equal to two months'
assessments . This assessment reserve fund may be maintained at all times, just as a reserve for
taxes and insurance is so maintained, and, in the event of a subsequent transfer of the unit
owner's interest in the project, the subsequent purchaser shall be responsible for establishing and
maintaining this reserve fund.
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
Section 6. DELINQUENCIES
There shall accrue with each delinquent assessment a late charge of Ten Dollars ($10),
together with interest at the maximum rate permitted by law on such delinquent sums, calculated
from the date of delinquency to and including the date full payment is received by the
Association.
ARTICLE IX
THE ASSOCIATION
Section 1. FORMATION AND MEMBERSHIP
The association shall be incorporated under the name of Peninsula Hangar Association,
as a Nonprofit corporation under the laws of the State of Alaska. Every unit owner who is subject
to assessment shall automatically, upon becoming the owner of a unit, be a member of the
Association and shall remain a member thereof until such time as his ownership ceases for any
reason, at which time his membership in the Association shall automatically cease. A person
shall be deemed an owner of a unit only upon execution and recordation of a Proprietary Lease
conveying the unit to him, and the membership shall be appurtenant to the unit conveyed. Each
member shall be issued a Certificate of Ownership by the Association, which shall be evidence
of his rights in the Association.
(al Bylaws. The Association shall adopt Bylaws for the administration of the
property and the Association and other purposes not inconsistent with this Declaration and the
Act. These Bylaws shall be adopted by the Board of Directors of the Association after their
election at the Association's organizational meeting. The Bylaws may thereafter be amended or
modified by the vote of a majority of the unit owners. Any proposed modifications or
amendments to the Bylaws shall be proposed by Association members at any duly constituted
annual or special meeting of the Association. A copy of the proposed amendment shall be
included in the notice of any meeting in which action is to be taken.
(b) Proprietary Lease . Each member, as a condition of owning a unit, must
execute a Proprietary Lease with the Association. The Board of Directors shall adopt a form of
Proprietary Lease, in a recordable form, to be used by the Association. The Proprietary Lease
shall contain such restrictions, limitations, and provisions with respect to the amendment thereof,
the subletting of the unit, and other terms, provisions, conditions and covenants , as the Board of
Directors may determine. After a Proprietary Lease in the form so adopted by the Board of
Directors shall have been executed and delivered by the Association, further Proprietary Leases
subsequently executed and delivered shall be in the same form , except with respect to the date of
commencement and the monthly charges payable there under, or except as the Association
deems a modification or amendment to the form is reasonable and appropriate.
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
(c) Assignment of Proprietary Lease. The Proprietary Lease shall be assigned or
transferred only in compliance with terms, conditions, and provisions of this Declaration, such
Proprietary Lease, and the Lease with the City of Kenai . Without limiting the foregoing and
except for rentals as provided in Article IV, Section 12, no assignment of any Proprietary Lease
shall take place except in conjunction with the sale or transfer of a membership in the
Association, nor shall the assignment be effective unless and until all sums required to be paid by
the assignor to the Association have been so paid and the assignee has executed a new
Proprietary Lease with the Association. Until the Association has accepted and executed a new
Proprietary Lease with an assignee, the assignor shall remain a member for purposes of
remaining responsible for all expenses associated with his unit. Upon completion of an
assignment to an assignee, the assignor shall be released from all liabilities to the Association
accruing in the future, arising from membership in the cooperative.
Section 2. GENERAL POWERS OF THE ASSOCIATION
The Association shall have all of the powers set forth in its Articles of Incorporation,
together with its general powers as a nonprofit corporation, generally to do any and all things
that a corporation organized under the laws of the State of Alaska may lawfully do in operating
for the benefit of its members, subject only to the limitations upon the exercise of such powers as
are expressly set forth in the Articles of Incorporation, the Bylaws and in this Declaration and to
do any and all acts which may be necessary or proper for or incidental to the exercise of any of
the express powers of the Association or for the peace, health, comfort, safety and general
welfare of the unit owners and their guests.
The association shall have a lien (as such term is defined in AS 34.08.470) on each
outstanding unit in order to secure payment of any sums which shall be due or become due to the
Association for any reason whatsoever, including any sums due under an Proprietary Lease
appurtenant thereto .
Section 3 SPECIAL POWERS OF BOARD OF DIRECTORS
Without in any way limiting the generality of the foregoing, in the event that the Board of
Directors determines that an improvement is in need of repair, restoration or painting, or that
landscaping is in need of installation, rep air or restoration, or that an improvement is in existence
without proper approval of the Board or that there is a violation of any provision of this
Declaration, then the Board of Directors shall give written notice to the unit owner of the
condition or violation complained of, and unless the Board has approved in writing corrective
plans proposed by the unit owner to remedy the condition complained of within such period of
time as may be determined reasonable by the Board o f Directors after it has completed thereafter
within the time allotted by the Board of Directors, th e Board of Directors shall undertake to
remedy such condition or violation complained o f, and the cost thereof shall be charged to the
unit owner and his unit whose hangar is the subject matter of the corrective work, and such cost
20
DECLARATION OF PENINSULA HANGAR ASSOCIATION
shall be deemed to be a special assessment to such unit owner and his unit and subject to levy,
enforcement and collection by the Board of Directors in accordance with the assessment lien
procedure provided for in this Declaration.
Section 4. RIGHTS OF ENTRY
The Association shall have a limited right of entry in and upon all limited common areas
and the exterior of all units for the purpose of taking whatever corrective action may be deemed
necessary or proper by the Association, Nothing in this Article shall in any manner limit the
right of the unit owner to exclusive control over the interior of his unit, subject to the terms and
conditions of the Lease with the City of Kenai, provided, however, that an owner shall grant a
right of entry to the Association, or any other person authorized by the Association, in case of
any emergency originating in or threatening his unit, whether the owner is present or not.
Provided, further, that an owner shall permit other owners, or their representatives , to enter his
unit fo r the purpose of performing required installation, alterations or repair of the mechanical or
electrical services to a hangar, provided that requests for entry are made in advance and that such
entry is at a time convenient to the owner whose unit is to be entered. In case of an emergency,
such right of entry shall be immediate.
Section 5 MISCELLANEOUS DUTIES AND POWERS
The Association shall have the right to install or construct capital improvements on any
of the common areas. The Association may, at any time and from time to time, reconstruct,
replace or refinish any improvement or portion thereof upon the common areas in accordance
with the original design, finish or standard of construction of such improvement; construct,
reconstruct, replace or refinish any surface upon any portion of common areas; replace destroyed
trees or other vegetation and plant trees, shrubs and ground cover upon any portion of the
common areas, and place and maintain upon the common areas such signs as the Association
may deem necessary for their identification, for regulation of traffic, including parking, the
regulation and use of the common areas and for the health, welfare and safety of unit owners and
their guests. The Association may delegate all of the powers contained in this Declaration to any
mana gement organization or individual, and the Association may employ personnel necessary
for the effective operation and maintenance of the building and common areas of any type
described herein, including the employment of legal and accounting services.
Section 6. PRIORITIES AND INCONSISTENCIES
If there are conflicts or inconsistencies between this Declaration and either any
Proprietary Lease or the Bylaws, the terms and provisions of this Declaration shall prevail.
Notwithstanding the foregoing the City of Kenai Lease and any laws , regulations, or ordinances
governing the Kenai Airport shall prevail and control over all other agreements, leases, sub lease
Bylaws and this Declarati on.
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
Section 7 . MANAGING AGENT
The Association may enter into a written contract with a professional, corporate or
individual manager to conduct and perform the business , obligations and duties of the
Association.
Section 8. SHARES AND VOTING
At any meeting of the Association, each unit owner, including Declarant as to those units
not sold, shall be entitled to one vote for each unit owned. Where there is more than one record
owner of a unit, any or all of such persons may attend any meeting of the Association, but it shall
be necessary of those owners present to act unanimously in order to cast the vote to which the
unit entitled. AH agreements and determinations lawfully made by the Association in accordance
with the voting procedures and rights established herein shall be deemed to be binding on all
owners of units, their successors and assigns.
ARTICLE X
RIGHTS OF MORTGAGEE AND CITY OF KENAI
Section 1. PRIORITY
Where the mortgagee of a mortgage of record or other purchaser of a unit obtains title to
the same as a result of foreclosure of any such mortgage, or other purchaser of a unit obtains title
to the same as a result of a deed taken in lieu of foreclosure , the acquirer of title shall be required
to execute a Proprietary Lease with the Association and to pay any delinquent portion of the
share of the common expenses or assessments by the Association chargeable to such unit which
became due prior to the acquisition of title to such unit by such acquirer and shall be subject to
any future assessments which become due subsequent to his acquisition of title . Such unpaid
share of common expenses or assessments shall be deemed to be expenses collectible from such
acquirer, successors and assigns.
Section 2. DEFAULT
A breach of any of the provisions, covenants, restrictions or limitations hereof, the
recordation of any lien or assessment hereunder, or the pursuit of any remedy hereunder shall not
defeat or render invalid the lien of any mortgage made by a unit owner in good faith and for
value upon the interest of a unit owner. All of the provisions herein shall be binding upon and
effective against any owner whose title to said property is hereafter acquired through foreclo sure
or trustee's sale. The holder of a frrst mortgage of record is also, upon request, entitled to written
notification from the Association of any default in the performance by the individual unit owner
of any obligation under this Declaration, Association Bylaws or other Association documents,
which default is not cured within sixty (60) days.
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
Section 3 . RIGHT TO INSPECT ASSOCIATION RECORDS AND NOTICE
The holder of a first mortgage of record, its successors and assigns, shall have the right to
inspect the Association's books of account and other financial records and shall also be able to
require the Association to provide to it such additional financial data as may be reasonably
requested to protect its interests, including ammal financial statements, within ninety (90) days
following the end of the fiscal or calendar year of the Association. Written notice of all
Association meetings shall be sent to first mortgagees of record upon their written request who
may designate an agent to attend such meetings.
Section 4. PRIOR APPROVAL
Nothing in this Declaration or the Bylaws of the Association of unit owners provided for
herein to the contrary, and except as to reserved rights of the Declarant, or as to the rights of the
City of Kenai pursuant to the City of Kenai Lease described in Article III, prior written approval
of one hundred percent (100%) of the holders of the first mortgages or deeds of trust covering all
or any portion of the project shall be a condition precedent to the effectiveness of any of the
following actions:
(a) Removal of all or any portion of the property or project from the provisions of the
Common Interest Ownership Act pursuant to Alaska Statute 34.08 or as said statute may be
amended from time to time.
(b) A change in the pro rata interest or obligation of any unit for purposes of levying
assessments or charges or allocating distributions of hazard insurance proceeds of condemnation
awards.
(c) A change in the percentage interests of the unit owners in the common elements.
(d) The abandonment of the cooperative status of the project, except for abandonment
provided under the provisions of the Common Interest Ownership Act in case of substantial loss
to the units and common elements.
(e) The use of hazard insurance proceeds for losses to any cooperative property,
whether to a unit or to the common elements, for other than the repair, replacement or
reconstruction of such improvements, except as provided in the Common Interest Ownership Act
in the case of substantial loss to the units and common elements.
(f) Any amendment to this Declaration affecting the validity or priority of the rights
of any mortgagee .
Section 5. RIGHTS OF CITY OF KENAI
Prior written approval by the City of Kenai shall be required for any amendment to this
Declaration.
DECLARATION OF PENINSULA HANGAR ASSOCIATION
23
ARTICLE XI
INSURANCE
Section 1. TYP E S
The Association shall obtain and continue in effect all insurances as required by the City
of Kenai and adequate blanket public liability insurance for the common areas and fire insurance
with extended coverage for the full replacement value of the project. Such insurance shall be
maintained by the Association for the benefit of the Association, the unit owners, the Declarant,
the City of Kenai , and the encumbrancers upon the property, or any part thereof, as their interests
may appear, with underlying coverage on the individual units. The Association may purchase
such other insurance as it may deem necessary including but not limited to , fidelity bonds and
worker's compensation. Each owner shall provide insurance on his personal property. Nothing
herein shall preclude any individual owner from carrying any public liability insurance as he may
deem advisable to cover his individual liability for damages to person or property occurring
inside his individual unit or elsewhere upon the premises .
Section 2. PREMIUMS AND PROCEEDS
Insurance premiums for any such blanket insurance coverage obtained by the Association
and any other insurance deemed necessary by the A ssociation may become a common expense,
at the discretion of the Board of "Directors , to be included in the regular as sessments levied by
the Association for the repair or replacement of the property for which the insurance was carried
or otherwise disposed of as provided in this Declaration. The Association is hereby granted the
authority to negotiate loss settlements with the appropriate insurance carriers. Any two Directors
of the Association may sign a loss claim form and release form in connection with the settlement
of a loss claim, and such signature shall be binding on all the unit owners .
ARTICLE XII
DURATION AND AMENDMENT
Section 1. DURATION
This Declaration shall be perpetual and continue in full force until terminated by law or
as otherwise provided herein, or until termination of the leasehold or subleasehold referred to in
Article III.
Section 2 . AMENDME NT
Except fo r reserved rights of the Declarant, notic e of the subject matter of a proposed
amendment to this Declaration in reasonably detailed form shall be included in the notice of any
meeting of the Association at which a proposed amendment is to be considered. Notice of a
proposed amendment shall be given to the City of Kenai not less than thirty (30) days prior to the
24
DECLARATION OF PENINSULA HANGAR ASSOCIATION
effective date of any amendment, and the C ity of Kenai shall have th e r ight to consent to or
oppose amendments as prov ided in Article X , Section 5 . A resolution adopting a proposed
amendment may be proposed by a unit owner at a meeting of members of the Association. The
resolution shall be adopted by approval of unit owners owning in the aggregate not less than fifty
percent (50%) of the voting power, subject to the consent of the City of Kenai as described
above. A copy of each amendment shall be certified by at least two (2) officers of the
Association, and the amendment shall be effective when recorded in the public records, Kenai
Recording District, State of Alaska; provided, however, that any of the following amendments to
be effective must be approved in writing by the record holders of all encumbrances on any units
at the time of such amendment:
(a) Any amendment which affects or purports to affect the validity or priority of
encumbrances or the rights or protection granted to encumbrancers as provided herein.
(b) Any amendment which would or could result in an encumbrance being cancelled
by forfeiture.
( c) Any amendment relating to the insurance provisions as set out herein, to the
application of insurance proceeds as set out herein, or to the disposition of any money received
in any taking under condemnation proceedings .
Section 3. AMENDMENT BY DECLARANT
Notwithstanding the foregoing , until the close of any escrow for the sale of a unit in the
project, D e clarant shall have the right to terminate or, with the consent of the City of Kenai,
modify this Declaration by recordation of a supplement thereto setting forth such termination or
modification. For purposes of this Declaration, the close of escrow shall be deemed to be the
date upon which a Proprietary Lease for a unit is recorded.
AR TI CLE XIII
CONDEMNATION
Section l. CONSEQUENCES OF CONDEMNATION
If at any time or times during the continuance of the cooperative ownership, pursuant to
this Declaration, all or any part of the project shall be taken or condemned by any public
authority or sold or otherwise disposed of in lieu of or in advance thereof, the provisions of this
Article shall apply.
Se ction 2 . PROCEEDS
All compensat ion, damages, or other proceeds therefrom the sum of which is hereinafter
called the "condemnation award," shall be payable to the Ass ociation, in trust, for the purposes
set forth h erein.
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DECLARATION OF PENINSULA HANGAR ASSOCIATION
Section 3. COMPLETE TAKING
In the event that the entire project is taken or condemned, sold or otherwise disposed of
in lieu of or in avoidance thereof, the cooperative ownership pursuant thereto shall terminate .
The condemnation award shall be apportioned among the unit owners in proportion to the
respective undivided interests in the common elements, provided that if a standard different from
the value of the project as a whole is employed to measure the condemnation award in the
nego tiation, judicial decree or otherwise, then , in determining such shares , the same standard
shall be employed to the extent it is relevant and applicable.
On the basis of the principle set forth in the last preceding paragraph, the Association
shall, as soon as practicable, determine the share of the condemnation award to which each
owner is entitled and make payment acc ordingly.
Section 4. PARTIAL TAKING
In the event that less than the entire project is taken or condemned, or sold or otherwise
disposed of in lieu of or in avoidance thereof, the cooperative ownership hereunder shall not
terminate. "Each owner shall be entitled to a share of the condemnation award to be de termined
in the following manner:
(a) as soon as practicable, the Association shall reasonably and in good faith, allocate
the condemnation award between compensation damages and other proceeds and shall apportion
the amounts so allocated to taking of or injury to the common elements among the owners in
proportion to their res pective undivided interests in the common elements;
(b) the total amount allocated to severance damages shall be apportioned to those
units which were not taken of condemned;
( c) the respective amounts allocated to the taking of or injury to a particular unit
and/or improvements an owner had made within his own unit shall be apportioned to the
particular unit involved; and
( d) the amount allocated to consequential damages and any other takings or injuries
shall be apportioned as the Association determines to be equitable in the circumstances. If an
allocation of the condemnation award is already established in negotiation, judicial decree or
otherwise, then in allocating the condemnation award, the Association shall employ such
allocation to the extent it is relevant and applicable. Distribution of apportioned proceeds shall
be made by check payable jointly to the respective owners and their respective mortgagees .
Section 5. REORGANIZATION
In the event a partial taking results in the taking of a complete unit, the owner thereof
automatically shall cease to be a member of the Association, Thereafter, the Association shall
DECLARATION OF PENINSULA HANGAR ASSOCIATION
26
reallocate the ownership , voting rights and assessments ratio determined in accordance with this
Declaration according to the same principles employed in this Declaration at its inception and
shall submit such reallocation to the owners of remaining units for amendment of this
Declaration as provided in this Declaration.
Section 6. NOTICE TO MORTGAGEE
The institutional holder of a first mortgage on any unit shall be given written notice of
any condemnation proceeding described herein, and nothing herein shall entitle a unit owner, or
any other party, to priority over the holder of a first mortgage with respect to the distribution of
the proceeds of any award or settlement.
ARTICELXIV
MISCELLANEOUS
Section 1. LEGAL PROCEEDINGS
Failure to comply with any of the terms of the Declaration, Bylaws, and regulations
adopted pursuant thereto shall be grounds for relief which may include without limiting same, an
action to recover sums due for damages, injunctive relief, foreclosure oflien, or any combination
thereof, which relief may be sought by the Association or, if appropriate, by an aggrieved unit
owner. The provisions of this Declaration shall be liberally construed to effectuate its purpose of
creating a uniform plan for the development and operation of the project, and any violation of
this Declaration shall be deemed to be a nuisance. Failure to enforce any provision hereof shall
not constitute a waiver of the right to enforce said provision or any other provision hereof. Any
unit owner not, at the time , in default hereunder or Declarant shall be entitled to bring an action
for damages against any defaulting unit owner and in addition, may enjoin any violation of this
Declaration. Any judgment rendered in any action or proceeding pursuant hereto shall include a
sum for attorney's fees , in such amount as the court may deem reasonable, in favor of the
prevailing party. Each remedy provided for in this Declaration shall be cumulative and not
exclusive or exhaustive.
Section 2 . SEVERABILITY
The provisions hereof shall be deemed independent and severable, and the invalidity or
partial invalidity or enforceability of any one provision or portion hereof shall not affect the
validity or enforceability of any other provisions hereof.
Section 3. CONSTRUCTION BY DECLARANT
Nothing in this Declaration shall limit the right of Declarant to complete construction of
improvements to the common areas and to units owned by Declarant or to construct such
27
DECLARATION OF PENINSULA HANGAR ASSOCIATION
additional improvements as Declarant deems advisable prior to completion and sale of the entire
project. Such right shall include but shall not be limited to erecting, constructing and
maintaining on the project such structures and displays as may be reasonably necessary for the
conduct of its business of completing the work. This Declaration shall not limit the right of
Declarant, at any time prior to acquisition of title by a purchaser from Declarant, to establish on
the project additional easements, reservations and rights-of-way to itself, to utility companies or
to others as may, from time to time, be reasonably necessary to the proper development and
disposal of the project. Prospective purchasers and Declarant shall have the right to use all
common areas and limited common areas for access to the sales facilities of Declarant. The
rights of Declarant hereunder may be assigned by Declarant to any successor to all or part of
Declarant's interest in the project by an express assignment incorporated in a recorded deed
transferring such interest to such successor.
Section 4. EASEMENTS
Declarant expressly reser ves for the benefit of owners in the project reciprocal easement
of access, ingress and egress over all of the common areas. Such easements may be used by
Declarant's successors, purchasers and all unit owners, their guests, tenants and invitees, residing
or temporarily visiting the project, for pedestrian walkways, access, and such other purposes
reasonably necessary to use and enjoyment of a unit in the project. Such easements shall be
appurtenant to and shall pass with the title to every unit conveyed. The Declarant expressly
reserves for the benefit of each unit owner an exclusive easement for use of those areas depicted
on the cooperative plan as limited common areas as assigned to each unit owner for his
numbered unit. All building walls shall be considered to adjoin and abut the wall of the
contiguous hangar against the surface from the bottom of the foundation of the building. Such
right of use shall be as not to interfere with the use and enjoyment of the owners of adjoining
hangars, and, in the event that any such contiguous wall is damaged or injured from any cause
other than the act or negligence of one of the owners, the same shall be repaired or rebuilt at their
joint expense. In the event any portion of the common elements encroaches upon any unit or any
unit encroaches upon the common elements as a result of the construction, reconstruction, repair,
shifting, settlement of movement of any portion of the project, a valid easement for the
encroachment and for the maintenance of the same shall exist so long as the encroachment exists.
Section 5. VALUATION OF UNIT AND PROPERTY AND VOTING RIGHTS
Each unit described herein is valued as set forth in Exhibit C, the total value of such units
being the value of property comprising the project. The owner of each unit shall have an
undivided interest in the common areas and facilities appertaining to each unit for all purposes,
except as provided in this Declaration, as set forth in Exhibit C.
Section 6. SERVICE OF PROCESS
28
DECLARATION OF PENINSULA HANGAR ASSOCIATION
The name and address of the person to receive service of process in the cases provided
for in the Common Interest Ownership Act of the State of Alaska is:
Law Office of Sonja Redmond
Sonja Redmond
PO Box 3529
Soldotna, Alaska 99669
ARTICLE XV
SUBSEQUENT PHASES
Section 1. AMENDMENTS TO ESTABLISH SUBSEQUENT PHASES
Until such time as all construction in all phases is complete and all units sold, Declarant
shall have the right to use any common areas and facilities for the purpose of showing and sales,
and to display signs and advertising as deemed required by Declarant.
Section 2. FORMULA TO BE USED IN ESTABLISHING AND AMENDING
PERCENTAGES OF UNDIVIDED INTEREST AND VOTE IN THE EVENT
SUBSEQUENT PHASES ARE ESTABLISHED
In the event phases other than Phase I become part of this cooperative, the percentage of
undivided interest for all units shall be determined by the following formula: Each unit shall
have one vote, and an equal percentage allocation of ownership and responsibility for common
expenses, notwithstanding difference in the square feet of floor areas.
State of Alaska
Third Judicial District
)
)
)
SS .
LEGACY ELECTRIC, LLC
Derek Leichliter
Its: President
THIS IS TO CERTIFY that on this __ day of , 2019, before
me, the undersigned, a Notary Public in and for the State of Alaska duly commissioned
and sworn as such, personally appeared Derek Leichliter known to me to be the President
29
DECLARATION OF PENINSULA HANGAR ASSOCIATION
of LEGACY ELECTRIC, LLC a corporation named above, and know to me to be the
person named in and who executed the foregoing instrument for and on behalf of said
corporation by authority duly vested in him, and he acknowledged to me that he signed
the same freely and voluntarily for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
first hereinabove written.
Notary Public in and for the State of Alaska
My Commission Expires: _____ _
30
DECLARATION OF PENINSULA HANGAR ASSOCIATION
CONSENT TO E STABLISHMENT OF
LEASEHOLD COMMON INTEREST COMMUNITY
The City of Kenai hereby consents to Legacy E l ectric , LLC submitting its leasehold
estate to the provisions of AS 34.08 and establishing a common interest community. The
leasehold estate is that created by Lease between the City of Kenai and Legacy Electric, LLC,
signed by the Kenai City Manager on January 12, 2015 , pertaining to the following described
real property located in the Kenai Recording District, Third Judicial District, State of Alaska:
Lot 2, Block 1, General Aviation Apron, (Located on the Airport)
The City of Kenai hereby consents to Legacy Electric, LLC recording the Declaration of
Peninsula Hangar Association (A Common Interest Ownership Cooperative).
The consent of the City of Kenai indicates only the non-objection and consent of the City
of Kenai to the matters stated herein and is not intended nor should it be construed as an
endorsement or guarantee of the efficacy of the Declaration of Peninsu la Hangar Association or
of the legal rights to be assigned, transferred or held pursuant to the Declaration of Peninsula
Hangar Association or any other documents.
CITY OF KENAI ATTEST:
City Manager City Clerk
RECOMMENDED FOR APPROVAL
Airport Manger
31
DECLARATION OF PENINSULA HANGAR ASSOCIATION
State of Alaska
Third Judicial District
)
)
)
SS.
THIS IS TO CERTIFY that on this __ day of , 2019, before
me, the undersigned, a Notary Public in and for the State of Alaska duly commissioned
and sworn as such, personally appeared _______________ _
known to me to be the City Manager of the City of Kenai known to me to be the person
named in and who executed the foregoing instrument for and on behalf of said City of
Kenai by au thority duly vested in him, and he acknowledged to me that he signed the
same freely and voluntarily for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
first hereinabove written.
N otary Public in and for the State of Alaska
My Commission Expires: _____ _
State of Alaska
Third Judicial District
)
)
)
SS.
THIS IS TO CERTIFY that on this __ day of , 2019, before
me, the undersigned, a Notary Public in and for the State of Alaska duly commissioned
and sworn as such, personally appeared known to me
to be the Airport Manager of the Kenai Municipal Airport and known to me to be the
person named in and who executed the foregoing instrument for and on behalf of Kenai
Municipal Airport by authority duly vested in him, and he acknowledged to me that he
signed the same freely and voluntarily for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and s eal the day and year
first hereinabove written.
N otary Public in and for the State of Alaska
My Commission Expires : _____ _
32
DECLARATION OF PENINSULA HANGAR ASSOCIATION
Exhibit A :
Exhibit B:
Exhibit C:
Exhibit D:
Exhibit E :
INDEX TO EXHIBITS TO DECLARATION
Horizontal Plan
Description of Units
Value of Units
Lease Agreement with City of Kenai
Sublease
Index of Exhibits to Declaration
EXHIBIT A
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KENAI T-HANGAR PROJECT
CONSTRUCTION DOCUMENTS
KENAI, ALASKA
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I' ll0?21J ifft 't01.21uoe..i E;AtlM~'31C:"..ot.:SIGHSTUOIOSc:;c
Exhibit C
UNIT VALUE AND UNDIVIDED INTERESTS
IN COMMON AREA AND FACILITIES
Each unit varies in size of area from 1080 square feet to 1470 square feet, and will
be allocated an equal eight and one third (8.33%) interest in ownership and
responsibility for common expenses .
Unit Square feet Undivided Interest
1 1250 8.33
2 1080 8.33
3 1470 8.33
4 1250 8.33
5 1080 8.33
6 1470 8.33
7 1250 8.33
8 1080 8.33
9 1470 8.33
10 1250 8.33
11 1080 8.33
12 1470 8.33
Total 7600 100%
Unit Value and undivided interests
EXHIBITE
SUBLEASE
LEGACY ELECTRIC, LLC, an Alaska limited liability company, hereinafter
Sub lessor, of 46113 Sather Court, Soldotna, Alaska 99669, enters into the following
sublease agreement with PENINSULA HANGAR ASSOCIATION, an Alaska non-profit
corporation, of 46113 Sather Court, Soldotna, Alaska 99669.
1. Sublease Property. This is a sublease of City of Kenai Municipal Airport lease
for Lot 2, Block 1, General Aviation Apron, executed by the Kenai City Manager
on January 12, 2015 , in which the City of Kenai is the Lessor and Legacy Electric,
LLC is the Lessee, and which covers the following described real property:
Lot 2, Block 1, General Aviation Apron, at the Kenai Municipal
Airport, Kenai Recording District, Third Judicial District, State of
Alaska.
2 . Sublease Term. The Sublease shall commence on the date of execution of this
sublease agreement and shall terminate upon expiration of the City of Kenai
Leasehold, on August 30, 2049. A renewal may be made thereafter as may be
agreed by both the City of Kenai and Lessee.
3. Compliance with City of Kenai Lease. Except as expressly modified in this
sublease, sublessee agrees to perform and abide by all terms of the City of Kenai
Lease referred to above, the terms of which are incorporated herein by reference .
Sublessee is responsible to Sublessor in all ways as the Sublessor is to the City of
Kenai under the City of Kenai lease, and the sub lessee shall comply with all
provisions of the lessee under the City of Kenai lease, including provisions
requiring insurance. Any default by sublessee in provisions of the City of Kenai
lease shall constitute a default under this sublease.
4. Rent. The rent shall be 100% of the rent charged by the City of Kenai under its
lease, including any rent adjustments or increases or other charges by the City of
Kenai.
5 . Indemnification and Liability. Sublessee shall indemnify, defend, and hold
sublessor harmless, to the same extent as is provided for by the lessee in the City
of Kenai lease.
Sublease
6 . Renewal. In The event sublessor renews its lease with the City of Kenai, it
shall offer to extend or renew the sublease to sublessee on terms intended to be
similar to this sublease but which may take into account any other new terms in
any lease extension or renewal from the City of Kenai.
7 . Assignment and Assumption Sublessee may assume sublessor's lease from
the City of Kenai, upon obtaining approval from the City of Kenai.
8. Common Interest Community. The above real estate is subject to a Declaration
9.
creating a common interest community, the Peninsula Hangar Association, created
pursuant to AS 34 .08.090. This sublease is a conveyance of the real estate to the
sublessee as the Association formed pursuant to the Common Interest Community
and is made pursuant to AS 34.08.090(a).
I 0. Default. Any default in payment more than thirty (30) days, or any other
default of this sublease, shall allow sublessor to terminate this sublease pursuant to
Alaska law.
11. Assignment or Sublease. Sublessee may assign, sell, or convey any interest in
the subject property, subject to the provisions of the Declaration referred to in the
common interest community referred to above, and the consent of the City of
Kenai.
12. Consent by City of Kenai . This sublease is conditioned on, and subject to ,
consent by the City of Kenai as set forth above .
SUB LESSOR:
Legacy Electric, LLC
Dated: -------By: ______________ ~
Its:
--------------~
Sublease
Dated: -------
State of Alaska
Third Judicial District
)
)
)
SUBLE SSEE:
Peninsula Hangar Association
By: ______________ ~
Its :
--------------~
SS .
THIS IS TO CERTIFY that on this __ day of , 2019 , before
me, the undersigned, a Notary Public in and for the State of Alaska duly commissioned
and sworn as such, personally appeared Derek Leichliter known to me to be the President
of LEGACY ELECTRIC, LLC a corporation named above, and know to me to be the
person named in and who executed the foregoing instrument for and on behalf of said
corporation by authority duly vested in him, and he acknowledged to me that he signed
the same freely and voluntarily for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
first hereinabove written.
State of Alaska
Third Judicial District
)
)
)
Notary Public in and for the State of Ala ska
My Commission Expires : _____ _
SS.
THIS IS TO CERTIFY that on this __ day of , 2019, before
me, the undersigned, a Notary Public in and for the State of Alaska duly commissioned
and sworn as such, personally appeared Derek Leichliter known to me to be the President
o f Peninsula Hangar Association a corporation named above, and know to me to be the
person named in and who executed the forego ing instrument for and on behalf o f said
corporation by authority duly vested in him, and he acknowledged to me that he signed
the same freely and voluntarily for the uses and purposes therein set forth .
Sublease
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
first hereinabove written.
Notary Public in and for the State of Alaska
My Commission Expires: _____ _
Sublease
EXHIBITD
A
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A
s
K
A
2015-002299-0
Reco rding District 302 Kenai
03/25/2015 09:26 AM Page 1 of 33
I/ II II Ill lllllll II lllllllll lll lllll II Ill II I ll lll I II II Ill I l II I llllll I lllllll Ill I Ill II ll II Ill
KENAI MUNICIPAL AIRPORT
LEASE OF AIRPORT RESERVE LANDS
~
..}j_ -r-s
TIDS LEASE AGREEMENT entered into this /,l.--day of Jtlit~ , 201/, by
and between the CITY OF KENAI, ("City") 210 Fidalgo Avenue, Kenai, Alask~ 611-7794,
and LEGACY ELECTRIC, LLC. ("Lessee") whose address is 46113 Sather Court, Soldotna, AK
99669.
DEFINITIONS
For the purposes of this Lease the following terms are defined as follows:
] . Airport-the Kenai Municipal Airport, including all the runways, taxiways, aprons, water
lanes, water taxiways, and all City-owned real estate located within the boundaries of the Airport
Reserve as defined in KMC 21.05 .010-020.
2. Airport Manager -the official to whom the City Manager oftbe.Cify has delegated the
authority and responsibility of man~ging and direc~g the activities of the Airport. "Airport
Manager" includes that person's authorized representative.
3. City-the City of Kenai, Alaska, a home rule municipal corporation of Alaska.
4. City Manager -the official to whom the Kenai City Council has delegated the
responsibility of managing and directing all activities of the City.
5. Contamination -the unpermitted presence of any released Hazardous Substance.
6 . Environmental Law -any applicable federal~ state, or local statute, law, r.egulation,
ordinance, c ode, permit, order, decision, judgment of any governmental entity relating to
environmental matters, including littering and dumping.
7. FAA -the abbreviation for the Federal Aviation Administration.
8 . Hazardous Substance -any substance that is defined under an Environmental Law as
hazardous waste, Hazardous Substance, hazardous material, toxic, pollutant, contaminant,
petroleum, petroleum product, or oil.
LEASE OF AIRPORT LANDS
Page 1 of33
City: iM
Lessee :~
9. KMC-the abbreviation for the Kenai Municipal Code.
IO. Permanent Improvement -a fixed addition or change to land that is not temporary or
portable, including a building, building addition, gravel fill, paving, retaining wall, storage tank,
and well.
ARTICLE I
PREMISES LEASED
A. PREMISES: In consideration of Lessee's payment of the rents and performance of all
the covenants of this Lease, the City leases to the Lessee, and the Lessee leases from the City,
the following described property ("Premises") in the Kenai Recording District, Third Judicial
District, State of Alaska and located on the Airport; to wit:
Lot 2, Block 1, General Aviation Apron
B . NO WARRANTY: Except as may be provided in this Lease, the City makes no specific
warranties, expressed or implied, concerning the condition of the Premises including, survey,
soils, wetlands, access, and suitability or profitability for any use including those authorized by
this Lease, its environmental condition, or the presence or absence of Hazardous Substances in,
on, and under the surface. The Lessee takes the Premises on an "as is" basis and without
warranty, subject to any and all of the covenants, terms, and conditions affecting the City's title
to the Premises.
A. AUTHORIZED USES
ARTICLE II
RIGHTS AND USES
1. USE OF PREMISES: The City authorizes the Lessee to use the Premises for the
following purposes only:
T-Hangar Heated Complex
2 . CONTINUOUS OPERATIONS: Unless the City approves otherwise in writing,
the Lessee will operate its business on the Premises on a continuous basis,
uninterrupted by any period of closure over 15 consecutive days or 30 aggregate
days within any 12-month period of the term of this lease. The Lessee will give
the City written notice before closing the Lessee's business on the Premises for
more than 10 consecutive days. The notice must state the reason for the closure
LEASE OF AIRPORT LANDS
Page 2 of33
City: tw\_ /J Lessee :~
Page 2 of 33
?n1 i:;_nn'?'?oo "
1111 J
not apply to any period during which the Lessee is unable to operate its business
as a result of an act or directive of the City, or as a result of a closure of the
Airport or loss of the Lessee's buildings on the Premises due to fire or natural
disaster or order of public authority .
B. RIGHTS RESERVED TO THE CITY.
1. RIGHT TO GRANT TO OTHERS: The Cityteserves the right to grant to others
any rights and privileges not specifically granted to the Lessee on an exclusive
basis. The rights and privileges granted to the Lessee in this Lease are the only
rights and privileges granted to the Lessee by this Lease.
2. EASEMENTS: The City reserves the right to make grants to third parties or
reserve to the City easements or rights of way through, on, or above the Premises.
The City will not grant or reserve any easement or right of way that unreasonably
interferes with the Lessee's authorized uses of the Premises.
3 . INGRESS, EGRESS AND INSPECTION: The City reserves the right of ingress
to and egress from the Premises and the right to enter any part of the Premises,
including buildings, for the purpose of inspection or environmental testing at any
time. Except in the case of an emergency, all inspections and environmental
testing will be coordinated with the Lessee to minimize interference with the
Lessee's authorized uses of the Premises.
4. RIGHT OF FLIGHT: There is hereby reserved to the City, its successors 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 Premises. This public right of
flight will include the right to cause in the airspace any noise inherent in the
operation of any aircraft used for navigation or flight through the airspace or
landing at, taking off from, or operation on the Airport.
C. PROHIBITED USES
Unless specifically authorized by this Lease or an amendment to this Lease, the following are
prohibited:
1. Any use of the Premises other than those authorized in this Lease.
2. Any use of the Premises that is in violation of a City Ordinance or an Airport
regulation.
LEASE OF AIRPORT LANDS
Page 3 of33
Page 3 of 33
2015-002299-0
3 . The outside storage on the Premises of junk, salvage aircraft or vehicle parts, non-
operational support equipment, unused or damaged equipment or material, or
solid waste or debris unless allowed pursuant to a conditional use permit under
KMC 14.20.
4. The disposal on the Premises or the Airport of waste materials generated by the
Lessee, including any Hazardous Substance, slash, overburden, and construction
waste.
5. The stripping, wasting, or removing any natural material from the Premises
without the prior written approval of the City.
6. Erectmg structures or allowing growth of natural objects that would constitute an
obstruction to air navigation, or allowing any activity on the Premises that would
interfere with or be a hazard to the flight of aircraft, or interfere with air
navigation or communication facilities, serving the Airport.
7. Any use or activity that is prohibited by applicable law or regulation.
ARTICLE ill
TERM & HOLDOVER
A. TERM: The initial term of this Lease is for thirty-five (35) years, beginning the 1st
day of September, 2014 and ending on the 30th day of August, 2049. As long as Lessee is in
compliance with all terms and conditions of this Lease (including any amendments), City
ordinances, and is current on all City tax liabilities, Lessee may at Lessee's sole option extend
the lease for an additional twenty (20) year term.
B. HOLDOVER: If the Lessee holds over and remains in possession of the Premises after
the expiration, cancellation or termination of this Lease, the holding over will not operate as an
extension of the term of this Lease, but only creates a month-to-month tenancy, regardless of any
rent payments accepted by the City. The Lessee's obligations for perfonnance under this Lease
will continue during the month-to-month tenancy. The City or Lessee may terminate the
Lessee's holdover with ten (10) days' advance written notice.
ARTICLE IV
RENTS AND FEES
A. RENT: The reasonable market value of work approved by Lessor and performed by
Lessee with regard to clearing and grubbing, unclassified excavation, placement of classified fill
LEASE OF AIRPORT LANDS
Page 4 of33
Page 4 of 33
2015 -00??00 ("\
and utility service extensions on the Premises, shall be applied as a credit against rent owed for a
maximum period often (10) years from the date clearing and grubbing, unclassified excavation,
placement of classified fill and utility service extensions are completed. The rent for the
Premises is $11,400.00 per year, as established by the City pursuant KMC 21 . l 0.1 QO and as
subject to adjustment under Article V of this Lease, plus applicable sales tax. The rent shall be
payable annually in advance of the first day of each year of the term of this Lease. All payments
required by this Lease must be made in U.S. dollars. If the annual rent exceeds $2,400, the
Lessee may, upon written notice to the City, choose to pay the rent in equal monthly
installments, payable in advance on or before the anniversary date of the term of this Lease and
thereafter at monthly intervals. No conversion of the payment schedule from annual to monthly
shall result in the City receiving less rent than it would have received had the conversion not
taken place.
B . RENT PRORATED: Rental for any period less than one (I) year shall be prorated on the
basis of the rent payable under this Lease in the last full year previous to the prorating.
C. ADDITIONAL RENT: In addition to the rent specified in (A) of this Article, Lessee
agrees to pay to the appropriate parties all levies, assessments, and charges as follows :
1. Taxes pertaining to the leasehold interest of the Lessee.
2. Sales tax now enforced or levied in the future, computed upon rent payable in
monthly installments whether the Lessee pays rent under this Lease on a monthly
or annual basis .
3 . All taxes and assessments levied in the future by the City, as if Lessee was the
legal owner of record of the Premises.
4. Reimbursement for City constructed improvements under Article XV.
D. PAYMENTS: The Lessee shall make checks, bank drafts, or postal money orders
payable to the City of Kenai and deliver payments to City of Kenai, Finance Department, 210
Fida.Igo Avenue, Kenai , Alaska 99611-7794 or any other address the City may designate in
writing to the Lessee.
E . INTEREST: Beginning the day after payment is due, all unpaid rents , charges, and fees
required under this Lease will accrue interest at the rate of eight percent (8 .0%) per annum.
Interest on disputed amounts will not be charged to the Lessee if the dispute is resolved in the
Lessee's favor.
F . LATE PAYMENT PENALTY: In addition to any interest payable under Provision (E)
LEASE OF AIR.PORT LANDS ·
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of this Article, each time the Lessee fails to pay any rent or fee by the date required in this Lease,
the City will charge, and the Lessee shall pay, an administrative penalty of ten percent (I 0.0%)
of the amount due and unpaid .
G. COURTESY BILLINGS: Lessee acknowledges that any billing statement issued by the
City is provided only as a courtesy. The Lessee is obligated to pay all rents and fees when due,
regardless of whether or not the Lessee receives a billing statement from the City.
H . LIEN AGAINST LESSEE: Any rent, charge, fee, or other consideration which is due
and unpaid at the expiration, termination, or cancellation of this Lease will be a lien against the
Lessee's property, real or personal.
I. PAYMENT OF CITY'S COSTS: The Lessee will pay all reasonable actual expenses,
costs, and attorney fees City may incur, with or without formal action, to enforce, defend, or
protect this Lease or City's rights under this Lease, including any expense incurred with respect
to environmental compliance, bankruptcy or any proceeding that involves the Lessee, the Lease ,
the Premises, or improvements or personal property on the Premises. The Lessee will make
payment within 30 days of the date of each notice from City of any amounts payable under this
provision.
J. PAYMENT FOR SPECIAL SERVICES: Lessee agrees to pay the City a reasonable fee
for any special services or facilities the City agrees to perform, which the City is not otherwise
obligated by this Lease to provide and which the Lessee requests from the City in writing.
ARTICLEV
ADJUSTMENT OF RENT AND FEES
A. RENT OR FEE ADJUSTMENT: At intervals of approximately five (5) years, the City
shall, in its sole discretion, adjust the rent or a fee payable by the Lessee under Article IV or
other provision of this lease. The first rent adjustment shall be made in2015. The amount to
which the City increases or decreases any rent or fee shall be established in accordance with
K.MC 21 . l O .100 and 21.10 .160. Any rent change by the City shall be based on the fair market
value of:
1. The Premises in its condition on the term beginning date stated in Article III or in
the case of a lease renewal or extension, the beginning date for the original lease;
plus
2. Any improvements made by the City subsequent to that date, the cost of which is
no t reimbursed by the Lessee.
LEASE OF AIRPORT LANDS
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Page 6 of 33
Ill~
No rent or fee change shall be effective until 30 days after the date of the City's written
notice to the Lessee. If the Lessee believes that any changed rent exceeds the fair market rent for
the Premises, the Lessee may appeal the rent change to the City under KMC 21 .10.160.
B. CITY-CONSTRUCTED IMPROVEMENTS: Improvements constructed by the City on,
or in connection with, the Premises shall not be considered a part of the Premises for the purpose
of establishing the rent under (a) of this Article, if the Lessee, as a condition of this lease,
reimburses the City for the City's construction costs pursuant to KMC 21.10 .110.
ARTICLE VI
ASSIGNMENT & SUBLETTING
A. INVALID WITHOUT CITY'S CONSENT: The Lessee may not assign, sublet, or grant
a security interest in, by grant or implication, the whole or any part of this Lease, the Premises,
or any improvement on the Premises without the written consent of the City. (my proposed
assignment, sublease, or security interest must be written and must be submitted to the City
bearing the original, notarized signature of all parties. The Lessee may submit unsigned draft
documents for the City's conceptual review. However, the City's conceptual approval of a draft
document may not be construed as the City's consent to any assignment, sublease, or security
interest. All provisions in this Lease extend to and bind the assignees and sublessees of the
Lessee.
B. NOW AIVER OF CONSENT: The City's consent to one assignment, sublease, or
security interest will not waive the requirement for the Lessee to obtain th~ City's consent to any
other assignment, sublease, or security interest.
C. ASSIGNEE I LESSEE OBLIGATIONS: An assignment must include a provision stating
that the assignee accepts responsibility for all of the assignor's (Lessee's) obligations under this
Lease, including environmental liability and responsibility. However, unless the City
specifically releases the Lessee in writing, the City may hold the Lessee responsible for
performing any obligation under this lease which an assignee fails to perform.
D . OCCUPANCY BEFORE CITY CONSENT: An assignee or sublessee may not occupy
the Premises before the City consents to the assignment or sublease in writing.
E. CONFLICT OF PROVISIONS: In the event of a conflict between this Lease and an
assignment or a sublease, the terms of this Lease control.
F. LESSEE NOT RELIEVED OF OBLIGATIONS: The City's consent to any sublease
does not relieve or otherwise alter the Lessee's obligations under this Lease.
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( Page 7 of 33
"'"'"',.. ,...,.. .......... ,.. ..... -
G . SECURJTY ASSIGNMENTS AND FINANCING:
I . Subject to the requirements of (A) of this Article VI, the Lessee may assign a
security interest in this Lease. The security interest may be in the form of a
mortgage, deed of trust, assignment or other appropriate instrument, provided:
a. the security interest pertains only to the Lessee's leasehold interest;
b . the security interest does not pertain to or create any interest in City's title
to the Premises; and
c. the documents providing for the security interest are acceptable to the
City.
2. If the assignment of a security interest to which the City has consented shall be
held by an established lending or financial institution, including a bank, an
established insurance company and qualified pension or profit sharing trust, and
the lending institution acquires the Lessee's interest in this Lease as a result of a
foreclosure action or other remedy of the secured party, or through any transfer in
lieu of foreclosure, or through settlement of or arising out of any pending or
contemplated foreclosure action, the lending institution may transfer its interest in
this Lease to a nominee or a wholly owned subsidiar)r corporation with the prior
written consent of the City, provided, the transferee assumes all of the covenants
and conditions required to be performed by the Lessee (including payment of any
monies owed by Lessee to the City under the lease). In the event of such a
~ansfer, the lending institution shall be relieved of any further liability under this
Lessee.
3. A holder of a security interest in this Lease consented to by the City shall have,
and be subrogated to, any and all rights of the Lessee with respect to the curing of
any default of this Lease by Lessee.
4 . If, before any default has occurred in the Lease, the holder of a security interest in
this Lease cons ented to by the City gives the City a written notice of the holder's
post office address , the City shall thereafter
a. by regular U.S. mail, send to the holder a copy of each notice of default at
the same time as the City gives notice of default to the Lessee; and
LEASE OF AIRPORT LANDS
Page 8 of33
b not accept any surrender or enter into any modification of this Lease
without the prior written consent of the holder, which 'the holder shall not
unreasonably delay or withhold ..
5. The City will enter into a new lease of the Premises with the holder of a security
interest consented to by the City, if the City terminates this Lease prior to its
normal expiration due to a default by the Lessee. The new lease shall be for the
remainder of the term ofthis Lease and shall be effective as of the termination of
this Lease. The City's grant of the new lease shall be subject to the following
conditions :
a. the new lease shall be effective on the date this Lease is terminated;
b. the new lease shall be for the same rent, additional rent, and covenants as
this Lease; ·
c. By no later than the twentieth (20th) day following the termination of this
Lease, the security holder must submit a written request to the City for the
new lease, together with payment of all rent, additional rent and other
sums then due to the City under this Lease.
d. The security holder shall pay to the City, at the time of the execution and
delivery of such new lease any and all sums due thereunder in addition to
those which would at the time of the execution and delivery thereof be due
under this Lease but for such termination, and in addition thereto, any
reasonable expenses, including legal and attorneys' fees, to which the City
shall have been subjected by reason of such default.
e. The security holder shall, on or before the execution of the new lease,
perform all the other obligations of the Lessee under this Lease to the
extent the Lessee failed to perform them prior to the termination of this
Lease.
6. A holder of a security interest consented to by the City that takes possession of
this Lease or enters into a new lease with the City shall not be released from the
obligations and liabilities of this Lease or the new lease unless the holder assigns ·
its leasehold estate to an assignee who is financially capable and otherwise
qualified to undertake to perform and observe the conditions of this Lease or the
new lease and .the City consents to the assignment. The City's consent will not be
unreasonably withheld. If the security holder asserts that the City is unreasonably
LEASE OF AIRPORT LANDS
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withholding its consent to a proposed assignment, the dispute shall be resolved by
arbitration.
ARTICLE VII
MAINTENANCE, SNOW REMOVAL & UTILITIES
A. MAINTENANCE
1. At no cost to the City, the Lessee will keep the Premises and all improvements on
the Premises clean, neat and presentable, as reasonably determined by the City.
2. At no cost to the City, the Lessee will provide for all maintenance and services at
the Premises as may be necessary to facilitate the Lessee's compliance with this
Lease and the Lessee's use of the Premises.
3 . The Lessee shall comply with all regulations or ordinances of the City that are ·
promulgated for the promotion of sanitation. At no cost to the City, the Lessee
shall keep the Premises in a clean and sanitary condition, and control activities on
the Premises to prevent the pollution of water.
4. The Lessee agrees to comply with all decisions and directions of the City's
Airport Manager regarding maintenance and operation of the Airport, and the use
of the Airport by the Lessee.
B . SNOWREMOVAL
I. At no cost to the City, the Lessee is responsible for snow removal on the
Premises. The Lessee shall dispose of snow in an off-Premises location approved
in writing by the City or provide suitable snow storage within the boundaries of
the Premises in accordance with all applicable federal and state laws. At the
request of the Airport Manager, the Lessee shall submit a snow removal plan for
the Premises to the Manager for review. Upon approval of the Lessee's plan by
the Airport Manager, the Lessee shall conduct all snow removal operations on the
Premises in accordance with the approved plan.
2. Lessee shall not deposit snow on an apron, taxiway, safety area, or other aircraft-
maneuvering surface provided for common use by others Without the prior written
approval of the Airport Manager.
LEASE OF AIRPORT LANDS
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3. Lessee agrees to not allow an accumulation of snow on the Premises that would
cause interference with adjoining leaseholders or other users of the Airport.
C. UTILITIES. Unless specifically provided otherwise in _this Lease, the Lessee shall, at no
cost to the City, provide for all utilities at the Premises necessary to facilitate the Lessee's use of
the Premises.
ARTICLEVIll
OPERATIONS
A. OPERATIONS ON THE AIRPORT: The Lessee will ensure that the Lessee, its
employees, guests, contractors, sublessees, and vendors that perform any activity or function
authorized under this Lease shall do so in a manner that ensures the safety of people, the
protection of public health and the environment, and the safety and integrity of the Airport and
the Premises.
B. LESSEE'S CONTROL AND RESPONSIBILITY
I. The Lessee will assume full control and sole responsibility as between Lessee and
City for the activities of the Lessee, the Lessee's personnel and employees, and
anyone else acting by, on behalf of, or under the authority of the Lessee on the
Airport, including the Premises.
2. The Lessee will immediately notify the City of any condition, problem,
malfunction or other occurrence that threatens the safety of people or the Airport,
harm to public health or the environment, or the safety or integrity of the
Premises.
c. RADIO INTERFERENCE: The Lessee will discontinue the use of any machine or
device that interferes with any government-operated transmitter, receiver, or navigation aid until
the cause of the interference is eliminated.
D. WILDLIFE: The Lessee acknowledges that a concentration of birds or other wildlife on
an airport constitutes a significant hazard to aircraft operations. The Lessee agrees to keep the
Premises clean of fish slime, fish waste, or any other material that might attract birds or other
wildlife. The Lessee accepts full responsibility to maintain the Premises, control operations, and
take all reasonable measures to prevent a concentration of birds or other wildlife on the Premises.
E. PARKING: The Lessee will provide adequate vehicle, equipmen~ and aircraft parking
space on the Premises for Lessee's business or activities, or confine parking to such other places
LEASE OF AIRPORT LANDS
Page J 1 of33
on the Airport as may be approved or designated in writing by the Airport Manager.
ARTICLE IX
ENVIRONMENTAL PROVISIONS
A . HAZARDOUS SUBSTANCE
1. The Lessee will conduct it business and/or operation on the Premises in
compliance with all environmental laws and permits. If hazardous substances are
handled on the Premises, the Lessee agrees to have properly trained personnel and
adequate procedures for safely storing, dispensing, and otherwise handling
Hazardous Substances in accordance with all applicable federal, state and local
laws.
2. Lessee will promptly give the City notice of proceeding to abate or settle matters
relating to the presence of a Hazardous Substance on the Premises or from
Lessee's operations on the Airport. The Lessee will allow the City to participate
in any such proceeding~. ·
B. ENVIRONMENTAL INDEMNIFICATION
If Contamination of the Premises or other property by a Hazardous Substance occurs from the
Lessee's operations on the Premises the Lessee will indemnify, defend, and hold the City
harmless from any and all claims, judgments, damages, penalties, fines, costs, liabilities, or
losses, including, but not limited to, sums paid in settlement of claims, attorney's fees, consultant
fees, and expert fees, which arise during or after the term of this Lease as a result of such
Contamination. This indemnification of the City by Lessee includes, but is not limited to, costs
incurred in connection with any investigation of site conditions or any cleanup, remediation,
removal, or restorative work required by any federal, state, or local governmental agency
because of a Hazardous Substance being present in the soil or groundwater or under the Premises
or other properties affected by the Contamination.
C. REMEDIATION
I. In the event of a Hazardous Substance spill on the Premises, the Lessee will
immediately notify the City and the Alaska Department of Environmental
Conversation and act, promptly, at its sole expense, to contain the spill, repair,
any damage, absorb and clean up the spill area, and restore the Premises to a
condition satisfactory to the City and otherwise comply with the applicable
portions of any environmental law.
LEASE OF AIRPORT LANDS
Page 12 of33
2. In addition to any notices required by this Lease, the Lessee will immediately
notify and copy the City in writing of any of the following:
A. Any permit, enforcement, clean up, lien, removal or other governmental or
regulatory action instituted, completed, or threatened pursuant to an
Environmental Law.
B. Any claim made or threatened by any person against the Lessee or arising
from the Lessee's operations authorized by this Lease, relating to damage,
contribution, compensation, loss or injury resulting, from, or claimed to
result from any Hazardous Substances in, on, or under the Airport; or
C. Any report made by, or on behalf of, the Lessee to any environmental
agency arising out of or in connection with any Hazardous Substances in,
on, or removed from the Premises, including any complaints, notices,
warnings, or asserted violations.
3. Remediation and restoration of the contaminated area must meet all applicable
state and federal regulations and must meet the requirements of all governing
regulatory authorities.
D . ENVIRONMENTALAUDIT
The Lessee will provide the City with all investigative data, test results, reports , and any other
information gathered or analyzed as part of or in relation to any Environmental Assessment,
characterization or audit on the Premises or the Airport that Lessee performs or causes to be
performed after the starting date of this Lease. The Lessee will submit the data, result, report or
information to the City within 60 days following the date on which it becomes available to the
Lessee.
E . RELEASE OF LESSEE
The City releases the Lessee from liability to the City for Contamination and the presence of
Hazardous Substances that existed prior to the commencement date of this lease unless caused or
materially contributed to by the Lessee.
F. SURVIVAL OF OBLIGATIONS
The obligations and duties of the City and Lessee under Article IX of this lease shall survive the
cancellation, termination or expiration of this lease .
LEASE OF AIRPORT LANDS
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ARTICLEX
INDEMNIFICATION & INSURANCE
A. INDEMNIFICATION
1. The Lessee will indemnify, save harmless, and defend the City, its officers,
agents, and employees from and against any and all liabilities, losses, suits,
administrative actions, claims, awards, judgments, fines, demands, damages,
injunctive relief or penalties of any nature or kind to the full extent of the loss or
obligation for property damage, personal injury, death, violation of any regulation
or grant agreement, or any other injury or harm resulting from or arising out of
any acts or commission of or omission by the Lessee, his agents, employees,
customers, invitees or arising out of the Lessee's occupation or use of the
premises demised or privileges granted, and to pay all costs connected therewith.
This indemnification of the City by the Lessee shall include sums paid in
settlement of claims, attorney fees, consultant fees, expert fees, or other costs and
expenses, directly or indirectly arising from, connected to or on account of this
Lease as it relates to the Lessee, the Lessee's activities at or relating to the
Airport, or any act or omission by the Lessee, or by any of its officers, employees,
agents, contractors or sublessees. These indemnity obligations are in addition to,
and not limited by, the Lessee's obligation to provide insurance, and shall survive
the expiration or earlier termination of this Lease.
2 . The Lessee shall give the City prompt notice of any suit, claim, action or other
matter affecting the City to which Paragraph 1, above, may apply, together with .a
copy of any letter by an attorney on behalf of a complainant, any complaint filed
in court, and any notice or complaint by any regulatory agency. The City shall
have the right, at its option, to participate cooperatively in the defense of, and
settlement negotiations regarding, any such matter, without relieving the Lessee
of any of its obligations under this provision.
3. As to any amount paid to others for personal injury or property damage with
respect to which an act or omission of the City is a legal cause, notwithstanding
Paragraph 1 of this section, the Lessee and the City shall reimburse each other
according to the principles of comparative fault . If liability to a third party is
subject to apportionment according to comparative fault under this provision, the
Lessee and the City shall seek in good faith to achieve non-judicial agreement as
to apportionment of fault as between themselves. This apportionment of liability
between the City and the Lessee shall not be construed to affect the rights of any
person who is not a party to this Lease.
LEASE OF AIRPORT LANDS
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L 1~~11111
Page 14 of 33
201 s.nm?oa_r'
B. INSURANCE: At no expense to the City, the Lessee will obtain and keep in force during
the term of this Lease, insurance of the type and limits required by this provision. Where
specific limits are set, they will be the minimum acceptable limits. If the Lessee's policy
contains.higher limits, the City will be entitled to coverage to the extent of the higher limits. At
the time insurance is obtained by the Lessee, all insurance shall be by a company/corporation
rated "A-11 or better by A.M. Best. The following policies of insurance are required with the
following minimum amounts:
I. Commercial General Liability, including Premises, all operations, property
·damage, products and completed operations, and personal injury and death,
broad-form contractual, with a per-occurrence limit of not less than $1,000,000
combined single limit. If this lease authorizes the Lessee to engage in the sale or
the commercial dispensing or storage of aviation fuel, the policy must not exclude
of the Lessee's fuel handling activities. This policy must name the City as an
additional insured. ·
2. Commercial Automobile Coverage with not less than $1,000,000
combined single limit per occurrence. This insurance must cover all
owned, hired, and non-owned motor vehicles used by the Lessee.
3 . Workers Compensation Insurance. The Lessee will provide and maintain,
for all employees, coverage as required under AS 23.30.045, and, where
applicable, any other statutory obligations. The policy must waive
subrogation against the City.
4. The Lessee will provide the City with proof of insurance coverage in the
form of an insurance policy or a certificate of insurance, together with
proof that the premiums have been paid, showing the types and monetary
limits of coverage secured. All insurance required by this provision must
provide that the City be notified at least 30 days prior to any termination,
cancellation, or material change in the insurance coverage.
5. If the Lessee's insurance coverage lapses or is cancelled, Lessee will
immediately, upon written notice by the City, halt all operations on the
Airport, including the Premises. The Lessee will not resume operations
until the City receives evidence that the Lessee has obtained current
insurance coverage meeting the requirements of this Lease.
6. The City may, at intervals of not less than five years from the beginning
date of the term of this Lease and upon written notice to Lessee, revise the
insurance requirements required under this Lease. City's determination to
LEASE OF AIRPORT LANDS
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Page 15 of 33
revise the insurance requirements will be based on the risks relative to the
Lessee's operations, any insurance guidelines adopted by the City, and any
change in applicable law.
7. If the Lessee subleases all or any portion of the Premises under the
provisions of this Lease, the Lessee will require the sub lessee to provide to
the insurance coverage required of the Lessee under this Article X.
ARTICLE XI
LAWS&TAXES
A. COMPLIANCE WITH LAW: Lessee shall comply with all applicable laws , ordinances,
and regulations of public authorities now or hereafter in any manner affecting the Airport, the
Premises or the sidewalks, alleys, streets, and ways adjacent to the Premises, or any buildings,
structures, fixtures and improvements or the use thereof, whether or not any such laws,
ordinances, and regulations which may be hereafter enacted involve a change of policy on the
part of the governmental body enacting the same. Lessee agrees to hold City financially
harmless :
I . From the consequences of any violation of such laws, ordinances , and/or
regulations; and
2 . From all claims for damages on account of injuries, death, or property damage
resulting from such violation.
B. UNLAWFUL ACTIVITY: The Lessee shall not permit any unlawful use, occupation,
business, or trade to be conducted on the Premises contrary to any law, ordinance, or regulation,
including zoning ordinances, rules and regulations .
c . LICENSES AND PERMITS: The Lessee will obtain all necessary licenses and permits,
pay all taxes and special assessments lawfully imposed upon the Premises, and pay other fees
and charges assessed under applicable law. Nothing in this Lease prevents the Lessee from
challenging any taxes or special assessments to the appropriate authority.
D. LITIGATION: The KMC, including regulations promulgated thereunder, and the laws of
the State of Alaska will govern in any dispute between the Lessee and City . If a dispute
continues after exhaustion of administration remedies , any lawsuit must be brought in the cou rts
of the State of Alaska , in Kenai, Alaska.
LEASE OF AIRPORT LANDS
Page 16 of33
!I ~
E. LESSEE TO PAY TAXES: Lessee shall pay all lawful taxes and assessments which,
during the term of this Lease may become a lien upon or which may be levied by the State,
Borough, City, or any other tax levying body, upon any taxable possessory right which Lessee
may have in or to the Premises or improvements on the Premises by reason of its use or
occupancy or the terms of this Lease provided, however, that nothing in this provision shall
prevent Lessee from contesting any increase in a tax or assessment under any applicable law,
ordinance, or regulation.
F . p ARTIAL INVALIDITY: If any term, provision, condition, or part of this Lease is
declared by a court of competent jurisdiction to be invalid or unconstitutional, the remaining
terms, provisions, conditions, or parts shall continue in full force and effect as though the
declaration had not been made.
ARTICLE XII
LEASE TERMINATION
A. CANCELLATION: The City may, after 30 days' written notice to the Lessee, cancel this
Lease and recover possession of the Premises if any of the following violations occur, unless the
violation is cured within the 30 days :
1. The Lessee fails to pay when due the rents, additional rents, charges, or other
sums specified in this Lease, including any increases made under this Lease.
2 . The Lessee's check for payment of any sum due under this Lease is returned for
insufficient funds.
3 . The Lessee uses or authorizes the use of the Premises for any purpose not
authorized by this Lease. ·
4 . The Lessee fails to fully perform and comply with any provision in this Lease.
5. The court enters a judgment of insolvency against the Lessee . .
6. A trustee or receiver is appointed for the Lessee's assets in a proceeding brought
by or against the Lessee, or the Lessee files a voluntary petition in bankruptcy.
7. Failure by the Lessee to comply with any land development or permanent
improvement construction required by this Lease.
B . ENTRY AND RE-ENTRY: In the event that the Lease should be terminated in
accordance with this Article XII, or by summary proceedings or otherwise, or upon the Lessee's
LEASE OF AIRPORT LANDS
Page 17 of33
abandonment of the Premises or a portion of the Premises, the City or its agents, servants, or
representatives may, immediately or any time thereafter, re-enter, and resume possession of the
Premises or portion thereof, and remove all persons and property therefrom, without being liable
for any damages therefore. No re-entry by the City shall be deemed .an acceptance of a surrender
of the Lease.
C. CONTINUING OBLIGATIONS UNTIL PREMISES VACATED: The Lessee will
continue to pay City rent after the expiration, termination, or cancellation of this lease and to
abide by the lease obligations, including providing proof of insurance coverage, through the date
Lessee relinquishes possession of and completely vacates the Premises. City will consider the
Premises completely vacated if the Lessee has;
1. Remediated any environmental contamination for which the Lessee is
responsible; and
2. Restored the Premises to a neat and clean physical condition acceptable to the
City.
D. REASONABLE CURE
I. In the case of a violation that cannot be reasonably cured within 30 days, a notice
of cancellation issued by the City to the Lessee under this Article is stayed if,
within the 30-day notice period, the Lessee begins and continues expeditious
action to cure the violation. The City will determine if a violation cannot be
reasonably cured ·within 30 days and what constitutes expeditious action.
2. In the case where, in City's sole determination, Lessee's violation is considered
an imminent threat to the airport, public health or safety, or the environment, City
will direct the Lessee to stop the activity immediately and may reduce the period
to cure the violation, or the City may correct the violation pursuant to (E) of this
Article.
E. .RIGHT OF CITY TO PERFORM:
1. If, after 30 days following notice the Lessee fails or refuses to perform any action
required by this Lease, the City will have the right, but not the obligation, to
perform any or all such actions required by this Lease at the sole expense of the
Lessee. The City will not take action ifthe Lessee begins and continues
expeditious action to perform any action required by this Lease that cannot be
reasonably completed within 30 days. The City will, at its sole discretion,
determine what constitutes expeditious action and if an action cannot be
LEASE OF AIRPORT LANDS
Page 18 of33
City: Th_
Lessee:~
111111 1111 11 1~1111~1!1111
Page 18 of 33
reasonably performed in 30 days. The City will submit to the Lessee an invoice
for the expenses incurred by the City in the performance by the City of any
required action. The Lessee will pay the amount of each invoice within 30 days
from issuance.
2 . If Lessee fails or refuses to perform any action that has been deemed an imminent
threat the City will have the right, but not the obligation, fo perform any or all
such actions required to expeditiously correct the imminent threat. Lessee shall
reimburse the City for any cost, including legal fees and administrative costs
reasonably incurred by the City in acting to correct the imminent threat violation.
F. WA.IVER: A waiver by the City of any default by the Lessee of any provision of this
Lease will not operate as a waiver of any subsequent default. If the City waives a default, the
City is not required to provide notice to the Lessee to restore or revive any term or condition
under this Lease. The waiver by the City of any provision in this Lease cannot be enforced or
relied upon unless the waiver is in writing and signed on behalf of the City. The City's failure to
insist upon the strict performance by the Lessee of any provision in this Lease is not a waiver or
relinquishment for the future, and the provision will continue in full force .
G. AIRPORT CLOSURE:
I. If the City closes the airport to aircraft operations for sixty ( 60) days or less, this
Lease will remain in full force and effect without adjustment
2. If the City closes the Airport to aircraft operations for more than sixty (60) days,
but not permanently, and this Lease is for aviation or direct aviation support uses ,
the Lessee may, upon written notice to the City, either terminate the Lease or
retain the Lease and receive a fifty (50%) percent rent reduction or credit forthat
portion of the closure that exceeds 60 days .
3 . If the City permanently closes the Airport to aircraft operations and
(a) this Lease is for aviation or direct aviation support uses, the Lessee may
terminate this agreement by written notice to the City; or
(b) this Lease is for non-aviation uses, the Lessee may request in writing to
have the Lease terminated. The City will consider the Lessee's request in
light of the City's best interest and either terminate the Lease, or deny the
Lessee's request in writing.
LEASE OF AIRPORT LANDS
Page 19 of33
Page 19 of 33
"')("'\"1 c:. nn"l"nn n
H. DISASTERS
The Lessee or City may cancel this lease upon written notice to the other party if;
1. the Premises becomes unusable through no fault of either party and perfonnance
under this lease becomes impossible; or
2. the Airport becomes unusable through no fault of either party and the
performance under this lease becomes impossible.
If the Lessee elects in writing that it will continue to operate after notice from City to Lessee that
the Airport has become unusable, the Lessee's obligations under the Lease will continue, but
City shall be under no obligation to continue to perform.
Causes for tennination of the lease under this provision (H) include acts of God, the public
enemy, and the United States.
I. NATIONAL EMERGENCY: If the federal government declares a national emergency,
neither party may hold the other liable for any inability to perform any part of this Lease as a
result of the national emergency.
J. SURRENDER ON TERMINATION: Except as provided otherwise in this Article XII,
Lessee shall, on the last day of the term of this Lease (including any extension or renewal
thereof) or upon any earlier termination of this Lease, surrender and deliver up the premises into
the possession and use of City without fraud or delay in good order, condition, and repair, except
for reasonable wear and tear since the last necessary repair, replacement, restoration or renewal,
free and clear of all lettings and occupancies unless expressly permitted by the City in writing,
and free and clear of all liens and encumbrances other than those created by and for loans to
City.
K. Disposition of Improvements Upon Termination.
(a) Permanent improvements constructed by Lessee, excluding site development materials
and utility lines and connection are the Lessee's property, subject to the tenns and
provisions of this Lease, as long as Lease remains in effect.
(b) Upon, expiration, cancellation or termination of this lease the Lesssee may elect to do
one or more of the following:
(1) Remove Lessee owned permanent improvements from the premises , remediate any
damage, and restore the premises to a clean and neat physical condition acceptable to
City w1thin 60 days of termination of the lease.
(2) Sell Lessee owned improvements to succeeding lessee, if any, and rernediate any
damage, and restore the premises to a clean and neat physical condition acceptable to
LEASE OF AIRPORT LANDS
Page 20 of33
City:~ Lessee:~
~~~1~11111 11~11~
Page 20 of 33
City within 60 days of termination of the lease.
(3) Request the City sell Lessee-owned permanent improvements at a public auction and
remediate any damage, and restore the premises to a clean and neat physical condition
acceptable to City within sixty (60) days of termination of the lease. The City will not
unreasonably deny such a request and will pay the Lessee any proceeds of the sale less
the administrative costs of the public auction and any financial obligation the Lessee
owes the City under the Lease. If all or a portion of the lessee owned permanent
improvements do not sell at public auction, the Lessee shall, within sixty (60) days of the
public auction, remove those permanent improvements days and remediate any damage,
and restore the premises to a clean and neat physical condition acceptable to City.
ARTICLE XIII
GENERAL COVENANTS
A. USE OF THE AIRPORT: Except as provided herein, any regular use of Airport lands or
facilities without the written consent of the City is prohibited. This prohibition shall not apply to
use of areas designated by the City for specified public uses, such as passenger terminals,
automobile parking areas, and streets.
B. COSTS AND EXPENSES: Costs and expenses incident to this lease, including but not
limited to recording costs, shall be paid by Lessee.
c . CARE OF THE PREMISES: The Lessee shall keep the Premises clean and in good
order at the Lessee's own expense, allowing no damage, waste, nor destruction thereof, nor
removing any material therefrom, without written permission of the City. At the expiration of
the term fixed, or any earlier termination of the Lease, the Lessee will peaceably and quietly quit
and surrender the premises to the City.
D. CONSTRUCTION APPROVAL AND STANDARDS: Any building construction on the
Premises by the Lessee must be compatible with its surroundings and consistent with the uses
authorized under this Lease, as determined by the City. The Lessee must obtain the City's
written approval before placing fill material, beginning any land development, or constructing or
demolishing any improveme~ts on the Premises, and before beginning any alterations,
modifications, or renovation of existing structures on the Premises. The Lessee must submit to
the City detailed drawings of the proposed development, alteration, modification, or renovation,
together with specifications or any other information the City reasonably requires. Further, the .
Lessee will submit to City evidence of the Lessee's compliance with Federal Aviation
Administration regulation 14 CFR Part 77 .
LEASE OF AIRPORT LANDS
Page 21 of33
E . LEASE SUBORDINATE TO AIRPORT FINANCING REQUIREMENTS: Lessee
agrees that City may modify this Lease to meet revised requirements for Federal or State grants,
or to conform to the requirements of any revenue bond covenant. However, the modification
shall not act to reduce the rights or privileges granted the Lessee by this Lease, nor act to cause
the Lessee financial loss.
F. RlGHT TO ENJOYivffiNT AND PEACEABLE POSSESSION: City hereby agrees and
covenants that the Lessee, upon paying rent and performing other covenants, terms, and
conditions of this Lease, shall have .the right to quietly and peacefully hold, use, occupy, and
enjoy the Premises, except that the following shall not construed as a denial of the right of quiet
or peaceable possession:
1. Any inconvenience caused by public works projects in or about the Premises; and
2. Any other entries by the City on the Premises reserved or authorized under other
provisions of this Lease.
G. NO PARTNERSHIP OR JOINT VENTURE C~ATED: It is expressly understood that
the City shall not be construed or held to be a partner or joint venture of Lessee in the conduct of
the Lessee's activities or business on the Premises. The relat ionship between the City and the
Lessee is, and shall at all times remain, strictly that of landlord and tenant, respectively.
H. DISCRIMINATION: The Lessee will not discriminate on the grounds of race, color,
religion, national origin, ancestry, age, or sex against any patron, employee, applicant for
employment, or other person or group of persons in any manner prohibited by federal or state
law. The Lessee recognizes the right of the City to take any action necessary to enforce this
provision, including actions required pursuant to any federal or state law.
I. AFFIRMATIVE ACTION: If required by 14 CFR Part 152, subpart E, the Lessee will
undertake an affirmative action program to insure that no person will be excluded from
participating in any employment activities offered by the Lessee on the grounds of race, creed,
color, national origin, or sex. No person may be excluded on these grounds from participating in
or receiving the services or benefits of any program or activity covered by subpart E. The Lessee
further agrees that it will require its suborganization(s) provide assurance to the City to the same
effect that they will also undertake affirmative action programs and require assurances from their
suborganization(s) as required by 14 CFR, Part 152, subpart E.
Tenant shall use the premises in compliance with all other requirements imposed by or
pursuant to title 49, code of Federal Regulations, DOT, Subtitle A, Office of the Secretary, Part
21, Nondiscrimination in Federally-Assisted programs of the DepartmentofTransportation-
Effectuation of Title VI of the Civil Rights Act of 1964, and as the Regulation may be amended.
LEASE OF AIRPORT LANDS
Page 22 of33
J. INTEGRATION, MERGER, AND MODIFICATION: This Lease sets out all the terms,
conditions, and agreements of the parties and supersedes any previous understandings or
agreements regarding the Premises whether oral or written. No modification or amendment of
thi s Lease is effective unless in vvriting and signed on behalf of the City and the Lessee .
K. RIGHT TO ADOPT RULES : City reserves the right to adopt, amend, and enforce
reasonable rules and regulations governing the Airport, including the Premises. The City shall
not be liable to Lessee for any diminution or deprivation of possession, or of Lessee's rights
under this Lease, on account of the exercise of the City's authority reserved under this provision.
Furthermore, the Lessee shall not be entitled to terminate the whole or any portion of the
leasehold estate created under this Lease, by reason of the exercise of the City's authority
reserved under this provision, unless the exercise thereof so interferes with Lessee's use and
occupancy of the Premises as to constitute a termination, in whole or in part, of this Lease by
operation of law under the laws of the State of Alaska and of the United States made applicable
to the states.
L. LESSEE'S OBLIGATION TO PREVENT AND REMOVE LIENS : Lessee will not
permit any liens including, but not limited to, mechanics', laborers', or materialmen's liens
obtainable or available under the then existing laws, to stand against the Premises or
improvements on the Premises for any labor or material furnished to Lessee or claimed to have
been furnished to Lessee or to the Lessee's agents, contractors, or sublessees, in connection with
work of any character performed or claimed to have been performed on the Premises or
improvements by or at the direction or sufferance of Lessee. Provided, however, the Lessee shall
have the right to provide a bond as contemplated by Alaska law and contest the validity or
amount of any such lien or claimed lien. Upon a final determination of the lien or claim for lien,
the Lessee will immediately pay any judgment rendered with all proper costs and charges and
shall have such lien released or judgment satisfied at Lessee's own expense.
M . CONDEMNATION: In the event the Premises or any part thereof shall be condemned
and taken for a public or a quasi-public use, then upon payment of any award or compensation
arising from the condemnation or taking, the City and the Lessee shall make a good faith effort
to agree upon
1. the division of the proceeds;
2 . the abatement in rent payable during the term or any extension of the tenn of this
Lease; and
3. other adjustments as the parties may agree upon as being just and equitable under
all the circumstances .
LEAS E OF AIRPORT LANDS
Page 23 of33
If, within thirty (30) days after the award has been paid into Court, the City and Lessee are
unable to agree upon what division, abatement in rent, and other adjus1ments as are just and
equitable, the dispute shall be determined by arbitration.
N. SUCCESSORS IN INTEREST: This Lease shall be binding upon and shall inure to the
benefit of the respective successors and assigns of the parties hereto, subject to such specific
limitations on assignment as are provided for in this Lease.
0. NOTICES :
1. Any notices required by this Lease must be in writing and must be delivered
personally or mailed by certified or registered mail in a prepaid envelope. A
mailed notice
a. must be addressed to the respective party at the address written on the first
page of this Lease or to the latest address designated in accordance with
(2) of this Provision (O); and
b. shall be deemed delivered on the date it is deposited in a U.S. general or
branch post office.
2. The City or the Lessee may, from time to time, designate a new address at which
they will receive notices by providing the other party with written notice at least
15 days prior to the effective date of the change. An address change notice must
be delivered according to the procedure set out in (1) of this Provision (0).
p. RETENTION OF RENT AL: In the event the City terminates this Lease because of any
breach by the Lessee, the City shall retain any unused balance of the rental payment last made by
the Lessee City as partial or total liquidated damagt'.s for the breach.
Q. FIRE PROTECTION: The Lessee will take all reasonable precautions to prevent, and
take all necessary action to suppress destructive or uncontrolled fires and comply with all laws,
regulations, and rules promulgated and enforced by the City for fire protection on the Airport.
R. PERSONAL USE OF MATERIALS: No interest in coal, oil, gas or any other mineral,
or in any deposit of stone or gravel valuable for extraction or utilization is included in the
Premises or in the rights granted by this lease.. The Lessee shall not sell or remove from the
Premises for use elsewhere any timber, stone, gravel, peat moss, topsoil or any other material
valuable for building or commercial purposes.
LEASE OF AIRPORT LANDS
Page 24 of33
S. APPROVAL OF OTHER AUTHORITIES : The granting of this lease by the City does
not relieve the Lessee of the responsibility to obtain any license or permit as may be required by
federal , state, or local law.
T. EXECUTION BY THE PARTIES : This Lease is of no effect unless signed by the
Lessee, or a duly authorized representative of Lessee, and an authorized representative of the
City.
U . CAPTIONS: The captions of the provisions of this Lease are for convenience only and
do not necessarily define, limit, describe, or construe the contents of any provision.
V . RIGHTS OF CONSTRUCTION: This Lease is intended to make public property
available for private use, while at all times protecting the public interest to the greatest extent
possible. Following the rule that transfers of interest in public property are to be strictly
construed in favor of the public property landlord, all rights granted to the Lessee under this
Lease will be strictly construed, and all rights of the City and the protections of the public
interest will be liberally construed.
W. LESSEE ACKNOWLEDGEMENT: The Lessee acknowledges that the Lessee has read
this Lease and fully understands its terms, that the Lessee has been fully advised or has had the
opportunity of adv ice by separate legal counsel, and voluntarily executes this Lease. Lessee also
acknowledges and agrees that the rule of interpretation under which a document is construed
against the drafter will not apply to this Lease.
X. APPROVAL BY LESSOR: _Any approval required of the Lessor by this Lease will not
be unreasonably withheld. The Lessor's approval does not waive the Lessee's legal
responsibility or liability to comply with all applicable federal and state laws and regulations .
ARTICLE XIV
SURVEY,IMPROVEMENTSANDPERFORMANCEBOND
· A . SURVEY: The Lessee is solely responsible, at its sole expense, to confirm or establish
the physical location of the boundaries of the Premises prior to beginning any construction
thereon, including clearing grubbing, back-filling and environmental sampling. Any survey of
the Premises shall be performed by a Land Surveyor registered in the State of Alaska. The
Lessee shall furnish the City with a copy of the plat of any survey performed on the Premises by,
or on behalf of, the Lessee.
B. IMPROVEMENTS.
LEASE OF AIRPORT LANDS
Page 25 of33
C ity :~
Lessee : --k-
ll j
1. REQUIRED IMPROVEMENTS: At no cost to the City, Lessee agrees to
complete land development and construction of Permanent Improvements
including removal of waste material previously buried on the site and
construct two 2 6-plex unit t-hangar heated complex , by no later than
September 1, 2016 with an appraised value of at least $500,000.00. In
addition to the as-built drawings required by this Lease, the Lessee must
submit to the City written evidence that the Lessee has completed the land
development and constructed improvements on the Premises with an
aggregate cost or investment of not less than $500,000.00.
The evidence of cost must be submitted to the City within sixty (60) days
of the completion of the development and improvements, but by no later
than September 1, 2016.
a. Costs considered toward the aggregate cost of permanent improvements
include building construction, design, labor, materials, materials shipping,
permits, equipment, soil testing, environmental baseline report, and
environmental assessment directly related to the construction; premises
·and as-built surveys; site preparation, including excavation, geotextile
fabric, filling, grading, fill material, gravel, and pavement, remediation of
environmental contamination (unless Lessee caused or materially
contributed to the contamination); and utility connection costs.
b. The cost of Permanent Improvements excludes
(i) work performed. by the City and not reimbursed by the Lessee;
and ·
(ii) work performed by the Lessee and reimbursed by the City.
2. FAILURE TO COMPLETE IMPROVEMENTS : If the Lessee fails to complete
the required construction within the time allowed under (B)(l) of this Article,
including any extensions granted, the City will execute against and the Lessee
will forfeit, any bond or other guarantee given by the Lessee and, as applicable,
City will
a. initiate cancellation of the lease; or
b. reduce the term of the lease to a period that is consistent with the portion
of the required construction timely complet~d .
LEASE OF AIRPORT LANDS
Page 26 of33
(
G;ty :~
Lessee: --JjL-
11 11~1 1
Page 26 of 33
3. APPEARANCE : When completed, all improvements on'the Premises must be
neat, presentable, and compatible with the authorized use of the Premises under
this Lease, as determined by the City.
4. CITY APPROVAL REQUIRED: The Lessee must first obtain the City's written
approval before beginning any land development, construction or demolition of
any improvements on the Premises,' or before beginning any alterations,
modifications, or renovation of existing structures on the Premises. The Lessee
must submit to the City detailed drawings of the proposed development,
alteration, modification, or renovation. Further, the Lessee will submit to City
evidence of the Lessee's compliance with the FAA regulation 14 CFR Part 77 .
5. CITY APPROVAL WITHHELD: The City's approval of any construction,
alteration, modification, or renovation will not be withheld unless :
a. the Lessee fails to demonstrate adequate financial resources to complete
the project;
b. the project plans, specifications, and agency approvals are incomplete;
c. the proposed project would result in a violation of an applicable ordinance,
regulation, or law;
d. the proposed project would interfere with or is incompatible with the
safety, security, maintenance, or operation of the airport;
e. the proposed project is inconsistent with the Airport Master Plan;
f. the proposed project is inconsistent with the terms of the lease, zoning
ordinances, or the City's Comprehensive Plan;
g the project plans do not make sufficient provision for drainage, aircraft,
vehicle, and equipment parking, or for snow storage; or
h. the proposed project does not conform to generally recognized
engineering principles or applicable fire or building codes.
6 . DEMOLITION: Prior to any demolition of any structure(s) on the Premises,
Lessee will deliver to City a written scope of work that, at a minimum, lists the
structure(s) that are to be demolished and the timeframe for demolition and
removal of the debris from the Airport. City will review Lessee's scope for
demolition and issue Lessee written approval for the work to be done.
7 . BUILDING SETBACK: No building or other permanent structure may be
constructed or placed within twenty (20) feet of any lot line of the Premises
without City's prior written approval . In addition, no building or other pennanent
structure may be constructed or placed within N/ A feet of any boundary line of
the Premises which fronts on a landing strip, taxiway, or apron.
LEASE OF AIRPORT LANDS
Page 27 of33
8. AS-BUILT DRAWINGS: Within sixty (60) days after completion of
construction or placement of improvements upon the Premises, the Lessee will
deliver to the City a copy of an as-built drawing, acceptable to the City, showing
the location and dimensions of the improvements, giving distances to all
Premises' boundaries. If the Lessee constructs underground improvements, the
Lessee will appropriately mark the surface of the land with adequate surface
marker s. The type, quantity, and distance between such markers will be subject to
approval of the City.
9. AIR.PORT SECURITY FENCING: If any construction by the Lessee requires a
realignment or alteration of an existing security fence on the Premises or
boundary of the Premises, the Lessee agrees to realign or alter the fence in a
manner approved in writing by the Airport Manager. Anytime the fence must be
breached to allow the Lessee to complete improvement construction or fence
modifications, the Lessee shall, at the Lessee's sole expense place temporary
barriers to maintain the security of the Airport, as determined by the Airport
Manager. If damage occurs to a security fence on the Premises or boundary of the
Premises in connection with the Lessee's use or occupation of the Premises, the
Lessee shall promptly repair the fence to the satisfaction of the Airport Manager.
1 O. DAMAGE TO IMPROVEMENTS: If Lessee's improvements on the Premises
are damaged or destroyed, Lessee will cause the improvements to be repaired or
rebuilt, and restored to normal function within two (2) years following the
damage or destruction. If the Lessee fails to timely rebuild or restore the
improvements, the City may, at its sole discretion, either reduce the term of this
Lease commensurate with the estimated value of the Lessee's remaining, fully
functional improvements on the Premises, or cancel this Lease.
11 . DAMAGE NEAR EXPIRATION: If Lessee's improvements are damaged to the
extent that more than 50% of the space is unusable and the damage occurs within
five years of the expiration of the term of this Lease, Lessee may remove the
damaged improvements, restore the Premises and terminate this Lease .
c. PERFORMANCE BOND : Prior to beginning the construction of permanent
improvements required under (B)(l) of this Article, the Lessee shall submit to the City a
performance bond, deposit, or other security in the amount of $NIA. The form of the bond or
other security shall be subject to the City's approval.
LEASE OF AIRPORT LANDS
Page 28 of33
D. SURRENDER ON TERMINATION: Lessee shall, on the last day of the term of this
Lease or upon any earlier termination of this Lease, surrender and deliver upon the premises into
the possession and use of City without fraud or delay in good order, condition, and repair, except
for reasonable wear and tear since the last necessary repair, replacement, restoration or renewal,
free and clear of all lettings and occupancies unless expressly permitted by the City in writing,
and free and clear of all liens and encumbrances other than those created by and for loans to
City. Upon the end of the term of this Lease, including any extension or renewal, or any earlier
termination thereof, title to the buildings, improvements and building equipment shall
automatically vest in City without requirement of any deed, conveyance, or bill of sale thereon.
However, if City should require any such document in confirmation hereof, Lessee shall execute,
acknowledge, and deliver the same and shall pay any charge, tax, and fee asserted or imposed by
any and all governmental units in connection herewith.
E . NOTICE OF CONSTRUCTION: The Lessee agrees to notify the City in writing three
days prior to commencing any construction project valued in excess of$1,000.00 on the
Premises. The Lessee agrees to assist in the posting of a notice of non-responsibility and
maintenance of the notice on the Premises during construction. Lessee agrees that in the event
the Lessee fails to notify the City as required by this Provision (t), the Lessee shall indemnify the
City against any materialmen's liens as defined in AS 34.35.050 which arise as a result of
construction on the premises.
ARTICLE XV
SPECIAL PROVISIONS
A. CITY CONSTRUCTED IMPROVEMENTS.
1.. ALTERNATIVE ONE -The City comm.its to construct improvements after the
lease is signed.
(a) As part of the exchange of consideration of this lease, the City will, at the
City's expense, cause the following improvements to be constructed on or
in connection with the Premises:
(i) NIA;
(ii) NIA;
(iii) NIA.
(b) The City's total cost of the improvement construction shall not exceed
$NIA without the Lessee's written concurrence.
LEASE OF AIRPORT LANDS
Page 29 of33
( c) The Lessee shall reimburse the City for the City's cost of constructing the
improvements. The reimbursement shall be made in ten (10) equal annual
payments, plus interest at eight percent (8%) per year on the unpaid
balance. The Lessee may pay the entire remaining balance to the City
earlier than due.
( d) After completing the improvements, the City will give the Lessee written
notice of the City's total cost of constructing the improvements and the
date on which the Lessee's reimbursement payments shall begin, which
date shall be no earlier than 60 days after the date of the City's notice.
The Lessee's annual reimbursement payment for each succeeding year
shall be made to the City by no later than the anniversary of date on which
the first payment was due.
( e) Failure by the Lessee to timely reimburse the City as required under (b)
through ( d) of this provision shall be grounds for termination of this lease
by the City.
2 . ALTERNATIVE TWO -The City builds improvements before the lease is
signed.
(a) The Lessee acknowledges that prior to the execution of this lease, the City
constructed the following improvements on or in connection with the
Premises:
(b)
(i) NIA;
(ii) NIA;
(iii) NIA.
The City's total cost to construct the improvements was $NIA.
( c) As part of the consideration of this lease, the Lessee shall reimburse the
City for the City's cost of constructing the improvements. The
reimbursement shall be made in ten (10) equal annual payments, plus
interest at eight percent (8%) per year on the unpaid balance. The Lessee
may pay the entire remaining balance to the City earlier than due.
( d) The Lessee shall make the first reimbursement payment to the City by no
later than the first anniversary of the lease term beginning date given in
Article III ofthis Lease. The Lessee's annual reimbursement payment for
LEASE OF AIRPORT LANDS
Page 30 of33
(
1 11!1 ~1111
City:_&_
Lessee : -k=:.
Page 30 of 33
""'""' r ,.,,....,... ___ -
each succeeding year shall be made to the City by no later than the
anniversary of date on which the first payment was due.
( e) Failure by the Lessee to timely reimburse the City as required under ( c)
and ( d) of this provision shall be grounds for termination ofthis Lease by
the City.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, the day and
year stated in the individual acknowledgments below.
(If Lessee is a Corporation)
AITEST:
Name
Title
LEASE OF AIRPORT LANDS
Page 31of33
CITY OF KENAI
By: !l/lllli
City Manager
LESSEE:
LEGACY ELECTRIC, LLC ,
B~-Q<-Nt'
N Title
(
m:~111 1
City:~
Lessee:-/£,.--
II~\\
Page 31 of 33
2015-00229~-0
I~
STATE OF ALASKA )
) SS.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this \ZJ'1 day of J ~NV A.P...1, 20 Ii,
Name: Dfil¥--lk\1Ll1U1M: , Title: OWtJ@& , of LEGACY ELECTRIC,
LLC, being personally known to me or having produced satisfactory evidence of identification,
appeared before me and acknowledged the voluntary and authorized execution of the foregoing
instrument on behalf of said corporation.
~
Notary P&lmc for Alaska
My Commission Expires: W/offl l -l?
STATE OF ALASKA )
) SS.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this \[1 1
' day of JN,JVKf:{, 201~ RICK R. KOCH, City
Manager of the City of Kenai, Alaska, being personally known to me or having produced
satisfactory evidence of identification, appeared before me and acknowledged the voluntary and .
authorized execution of the foregoing instrument on behalf of said City.
LEASE OF AIRPORT LANDS
Page 32 of33
~:;,-:-~--
Notary I5ii6ITCfOIAlaSka
My Corrunission Expires :~(;?
Approved as to lease form by City Attorney: srt
Approved by Finance Director: :ik--
Airport Commission recommended approval on 25 JI l.f /; l{
r f
Planning & Zonj.ng Commission recommended approval on ~ Jza-{ I y
San~ty Clerk
LEASE OF AIRPORT LANDS
Page 33 of 33
(1
City~ Lessee:
~1:11111 I~ Page 33 of 33
2015-002299-0
MEMORANDUM
TO: Mayor Brian Gabriel and Kenai City Council
FROM: Paul Ostrander, City Manager
DATE: February 14, 2019
SUBJECT: Resolution No. 2019 – 13 Sublease between Legacy Electric, LLC and
the Peninsula Hangar Association
____________________________________________________________________________
Legacy Electric, LLC executed a lease with the City on January 12, 2015 to operate a T-hangar
complex on the airport with an initial term of 35 years. Legacy Electric, LLC’s plan is to form a
common interest ownership community to manage the project. This allows the Lessee to sell units
of the common interest ownership property to potential buyers for use of the facility. The buyers
essential gain ownership of individual units subject to the City’s Lease. In order to facilitate this,
the City must consent to a sublease between Legacy Electric, LLC and the Peninsula Hangar
Association that will manage the common interest ownership community, and as the landowner
consent to the declaration of the Common Interest Ownership Cooperative. The City Attorney has
reviewed the relevant documents and the terms of the declaration and sublease are subject to
the terms of the City’s Lease with the Legacy Electric, LLC. These types of projects have been
successful at other airports in the State, including Lake Hood, and is needed to allow for
successful utilization of the City’s Airport and add to the business community within the Airport
Reserve.
Your consideration is appreciated.