HomeMy WebLinkAbout2019-09-03 Council Packet - Work SessionAGENDA
CITY COUNCIL WORK SESSION
SEPTMBER 3, 2019 – 6:00 P.M.
KENAI CITY COUNCIL CHAMBERS
210 FIDALGO AVENUE, KENAI, AK 99611
http://www.kenai.city
A. Call to Order
B. Introduction – Mayor Gabriel
C. Discussion on Ordinance No. 3072-2019 – Land Sale and Leasing Policies and Procedures
D. Public Comment (limited to 3 minutes per speaker; 30 minutes’ aggregate)
E. Adjournment
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Sponsored by: Administration
CITY OF KENAI
ORDINANCE NO. 3072-2019
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, RENAMING,
REPEALING AND RE-ENACTING KENAI MUNICIPAL CODE TITLE 22-GENERAL FUND
LANDS, RENAMING TITLE 21-CITY AIRPORT AND AIRPORT LANDS, AND REPEALING
KENAI MUNICIPAL CODE CHAPTER 21.15-LEASE AND SALE OF AIRPORT LANDS OUTSIDE
OF THE AIRPORT RESERVE TO ENCOURAGE RESPONSIBLE GROWTH AND
DEVELOPMENT TO SUPPORT A THRIVING BUSINESS, RESIDENTIAL, RECREATIONAL
AND CULTURAL COMMUNITY THROUGH RESPONSIBLE LAND POLICIES AND
PRACTICES.
WHEREAS, amendments to Title 22-General Fund Lands, coupled with the repeal of Chapter
21.15- Lease and Sale of Airport Lands Outside the Airport Reserve, are intended to encourage
responsible growth and development to support a thriving business, residential, recreational and
cultural community through responsible land policies and practices; and,
WHEREAS, combining code provisions for general fund lands, lands outside the airport reserve
restricted by the Federal Aviation Administration, and certain tidelands recognizes these are all
City-owned lands and should be similarly treated consistent with granting restrictions, if any; and,
WHEREAS, the changes provide for development incentives to encourage new development in
the City and changes to the term table and ownership of improvements to encourage investment;
and,
WHEREAS, other changes are focused on providing a City-wide approach to land management
and lease and sales policy along with rental rate adjustments based on consumer price indexes
protect lessees from unexpected increases and to reduce conflict between the City and current
and future lessees; and,
WHEREAS, the amendments discourage land speculation on commercial City-owned lands by
requiring development for lease or sale; and,
WHEREAS, the Planning and Zoning Commission, at its meeting of August 14, 2019,
recommended the City Council ______ Ordinance No. 3072-2019; and,
WHEREAS, the Airport Commission, at its meeting of August 8, 2019, recommended the City
Council ______ Ordinance No. 3072-2019, and,
WHEREAS, the Harbor Commission at its meeting of August 19, 2019, recommended the City
Council ______ Ordinance No. 3072-2019.
Ordinance 3072-2019
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NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA,
as follows:
Section 1. Renaming Title 21 of the Kenai Municipal Code: That Kenai Municipal Code, Title
21 – City Airport And Airport Lands is hereby renamed as follows:
CITY AIRPORT RESERVE [AND AIRPORT] LANDS
Section 2. Repealing Chapter 21.15 of the Kenai Municipal Code: That Kenai Municipal Code,
Chapter 21.15 – Lease and Sale of Airport Land Outside of the Airport Reserve is hereby repealed
as follows:
[CHAPTER 21.15
LEASE AND SALE OF AIRPORT LAND OUTSIDE OF THE AIRPORT RESERVE
21.15.010 AIRPORT LAND OUTSIDE OF THE AIRPORT RESERVE.
(A) THIS CHAPTER APPLIES TO AIRPORT LAND OUTSIDE OF THE AIRPORT
RESERVE.
(B) THE CITY MAY SELL, CONVEY, EXCHANGE, TRANSFER, DONATE, DEDICATE,
DIRECT, OR ASSIGN TO USE, OR OTHERWISE DISPOSE OF AIRPORT LAND OUTSIDE
OF THE AIRPORT RESERVE, INCLUDING PROPERTY ACQUIRED, HELD FOR, OR
DEVOTED TO A PUBLIC USE, IN ACCORDANCE WITH THIS CHAPTER. DISPOSAL OR
SALE OF LANDS SHALL BE MADE ONLY WHEN, IN THE JUDGMENT OF THE CITY
COUNCIL, SUCH LANDS ARE NOT REQUIRED BY THE CITY FOR A PUBLIC PURPOSE,
(C) THE CITY MAY LEASE, SELL OR DISPOSE OF REAL PROPERTY BY WARRANTY
OR QUIT-CLAIM DEED, EASEMENT, GRANT, PERMIT, LICENSE, DEED OF TRUST,
MORTGAGE, CONTRACT FOR SALE OF REAL PROPERTY, PLAT DEDICATION, LEASE,
OR ANY OTHER LAWFUL METHOD OR MODE OF CONVEYANCE OR GRANT. ANY
INSTRUMENT REQUIRING EXECUTION BY THE CITY SHALL BE SIGNED BY THE CITY
MANAGER AND ATTESTED BY THE CITY CLERK. THE FORM OF ANY INSTRUMENT
SHALL BE APPROVED BY THE CITY ATTORNEY.
(D) THE PROVISIONS OF THIS CHAPTER SHALL NOT ALTER OR AMEND THE TERMS
OR RIGHTS GRANTED UNDER LEASES EXISTING PRIOR TO THE EFFECTIVE DATE
OF THE ORDINANCE CODIFIED IN THIS CHAPTER.
(E) PENDING LEASE APPLICATIONS FOR AIRPORT LAND FILED PRIOR TO THE
EFFECTIVE DATE OF THE ORDINANCE CODIFIED IN THIS CHAPTER SHALL BE
PROCESSED AND ISSUED UNDER THE PROVISIONS OF KMC TITLES 21 AND 22 IN
EXISTENCE IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THE ORDINANCE
CODIFIED IN THIS CHAPTER. OTHERWISE THE PROVISIONS OF THIS CHAPTER
SHALL APPLY.
Ordinance 3072-2019
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21.15.020 QUALIFICATIONS OF APPLICANTS OR BIDDERS.
AN APPLICANT OR BIDDER FOR A LEASE IS QUALIFIED IF THE APPLICANT OR BIDDER:
(A) IS AN INDIVIDUAL AT LEAST EIGHTEEN (18) YEARS OF AGE OR OVER; OR
(B) IS A GROUP, ASSOCIATION, OR CORPORATION WHICH IS AUTHORIZED TO
CONDUCT BUSINESS UNDER THE LAWS OF ALASKA; OR
(C) IS ACTING AS AN AGENT FOR ANOTHER AND HAS QUALIFIED BY FILING WITH
THE CITY MANAGER A PROPER POWER OF ATTORNEY OR A LETTER OF
AUTHORIZATION CREATING SUCH AGENCY. THE AGENT SHALL REPRESENT ONLY
ONE (1) PRINCIPAL TO THE EXCLUSION OF HIM OR HERSELF. THE TERM “AGENT”
INCLUDES REAL ESTATE BROKERS AND AGENTS.
21.15.030 APPLICATIONS.
(A) ALL APPLICATIONS FOR LEASE OF LANDS SHALL BE FILED WITH THE CITY
MANAGER ON FORMS PROVIDED BY THE CITY AVAILABLE AT CITY HALL.
APPLICATIONS SHALL BE DATED ON RECEIPT AND PAYMENT OF FILING FEE AND
DEPOSIT. NO APPLICATION WILL BE ACCEPTED BY THE CITY MANAGER UNLESS IT
APPEARS TO THE CITY MANAGER TO BE COMPLETE. FILING FEES ARE NOT
REFUNDABLE.
(B) WITH EVERY APPLICATION, THE APPLICANT SHALL SUBMIT A DEVELOPMENT
PLAN, SHOWING AND STATING:
(1) THE PURPOSE OF THE PROPOSED LEASE;
(2) THE USE, VALUE AND NATURE OF IMPROVEMENTS TO BE CONSTRUCTED;
(3) THE TYPE OF CONSTRUCTION;
(4) THE DATES CONSTRUCTION IS ESTIMATED TO COMMENCE AND BE
COMPLETED (ORDINARILY A MAXIMUM OF TWO (2) YEARS); AND
(5) WHETHER INTENDED USE COMPLIES WITH THE ZONING ORDINANCE AND
COMPREHENSIVE PLAN OF THE CITY. APPLICATIONS SHALL BECOME A PART
OF THE LEASE.
21.15.040 FILING FEE AND DEPOSIT.
(A) WHEN SUBMITTING AN APPLICATION FOR LEASE OF LAND, THE APPLICANT
SHALL PAY THE CITY THE FOLLOWING AS SET FORTH IN THE CITY’S SCHEDULE OF
FEES ADOPTED BY THE CITY COUNCIL:
(1) PAY A NON-REFUNDABLE FILING FEE; AND
(2) A DEPOSIT TO SHOW GOOD FAITH AND SECURE THE CITY IN PAYMENT OF
ANY COSTS, INCLUDING:
(A) AN APPRAISAL COST RECOVERY DEPOSIT; AND
Ordinance 3072-2019
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(B) AN ENGINEERING, SURVEYING AND CONSULTING COST RECOVERY
DEPOSIT.
(B) IF THE CITY DECIDES TO REJECT THE APPLICANT’S APPLICATION AND NOT
ENTER INTO A LEASE WITH THE APPLICANT THROUGH NO FAULT OF THE
APPLICANT OR FAILURE OF THE APPLICANT TO COMPLY WITH ANY REQUIREMENT
OF THIS CHAPTER, ANY DEPOSIT MADE UNDER SUBSECTION (A)(2) OF THIS
SECTION WILL BE RETURNED TO THE APPLICANT.
(C) IF THE CITY ENTERS INTO A LEASE WITH THE APPLICANT ANY DEPOSIT MADE
BY THE APPLICANT UNDER SUBSECTION (A)(2) OF THIS SECTION WILL BE APPLIED
TO THE CITY’S ENGINEERING, APPRAISAL, AND CONSULTING COSTS RELATED TO
THE PROCESSING OF THE APPLICANT’S APPLICATION AND ENTERING INTO THE
LEASE. THE CITY WILL APPLY ANY UNUSED BALANCE OF A DEPOSIT TO THE RENT
PAYABLE UNDER THE LEASE. IF THE CITY’S COSTS EXCEED THE AMOUNT OF ANY
DEPOSIT, THE APPLICANT SHALL PAY THE SHORTAGE TO THE CITY AS A
CONDITION OF THE LEASE.
(D) IF THE APPLICANT FAILS TO COMPLY WITH ANY REQUIREMENT OF THIS
CHAPTER, CAUSES INORDINATE DELAY, AS DETERMINED BY THE CITY MANAGER,
OR REFUSES TO SIGN A LEASE OFFERED TO THE APPLICANT, THE CITY MANAGER
WILL REJECT THE APPLICANT’S APPLICATION AND APPLY ANY DEPOSIT MADE BY
THE APPLICANT UNDER SUBSECTION (A) OF THIS SECTION TO THE CITY’S
APPRAISAL, ENGINEERING, AND CONSULTING COSTS INCURRED IN CONNECTION
WITH THE APPLICANT’S APPLICATION. IF THE CITY’S COSTS FOR APPRAISAL,
ENGINEERING AND CONSULTING COSTS EXCEED THE DEPOSITS, THE APPLICANT
WILL BE RESPONSIBLE FOR THESE COSTS. THE CITY WILL RETURN ANY UNUSED
DEPOSIT BALANCE TO THE APPLICANT.
21.15.050 RIGHTS PRIOR TO LEASING.
THE FILING OF AN APPLICATION FOR A LEASE SHALL GIVE THE APPLICANT NO RIGHT
TO LEASE OR TO THE USE OF THE LAND FOR WHICH THE APPLICANT APPLIED. THE
APPLICATION SHALL EXPIRE WITHIN TWELVE (12) MONTHS AFTER THE APPLICATION
HAS BEEN MADE IF A LEASE HAS NOT BEEN ENTERED INTO BETWEEN THE CITY AND
THE APPLICANT BY THAT TIME UNLESS THE CITY COUNCIL FOR GOOD CAUSE
GRANTS AN EXTENSION. NO EXTENSION MAY BE GRANTED FOR A PERIOD LONGER
THAN SIX (6) ADDITIONAL MONTHS. LEASE RATES ARE SUBJECT TO CHANGE ON THE
BASIS OF AN APPRAISAL DONE EVERY TWELVE (12) MONTHS ON THE PROPERTY
APPLIED FOR.
Ordinance 3072-2019
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21.15.060 PROCESSING PROCEDURE.
(A) APPLICATIONS SHALL BE FORWARDED TO THE PLANNING AND ZONING
COMMISSION UPON RECEIPT. THE PLANNING AND ZONING COMMISSION SHALL
NORMALLY CONSIDER APPLICATIONS FOR SPECIFIC LANDS ON A FIRST-COME,
FIRST-SERVED BASIS IF THE COMMISSION FINDS THAT THE APPLICATION IS
COMPLETE AND CONFORMS TO THE COMPREHENSIVE PLAN AND THE KENAI
ZONING CODE. WHERE THERE IS DIFFICULTY IN OBTAINING A PERFECTED
APPLICATION, DETAILS AS TO DEVELOPMENT PLANS, ETC., OR WHERE THE
APPLICANT FAILS TO COMPLY WITH DIRECTIONS OR REQUESTS OF THE PLANNING
AND ZONING COMMISSION, ANY SUCH PRIORITY WILL BE LOST. IF AN APPLICATION
FOR THE PURCHASE OF CITY-OWNED LANDS, PREVIOUSLY AUTHORIZED FOR SALE
BY THE COUNCIL, IS RECEIVED BY THE CITY PRIOR TO THE KENAI PLANNING AND
ZONING COMMISSION MAKING AN AFFIRMATIVE OR NEGATIVE RECOMMENDATION
TO THE COUNCIL REGARDING THE LEASE APPLICATION FOR THE SAME PROPERTY,
THE CITY MAY ELECT TO SELL SAID PROPERTY IN ACCORDANCE WITH THE
PROVISIONS OF THE CODE.
(B) THE CITY COUNCIL SHALL NORMALLY CONSIDER A LEASE PROPOSAL ONLY
AFTER APPROVAL OF THE PLANNING AND ZONING COMMISSION. HOWEVER,
APPEALS OF PLANNING AND ZONING COMMISSION DISAPPROVAL MAY BE MADE TO
THE CITY COUNCIL. COMPLETED LEASE APPLICATIONS MUST BE PRESENTED TO
THE CITY COUNCIL WITHIN THIRTY (30) DAYS AFTER APPROVAL BY THE PLANNING
AND ZONING COMMISSION.
(C) WHERE THERE ARE TWO (2) OR MORE APPLICATIONS FOR THE SAME AIRPORT
LANDS FOR DIFFERENT USES, THEN IF THE PLANNING AND ZONING COMMISSION
MAKES A FINDING THAT A SUBSEQUENT APPLICATION WOULD RESULT IN USE OF
THE LANDS FOR A HIGHER AND BETTER PURPOSE WITH A GREATER BENEFIT TO
THE CITY OF KENAI AND THE CITIZENS THEREOF, THEN THE LEASE WILL BE ISSUED
TO SUCH APPLICANT NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A) IN
THIS SECTION WHICH PROVIDE FOR LEASING ON A FIRST-COME, FIRST-SERVED
BASIS. ANY APPLICANT MAY APPEAL TO THE CITY COUNCIL FROM A FINDING OR A
REFUSAL TO FIND BY THE PLANNING AND ZONING COMMISSION BY FILING AN
APPEAL WITH THE CITY CLERK WITHIN SEVEN (7) DAYS AFTER THE FINDING IS
MADE OR REFUSED BY THE PLANNING AND ZONING COMMISSION.
(D) THE DECISION WHETHER OR NOT TO LEASE LAND RESTS IN THE SOLE
DISCRETION OF THE CITY COUNCIL.
Ordinance 3072-2019
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21.15.070 REVIEW.
NO LEASED LAND MAY BE CHANGED IN USE, NOR MAY ANY RENEWAL LEASE BE ISSUED
UNTIL THE PROPOSED USE OR RENEWAL HAS BEEN REVIEWED BY THE PLANNING
COMMISSION AND APPROVED BY THE COUNCIL.
21.15.080 APPRAISAL.
NO LAND SHALL BE SOLD, LEASED, OR A RENEWAL OF LEASE ISSUED, UNLESS THE
SAME HAS BEEN APPRAISED WITHIN A TWELVE (12) MONTH PERIOD PRIOR TO THE
SALE OR DATE FIXED FOR BEGINNING OF THE TERM OF THE LEASE OR RENEWAL
LEASE. NO LAND SHALL BE LEASED FOR LESS THAN THE APPROVED APPRAISED
ANNUAL RENTAL. APPRAISALS SHALL REFLECT THE NUMBER AND VALUE OF CITY
SERVICES RENDERED THE LAND IN QUESTION.
21.15.090 TERMS OF LEASE.
ALL LEASES SHALL BE APPROVED BY THE CITY COUNCIL BEFORE THE SAME SHALL
BECOME EFFECTIVE. THE TERM OF ANY GIVEN LEASE SHALL DEPEND UPON THE
DURABILITY OF THE PROPOSED USE, THE AMOUNT OF INVESTMENT IN IMPROVEMENT
PROPOSED AND MADE, AND THE NATURE OF THE IMPROVEMENT PROPOSED WITH
RESPECT TO DURABILITY AND TIME REQUIRED TO AMORTIZE THE PROPOSED
INVESTMENT.
21.15.100 ANNUAL M INIMUM RENTAL.
(A) ANNUAL MINIMUM RENTALS SHALL BE COMPUTED FROM THE APPROVED
APPRAISED MARKET VALUE UTILIZING THE METHOD AS DESCRIBED IN KMC
21.15.120 OF THIS CHAPTER.
(B) UPON EXECUTION OF THE LEASE, THE LANDS BECOME TAXABLE TO THE
EXTENT OF ITS LEASEHOLD INTEREST AND LESSEE SHALL PAY ALL REAL
PROPERTY TAXES LEVIED UPON SUCH LEASEHOLD INTEREST IN THESE LANDS,
AND SHALL PAY ANY SPECIAL ASSESSMENTS AND TAXES AS IF LESSEE WERE THE
OWNER OF SAID LAND.
(C) RENT SHALL BE PAID ANNUALLY IN ADVANCE. SAID PAYMENTS SHALL BE
PRORATED TO CONFORM TO THE CITY OF PAYMENT EXCEEDS TWO HUNDRED
DOLLARS ($200.00), THEN THE LESSEE SHALL HAVE THE OPTION OF Kenai’s fiscal
year BEGINNING JULY 1 AND ENDING JUNE 30. IF THE EQUIVALENT MONTHLY
MAKING PAYMENTS ON A MONTHLY BASIS.
(D) LESSEE SHALL BE RESPONSIBLE FOR ALL SALES TAXES APPLICABLE TO ITS
OPERATIONS.
Ordinance 3072-2019
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21.15.110 BIDDING PROCEDURE.
AS AN EXCEPTION TO GENERAL POLICY LISTED ABOVE, THE CITY COUNCIL MAY
DESIGNATE A SPECIFIC LOT OR LOTS TO BE MADE AVAILABLE ONLY FOR BID. THIS
PROVISION SHALL APPLY ONLY WHEN THERE IS NO OUTSTANDING APPLICATION
PENDING ON THE LOT OR LOTS. AS DESIGNATED, SEALED BIDS SHALL BE RECEIVED
OFFERING A ONE-TIME PREMIUM IN ADDITION TO THE ESTABLISHED LEASE RATE.
HIGHEST BID, HOWEVER, SHALL BE SUBJECT TO ALL PROVISIONS OF REVIEW AND
APPROVAL ESTABLISHED FOR ALL OTHER LEASE APPLICATIONS.
21.15.120 PRINCIPLES AND POLICY OF LEASE RATES.
(A) A FAIR RETURN TO THE AIRPORT SYSTEM IS MANDATED BY THE TERMS AND
CONDITIONS OF THE QUITCLAIM DEED AND APPROPRIATE DEEDS OF RELEASE,
GRANTING THESE LANDS TO THE AIRPORT SYSTEM BY THE FEDERAL
GOVERNMENT. TO ENSURE A FAIR RETURN, ALL LEASES FOR A PERIOD IN EXCESS
OF FIVE (5) YEARS SHALL INCLUDE A REDETERMINATION CLAUSE AS OF THE FIFTH
ANNIVERSARY, AND ALL LANDS FOR LEASE SHALL BE APPRAISED PRIOR TO LEASE
AND AGAIN PRIOR TO REDETERMINATION. LEASE RATES:
(1) SHALL BE BASED ON FAIR MARKET VALUE OF THE LAND, INCLUDING AN
APPROPRIATE CONSIDERATION OF FACILITIES AND SERVICES AVAILABLE
(PUBLIC WATER, PUBLIC SEWER, STORM SEWERS, AND OTHER PUBLIC
UTILITIES) AS DETERMINED BY A QUALIFIED INDEPENDENT APPRAISER,
CONSIDERING THE BEST USE OF THE SPECIFIED LAND; AND,
(2) SHALL BE EIGHT PERCENT (8%) OF FAIR MARKET VALUE.
(B) FOR LEASES IN EXISTENCE PRIOR TO THE EFFECTIVE DATE OF THIS CHAPTER,
THE LEASE RATE REDETERMINATION SHALL BE AS PROVIDED IN THE LEASE.
(C) THE CITY MANAGER SHALL CHANGE THE RENT IN A LEASE BY GIVING THE
LESSEE WRITTEN NOTICE AT LEAST THIRTY (30) DAYS IN ADVANCE OF THE
EFFECTIVE DATE OF THE CHANGE.
(D) THE “FAIR MARKET VALUE” OF THE PREMISES SHALL BE EQUAL TO THE THEN-
FAIR MARKET RATE FOR SIMILAR COMMERCIAL PROPERTY IN THE CITY OF KENAI,
ALASKA (THE “RELEVANT AREA”). CITY SHALL GIVE NOTICE TO LESSEE OF CITY’S
ESTIMATION OF THE FAIR MARKET VALUE NOT LATER THAN THIRTY (30) DAYS
PRIOR TO THE EXPIRATION OF THE THEN-APPLICABLE FIVE (5) YEAR PERIOD, AS
EVIDENCED AND SUPPORTED BY THE WRITTEN OPINION OF AN INDEPENDENT
REAL ESTATE APPRAISER CERTIFIED UNDER ALASKA STATUTE 8.87, SELECTED
AND PAID FOR BY THE CITY, FAMILIAR WITH THE RELEVANT AREA (THE “FIRST
APPRAISER”). IF LESSEE DISAGREES WITH SUCH ESTIMATE, IT SHALL ADVISE THE
CITY IN WRITING THEREOF WITHIN THIRTY (30) DAYS OF LESSEE’S RECEIPT OF
Ordinance 3072-2019
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SUCH ESTIMATE, AS EVIDENCED AND SUPPORTED BY THE WRITTEN OPINION OF A
REAL ESTATE APPRAISER CERTIFIED UNDER ALASKA STATUTE 8.87 (SELECTED
AND PAID FOR BY LESSEE) FAMILIAR WITH THE RELEVANT AREA (THE “SECOND
APPRAISER”). THE PARTIES SHALL PROMPTLY MEET TO ATTEMPT TO RESOLVE
THEIR DIFFERENCES BETWEEN THE FIRST APPRAISER AND THE SECOND
APPRAISER CONCERNING THE FAIR MARKET VALUE OF THE PREMISES. IF CITY
AND LESSEE CANNOT AGREE UPON SUCH VALUE THEN, WITH ALL DELIBERATE
SPEED, THEY SHALL DIRECT THE FIRST APPRAISER AND THE SECOND APPRAISER
TO EXPEDITIOUSLY AND MUTUALLY SELECT A THIRD REAL ESTATE APPRAISER
CERTIFIED UNDER ALASKA STATUTE 8.87 (SELECTED AND PAID FOR JOINTLY BY
THE PARTIES) FAMILIAR WITH THE RELEVANT AREA (THE “THIRD APPRAISER”).
WITHIN THIRTY (30) DAYS AFTER THE THIRD APPRAISER HAS BEEN APPOINTED,
THE THIRD APPRAISER SHALL DECIDE WHICH OF THE TWO (2) RESPECTIVE
APPRAISALS FROM THE FIRST APPRAISER AND THE SECOND APPRAISER MOST
CLOSELY REFLECTS THE FAIR MARKET VALUE OF THE PREMISES. THE FAIR
MARKET VALUE OF THE PREMISES SHALL IRREBUTTABLY BE PRESUMED TO BE
THE VALUE CONTAINED IN SUCH APPRAISAL SELECTED BY THE THIRD APPRAISER,
AND THE RENTAL SHALL BE REDETERMINED BASED ON SUCH VALUE.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, RENT SHALL
CONTINUE TO BE PAID AT THE THEN-APPLICABLE RATE UNTIL ANY SUCH NEW
RENTAL RATE IS ESTABLISHED, AND LESSEE AND CITY SHALL PROMPTLY PAY OR
REFUND, AS THE CASE MAY BE, ANY VARIANCE IN THE RENT, WITHOUT INTEREST
THEREON ACCRUING TO THE EXTENT TO BE PAID/REFUNDED IN A TIMELY
FASHION.
21.15.130 REIMBURSEMENT FOR CITY-CONSTRUCTED IMPROVEMENTS.
(A) THE CITY MANAGER MAY INCLUDE IN A LEASE A REQUIREMENT FOR THE
LESSEE TO REIMBURSE THE CITY FOR THE CITY’S COST OF:
(1) LAND CLEARING, GRAVEL FILL, UTILITY EXTENSIONS AND OTHER
IMPROVEMENTS OR AMENITIES ON OR IN DIRECT CONNECTION WITH THE
PREMISES, CONSTRUCTED BY THE CITY PRIOR TO THE EFFECTIVE DATE OF
THE LEASE; OR
(2) LAND CLEARING, GRAVEL FILL, UTILITY EXTENSIONS AND OTHER
IMPROVEMENTS OR AMENITIES ON OR IN DIRECT CONNECTION WITH THE
PREMISES, WHICH THE CITY AGREES TO CONSTRUCT AS A CONDITION OF THE
LEASE, SUBJECT TO CITY COUNCIL APPROVAL.
(B) THE LESSEE SHALL REIMBURSE THE CITY FOR THE CITY’S COST OF
CONSTRUCTING THE IMPROVEMENTS IN TEN (10) EQUAL ANNUAL PAYMENTS,
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PLUS INTEREST AT EIGHT PERCENT (8%) PER YEAR ON THE UNPAID BALANCE OR
UNDER SUCH TERMS AND CONDITIONS AS THE COUNCIL MAY SET BY RESOLUTION.
IF THE LEASE IS FOR LESS THAN TEN (10) YEARS, THE REPAYMENT SCHEDULE MAY
NOT BE LONGER THAN THE TERM OF THE LEASE. THE LESSEE MAY PAY THE
ENTIRE REMAINING BALANCE TO THE CITY AT ANY TIME DURING THE TERM OF THE
LEASE.
21.15.140 LEASE EXECUTION.
THE LEASE APPLICANT SHALL EXECUTE AND RETURN THE APPROPRIATE LEASE
AGREEMENT WITH THE CITY OF KENAI WITHIN THIRTY (30) DAYS OF MAILING THE
AGREEMENT TO SAID APPLICANT. THE LEASE AGREEMENT SHALL BE PREPARED IN
ACCORDANCE WITH THE REQUIREMENTS OF THIS TITLE. FAILURE TO EXECUTE AND
RETURN THE LEASE AGREEMENT WITHIN THE SPECIFIED PERIOD SHALL RESULT IN
THE FORFEITURE OF ALL LEASING RIGHTS.
21.15.150 LEASE UTILIZATION.
LEASED LANDS SHALL BE UTILIZED FOR PURPOSES WITHIN THE TERMS OF THE LEASE
AND IN CONFORMITY WITH THE ORDINANCES OF THE CITY, AND IN SUBSTANTIAL
CONFORMITY WITH THE COMPREHENSIVE PLAN. UTILIZATION OR DEVELOPMENT FOR
OTHER THAN THE ALLOWED USES SHALL CONSTITUTE A VIOLATION OF THE LEASE
AND SUBJECT THE LEASE TO CANCELLATION AT ANY TIME. FAILURE TO
SUBSTANTIALLY COMPLETE THE DEVELOPMENT PLAN FOR THE LAND, CONSISTENT
WITH THE PROPOSED USE AND TERMS OF THE LEASE, SHALL CONSTITUTE GROUNDS
FOR CANCELLATION.
21.15.160 FORM OF LEASE.
(A) WHEN LEASING LAND UNDER THIS CHAPTER, THE CITY MANAGER SHALL USE
A STANDARD LEASE FORM THAT IS:
(1) DRAFTED TO:
(I) PROVIDE A REASONABLE BASIS FOR THE LESSEE’S USE OF THE
PREMISES,
(II) FOSTER THE SAFE, EFFECTIVE, AND EFFICIENT OPERATION OF THE
AIRPORT,
(III) CONFORM WITH THE APPLICABLE REQUIREMENTS OF THE KMC,
INCLUDING THIS CHAPTER, ALASKA STATUTES, FEDERAL AVIATION
ADMINISTRATION REGULATIONS, AND OTHER APPLICABLE FEDERAL LAW,
AND
(Iv) PROVIDE FOR THE BEST INTEREST OF THE CITY.
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(2) APPROVED AS TO FORM BY THE CITY ATTORNEY; AND
(3) ADOPTED BY RESOLUTION OF THE CITY COUNCIL.
(B) THE CITY MANAGER MAY ENTER INTO A LAND LEASE THAT DEVIATES FROM
THE STANDARD FORM ADOPTED UNDER SUBSECTION (A) OF THIS SECTION, IF:
(1) THE MANAGER BELIEVES THE ACTION IS IN THE BEST INTEREST OF THE
CITY; AND
(2) THE LEASE IS APPROVED AS TO FORM BY THE CITY ATTORNEY; AND
(3) THE LEASE IS APPROVED BY RESOLUTION OF THE CITY COUNCIL.
21.15.170 CONVEYANCE TO ENCOURAGE NEW ENTERPRISES.
(A) NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS CHAPTER, WHERE IT IS
FOUND THAT ENCOURAGEMENT OF A NEW COMMERCIAL OR INDUSTRIAL
ENTERPRISE WOULD BE BENEFICIAL TO THE CITY OF KENAI, THE CITY COUNCIL BY
ORDINANCE SO FINDING MAY DIRECT CONVEYANCE OF ONE OR MORE PARCELS
OF CITY LAND BY THE CITY MANAGER TO SUCH ENTERPRISE UPON SUCH TERMS
AS TO PRICE, CONDITIONS OF CONVEYANCE, AND WITH SUCH CONTINGENCIES AS
MAY BE SET FORTH IN SAID ORDINANCE.
(B) IN THE EVENT THE LAND DIRECTED TO BE CONVEYED UNDER SUBSECTION (A)
OF THIS SECTION CONSISTS IN PART OR IN WHOLE OF AIRPORT LANDS, THEN THE
ORDINANCE ORDERING ITS CONVEYANCE. WILL NOT BE EFFECTIVE UNTIL THE
CITY COUNCIL BY ORDINANCE HAS APPROPRIATED FROM THE GENERAL FUND TO
BE DEDICATED TO THE AIRPORT THE DIFFERENCE BETWEEN THE APPRAISED FAIR
MARKET VALUE OF SAID AIRPORT LANDS AND THE PURCHASE PRICE, IF ANY, SET
FORTH IN SAID ORDINANCE.
21.15.180 SALE.
(A) AIRPORT LAND OUTSIDE THE AIRPORT RESERVE TO WHICH THE CITY OF KENAI
HOLDS TITLE WHICH ARE NOT RESTRICTED FROM SALE BY THE DEED OF
CONVEYANCE TO THE CITY, OR WHICH HAVE BEEN RELEASED FROM SUCH
RESTRICTIONS, WHICH THE CITY COUNCIL HAS DETERMINED ARE NOT REQUIRED
FOR A PUBLIC PURPOSE, MAY BE LISTED FOR SALE BY THE CITY MANAGER,
EXCEPT THAT LANDS WHICH HAVE BEEN LEASED SHALL NOT BE SOLD UNLESS THE
LESSEE HAS MADE A WRITTEN REQUEST TO THE CITY TO PLACE THE LAND FOR
SALE. THE DECISION WHETHER OR NOT TO SELL THE LAND RESTS IN THE SOLE
DISCRETION OF THE CITY.
(B) SALES OF LAND PURSUANT TO SUBSECTION (A) OF THIS SECTION SHALL BE
MADE AT NOT LESS THAN FAIR MARKET VALUE. THE PURCHASER SHALL EXECUTE
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THE “AGREEMENT FOR SALE OF LAND” WITHIN ONE (1) YEAR OF THE DATE OF
APPRAISAL. THE CITY MANAGER HAS THE OPTION TO DISPOSE
OF SUCH PROPERTIES IN ACCORDANCE WITH THE SALE PROCEDURES SET OUT IN
THIS TITLE:
(1) BY NEGOTIATED SALE; OR
(2) BY OUTCRY AUCTION TO THE HIGHEST RESPONSIBLE BIDDER; OR
(3) BY COMPETITIVE SEALED BIDS TO THE HIGHEST RESPONSIBLE BIDDER.
IN THE EVENT THAT THE SALE IS NOT CLOSED WITHIN ONE (1) YEAR OF THE
DATE OF APPRAISAL, THE BUYER WILL BE CHARGED, UPON CLOSING,
INTEREST COMPUTED IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF
THE KENAI MUNICIPAL CODE, BASED UPON THE TOTAL SALES PRICE FOR THE
NUMBER OF DAYS PAST THE EXPIRATION OF THE SIX (6) MONTH PERIOD.
21.15.190 SALE PROCEDURE.
(A) THE CITY MANAGER WILL OBTAIN SUCH AN APPRAISAL FOR A DETERMINATION
OF THE MINIMUM PRICE ON SAID LAND.
(B) WHERE ANY PARTY, HEREINAFTER CALLED “APPLICANT,” REQUESTS THAT A
TRACT OR TRACTS OF LAND BE SOLD FOR WHICH AN APPRAISAL WILL BE
REQUIRED, WHICH WILL REQUIRE SUBDIVIDING, PLATTING, OR SURVEYING AND
STAKING, OR WHICH WILL REQUIRE ADVERTISING OR INCURRING ANY OTHER
EXPENDITURES BY THE CITY PRIOR TO SALE,
(1) NO ACTIONS IN PREPARATION FOR SALE WILL BE TAKEN BY THE CITY
UNTIL AN AGREEMENT TO PURCHASE SHALL BE PROPERLY EXECUTED AND
FILED WITH THE CITY MANAGER FOR THE PURCHASE OF SUCH LAND WITH
PAYMENT OF SUFFICIENT GOOD FAITH DEPOSIT, WHICH SHALL CONSIST OF
CASH OR ITS EQUIVALENT DEPOSITED WITH THE FINANCE OFFICER OF THE
CITY OF KENAI, AS MAY BE DETERMINED BY THE CITY MANAGER, TO COVER
ALL EXPENSES OF THE CITY AND SUCH AGREEMENT TO PURCHASE SHALL
FURTHER CONTAIN THE AGREEMENT BY APPLICANT TO PAY ANY ADDITIONAL
COSTS IF SUCH GOOD FAITH DEPOSIT IS INSUFFICIENT TO PAY ALL COSTS
INCURRED BY THE CITY.
(2) IF AT ANY TIME DURING THE PROCESS OF PREPARING FOR SALE, THE
APPLICANT GIVES NOTICE TO THE CITY MANAGER OF WITHDRAWAL OF THE
REQUEST FOR SALE, THE CITY MANAGER SHALL STOP ALL PROCEDURES,
SHALL PAY EXPENSES INCURRED PRIOR TO TERMINATION OF SALE
PROCEDURES, AND SHALL REIMBURSE APPLICANT FOR ANY GOOD FAITH
DEPOSIT ADVANCED IN EXCESS OF ALL EXPENSES INCURRED. (HOWEVER, IF
ANOTHER PARTY DESIRES THE SALE TO PROCEED, FILES AN APPLICATION
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FOR SALE, EXECUTES AND FILES AN AGREEMENT TO PURCHASE, AND
ADVANCES SUFFICIENT FUNDS THEREFOR, THEN THE PRIOR APPLICANT WILL
BE REIMBURSED FOR EXPENSES CHARGES WHICH CAN BE ATTRIBUTED TO
THE SUBSEQUENT APPLICANT.)
(3) IF ALL ACTIONS NECESSARY FOR PREPARATION FOR SALE HAVE BEEN
ACCOMPLISHED, AND IF NEITHER THE APPLICANT NOR ANY OTHER PARTY
PURCHASES SAID LAND WHEN FIRST OFFERED FOR SALE AFTER SUCH
REQUEST, THEN ALL EXPENSES INCURRED IN PREPARATION FOR THE SALE
WILL BE PAID FROM THE GOOD FAITH DEPOSIT, AND THE BALANCE, IF ANY,
SHALL BE RETURNED TO THE APPLICANT. IF THE SUMS ADVANCED AS GOOD
FAITH DEPOSIT ARE INSUFFICIENT TO PAY ALL OF THE COSTS, THE APPLICANT
WILL BE BILLED FOR THE BALANCE DUE AND NORMAL COLLECTION
PROCEDURES FOLLOWED.
(4) IF THE LAND APPLIED FOR IS SOLD ON PUBLIC SALE SET IN RESPONSE TO
SUCH REQUEST TO ANYONE OTHER THAN APPLICANT, THEN ON CLOSING OF
THE SALE, THE GOOD FAITH DEPOSIT WILL BE REFUNDED IN TOTAL TO THE
APPLICANT. THE CITY’S EXPENSES WILL BE FIRST DEDUCTED FROM THE
DEPOSIT OF THE SUCCESSFUL BIDDER.
(5) IF THE LAND IN QUESTION IS SOLD TO APPLICANT, THE GOOD FAITH
DEPOSIT ADVANCED, AFTER DEDUCTING THE CITY’S EXPENSES, WILL BE
APPLIED ON THE PAYMENT DUE AT CLOSING.
(6) IF THE LAND IN QUESTION IS TO BE SOLD BY SEALED BID AND THE
APPLICANT HAS SUBMITTED A VALID BID, BUT THE APPLICANT IS NOT THE HIGH
BIDDER, HE OR SHE MAY PURCHASE THE LAND BY TENDERING THE CITY A BID
EQUAL TO THE HIGH BID WITHIN FIVE (5) DAYS OF THE BID OPENING. IF THE
LAND SALE IS INITIATED IN ACCORDANCE WITH KMC 21.15.060(A), THE
APPLICANT SHALL BE DEFINED AS THAT PARTY SUBMITTING THE INITIAL LEASE
APPLICATION.
(C) IF THE TRACT OF LAND PROPOSED TO BE SOLD IS LEASED LAND, THE LESSEE
MAY REQUEST THE SALE OF THE LAND AT NOT LESS THAN THE FAIR MARKET
VALUE. THE CURRENT LESSEE MAY REQUEST TO NEGOTIATE A SALE ONLY AFTER,
TO THE SATISFACTION OF THE CITY MANAGER, DEVELOPMENT HAS BEEN
COMPLETED AS DETAILED IN THE DEVELOPMENT SCHEDULE WHICH HAS BEEN
INCORPORATED INTO THE LEASE AGREEMENT. IF THERE IS NO DEVELOPMENT
SCHEDULE, THE LESSEE MAY REQUEST TO PURCHASE THE PROPERTY IF THERE
HAVE BEEN SUBSTANTIAL IMPROVEMENTS AS DETERMINED BY THE CITY
MANAGER. THE DECISION WHETHER OR NOT TO SELL THE LAND TO THE LESSEE
RESTS IN THE SOLE DISCRETION OF THE CITY.
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(D) AN APPLICANT MAY REQUEST THE LEASE OF CITY LAND INCLUDE A RIGHT TO
PURCHASE THE LEASED LAND WITHIN TWELVE (12) MONTHS OF THE COMPLETION
OF THE DEVELOPMENT AS DETAILED IN THE DEVELOPMENT SCHEDULE. A SALE
UNDER THIS SUBSECTION SHALL BE AT NOT LESS THAN FAIR MARKET VALUE AS
DETERMINED BY AN APPRAISER QUALIFIED UNDER AS 8.87. THE CITY MAY CHARGE
ADDITIONAL CONSIDERATION FOR GRANTING THE RIGHT TO PURCHASE THE
PROPERTY. THE LAND MUST BE APPRAISED WITHIN TWELVE (12) MONTHS OF SALE
AS REQUIRED UNDER KMC 21.15.070. AN APPLICANT’S REQUEST TO HAVE A
CONTRACTUAL RIGHT TO PURCHASE THE LEASE PROPERTY MUST BE APPROVED
BY AN ORDINANCE OF THE COUNCIL. THE COUNCIL MAY GRANT THE REQUEST IF
IT DETERMINES IT IS IN THE BEST INTEREST OF THE CITY.
(E) IF THE TRACT OF LAND PROPOSED TO BE SOLD IS NOT LEASED LAND, OR IS
LEASED LAND WITHOUT SUBSTANTIAL IMPROVEMENTS, THEN THE TRACT OF LAND
MAY ONLY BE SOLD BY OUTCRY AUCTION OR BY COMPETITIVE SEALED BIDS. THE
DECISION WHETHER OR NOT TO SELL THE LAND RESTS IN THE SOLE DISCRETION
OF THE CITY. IF THE TRACT IS TO BE PUT UP FOR SUCH COMPETITIVE AUCTION OR
SEALED BID SALE, NOTICE OF SALE AND THE MANNER IN WHICH THE LAND IS TO
BE SOLD SHALL BE PUBLISHED IN A NEWSPAPER OF GENERAL CIRCULATION
WITHIN THE CITY ONCE EACH WEEK FOR TWO (2) SUCCESSIVE WEEKS NOT LESS
THAN THIRTY (30) DAYS PRIOR TO THE DATE OF SALE; SUCH NOTICE SHALL ALSO
BE POSTED IN AT LEAST THREE PUBLIC PLACES WITHIN THE CITY AT LEAST THIRTY
(30) DAYS PRIOR TO THE DATE OF SALE, AND SUCH OTHER NOTICE MAY BE GIVEN
BY SUCH OTHER MEANS AS MAY BE CONSIDERED ADVISABLE BY THE CITY
MANAGER. SUCH NOTICE MUST CONTAIN:
(1) THE LEGAL DESCRIPTION OF THE LAND;
(2) A BRIEF PHYSICAL DESCRIPTION OF THE LAND;
(3) THE AREA AND GENERAL LOCATION OF THE LAND;
(4) THE MINIMUM ACCEPTABLE OFFER FOR THE LAND (WHICH SHALL BE ITS
APPRAISED FAIR MARKET VALUE);
(5) THE TERMS UNDER WHICH THE LAND WILL BE SOLD;
(6) ANY LIMITATIONS ON THE SALE OF THE LAND;
(7) THE TIME AND PLACE SET FOR THE AUCTION OR BID OPENING;
(8) THE AMOUNT OF DEPOSIT TO BE SUBMITTED WITH EACH BID IN ORDER TO
COVER THE CITY’S EXPENSES SUCH AS SURVEY, APPRAISAL, AND REVIEWS;
(9) ANY OTHER MATTERS CONCERNING THE SALE OF WHICH THE CITY
MANAGER BELIEVES THE PUBLIC SHOULD BE INFORMED.
(F) WHERE A REAL ESTATE AGENT FURNISHES A BUYER FOR CITY LAND, THE
CLOSING AGENT SHALL BE AUTHORIZED TO PAY THE AGENT A REAL ESTATE
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COMMISSION OF FIVE PERCENT (5%) OF THE PURCHASE PRICE FOR THE LAND OR
FIVE PERCENT (5%) OF THE APPRAISED FAIR MARKET VALUE OF THE LAND,
WHICHEVER IS LOWER, UNDER THE FOLLOWING TERMS AND CONDITIONS:
(1) THE CITY MANAGER SHALL PROVIDE A NON-EXCLUSIVE LISTING OF LANDS
AVAILABLE FOR SALE.
(2) NO COMMISSION SHALL BE PAID TO AN AGENT WHERE SAID AGENT IS A
PARTY, OR IN PRIVITY WITH A PARTY, TO THE SALE.
(G) CLOSING OF SALE OF CITY LANDS SHALL BE HANDLED BY A TITLE OR ESCROW
COMPANY WITHIN THE CITY WHICH SPECIALIZES IN CLOSING OF REAL ESTATE
SALES.
(H) CONVEYANCE OF CITY LANDS SHALL BE BY QUIT CLAIM OR WARRANTY DEED
FURNISHED BY THE CITY, AND BUYERS ARE ADVISED THAT ALL SUCH
CONVEYANCES ARE SUBJECT TO ALL LIENS, ENCUMBRANCES, RESTRICTIONS,
AND COVENANTS OF RECORD AND ARE SPECIFICALLY, WITHOUT BEING LIMITED
THERETO, SUBJECT TO ANY UNRELEASED RESTRICTIONS CONTAINED IN THE
DEED OR DEEDS BY WHICH THE CITY RECEIVED TITLE TO THE LAND. THE DEED
SHALL BE SIGNED BY THE CITY MANAGER AND ATTESTED BY THE CITY CLERK. THE
FORM OF THE DEED SHALL BE APPROVED BY THE CITY ATTORNEY.
(I) IF A BUYER DESIRES TO OBTAIN A PRELIMINARY COMMITMENT FOR TITLE
INSURANCE OR TITLE INSURANCE TO THE LAND, THEN IT SHALL BE THE
RESPONSIBILITY OF THE BUYER TO OBTAIN SUCH COMMITMENT OR INSURANCE
AND TO PAY FOR THE SAME.
(J) IF THE TRACT OR TRACTS OF LAND ARE SOLD UNDER TERMS BY WHICH THE
CITY IS TO ACCEPT A NOTE AS A PORTION OF THE PURCHASE PRICE, THE NOTE
AND ACCOMPANYING DEED OF TRUST MUST BE PREPARED BY AN ATTORNEY, BUT
MUST BE APPROVED BY THE CITY ATTORNEY PRIOR TO CLOSING.
(K) THE NOTE SHALL BE PLACED FOR COLLECTION WITH A BANK SELECTED BY
THE CITY MANAGER, WHICH MAY BE CHANGED FROM TIME TO TIME, AND WHICH
SHALL BE THE BANK IN WHICH CITY FUNDS ARE DEPOSITED. THE SET-UP FEE TO
INITIATE COLLECTION MAY BE NEGOTIATED, AND THE BUYER SHALL PAY THE
ANNUAL COLLECTION FEES FOR SUCH BANK COLLECTION.
(L) TO ENABLE THE CITY TO COMPETE ON AN EQUAL BASIS WITH PRIVATE
ENTERPRISE IN LANDS DISPOSAL, THE CITY MANAGER IS AUTHORIZED TO
NEGOTIATE A DIVISION OF THE COSTS OF SALE LISTED IN KMC 21.15.190(F) (G), (H),
(I) AND (J) TO A MAXIMUM OF FIFTY PERCENT (50%) OF THE REQUIRED COSTS
BEING BORNE BY THE CITY.
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21.15.200 TERMS FOR FINANCING SALE OF CITY LAND s.
(A) IN ORDER TO EXPEDITE AND FACILITATE THE SALE OF CITY LANDS, THE CITY
MANAGER IS AUTHORIZED TO ACCEPT TERMS FOR SAID SALES AND MAY ACCEPT
A NOTE SECURED BY A DEED OF TRUST FOR A PORTION OF THE PURCHASE PRICE
THEREOF, SUBJECT TO THE FOLLOWING RESTRICTIONS:
(1) IF THE SALE IS TO A LESSEE WHO HAS PLACED A LIEN FOR FINANCING
UPON THE LAND OR IMPROVEMENTS, THEN THE CITY MANAGER IS NOT
AUTHORIZED TO SELL THE LAND EXCEPT FOR TOTAL CASH PAYMENT,
PROVIDED; HOWEVER, THAT THE CITY MANAGER MAY ACCEPT A NOTE
SECURED BY A DEED OF TRUST SUBORDINATE TO THE EXISTING SECURITY
INTEREST IF THE AMOUNT OF THE NOTE THEREBY SECURED IS WITHIN THE
DIFFERENCE BETWEEN THE FAIR MARKET VALUE OF THE LAND WITH
IMPROVEMENTS, AND THE SUM OF ALL PRIOR SECURITY INTERESTS. THE SALE
DOCUMENTS SHALL BE SUBJECT TO THE SAME RESTRICTIONS CONTAINED IN
THE LEASE AS THE LEASE PROVIDES AT THE TIME OF SALE.
(2) PRIOR TO MAKING A DETERMINATION TO ACCEPT A NOTE AND DEED OF
TRUST FROM A PROSPECTIVE PURCHASER, THE CITY MANAGER SHALL
SECURE A PRELIMINARY COMMITMENT FOR TITLE INSURANCE (AT
PURCHASER’S EXPENSE) AND A REVIEW OF THE GRANTEE INDEX COVERING
THE PARTY DESIRING TO PURCHASE THE LAND FROM THE TITLE COMPANY IN
THE LOCAL RECORDING DISTRICT, AND NO CREDIT WILL BE ADVANCED ON
SUCH SALE IF THERE ARE ANY DELINQUENT LIENS OR UNPAID JUDGMENTS
FOUND IN THE TITLE COMPANY REPORT UNTIL ANY SUCH JUDGMENTS OR
LIENS ARE PAID AND RELEASES THEREFORE HAVE BEEN FILED.
(3) IN THE EVENT OF A CREDIT SALE, THE DOWN PAYMENT REQUIRED SHALL
BE DETERMINED BY THE CITY MANAGER, BUT SHALL NOT BE LESS THAN
FIFTEEN PERCENT (15%) OF THE SALES PRICE.
(B) IF THE CITY MANAGER DETERMINES THAT IT IS IN THE CITY’S INTEREST TO
SELL CITY LANDS, THE SALE SHALL BE EITHER A CASH TRANSACTION OR BY A
NOTE SECURED BY A DEED OF TRUST, SUBJECT TO SUBSECTION (A) OF THIS
SECTION, AND BY NO OTHER MEANS. THE NOTE AND DEED OF TRUST SHALL
CARRY TERMS AS FOLLOWS:
(1) THE TERM OF SUCH NOTE MAY BE SET BY THE CITY MANAGER, BUT IT
SHALL PROVIDE FOR MONTHLY PAYMENTS AND NOT EXCEED TWENTY (20)
YEARS UNLESS A LONGER PERIOD FOR A SPECIFIC SALE OF LAND IS
APPROVED BY RESOLUTION OF THE CITY COUNCIL.
(2) SUCH NOTE SHALL BEAR INTEREST AT A RATE TO BE DETERMINED BY THE
CITY COUNCIL BY RESOLUTION.
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21.15.210 DETERMINATION AS TO NEED FOR PUBLIC USE.
(A) WHETHER LAND SHALL BE ACQUIRED, RETAINED, DEVOTED, OR DEDICATED
TO A PUBLIC USE SHALL BE DETERMINED BY ORDINANCE WHICH SHALL CONTAIN
THE PUBLIC USE FOR W HICH SAID PROPERTY IS TO BE DEDICATED, THE LEGAL
DESCRIPTION OF THE PROPERTY, AND THE ADDRESS OR A GENERAL
DESCRIPTION OF THE PROPERTY SUFFICIENT TO PROVIDE THE PUBLIC WITH
NOTICE OF ITS LOCATION.
(B) WHETHER LAND PREVIOUSLY DEDICATED TO A PUBLIC USE SHOULD BE
DEDICATED TO A DIFFERENT PUBLIC USE OR SHOULD NO LONGER BE NEEDED BY
THE CITY FOR PUBLIC USE SHALL BE DETERMINED BY THE CITY COUNCIL BY
ORDINANCE WHICH SHALL CONTAIN THE NEW PUBLIC USE FOR WHICH SAID
PROPERTY IS TO BE DEDICATED OR THE REASON THE LAND IS NO LONGER
NEEDED FOR PUBLIC USE, THE LEGAL DESCRIPTION OF THE PROPERTY, AND THE
ADDRESS OR A GENERAL DESCRIPTION OF THE PROPERTY SUFFICIENT TO
PROVIDE THE PUBLIC W ITH NOTICE OF ITS LOCATION.
21.15.220 PROPERTY EXCHANGES.
THE COUNCIL MAY APPROVE, BY RESOLUTION, AFTER PUBLIC NOTICE AND AN
OPPORTUNITY FOR PUBLIC HEARING, THE CONVEYANCE AND EXCHANGE OF A
PARCEL OF CITY PROPERTY FOR PROPERTY OWNED BY ANOTHER PERSON SUBJECT
TO SUCH CONDITIONS AS COUNCIL MAY IMPOSE ON THE EXCHANGE, WHENEVER IN
THE JUDGMENT OF THE CITY COUNCIL IT IS ADVANTAGEOUS TO THE CITY TO MAKE
THE PROPERTY EXCHANGE AND THE CITY SHALL RECEIVE PROPERTY (INCLUDING A
PORTION OF MONEY) AT LEAST EQUIVALENT TO THE VALUE OF THE PROPERTY
EXCHANGED BY THE CITY.
21.15.230 PROPERTY SALE TO ADJACENT OWNERS.
THE COUNCIL MAY APPROVE, BY RESOLUTION, AFTER PUBLIC NOTICE AND AN
OPPORTUNITY FOR PUBLIC HEARING, THE SALE AND CONVEYANCE OF A PARCEL OF
CITY PROPERTY AT ITS APPRAISED VALUE TO THE OWNER OF ADJACENT LAND
WHENEVER, IN THE JUDGMENT OF THE CITY COUNCIL, THE PARCEL OF LAND IS OF
SUCH SMALL SIZE, SHAPE, OR LOCATION THAT IT COULD NOT BE PUT TO PRACTICAL
USE BY ANY OTHER PARTY AND, IN ADDITION THERETO, WHERE THERE IS NO
FORESEEABLE NEED OF THE LAND FOR ANY FUTURE USE BY THE CITY.
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21.15.240 GRANT OR DEVOTION.
(A) THE COUNCIL, BY ORDINANCE, MAY LEASE, GRANT OR DEVOTE REAL
PROPERTY NO LONGER NEEDED BY THE CITY FOR A PUBLIC PURPOSE TO THE
UNITED STATES, THE STATE OF ALASKA, A LOCAL POLITICAL SUBDIVISION OF THE
STATE OF ALASKA (INCLUDING THE CITY OF KENAI GENERAL FUND), OR ANY
AGENCY OF ANY OF THESE GOVERNMENTS OR NON-PROFIT CORPORATION, FOR
A CONSIDERATION AGREED UPON BETWEEN THE CITY AND GRANTEE WITHOUT A
PUBLIC SALE IF THE GRANT OR DEVOTION IS ADVANTAGEOUS TO THE CITY.
(B) IN THE EVENT THE LAND DIRECTED TO BE CONVEYED UNDER SUBSECTION (A)
OF THIS SECTION CONSISTS IN PART OR IN WHOLE OF AIRPORT LANDS, THEN THE
ORDINANCE ORDERING ITS CONVEYANCE WILL NOT BE EFFECTIVE UNTIL THE CITY
COUNCIL BY ORDINANCE HAS APPROPRIATED FROM THE GENERAL FUND TO BE
DEDICATED TO THE AIRPORT THE DIFFERENCE BETWEEN THE APPRAISED FAIR
MARKET VALUE OF SAID AIRPORT LANDS AND THE PURCHASE PRICE, IF ANY, SET
FORTH IN SAID ORDINANCE.
21.15.250 USE PERMITS.
THE COUNCIL MAY AUTHORIZE THE CITY MANAGER TO GRANT PERMITS FOR THE
TEMPORARY USE OF REAL PROPERTY OWNED BY THE CITY FOR A PERIOD NOT TO
EXCEED ONE (1) YEAR, WITHOUT APPRAISAL OF THE VALUE OF THE PROPERTY OR
PUBLIC AUCTION, FOR ANY PURPOSE COMPATIBLE WITH THE ZONING OF THE LAND,
AND ON SUCH TERMS AND FOR SUCH RENTALS AS THE COUNCIL SHALL DETERMINE.
21.15.260 ACQUISITION OF REAL PROPERTY.
(A) THE CITY, BY AUTHORIZATION OF THE CITY COUNCIL, EXPRESSED IN A
RESOLUTION FOR SUCH PURPOSE, MAY PURCHASE OR ACQUIRE AN INTEREST IN,
OR LEASE REAL PROPERTY NEEDED FOR A PUBLIC USE WITHIN OR OUTSIDE THE
AIRPORT RESERVE ON SUCH TERMS AND CONDITIONS AS THE COUNCIL SHALL
DETERMINE, BUT NO PURCHASE SHALL BE MADE UNTIL A QUALIFIED APPRAISER
HAS APPRAISED THE PROPERTY AND GIVEN THE COUNCIL AN INDEPENDENT
OPINION AS TO THE FULL AND TRUE VALUE THEREOF;
(B) BECAUSE OF THE UNIQUE VALUE OF REAL PROPERTY, THE CITY NEED NOT
ACQUIRE OR LEASE REAL PROPERTY BY COMPETITIVE BIDDING.
Section 3. Repealing, Renaming and Re-enacting Title 22 of the Kenai Municipal Code: That
Kenai Municipal Code, Title 22 – General Fund Lands is hereby repealed, renamed, and re-
enacted as follows:
Ordinance 3072-2019
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[TITLE 22
GENERAL FUND LANDS
CHAPTER 22.05
DISPOSITION OF CITY GENERAL FUND LANDS
22.05.010 POWER TO DISPOSE OF REAL PROPERTY.
(A) THE PROVISIONS OF THIS CHAPTER APPLY TO GENERAL FUND REAL
PROPERTY.
(B) THE CITY MAY SELL, CONVEY, EXCHANGE, TRANSFER, DONATE, DEDICATE,
DIRECT, OR ASSIGN TO USE, OR OTHERWISE DISPOSE OF CITY-OWNED REAL
PROPERTY, INCLUDING PROPERTY ACQUIRED, HELD FOR, OR DEVOTED TO A
PUBLIC USE, ONLY IN ACCORDANCE WITH THIS CHAPTER, AND, WITH RESPECT TO
PROPERTIES ACQUIRED THROUGH FORECLOSURE FOR TAXES, IN COMPLIANCE
WITH THOSE TERMS AND PROVISIONS OF AS 29 Which Home-Rule Municipalities Are
Required To Comply With. DISPOSAL OR SALE OF LANDS SHALL BE MADE ONLY
WHEN, IN THE JUDGMENT OF THE CITY COUNCIL, SUCH LANDS ARE NOT REQUIRED
FOR A PUBLIC PURPOSE.
22.05.015 SALE OR DISPOSAL.
THE CITY MAY SELL OR DISPOSE OF REAL PROPERTY BY WARRANTY OR QUIT-CLAIM
DEED, EASEMENT, LEASE, GRANT, PERMIT, LICENSE, DEED OF TRUST, MORTGAGE
CONTRACT OF SALE OF REAL PROPERTY, PLAT DEDICATION, TAX DEED, OR ANY
OTHER LAWFUL METHOD OR MODE OF CONVEYANCE OR GRANT. ANY INSTRUMENT
REQUIRING EXECUTION BY THE CITY SHALL BE SIGNED BY THE CITY MANAGER AND
ATTESTED BY THE CITY CLERK. THE FORM OF ANY INSTRUMENT SHALL BE APPROVED
BY THE CITY ATTORNEY.
22.05.020 QUALIFICATIONS OF APPLICANTS OR BIDDERS.
AN APPLICANT OR BIDDER FOR A LEASE IS QUALIFIED IF THE APPLICANT OR BIDDER:
(A) IS AN INDIVIDUAL AT LEAST EIGHTEEN (18) YEARS OF AGE OR OVER; OR
(B) IS A GROUP, ASSOCIATION, OR CORPORATION WHICH IS AUTHORIZED TO
CONDUCT BUSINESS UNDER THE LAWS OF ALASKA; OR
(C) IS ACTING AS AN AGENT FOR ANOTHER AND HAS QUALIFIED BY FILING WITH
THE CITY MANAGER A PROPER POWER OF ATTORNEY OR A LETTER OF
AUTHORIZATION CREATING SUCH AGENCY. THE AGENT SHALL REPRESENT ONLY
ONE (1) PRINCIPAL TO THE EXCLUSION OF HIMSELF OR HERSELF. THE TERM
“AGENT” INCLUDES REAL ESTATE BROKERS AND AGENTS.
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22.05.025 APPLICATIONS.
(A) ALL APPLICATIONS FOR LEASE OF LANDS SHALL BE FILED WITH THE CITY
MANAGER ON FORMS PROVIDED BY THE CITY AVAILABLE AT CITY HALL.
APPLICATIONS SHALL BE DATED ON RECEIPT AND PAYMENT OF FILING FEE AND
DEPOSIT. NO APPLICATION WILL BE ACCEPTED BY THE CITY MANAGER UNLESS IT
APPEARS TO THE CITY MANAGER TO BE COMPLETE. FILING FEES ARE NOT
REFUNDABLE.
(B) WITH EVERY APPLICATION, THE APPLICANT SHALL SUBMIT A DEVELOPMENT
PLAN, SHOWING AND STATING:
(1) THE PURPOSE OF THE PROPOSED LEASE;
(2) THE USE, VALUE AND NATURE OF IMPROVEMENTS TO BE CONSTRUCTED;
(3) THE TYPE OF CONSTRUCTION;
(4) THE DATES CONSTRUCTION IS ESTIMATED TO COMMENCE AND BE
COMPLETED (ORDINARILY A MAXIMUM OF TWO (2) YEARS); AND
(5) WHETHER INTENDED USE COMPLIES WITH THE ZONING ORDINANCE AND
COMPREHENSIVE PLAN OF THE CITY. APPLICATIONS SHALL BECOME A PART
OF THE LEASE.
22.05.030 FILING FEE AND DEPOSIT.
(A) WHEN SUBMITTING AN APPLICATION FOR LEASE OF LAND, THE APPLICANT
SHALL PAY THE CITY THE FOLLOWING AS SET FORTH IN THE CITY’S SCHEDULE OF
FEES ADOPTED BY THE CITY COUNCIL:
(1) PAY A NON-REFUNDABLE FILING FEE IN THE AMOUNT; AND
(2) A DEPOSIT TO SHOW GOOD FAITH AND SECURE THE CITY IN PAYMENT OF
ANY COSTS, INCLUDING:
(A) AN APPRAISAL COST RECOVERY DEPOSIT; AND
(B) AN ENGINEERING, SURVEYING AND CONSULTING COST RECOVERY
DEPOSIT.
(B) IF THE CITY DECIDES TO REJECT THE APPLICANT’S APPLICATION AND NOT
ENTER INTO A LEASE WITH THE APPLICANT THROUGH NO FAULT OF THE
APPLICANT OR FAILURE OF THE APPLICANT TO COMPLY WITH ANY REQUIREMENT
OF THIS CHAPTER, ANY DEPOSIT MADE UNDER SUBSECTION (A)(2) OF THIS
SECTION WILL BE RETURNED TO THE APPLICANT.
(C) IF THE CITY ENTERS INTO A LEASE WITH THE APPLICANT ANY DEPOSIT MADE
BY THE APPLICANT UNDER SUBSECTION (A)(2) OF THIS SECTION WILL BE APPLIED
TO THE CITY’S ENGINEERING, APPRAISAL, AND CONSULTING COSTS RELATED TO
THE PROCESSING OF THE APPLICANT’S APPLICATION AND ENTERING INTO THE
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LEASE. THE CITY WILL APPLY ANY UNUSED BALANCE OF A DEPOSIT TO THE RENT
PAYABLE UNDER THE LEASE. IF THE CITY’S COSTS EXCEED THE AMOUNT OF ANY
DEPOSIT, THE APPLICANT SHALL PAY THE SHORTAGE TO THE CITY AS A
CONDITION OF THE LEASE.
(D) IF THE APPLICANT FAILS TO COMPLY WITH ANY REQUIREMENT OF THIS
CHAPTER, CAUSES INORDINATE DELAY, AS DETERMINED BY THE CITY MANAGER,
OR REFUSES TO SIGN A LEASE OFFERED TO THE APPLICANT, THE CITY MANAGER
WILL REJECT THE APPLICANT’S APPLICATION AND APPLY ANY DEPOSIT MADE BY
THE APPLICANT UNDER SUBSECTION (A) OF THIS SECTION TO THE CITY’S
APPRAISAL, ENGINEERING, AND CONSULTING COSTS INCURRED IN CONNECTION
WITH THE APPLICANT’S APPLICATION. IF THE CITY’S COSTS FOR APPRAISAL,
ENGINEERING AND CONSULTING COSTS EXCEED THE DEPOSITS, THE APPLICANT
WILL BE RESPONSIBLE FOR THESE COSTS. THE CITY WILL RETURN ANY UNUSED
DEPOSIT BALANCE TO THE APPLICANT.
22.05.035 RIGHTS PRIOR TO LEASING.
THE FILING OF AN APPLICATION FOR A LEASE SHALL GIVE THE APPLICANT NO RIGHT
TO LEASE OR TO THE USE OF THE LAND FOR WHICH THEY HAVE APPLIED. THE
APPLICATION SHALL EXPIRE WITHIN TWELVE (12) MONTHS AFTER THE APPLICATION
HAS BEEN MADE IF A LEASE HAS NOT BEEN ENTERED INTO BETWEEN THE CITY AND
THE APPLICANT BY THAT TIME UNLESS THE CITY COUNCIL FOR GOOD CAUSE GRANTS
AN EXTENSION. NO EXTENSION MAY BE GRANTED FOR A PERIOD LONGER THAN SIX
(6) ADDITIONAL MONTHS. LEASE RATES ARE SUBJECT TO CHANGE ON THE BASIS OF
AN APPRAISAL DONE EVERY TWELVE (12) MONTHS ON THE PROPERTY APPLIED FOR.
22.05.040 PROCESSING PROCEDURE.
(A) APPLICATIONS SHALL BE FORWARDED TO THE PLANNING AND ZONING
COMMISSION UPON RECEIPT. THE PLANNING AND ZONING COMMISSION SHALL
NORMALLY CONSIDER APPLICATIONS FOR SPECIFIC LANDS ON A FIRST-COME,
FIRST-SERVED BASIS IF THE COMMISSION FINDS THAT THE APPLICATION IS
COMPLETE AND CONFORMS TO THE COMPREHENSIVE PLAN AND THE KENAI
ZONING CODE. WHERE THERE IS DIFFICULTY IN OBTAINING A PERFECTED
APPLICATION, DETAILS AS TO DEVELOPMENT PLANS, ETC., OR WHERE THE
APPLICANT FAILS TO COMPLY WITH DIRECTIONS OR REQUESTS OF THE PLANNING
AND ZONING COMMISSION, ANY SUCH PRIORITY WILL BE LOST. IF AN APPLICATION
FOR THE PURCHASE OF CITY-OWNED LANDS, PREVIOUSLY AUTHORIZED FOR SALE
BY THE COUNCIL, IS RECEIVED BY THE CITY PRIOR TO THE KENAI PLANNING AND
ZONING COMMISSION MAKING AN AFFIRMATIVE OR NEGATIVE RECOMMENDATION
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TO THE COUNCIL REGARDING THE LEASE APPLICATION FOR THE SAME PROPERTY,
THE CITY MAY ELECT TO SELL THE PROPERTY IN ACCORDANCE WITH THE
PROVISIONS OF THE CODE.
(B) THE CITY COUNCIL SHALL NORMALLY CONSIDER A LEASE PROPOSAL ONLY
AFTER APPROVAL OF THE PLANNING AND ZONING COMMISSION. HOWEVER,
APPEALS OF PLANNING AND ZONING COMMISSION DISAPPROVAL MAY BE MADE TO
THE CITY COUNCIL. COMPLETED LEASE APPLICATIONS MUST BE PRESENTED TO
THE CITY COUNCIL WITHIN THIRTY (30) DAYS AFTER APPROVAL BY THE PLANNING
AND ZONING COMMISSION.
(C) WHERE THERE ARE TWO (2) OR MORE APPLICATIONS FOR THE SAME LANDS
FOR DIFFERENT USES, THEN IF THE PLANNING AND ZONING COMMISSION MAKES
A FINDING THAT A SUBSEQUENT APPLICATION WOULD RESULT IN USE OF THE
LANDS FOR A HIGHER AND BETTER PURPOSE WITH A GREATER BENEFIT TO THE
CITY OF KENAI AND THE CITIZENS THEREOF, THEN THE LEASE MAY BE ISSUED TO
SUCH APPLICANT NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A) IN
THIS SECTION WHICH PROVIDE FOR LEASING ON A FIRST-COME, FIRST-SERVED
BASIS. ANY APPLICANT MAY APPEAL TO THE CITY COUNCIL FROM A FINDING OR A
REFUSAL TO FIND BY THE PLANNING AND ZONING COMMISSION BY FILING AN
APPEAL WITH THE CITY CLERK WITHIN SEVEN (7) DAYS AFTER THE FINDING IS
MADE OR REFUSED BY THE PLANNING AND ZONING COMMISSION.
(D) THE DECISION WHETHER OR NOT TO LEASE LAND RESTS IN THE SOLE
DISCRETION OF THE CITY COUNCIL.
22.05.045 REVIEW.
NO LEASED LAND MAY BE CHANGED IN USE, NOR MAY ANY RENEWAL LEASE BE ISSUED
UNTIL THE PROPOSED USE OR RENEWAL HAS BEEN REVIEWED BY THE PLANNING
COMMISSION AND APPROVED BY THE COUNCIL.
22.05.050 APPRAISAL.
NO LAND SHALL BE SOLD, LEASED, OR A RENEWAL OF LEASE ISSUED, UNLESS THE
SAME HAS BEEN APPRAISED WITHIN A TWELVE (12) MONTH PERIOD PRIOR TO THE
SALE OR DATE FIXED FOR BEGINNING OF THE TERM OF THE LEASE OR RENEWAL
LEASE. NO LAND SHALL BE LEASED FOR LESS THAN THE APPROVED APPRAISED
ANNUAL RENTAL. APPRAISALS SHALL REFLECT THE NUMBER AND VALUE OF CITY
SERVICES RENDERED THE LAND IN QUESTION.
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22.05.055 TERMS OF LEASE.
ALL LEASES SHALL BE APPROVED BY THE CITY COUNCIL BEFORE THE SAME SHALL
BECOME EFFECTIVE. THE TERM OF ANY GIVEN LEASE SHALL DEPEND UPON THE
DURABILITY OF THE PROPOSED USE, THE AMOUNT OF INVESTMENT IN IMPROVEMENT
PROPOSED AND MADE, AND THE NATURE OF THE IMPROVEMENT PROPOSED WITH
RESPECT TO DURABILITY AND TIME REQUIRED TO AMORTIZE THE PROPOSED
INVESTMENT. (ORD. 2200-2006)
22.05.060 ANNUAL MINIMUM RENTAL.
(A) ANNUAL MINIMUM RENTALS SHALL BE COMPUTED FROM THE APPROVED
APPRAISED MARKET VALUE UTILIZING THE METHOD AS DESCRIBED IN KMC
22.05.070 OF THIS CHAPTER.
(B) UPON EXECUTION OF THE LEASE, THE LANDS BECOME TAXABLE TO THE
EXTENT OF ITS LEASEHOLD INTEREST AND LESSEE SHALL PAY ALL REAL
PROPERTY TAXES LEVIED UPON SUCH LEASEHOLD INTEREST IN THESE LANDS,
AND SHALL PAY ANY SPECIAL ASSESSMENTS AND TAXES AS IF HE OR SHE WERE
THE OWNER OF THE LAND.
(C) RENT SHALL BE PAID ANNUALLY IN ADVANCE. PAYMENTS SHALL BE
PRORATED TO CONFORM TO THE CITY OF KENAI’S FISCAL YEAR BEGINNING JULY
1ST AND ENDING JUNE 30TH. IF THE EQUIVALENT MONTHLY PAYMENT EXCEEDS
TWO HUNDRED DOLLARS ($200.00), THEN THE LESSEE SHALL HAVE THE OPTION
OF MAKING PAYMENTS ON A MONTHLY BASIS.
(D) LESSEE SHALL BE RESPONSIBLE FOR ALL SALES TAXES APPLICABLE TO ITS
OPERATIONS.
22.05.065 BIDDING PROCEDURE.
AS AN EXCEPTION TO GENERAL POLICY LISTED ABOVE, THE CITY COUNCIL MAY
DESIGNATE A SPECIFIC LOT OR LOTS TO BE MADE AVAILABLE ONLY FOR BID. THIS
PROVISION SHALL APPLY ONLY WHEN THERE IS NO OUTSTANDING APPLICATION
PENDING ON THE LOT OR LOTS. AS DESIGNATED, SEALED BIDS SHALL BE RECEIVED
OFFERING A ONE (1) TIME PREMIUM IN ADDITION TO THE ESTABLISHED LEASE RATE.
HIGHEST BID, HOWEVER, SHALL BE SUBJECT TO ALL PROVISIONS OF REVIEW AND
APPROVAL ESTABLISHED FOR ALL OTHER LEASE APPLICATIONS.
22.05.070 PRINCIPLES AND POLICY OF LEASE RATES.
(A) A FAIR RETURN TO THE GENERAL FUND IS THE POLICY OF THE CITY, UNLESS
DEVIATION FROM THAT POLICY IS IN THE BEST INTEREST OF THE CITY AS
DETERMINED BY THE CITY COUNCIL. TO ENSURE A FAIR RETURN, ALL LEASES FOR
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A PERIOD IN EXCESS OF FIVE (5) YEARS SHALL INCLUDE A REDETERMINATION
CLAUSE AS OF THE FIFTH ANNIVERSARY OF THE LEASE AND EVERY FIVE (5) YEARS
THEREAFTER, AND ALL LANDS FOR LEASE SHALL BE APPRAISED PRIOR TO LEASE
AND AGAIN PRIOR TO REDETERMINATION. LEASE RATES:
(1) SHALL BE BASED ON FAIR MARKET VALUE OF THE LAND, INCLUDING AN
APPROPRIATE CONSIDERATION OF FACILITIES AND SERVICES AVAILABLE
(PUBLIC WATER, PUBLIC SEWER, STORM SEWERS, AND OTHER PUBLIC
UTILITIES) AS DETERMINED BY A QUALIFIED INDEPENDENT APPRAISER,
CONSIDERING THE BEST USE OF THE SPECIFIED LAND; AND
(2) SHALL BE EIGHT PERCENT (8%) OF FAIR MARKET VALUE.
(B) FOR LEASES IN EXISTENCE PRIOR TO THE EFFECTIVE DATE OF THE
ORDINANCE CODIFIED IN THIS CHAPTER, THE LEASE RATE REDETERMINATION
SHALL BE AS PROVIDED IN THE LEASE.
(C) THE CITY MANAGER SHALL CHANGE THE RENT IN A LEASE BY GIVING THE
LESSEE WRITTEN NOTICE AT LEAST THIRTY (30) DAYS IN ADVANCE OF THE
EFFECTIVE DATE OF THE CHANGE.
(D) THE “FAIR MARKET VALUE” OF THE PREMISES SHALL BE EQUAL TO THE THEN
FAIR MARKET RATE FOR SIMILAR COMMERCIAL PROPERTY IN THE CITY OF KENAI,
ALASKA (THE “RELEVANT AREA”). CITY SHALL GIVE NOTICE TO LESSEE OF CITY’S
ESTIMATION OF THE FAIR MARKET VALUE NOT LATER THAN THIRTY (30) DAYS
PRIOR TO THE EXPIRATION OF THE THEN-APPLICABLE FIVE (5) YEAR PERIOD, AS
EVIDENCED AND SUPPORTED BY THE WRITTEN OPINION OF AN INDEPENDENT
REAL ESTATE APPRAISER CERTIFIED UNDER ALASKA STATUTE 8.87, SELECTED
AND PAID FOR BY THE CITY, FAMILIAR WITH THE RELEVANT AREA (THE “FIRST
APPRAISER”). IF LESSEE DISAGREES WITH SUCH ESTIMATE, IT SHALL ADVISE THE
CITY IN WRITING THEREOF WITHIN THIRTY (30) DAYS OF LESSEE’S RECEIPT OF
SUCH ESTIMATE, AS EVIDENCED AND SUPPORTED BY THE WRITTEN OPINION OF A
REAL ESTATE APPRAISER CERTIFIED UNDER ALASKA STATUTE 8.87 (SELECTED
AND PAID FOR BY LESSEE) FAMILIAR WITH THE RELEVANT AREA (THE “SECOND
APPRAISER”). THE PARTIES SHALL PROMPTLY MEET TO ATTEMPT TO RESOLVE
THEIR DIFFERENCES BETWEEN THE FIRST APPRAISER AND THE SECOND
APPRAISER CONCERNING THE FAIR MARKET VALUE OF THE PREMISES. IF CITY
AND LESSEE CANNOT AGREE UPON SUCH VALUE THEN, WITH ALL DELIBERATE
SPEED, THEY SHALL DIRECT THE FIRST APPRAISER AND THE SECOND APPRAISER
TO EXPEDITIOUSLY AND MUTUALLY SELECT A THIRD REAL ESTATE APPRAISER
CERTIFIED UNDER ALASKA STATUTE 8.87 (SELECTED AND PAID FOR JOINTLY BY
THE PARTIES) FAMILIAR WITH THE RELEVANT AREA (THE “THIRD APPRAISER”).
WITHIN THIRTY (30) DAYS AFTER THE THIRD APPRAISER HAS BEEN APPOINTED,
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THE THIRD APPRAISER SHALL DECIDE WHICH OF THE TWO (2) RESPECTIVE
APPRAISALS FROM THE FIRST APPRAISER AND THE SECOND APPRAISER MOST
CLOSELY REFLECTS THE FAIR MARKET VALUE OF THE PREMISES. THE FAIR
MARKET VALUE OF THE PREMISES SHALL IRREBUTTABLY BE PRESUMED TO BE
THE VALUE CONTAINED IN SUCH APPRAISAL SELECTED BY THE THIRD APPRAISER,
AND THE RENTAL SHALL BE REDETERMINED BASED ON SUCH VALUE.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, RENTAL SHALL
CONTINUE TO BE PAID AT THE THEN-APPLICABLE RATE UNTIL ANY SUCH NEW
RENTAL RATE IS ESTABLISHED, AND LESSEE AND CITY SHALL PROMPTLY PAY OR
REFUND, AS THE CASE MAY BE, ANY VARIANCE IN THE RENTAL, WITHOUT
INTEREST THEREON ACCRUING TO THE EXTENT TO PAID/REFUNDED IN A TIMELY
FASHION.
22.05.075 REIMBURSEMENT FOR CITY-CONSTRUCTED IMPROVEMENTS.
(A) THE CITY MANAGER MAY INCLUDE IN A LEASE A REQUIREMENT FOR THE
LESSEE TO REIMBURSE THE CITY FOR THE CITY’S COST OF:
(1) LAND CLEARING, GRAVEL FILL, UTILITY EXTENSIONS AND OTHER
IMPROVEMENTS OR AMENITIES ON OR IN DIRECT CONNECTION WITH THE
PREMISES, CONSTRUCTED BY THE CITY PRIOR TO THE EFFECTIVE DATE OF
THE LEASE; OR
(2) LAND CLEARING, GRAVEL FILL, UTILITY EXTENSIONS AND OTHER
IMPROVEMENTS OR AMENITIES ON OR IN DIRECT CONNECTION WITH THE
PREMISES, WHICH THE CITY AGREES TO CONSTRUCT AS A CONDITION OF THE
LEASE, SUBJECT TO CITY COUNCIL APPROVAL.
(B) THE LESSEE SHALL REIMBURSE THE CITY FOR THE CITY’S COST OF
CONSTRUCTING THE IMPROVEMENTS IN TEN (10) EQUAL ANNUAL PAYMENTS,
PLUS INTEREST AT EIGHT PERCENT (8%) PER YEAR ON THE UNPAID BALANCE. IF
THE LEASE IS FOR LESS THAN TEN (10) YEARS, THE REPAYMENT SCHEDULE MAY
NOT BE LONGER THAN THE TERM OF THE LEASE. THE LESSEE MAY PAY THE
ENTIRE REMAINING BALANCE TO THE CITY AT ANY TIME DURING THE TERM OF THE
LEASE.
22.05.080 LEASE EXECUTION.
THE LEASE APPLICANT SHALL EXECUTE AND RETURN THE APPROPRIATE LEASE
AGREEMENT WITH THE CITY OF KENAI WITHIN THIRTY (30) DAYS OF MAILING THE
AGREEMENT TO THE APPLICANT. THE LEASE AGREEMENT SHALL BE PREPARED IN
ACCORDANCE WITH THE REQUIREMENTS OF THIS TITLE. FAILURE TO EXECUTE AND
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RETURN THE LEASE AGREEMENT WITHIN THE SPECIFIED PERIOD SHALL RESULT IN
THE FORFEITURE OF ALL LEASING RIGHTS.
22.05.085 LEASE UTILIZATION.
LEASED LANDS SHALL BE UTILIZED FOR PURPOSES WITHIN THE SCOPE OF THE
APPLICATION, THE TERMS OF THE LEASE AND IN CONFORMITY WITH THE ORDINANCES
OF THE CITY, AND IN SUBSTANTIAL CONFORMITY WITH THE COMPREHENSIVE PLAN.
UTILIZATION OR DEVELOPMENT FOR OTHER THAN THE ALLOWED USES SHALL
CONSTITUTE A VIOLATION OF THE LEASE AND SUBJECT THE LEASE TO CANCELLATION
AT ANY TIME. FAILURE TO SUBSTANTIALLY COMPLETE THE DEVELOPMENT PLAN FOR
THE LAND SHALL CONSTITUTE GROUNDS FOR CANCELLATION.
22.05.090 CONVEYANCE TO ENCOURAGE NEW ENTERPRISES.
NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS CHAPTER, WHERE IT IS FOUND
THAT ENCOURAGEMENT OF A NEW COMMERCIAL OR INDUSTRIAL ENTERPRISE WOULD
BE BENEFICIAL TO THE CITY OF KENAI, THE CITY COUNCIL BY ORDINANCE SO FINDING
MAY DIRECT CONVEYANCE OF ONE OR MORE PARCELS OF CITY LAND BY THE CITY
MANAGER TO SUCH ENTERPRISE UPON SUCH TERMS AS TO PRICE, CONDITIONS OF
CONVEYANCE, AND WITH SUCH CONTINGENCIES AS MAY BE SET FORTH IN THE
ORDINANCE.
22.05.095 SALE.
(A) LANDS, TO WHICH THE CITY OF KENAI HOLDS TITLE WHICH ARE NOT
RESTRICTED FROM SALE BY THE DEED OF CONVEYANCE TO THE CITY, OR WHICH
HAVE BEEN RELEASED FROM SUCH RESTRICTIONS, WHICH THE CITY COUNCIL HAS
DETERMINED ARE NOT REQUIRED FOR A PUBLIC PURPOSE, MAY BE LISTED FOR
SALE BY THE CITY MANAGER, EXCEPT THAT LANDS WHICH HAVE BEEN LEASED
SHALL NOT BE SOLD UNLESS THE LESSEE HAS MADE A WRITTEN REQUEST TO THE
CITY TO PLACE THE LAND FOR SALE.
(B) SALES OF LAND PURSUANT TO SUBSECTION (A) OF THIS SECTION SHALL BE
MADE AT NOT LESS THAN FAIR MARKET VALUE. THE PURCHASER SHALL EXECUTE
THE “AGREEMENT FOR SALE OF LAND” WITHIN ONE (1) YEAR OF THE DATE OF
APPRAISAL. THE CITY MANAGER HAS THE OPTION TO DISPOSE OF SUCH
PROPERTIES IN ACCORDANCE WITH THE SALE PROCEDURES SET OUT IN THIS
TITLE:
(1) BY NEGOTIATED SALE; OR
(2) BY OUTCRY AUCTION TO THE HIGHEST RESPONSIBLE BIDDER; OR
(3) BY COMPETITIVE SEALED BIDS TO THE HIGHEST RESPONSIBLE BIDDER.
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IN THE EVENT THAT THE SALE IS NOT CLOSED WITHIN SIX (6) MONTHS OF THE
DATE OF APPRAISAL, THE BUYER WILL BE CHARGED, UPON CLOSING,
INTEREST COMPUTED IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF
THE KENAI MUNICIPAL CODE, BASED UPON THE TOTAL SALES PRICE FOR THE
NUMBER OF DAYS PAST THE EXPIRATION OF THE SIX (6) MONTH PERIOD.
22.05.100 SALE PROCEDURE.
(A) THE CITY MANAGER WILL OBTAIN SUCH AN APPRAISAL FOR A DETERMINATION
OF THE MINIMUM PRICE ON THE LAND.
(B) WHERE ANY PARTY, HEREINAFTER CALLED “APPLICANT,” REQUESTS THAT A
TRACT OR TRACTS OF LAND BE SOLD FOR W HICH AN APPRAISAL WILL BE
REQUIRED, WHICH WILL REQUIRE SUBDIVIDING, PLATTING, OR SURVEYING AND
STAKING, OR WHICH WILL REQUIRE ADVERTISING OR INCURRING ANY OTHER
EXPENDITURES BY THE CITY PRIOR TO SALE.
(1) NO ACTIONS IN PREPARATION FOR SALE WILL BE TAKEN BY THE CITY
UNTIL AN AGREEMENT TO PURCHASE SHALL BE PROPERLY EXECUTED AND
FILED WITH THE CITY MANAGER FOR THE PURCHASE OF SUCH LAND WITH
PAYMENT OF SUFFICIENT GOOD FAITH DEPOSIT, WHICH SHALL CONSIST OF
CASH OR ITS EQUIVALENT DEPOSITED WITH THE FINANCE OFFICER OF THE
CITY OF KENAI, AS MAY BE DETERMINED BY THE CITY MANAGER, TO COVER
ALL EXPENSES OF THE CITY AND SUCH AGREEMENT TO PURCHASE SHALL
FURTHER CONTAIN THE AGREEMENT BY APPLICANT TO PAY ANY ADDITIONAL
COSTS IF SAID GOOD FAITH DEPOSIT IS INSUFFICIENT TO PAY ALL COSTS
INCURRED BY THE CITY.
(2) IF AT ANY TIME DURING THE PROCESS OF PREPARING FOR SALE, THE
APPLICANT GIVES NOTICE TO THE CITY MANAGER OF WITHDRAWAL OF THE
REQUEST FOR SALE, THE CITY MANAGER SHALL STOP ALL PROCEDURES,
SHALL PAY EXPENSES INCURRED PRIOR TO TERMINATION OF SALE
PROCEDURES, AND SHALL REIMBURSE APPLICANT FOR ANY GOOD FAITH
DEPOSIT ADVANCED IN EXCESS OF ALL EXPENSES INCURRED. (HOWEVER, IF
ANOTHER PARTY DESIRES THE SALE TO PROCEED, FILES AN APPLICATION
FOR SALE, EXECUTES AND FILES AN AGREEMENT TO PURCHASE, AND
ADVANCES SUFFICIENT FUNDS THEREFOR, THEN THE PRIOR APPLICANT WILL
BE REIMBURSED FOR EXPENSES CHARGES WHICH CAN BE ATTRIBUTED TO
THE SUBSEQUENT APPLICANT.)
(3) IF ALL ACTIONS NECESSARY FOR PREPARATION FOR SALE HAVE BEEN
ACCOMPLISHED, AND IF NEITHER THE APPLICANT NOR ANY OTHER PARTY
PURCHASES SAID LAND WHEN FIRST OFFERED FOR SALE AFTER SUCH
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REQUEST, THEN ALL EXPENSES INCURRED IN PREPARATION FOR THE SALE
WILL BE PAID FROM THE GOOD FAITH DEPOSIT, AND THE BALANCE, IF ANY,
SHALL BE RETURNED TO THE APPLICANT. IF THE SUMS ADVANCED AS GOOD
FAITH DEPOSIT ARE INSUFFICIENT TO PAY All Of THE COSTS, THE APPLICANT
WILL BE BILLED FOR THE BALANCE DUE AND NORMAL COLLECTION
PROCEDURES FOLLOWED.
(4) IF THE LAND APPLIED FOR IS SOLD ON PUBLIC SALE SET IN RESPONSE TO
SUCH REQUEST TO ANYONE OTHER THAN APPLICANT, THEN ON CLOSING OF
THE SALE, THE GOOD FAITH DEPOSIT WILL BE REFUNDED IN TOTAL TO THE
APPLICANT. THE CITY’S EXPENSES WILL BE FIRST DEDUCTED FROM THE
DEPOSIT OF THE SUCCESSFUL BIDDER.
(5) IF THE LAND IN QUESTION IS SOLD TO APPLICANT, THE GOOD FAITH
DEPOSIT ADVANCED, AFTER DEDUCTING THE CITY’S EXPENSES, WILL BE
APPLIED ON THE PAYMENT DUE AT CLOSING.
(6) IF THE LAND IN QUESTION IS TO BE SOLD BY SEALED BID AND THE
APPLICANT HAS SUBMITTED A VALID BID, BUT THE APPLICANT IS NOT THE HIGH
BIDDER, HE OR SHE MAY PURCHASE THE LAND BY TENDERING THE CITY A BID
EQUAL TO THE HIGH BID WITHIN FIVE (5) DAYS OF THE BID OPENING. IF THE
LAND SALE IS INITIATED IN ACCORDANCE WITH KMC 22.05.040(A), THE
APPLICANT SHALL BE DEFINED AS THAT PARTY SUBMITTING THE INITIAL LEASE
APPLICATION.
(C) IF THE TRACT OF LAND PROPOSED TO BE SOLD IS LEASED LAND, THE LESSEE
MAY REQUEST THE SALE OF THE LAND AT NOT LESS THAN THE FAIR MARKET
VALUE. THE CURRENT LESSEE OBTAINS THIS RIGHT TO REQUEST A SALE ONLY
AFTER, TO THE SATISFACTION OF THE CITY MANAGER, DEVELOPMENT HAS BEEN
COMPLETED AS DETAILED IN THE DEVELOPMENT SCHEDULE WHICH HAS BEEN
INCORPORATED INTO THE LEASE AGREEMENT. IF THERE IS NO DEVELOPMENT
SCHEDULE, THE LESSEE MAY PURCHASE THE PROPERTY IF THERE HAVE BEEN
SUBSTANTIAL IMPROVEMENTS AS DETERMINED BY THE CITY MANAGER. THE
DECISION WHETHER OR NOT TO SELL THE LAND TO THE LESSEE RESTS WITH THE
SOLD DISCRETION OF THE CITY.
(D) IF THE TRACT OF LAND PROPOSED TO BE SOLD IS NOT LEASED LAND, OR IS
LEASED LAND WITHOUT SUBSTANTIAL IMPROVEMENTS, THEN THE TRACT OF LAND
MAY ONLY BE SOLD BY OUTCRY AUCTION OR BY COMPETITIVE SEALED BIDS. IF
THE TRACT IS TO BE PUT UP FOR SUCH COMPETITIVE AUCTION OR SEALED BID
SALE, NOTICE OF SALE AND THE MANNER IN WHICH THE LAND IS TO BE SOLD
SHALL BE PUBLISHED IN A NEWSPAPER OF GENERAL CIRCULATION WITHIN THE
CITY ONCE EACH WEEK FOR TWO (2) SUCCESSIVE WEEKS NOT LESS THAN THIRTY
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(30) DAYS PRIOR TO THE DATE OF SALE; SUCH NOTICE SHALL ALSO BE POSTED IN
AT LEAST THREE (3) PUBLIC PLACES WITHIN THE CITY AT LEAST THIRTY (30) DAYS
PRIOR TO THE DATE OF SALE, AND SUCH OTHER NOTICE MAY BE GIVEN BY SUCH
OTHER MEANS AS MAY BE CONSIDERED ADVISABLE BY THE CITY MANAGER. SUCH
NOTICE MUST CONTAIN:
(1) THE LEGAL DESCRIPTION OF THE LAND;
(2) A BRIEF PHYSICAL DESCRIPTION OF THE LAND;
(3) THE AREA AND GENERAL LOCATION OF THE LAND;
(4) THE MINIMUM ACCEPTABLE OFFER FOR THE LAND (WHICH SHALL BE ITS
APPRAISED FAIR MARKET VALUE);
(5) THE TERMS UNDER WHICH THE LAND WILL BE SOLD;
(6) ANY LIMITATIONS ON THE SALE OF THE LAND;
(7) THE TIME AND PLACE SET FOR THE AUCTION OR BID OPENING;
(8) THE AMOUNT OF DEPOSIT TO BE SUBMITTED WITH EACH BID IN ORDER TO
COVER THE CITY’S EXPENSES SUCH AS SURVEY, APPRAISAL, AND REVIEWS;
(9) ANY OTHER MATTERS CONCERNING THE SALE OF WHICH THE CITY
MANAGER BELIEVES THE PUBLIC SHOULD BE INFORMED.
(E) IF NO OFFERS ARE SUBMITTED MEETING THE MINIMUM ACCEPTABLE OFFER
(OR APPRAISED VALUATION), THE CITY MANAGER MAY NEGOTIATE FOR SALE OF
THE TRACT OR TRACTS OF LAND WITH A MODIFICATION OF PROPOSED TERMS OR
FOR LESS THAN THE APPRAISED VALUATION PROVIDED THAT NO SUCH
NEGOTIATED SALE FOR LESS THAN APPRAISED VALUE SHALL BE BINDING UPON
THE CITY UNLESS THE TERMS AND PRICE THEREIN ARE APPROVED BY
RESOLUTION OF THE CITY COUNCIL.
(F) WHERE A REAL ESTATE AGENT FURNISHES A BUYER FOR CITY LAND, THE
CLOSING AGENT SHALL BE AUTHORIZED TO PAY THE AGENT A REAL ESTATE
COMMISSION OF FIVE PERCENT (5%) OF THE PURCHASE PRICE FOR THE LAND OR
FIVE PERCENT (5%) OF THE APPRAISED FAIR MARKET VALUE OF THE LAND,
WHICHEVER IS LOWER, UNDER THE FOLLOWING TERMS AND CONDITIONS:
(1) THE CITY MANAGER SHALL PROVIDE A NON-EXCLUSIVE LISTING OF LANDS
AVAILABLE FOR SALE.
(2) NO COMMISSION SHALL BE PAID TO AN AGENT WHERE THE AGENT IS A
PARTY, OR IN PRIVITY WITH A PARTY, TO THE SALE.
(G) CLOSING OF SALE OF CITY LANDS SHALL BE HANDLED BY A TITLE OR ESCROW
COMPANY.
(H) CONVEYANCE OF CITY LANDS SHALL BE BY QUIT CLAIM OR WARRANTY DEED
FURNISHED BY THE CITY, AND BUYERS ARE ADVISED THAT ALL SUCH
CONVEYANCES ARE SUBJECT TO ALL LIENS, ENCUMBRANCES, RESTRICTIONS,
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AND COVENANTS OF RECORD AND ARE SPECIFICALLY, WITHOUT BEING LIMITED
THERETO, SUBJECT TO ANY UNRELEASED RESTRICTIONS CONTAINED IN THE
DEED OR DEEDS BY WHICH THE CITY RECEIVED TITLE TO THE LAND.
(I) IF A BUYER DESIRES TO OBTAIN A PRELIMINARY COMMITMENT FOR TITLE
INSURANCE OR TITLE INSURANCE TO THE LAND, THEN IT SHALL BE THE
RESPONSIBILITY OF THE BUYER TO OBTAIN SUCH COMMITMENT OR INSURANCE
AND TO PAY FOR THE SAME.
(J) IF THE TRACT OR TRACTS OF LAND ARE SOLD UNDER TERMS BY WHICH THE
CITY IS TO ACCEPT A NOTE AS A PORTION OF THE PURCHASE PRICE, THE NOTE
AND ACCOMPANYING DEED OF TRUST MUST BE PREPARED BY AN ATTORNEY, BUT
MUST BE APPROVED BY THE CITY ATTORNEY PRIOR TO CLOSING.
(K) THE NOTE SHALL BE PLACED FOR COLLECTION WITH A BANK SELECTED BY
THE CITY MANAGER, WHICH MAY BE CHANGED FROM TIME TO TIME, AND WHICH
SHALL BE THE BANK IN WHICH CITY FUNDS ARE DEPOSITED. THE SET-UP FEE TO
INITIATE COLLECTION MAY BE NEGOTIATED AS SPECIFIED IN KMC 22.05.100(L), AND
THE BUYER SHALL PAY THE ANNUAL COLLECTION FEES FOR SUCH BANK
COLLECTION.
(l) THE CITY MANAGER IS AUTHORIZED TO NEGOTIATE A DIVISION OF THE COSTS
OF SALE LISTED IN KMC 22.05.100(G) (H), (I), (J) AND (K) TO A MAXIMUM OF FIFTY
PERCENT (50%) OF THE REQUIRED COSTS BEING BORNE BY THE CITY, PROVIDED
HOWEVER THAT NO COSTS OF SALE WILL BE PAID BY THE CITY WHERE A SALE IS
NEGOTIATED AT A PRICE BELOW APPRAISED FAIR MARKET VALUE.
22.05.105 TERMS FOR FINANCING SALE OF CITY LANDS.
(A) IN ORDER TO EXPEDITE AND FACILITATE THE SALE OF CITY LANDS, THE CITY
MANAGER IS AUTHORIZED TO ACCEPT TERMS FOR SALES AND MAY ACCEPT A
NOTE SECURED BY A DEED OF TRUST FOR A PORTION OF THE PURCHASE PRICE
THEREOF, SUBJECT TO THE FOLLOWING RESTRICTIONS:
(1) IF THE SALE IS TO A LESSEE WHO HAS PLACED A LIEN FOR FINANCING
UPON THE LAND OR IMPROVEMENTS, THEN THE CITY MANAGER IS NOT
AUTHORIZED TO SELL THE LAND EXCEPT FOR TOTAL CASH PAYMENT,
PROVIDED, HOWEVER, THAT THE CITY MANAGER MAY ACCEPT A NOTE
SECURED BY A DEED OF TRUST SUBORDINATE TO THE EXISTING SECURITY
INTEREST IF THE AMOUNT OF THE NOTE THEREBY SECURED IS WITHIN THE
DIFFERENCE BETWEEN THE FAIR MARKET VALUE OF THE LAND WITH
IMPROVEMENTS, AND THE SUM OF ALL PRIOR SECURITY INTERESTS. THE SALE
DOCUMENTS SHALL BE SUBJECT TO THE SAME RESTRICTIONS CONTAINED IN
THE LEASE AS THE LEASE PROVIDES AT THE TIME OF SALE.
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(2) EXCEPT FOR PROPERTY SOLD BY THE CITY SUBSEQUENT TO
FORECLOSURE FOR DELINQUENT TAXES OR ASSESSMENTS, PRIOR TO
MAKING A DETERMINATION TO ACCEPT A NOTE AND DEED OF TRUST FROM A
PROSPECTIVE PURCHASER, THE CITY MANAGER SHALL SECURE A
PRELIMINARY COMMITMENT FOR TITLE INSURANCE AND A REVIEW OF THE
GRANTEE INDEX COVERING THE PARTY DESIRING TO PURCHASE THE LAND
FROM THE TITLE COMPANY IN THE LOCAL RECORDING DISTRICT, AND NO
CREDIT WILL BE ADVANCED ON SUCH SALE IF THERE ARE ANY DELINQUENT
LIENS OR UNPAID JUDGMENTS FOUND IN THE TITLE COMPANY REPORT UNTIL
ANY SUCH JUDGMENTS OR LIENS ARE PAID AND RELEASES THEREFOR HAVE
BEEN FILED.
(3) IN THE EVENT OF A CREDIT SALE, THE DOWN PAYMENT REQUIRED SHALL
BE DETERMINED BY THE CITY MANAGER, BUT SHALL NOT BE LESS THAN
FIFTEEN PERCENT (15%) OF THE SALES PRICE.
(4) THE CITY MANAGER IS NOT AUTHORIZED TO ACCEPT TERMS FOR THE
SALE OF TAX-FORECLOSED LANDS UNLESS THE DOWN PAYMENT TO BE
RECEIVED THEREUNDER, OR OTHER SUMS APPROPRIATED FOR THE
PURPOSE, ARE SUFFICIENT TO MAKE IMMEDIATE PAYMENT TO THE KENAI
PENINSULA BOROUGH AND THE FORMER RECORD OWNER OF THE SUMS
WHICH ARE, OR MAY BECOME, DUE TO THEM PURSUANT TO THE PROVISIONS
OF AS 29.
(B) IF THE CITY MANAGER DETERMINES THAT IT IS IN THE CITY’S INTEREST TO
SELL CITY LANDS, THE SALE SHALL BE EITHER A CASH TRANSACTION OR BY A
NOTE SECURED BY A DEED OF TRUST, SUBJECT TO SUBSECTION (A) OF THIS
SECTION, AND BY NO OTHER MEANS. THE NOTE AND DEED OF TRUST SHALL
CARRY TERMS AS FOLLOWS:
(1) THE TERM OF SUCH NOTE MAY BE SET BY THE CITY MANAGER, BUT IT
SHALL PROVIDE FOR MONTHLY PAYMENTS AND NOT EXCEED TWENTY (20)
YEARS UNLESS A LONGER PERIOD FOR A SPECIFIC SALE OF LAND IS
APPROVED BY RESOLUTION OF THE CITY COUNCIL.
(2) SUCH NOTE SHALL BEAR INTEREST AT A RATE TO BE DETERMINED BY THE
CITY COUNCIL BY RESOLUTION.
22.05.110 DETERMINATION AS TO NEED FOR PUBLIC USE.
(A) WHETHER LAND SHALL BE ACQUIRED, RETAINED, DEVOTED, OR DEDICATED
TO A PUBLIC USE SHALL BE DETERMINED BY ORDINANCE WHICH SHALL CONTAIN
THE PUBLIC USE FOR WHICH THE PROPERTY IS TO BE DEDICATED, THE LEGAL
DESCRIPTION OF THE PROPERTY, AND THE ADDRESS OR A GENERAL
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DESCRIPTION OF THE PROPERTY SUFFICIENT TO PROVIDE THE PUBLIC WITH
NOTICE OF ITS LOCATION. THIS REQUIREMENT DOES NOT APPLY TO RIGHTS-OF-
WAY OR EASEMENTS DEDICATED THROUGH THE CITY AND BOROUGH PLATTING
PROCESS.
(B) WHETHER LAND PREVIOUSLY DEDICATED TO A PUBLIC USE SHOULD BE
DEDICATED TO A DIFFERENT PUBLIC USE OR SHOULD NO LONGER BE NEEDED FOR
PUBLIC USE SHALL BE DETERMINED BY THE CITY COUNCIL BY ORDINANCE,
EXCEPT IN CASES OF VACATION OF RIGHTS-OF-WAY OR EASEMENTS WHICH MAY
BE DETERMINED BY RESOLUTION, EITHER OF WHICH SHALL CONTAIN THE NEW
PUBLIC USE FOR WHICH THE PROPERTY IS TO BE DEDICATED OR THE REASON
THE LAND IS NO LONGER NEEDED FOR PUBLIC USE, THE LEGAL DESCRIPTION OF
THE PROPERTY, AND THE ADDRESS OR A GENERAL DESCRIPTION OF THE
PROPERTY SUFFICIENT TO PROVIDE THE PUBLIC WITH NOTICE OF ITS LOCATION.
22.05.115 PROPERTY EXCHANGES.
THE COUNCIL MAY APPROVE, BY ORDINANCE, AFTER PUBLIC NOTICE AND AN
OPPORTUNITY FOR PUBLIC HEARING, THE CONVEYANCE AND EXCHANGE OF A
PARCEL OF CITY PROPERTY FOR PROPERTY OWNED BY ANOTHER PERSON SUBJECT
TO SUCH CONDITIONS AS COUNCIL MAY IMPOSE ON THE EXCHANGE, WHENEVER IN
THE JUDGMENT OF THE CITY COUNCIL IT IS ADVANTAGEOUS TO THE CITY TO MAKE
THE PROPERTY EXCHANGE.
22.05.120 PROPERTY SALE TO ADJACENT OWNERS.
THE COUNCIL MAY APPROVE, BY ORDINANCE, AFTER PUBLIC NOTICE AND AN
OPPORTUNITY FOR PUBLIC HEARING, THE SALE AND CONVEYANCE OF A PARCEL OF
CITY PROPERTY AT ITS APPRAISED VALUE TO THE OWNER OF ADJACENT LAND
WHENEVER, IN THE JUDGMENT OF THE CITY COUNCIL, THE PARCEL OF LAND IS OF
SUCH SMALL SIZE, SHAPE, OR LOCATION THAT IT COULD NOT BE PUT TO PRACTICAL
USE BY ANY OTHER PARTY AND, IN ADDITION THERETO, WHERE THERE IS NO
FORESEEABLE NEED OF THE LAND FOR ANY FUTURE USE BY THE CITY.
22.05.125 GRANT OR DEVOTION.
THE COUNCIL, BY ORDINANCE, MAY WAIVE THE PROVISIONS OF THIS CHAPTER AND
LEASE, GRANT OR DEVOTE REAL PROPERTY NO LONGER NEEDED BY THE CITY FOR
PUBLIC PURPOSE TO THE UNITED STATES, THE STATE OF ALASKA, A LOCAL POLITICAL
SUBDIVISION OF THE STATE OF ALASKA, OR ANY AGENCY OF ANY OF THESE
GOVERNMENTS OR A NON-PROFIT CORPORATION, FOR A CONSIDERATION AGREED
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UPON BETWEEN THE CITY AND GRANTEE WITHOUT A PUBLIC SALE IF THE GRANT,
DEVOTION OR LEASE IS ADVANTAGEOUS TO THE CITY.
22.05.130 USE PERMITS.
THE COUNCIL MAY AUTHORIZE THE CITY MANAGER TO GRANT PERMITS FOR THE
TEMPORARY USE OF REAL PROPERTY OWNED BY THE CITY FOR A PERIOD NOT TO
EXCEED FIVE (5) YEARS, WITHOUT APPRAISAL OF THE VALUE OF THE PROPERTY OR
PUBLIC AUCTION, FOR ANY PURPOSE COMPATIBLE WITH THE ZONING OF THE LAND,
AND ON SUCH TERMS AND FOR SUCH RENTALS AS THE COUNCIL SHALL DETERMINE.
22.05.135 ACQUISITION OF REAL PROPERTY.
(A) THE CITY, BY AUTHORIZATION OF THE CITY COUNCIL, EXPRESSED IN A
RESOLUTION FOR SUCH PURPOSE, MAY LEASE, PURCHASE OR ACQUIRE AN
INTEREST IN REAL PROPERTY NEEDED FOR A PUBLIC USE ON SUCH TERMS AND
CONDITIONS AS THE COUNCIL SHALL DETERMINE. NO PURCHASE SHALL BE MADE
UNTIL A QUALIFIED APPRAISER HAS APPRAISED THE PROPERTY AND GIVEN THE
COUNCIL AN INDEPENDENT OPINION AS TO THE FULL AND TRUE VALUE THEREOF
UNLESS THE COUNCIL, UPON RESOLUTION SO FINDING, DETERMINES THAT THE
PUBLIC INTEREST WILL NOT BE SERVED BY AN APPRAISAL.
(B) BECAUSE OF THE UNIQUE VALUE OF REAL PROPERTY, THE CITY NEED NOT
ACQUIRE OR LEASE REAL PROPERTY BY COMPETITIVE BIDDING.
(C) RIGHTS-OF-WAY AND EASEMENTS MAY BE ACCEPTED OR ISSUED BY THE CITY
MANAGER AFTER APPROVAL BY THE CITY COUNCIL FOR UTILITY LINES AND
SERVICES OF ALL TYPES AND FOR NECESSARY RIGHTS-OF-WAY EASEMENTS.]
Title 22
CITY-OWNED LANDS
Chapter 22.05
DISPOSITION OF CITY LANDS
22.05.05 Definitions.
When used in this chapter, the following terms shall have the meaning given below:
“Amendment” means a formal change to a lease of lands other than a lease extension or renewal.
“Annual rent” means an amount paid to the City annually according to the terms of the lease and
Kenai Municipal Code.
“Assignment” means the transfer of all interest in a lease from one person or entity to another.
“City” means the City of Kenai, its elected officials, officers, employees or agents.
“Consumer Price Index (CPI)” means the annual CPI for all urban consumers (CPI-U) for
Anchorage, Alaska.
“Existing lease” means a lease with at least one (1) year of term remaining.
“Expiring lease” means a lease with less than one (1) year of term remaining.
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“Fair market value” means the most probable price which a property should bring in a competitive
and open market as determined by a qualified independent appraiser, or the value as determined
by the latest appraisal adjusted by the change in Consumer Price Index from the date of the latest
appraisal.
“Lease extension” means extending the term of an existing lease.
“Lease rate percent” means a percentage that when applied to the fair market value of land
establishes a rate of rent commensurate with rental rates prevalent in the local area as determined
by a qualified real estate appraiser.
“Lease renewal” means a new lease of property currently under an existing or expiring lease to
an existing lessee or a purchaser.
“Market analysis” means an analysis of data collected from other land leases to determine
whether a market adjustment in either fair market value or lease rate percentage reflects the
market.
“Permanent improvement” means a fixed addition or change to land that is not temporary or
portable, including a building, building addition, retaining wall, storage tank, earthwork, fill
material, gravel, and pavement, and remediation of contamination for which the applicant is not
responsible and excluding items of ordinary maintenance, such as glass replacement, painting,
roof repairs, door repairs, plumbing repairs, floor covering replacement, or pavement patching.
“Professional estimate of the remaining useful life of the principal improvement” means an
estimate of the number of remaining years that the principal improvement will be able to function
in accordance with its intended purpose prepared by a qualified real estate appraiser, engineer,
or architect licensed in Alaska.
“Qualified independent appraiser” means a general real estate appraiser certified by the State of
Alaska under AS 08.87.
“Site development materials” means materials used for preparing a lease site for building
construction or to provide a firm surface on which to operate a vehicle or aircraft, including
geotextile, fill, gravel, paving, utilities and pavement reinforcement materials.
“Site preparation work” means work on the leased premises to include clearing and grubbing,
unclassified excavation, classified fill and back fill, a crushed aggregate base course and utility
extensions.
22.05.010 Authority and Intent.
(a) The provisions of this chapter apply to City-owned real property other than lands within
the Airport Reserve as described in KMC 21.10 and the leasing of tidelands for shore fisheries.
(b) The City may sell, convey, exchange, transfer, donate, dedicate, direct, assign to use, or
otherwise dispose of City-owned real property, including property acquired, held for, or
previously devoted to a public use, only in accordance with this chapter, and, with respect to
properties acquired through foreclosure for taxes, in compliance with those terms and
provisions of AS 29 which apply to home-rule municipalities. Disposal or sale of lands shall
be made only when, in the judgment of the City Council, such lands are not or are no longer
required for a public purpose.
(c) It is the intent of this chapter to provide land policies and practices that encourage
responsible growth and development to support a thriving business, residential, recreational
and cultural community.
(d) It is not the intent of this chapter to allow for speculation on City-owned lands. All leases,
sales, and other disposals of City-owned land must meet the intent of this chapter.
(e) The provisions of this chapter shall not alter or amend the terms or rights granted under
leases existing prior to the effective date of the ordinances codified in this chapter.
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22.05.015 Lands Available for Lease, Sale or Disposal.
(a) The City may lease, sell or dispose of real property not restricted from lease or sale which
the City Council has determined is not required for a public purpose by any lawful method or
mode of conveyance or grant. Any instrument requiring execution by the City shall be signed
by the City Manager and attested by the City Clerk. The form of any instrument shall be
approved by the City Attorney.
22.05.020 Qualifications of Lease Applicants or Bidders.
An applicant or bidder for a lease is qualified if the applicant or bidder:
(a) Is an individual at least eighteen (18) years of age; or
(b) Is a legal entity which is authorized to conduct business under the laws of Alaska; or
(c) Is acting as an agent for another meeting the requirements of subsection (a) or (b) of this
section and has qualified by filing with the City a proper power of attorney or a letter of
authorization creating such agency.
22.05.025 Initial Lease Application.
(a) All applications for lease of lands must be submitted to the City on an application form
provided by the City. Applications will be dated on receipt and must include payment of the
nonrefundable application fee as set forth in the City’s schedule of fees approved by the City
Council.
(b) The application form must include the following information:
(1) The purpose of the proposed lease;
(2) The use, nature, type, and estimated cost of improvements to be constructed;
(3) The dates construction is estimated to commence and be completed. Construction
must be completed within two (2) years except in special circumstances, that require a
longer period of time and which must be approved by the City Council; and
(4) A comprehensive description of the proposed business or activity intended;
(5) Whether the applicant requests a lease with an option to purchase; and
(6) How the proposed lease meets the intent of this chapter.
(c) Applications which propose a subdivision shall require the applicant to be responsible for
all costs associated with the subdivision, including but not limited to any new appraisal,
engineering services, surveying and consulting costs, unless in the sole discretion of the City
Council, it is determined that the subdivision serves other City purposes.
(1) If the Council determines that other City purposes are served by the subdivision, the
City Council may choose in its sole discretion to share in the subdivision costs with the
applicant in an amount the City Council determines is reasonable given the benefit to the
City.
(2) If the Council does not make a determination that other City purposes are served by
the subdivision, the applicant must submit a deposit to cover the estimated costs
associated with the subdivision.
(3) If the City enters into a lease with the applicant, any unused balance of the deposit
made to cover costs associated with subdivision will apply to the rent payable under the
lease.
(4) If the City’s costs exceed the amount of any deposit made to cover costs associated
with subdivision, the applicant must pay the shortage to the City as a condition of the
lease.
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(5) If the application is rejected or if the applicant withdraws the application or fails to sign
a lease offered to the applicant, the City will return any unused deposit balance to the
applicant.
(d) Applications for lands which have not been appraised within one (1) year of the requested
starting date of the lease require the applicant to be responsible for all costs associated with
appraisal. The cost of the appraisal shall be credited or refunded to the lessee once
development is completed as required by the lease, extension or renewal.
(e) Applications which result in a lease agreement with the City require the lessee to be
responsible for all recording costs and any other fees associated with execution of the lease
including a preliminary commitment for title insurance and fifty percent (50%) of the required
costs associated with a sale of leased land in which the lease contains an option to purchase
once the minimum development requirements have been met.
(f) Anytime during the processing of a lease application, the City may request, and the
applicant must supply, any clarification or additional information that the City reasonably
determines is necessary for the City to make a final decision on the application.
22.05.035 No Right of Occupancy – Lease Application Expiration.
(a) Submitting an application for a lease does not give the applicant a right to lease or use
City-owned land.
(b) The application shall expire upon execution of a lease or rejection of a lease application
by the City Council or within twelve (12) months after the date the application has been
submitted.
22.05.040 Lease Application Review.
(a) Applications shall be reviewed by City staff for application completeness and conformance
with City ordinances.
(b) Based on the initial review, if the City Manager determines the application is complete,
the application shall be referred to the Planning and Zoning Commission and any other
applicable commissions for review and comment, together with the City Manager’s
recommendation for approval or rejection.
(c) Notice of complete applications for new leases, renewals or extensions shall be published
in a newspaper of general circulation within the City and posted on the property. The notice
must contain the name of the applicant, a brief description of the land, whether the applicant
requests a lease with an option to purchase, and the date upon which any competing
applications must be submitted (thirty (30) days from the date of publication).
(d) The recommendations of the City Manager, Planning and Zoning Commission, and any
other applicable commissions shall be provided to the City Council. The City Council shall
determine whether the lease is consistent with the intent of this chapter. The decision whether
or not to lease land or authorize a lease extension, renewal, amendment or assignment rests
in the sole discretion of the City Council.
(e) If the applicant is in default of any charges, fees, rents, taxes, or other sums due and
payable to the City or the applicant is in default of a requirement of any lease or contract with
the City a lease shall not be entered into until the deficiencies are remedied .
22.05.045 Application for Lease Amendment, Assignment, Extension or Renewal.
(a) A request from an existing lessee for a lease amendment, assignment, extension or
renewal of the lease must be submitted to the City on an application form provided by the City.
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Applications must be complete and dated on receipt and include payment of the
nonrefundable application fee and applicable deposit as set forth in the City’s schedule of fees
adopted by the City Council.
(b) An application for an amendment must include the following information:
(1) The purpose of the proposed amendment;
(2) The proposed change in use or activity, if any;
(3) A comprehensive description of the proposed business or activity, if applicable; and
(4) How the proposed amendment meets the intent of this chapter.
(c) An application for a lease assignment must include the following:
(1) The name of the individual or legal entity to which the lessee requests to assign the
lease.
(d) An application for a lease extension must include the following information:
(1) The use, nature, type and estimated cost of additional improvements to be
constructed;
(2) The dates new construction is estimated to commence and be completed; and
(3) How the proposed lease extension meets the intent of this chapter.
(e) An application for a lease renewal must include the following information:
(1) For a lease renewal of an existing lease:
(i) The use, nature, type and estimated cost of additional investment in the
construction of new permanent improvements;
(ii) The dates new construction is estimated to commence and be completed;
(iii) If the renewal is pursuant to a transaction between the current lessee and a new
buyer and prospective lessee, the estimated purchase price of real property
improvements on the premises as certified by the current lessee and proposed
purchaser in a bill of sale; and
(iv) How the proposed lease renewal meets the intent of this chapter.
(2) For a lease renewal of an expiring lease:
(i) A fair market value appraisal of the existing principal improvement on the property,
paid for by the applicant, and the estimated cost of any additional investment in the
construction of permanent improvements on the premises, if applicable;
(ii) If the renewal is pursuant to a transaction between the current lessee and a new
buyer and prospective lessee, the estimated purchase price of existing real property
improvements, as certified by the current lessee and the proposed purchaser in a bill
of sale and the estimated cost of any additional investment in the construction of
permanent improvements on the premises, if applicable;
(iii) If the renewal is based on a professional estimate of the remaining useful life of
the real property improvements on the premises, the estimated value and how it was
determined;
(iv) The use, nature, type and estimated cost of any additional improvements to be
constructed, if applicable;
(v) The dates any new construction is estimated to commence and be completed; and
(vi) How the proposed lease meets the intent of this chapter.
(f) Applications for amendment, assignment, extension or renewal shall be processed in
accordance with the lease application review provisions of this chapter, except that
applications for assignment shall not be referred to the Planning and Zoning Commission. The
City has no obligation to amend, assign, renew or extend a lease and may decline to do so
upon making specific findings as to why a lease amendment, assignment, renewal, or
extension is not in the best interest of the City.
22.05.050 Competing Lease Applications.
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If another application for a new lease, extension or a renewal is received for the same property
within thirty (30) days from the notice of application publication date by a different applicant, City
staff shall process the application and forward the application, the City Manager’s
recommendation and applicable commission recommendations to the City Council for approval
of the application anticipated to best serve the interests of the City. The City Council may approve
one (1) of the applications, reject all the applications or direct the City Manager to award a lease
of the property by sealed bid. An applicant for a renewal or extension may withdraw an application
for a renewal or extension at any time prior to a decision by the City Council whether or not to
approve such a renewal or extension.
22.05.055 Length of Lease Term.
(a) The length of term for an initial lease shall be based on the amount of investment the
applicant proposes to make in the construction of new permanent improvements on the premises
as provided in the application. The City Council may offer a shorter lease term, if the City Council
makes specific findings that a shorter lease term is in the best interest of the City.
(b) The maximum term of a lease shall be determined according to the following term table and
cannot exceed forty-five (45) years:
Term Table
APPLICANT’S INVESTMENT/VALUE MAXIMUM TERM OF
YEARS
$7,500 5
15,000 6
22,500 7
30,000 8
37,500 9
45,000 10
52,500 11
60,000 12
67,500 13
75,000 14
82,500 15
90,000 16
97,500 17
105,000 18
112,500 19
120,000 20
127,500 21
135,000 22
142,500 23
150,000 24
157,500 25
165,000 26
172,500 27
180,000 28
187,500 29
195,000 30
202,500 31
210,000 32
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217,500 33
225,000 34
232,500 35
240,000 36
247,500 37
255,000 38
262,500 39
270,000 40
277,500 41
285,000 42
292,500 43
300,000 44
307,500 45
(c) Lease extension. The length of term for a lease extension shall be determined based on
the remaining term of the initial lease and the estimated cost of new investment the applicant
proposes to make in the construction of new permanent improvements on the premises
according to the term table and provided no extension shall extend a lease term past forty-
five (45) years.
(d) Lease renewal for an existing lease. A renewal for an existing lease requires the
construction of new permanent improvements, and the length of term for a lease renewal for
an existing lease shall be determined as follows:
(1) Based on the remaining term of the initial lease according to the term table and the
estimated cost of new investment the applicant proposes to make in the construction of
new permanent improvements on the premises according to the term table; or
(2) Pursuant to a transaction between the current lessee and a new buyer and prospective
lessee and based on the purchase price of existing real property improvements on the
premises, as certified by the current lessee and the proposed purchaser in the bill of sale,
to be executed at closing of the transaction and the estimated cost of new investment in
the construction of new permanent improvements on the premises according to the term
table.
(3) The term for renewal of an existing lease cannot exceed forty-five (45) years.
(e) Lease renewal for an expiring lease. The length of term for a lease renewal of an expiring
lease shall be determined as follows:
(1) The purchase price of existing real property improvements on the premises, as
certified by the current lessee and the proposed purchaser in the bill of sale, to be
executed at closing of the transaction and the estimated cost of any new investment in the
construction of new permanent improvements on the premises according to the term table;
or
(2) A professional estimate of the remaining useful life of the real property improvements
on the premises, paid for by the applicant and the estimated cost of any new investment
in the construction of new permanent improvements on the premises according to the term
table; or
(3) A fair market value appraisal of the existing real property improvements on the
premises, paid for by the applicant and the estimated cost of any new investment in the
construction of new permanent improvements on the premises according to the term table.
(4) The term for renewal of an existing lease cannot exceed forty-five (45) years.
(f) If the initial lease, term extension, or lease renewal granted to the applicant requires
construction of new permanent improvements, the lease or term extension shall be subject to
the following conditions:
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(1) The lessee to complete the proposed permanent improvements within two (2) years
except in special circumstances, that require a longer period of time and which must be
approved by the City Council.
(2) The lessee to provide a performance bond, deposit, personal guarantee, or other
security if the City Council determines security is necessary or prudent to ensure the
applicant’s completion of the permanent improvements required in the lease, renewal, or
extension. The City Council shall determine the form and amount of the security according
to the best interest of the City, after a recommendation by the City Manager considering
the nature and scope of the proposed improvements and the financial responsibility of the
applicant.
(3) At no expense to the City, the lessee must obtain and keep in force during the term of
the lease, insurance of the type and limits required by the City for the activities on the
premises.
(4) Within thirty (30) days after completion of the permanent improvements, the lessee
shall submit to the City written documentation that the improvements have been
completed as required. The City Manager shall make a report to the City Council of
completion as soon as reasonably practical.
(5) If the applicant shows good cause and the City Council determines the action is in the
best interest of the City, the City Council may grant an extension of the time allowed to
complete permanent improvements by resolution that is sufficient to allow for the
completion of the permanent improvements or for submission of documentation that the
permanent improvements have been completed.
(6) If, within the time required, the applicant fails to complete the required permanent
improvements, the City shall:
(i) If the application is for a new lease or lease renewal, execute the forfeiture of the
performance bond, deposit, personal guarantee, or other security posted by the
applicant under subsection (f)(2) of this section to the extent necessary to reimburse
the City for all costs and damages, including administrative and legal costs, arising
from the applicant’s failure to complete the required improvements, and/or initiate
cancellation of the lease or reduce the term of the lease to a period consistent with the
portion of the improvements substantially completed in a timely manner according to
the best interests of the City.
(ii) If the application is for a lease extension, the City shall terminate the amendment
extending the term of the lease or reduce the term of the extension at the City’s sole
discretion.
22.05.060 Principles and Policy of Lease Rates.
(a) Annual rent shall be computed by multiplying the fair market value of the land by a lease
rate percentage of eight percent (8%) for each parcel; and
(b) The City will determine the fair market value of the land requested to be leased based on
an appraisal conducted for the City by an independent real estate appraiser certified under
Alaska State statutes and ordered by the City for the purpose of determining annual rent. The
appraisal shall be paid for by the applicant, and the cost of the appraisal shall be credited or
refunded to the lessee once development is completed as required by the lease. The fair
market value of the land will be adjusted annually based on the rate of inflation determined by
the consumer price index (CPI) to determine annual rent; and
(c) The City will conduct a land market analysis of City-owned land under lease once every
ten (10) years to determine whether a market adjustment in either fair market value of land or
lease rate percentage is justified; and
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(d) If the City determines from the market analysis that a market adjustment to the lease rate
percentage is in the best interests of the City, the new lease percentage must be approved by
an ordinance and utilized to compute annual rents for the next fiscal year; and
(e) If the market analysis or extraordinary circumstances determine a fair market value
adjustment is in the best interests of the City, the City shall retain the services of an
independent, real estate appraiser certified under Alaska State statutes to determine the fair
market value of all leased land and shall use these values to compute annual rents for the
next fiscal year; and
(f) The City shall adjust the annual rent of a lease by giving the lessee written notice at least
thirty (30) days prior to application of a new annual rent determination; and
(g) If a lessee disagrees with the proposed change in the fair market value of land or lease
rate percent (excluding CPI determinations, which cannot be appealed) and cannot informally
resolve the issue with the City, the lessee must:
(1) Provide notice of appeal in writing within ninety (90) days of notification supported by
the written appraisal of a qualified real estate appraiser, selected and paid for by lessee
(the “second appraiser”); and
(2) The City and the lessee will meet to attempt to resolve the differences between the
first appraiser and the second appraiser concerning the fair market value of the land or
lease rate percent; and
(3) If the City and lessee cannot agree upon the fair market value or lease rate percent
then they shall direct the first appraiser and the second appraiser to mutually select a third
qualified real estate appraiser, paid for jointly by the parties (the “third appraiser”); and
(4) Within thirty (30) days after the third appraiser has been appointed, the third appraiser
shall decide which of the two (2) respective appraisals from the first appraiser and the
second appraiser most closely reflects the fair market value of the land or lease rate
percent; and
(5) The fair market value of the land or lease rate percent shall irrefutably be presumed
to be the value(s) contained in such appraisal selected by the third appraiser, and the rent
shall be redetermined based on such value(s); and
(6) Rent shall continue to be paid at the then-applicable rate until any such new rental
rate is established, and lessee and the City shall promptly pay or refund, as the case may
be, any variance in the rent, without interest accruing to the extent to be paid/refunded.
22.05.065 Lease Bidding Procedure.
With the approval of the City Council, the City Manager may designate a specific lot or lots to be
leased through competitive sealed bid. The City Manager shall award the lease to the qualified
bidder utilizing a procurement procedure which may consider qualitative factors in addition to the
amount of any one (1) time premium payment to be paid by the successful bidder; provided,
however, that the high bidder and the bidder’s lease proposal shall be subject to all provisions of
lease application review and approval under this chapter.
22.05.070 Development Incentives.
(a) The City Council may include a lease rent incentive to encourage commercial investment
as follows:
(1) A credit may be applied toward rent for a maximum of five (5) years. The credit may
only include the value of site preparation work on the leased premises to include clearing
and grubbing, unclassified excavation, classified fill and back fill, crushed aggregate base
course, and utility extensions.
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(2) An estimate of the value of the work, including a scope of work, prepared by a qualified
engineer licensed to work in Alaska must be provided to the City and accepted prior to
work being performed.
(3) Any changes to the estimate of the value of the work or scope of work must be
provided to the City and accepted prior to work being performed to be eligible for the credit.
(4) For the credit to be applied, the approved scope of work must be completed.
(5) A certification from a qualified engineer that the accepted scope of work has been
completed must be provided to the City and accepted at the completion of the site
preparation work.
(6) Credit will be limited to original qualified engineer’s estimate unless another amount
is accepted by the City in advance of work being completed.
(7) Once the work is completed as proposed and the qualified engineer’s certification of
completion has been received, a credit shall be applied to the lease payments, prorated
as necessary for a maximum of five (5) years.
(8) Rent shall be paid at the then-applicable rate until any such credit toward rent has
been approved by the City Manager or designee, and the City shall apply a credit to lease
payments prorated as necessary or promptly pay or refund, as the case may be, any
variance between the credit applied and the rent paid, without interest accruing to the
extent to be paid/refunded.
22.05.075 Ownership of Improvements.
(a) Permanent improvements on the premises, excluding site development materials,
constructed, placed, or purchased by the lessee remain the lessee’s property as long as a
lease for the premises remains in effect with the lessee, including renewals, any period of
extension approved by the City pursuant to the provisions of this chapter, or any period of
holdover.
(b) Unless otherwise provided in a land lease, at the expiration, cancellation, or termination
of a lease that is extended or followed by a successive lease, the departing lessee may do
one (1) or more of the following:
(1) Remove lessee-owned permanent improvements from the premises, remediate any
contamination for which the lessee is responsible, and restore the premises to a clean and
neat physical condition acceptable to the City within ninety (90) days after the expiration,
cancellation, or termination date of the lease; or
(2) Sell lessee-owned permanent improvements to the succeeding lessee, remove all
personal property, remediate any contamination for which the lessee is responsible, and
leave the premises in a clean and neat physical condition acceptable to the City within
sixty (60) days after notice from the City that the City has approved an application for a
lease of the premises by another person or such longer period specified in the notice, but
in no event more than one hundred eighty (180) days after the expiration, termination, or
cancellation date of the lease; or
(3) Purchase the property in which the lease contains an option to purchase once the
minimum development requirements have been met for the fair market value of the land
excluding permanent improvements made by the lessee.
(c) If the lessee does not timely remove or sell the lessee-owned permanent improvements
on a premises in accordance with the requirements of this section, any remaining permanent
improvements and any remaining personal property of the departing lessee will be considered
permanently abandoned. The City may sell, lease, demolish, dispose of, remove, or retain the
abandoned property for use as the City determines is in the best interest of the City. The
lessee shall, within thirty (30) days after being billed by the City, reimburse the City for any
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costs reasonably incurred by the City, including legal and administrative costs, to demolish,
remove, dispose, clear title to, or sell the abandoned property and to remediate any
contamination and restore the premises.
(d) Site development materials that a lessee places on a premises become part of the City-
owned real property and property of the City upon placement. The lessee:
(1) Must maintain the site development work and site development materials throughout
the term of the lease or successive lease, including any extensions and periods of
holdover; and
(2) May not remove the site development materials unless the City approves in writing.
22.05.080 Lease Execution.
The lease applicant shall execute and return the appropriate lease agreement with the City of
Kenai within thirty (30) days of mailing the agreement to the applicant. The lease agreement shall
be prepared in accordance with the requirements of this title. Failure to execute and return the
lease agreement within the specified period shall result in the forfeiture of all leasing rights.
22.05.085 Lease Utilization.
Leased lands shall be utilized for purposes within the scope of the application, the terms of the
lease and in conformity with the ordinances of the City, and in substantial conformity with the
Comprehensive Plan. Utilization or development for other than the allowed uses shall constitute
a material breach of the lease and subject the lease to cancellation at any time. Failure to
substantially complete the development plan for the land shall constitute grounds for cancellation.
22.05.086 Form of Lease.
(a) When leasing land under this chapter, the City Manager shall use a standard lease form
that:
(1) Provides a reasonable basis for the lessee’s use of the premises,
(2) Complies with the intent of this chapter, and
(3) Provides for the best interest of the City.
(4) Approved as to form by the City Attorney; and
(5) Adopted by resolution of the City Council.
(b) The City Manager may enter into a land lease that deviates from the standard form
adopted under subsection (a) of this section, if:
(1) The City Manager believes the action is in the best interest of the City;
(2) The lease is approved as to form by the City Attorney; and
(3) The lease is approved by resolution of the City Council.
22.05.087 Lease Payments.
(a) Upon execution of the lease, the land becomes taxable to the extent of the lessee’s
leasehold interest and lessee shall pay all real property taxes levied upon such leasehold
interest in these lands, and shall pay any special assessments and taxes.
(b) Rent shall be paid annually in advance unless the lessee submits a written request to the
City to pay on a quarterly or monthly basis. The payments shall be prorated to conform to the
City of Kenai’s fiscal year beginning July 1st and ending June 30th.
(c) Lessee shall be responsible for all sales taxes due on payments under the lease.
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22.05.095 Methods of Sale or Disposal.
(a) Lands to which the City of Kenai holds title which are not restricted from sale by the deed
of conveyance to the City or which have been released from such restrictions and that the
City Council has determined are not required for a public purpose, may be listed for sale by
the City Manager. The decision whether or not to sell the land rests in the sole discretion of
the City Council.
(b) The City Council may by ordinance authorize the City Manager to dispose of such
properties in accordance with the intent of this chapter as follows:
(1) Non-competitive process:
(i) Conveyance to encourage new enterprises where it is found that encouragement
of a new commercial or industrial enterprise would be beneficial to the City of Kenai,
one or more parcels of City land may be sold upon such terms as to price, conditions
of conveyance, and with such contingencies as may be set forth in the ordinance.
(ii) Property sale to adjacent owners for the conveyance of a parcel of City property
at fair market value to the owner of adjacent land whenever, in the judgment of the
City Council, the parcel of land is of such small size, shape, or location that it could
not be put to practical use by any other party.
(iii) Grant or devotion of real property to the United States, the State of Alaska, a local
political subdivision of the State of Alaska, or any agency of any of these governments
or a non-profit corporation, for a consideration agreed upon between the City and
grantee without a public sale if the grant, devotion or lease is advantageous to the
City.
(iv) Conveyance of land to resolve a land use conflict.
(2) Competitive process:
(i) Public outcry auction to the highest responsible bidder.
(ii) Sealed bid to the highest responsible bidder.
(iii) Over-the-Counter sale after a public outcry auction or sealed bid process on a first-
come basis, provided minimum development requirements are met within two (2)
years of sale and the land is sold for fair market value. An appraisal to determine fair
market value must be completed within a one (1) year period prior to the date of sale.
(iv) Leased land in which the lease was subject to competition through the lease
application review process and which contains an option to purchase once the
minimum development requirements have been met for the fair market value of the
land excluding permanent improvements made by the lessee. An appraisal to
determine fair market value must be completed within a one (1) year period prior to
the sale.
(3) Property exchange: Property exchanges for the conveyance and exchange of a parcel
of City-owned property for property owned by another individual or legal entity subject to
such conditions as Council may impose on the exchange, whenever the City Council
makes findings it is advantageous to the City to make the property exchange.
(c) Any sale of land owned by the City of Kenai and held by it for the use or benefit of the
Kenai Municipal Airport must include in any instrument conveying title to the property
restrictions accepted by the City under the terms of the 1963 Quitclaim Deed from the United
States of America recorded at Book 27, Page 303 at the Kenai Recording District, Kenai
Alaska or any other land owned by the City and acquired with Airport funds which may include
similar restrictions. Additionally, any sale or disposal of the aforementioned lands for less than
fair market value shall require a deposit in the amount of the difference between fair market
value and the sale price to the Airport Land Sale Permanent Fund for the benefit of the Kenai
Municipal Airport.
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22.05.100 Sale Procedure.
(a) All requests to purchase City land must be submitted to the City on approved forms
provided by the City. Applications will be dated on receipt and payment of the nonrefundable
application fee and must include applicable deposit as set forth in the City’s schedule of fees
adopted by the City Council.
(b) Applications which propose a subdivision shall require the applicant to be responsible for
all costs associated with the subdivision, including but not limited to engineering services,
surveying and consulting costs, unless in the sole discretion of the City Council it is determined
the subdivision serves other City purposes.
(1) If the Council determines that other City purposes are served by the subdivision, the
City Council may choose in its sole discretion to share in the subdivision costs with the
applicant in an amount the City Council determines is reasonable given the benefit to the
City.
(2) If the Council does not make a determination that other City purposes are served by
the subdivision, the applicant must submit a deposit to cover the estimated costs
associated with the subdivision.
(3) If the City enters into a sale with the applicant, any unused balance of the deposit
made to cover costs associated with subdivision will be credited toward the purchaser at
closing.
(4) If the City’s costs exceed the amount of any deposit made to cover costs associated
with subdivision, the applicant must pay the shortage to the City as a condition of the sale.
(5) If the application is rejected or if the applicant withdraws the application or fails to enter
into a sale offered to the applicant, the City will return any unused deposit balance to the
applicant.
(c) The City will retain the services of an independent, real estate appraiser certified under
Alaska State statutes to determine the fair market value for a determination of the minimum
price on the land to be paid for from the deposit made by the applicant unless such an
appraisal has been obtained within one (1) year prior to the date of sale. The cost of the
appraisal will be credited toward the purchaser at closing.
(d) If at any time during the process of preparing for sale, the applicant withdraws the
application for sale, the City shall stop all procedures, pay expenses incurred prior to
withdrawal of the application for sale, and reimburse applicant for any deposit advanced in
excess of expenses incurred. However, if another party desires the sale to proceed, files an
application for sale, executes and files an agreement to purchase, and deposits sufficient
funds, then the prior applicant will be reimbursed for expenses which can be attributed to the
subsequent applicant.
(e) If all actions necessary for preparation for sale have been accomplished, and if neither
the applicant nor any other party purchases said land when first offered for sale after such
request, then all expenses incurred in preparation for the sale will be paid from the applicant’s
deposit, and the balance, if any, shall be returned to the applicant. If the amount of the deposit
is insufficient to pay all of the costs, the applicant will be billed for the balance due.
(f) If the land is sold in a competitive public sale set in response to such request to anyone
other than the applicant, the applicant’s deposit will be refunded in total to the applicant. The
City’s expenses will be first deducted from the deposit of the successful bidder.
(g) If the land is sold to the applicant, any deposit advanced, after deducting the City’s
expenses, will be credited to the purchaser at closing.
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(h) If the land is leased land in which the lease contains an option to purchase once the
minimum development requirements have been met, the lessee may request the sale of the
land at not less than the fair market value.
(i) If the land is to be sold through a competitive process, notice of sale and the manner in
which the land is to be sold must be posted to the extent possible to be visible from each
improved street adjacent to the property and published in a newspaper of general circulation
within the City. The published notice must contain:
(1) The legal description of the land;
(2) A brief physical description of the land;
(3) The area and general location of the land;
(4) The minimum acceptable offer for the land (which shall be the fair market value);
(5) The terms under which the land will be sold;
(6) Any limitations on the sale of the land;
(7) The time and place set for the auction or bid opening;
(8) The amount of deposit to be submitted with each bid in order to cover the City’s
expenses such as survey, appraisal, and reviews;
(9) Any other matters concerning the sale of which the City Manager believes the public
should be informed.
(j) If a buyer desires to obtain a preliminary commitment for title insurance or title insurance
to the land, it shall be the responsibility of the buyer to obtain and pay for such commitment
or insurance.
(k) The City Manager is authorized to negotiate a division of the costs of sale to a maximum
of fifty percent (50%) of the required costs being borne by the City, provided however that no
costs of sale will be paid by the City where a sale is negotiated at a price below the fair market
value of the land.
22.05.101 No Right of Occupancy – Land Purchase Application Expiration.
(a) Submitting an application to purchase land does not give the applicant a right to purchase
or use City-owned land.
(b) The application shall expire upon closing of the sale or rejection of a land purchase
application by the City Council or within twelve (12) months after the date the application has
been submitted.
22.05.105 Terms for Financing Sale of City-Owned Lands.
(a) In order to expedite and facilitate the sale of City lands, the City Manager is authorized to
accept terms for sales and may accept a note secured by a deed of trust for a portion of the
purchase price thereof, subject to the following restrictions:
(1) Except for property sold by the City subsequent to foreclosure for delinquent taxes or
assessments, prior to making a determination to accept a note and deed of trust from a
prospective purchaser, the City shall order a preliminary commitment for title insurance
and a review of the grantee index covering the party desiring to purchase the land at the
cost of the party requesting to purchase the land, and no credit will be advanced on such
sale if there are any delinquent liens or unpaid judgments found in the title company report
until any such judgments or liens are paid and releases therefor have been filed.
(2) In the event of a credit sale, terms shall be approved by the City Council in the
Ordinance approving the sale, as follows:
(i) The down payment required, which shall not be less than fifteen percent (15%) of
the sales price; and
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(ii) The length of the note; and
(iii) A fixed or variable interest rate.
22.05.110 Determination as to Need for Public Use.
(a) Whether land shall be acquired, retained, devoted, or dedicated to a public use shall be
determined by ordinance which shall contain the public use for which the property is to be
dedicated, the legal description of the property, and the address or a general description of
the property sufficient to provide the public with notice of its location. This requirement does
not apply to rights-of-way or easements dedicated through the City and Borough platting
process.
(b) Whether land previously dedicated to a public use should be dedicated to a different public
use or should no longer be needed for public use shall be determined by the City Council by
ordinance, except in cases of vacation of rights-of-way or easements which may be
determined by resolution, either of which shall contain the new public use for which the
property is to be dedicated or the reason the land is no longer needed for public use, the legal
description of the property, and the address or a general description of the property sufficient
to provide the public with notice of its location.
22.05.130 Special Use Permits.
The City Council may authorize the City Manager to grant special use permits for the temporary
use of real property owned by the City for a period not to exceed one (1) year, without appraisal
of the value of the property or public auction, for any purpose compatible with the zoning of the
land, and on such terms and for such rentals as the Council shall determine.
22.05.135 Acquisition of Real Property.
(a) The City, by authorization of the City Council, expressed in a resolution for such purpose,
may lease, purchase or acquire an interest in real property needed for a public purpose on
such terms and conditions as the Council shall determine. No purchase shall be made until a
qualified independent appraiser has appraised the property and given the Council an opinion
as to the fair market value of the land unless the Council, upon resolution so finding,
determines that the public interest will not be served by an appraisal.
(b) Rights-of-way and easements may be accepted or issued by the City Manager after
approval by the City Council for utility lines and services of all types and for necessary rights-
of-way easements. This requirement does not apply to rights-of-way or easements dedicated
through the City and Borough platting process.
Section 4. Leaseholders of existing leases may convert their current lease to a new lease
form approved by the City Council and governed by the Kenai Municipal Code Enacted by this
Ordinance, except that the existing lease terms will not be entered only by virtue of the lease
conversion.
Section 5. Severability: That if any part or provision of this ordinance or application thereof to
any person or circumstances is adjudged invalid by any court of competent jurisdiction, such
judgment shall be confined in its operation to the part, provision, or application directly involved
in all controversy in which this judgment shall have been rendered, and shall not affect or impair
the validity of the remainder of this title or application thereof to other persons or circumstances.
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The City Council hereby declares that it would have enacted the remainder of this ordinance even
without such part, provision, or application.
Section 6. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect
30 days after enactment.
ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 21st day of August, 2019.
BRIAN GABRIEL SR., MAYOR
ATTEST:
___________________________________
Jamie Heinz, CMC, City Clerk
Introduced: August 7, 2019
Enacted: August 21, 2019
Effective: September 21, 2019
MEMORANDUM
TO: Mayor Brian Gabriel and Kenai City Council
FROM: Scott Bloom City Attorney
DATE: July 31, 2019
SUBJECT: Ordinance No. 3072-2019 – City Owned Lands
____________________________________________________________________________
Introduction:
Building off recent code changes to airport reserve lands, Ordinance No. 3072-2019 amends the
City’s lands code with the intent of providing land policies and practices that encourage
responsible growth and development to support a thriving business, residential, recreational, and
cultural community. These changes will affect City general fund lands, lands outside the airport
reserve restricted by FAA, and certain harbor lands. The changes provide consistent guidance
for the competitive lease and sale of lands, require development of commercial properties and
discourage land speculation. Amendments to ownership of improvements on leases, the term
table, and the provision of development incentives are designed to encourage interest in
development in the City.
The Ordinance repeals and re-enacts Chapter 22.05, changes the title of Title 22, repeals Chapter
21.15 (airport lands outside the airport reserve), and renames Title 21.
This memo contains procedural guidance and a sectional analysis of the changes below.
Additionally, a copy of the amendments in legislative format (not repeal and replace as in the
Ordinance) and a clean copy is provided.
Procedure:
Administration has presented the material in this Ordinance to Council, the Planning and Zoning
Commission, and Airport Commission, and will present to the Harbor Commission the third week
in August. Administration recommends this Ordinance be referred to the three commissions for
recommendations prior to a public hearing. The Airport Commission meets August 8, the Harbor
Commission, August 19, and the Planning and Zoning Commission, August 14.
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Trailing this Ordinance is the City Administration’s Land Management Plan, which will identify
parcels for sale and lease, among other information, and revisions to the Harbor Code addressing
land leases and sales.
Sectional Analysis:
1. Renaming Title 21: Title 21 is renamed to reflect that it only applies to lands within the
airport reserve as lands restricted by the FAA outside the airport reserve are incorporated
within Title 22 in the Ordinance and will be treated the same as other City lands outside
the airport reserve, in compliance with any FAA restrictions per new KMC 22.05.095 which
also provides for proceeds from sales to go to the airport.
2. Repealing 21.15: Chapter 21.15, which addresses FAA restricted lands outside the airport
reserve, is repealed consistent with the new title for Title 21 addressed above, as all FAA
restricted lands outside the airport reserve lands are incorporated into Chapter 22.05. This
is reflected on pages 2 through 17 of the Ordinance.
3. Repealing and Re-enacting Title 22: Due to the number and significance of the proposed
amendments to Title 22, which only contains one chapter, Chapter 22.05, the entire title
is replaced as opposed to making changes one section at a time. This repeal is reflected
on pages 17 through 32 of the Ordinance.
4. Renaming Title 22: On page 32, the title of Title 22 is changed from General Funds Lands
to City-Owned Lands to reflect the inclusion of FAA restricted lands and certain harbor
lands.
5. Renaming Chapter 22.05: Similarly on page 32, the title of Chapter 22.05 within Title 22
is amended to read “disposition of City Lands,” instead of “Disposition of City General
Fund Lands.”
6. KMC 22.05.005: This is a new definitions section which did not previously exist, providing
key terms for the Chapter.
7. KMC 22.05.010: This section, “Authority and Intent”, was formerly titled “Power to Dispose
of Real Property.” This section now clarifies that it applies to all City owned lands except
lands within the airport reserve and the leasing of tidelands for shore fisheries. It also
makes an affirmative statement of the intent of the chapter: “to provide land policies and
practices that encourage responsible growth and development to support a thriving
business, residential, recreational and cultural community” and requires that all land sales
and leases meet this intent.
8. KMC 22.05.015: “Lands Available for Lease, Sale or Disposal,” formerly titled, “Sale or
Disposal,” clarifies that the City can lease, sell, or dispose of real property, not restricted
from the same, after Council has determined it is not needed for a public purpose by any
lawful method.
9. KMC 22.05.020: “Qualifications of Lease Applicants or Bidders” makes only housekeeping
changes to the former section, describing who can lease or purchase property from the
City.
10. KMC 22.05.025: “Initial Lease Application,” formerly titled “Applications,” describes the
information required and process for submitting lease applications. Changes include
provisions for applications requiring a subdivision, whether the applicant wants an option
to purchase, and whether the lease meets the intent of the Chapter. For properties without
a recent appraisal, this section now requires the applicant to pay for an appraisal, and the
appraisal cost to be credited or refunded once development is complete. The changes are
generally intended to more clearly define what information the City needs to evaluate a
lease and communicate the process going forward and potential costs for lessees.
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11. Former KMC 22.05.030: This section formerly titled “Filing Fee and Deposit” is repealed
in its entirety, as fees and deposits are now addressed in KMC 22.05.025 and other
sections of code.
12. KMC 22.05.035: “No Right of Occupancy-Lease Application Expiration,” formerly titled
“Rights Prior to Leasing,” clarifies that submission of a lease application does not give an
applicant the right to lease or occupy the land. It also provides that a lease application
expires within 12 months of the date of submission, upon execution of a lease, or rejection
of the application by the Council.
13. KMC 22.05.040: “Lease Application Review” formerly titled “Processing Procedure”
provides the following review process:
(i) Administration reviews for completeness and conformance with City ordinances,
(ii) If complete, Manager forwards to appropriate commissions for review and
comment together with a Manager’s recommendation for approval or rejection,
(iii) Notice of complete applications are published and posted on the property, with a
date in which any competing applications must be received,
(iv) The recommendations of the City Manager and any applicable commissions are
provided to Council, which decides whether the application meets the intent of the
code and whether the application should be approved.
14. KMC 22.05.045: “Application for Lease Amendment, Assignment, Extension or Renewal,”
formally “Review,” provides the process for lease amendments, assignments, extensions,
or renewals. Similar to the airport reserve properties, the term of a lease can be based on
other factors than new development, such as the purchase price or estimated remaining
useful life of improvements. These transactions are generally reviewed by the City in the
same way as a new lease application, although lease assignments are not required to be
reviewed by planning and zoning.
15. KMC 22.05.050: “Competing Lease Applications,” replaces former “Appraisal,” to provide
a process for evaluating competing lease applications. Information regarding appraisal
requirements has been incorporated into other code sections. When more than one
application is submitted for a property, the Council can choose which applicant to lease to
based on which application is found to be in the best interest of the City, after review and
recommendation by the City Manager and applicable commissions. A safe harbor is
provided for existing lessees seeking an extension or renewal, by allowing them to
withdraw their application and stop the competitive process at any time prior to Council
making a decision.
16. KMC 22.05.055: “Length of Lease Term” describes how the term of a new lease,
extension, or renewal is determined. The term table matches that of the term table for
properties within the airport reserve. Development of $307,500 or greater receives the
maximum term of 45 years. The term of a lease can also be determined by the purchase
price of improvements, an appraisal value of improvements, or the remaining useful life of
improvements depending on the transaction.
17. KMC 22.05.060: “Principals and Policy of Lease Rates” was formerly 22.05.070. This
provides that annual rent is based on 8% of the fair market value of the land. Annual rental
adjustments are based on the Consumer Price Index (CPI). Every ten years, or pursuant
to extraordinary circumstances, the City will conduct a market analysis to determine
whether its rates and adjustments are in line with the market or whether changes need to
be made. A process for a lessee to appeal is provided in this section as well, however,
CPI adjustments are not appealable.
18. KMC 22.05.65: “Lease Bidding Procedure” provides a process for the City to designate
lots to be leased through a competitive bid process to the highest bidder.
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19. KMC 22.05.070: “Development Incentives” is a new section similar to what is offered
within the airport reserve. Certain improvements to the property paid for by the lessee can
be used to offset up to five years of rental payments.
20. KMC 22.05.075: “Ownership of Improvements” is a new section that provides that the
lessee owns the improvements on the leased property. These improvements can be sold
by the lessee. A process for sale and/ or removal is also provided.
21. KMC 22.05.080 and 22.05.085: “Lease Execution” and “Lease Utilization” remain largely
unchanged and describe the process for executing a lease and how the leased property
can be used by the lessee.
22. KMC 22.05.086: “Form of Lease.” This section provides some of the basic terms for the
lease form that is developed by the City Attorney and approved by the Council. A
resolution to approve the standard lease form will be brought to Council at the same
meeting as the public hearing on this ordinance.
23. KMC 22.05.087: “Lease Payments.” this section provides that the lessee is responsible
for all taxes and special assessments on the property. Rent is paid annually or quarterly
to the City.
24. KMC 22.05.095: “Methods of Sale” incorporates former KMC 22.05.090 “Conveyance to
Encourage New Enterprise,” KMC 22.05.115, 22.05.120 and 22.05.125: “Property
Exchanges”, “Property Sale to Adjacent Owners,” and “Grant or Devotion,” and provides
the methods of sale or disposal for City owned lands. Non-competitive sales are allowed
only to encourage new enterprise, for sale to adjacent property owners when the land is
not practicably usable by others, to other government agencies, or to resolve a land use
conflict. All other sales require a competitive process.
25. KMC 22.05.100: “Sale Procedure” provides the process for selling City property, public
notice of sales, and describes which party is responsible for various costs associated with
a sale.
26. KMC 22.05.101: “No Right of Occupancy-Land Purchase Application Expiration.” This
section explains that an application to purchase land does not convey any rights to the
property and that an application expires after 12 months, a decision by Council not to sell
the property, or upon closing of the sale.
27. KMC 22.05.105: “Terms for Financing Sale of City Owned Lands” this section provides
the process for the City to finance a sale. It provides that the length of the note and rate,
whether fixed or variable, is determined by the Council in the ordinance approving a sale.
28. KMC 22.05.110: “Determination as to Need for Public Use.” This section is unchanged
and requires that before any property can be sold, Council must first determine that it is
not needed for a public use.
29. KMC 22.05.115, 22.05.120 and 22.05.125: “Property Exchanges,” “Property Sale to
Adjacent Owners,” and “Grant or Devotion,” are all repealed as their terms and provisions
are incorporated into 22.05.095.
30. KMC 22.05.130: “Special Use Permits” allows for a more informal use of City lands for a
period of up to one year.
31. KMC 22.05.135: “Acquisition of Real Property” describes the process for the City to
purchase or otherwise acquire new property and remains largely unchanged from the
existing code.
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Title 22
[GENERAL FUND]CITY-OWNED LANDS
Chapter 22.05
DISPOSITION OF CITY [GENERAL FUND]LANDS
22.05.05 Definitions.
When used in this chapter, the following terms shall have the meaning given below:
“Amendment” means a formal change to a lease of lands other than a lease extension or renewal.
“Annual rent” means an amount paid to the City annually according to the terms of the lease and
Kenai Municipal Code.
“Assignment” means the transfer of all interest in a lease from one person or entity to another.
“City” means the City of Kenai, its elected officials, officers, employees or agents.
“Consumer Price Index (CPI)” means the annual CPI for all urban consumers (CPI-U) for
Anchorage, Alaska.
“Existing lease” means a lease with at least one (1) year of term remaining.
“Expiring lease” means a lease with less than one (1) year of term remaining.
“Fair market value” means the most probable price which a property should bring in a
competitive and open market as determined by a qualified independent appraiser, or the value as
determined by the latest appraisal adjusted by the change in Consumer Price Index from the date
of the latest appraisal.
“Lease extension” means extending the term of an existing lease.
“Lease rate percent” means a percentage that when applied to the fair market value of land
establishes a rate of rent commensurate with rental rates prevalent in the local area as determined
by a qualified real estate appraiser.
“Lease renewal” means a new lease of property currently under an existing or expiring lease to
an existing lessee or a purchaser.
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“Market analysis” means an analysis of data collected from other land leases to determine
whether a market adjustment in either fair market value or lease rate percentage reflects the
market.
“Permanent improvement” means a fixed addition or change to land that is not temporary or
portable, including a building, building addition, retaining wall, storage tank, earthwork, fill
material, gravel, and pavement, and remediation of contamination for which the applicant is not
responsible and excluding items of ordinary maintenance, such as glass replacement, painting,
roof repairs, door repairs, plumbing repairs, floor covering replacement, or pavement patching.
“Professional estimate of the remaining useful life of the principal improvement” means an
estimate of the number of remaining years that the principal improvement will be able to
function in accordance with its intended purpose prepared by a qualified real estate appraiser,
engineer, or architect licensed in Alaska.
“Qualified independent appraiser” means a general real estate appraiser certified by the State of
Alaska under AS 08.87.
“Site development materials” means materials used for preparing a lease site for building
construction or to provide a firm surface on which to operate a vehicle or aircraft, including
geotextile, fill, gravel, paving, utilities and pavement reinforcement materials.
“Site preparation work” means work on the leased premises to include clearing and grubbing,
unclassified excavation, classified fill and back fill, a crushed aggregate base course and utility
extensions.
22.05.010 [POWER]Authority and Intent [TO DISPOSE OF REAL PROPERTY].
(a) The provisions of this chapter apply to [GENERAL FUND] City-owned real property other
than lands within the Airport Reserve as described in KMC 21.10 and the leasing of tidelands for
shore fisheries.
(b) The City may sell, convey, exchange, transfer, donate, dedicate, direct, [OR ]assign to use,
or otherwise dispose of City-owned real property, including property acquired, held for, or
previously devoted to a public use, only in accordance with this chapter, and, with respect to
properties acquired through foreclosure for taxes, in compliance with those terms and provisions
of AS 29 which apply to home-rule municipalities [ARE REQUIRED TO COMPLY WITH].
Disposal or sale of lands shall be made only when, in the judgment of the City Council, such
lands are not or are no longer required for a public purpose.
(c) It is the intent of this chapter to provide land policies and practices that encourage
responsible growth and development to support a thriving business, residential, recreational and
cultural community.
(d) It is not the intent of this chapter to allow for speculation on City-owned lands. All leases,
sales, and other disposals of City-owned land must meet the intent of this chapter.
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(e) The provisions of this chapter shall not alter or amend the terms or rights granted under leases
existing prior to the effective date of the ordinances codified in this chapter.
22.05.015 Lands Available for Lease, Sale or [D]Disposal.
(a) The City may lease, sell or dispose of real property not restricted from lease or sale which
the City Council has determined is not required for a public purpose [BY WARRANTY OR
QUIT-CLAIM DEED, EASEMENT, LEASE, GRANT, PERMIT, LICENSE, DEED OF
TRUST, MORTGAGE CONTRACT OF SALE OF REAL PROPERTY, PLAT DEDICATION,
TAX DEED, OR] by any [OTHER ]lawful method or mode of conveyance or grant. Any
instrument requiring execution by the City shall be signed by the City Manager and attested by
the City Clerk. The form of any instrument shall be approved by the City Attorney.
22.05.020 Qualifications of Lease [A]Applicants or [B]Bidders.
An applicant or bidder for a lease is qualified if the applicant or bidder:
(a) Is an individual at least eighteen (18) years of age [OR OVER]; or
(b) Is a [GROUP, ASSOCIATION, OR CORPORATION WHICH IS] legal entity which is
authorized to conduct business under the laws of Alaska; or
(c) Is acting as an agent for another meeting the requirements of subsection (a) or (b) of this
section and has qualified by filing with the City [MANAGER] a proper power of attorney or a
letter of authorization creating such agency. [THE AGENT SHALL REPRESENT ONLY ONE
(1) PRINCIPAL TO THE EXCLUSION OF HIMSELF OR HERSELF. THE TERM “AGENT”
INCLUDES REAL ESTATE BROKERS AND AGENTS.]
22.05.025 Initial Lease Application[S].
(a) All applications for lease of lands [SHALL] must be [FILED WITH] submitted to the City
[MANAGER] on an application form[S] provided by the City[AVAILABLE AT CITY HALL].
Applications [SHALL] will be dated on receipt and must include payment of [FILING] the
nonrefundable application fee [AND DEPOSIT. NO APPLICATION WILL BE ACCEPTED
BY THE CITY MANAGER UNLESS IT APPEARS TO THE CITY MANAGER TO BE
COMPLETE. FILING FEES ARE NOT REFUNDABLE] as set forth in the City’s schedule of
fees approved by the City Council.
(b) [WITH EVERY]The application[, THE APPLICANT SHALL SUBMIT A
DEVELOPMENT PLAN, SHOWING AND STATING] form must include the following
information:
(1) The purpose of the proposed lease;
(2) The use, [VALUE AND]nature, type, and estimated cost of improvements to be constructed;
(3) [THE TYPE OF CONSTRUCTION;
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(4)] The dates construction is estimated to commence and be completed. [(ORDINARILY A
MAXIMUM OF TWO (2) YEARS)] Construction must be completed within two (2) years
except in special circumstances, that require a longer period of time and which must be approved
by the City Council; and
([5]4) [WHETHER INTENDED USE COMPLIES WITH THE ZONING ORDINANCE AND
COMPREHENSIVE PLAN OF THE CITY. APPLICATIONS SHALL BECOME A PART OF
THE LEASE]A comprehensive description of the proposed business or activity intended;
(5) Whether the applicant requests a lease with an option to purchase; and
(6) How the proposed lease meets the intent of this chapter.
(c) Applications which propose a subdivision shall require the applicant to be responsible for all
costs associated with the subdivision, including but not limited to any new appraisal, engineering
services, surveying and consulting costs, unless in the sole discretion of the City Council, it is
determined that the subdivision serves other City purposes.
(1) If the Council determines that other City purposes are served by the subdivision, the City
Council may choose in its sole discretion to share in the subdivision costs with the applicant in
an amount the City Council determines is reasonable given the benefit to the City.
(2) If the Council does not make a determination that other City purposes are served by the
subdivision, the applicant must submit a deposit to cover the estimated costs associated with the
subdivision.
(3) If the City enters into a lease with the applicant, any unused balance of the deposit made to
cover costs associated with subdivision will apply to the rent payable under the lease.
(4) If the City’s costs exceed the amount of any deposit made to cover costs associated with
subdivision, the applicant must pay the shortage to the City as a condition of the lease.
(5) If the application is rejected or if the applicant withdraws the application or fails to sign a
lease offered to the applicant, the City will return any unused deposit balance to the applicant.
(d) Applications for lands which have not been appraised within one (1) year of the requested
starting date of the lease require the applicant to be responsible for all costs associated with
appraisal. The cost of the appraisal shall be credited or refunded to the lessee once development
is completed as required by the lease, extension or renewal.
(e) Applications which result in a lease agreement with the City require the lessee to be
responsible for all recording costs and any other fees associated with execution of the lease
including a preliminary commitment for title insurance and fifty percent (50%) of the required
costs associated with a sale of leased land in which the lease contains an option to purchase once
the minimum development requirements have been met.
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(f) Anytime during the processing of a lease application, the City may request, and the applicant
must supply, any clarification or additional information that the City reasonably determines is
necessary for the City to make a final decision on the application.
[22.05.030 FILING FEE AND DEPOSIT.
(A) WHEN SUBMITTING AN APPLICATION FOR LEASE OF LAND, THE APPLICANT
SHALL PAY THE CITY THE FOLLOWING AS SET FORTH IN THE CITY’S SCHEDULE
OF FEES ADOPTED BY THE CITY COUNCIL:
(1) PAY A NON-REFUNDABLE FILING FEE IN THE AMOUNT; AND
(2) A DEPOSIT TO SHOW GOOD FAITH AND SECURE THE CITY IN PAYMENT OF
ANY COSTS, INCLUDING:
(A) AN APPRAISAL COST RECOVERY DEPOSIT; AND
(B) AN ENGINEERING, SURVEYING AND CONSULTING COST RECOVERY DEPOSIT.
(B) IF THE CITY DECIDES TO REJECT THE APPLICANT’S APPLICATION AND NOT
ENTER INTO A LEASE WITH THE APPLICANT THROUGH NO FAULT OF THE
APPLICANT OR FAILURE OF THE APPLICANT TO COMPLY WITH ANY
REQUIREMENT OF THIS CHAPTER, ANY DEPOSIT MADE UNDER
SUBSECTION (A)(2) OF THIS SECTION WILL BE RETURNED TO THE APPLICANT.
(C) IF THE CITY ENTERS INTO A LEASE WITH THE APPLICANT ANY DEPOSIT
MADE BY THE APPLICANT UNDER SUBSECTION (A)(2) OF THIS SECTION WILL BE
APPLIED TO THE CITY’S ENGINEERING, APPRAISAL, AND CONSULTING COSTS
RELATED TO THE PROCESSING OF THE APPLICANT’S APPLICATION AND
ENTERING INTO THE LEASE. THE CITY WILL APPLY ANY UNUSED BALANCE OF A
DEPOSIT TO THE RENT PAYABLE UNDER THE LEASE. IF THE CITY’S COSTS
EXCEED THE AMOUNT OF ANY DEPOSIT, THE APPLICANT SHALL PAY THE
SHORTAGE TO THE CITY AS A CONDITION OF THE LEASE.
(D) IF THE APPLICANT FAILS TO COMPLY WITH ANY REQUIREMENT OF THIS
CHAPTER, CAUSES INORDINATE DELAY, AS DETERMINED BY THE CITY
MANAGER, OR REFUSES TO SIGN A LEASE OFFERED TO THE APPLICANT, THE
CITY MANAGER WILL REJECT THE APPLICANT’S APPLICATION AND APPLY ANY
DEPOSIT MADE BY THE APPLICANT UNDER SUBSECTION (A) OF THIS SECTION TO
THE CITY’S APPRAISAL, ENGINEERING, AND CONSULTING COSTS INCURRED IN
CONNECTION WITH THE APPLICANT’S APPLICATION. IF THE CITY’S COSTS FOR
APPRAISAL, ENGINEERING AND CONSULTING COSTS EXCEED THE DEPOSITS, THE
APPLICANT WILL BE RESPONSIBLE FOR THESE COSTS. THE CITY WILL RETURN
ANY UNUSED DEPOSIT BALANCE TO THE APPLICANT.]
22.05.035 [RIGHTS PRIOR TO LEASING.]No Right of Occupancy – Lease Application
Expiration.
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(a) Submitting [THE FILING OF] an application for a lease [SHALL] does not give the
applicant [NO]a right to lease or [TO THE]use [OF THE]City-owned land[ FOR WHICH THEY
HAVE APPLIED].
(b) The application shall expire upon execution of a lease or rejection of a lease application by
the City Council or within twelve (12) months after the date the application has been [MADE]
submitted [IF A LEASE HAS NOT BEEN ENTERED INTO BETWEEN THE CITY AND
THE APPLICANT BY THAT TIME UNLESS THE CITY COUNCIL FOR GOOD CAUSE
GRANTS AN EXTENSION. NO EXTENSION MAY BE GRANTED FOR A PERIOD
LONGER THAN SIX (6) MONTHS. LEASE RATES ARE SUBJECT TO CHANGE ON THE
BASIS OF AN APPRAISAL DONE EVERY TWELVE (12) MONTHS ON THE PROPERTY
APPLIED FOR].
22.05.040 [PROCESSING PROCEDURE] Lease Application Review.
(a) Applications shall be [FORWARDED]reviewed by City staff for application completeness
and conformance with City ordinances.
(b) Based on the initial review, if the City Manager determines the application is complete, the
application shall be referred to the Planning and Zoning Commission and any other applicable
commissions [UPON RECEIPT]for review and comment, together with the City Manager’s
recommendation for approval or rejection. [THE PLANNING AND ZONING COMMISSION
SHALL NORMALLY CONSIDER APPLICATIONS FOR SPECIFIC LANDS ON A FIRST-
COME, FIRST-SERVED BASIS IF THE COMMISSION FINDS THAT THE APPLICATION
IS COMPLETE AND CONFORMS TO THE COMPREHENSIVE PLAN AND THE KENAI
ZONING CODE. WHERE THERE IS DIFFICULTY IN OBTAINING A PERFECTED
APPLICATION, DETAILS AS TO DEVELOPMENT PLANS, ETC., OR WHERE THE
APPLICANT FAILS TO COMPLY WITH DIRECTIONS OR REQUESTS OF THE
PLANNING AND ZONING COMMISSION, ANY SUCH PRIORITY WILL BE LOST. IF AN
APPLICATION FOR THE PURCHASE OF CITY-OWNED LANDS, PREVIOUSLY
AUTHORIZED FOR SALE BY THE COUNCIL, IS RECEIVED BY THE CITY PRIOR TO
THE KENAI PLANNING AND ZONING COMMISSION MAKING AN AFFIRMATIVE OR
NEGATIVE RECOMMENDATION TO THE COUNCIL REGARDING THE LEASE
APPLICATION FOR THE SAME PROPERTY, THE CITY MAY ELECT TO SELL THE
PROPERTY IN ACCORDANCE WITH THE PROVISIONS OF THE CODE.
(B) THE CITY COUNCIL SHALL NORMALLY CONSIDER A LEASE PROPOSAL ONLY
AFTER APPROVAL OF THE PLANNING AND ZONING COMMISSION. HOWEVER,
APPEALS OF PLANNING AND ZONING COMMISSION DISAPPROVAL MAY BE MADE
TO THE CITY COUNCIL. COMPLETED LEASE APPLICATIONS MUST BE PRESENTED
TO THE CITY COUNCIL WITHIN THIRTY (30) DAYS AFTER APPROVAL BY THE
PLANNING AND ZONING COMMISSION.]
(c) Notice of complete applications for new leases, renewals or extensions shall be published in
a newspaper of general circulation within the City and posted on the property. The notice must
contain the name of the applicant, a brief description of the land, whether the applicant requests a
7
lease with an option to purchase, and the date upon which any competing applications must be
submitted (thirty (30) days from the date of publication).
[(C) WHERE THERE ARE TWO (2) OR MORE APPLICATIONS FOR THE SAME LANDS
FOR DIFFERENT USES, THEN IF THE PLANNING AND ZONING COMMISSION
MAKES A FINDING THAT A SUBSEQUENT APPLICATION WOULD RESULT IN USE
OF THE LANDS FOR A HIGHER AND BETTER PURPOSE WITH A GREATER BENEFIT
TO THE CITY OF KENAI AND THE CITIZENS THEREOF, THEN THE LEASE MAY BE
ISSUED TO SUCH APPLICANT NOTWITHSTANDING THE PROVISIONS OF
SUBSECTION (A) IN THIS SECTION WHICH PROVIDE FOR LEASING ON A FIRST-
COME, FIRST-SERVED BASIS. ANY APPLICANT MAY APPEAL TO THE CITY
COUNCIL FROM A FINDING OR A REFUSAL TO FIND BY THE PLANNING AND
ZONING COMMISSION BY FILING AN APPEAL WITH THE CITY CLERK WITHIN
SEVEN (7) DAYS AFTER THE FINDING IS MADE OR REFUSED BY THE PLANNING
AND ZONING COMMISSION.
(d) The recommendations of the City Manager, Planning and Zoning Commission, and any
other applicable commissions shall be provided to the City Council. The City Council shall
determine whether the lease is consistent with the intent of this chapter. The decision whether or
not to lease land or authorize a lease extension, renewal, amendment or assignment rests in the
sole discretion of the City Council.
(e) If the applicant is in default of any charges, fees, rents, taxes, or other sums due and payable
to the City or the applicant is in default of a requirement of any lease or contract with the City a
lease shall not be entered into until the deficiencies are remedied .
22.05.045 [REVIEW]Application for Lease Amendment, Assignment, Extension or
Renewal.
[NO LEASED LAND MAY BE CHANGED IN USE, NOR MAY ANY RENEWAL LEASE
BE ISSUED UNTIL THE PROPOSED USE OR RENEWAL HAS BEEN REVIEWED BY
THE PLANNING COMMISSION AND APPROVED BY THE COUNCIL.]
(a) A request from an existing lessee for a lease amendment, assignment, extension or renewal
of the lease must be submitted to the City on an application form provided by the City.
Applications must be complete and dated on receipt and include payment of the nonrefundable
application fee and applicable deposit as set forth in the City’s schedule of fees adopted by the
City Council.
(b) An application for an amendment must include the following information:
(1) The purpose of the proposed amendment;
(2) The proposed change in use or activity, if any;
(3) A comprehensive description of the proposed business or activity, if applicable; and
(4) How the proposed amendment meets the intent of this chapter.
8
(c) An application for a lease assignment must include the following:
(1) The name of the individual or legal entity to which the lessee requests to assign the lease.
(d) An application for a lease extension must include the following information:
(1) The use, nature, type and estimated cost of additional improvements to be constructed;
(2) The dates new construction is estimated to commence and be completed; and
(3) How the proposed lease extension meets the intent of this chapter.
(e) An application for a lease renewal must include the following information:
(1) For a lease renewal of an existing lease:
(i) The use, nature, type and estimated cost of additional investment in the construction of new
permanent improvements;
(ii) The dates new construction is estimated to commence and be completed;
(iii) If the renewal is pursuant to a transaction between the current lessee and a new buyer and
prospective lessee, the estimated purchase price of real property improvements on the premises
as certified by the current lessee and proposed purchaser in a bill of sale; and
(iv) How the proposed lease renewal meets the intent of this chapter.
(2) For a lease renewal of an expiring lease:
(i) A fair market value appraisal of the existing principal improvement on the property, paid for
by the applicant, and the estimated cost of any additional investment in the construction of
permanent improvements on the premises, if applicable;
(ii) If the renewal is pursuant to a transaction between the current lessee and a new buyer and
prospective lessee, the estimated purchase price of existing real property improvements, as
certified by the current lessee and the proposed purchaser in a bill of sale and the estimated cost
of any additional investment in the construction of permanent improvements on the premises, if
applicable;
(iii) If the renewal is based on a professional estimate of the remaining useful life of the real
property improvements on the premises, the estimated value and how it was determined;
(iv) The use, nature, type and estimated cost of any additional improvements to be constructed,
if applicable;
(v) The dates any new construction is estimated to commence and be completed; and
(vi) How the proposed lease meets the intent of this chapter.
9
(f) Applications for amendment, assignment, extension or renewal shall be processed in
accordance with the lease application review provisions of this chapter, except that applications
for assignment shall not be referred to the Planning and Zoning Commission. The City has no
obligation to amend, assign, renew or extend a lease and may decline to do so upon making
specific findings as to why a lease amendment, assignment, renewal, or extension is not in the
best interest of the City.
[22.05.050 APPRAISAL.
NO LAND SHALL BE SOLD, LEASED, OR A RENEWAL OF LEASE ISSUED, UNLESS
THE SAME HAS BEEN APPRAISED WITHIN A TWELVE (12) MONTH PERIOD PRIOR
TO THE SALE OR DATE FIXED FOR BEGINNING OF THE TERM OF THE LEASE OR
RENEWAL LEASE. NO LAND SHALL BE LEASED FOR LESS THAN THE APPROVED
APPRAISED ANNUAL RENTAL. APPRAISALS SHALL REFLECT THE NUMBER AND
VALUE OF CITY SERVICES RENDERED THE LAND IN QUESTION.]
22.05.050 Competing Lease Applications.
If another application for a new lease, extension or a renewal is received for the same property
within thirty (30) days from the notice of application publication date by a different applicant,
City staff shall process the application and forward the application, the City Manager’s
recommendation and applicable commission recommendations to the City Council for approval
of the application anticipated to best serve the interests of the City. The City Council may
approve one (1) of the applications, reject all the applications or direct the City Manager to
award a lease of the property by sealed bid. An applicant for a renewal or extension may
withdraw an application for a renewal or extension at any time prior to a decision by the City
Council whether or not to approve such a renewal or extension.
22.05.055 [TERMS]Length of [L]Lease [T]Term.
[ALL LEASES SHALL BE APPROVED BY THE CITY COUNCIL BEFORE THE SAME
SHALL BECOME EFFECTIVE. THE TERM OF ANY GIVEN LEASE SHALL DEPEND
UPON THE DURABILITY OF THE PROPOSED USE, THE AMOUNT OF INVESTMENT
IN IMPROVEMENT PROPOSED AND MADE, AND THE NATURE OF THE
IMPROVEMENT PROPOSED WITH RESPECT TO DURABILITY AND TIME REQUIRED
TO AMORTIZE THE PROPOSED INVESTMENT].
(a) The length of term for an initial lease shall be based on the amount of investment the
applicant proposes to make in the construction of new permanent improvements on the premises
as provided in the application. The City Council may offer a shorter lease term, if the City
Council makes specific findings that a shorter lease term is in the best interest of the City.
(b) The maximum term of a lease shall be determined according to the following term table and
cannot exceed forty-five (45) years:
Term Table
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Applicant’s Investment/Value Maximum Term Of
Years
$7,500 5
15,000 6
22,500 7
30,000 8
37,500 9
45,000 10
52,500 11
60,000 12
67,500 13
75,000 14
82,500 15
90,000 16
97,500 17
105,000 18
112,500 19
120,000 20
127,500 21
135,000 22
142,500 23
150,000 24
157,500 25
165,000 26
172,500 27
180,000 28
187,500 29
195,000 30
202,500 31
210,000 32
217,500 33
225,000 34
232,500 35
240,000 36
247,500 37
255,000 38
262,500 39
270,000 40
277,500 41
285,000 42
292,500 43
300,000 44
307,500 45
(c) Lease extension. The length of term for a lease extension shall be determined based on the
remaining term of the initial lease and the estimated cost of new investment the applicant
11
proposes to make in the construction of new permanent improvements on the premises according
to the term table and provided no extension shall extend a lease term past forty-five (45) years.
(d) Lease renewal for an existing lease. A renewal for an existing lease requires the construction
of new permanent improvements, and the length of term for a lease renewal for an existing lease
shall determined as follows:
(1) Based on the remaining term of the initial lease according to the term table and the estimated
cost of new investment the applicant proposes to make in the construction of new permanent
improvements on the premises according to the term table; or
(2) Pursuant to a transaction between the current lessee and a new buyer and prospective lessee
and based on the purchase price of existing real property improvements on the premises, as
certified by the current lessee and the proposed purchaser in the bill of sale, to be executed at
closing of the transaction and the estimated cost of new investment in the construction of new
permanent improvements on the premises according to the term table.
(3) The term for renewal of an existing lease cannot exceed forty-five (45) years.
(e) Lease renewal for an expiring lease. The length of term for a lease renewal of an expiring
lease shall be determined as follows:
(1) The purchase price of existing real property improvements on the premises, as certified by
the current lessee and the proposed purchaser in the bill of sale, to be executed at closing of the
transaction and the estimated cost of any new investment in the construction of new permanent
improvements on the premises according to the term table; or
(2) A professional estimate of the remaining useful life of the real property improvements on
the premises, paid for by the applicant and the estimated cost of any new investment in the
construction of new permanent improvements on the premises according to the term table; or
(3) A fair market value appraisal of the existing real property improvements on the premises,
paid for by the applicant and the estimated cost of any new investment in the construction of new
permanent improvements on the premises according to the term table.
(4) The term for renewal of an existing lease cannot exceed forty-five (45) years.
(f) If the initial lease, term extension, or lease renewal granted to the applicant requires
construction of new permanent improvements, the lease or term extension shall be subject to the
following conditions:
(1) The lessee to complete the proposed permanent improvements within two (2) years except in
special circumstances, that require a longer period of time and which must be approved by the
City Council.
(2) The lessee to provide a performance bond, deposit, personal guarantee, or other security if
the City Council determines security is necessary or prudent to ensure the applicant’s completion
of the permanent improvements required in the lease, renewal, or extension. The City Council
12
shall determine the form and amount of the security according to the best interest of the City,
after a recommendation by the City Manager considering the nature and scope of the proposed
improvements and the financial responsibility of the applicant.
(3) At no expense to the City, the lessee must obtain and keep in force during the term of the
lease, insurance of the type and limits required by the City for the activities on the premises.
(4) Within thirty (30) days after completion of the permanent improvements, the lessee shall
submit to the City written documentation that the improvements have been completed as
required. The City Manager shall make a report to the City Council of completion as soon as
reasonably practical.
(5) If the applicant shows good cause and the City Council determines the action is in the best
interest of the City, the City Council may grant an extension of the time allowed to complete
permanent improvements by resolution that is sufficient to allow for the completion of the
permanent improvements or for submission of documentation that the permanent improvements
have been completed.
(6) If, within the time required, the applicant fails to complete the required permanent
improvements, the City shall:
(i) If the application is for a new lease or lease renewal, execute the forfeiture of the
performance bond, deposit, personal guarantee, or other security posted by the applicant under
subsection (f)(2) of this section to the extent necessary to reimburse the City for all costs and
damages, including administrative and legal costs, arising from the applicant’s failure to
complete the required improvements, and/or initiate cancellation of the lease or reduce the term
of the lease to a period consistent with the portion of the improvements substantially completed
in a timely manner according to the best interests of the City.
(ii) If the application is for a lease extension, the City shall terminate the amendment extending
the term of the lease or reduce the term of the extension at the City’s sole discretion.
22.05.060 [ANNUAL MINIMUM RENTAL]Principles and Policy of Lease Rates.
(a) Annual [MINIMUM] rent[ALS] shall be computed [FROM THE APPROVED
APPRAISED]by multiplying the fair market value of the land by a lease rate percentage of eight
percent (8%) for each parcel [UTILIZING THE METHOD AS DESCRIBED IN
KMC 22.05.070 OF THIS CHAPTER.]; and
(b) The City will determine the fair market value of the land requested to be leased based on an
appraisal conducted for the City by an independent real estate appraiser certified under Alaska
State statutes and ordered by the City for the purpose of determining annual rent. The appraisal
shall be paid for by the applicant, and the cost of the appraisal shall be credited or refunded to the
lessee once development is completed as required by the lease. The fair market value of the land
will be adjusted annually based on the rate of inflation determined by the consumer price index
(CPI) to determine annual rent[.]; and
13
[(B) UPON EXECUTION OF THE LEASE, THE LANDS BECOME TAXABLE TO THE
EXTENT OF ITS LEASEHOLD INTEREST AND LESSEE SHALL PAY ALL REAL
PROPERTY TAXES LEVIED UPON SUCH LEASEHOLD INTEREST IN THESE LANDS,
AND SHALL PAY ANY SPECIAL ASSESSMENTS AND TAXES AS IF HE OR SHE WERE
THE OWNER OF THE LAND.
(C) RENT SHALL BE PAID ANNUALLY IN ADVANCE. PAYMENTS SHALL BE
PRORATED TO CONFORM TO THE CITY OF KENAI’S FISCAL YEAR BEGINNING
JULY 1ST AND ENDING JUNE 30TH. IF THE EQUIVALENT MONTHLY PAYMENT
EXCEEDS TWO HUNDRED DOLLARS ($200.00), THEN THE LESSEE SHALL HAVE
THE OPTION OF MAKING PAYMENTS ON A MONTHLY BASIS.
(D) LESSEE SHALL BE RESPONSIBLE FOR ALL SALES TAXES APPLICABLE TO ITS
OPERATIONS.]
(c) The City will conduct a land market analysis of City-owned land under lease once every ten
(10) years to determine whether a market adjustment in either fair market value of land or lease
rate percentage is justified; and
(d) If the City determines from the market analysis that a market adjustment to the lease rate
percentage is in the best interests of the City, the new lease percentage must be approved by an
ordinance and utilized to compute annual rents for the next fiscal year; and
(e) If the market analysis or extraordinary circumstances determine a fair market value
adjustment is in the best interests of the City, the City shall retain the services of an independent,
real estate appraiser certified under Alaska State statutes to determine the fair market value of all
leased land and shall use these values to compute annual rents for the next fiscal year; and
(f) The City shall adjust the annual rent of a lease by giving the lessee written notice at least
thirty (30) days prior to application of a new annual rent determination; and
(g) If a lessee disagrees with the proposed change in the fair market value of land or lease rate
percent (excluding CPI determinations, which cannot be appealed) and cannot informally resolve
the issue with the City, the lessee must:
(1) Provide notice of appeal in writing within ninety (90) days of notification supported by the
written appraisal of a qualified real estate appraiser, selected and paid for by lessee (the “second
appraiser”); and
(2) The City and the lessee will meet to attempt to resolve the differences between the first
appraiser and the second appraiser concerning the fair market value of the land or lease rate
percent; and
(3) If the City and lessee cannot agree upon the fair market value or lease rate percent then they
shall direct the first appraiser and the second appraiser to mutually select a third qualified real
estate appraiser, paid for jointly by the parties (the “third appraiser”); and
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(4) Within thirty (30) days after the third appraiser has been appointed, the third appraiser shall
decide which of the two (2) respective appraisals from the first appraiser and the second
appraiser most closely reflects the fair market value of the land or lease rate percent; and
(5) The fair market value of the land or lease rate percent shall irrefutably be presumed to be the
value(s) contained in such appraisal selected by the third appraiser, and the rent shall be
redetermined based on such value(s); and
(6) Rent shall continue to be paid at the then-applicable rate until any such new rental rate is
established, and lessee and the City shall promptly pay or refund, as the case may be, any
variance in the rent, without interest accruing to the extent to be paid/refunded.
22.05.065 [B]Lease Bidding [P]Procedure.
[AS AN EXCEPTION TO GENERAL POLICY LISTED ABOVE]With the approval of the City
Council, the [CITY COUNCIL]City Manager may designate a specific lot or lots to be [MADE
AVAILABLE ONLY FOR]leased through competitive sealed bid. The City Manager shall
award the lease to the qualified bidder utilizing a procurement procedure which may consider
qualitative factors in addition to the amount of any [AS DESIGNATED, SEALED BIDS
SHALL BE RECEIVED OFFERING A]one (1) time premium payment to be paid by the
successful bidder; provided, however, that the high bidder and the bidder’s lease proposal [IN
ADDITION TO THE ESTABLISHED LEASE RATE. HIGHEST BID, HOWEVER,]shall be
subject to all provisions of lease application review and approval [ESTABLISHED FOR ALL
OTHER LEASE APPLICATIONS]under this chapter.
[22.05.070 PRINCIPLES AND POLICY OF LEASE RATES.
(A) A FAIR RETURN TO THE GENERAL FUND IS THE POLICY OF THE CITY,
UNLESS DEVIATION FROM THAT POLICY IS IN THE BEST INTEREST OF THE CITY
AS DETERMINED BY THE CITY COUNCIL. TO ENSURE A FAIR RETURN, ALL
LEASES FOR A PERIOD IN EXCESS OF FIVE (5) YEARS SHALL INCLUDE A
REDETERMINATION CLAUSE AS OF THE FIFTH ANNIVERSARY OF THE LEASE AND
EVERY FIVE (5) YEARS THEREAFTER, AND ALL LANDS FOR LEASE SHALL BE
APPRAISED PRIOR TO LEASE AND AGAIN PRIOR TO REDETERMINATION. LEASE
RATES:
(1) SHALL BE BASED ON FAIR MARKET VALUE OF THE LAND, INCLUDING AN
APPROPRIATE CONSIDERATION OF FACILITIES AND SERVICES AVAILABLE
(PUBLIC WATER, PUBLIC SEWER, STORM SEWERS, AND OTHER PUBLIC UTILITIES)
AS DETERMINED BY A QUALIFIED INDEPENDENT APPRAISER, CONSIDERING THE
BEST USE OF THE SPECIFIED LAND; AND
(2) SHALL BE EIGHT PERCENT (8%) OF FAIR MARKET VALUE.
(B) FOR LEASES IN EXISTENCE PRIOR TO THE EFFECTIVE DATE OF THE
ORDINANCE CODIFIED IN THIS CHAPTER, THE LEASE RATE REDETERMINATION
SHALL BE AS PROVIDED IN THE LEASE.
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(C) THE CITY MANAGER SHALL CHANGE THE RENT IN A LEASE BY GIVING THE
LESSEE WRITTEN NOTICE AT LEAST THIRTY (30) DAYS IN ADVANCE OF THE
EFFECTIVE DATE OF THE CHANGE.
(D) THE “FAIR MARKET VALUE” OF THE PREMISES SHALL BE EQUAL TO THE
THEN FAIR MARKET RATE FOR SIMILAR COMMERCIAL PROPERTY IN THE CITY
OF KENAI, ALASKA (THE “RELEVANT AREA”). CITY SHALL GIVE NOTICE TO
LESSEE OF CITY’S ESTIMATION OF THE FAIR MARKET VALUE NOT LATER THAN
THIRTY (30) DAYS PRIOR TO THE EXPIRATION OF THE THEN-APPLICABLE FIVE (5)
YEAR PERIOD, AS EVIDENCED AND SUPPORTED BY THE WRITTEN OPINION OF AN
INDEPENDENT REAL ESTATE APPRAISER CERTIFIED UNDER ALASKA STATUTE
8.87, SELECTED AND PAID FOR BY THE CITY, FAMILIAR WITH THE RELEVANT
AREA (THE “FIRST APPRAISER”). IF LESSEE DISAGREES WITH SUCH ESTIMATE, IT
SHALL ADVISE THE CITY IN WRITING THEREOF WITHIN THIRTY (30) DAYS OF
LESSEE’S RECEIPT OF SUCH ESTIMATE, AS EVIDENCED AND SUPPORTED BY THE
WRITTEN OPINION OF A REAL ESTATE APPRAISER CERTIFIED UNDER ALASKA
STATUTE 8.87 (SELECTED AND PAID FOR BY LESSEE) FAMILIAR WITH THE
RELEVANT AREA (THE “SECOND APPRAISER”). THE PARTIES SHALL PROMPTLY
MEET TO ATTEMPT TO RESOLVE THEIR DIFFERENCES BETWEEN THE FIRST
APPRAISER AND THE SECOND APPRAISER CONCERNING THE FAIR MARKET
VALUE OF THE PREMISES. IF CITY AND LESSEE CANNOT AGREE UPON SUCH
VALUE THEN, WITH ALL DELIBERATE SPEED, THEY SHALL DIRECT THE FIRST
APPRAISER AND THE SECOND APPRAISER TO EXPEDITIOUSLY AND MUTUALLY
SELECT A THIRD REAL ESTATE APPRAISER CERTIFIED UNDER ALASKA STATUTE
8.87 (SELECTED AND PAID FOR JOINTLY BY THE PARTIES) FAMILIAR WITH THE
RELEVANT AREA (THE “THIRD APPRAISER”). WITHIN THIRTY (30) DAYS AFTER
THE THIRD APPRAISER HAS BEEN APPOINTED, THE THIRD APPRAISER SHALL
DECIDE WHICH OF THE TWO (2) RESPECTIVE APPRAISALS FROM THE FIRST
APPRAISER AND THE SECOND APPRAISER MOST CLOSELY REFLECTS THE FAIR
MARKET VALUE OF THE PREMISES. THE FAIR MARKET VALUE OF THE PREMISES
SHALL IRREBUTTABLY BE PRESUMED TO BE THE VALUE CONTAINED IN SUCH
APPRAISAL SELECTED BY THE THIRD APPRAISER, AND THE RENTAL SHALL BE
REDETERMINED BASED ON SUCH VALUE. NOTWITHSTANDING ANYTHING TO
THE CONTRARY HEREIN, RENTAL SHALL CONTINUE TO BE PAID AT THE THEN-
APPLICABLE RATE UNTIL ANY SUCH NEW RENTAL RATE IS ESTABLISHED, AND
LESSEE AND CITY SHALL PROMPTLY PAY OR REFUND, AS THE CASE MAY BE,
ANY VARIANCE IN THE RENTAL, WITHOUT INTEREST THEREON ACCRUING TO
THE EXTENT TO PAID/REFUNDED IN A TIMELY FASHION.
22.05.075 REIMBURSEMENT FOR CITY-CONSTRUCTED IMPROVEMENTS.
(A) THE CITY MANAGER MAY INCLUDE IN A LEASE A REQUIREMENT FOR THE
LESSEE TO REIMBURSE THE CITY FOR THE CITY’S COST OF:
(1) LAND CLEARING, GRAVEL FILL, UTILITY EXTENSIONS AND OTHER
IMPROVEMENTS OR AMENITIES ON OR IN DIRECT CONNECTION WITH THE
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PREMISES, CONSTRUCTED BY THE CITY PRIOR TO THE EFFECTIVE DATE OF THE
LEASE; OR
(2) LAND CLEARING, GRAVEL FILL, UTILITY EXTENSIONS AND OTHER
IMPROVEMENTS OR AMENITIES ON OR IN DIRECT CONNECTION WITH THE
PREMISES, WHICH THE CITY AGREES TO CONSTRUCT AS A CONDITION OF THE
LEASE, SUBJECT TO CITY COUNCIL APPROVAL.
(B) THE LESSEE SHALL REIMBURSE THE CITY FOR THE CITY’S COST OF
CONSTRUCTING THE IMPROVEMENTS IN TEN (10) EQUAL ANNUAL PAYMENTS,
PLUS INTEREST AT EIGHT PERCENT (8%) PER YEAR ON THE UNPAID BALANCE. IF
THE LEASE IS FOR LESS THAN TEN (10) YEARS, THE REPAYMENT SCHEDULE MAY
NOT BE LONGER THAN THE TERM OF THE LEASE. THE LESSEE MAY PAY THE
ENTIRE REMAINING BALANCE TO THE CITY AT ANY TIME DURING THE TERM OF
THE LEASE.]
22.05.070 Development Incentives.
(a) The City Council may include a lease rent incentive to encourage commercial investment as
follows:
(1) A credit may be applied toward rent for a maximum of five (5) years. The credit may only
include the value of site preparation work on the leased premises to include clearing and
grubbing, unclassified excavation, classified fill and back fill, crushed aggregate base course, and
utility extensions.
(2) An estimate of the value of the work, including a scope of work, prepared by a qualified
engineer licensed to work in Alaska must be provided to the City and accepted prior to work
being performed.
(3) Any changes to the estimate of the value of the work or scope of work must be provided to
the City and accepted prior to work being performed to be eligible for the credit.
(4) For the credit to be applied, the approved scope of work must be completed.
(5) A certification from a qualified engineer that the accepted scope of work has been completed
must be provided to the City and accepted at the completion of the site preparation work.
(6) Credit will be limited to original qualified engineer’s estimate unless another amount is
accepted by the City in advance of work being completed.
(7) Once the work is completed as proposed and the qualified engineer’s certification of
completion has been received, a credit shall be applied to the lease payments, prorated as
necessary for a maximum of five (5) years.
(8) Rent shall be paid at the then-applicable rate until any such credit toward rent has been
approved by the City Manager or designee, and the City shall apply a credit to lease payments
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prorated as necessary or promptly pay or refund, as the case may be, any variance between the
credit applied and the rent paid, without interest accruing to the extent to be paid/refunded.
22.05.075 Ownership of Improvements.
(a) Permanent improvements on the premises, excluding site development materials,
constructed, placed, or purchased by the lessee remain the lessee’s property as long as a lease for
the premises remains in effect with the lessee, including renewals, any period of extension
approved by the City pursuant to the provisions of this chapter, or any period of holdover.
(b) Unless otherwise provided in a land lease, at the expiration, cancellation, or termination of a
lease that is extended or followed by a successive lease, the departing lessee may do one (1) or
more of the following:
(1) Remove lessee-owned permanent improvements from the premises, remediate any
contamination for which the lessee is responsible, and restore the premises to a clean and neat
physical condition acceptable to the City within ninety (90) days after the expiration,
cancellation, or termination date of the lease; or
(2) Sell lessee-owned permanent improvements to the succeeding lessee, remove all personal
property, remediate any contamination for which the lessee is responsible, and leave the
premises in a clean and neat physical condition acceptable to the City within sixty (60) days after
notice from the City that the City has approved an application for a lease of the premises by
another person or such longer period specified in the notice, but in no event more than one
hundred eighty (180) days after the expiration, termination, or cancellation date of the lease; or
(3) Purchase the property in which the lease contains an option to purchase once the minimum
development requirements have been met for the fair market value of the land excluding
permanent improvements made by the lessee.
(c) If the lessee does not timely remove or sell the lessee-owned permanent improvements on a
premises in accordance with the requirements of this section, any remaining permanent
improvements and any remaining personal property of the departing lessee will be considered
permanently abandoned. The City may sell, lease, demolish, dispose of, remove, or retain the
abandoned property for use as the City determines is in the best interest of the City. The lessee
shall, within thirty (30) days after being billed by the City, reimburse the City for any costs
reasonably incurred by the City, including legal and administrative costs, to demolish, remove,
dispose, clear title to, or sell the abandoned property and to remediate any contamination and
restore the premises.
(d) Site development materials that a lessee places on a premises become part of the City-owned
real property and property of the City upon placement. The lessee:
(1) Must maintain the site development work and site development materials throughout the
term of the lease or successive lease, including any extensions and periods of holdover; and
(2) May not remove the site development materials unless the City approves in writing.
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22.05.080 Lease [E]Execution.
The lease applicant shall execute and return the appropriate lease agreement with the City of
Kenai within thirty (30) days of mailing the agreement to the applicant. The lease agreement
shall be prepared in accordance with the requirements of this title. Failure to execute and return
the lease agreement within the specified period shall result in the forfeiture of all leasing rights.
22.05.085 Lease [U]Utilization.
Leased lands shall be utilized for purposes within the scope of the application, the terms of the
lease and in conformity with the ordinances of the City, and in substantial conformity with the
Comprehensive Plan. Utilization or development for other than the allowed uses shall constitute
a [VIOLATION]material breach of the lease and subject the lease to cancellation at any time.
Failure to substantially complete the development plan for the land shall constitute grounds for
cancellation.
22.05.086 Form of Lease.
(a) When leasing land under this chapter, the City Manager shall use a standard lease form that:
(1) Provides a reasonable basis for the lessee’s use of the premises,
(2) Complies with the intent of this chapter, and
(3) Provides for the best interest of the City.
(4) Approved as to form by the City Attorney; and
(5) Adopted by resolution of the City Council.
(b) The City Manager may enter into a land lease that deviates from the standard form adopted
under subsection (a) of this section, if:
(1) The City Manager believes the action is in the best interest of the City;
(2) The lease is approved as to form by the City Attorney; and
(3) The lease is approved by resolution of the City Council.
22.05.087 Lease Payments.
(a) Upon execution of the lease, the land becomes taxable to the extent of the lessee’s leasehold
interest and lessee shall pay all real property taxes levied upon such leasehold interest in these
lands, and shall pay any special assessments and taxes.
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(b) Rent shall be paid annually in advance unless the lessee submits a written request to the City
to pay on a quarterly or monthly basis. The payments shall be prorated to conform to the City of
Kenai’s fiscal year beginning July 1st and ending June 30th.
(c) Lessee shall be responsible for all sales taxes due on payments under the lease.
[22.05.090 CONVEYANCE TO ENCOURAGE NEW ENTERPRISES.
NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS CHAPTER, WHERE IT IS
FOUND THAT ENCOURAGEMENT OF A NEW COMMERCIAL OR INDUSTRIAL
ENTERPRISE WOULD BE BENEFICIAL TO THE CITY OF KENAI, THE CITY COUNCIL
BY ORDINANCE SO FINDING MAY DIRECT CONVEYANCE OF ONE OR MORE
PARCELS OF CITY LAND BY THE CITY MANAGER TO SUCH ENTERPRISE UPON
SUCH TERMS AS TO PRICE, CONDITIONS OF CONVEYANCE, AND WITH SUCH
CONTINGENCIES AS MAY BE SET FORTH IN THE ORDINANCE.]
22.05.095 [S]Methods of Sale or Disposal.
(a) Lands[,] to which the City of Kenai holds title which are not restricted from sale by the deed
of conveyance to the City[,] or which have been released from such restrictions[, WHICH] and
that the City Council has determined are not required for a public purpose, may be listed for sale
by the City Manager[, EXCEPT THAT LANDS WHICH HAVE BEEN LEASED SHALL NOT
BE SOLD UNLESS THE LESSEE HAS MADE A WRITTEN REQUEST TO THE CITY TO
PLACE THE LAND FOR SALE]. The decision whether or not to sell the land rests in the sole
discretion of the City Council.
(b) [SALES OF LAND PURSUANT TO SUBSECTION (A) OF THIS SECTION SHALL BE
MADE AT NOT LESS THAN FAIR MARKET VALUE. THE PURCHASER SHALL
EXECUTE THE “AGREEMENT FOR SALE OF LAND” WITHIN ONE (1) YEAR OF THE
DATE OF APPRAISAL. ]The City Council may by ordinance authorize the City Manager [HAS
THE OPTION ]to dispose of such properties in accordance with [THE SALE PROCEDURES
SET OUT IN THIS TITLE]the intent of this chapter as follows:
(1) [BY NEGOTIATED SALE; OR]Non-competitive process:
(i) Conveyance to encourage new enterprises where it is found that encouragement of a new
commercial or industrial enterprise would be beneficial to the City of Kenai, one or more parcels
of City land may be sold upon such terms as to price, conditions of conveyance, and with such
contingencies as may be set forth in the ordinance.
(ii) Property sale to adjacent owners for the conveyance of a parcel of City property at fair
market value to the owner of adjacent land whenever, in the judgment of the City Council, the
parcel of land is of such small size, shape, or location that it could not be put to practical use by
any other party.
(iii) Grant or devotion of real property to the United States, the State of Alaska, a local political
subdivision of the State of Alaska, or any agency of any of these governments or a non-profit
20
corporation, for a consideration agreed upon between the City and grantee without a public sale
if the grant, devotion or lease is advantageous to the City.
(iv) Conveyance of land to resolve a land use conflict.
(2) [BY]Competitive process:
(i) Public outcry auction to the highest responsible bidder[; OR].
[(3) BY COMPETITIVE S](ii) Sealed bid[s] to the highest responsible bidder.
(iii) Over-the-Counter sale after a public outcry auction or sealed bid process on a first-come
basis, provided minimum development requirements are met within two (2) years of sale and the
land is sold for fair market value. An appraisal to determine fair market value must be completed
within a one (1) year period prior to the date of sale.
(iv) Leased land in which the lease was subject to competition through the lease application
review process and which contains an option to purchase once the minimum development
requirements have been met for the fair market value of the land excluding permanent
improvements made by the lessee. An appraisal to determine fair market value must be
completed within a one (1) year period prior to the sale.
(3) Property exchange: Property exchanges for the conveyance and exchange of a parcel of
City-owned property for property owned by another individual or legal entity subject to such
conditions as Council may impose on the exchange, whenever the City Council makes findings it
is advantageous to the City to make the property exchange.
[IN THE EVENT THAT THE SALE IS NOT CLOSED WITHIN SIX (6) MONTHS OF THE
DATE OF APPRAISAL, THE BUYER WILL BE CHARGED, UPON CLOSING, INTEREST
COMPUTED IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF THE KENAI
MUNICIPAL CODE, BASED UPON THE TOTAL SALES PRICE FOR THE NUMBER OF
DAYS PAST THE EXPIRATION OF THE SIX (6) MONTH PERIOD.]
(c) Any sale of land owned by the City of Kenai and held by it for the use or benefit of the
Kenai Municipal Airport must include in any instrument conveying title to the property
restrictions accepted by the City under the terms of the 1963 Quitclaim Deed from the United
States of America recorded at Book 27, Page 303 at the Kenai Recording District, Kenai Alaska
or any other land owned by the City and acquired with Airport funds which may include similar
restrictions. Additionally, any sale or disposal of the aforementioned lands for less than fair
market value shall require a deposit in the amount of the difference between fair market value
and the sale price to the Airport Land Sale Permanent Fund for the benefit of the Kenai
Municipal Airport.
22.05.100 Sale [P]Procedure.
(a) All requests to purchase City land must be submitted to the City on approved forms provided
by the City. Applications will be dated on receipt and payment of the nonrefundable application
21
fee and must include applicable deposit as set forth in the City’s schedule of fees adopted by the
City Council.
(b) Applications which propose a subdivision shall require the applicant to be responsible for all
costs associated with the subdivision, including but not limited to engineering services,
surveying and consulting costs, unless in the sole discretion of the City Council it is determined
the subdivision serves other City purposes.
(1) If the Council determines that other City purposes are served by the subdivision, the City
Council may choose in its sole discretion to share in the subdivision costs with the applicant in
an amount the City Council determines is reasonable given the benefit to the City.
(2) If the Council does not make a determination that other City purposes are served by the
subdivision, the applicant must submit a deposit to cover the estimated costs associated with the
subdivision.
(3) If the City enters into a sale with the applicant, any unused balance of the deposit made to
cover costs associated with subdivision will be credited toward the purchaser at closing.
(4) If the City’s costs exceed the amount of any deposit made to cover costs associated with
subdivision, the applicant must pay the shortage to the City as a condition of the sale.
(5) If the application is rejected or if the applicant withdraws the application or fails to enter into
a sale offered to the applicant, the City will return any unused deposit balance to the applicant.
(c) The City [MANAGER WILL OBTAIN SUCH AN APPRAISAL]will retain the services of
an independent, real estate appraiser certified under Alaska State statutes to determine the fair
market value for a determination of the minimum price on the land to be paid for from the
deposit made by the applicant unless such an appraisal has been obtained within one (1) year
prior to the date of sale. The cost of the appraisal will be credited toward the purchaser at
closing.
[(B) WHERE ANY PARTY, HEREINAFTER CALLED “APPLICANT,” REQUESTS THAT
A TRACT OR TRACTS OF LAND BE SOLD FOR WHICH AN APPRAISAL WILL BE
REQUIRED, WHICH WILL REQUIRE SUBDIVIDING, PLATTING, OR SURVEYING AND
STAKING, OR WHICH WILL REQUIRE ADVERTISING OR INCURRING ANY OTHER
EXPENDITURES BY THE CITY PRIOR TO SALE.
(1) NO ACTIONS IN PREPARATION FOR SALE WILL BE TAKEN BY THE CITY UNTIL
AN AGREEMENT TO PURCHASE SHALL BE PROPERLY EXECUTED AND FILED
WITH THE CITY MANAGER FOR THE PURCHASE OF SUCH LAND WITH PAYMENT
OF SUFFICIENT GOOD FAITH DEPOSIT, WHICH SHALL CONSIST OF CASH OR ITS
EQUIVALENT DEPOSITED WITH THE FINANCE OFFICER OF THE CITY OF KENAI,
AS MAY BE DETERMINED BY THE CITY MANAGER, TO COVER ALL EXPENSES OF
THE CITY AND SUCH AGREEMENT TO PURCHASE SHALL FURTHER CONTAIN THE
AGREEMENT BY APPLICANT TO PAY ANY ADDITIONAL COSTS IF SAID GOOD
FAITH DEPOSIT IS INSUFFICIENT TO PAY ALL COSTS INCURRED BY THE CITY.]
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(2)](d) If at any time during the process of preparing for sale, the applicant [GIVES NOTICE
TO THE CITY MANAGER OF WITHDRAWAL OF ]withdraws the [REQUEST]application
for sale, the City [MANAGER ]shall stop all procedures, [SHALL ]pay expenses incurred prior
to [TERMINATION OF SALE PROCEDURES ]withdrawal of the application for sale, and
[SHALL ]reimburse applicant for any [GOOD FAITH ]deposit advanced in excess of
[ALL]expenses incurred. [(]However, if another party desires the sale to proceed, files an
application [FOR SALE ]for sale, executes and files an agreement to purchase, and
[ADVANCES ]deposits sufficient funds[ THEREFOR], then the prior applicant will be
reimbursed for expenses [CHARGES ]which can be attributed to the subsequent applicant.[)
(3)](e) If all actions necessary for preparation for sale have been accomplished, and if neither
the applicant nor any other party purchases said land when first offered for sale after such
request, then all expenses incurred in preparation for the sale will be paid from the [GOOD
FAITH ]applicant’s deposit, and the balance, if any, shall be returned to the applicant. If the
[SUMS ]amount of the deposit is [ADVANCED AS GOOD FAITH DEPOSIT ARE]insufficient
to pay all of the costs, the applicant will be billed for the balance due[ AND NORMAL
COLLECTION PROCEDURES FOLLOWED].
[(4)](f) If the land [APPLIED FOR ]is sold [ON ]in a competitive public sale set in response to
such request to anyone other than the applicant, [THEN ON CLOSING OF THE SALE, ]the
[GOOD FAITH] applicant’s deposit will be refunded in total to the applicant. The City’s
expenses will be first deducted from the deposit of the successful bidder.
[(5)](g) If the land [IN QUESTION ]is sold to the applicant, [THE]any [GOOD FAITH ]deposit
advanced, after deducting the City’s expenses, will be [APPLIED ON THE PAYMENT DUE]
credited to the purchaser at closing.
[(6) IF THE LAND IN QUESTION IS TO BE SOLD BY SEALED BID AND THE
APPLICANT HAS SUBMITTED A VALID BID, BUT THE APPLICANT IS NOT THE HIGH
BIDDER, HE OR SHE MAY PURCHASE THE LAND BY TENDERING THE CITY A BID
EQUAL TO THE HIGH BID WITHIN FIVE (5) DAYS OF THE BID OPENING. IF THE
LAND SALE IS INITIATED IN ACCORDANCE WITH KMC 22.05.040[(A)], THE
APPLICANT SHALL BE DEFINED AS THAT PARTY SUBMITTING THE INITIAL LEASE
APPLICATION.]
([C]h) If the [TRACT OF ]land [PROPOSED TO BE SOLD ]is leased land in which the lease
contains an option to purchase once the minimum development requirements have been met, the
lessee may request the sale of the land at not less than the fair market value. [THE CURRENT
LESSEE OBTAINS THIS RIGHT TO REQUEST A SALE ONLY AFTER, TO THE
SATISFACTION OF THE CITY MANAGER, DEVELOPMENT HAS BEEN COMPLETED
AS DETAILED IN THE DEVELOPMENT SCHEDULE WHICH HAS BEEN
INCORPORATED INTO THE LEASE AGREEMENT. IF THERE IS NO DEVELOPMENT
SCHEDULE, THE LESSEE MAY PURCHASE THE PROPERTY IF THERE HAVE BEEN
SUBSTANTIAL IMPROVEMENTS AS DETERMINED BY THE CITY MANAGER. THE
DECISION WHETHER OR NOT TO SELL THE LAND TO THE LESSEE RESTS WITH
THE SOLD DISCRETION OF THE CITY.]
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([D]i) [IF THE TRACT OF LAND PROPOSED TO BE SOLD IS NOT LEASED LAND, OR
IS LEASED LAND WITHOUT SUBSTANTIAL IMPROVEMENTS, THEN THE TRACT OF
LAND MAY ONLY BE SOLD BY OUTCRY AUCTION OR BY COMPETITIVE SEALED
BIDS.] If the [TRACT] land is to be [PUT UP FOR SUCH ]sold through a competitive
[AUCTION OR SEALED BID SALE ]process, notice of sale and the manner in which the land
is to be sold [SHALL BE]must be posted to the extent possible to be visible from each improved
street adjacent to the property and published in a newspaper of general circulation within the
City [ONCE EACH WEEK FOR TWO (2) SUCCESSIVE WEEKS NOT LESS THAN
THIRTY (30) DAYS PRIOR TO THE DATE OF SALE; SUCH NOTICE SHALL ALSO BE
POSTED IN AT LEAST THREE (3) PUBLIC PLACES WITHIN THE CITY AT LEAST
THIRTY (30) DAYS PRIOR TO THE DATE OF SALE, AND SUCH OTHER NOTICE MAY
BE GIVEN BY SUCH OTHER MEANS AS MAY BE CONSIDERED ADVISABLE BY THE
CITY MA NAGER. SUCH]. The published notice must contain:
(1) The legal description of the land;
(2) A brief physical description of the land;
(3) The area and general location of the land;
(4) The minimum acceptable offer for the land (which shall be [ITS APPRAISED ]the fair
market value);
(5) The terms under which the land will be sold;
(6) Any limitations on the sale of the land;
(7) The time and place set for the auction or bid opening;
(8) The amount of deposit to be submitted with each bid in order to cover the City’s expenses
such as survey, appraisal, and reviews;
(9) Any other matters concerning the sale of which the City Manager believes the public should
be informed.
[(E) IF NO OFFERS ARE SUBMITTED MEETING THE MINIMUM ACCEPTABLE OFFER
(OR APPRAISED VALUATION), THE CITY MANAGER MAY NEGOTIATE FOR SALE
OF THE TRACT OR TRACTS OF LAND WITH A MODIFICATION OF PROPOSED
TERMS OR FOR LESS THAN THE APPRAISED VALUATION PROVIDED THAT NO
SUCH NEGOTIATED SALE FOR LESS THAN APPRAISED VALUE SHALL BE BINDING
UPON THE CITY UNLESS THE TERMS AND PRICE THEREIN ARE APPROVED BY
RESOLUTION OF THE CITY COUNCIL.
(F) WHERE A REAL ESTATE AGENT FURNISHES A BUYER FOR CITY LAND, THE
CLOSING AGENT SHALL BE AUTHORIZED TO PAY THE AGENT A REAL ESTATE
COMMISSION OF FIVE PERCENT (5%) OF THE PURCHASE PRICE FOR THE LAND OR
FIVE PERCENT (5%) OF THE APPRAISED FAIR MARKET VALUE OF THE LAND,
WHICHEVER IS LOWER, UNDER THE FOLLOWING TERMS AND CONDITIONS:
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(1) THE CITY MANAGER SHALL PROVIDE A NON-EXCLUSIVE LISTING OF LANDS
AVAILABLE FOR SALE.
(2) NO COMMISSION SHALL BE PAID TO AN AGENT WHERE THE AGENT IS A
PARTY, OR IN PRIVITY WITH A PARTY, TO THE SALE.
(G) CLOSING OF SALE OF CITY LANDS SHALL BE HANDLED BY A TITLE OR
ESCROW COMPANY.
(H) CONVEYANCE OF CITY LANDS SHALL BE BY QUIT CLAIM OR WARRANTY
DEED FURNISHED BY THE CITY, AND BUYERS ARE ADVISED THAT ALL SUCH
CONVEYANCES ARE SUBJECT TO ALL LIENS, ENCUMBRANCES, RESTRICTIONS,
AND COVENANTS OF RECORD AND ARE SPECIFICALLY, WITHOUT BEING LIMITED
THERETO, SUBJECT TO ANY UNRELEASED RESTRICTIONS CONTAINED IN THE
DEED OR DEEDS BY WHICH THE CITY RECEIVED TITLE TO THE LAND.]
([I]j) If a buyer desires to obtain a preliminary commitment for title insurance or title insurance
to the land, [THEN ]it shall be the responsibility of the buyer to obtain and pay for such
commitment or insurance[ AND TO PAY FOR THE SAME].
[(J) IF THE TRACT OR TRACTS OF LAND ARE SOLD UNDER TERMS BY WHICH THE
CITY IS TO ACCEPT A NOTE AS A PORTION OF THE PURCHASE PRICE, THE NOTE
AND ACCOMPANYING DEED OF TRUST MUST BE PREPARED BY AN ATTORNEY,
BUT MUST BE APPROVED BY THE CITY ATTORNEY PRIOR TO CLOSING.
(K) THE NOTE SHALL BE PLACED FOR COLLECTION WITH A BANK SELECTED BY
THE CITY MANAGER, WHICH MAY BE CHANGED FROM TIME TO TIME, AND
WHICH SHALL BE THE BANK IN WHICH CITY FUNDS ARE DEPOSITED. THE SET-UP
FEE TO INITIATE COLLECTION MAY BE NEGOTIATED AS SPECIFIED IN
KMC 22.05.100(L), AND THE BUYER SHALL PAY THE ANNUAL COLLECTION FEES
FOR SUCH BANK COLLECTION.]
([L]k) The City Manager is authorized to negotiate a division of the costs of sale [LISTED IN
KMC 22.05.100(G) (H), (I), (J)AND (K) ]to a maximum of fifty percent (50%) of the required
costs being borne by the City, provided however that no costs of sale will be paid by the City
where a sale is negotiated at a price below [APPRAISED ]the fair market value of the land.
22.05.101 No Right of Occupancy – Land Purchase Application Expiration.
(a) Submitting an application to purchase land does not give the applicant a right to purchase or
use City-owned land.
(b) The application shall expire upon closing of the sale or rejection of a land purchase
application by the City Council or within twelve (12) months after the date the application has
been submitted.
22.05.105 Terms for [F]Financing [S]Sale of City-Owned [L]Lands.
25
(a) In order to expedite and facilitate the sale of City lands, the City Manager is authorized to
accept terms for sales and may accept a note secured by a deed of trust for a portion of the
purchase price thereof, subject to the following restrictions:
(1) [IF THE SALE IS TO A LESSEE WHO HAS PLACED A LIEN FOR FINANCING UPON
THE LAND OR IMPROVEMENTS, THEN THE CITY MANAGER IS NOT AUTHORIZED
TO SELL THE LAND EXCEPT FOR TOTAL CASH PAYMENT, PROVIDED, HOWEVER,
THAT THE CITY MANAGER MAY ACCEPT A NOTE SECURED BY A DEED OF TRUST
SUBORDINATE TO THE EXISTING SECURITY INTEREST IF THE AMOUNT OF THE
NOTE THEREBY SECURED IS WITHIN THE DIFFERENCE BETWEEN THE FAIR
MARKET VALUE OF THE LAND WITH IMPROVEMENTS, AND THE SUM OF ALL
PRIOR SECURITY INTERESTS. THE SALE DOCUMENTS SHALL BE SUBJECT TO THE
SAME RESTRICTIONS CONTAINED IN THE LEASE AS THE LEASE PROVIDES AT
THE TIME OF SALE.
(2)] Except for property sold by the City subsequent to foreclosure for delinquent taxes or
assessments, prior to making a determination to accept a note and deed of trust from a
prospective purchaser, the City [MANAGER] shall [SECURE] order a preliminary commitment
for title insurance and a review of the grantee index covering the party desiring to purchase the
land [FROM THE TITLE COMPANY IN THE LOCAL RECORDING DISTRICT]at the cost of
the party requesting to purchase the land, and no credit will be advanced on such sale if there are
any delinquent liens or unpaid judgments found in the title company report until any such
judgments or liens are paid and releases therefor have been filed.
([3]2) In the event of a credit sale, terms shall be approved by the City Council in the Ordinance
approving the sale, as follows:
(i) [T]The down payment required, which shall [BE DETERMINED BY THE CITY
MANAGER, BUT SHALL ]not be less than fifteen percent (15%) of the sales price[.]; and
(ii) The length of the note; and
(iii) A fixed or variable interest rate.
[(4) THE CITY MANAGER IS NOT AUTHORIZED TO ACCEPT TERMS FOR THE SALE
OF TAX-FORECLOSED LANDS UNLESS THE DOWN PAYMENT TO BE RECEIVED
THEREUNDER, OR OTHER SUMS APPROPRIATED FOR THE PURPOSE, ARE
SUFFICIENT TO MAKE IMMEDIATE PAYMENT TO THE KENAI PENINSULA
BOROUGH AND THE FORMER RECORD OWNER OF THE SUMS WHICH ARE, OR
MAY BECOME, DUE TO THEM PURSUANT TO THE PROVISIONS OF AS 29.]
[(B) IF THE CITY MANAGER DETERMINES THAT IT IS IN THE CITY’S INTEREST TO
SELL CITY LANDS, THE SALE SHALL BE EITHER A CASH TRANSACTION OR BY A
NOTE SECURED BY A DEED OF TRUST, SUBJECT TO SUBSECTION (A) OF THIS
SECTION, AND BY NO OTHER MEANS. THE NOTE AND DEED OF TRUST SHALL
CARRY TERMS AS FOLLOWS:
26
(1) THE TERM OF SUCH NOTE MAY BE SET BY THE CITY MANAGER, BUT IT
SHALL PROVIDE FOR MONTHLY PAYMENTS AND NOT EXCEED TWENTY (20)
YEARS UNLESS A LONGER PERIOD FOR A SPECIFIC SALE OF LAND IS APPROVED
BY RESOLUTION OF THE CITY COUNCIL.
(2) SUCH NOTE SHALL BEAR INTEREST AT A RATE TO BE DETERMINED BY THE
CITY COUNCIL BY RESOLUTION.]
22.05.110 Determination as to [N]Need for [P]Public [U]Use.
(a) Whether land shall be acquired, retained, devoted, or dedicated to a public use shall be
determined by ordinance which shall contain the public use for which the property is to be
dedicated, the legal description of the property, and the address or a general description of the
property sufficient to provide the public with notice of its location. This requirement does not
apply to rights-of-way or easements dedicated through the City and Borough platting process.
(b) Whether land previously dedicated to a public use should be dedicated to a different public
use or should no longer be needed for public use shall be determined by the City Council by
ordinance, except in cases of vacation of rights-of-way or easements which may be determined
by resolution, either of which shall contain the new public use for which the property is to be
dedicated or the reason the land is no longer needed for public use, the legal description of the
property, and the address or a general description of the property sufficient to provide the public
with notice of its location.
[22.05.115 PROPERTY EXCHANGES.
THE COUNCIL MAY APPROVE, BY ORDINANCE, AFTER PUBLIC NOTICE AND AN
OPPORTUNITY FOR PUBLIC HEARING, THE CONVEYANCE AND EXCHANGE OF A
PARCEL OF CITY PROPERTY FOR PROPERTY OWNED BY ANOTHER PERSON
SUBJECT TO SUCH CONDITIONS AS COUNCIL MAY IMPOSE ON THE EXCHANGE,
WHENEVER IN THE JUDGMENT OF THE CITY COUNCIL IT IS ADVANTAGEOUS TO
THE CITY TO MAKE THE PROPERTY EXCHANGE.
22.05.120 PROPERTY SALE TO ADJACENT OWNERS.
THE COUNCIL MAY APPROVE, BY ORDINANCE, AFTER PUBLIC NOTICE AND AN
OPPORTUNITY FOR PUBLIC HEARING, THE SALE AND CONVEYANCE OF A
PARCEL OF CITY PROPERTY AT ITS APPRAISED VALUE TO THE OWNER OF
ADJACENT LAND WHENEVER, IN THE JUDGMENT OF THE CITY COUNCIL, THE
PARCEL OF LAND IS OF SUCH SMALL SIZE, SHAPE, OR LOCATION THAT IT COULD
NOT BE PUT TO PRACTICAL USE BY ANY OTHER PARTY AND, IN ADDITION
THERETO, WHERE THERE IS NO FORESEEABLE NEED OF THE LAND FOR ANY
FUTURE USE BY THE CITY.
22.05.125 GRANT OR DEVOTION.
THE COUNCIL, BY ORDINANCE, MAY WAIVE THE PROVISIONS OF THIS CHAPTER
AND LEASE, GRANT OR DEVOTE REAL PROPERTY NO LONGER NEEDED BY THE
27
CITY FOR PUBLIC PURPOSE TO THE UNITED STATES, THE STATE OF ALASKA, A
LOCAL POLITICAL SUBDIVISION OF THE STATE OF ALASKA, OR ANY AGENCY OF
ANY OF THESE GOVERNMENTS OR A NON-PROFIT CORPORATION, FOR A
CONSIDERATION AGREED UPON BETWEEN THE CITY AND GRANTEE WITHOUT A
PUBLIC SALE IF THE GRANT, DEVOTION OR LEASE IS ADVANTAGEOUS TO THE
CITY.]
22.05.130 Special Use [P]Permits.
The City Council may authorize the City Manager to grant special use permits for the temporary
use of real property owned by the City for a period not to exceed [FIVE (5)] one (1) year[S],
without appraisal of the value of the property or public auction, for any purpose compatible with
the zoning of the land, and on such terms and for such rentals as the [C]Council shall determine.
22.05.135 Acquisition of [R]Real [P]Property.
(a) The City, by authorization of the City Council, expressed in a resolution for such purpose,
may lease, purchase or acquire an interest in real property needed for a public [USE] purpose on
such terms and conditions as the Council shall determine. No purchase shall be made until a
qualified independent appraiser has appraised the property and given the Council an
[INDEPENDENT ]opinion as to the [FULL AND TRUE ]fair market value [THEREOF ]of the
land unless the Council, upon resolution so finding, determines that the public interest will not be
served by an appraisal.
[(B) BECAUSE OF THE UNIQUE VALUE OF REAL PROPERTY, THE CITY NEED NOT
ACQUIRE OR LEASE REAL PROPERTY BY COMPETITIVE BIDDING.]
(c) Rights-of-way and easements may be accepted or issued by the City Manager after approval
by the City Council for utility lines and services of all types and for necessary rights-of-way
easements. This requirement does not apply to rights-of-way or easements dedicated through the
City and Borough platting process.
Title 22
CITY-OWNED LANDS
Chapter 22.05
DISPOSITION OF CITY LANDS
22.05.05 Definitions.
When used in this chapter, the following terms shall have the meaning given below:
“Amendment” means a formal change to a lease of lands other than a lease extension or renewal.
“Annual rent” means an amount paid to the City annually according to the terms of the lease and
Kenai Municipal Code.
“Assignment” means the transfer of all interest in a lease from one person or entity to another.
“City” means the City of Kenai, its elected officials, officers, employees or agents.
“Consumer Price Index (CPI)” means the annual CPI for all urban consumers (CPI-U) for
Anchorage, Alaska.
“Existing lease” means a lease with at least one (1) year of term remaining.
“Expiring lease” means a lease with less than one (1) year of term remaining.
“Fair market value” means the most probable price which a property should bring in a competitive
and open market as determined by a qualified independent appraiser, or the value as determined
by the latest appraisal adjusted by the change in Consumer Price Index from the date of the latest
appraisal.
“Lease extension” means extending the term of an existing lease.
“Lease rate percent” means a percentage that when applied to the fair market value of land
establishes a rate of rent commensurate with rental rates prevalent in the local area as determined
by a qualified real estate appraiser.
“Lease renewal” means a new lease of property currently under an existing or expiring lease to
an existing lessee or a purchaser.
“Market analysis” means an analysis of data collected from other land leases to determine
whether a market adjustment in either fair market value or lease rate percentage reflects the
market.
“Permanent improvement” means a fixed addition or change to land that is not temporary or
portable, including a building, building addition, retaining wall, storage tank, earthwork, fill
material, gravel, and pavement, and remediation of contamination for which the applicant is not
responsible and excluding items of ordinary maintenance, such as glass replacement, painting,
roof repairs, door repairs, plumbing repairs, floor covering replacement, or pavement patching.
“Professional estimate of the remaining useful life of the principal improvement” means an
estimate of the number of remaining years that the principal improvement will be able to function
in accordance with its intended purpose prepared by a qualified real estate appraiser, engineer,
or architect licensed in Alaska.
“Qualified independent appraiser” means a general real estate appraiser certified by the State of
Alaska under AS 08.87.
“Site development materials” means materials used for preparing a lease site for building
construction or to provide a firm surface on which to operate a vehicle or aircraft, including
geotextile, fill, gravel, paving, utilities and pavement reinforcement materials.
“Site preparation work” means work on the leased premises to include clearing and grubbing,
unclassified excavation, classified fill and back fill, a crushed aggregate base course and utility
extensions.
22.05.010 Authority and Intent.
(a) The provisions of this chapter apply to City-owned real property other than lands within
the Airport Reserve as described in KMC 21.10 and the leasing of tidelands for shore fisheries.
(b) The City may sell, convey, exchange, transfer, donate, dedicate, direct, assign to use, or
otherwise dispose of City-owned real property, including property acquired, held for, or
previously devoted to a public use, only in accordance with this chapter, and, with respect to
properties acquired through foreclosure for taxes, in compliance with those terms and
provisions of AS 29 which apply to home-rule municipalities. Disposal or sale of lands shall
be made only when, in the judgment of the City Council, such lands are not or are no longer
required for a public purpose.
(c) It is the intent of this chapter to provide land policies and practices that encourage
responsible growth and development to support a thriving business, residential, recreational
and cultural community.
(d) It is not the intent of this chapter to allow for speculation on City-owned lands. All leases,
sales, and other disposals of City-owned land must meet the intent of this chapter.
(e) The provisions of this chapter shall not alter or amend the terms or rights granted under
leases existing prior to the effective date of the ordinances codified in this chapter.
22.05.015 Lands Available for Lease, Sale or Disposal.
(a) The City may lease, sell or dispose of real property not restricted from lease or sale which
the City Council has determined is not required for a public purpose by any lawful method or
mode of conveyance or grant. Any instrument requiring execution by the City shall be signed
by the City Manager and attested by the City Clerk. The form of any instrument shall be
approved by the City Attorney.
22.05.020 Qualifications of Lease Applicants or Bidders.
An applicant or bidder for a lease is qualified if the applicant or bidder:
(a) Is an individual at least eighteen (18) years of age; or
(b) Is a legal entity which is authorized to conduct business under the laws of Alaska; or
(c) Is acting as an agent for another meeting the requirements of subsection (a) or (b) of this
section and has qualified by filing with the City a proper power of attorney or a letter of
authorization creating such agency.
22.05.025 Initial Lease Application.
(a) All applications for lease of lands must be submitted to the City on an application form
provided by the City. Applications will be dated on receipt and must include payment of the
nonrefundable application fee as set forth in the City’s schedule of fees approved by the City
Council.
(b) The application form must include the following information:
(1) The purpose of the proposed lease;
(2) The use, nature, type, and estimated cost of improvements to be constructed;
(3) The dates construction is estimated to commence and be completed. Construction
must be completed within two (2) years except in special circumstances, that require a
longer period of time and which must be approved by the City Council; and
(4) A comprehensive description of the proposed business or activity intended;
(5) Whether the applicant requests a lease with an option to purchase; and
(6) How the proposed lease meets the intent of this chapter.
(c) Applications which propose a subdivision shall require the applicant to be responsible for
all costs associated with the subdivision, including but not limited to any new appraisal,
engineering services, surveying and consulting costs, unless in the sole discretion of the City
Council, it is determined that the subdivision serves other City purposes.
(1) If the Council determines that other City purposes are served by the subdivision, the
City Council may choose in its sole discretion to share in the subdivision costs with the
applicant in an amount the City Council determines is reasonable given the benefit to the
City.
(2) If the Council does not make a determination that other City purposes are served by
the subdivision, the applicant must submit a deposit to cover the estimated costs
associated with the subdivision.
(3) If the City enters into a lease with the applicant, any unused balance of the deposit
made to cover costs associated with subdivision will apply to the rent payable under the
lease.
(4) If the City’s costs exceed the amount of any deposit made to cover costs associated
with subdivision, the applicant must pay the shortage to the City as a condition of the
lease.
(5) If the application is rejected or if the applicant withdraws the application or fails to sign
a lease offered to the applicant, the City will return any unused deposit balance to the
applicant.
(d) Applications for lands which have not been appraised within one (1) year of the requested
starting date of the lease require the applicant to be responsible for all costs associated with
appraisal. The cost of the appraisal shall be credited or refunded to the lessee once
development is completed as required by the lease, extension or renewal.
(e) Applications which result in a lease agreement with the City require the lessee to be
responsible for all recording costs and any other fees associated with execution of the lease
including a preliminary commitment for title insurance and fifty percent (50%) of the required
costs associated with a sale of leased land in which the lease contains an option to purchase
once the minimum development requirements have been met.
(f) Anytime during the processing of a lease application, the City may request, and the
applicant must supply, any clarification or additional information that the City reasonably
determines is necessary for the City to make a final decision on the application.
22.05.035 No Right of Occupancy – Lease Application Expiration.
(a) Submitting an application for a lease does not give the applicant a right to lease or use
City-owned land.
(b) The application shall expire upon execution of a lease or rejection of a lease application
by the City Council or within twelve (12) months after the date the application has been
submitted
22.05.040 Lease Application Review.
(a) Applications shall be reviewed by City staff for application completeness and conformance
with City ordinances.
(b) Based on the initial review, if the City Manager determines the application is complete,
the application shall be referred to the Planning and Zoning Commission and any other
applicable commissions for review and comment, together with the City Manager’s
recommendation for approval or rejection.
(c) Notice of complete applications for new leases, renewals or extensions shall be published
in a newspaper of general circulation within the City and posted on the property. The notice
must contain the name of the applicant, a brief description of the land, whether the applicant
requests a lease with an option to purchase, and the date upon which any competing
applications must be submitted (thirty (30) days from the date of publication).
(d) The recommendations of the City Manager, Planning and Zoning Commission, and any
other applicable commissions shall be provided to the City Council. The City Council shall
determine whether the lease is consistent with the intent of this chapter. The decision whether
or not to lease land or authorize a lease extension, renewal, amendment or assignment rests
in the sole discretion of the City Council.
(e) If the applicant is in default of any charges, fees, rents, taxes, or other sums due and
payable to the City or the applicant is in default of a requirement of any lease or contract with
the City a lease shall not be entered into until the deficiencies are remedied .
22.05.045 Application for Lease Amendment, Assignment, Extension or Renewal.
(a) A request from an existing lessee for a lease amendment, assignment, extension or
renewal of the lease must be submitted to the City on an application form provided by the City.
Applications must be complete and dated on receipt and include payment of the
nonrefundable application fee and applicable deposit as set forth in the City’s schedule of fees
adopted by the City Council.
(b) An application for an amendment must include the following information:
(1) The purpose of the proposed amendment;
(2) The proposed change in use or activity, if any;
(3) A comprehensive description of the proposed business or activity, if applicable; and
(4) How the proposed amendment meets the intent of this chapter.
(c) An application for a lease assignment must include the following:
(1) The name of the individual or legal entity to which the lessee requests to assign the
lease.
(d) An application for a lease extension must include the following information:
(1) The use, nature, type and estimated cost of additional improvements to be
constructed;
(2) The dates new construction is estimated to commence and be completed; and
(3) How the proposed lease extension meets the intent of this chapter.
(e) An application for a lease renewal must include the following information:
(1) For a lease renewal of an existing lease:
(i) The use, nature, type and estimated cost of additional investment in the
construction of new permanent improvements;
(ii) The dates new construction is estimated to commence and be completed;
(iii) If the renewal is pursuant to a transaction between the current lessee and a new
buyer and prospective lessee, the estimated purchase price of real property
improvements on the premises as certified by the current lessee and proposed
purchaser in a bill of sale; and
(iv) How the proposed lease renewal meets the intent of this chapter.
(2) For a lease renewal of an expiring lease:
(i) A fair market value appraisal of the existing principal improvement on the property,
paid for by the applicant, and the estimated cost of any additional investment in the
construction of permanent improvements on the premises, if applicable;
(ii) If the renewal is pursuant to a transaction between the current lessee and a new
buyer and prospective lessee, the estimated purchase price of existing real property
improvements, as certified by the current lessee and the proposed purchaser in a bill
of sale and the estimated cost of any additional investment in the construction of
permanent improvements on the premises, if applicable;
(iii) If the renewal is based on a professional estimate of the remaining useful life of
the real property improvements on the premises, the estimated value and how it was
determined;
(iv) The use, nature, type and estimated cost of any additional improvements to be
constructed, if applicable;
(v) The dates any new construction is estimated to commence and be completed; and
(vi) How the proposed lease meets the intent of this chapter.
(f) Applications for amendment, assignment, extension or renewal shall be processed in
accordance with the lease application review provisions of this chapter, except that
applications for assignment shall not be referred to the Planning and Zoning Commission. The
City has no obligation to amend, assign, renew or extend a lease and may decline to do so
upon making specific findings as to why a lease amendment, assignment, renewal, or
extension is not in the best interest of the City.
22.05.050 Competing Lease Applications.
If another application for a new lease, extension or a renewal is received for the same property
within thirty (30) days from the notice of application publication date by a different applicant, City
staff shall process the application and forward the application, the City Manager’s
recommendation and applicable commission recommendations to the City Council for approval
of the application anticipated to best serve the interests of the City. The City Council may approve
one (1) of the applications, reject all the applications or direct the City Manager to award a lease
of the property by sealed bid. An applicant for a renewal or extension may withdraw an application
for a renewal or extension at any time prior to a decision by the City Council whether or not to
approve such a renewal or extension.
22.05.055 Length of Lease Term.
(a) The length of term for an initial lease shall be based on the amount of investment the
applicant proposes to make in the construction of new permanent improvements on the premises
as provided in the application. The City Council may offer a shorter lease term, if the City Council
makes specific findings that a shorter lease term is in the best interest of the City.
(b) The maximum term of a lease shall be determined according to the following term table and
cannot exceed forty-five (45) years:
Term Table
APPLICANT’S INVESTMENT/VALUE MAXIMUM TERM OF
YEARS
$7,500 5
15,000 6
22,500 7
30,000 8
37,500 9
45,000 10
52,500 11
60,000 12
67,500 13
75,000 14
82,500 15
90,000 16
97,500 17
105,000 18
112,500 19
120,000 20
127,500 21
135,000 22
142,500 23
150,000 24
157,500 25
165,000 26
172,500 27
180,000 28
187,500 29
195,000 30
202,500 31
210,000 32
217,500 33
225,000 34
232,500 35
240,000 36
247,500 37
255,000 38
262,500 39
270,000 40
277,500 41
285,000 42
292,500 43
300,000 44
307,500 45
(c) Lease extension. The length of term for a lease extension shall be determined based on
the remaining term of the initial lease and the estimated cost of new investment the applicant
proposes to make in the construction of new permanent improvements on the premises
according to the term table and provided no extension shall extend a lease term past forty-
five (45) years.
(d) Lease renewal for an existing lease. A renewal for an existing lease requires the
construction of new permanent improvements, and the length of term for a lease renewal for
an existing lease shall be determined as follows:
(1) Based on the remaining term of the initial lease according to the term table and the
estimated cost of new investment the applicant proposes to make in the construction of
new permanent improvements on the premises according to the term table; or
(2) Pursuant to a transaction between the current lessee and a new buyer and prospective
lessee and based on the purchase price of existing real property improvements on the
premises, as certified by the current lessee and the proposed purchaser in the bill of sale,
to be executed at closing of the transaction and the estimated cost of new investment in
the construction of new permanent improvements on the premises according to the term
table.
(3) The term for renewal of an existing lease cannot exceed forty-five (45) years.
(e) Lease renewal for an expiring lease. The length of term for a lease renewal of an expiring
lease shall be determined as follows:
(1) The purchase price of existing real property improvements on the premises, as
certified by the current lessee and the proposed purchaser in the bill of sale, to be
executed at closing of the transaction and the estimated cost of any new investment in the
construction of new permanent improvements on the premises according to the term table;
or
(2) A professional estimate of the remaining useful life of the real property improvements
on the premises, paid for by the applicant and the estimated cost of any new investment
in the construction of new permanent improvements on the premises according to the term
table; or
(3) A fair market value appraisal of the existing real property improvements on the
premises, paid for by the applicant and the estimated cost of any new investment in the
construction of new permanent improvements on the premises according to the term table.
(4) The term for renewal of an existing lease cannot exceed forty-five (45) years.
(f) If the initial lease, term extension, or lease renewal granted to the applicant requires
construction of new permanent improvements, the lease or term extension shall be subject to
the following conditions:
(1) The lessee to complete the proposed permanent improvements within two (2) years
except in special circumstances, that require a longer period of time and which must be
approved by the City Council.
(2) The lessee to provide a performance bond, deposit, personal guarantee, or other
security if the City Council determines security is necessary or prudent to ensure the
applicant’s completion of the permanent improvements required in the lease, renewal, or
extension. The City Council shall determine the form and amount of the security according
to the best interest of the City, after a recommendation by the City Manager considering
the nature and scope of the proposed improvements and the financial responsibility of the
applicant.
(3) At no expense to the City, the lessee must obtain and keep in force during the term of
the lease, insurance of the type and limits required by the City for the activities on the
premises.
(4) Within thirty (30) days after completion of the permanent improvements, the lessee
shall submit to the City written documentation that the improvements have been
completed as required. The City Manager shall make a report to the City Council of
completion as soon as reasonably practical.
(5) If the applicant shows good cause and the City Council determines the action is in the
best interest of the City, the City Council may grant an extension of the time allowed to
complete permanent improvements by resolution that is sufficient to allow for the
completion of the permanent improvements or for submission of documentation that the
permanent improvements have been completed.
(6) If, within the time required, the applicant fails to complete the required permanent
improvements, the City shall:
(i) If the application is for a new lease or lease renewal, execute the forfeiture of the
performance bond, deposit, personal guarantee, or other security posted by the
applicant under subsection (f)(2) of this section to the extent necessary to reimburse
the City for all costs and damages, including administrative and legal costs, arising
from the applicant’s failure to complete the required improvements, and/or initiate
cancellation of the lease or reduce the term of the lease to a period consistent with the
portion of the improvements substantially completed in a timely manner according to
the best interests of the City.
(ii) If the application is for a lease extension, the City shall terminate the amendment
extending the term of the lease or reduce the term of the extension at the City’s sole
discretion.
22.05.060 Principles and Policy of Lease Rates.
(a) Annual rent shall be computed by multiplying the fair market value of the land by a lease
rate percentage of eight percent (8%) for each parcel; and
(b) The City will determine the fair market value of the land requested to be leased based on
an appraisal conducted for the City by an independent real estate appraiser certified under
Alaska State statutes and ordered by the City for the purpose of determining annual rent. The
appraisal shall be paid for by the applicant, and the cost of the appraisal shall be credited or
refunded to the lessee once development is completed as required by the lease. The fair
market value of the land will be adjusted annually based on the rate of inflation determined by
the consumer price index (CPI) to determine annual rent; and
(c) The City will conduct a land market analysis of City-owned land under lease once every
ten (10) years to determine whether a market adjustment in either fair market value of land or
lease rate percentage is justified; and
(d) If the City determines from the market analysis that a market adjustment to the lease rate
percentage is in the best interests of the City, the new lease percentage must be approved by
an ordinance and utilized to compute annual rents for the next fiscal year; and
(e) If the market analysis or extraordinary circumstances determine a fair market value
adjustment is in the best interests of the City, the City shall retain the services of an
independent, real estate appraiser certified under Alaska State statutes to determine the fair
market value of all leased land and shall use these values to compute annual rents for the
next fiscal year; and
(f) The City shall adjust the annual rent of a lease by giving the lessee written notice at least
thirty (30) days prior to application of a new annual rent determination; and
(g) If a lessee disagrees with the proposed change in the fair market value of land or lease
rate percent (excluding CPI determinations, which cannot be appealed) and cannot informally
resolve the issue with the City, the lessee must:
(1) Provide notice of appeal in writing within ninety (90) days of notification supported by
the written appraisal of a qualified real estate appraiser, selected and paid for by lessee
(the “second appraiser”); and
(2) The City and the lessee will meet to attempt to resolve the differences between the
first appraiser and the second appraiser concerning the fair market value of the land or
lease rate percent; and
(3) If the City and lessee cannot agree upon the fair market value or lease rate percent
then they shall direct the first appraiser and the second appraiser to mutually select a third
qualified real estate appraiser, paid for jointly by the parties (the “third appraiser”); and
(4) Within thirty (30) days after the third appraiser has been appointed, the third appraiser
shall decide which of the two (2) respective appraisals from the first appraiser and the
second appraiser most closely reflects the fair market value of the land or lease rate
percent; and
(5) The fair market value of the land or lease rate percent shall irrefutably be presumed
to be the value(s) contained in such appraisal selected by the third appraiser, and the rent
shall be redetermined based on such value(s); and
(6) Rent shall continue to be paid at the then-applicable rate until any such new rental
rate is established, and lessee and the City shall promptly pay or refund, as the case may
be, any variance in the rent, without interest accruing to the extent to be paid/refunded.
22.05.065 Lease Bidding Procedure.
With the approval of the City Council, the City Manager may designate a specific lot or lots to be
leased through competitive sealed bid. The City Manager shall award the lease to the qualified
bidder utilizing a procurement procedure which may consider qualitative factors in addition to the
amount of any one (1) time premium payment to be paid by the successful bidder; provided,
however, that the high bidder and the bidder’s lease proposal shall be subject to all provisions of
lease application review and approval under this chapter.
22.05.070 Development Incentives.
(a) The City Council may include a lease rent incentive to encourage commercial investment
as follows:
(1) A credit may be applied toward rent for a maximum of five (5) years. The credit may
only include the value of site preparation work on the leased premises to include clearing
and grubbing, unclassified excavation, classified fill and back fill, crushed aggregate base
course, and utility extensions.
(2) An estimate of the value of the work, including a scope of work, prepared by a qualified
engineer licensed to work in Alaska must be provided to the City and accepted prior to
work being performed.
(3) Any changes to the estimate of the value of the work or scope of work must be
provided to the City and accepted prior to work being performed to be eligible for the credit.
(4) For the credit to be applied, the approved scope of work must be completed.
(5) A certification from a qualified engineer that the accepted scope of work has been
completed must be provided to the City and accepted at the completion of the site
preparation work.
(6) Credit will be limited to original qualified engineer’s estimate unless another amount
is accepted by the City in advance of work being completed.
(7) Once the work is completed as proposed and the qualified engineer’s certification of
completion has been received, a credit shall be applied to the lease payments, prorated
as necessary for a maximum of five (5) years.
(8) Rent shall be paid at the then-applicable rate until any such credit toward rent has
been approved by the City Manager or designee, and the City shall apply a credit to lease
payments prorated as necessary or promptly pay or refund, as the case may be, any
variance between the credit applied and the rent paid, without interest accruing to the
extent to be paid/refunded.
22.05.075 Ownership of Improvements.
(a) Permanent improvements on the premises, excluding site development materials,
constructed, placed, or purchased by the lessee remain the lessee’s property as long as a
lease for the premises remains in effect with the lessee, including renewals, any period of
extension approved by the City pursuant to the provisions of this chapter, or any period of
holdover.
(b) Unless otherwise provided in a land lease, at the expiration, cancellation, or termination
of a lease that is extended or followed by a successive lease, the departing lessee may do
one (1) or more of the following:
(1) Remove lessee-owned permanent improvements from the premises, remediate any
contamination for which the lessee is responsible, and restore the premises to a clean and
neat physical condition acceptable to the City within ninety (90) days after the expiration,
cancellation, or termination date of the lease; or
(2) Sell lessee-owned permanent improvements to the succeeding lessee, remove all
personal property, remediate any contamination for which the lessee is responsible, and
leave the premises in a clean and neat physical condition acceptable to the City within
sixty (60) days after notice from the City that the City has approved an application for a
lease of the premises by another person or such longer period specified in the notice, but
in no event more than one hundred eighty (180) days after the expiration, termination, or
cancellation date of the lease; or
(3) Purchase the property in which the lease contains an option to purchase once the
minimum development requirements have been met for the fair market value of the land
excluding permanent improvements made by the lessee.
(c) If the lessee does not timely remove or sell the lessee-owned permanent improvements
on a premises in accordance with the requirements of this section, any remaining permanent
improvements and any remaining personal property of the departing lessee will be considered
permanently abandoned. The City may sell, lease, demolish, dispose of, remove, or retain the
abandoned property for use as the City determines is in the best interest of the City. The
lessee shall, within thirty (30) days after being billed by the City, reimburse the City for any
costs reasonably incurred by the City, including legal and administrative costs, to demolish,
remove, dispose, clear title to, or sell the abandoned property and to remediate any
contamination and restore the premises.
(d) Site development materials that a lessee places on a premises become part of the City-
owned real property and property of the City upon placement. The lessee:
(1) Must maintain the site development work and site development materials throughout
the term of the lease or successive lease, including any extensions and periods of
holdover; and
(2) May not remove the site development materials unless the City approves in writing.
22.05.080 Lease Execution.
The lease applicant shall execute and return the appropriate lease agreement with the City of
Kenai within thirty (30) days of mailing the agreement to the applicant. The lease agreement shall
be prepared in accordance with the requirements of this title. Failure to execute and return the
lease agreement within the specified period shall result in the forfeiture of all leasing rights.
22.05.085 Lease Utilization.
Leased lands shall be utilized for purposes within the scope of the application, the terms of the
lease and in conformity with the ordinances of the City, and in substantial conformity with the
Comprehensive Plan. Utilization or development for other than the allowed uses shall constitute
a material breach of the lease and subject the lease to cancellation at any time. Failure to
substantially complete the development plan for the land shall constitute grounds for cancellation.
22.05.086 Form of Lease.
(a) When leasing land under this chapter, the City Manager shall use a standard lease form
that:
(1) Provides a reasonable basis for the lessee’s use of the premises,
(2) Complies with the intent of this chapter, and
(3) Provides for the best interest of the City.
(4) Approved as to form by the City Attorney; and
(5) Adopted by resolution of the City Council.
(b) The City Manager may enter into a land lease that deviates from the standard form
adopted under subsection (a) of this section, if:
(1) The City Manager believes the action is in the best interest of the City;
(2) The lease is approved as to form by the City Attorney; and
(3) The lease is approved by resolution of the City Council.
22.05.087 Lease Payments.
(a) Upon execution of the lease, the land becomes taxable to the extent of the lessee’s
leasehold interest and lessee shall pay all real property taxes levied upon such leasehold
interest in these lands, and shall pay any special assessments and taxes.
(b) Rent shall be paid annually in advance unless the lessee submits a written request to the
City to pay on a quarterly or monthly basis. The payments shall be prorated to conform to the
City of Kenai’s fiscal year beginning July 1st and ending June 30th.
(c) Lessee shall be responsible for all sales taxes due on payments under the lease.
22.05.095 Methods of Sale or Disposal.
(a) Lands to which the City of Kenai holds title which are not restricted from sale by the deed
of conveyance to the City or which have been released from such restrictions and that the
City Council has determined are not required for a public purpose, may be listed for sale by
the City Manager. The decision whether or not to sell the land rests in the sole discretion of
the City Council.
(b) The City Council may by ordinance authorize the City Manager to dispose of such
properties in accordance with the intent of this chapter as follows:
(1) Non-competitive process:
(i) Conveyance to encourage new enterprises where it is found that encouragement
of a new commercial or industrial enterprise would be beneficial to the City of Kenai,
one or more parcels of City land may be sold upon such terms as to price, conditions
of conveyance, and with such contingencies as may be set forth in the ordinance.
(ii) Property sale to adjacent owners for the conveyance of a parcel of City property
at fair market value to the owner of adjacent land whenever, in the judgment of the
City Council, the parcel of land is of such small size, shape, or location that it could
not be put to practical use by any other party.
(iii) Grant or devotion of real property to the United States, the State of Alaska, a local
political subdivision of the State of Alaska, or any agency of any of these governments
or a non-profit corporation, for a consideration agreed upon between the City and
grantee without a public sale if the grant, devotion or lease is advantageous to the
City.
(iv) Conveyance of land to resolve a land use conflict.
(2) Competitive process:
(i) Public outcry auction to the highest responsible bidder.
(ii) Sealed bid to the highest responsible bidder.
(iii) Over-the-Counter sale after a public outcry auction or sealed bid process on a
first-come basis, provided minimum development requirements are met within two (2)
years of sale and the land is sold for fair market value. An appraisal to determine fair
market value must be completed within a one (1) year period prior to the date of sale.
(iv) Leased land in which the lease was subject to competition through the lease
application review process and which contains an option to purchase once the
minimum development requirements have been met for the fair market value of the
land excluding permanent improvements made by the lessee. An appraisal to
determine fair market value must be completed within a one (1) year period prior to
the sale.
(3) Property exchange: Property exchanges for the conveyance and exchange of a parcel
of City-owned property for property owned by another individual or legal entity subject to
such conditions as Council may impose on the exchange, whenever the City Council
makes findings it is advantageous to the City to make the property exchange.
(c) Any sale of land owned by the City of Kenai and held by it for the use or benefit of the
Kenai Municipal Airport must include in any instrument conveying title to the property
restrictions accepted by the City under the terms of the 1963 Quitclaim Deed from the United
States of America recorded at Book 27, Page 303 at the Kenai Recording District, Kenai
Alaska or any other land owned by the City and acquired with Airport funds which may include
similar restrictions. Additionally, any sale or disposal of the aforementioned lands for less than
fair market value shall require a deposit in the amount of the difference between fair market
value and the sale price to the Airport Land Sale Permanent Fund for the benefit of the Kenai
Municipal Airport.
22.05.100 Sale Procedure.
(a) All requests to purchase City land must be submitted to the City on approved forms
provided by the City. Applications will be dated on receipt and payment of the nonrefundable
application fee and must include applicable deposit as set forth in the City’s schedule of fees
adopted by the City Council.
(b) Applications which propose a subdivision shall require the applicant to be responsible for
all costs associated with the subdivision, including but not limited to engineering services,
surveying and consulting costs, unless in the sole discretion of the City Council it is determined
the subdivision serves other City purposes.
(1) If the Council determines that other City purposes are served by the subdivision, the
City Council may choose in its sole discretion to share in the subdivision costs with the
applicant in an amount the City Council determines is reasonable given the benefit to the
City.
(2) If the Council does not make a determination that other City purposes are served by
the subdivision, the applicant must submit a deposit to cover the estimated costs
associated with the subdivision.
(3) If the City enters into a sale with the applicant, any unused balance of the deposit
made to cover costs associated with subdivision will be credited toward the purchaser at
closing.
(4) If the City’s costs exceed the amount of any deposit made to cover costs associated
with subdivision, the applicant must pay the shortage to the City as a condition of the sale.
(5) If the application is rejected or if the applicant withdraws the application or fails to enter
into a sale offered to the applicant, the City will return any unused deposit balance to the
applicant.
(c) The City will retain the services of an independent, real estate appraiser certified under
Alaska State statutes to determine the fair market value for a determination of the minimum
price on the land to be paid for from the deposit made by the applicant unless such an
appraisal has been obtained within one (1) year prior to the date of sale. The cost of the
appraisal will be credited toward the purchaser at closing.
(d) If at any time during the process of preparing for sale, the applicant withdraws the
application for sale, the City shall stop all procedures, pay expenses incurred prior to
withdrawal of the application for sale, and reimburse applicant for any deposit advanced in
excess of expenses incurred. However, if another party desires the sale to proceed, files an
application for sale, executes and files an agreement to purchase, and deposits sufficient
funds, then the prior applicant will be reimbursed for expenses which can be attributed to the
subsequent applicant.
(e) If all actions necessary for preparation for sale have been accomplished, and if neither
the applicant nor any other party purchases said land when first offered for sale after such
request, then all expenses incurred in preparation for the sale will be paid from the applicant’s
deposit, and the balance, if any, shall be returned to the applicant. If the amount of the deposit
is insufficient to pay all of the costs, the applicant will be billed for the balance due.
(f) If the land is sold in a competitive public sale set in response to such request to anyone
other than the applicant, the applicant’s deposit will be refunded in total to the applicant. The
City’s expenses will be first deducted from the deposit of the successful bidder.
(g) If the land is sold to the applicant, any deposit advanced, after deducting the City’s
expenses, will be credited to the purchaser at closing.
(h) If the land is leased land in which the lease contains an option to purchase once the
minimum development requirements have been met, the lessee may request the sale of the
land at not less than the fair market value.
(i) If the land is to be sold through a competitive process, notice of sale and the manner in
which the land is to be sold must be posted to the extent possible to be visible from each
improved street adjacent to the property and published in a newspaper of general circulation
within the City. The published notice must contain:
(1) The legal description of the land;
(2) A brief physical description of the land;
(3) The area and general location of the land;
(4) The minimum acceptable offer for the land (which shall be the fair market value);
(5) The terms under which the land will be sold;
(6) Any limitations on the sale of the land;
(7) The time and place set for the auction or bid opening;
(8) The amount of deposit to be submitted with each bid in order to cover the City’s
expenses such as survey, appraisal, and reviews;
(9) Any other matters concerning the sale of which the City Manager believes the public
should be informed.
(j) If a buyer desires to obtain a preliminary commitment for title insurance or title insurance
to the land, it shall be the responsibility of the buyer to obtain and pay for such commitment
or insurance.
(k) The City Manager is authorized to negotiate a division of the costs of sale to a maximum
of fifty percent (50%) of the required costs being borne by the City, provided however that no
costs of sale will be paid by the City where a sale is negotiated at a price below the fair market
value of the land.
22.05.101 No Right of Occupancy – Land Purchase Application Expiration.
(a) Submitting an application to purchase land does not give the applicant a right to purchase
or use City-owned land.
(b) The application shall expire upon closing of the sale or rejection of a land purchase
application by the City Council or within twelve (12) months after the date the application has
been submitted.
22.05.105 Terms for Financing Sale of City-Owned Lands.
(a) In order to expedite and facilitate the sale of City lands, the City Manager is authorized to
accept terms for sales and may accept a note secured by a deed of trust for a portion of the
purchase price thereof, subject to the following restrictions:
(1) Except for property sold by the City subsequent to foreclosure for delinquent taxes or
assessments, prior to making a determination to accept a note and deed of trust from a
prospective purchaser, the City shall order a preliminary commitment for title insurance
and a review of the grantee index covering the party desiring to purchase the land at the
cost of the party requesting to purchase the land, and no credit will be advanced on such
sale if there are any delinquent liens or unpaid judgments found in the title company report
until any such judgments or liens are paid and releases therefor have been filed.
(2) In the event of a credit sale, terms shall be approved by the City Council in the
Ordinance approving the sale, as follows:
(i) The down payment required, which shall not be less than fifteen percent (15%) of
the sales price; and
(ii) The length of the note; and
(iii) A fixed or variable interest rate.
22.05.110 Determination as to Need for Public Use.
(a) Whether land shall be acquired, retained, devoted, or dedicated to a public use shall be
determined by ordinance which shall contain the public use for which the property is to be
dedicated, the legal description of the property, and the address or a general description of
the property sufficient to provide the public with notice of its location. This requirement does
not apply to rights-of-way or easements dedicated through the City and Borough platting
process.
(b) Whether land previously dedicated to a public use should be dedicated to a different public
use or should no longer be needed for public use shall be determined by the City Council by
ordinance, except in cases of vacation of rights-of-way or easements which may be
determined by resolution, either of which shall contain the new public use for which the
property is to be dedicated or the reason the land is no longer needed for public use, the legal
description of the property, and the address or a general description of the property sufficient
to provide the public with notice of its location.
22.05.130 Special Use Permits.
The City Council may authorize the City Manager to grant special use permits for the temporary
use of real property owned by the City for a period not to exceed one (1) year, without appraisal
of the value of the property or public auction, for any purpose compatible with the zoning of the
land, and on such terms and for such rentals as the Council shall determine.
22.05.135 Acquisition of Real Property.
(a) The City, by authorization of the City Council, expressed in a resolution for such purpose,
may lease, purchase or acquire an interest in real property needed for a public purpose on
such terms and conditions as the Council shall determine. No purchase shall be made until a
qualified independent appraiser has appraised the property and given the Council an opinion
as to the fair market value of the land unless the Council, upon resolution so finding,
determines that the public interest will not be served by an appraisal.
(b) Rights-of-way and easements may be accepted or issued by the City Manager after
approval by the City Council for utility lines and services of all types and for necessary rights-
of-way easements. This requirement does not apply to rights-of-way or easements dedicated
through the City and Borough platting process.
MEMORANDUM
TO: Mayor Brian Gabriel and Kenai City Council
FROM: Scott Bloom, City Attorney
DATE: March 12, 2019
SUBJECT: Ordinance No. 3072 – 2019
____________________________________________________________________________
The following amendments are intended to clarify that the City should not sell large parcels of
land when only a portion is needed for the intended use or development. For example if a parcel
is five acres and only one acre is needed for the development, the City should require a
subdivision and only sell an acre parcel to be consistent with the intent of the Chapter and
discourage land speculation. The amendments also attempt to clarify that land should only be
sold when it is in the best interest of the City, and even if someone requests a sale, it may be
more appropriate in certain cases for the City to pursue a lease with the interested party. Your
consideration is appreciated, and the following motion would be appropriate to move the
amendments:
I move to amend Section 3 or Ordinance No. 3072-2019 by amending the new section
22.05.015- Lands Available for Lease, Sale or Disposal to read:
22.05.015 Lands Available for Lease, Sale or Disposal.
(a) The City may lease, sell or dispose of real property not restricted from lease or sale which
the City Council has determined is not required for a public purpose by any lawful method or
mode of conveyance or grant. Any instrument requiring execution by the City shall be signed by
the City Manager and attested by the City Clerk. The form of any instrument shall be approved
by the City Attorney. Lands leased, sold or disposed of must be of appropriate size for the
intended development or use to meet the intent of this Chapter. Council may require a
subdivision prior to lease, sale or disposal of lands.
I move to amend Section 3 or Ordinance No. 3072-2019 by amending the new section
22.05.040- Lease Application Review, subsection (b) to read:
Page 2 of 14
Page 2 of 2
Ord. No. 3072-2019
22.05.040 Lease Application Review.
(b) Based on the initial review, if the City Manager determines the application is complete, the
application shall be referred to the Planning and Zoning Commission and any other applicable
commissions for review and comment, together with the City Manager’s recommendation for
approval or rejection. The recommendation may include a recommendation for a subdivision to
reduce or enlarge a parcel to meet the intended development or use.
I move to amend Section 3 or Ordinance No. 3072-2019 by amending the new section
22.05.100- Sale Procedure, subsections (a) and (b) to read:
22.05.100 Sale Procedure.
(a) All requests to purchase City land must be submitted to the City on approved forms provided
by the City. Applications will be dated on receipt and payment of the nonrefundable application
fee and must include applicable deposit as set forth in the City’s schedule of fees adopted by the
City Council. The City Council may decide to sell lands consistent with the intent of this Chapter
after a recommendation from the City Manager and any appropriate City commission. The City
Council may always recommend a lease as opposed to a sale when in the best interest of the City
and consistent with the intent of this Chapter.
(b) Applications which propose a subdivision shall require the applicant to be responsible for all
costs associated with the subdivision, including but not limited to engineering services,
surveying and consulting costs, unless in the sole discretion of the City Council it is determined
the subdivision serves other City purposes. Sales of parcels must be of appropriate size to meet
the needs of the proposed development or use to meet the intent of this Chapter. The sale of
excess acreage not needed for the intended development or use does not meet the intent of this
Chapter.
Page 3 of 14
New Text Underlined; [DELETED TEXT BRACKETED]
MEMORANDUM
TO: Mayor Brian Gabriel and Kenai City Council
FROM: Paul Ostrander, City Manager
DATE: August 21, 2019
SUBJECT: Ordinance No. 3072-2019 Amendment
____________________________________________________________________________
The Administration provided presentations to the Planning and Zoning Commission, Airport
Commission, and Harbor Commission on Ordinance 3072-2019. Additionally, each of the
commissions considered the ordinance at a regularly scheduled meeting. Ordinance 3072-2019
should be amended to reflect their considerations.
The sixth whereas should be amended as follows:
WHEREAS, the Planning and Zoning Commission, at its meeting of August 14, 2019,
recommended the City Council enact Ordinance No. 3072-2019; and,
The seventh whereas should be amended as follows:
WHEREAS, the Airport Commission, at its meeting of August 8, 2019, recommended the City
Council enact Ordinance No. 3072-2019, and,
The final whereas should be amended as follows:
WHEREAS, the Harbor Commission at its meeting of August 19, 2019, [RECOMMENDED THE
CITY COUNCIL] favorably discussed Ordinance No. 3072-2019 and had no recommended
amendments.
Your consideration is appreciated.
Page 4 of 14
Page 5 of 14
Page 6 of 14
MEMORANDUM
TO: Mayor Brian Gabriel and Kenai City Council
FROM: Paul Ostrander, City Manager
DATE: September 3, 2019
SUBJECT: Ordinance No. 3072-2019 – City Owned Lands
____________________________________________________________________________
Administration has presented the material in this Ordinance to Council to the Planning and Zoning
Commission and Airport Commission, and the Ordinance was referred to commissions for
recommendations prior to a public hearing. The Airport Commission meets August 8, the Harbor
Commission, August 19, and the Planning and Zoning Commission, August 14.
Administration has not received any recommended amendments from the commissions at this
time, however we recently received the following question related to the City’s land leasing code
on the Airport Reserve:
How long can a new buyer wait to renew a lease and still be able to use the purchase
price as the basis for the term of a renewal after the lease is assigned to the new buyer?
The Ordinance provides that appraisals must be completed within one year but does not include
a timeframe for the bill of sale or an estimate of remaining useful life for determining the value for
a renewal based on the term table.
Administration recommends the following amendment – amended text is in red and italicized:
22.05.045 [REVIEW]Application for Lease Amendment, Assignment, Extension or
Renewal.
(e) An application for a lease renewal must include the following information:
(1) For a lease renewal of an existing lease: (iii) If the renewal is pursuant to a
transaction between the current lessee and a new buyer and prospective lessee, the
estimated purchase price of real property improvements on the premises as certified by
the current lessee and proposed purchaser in a bill of sale dated within one (1) year of
the requested starting date of the renewal; and
Page 2 of 2
Ordinance 3072-2019
(2) For a lease renewal of an expiring lease: (ii) If the renewal is pursuant to a
transaction between the current lessee and a new buyer and prospective lessee, the
estimated purchase price of existing real property improvements, as certified by the
current lessee and the proposed purchaser in a bill of sale dated within one (1) year of
the requested starting date of the renewal and the estimated cost of any additional
investment in the construction of permanent improvements on the premises, if
applicable;
(iii) If the renewal is based on a professional estimate of the remaining useful life of the
real property improvements on the premises, the estimated value dated within one (1)
year of the requested starting date of the renewal and how it was determined;
(2) For a lease renewal of an expiring lease: (ii) If the renewal is pursuant to a
transaction between the current lessee and a new buyer and prospective lessee, the
estimated purchase price of existing real property improvements, as certified by the
current lessee and the proposed purchaser in a bill of sale dated within one (1) year of
the requested starting date of the renewal and the estimated cost of any additional
investment in the construction of permanent improvements on the premises, if
applicable;
(iii) If the renewal is based on a professional estimate of the remaining useful life of the
real property improvements on the premises, the estimated value dated within one (1)
year of the requested starting date of the renewal and how it was determined;
Your consideration is appreciated.