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HomeMy WebLinkAboutOrdinance No. 3096-2019theeifyc(, KENAI, ALASKA 'V C ITY OF KENAI ORDINANCE NO. 3096-2019 Sponsored by: Administration AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, DETERMINING THAT REAL PROPERTY DESCRIBED AS LOT ONE (1 ), ALEYESKA SUBDIVISION PART 3, ACCORDING TO PLAT NO. 1531 AND LOT ONE A (1-A), ALEYESKA SUBDIVISION PART 3, ACCORDING TO PLAT K-1531 , CITY-OWNED AIRPORT LAND LOCATED OUTSIDE THE AIRPORT RESERVE, IS NOT NEEDED FOR A PUBLIC PURPOSE AND AUTHORIZING THE SALE OF THE PROPERTY TO MITAK INC. WHEREAS, the City of Kenai received a quitclaim deed from the Federal Avia tion Administration (FAA) on December 1, 1963, to nearly 2,000 acres of land subject to certain restrictions , including a restriction that no property shall be used, leased, sold salvaged, or disposed of for reasons other than for airport purposes ; and , WHEREAS, on February 4, 1982, the FAA executed a Deed of Release, for an area of land subject to the Quitclaim Deed shown as Unit D-1 on the Airport Layout Plan that included Lot One (1), Aleyeska Subdivision Part 3, according to Plat No. 1531 and A lot One A (1-A), Aleyeska Subdivision Part 3, according to Plat K-1531, allowing a lease, sale , or disposal for nona irport purposes; and , · WHEREAS , the City has received a request to purchase Lot 1 and Lot 1-A, Aleyeska Subdivision from MITAK, Inc., the current lessee; and , WHEREAS , KMC 22 .05.015 -Disposition of City Land , Land Available for Lease , Sale Or Disposal , provides that the City may sell City-owned real property outside the Airport Reserve when in the judgement of the City Council , such lands are not required by the City for a public purpose ; and , WHEREAS , the properties are leased to MITAK, Inc. and developed for private commercial use and not needed for a public purpose ; and, WHEREAS, Resolution No. 2018-12 amended the City's Policy for sale of specific Airport Land Lots and both of these are parcels are addressed in the policy; and , WHEREAS, the sale of this property is i n the best interest of the City and Kena i Municipal Airport and encourages new development and/or improvements to the property; and , WHEREAS, KMC 22 .05.095 -Disposition of City Land , Methods of Sale or Disposa l, allows for a non-competitive sale at not less than fair market value. NOW, THEREFORE , BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA, as follows: Ordinance No. 3096-2019 Page 2 of 3 Section 1. Statement of Ownership: That the City of Kenai is the owner of Lot One ( 1 ), Aleyeska Subdivision Part 3 , according to Plat No. 1531 and A lot One A (1-A), Aleyeska Subdivision Part 3, according to Plat K-1531. Sect ion 2. Public Purpose and Best Interest Findings : That the Property is not needed for future public municipal or Airport purposes. Under the Airport Layout Plan, the Property is designated for non-aviation commercial uses. The sale of the Property is in the best interests of the City and Airport, as it serves a purpose of continuing commercial growth and investment in the City and will add to the A irport's Land Sale Permanent Fund . Section 3. Authorization of Sale: That the Kenai City Council hereby authorizes the City Manager to sell the City-owned lands described as Lot One (1 ), Aleyeska Subdivision Part 3 , accord ing to Plat No. 1531 and A lot One A (1-A), Aleyeska Subdivision Part 3, according to Plat K-1531 , under the procedures and terms established for the sale of City-owned lands outside of the Airport Reserve, as set forth in KMC 22 .05.095, Disposition of City Land , Methods of Sale or Disposal, and subject to the following additional essential terms and conditions of sale under the Policy for Sale of Specific Airport Leased Lands approved by City of Kenai Resolution No. 2018- 12: (a) The sale will be made through a negotiated sale to MITAK, Inc. for $605,000 , a value determined by an appraisal performed on the property as if vacant dated September 5, 2019 that valued Lot 1 at $535,000 and valued Lot 1-A at $70,000, and a minimum new investment in the construction of new permanent improvements on the premises equal to 25% of the fair market value of the land ($151,250) within three (3) years of sale. Section 4. Title : That title shall be conveyed by warranty deed . Any instrument conveying title to the Property shall include the following restrictions, promises , and/or covenants: (a) that the City of Kenai reserves un to that the grantee expressly agree for itself and its heirs, executors, administrators, successors, transferees , and assigns, for the use and benefit of the public a right of flight for the passage of aircraft in the airspace above the surface of the Property, together with the right to cause in said airspace such noise as may be inherent in the operation of aircraft, now known or hereafter used , for navigation of or flight in the said airspace , and for use of said airspace for landing on or at and for taking off from or operating on Kena i Municipal Airport; and , (b) that the grantee e x pressly agree for itself and its heirs, executors, administrators, successors , transferees, and assigns to restrict the height of structures, objects of natural grown , and other obstructions on the Property to a height of not more than 242 feet above mean sea level; and, (c) that the grantee expressly agree for itse lf a nd its heirs , executors , administrators , successors, transferees, and assigns to prevent any use of the Property which would interfere with landing or taking off of aircraft at the Kenai Municipal Airport, or otherwise constitute an airport hazard; and, (d) that all covenants heretofore stated shall run with the land and shall inure to the benefit of, and be binding upon the heirs, ex ecutors , administrators , successors , New Text Und erlined ; [DE LETED TEXT BRACKETED] Ordinance No . 3096-2019 Page 2 of 3 transferees, and assigns of the parties to the contract for sale and conveyance. Section 5. Proceeds of Sale : That should a sale of the Property be finalized, all revenues from the sale shall be deposited in the Airport Land Sale Permanent Fund for use in the development, improvement, and operation of the Kenai Municipal Airport and as otherwise required in the Deed of Release dated February 4, 1982. Sect ion 6. Effective Date : That pursuant to KMC 1.15.0?0(f), this ordinance shall take effect 30 days after enactment. ENACTED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA, this 4 th day of December, 2019 . ATTEST: BRIAN GABRIEL SR., MAYOR Introduced: November 6, 2019 Enacted: December 4, 2019 Effective: January 4, 2020 New Text Underlined; [DELETED TEXT BRACKETED] 'V/ff~ «1/t/r, a Pa.J'~ Ot'tf «1/t/r, a f"u.tP.l"e " 210 F idalgo Ave , Kena i, A laska 99611 -7794 Telephone : (907) 283 -7535 I Fax : (907) 2 83-301 4 www.kenai.city MEMO RA NDUM TO: THROUGH: FROM : DATE: SUBJECT: Mayor Brian Gabriel and Kenai City Council Paul Ostrander, City Manager Elizabeth Appleby, City Planner October 29, 2019 Ordinance No. 3096-2019 Author izing Sa l e of Property t o MITAK, Inc. MITAK, LLC submitted a request to purchase the above City-owned leased land outside the Airport Reserve with substantial constructed leasehold improvements pursuant to the City's Policy for Sale of Specific Airport Leased Lands, approved by Resolution No. 2018-12. Main Street Tap & Grill and the Main Street Hotel are currently operated by the lessee on these parcels . A map attached to this memorandum shows their location. MITAK, Inc. is the current lessee of Lot 1 and Lot 1-A, Aleyeska Subdivision Part 3. The lease for Lot 1 was entered into on May 5 , 1967, to be used in accordance with the zoning code for the City of Kenai. The lease for Lot 1-A was entered into on March 1, 1968, to provide a parking area behind the hotel. The leases had been transferred several times over the years before MITAK was assigned the leases in 2006. MITAK, LLC subleases the properties to Pink Coyote Limited. The 54-year and 55-year lease terms for both properties expires on June 30, 2022. MITAK, Inc. is current on obligations due to the City and the leases are in good standing. On February 4 , 1982, the Federal Aviation Administration (FAA), released the property for sale for other than airport purposes, allowing the property to be sold at fair market value . All revenues from the sale would be deposited in the Airport Land Sale Permanent Fund for use in the development, improvement, and operation of the Kenai Municipal Airport as required by the Deed of Release . The City's Policy does not provide for the sale of any specific property, but only a method for such sale, subject to the Ordinances of the City of Kenai. The pol icy is in effect until July 6, 2021. Any specific sale must be separately approved by the sole discretion of the Kenai City Council. MITAK, Inc. requests to purchase the properties at their fair ma r ket value excluding lessee-constructed improvements as determined by an appraisal and a minimum new investment in the construction Page 2 of 2 Ordinance No . 3096-2019 of new permanent improvements on the prem ises equal to 25% of the fair market value of the land within three years of sale. MITAK, Inc. submitted a good-faith deposit and the City o rdered an appraisal to be performed on the property as-if vacant. The fair market value of the properties was determined to be $605,000 in total ($535,000 for Lot 1 and $70 ,000 for Lot 1-A) by appraisals performed by Reliant, Advisory Services, LLC on September 5, 2019 . Based on the amount of the appraisal, MITAK, Inc. proposes to meet the m inimum new investment requ irement equal to $151 ,250 on the premises through an interior remodel of the hotel and restaurant building and improvements to the parking lot asphalt and landscaping. The City will verify the value of the improvements using an estimate from a licensed contractor. The permanent improvements must be completed within three (3) years of the sale . If the City Council approves the sale, City Administration may proceed with a sale. Thank you for your consideration . cc: MITAK, Inc. N W+E ~ ' ~ Map for Ordinance No. 3096-2019 04338003(Lot1-A) 04338004 (Lot 1 ), Aleyeska Subd Part3 The information depicted here on is for graphic representation only of the best available sources. The City of Kenai assumes no responsibility for errors on this map. Date: 1 0/28/2019 ''tftfltlje «1/th, a Pair~ Ot'tf «1/th a Fu.t~e" 210 FidalgoAve , Kenai , Alaska 99611-7794 Telephone : (907) 283-7535 I Fax: (907) 283-3014 www.kenai .city MEMORANDUM TO: THROUGH: FROM: DATE: SUBJECT: Mayor Brian Gabriel and Kenai City Council Paul Ostrander, City Manager Christine Cunningham, Assistant to City Manager November 25, 2019 Ordinance No. 3096 -2019 -Determining Lot 1 and Lot 1-A, Aleyeska Subdivision Part 3 is Not Needed for a Public Purpose and Authorizing Sale of Property to MITAK, Inc. MITAK, LLC submitted a request to convey title to the subject property by a special or general warranty deed . Ordinance No. 3096-2019 provides for conveyance by quitclaim deed, however the City does not have a policy for which type of property deed to use to dispose of property. The City Attorney reviewed MITAK's request and did not object to using a warranty deed as long as the buyer {MITAK, LLC} obtained and paid for title insurance. If the City Council approves of conveying title to the subject property by a warranty deed, Section 4 . of Ordinance No . 3096 -2019 would need to be amended as follows: Section 4. Title: That title shall be conveyed by [QUITCLAIM] warranty deed. Any instrument conveying title to the Property shall include the following restrictions, promises, and/or covenants : Thank you for your consideration. cc: MITAK, Inc.