HomeMy WebLinkAboutResolution No. 2020-31~ Sponsored by: Administration
Kl;NAI
CITY OF KENAI
RESOLUTION NO. 2020-31
A RESOLUTION OF THE CITY OF KENAI, ALASKA, APPROVING A CONVERSION OF A
LEASE OF AIRPORT RESERVE LANDS DESCRIBED AS LOT 4, FBO SUBDIVISION NO. 7,
WITH THE STATE OF ALASKA, DIVISION OF FORESTRY ON A NON STANDARD LEASE
FORM .
WHEREAS, in 2004, the State of Alaska, Department of Natural Resources, Division of Forestry
entered in to a lease with the City for Airport Reserve land described as Lot 4, FBO SUBDIVISION
No. 7, according to the official plat thereof, filed under Plat No. 2001-34 , Seward Meridian, Kenai
Recording District, State of Alaska; and,
WHEREAS, the 18-year lease is utilized by Division of Forestry for fire response and as a tanker
reloading base; and,
WHEREAS, Kenai Municipal Code Chapter 21.10-Leasing and Acquisition of Airport Reserve
Lands, was repealed and reenacted in 2018 to encourage growth , development and a thriving
aviation community; and,
WHEREAS, the Kenai City Council approved a new standard lease form reflecting the 2018 Code
changes to Title 21 and offered existing lessees the opportunity to request a conversion of their
leases to the new form for a time period of two years; and,
WHEREAS, the Division of Forestry would like to convert to the new lease form, but is unable to
execute the new standard lease form because of two indemnification requirements the State
asserts it may not agree to that were not included in the original lease ; and,
WHEREAS , Division of Forestry through the State of Alaska has provided a letter of self-
insurance that technically deviates from the insurance requirements in the approved lease form
and requ ires modification to the insurance terms in the standard lease form; and,
WHEREAS, Kenai Municipal Code Section 21.10.140-Form of Lease, allows for a lease form
that deviates from the standard form if the City Manager believes it is in the best interest of the
City, the lease is approved to form by the City Attorney, and the lease is approved by resolution;
and,
WHEREAS , at its regular meeting of May 14, 2020, the Airport Commission recommended the
City Council adopt this resolution .
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA:
Section 1. That the attached non-standard lease form converting the City 's lease with the
State of Alaska , Department of Natural Resources , Division of Forestry for Airport Re serve land
Resolution No . 2020-31
Page 2 of 2
described as Lot 4 , FBO SUBDIVISION No . 7 , according to the official plat thereof, filed under
Plat No. 2001-34, Seward Meridian, Kenai Recording District, State of Alaska is approved .
Section 2. That the City Manager believes the non-standard lease form is in the best interest
of the City.
Section 3 . That the City Attorney approves of the lease form.
Section 4. That this Resolution take s effect immediately upon passage .
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 20th day of May, 2020 .
BRIAN GABRIEL, SR., MAYOR
ATIEST:
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KENAI MUNICIPAL AIRPORT
CONVERSION OF LEASE OF AIRPORT RESERVE LANDS
THIS CONVERSION OF LEASE AGREEMENT is entered into between the CITY OF KENAI
(Lessor) whose address is 210 Fidalgo Avenue, Kenai, Alaska 99611 and STATE OF ALASKA,
DEPARTMENT OF NATURAL RESOURCES, DIVISION OF FORESTRY (Lessee) whose
address is 550 W. Seventh Avenue., Suite 1970, Anchorage, Alaska 99501, and converts the
Lease Agreement with the Lessor entered into on June 16, 2004 to this new Lease Form. While
the Commencement date and length of the Lease remain the same, all other terms, conditions,
rights, and obligations of this New Lease Form supersede the terms, conditions, rights, and
obligations of the prior Lease form entered into on June 16, 2004 and any amendments thereto.
This converted Lease becomes effective upon the last date of signature by the parties below.
DEFINITIONS
For the purposes of this Lease the following terms are defined in KMC 21.10.020 (effective as
of the date of execution of the lease) as follows:
1. Airport – the Kenai Municipal Airport, including all the runways, taxiways, aprons, water
lanes, water taxiways, and all City-owned real estate located within the boundaries of
the Airport Reserve as defined in KMC Chapter 21.05, Airport Administration and
Operation.
2. Airport Manager – the official to whom the City Manager of the City has delegated the
authority and responsibility of managing and directing the activities of the Airport.
“Airport Manager” includes that person’s authorized representative.
3. City – the City of Kenai, its elected officials, officers, employees or agents.
4. City Manager – the official to whom the Kenai City Council has delegated the
responsibility of managing and directing all activities of the City.
5. Contamination – the unpermitted presence of any released Hazardous Substance.
6. Environmental Law – any applicable federal, state, or local statute, law, regulation,
ordinance, code, permit, order, decision, judgment of any governmental entity relating
to environmental matters, including littering and dumping.
7. FAA – the abbreviation for the Federal Aviation Administration.
8. Hazardous Substance – any substance that is defined under an Environmental Law as
hazardous waste, Hazardous Substance, hazardous material, toxic, pollutant,
contaminant, petroleum, petroleum product, or oil.
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9. KMC – the abbreviation for the Kenai Municipal Code.
10. Permanent Improvement – a fixed addition or change to land that is not temporary or
portable, including a building, building addition, gravel fill, pavement, retaining wall,
storage tank, well, and remediation of contamination for what the lessee is not
responsible
ARTICLE I
PREMISES LEASED
A. PREMISES: In consideration of Lessee’s payment of the rents and performance of all
the covenants of this Lease, the City leases to the Lessee, and the Lessee leases from the
City, the following described property (“Premises”) in the Kenai Recording District, Third
Judicial District, State of Alaska and located on the Airport; to wit:
Lot 4, FBO SUBDIVISION NO. 7, according to the official plat thereof,
filed under Plat No. 2001-34, Seward Meridian, Kenai Recording District,
Third Judicial District, State of Alaska.
B. NO WARRANTY: Except as may be provided in this Lease, the City makes no specific
warranties, expressed or implied, concerning the condition of the Premises including, survey,
soils, wetlands, access, and suitability or profitability for any use including those authorized by
this Lease, its environmental condition, or the presence or absence of Hazardous Substances
in, on, and under the surface. The Lessee takes the Premises on an “as is” basis and without
warranty, subject to any and all of the covenants, terms, and conditions affecting the City's title
to the Premises.
ARTICLE II
RIGHTS AND USES
A. AUTHORIZED USES:
1. USE OF PREMISES: The City authorizes the Lessee to use the Premises for
the following purposes only:
Air Tanker Re-load Base for Fire Response
2. CONTINUOUS OPERATIONS: Unless the City approves otherwise in writing,
the Lessee will operate on the Premises on a continuous basis, uninterrupted
by any period of closure over 15 consecutive days. The Lessee will give the
City written notice before closing the Lessee’s business on the Premises for
more than 10 consecutive days. The notice must state the reason for the
closure and the date on which the Lessee will re-open for business. This
provision does not apply to any period during which the Lessee is unable to
operate its business as a result of an act or directive of the City, or as a result
of a closure of the Airport or loss of the Lessee’s buildings on the Premises due
to fire or natural disaster.
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B. RIGHTS RESERVED TO THE CITY:
1. RIGHT TO GRANT TO OTHERS: The City reserves the right to grant to others
any rights and privileges not specifically granted to the Lessee on an exclusive
basis. The rights and privileges granted to the Lessee in this Lease are the only
rights and privileges granted to the Lessee by this Lease.
2. EASEMENTS: The City reserves the right to make grants to third parties or
reserve to the City easements or rights of way through, on, or above the
Premises. The City will not grant or reserve any easement or right of way that
unreasonably interferes with the Lessee’s authorized uses of the Premises.
3. INGRESS, EGRESS AND INSPECTION: The City reserves the right of ingress
to and egress from the Premises and the right to enter any part of the Premises,
including buildings, for the purpose of inspection or environmental testing at any
time. Except in the case of an emergency, all inspections and environmental
testing will be coordinated with the Lessee to minimize interference with the
Lessee’s authorized uses of the Premises.
4. RIGHT OF FLIGHT: There is hereby reserved to the City, its successors and
assigns, for the use and benefit of the public, a right of flight for the passage of
aircraft in the airspace above the surface of the Premises. This public right of
flight will include the right to cause in the airspace any noise inherent in the
operation of any aircraft used for navigation or flight through the airspace or
landing at, taking off from, or operation on the Airport.
C. PROHIBITED USES: Unless specifically authorized by this Lease or an amendment
to this Lease, the following are prohibited:
1. Any use of the Premises other than those authorized in this Lease.
2. Any use of the Premises that is in violation of a City Ordinance or an Airport
regulation.
3. The outside storage on the Premises of junk, salvage aircraft or vehicle parts,
non-operational support equipment, unused or damaged equipment or material,
or solid waste or debris unless allowed pursuant to a conditional use permit
under KMC 14.20.
4. The disposal on the Premises or the Airport of waste materials generated by
the Lessee, including any Hazardous Substance, slash, overburden, and
construction waste.
5. The stripping, wasting, or removing any material from the Premises without the
prior written approval of the City.
6. Erecting structures or allowing growth of natural objects that would constitute
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an obstruction to air navigation, or allowing any activity on the Premises that
would interfere with or be a hazard to the flight of aircraft, or interfere with air
navigation or communication facilities, serving the Airport.
7. Any use or activity that is prohibited by applicable law or regulation.
ARTICLE III
TERM & HOLDOVER
A. TERM: The initial term of this Lease is for eighteen (18) years, from the 1st day of
December, 2003, to the 30th day of June 2021.
B. HOLDOVER: If the Lessee holds over and remains in possession of the Premises after
the expiration, cancellation or termination of this Lease, the holding over will not operate as an
extension of the term of this Lease, but only creates a month-to-month tenancy, regardless of
any rent payments accepted by the City. The Lessee's obligations for performance under this
Lease will continue during the month-to-month tenancy. The City or Lessee may terminate the
Lessee’s holdover with ten days’ advance written notice.
ARTICLE IV
RENTS AND FEES
A. RENT: The initial rent for the Premises is $18,816.00 per year, as established by the
City pursuant KMC 21.10.090 and as subject to annual adjustment on July 1 of each year
under Article V of this Lease, plus applicable sales tax. The rent shall be payable annually in
advance of the first day of each year of the term of this Lease. All payments required by this
Lease must be made in U.S. dollars. If the annual rent exceeds $2,400, the Lessee may, upon
written notice to the City, choose to pay the rent in equal monthly installments, payable in
advance on or before the anniversary date of the term of this Lease and thereafter at monthly
intervals. No conversion of the payment schedule from annual to monthly shall result in the
City receiving less rent than it would have received had the conversion not taken place.
1. Rent Credit: A rent credit may be applied for a maximum of five years of lease
payments as provided in KMC 21.10.100 (as effective at the time this lease is
executed). Once the work is completed and value determined, a credit will be
applied to the lease payments, prorated as necessary for the successive five
years.
B. RENT PRORATED: Rental for any period less than one year shall be prorated on the
basis of the rent payable under this Lease in last full year previous to the prorating.
C. ADDITIONAL RENT: In addition to the rent specified in (a) of this Article, Lessee
agrees to pay to the appropriate parties all levies, assessments, and charges as follows:
1. Taxes pertaining to the leasehold interest of the Lessee.
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2. Sales tax now enforced or levied in the future, computed upon rent payable in
monthly installments whether the Lessee pays rent under this Lease on a
monthly or annual basis.
3. All taxes and assessments levied in the future by the City, as if Lessee was the
legal owner of record of the Premises.
D. PAYMENTS: The Lessee shall make checks, bank drafts, or postal money orders
payable to the City of Kenai and deliver payments to City of Kenai, Finance Department, 210
Fidalgo Avenue, Suite 200, Kenai, Alaska 99611-7794 or any other address the City may
designate in writing to the Lessee.
E. INTEREST: Beginning the day after payment is due, all unpaid rents, charges, and
fees required under this Lease will accrue interest at the rate of eight percent (8.0%) per
annum. Interest on disputed amounts will not be charged to the Lessee if the dispute is
resolved in the Lessee’s favor.
F. LATE PAYMENT PENALTY: In addition to any interest payable under Provision (E) of
this Article, each time the Lessee fails to pay any rent or fee by the date required in this Lease,
the City will charge, and the Lessee shall pay, an administrative penalty of ten percent (10.0%)
of the amount due and unpaid.
G. COURTESY BILLINGS: Lessee acknowledges that any billing statement issued by the
City is provided only as a courtesy. The Lessee is obligated to pay all rents and fees when
due, regardless of whether or not the Lessee receives a billing statement from the City.
H. LIEN AGAINST LESSEE: Any rent, charge, fee, or other consideration which is due
and unpaid at the expiration, termination, or cancellation of this Lease will be a lien against the
Lessee’s property, real or personal.
I. PAYMENT OF CITY’S COSTS: The Lessee will pay all reasonable actual expenses,
costs, and attorney fees City may incur, with or without formal action, to enforce, defend, or
protect this Lease or City's rights under this Lease, including any expense incurred with respect
to environmental compliance, bankruptcy or any proceeding that involves the Lessee, the
Lease, the Premises, or improvements or personal property on the Premises. The Lessee will
make payment within 30 days of the date of each notice from City of any amounts payable
under this provision.
J. PAYMENT FOR SPECIAL SERVICES: Lessee agrees to pay the City a reasonable
fee for any special services or facilities the City agrees to perform, which the City is not
otherwise obligated by this Lease to provide and which the Lessee requests from the City in
writing.
ARTICLE V
ADJUSTMENT OF RENT AND FEES
A. RENT OR FEE ADJUSTMENT: The City shall adjust rent or fees payable by the
Lessee under Article IV or other provisions of this lease on July 1 of each year of the lease as
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proved in KMC 21.10.090 (as effective at the time this lease is executed) and shall make any
other adjustments to rent as allowed for in KMC 21.10.090.
No rent or fee change shall be effective until 30 days after the date of the City’s written notice
to the Lessee. If the Lessee believes that any changed rent exceeds the fair market rent for
the Premises, the Lessee may appeal a rent change to the City as provided in KMC 21.10.090.
ARTICLE VI
ASSIGNMENT & SUBLETTING
A. INVALID WITHOUT CITY’S CONSENT: The Lessee may not assign, sublet, or grant
a security interest in, by grant or implication, the whole or any part of this Lease, the Premises,
or any improvement on the Premises without the written consent of the City. Any proposed
assignment, sublease, or security interest must be written and must be submitted to the City
bearing the original, notarized signature of all parties. The Lessee may submit unsigned draft
documents for the City’s conceptual review. However, the City’s conceptual approval of a draft
document may not be construed as the City’s consent to any assignment, sublease, or security
interest. All provisions in this Lease extend to and bind the assignees and sub-lessees of the
Lessee.
B. NO WAIVER OF CONSENT: The City’s consent to one assignment, sublease, or
security interest will not waive the requirement for the Lessee to obtain the City’s consent to
any other assignment, sublease, or security interest.
C. ASSIGNEE / LESSEE OBLIGATIONS: An assignment must include a provision stating
that the assignee accepts responsibility for all of the assignor’s (Lessee’s) obligations under
this Lease, including environmental liability and responsibility. However, unless the City
specifically releases the Lessee in writing, the City may hold the Lessee responsible for
performing any obligation under this lease which an assignee fails to perform.
D. OCCUPANCY BEFORE CITY CONSENT: An assignee or sub-lessee may not occupy
the Premises before the City consents to the assignment or sublease in writing.
E. CONFLICT OF PROVISIONS: In the event of a conflict between this Lease and an
assignment or a sublease, the terms of this Lease control.
F. LESSEE NOT RELIEVED OF OBLIGATIONS: The City’s consent to any sublease
does not relieve or otherwise alter the Lessee’s obligations under this Lease.
G. SECURITY ASSIGNMENTS AND FINANCING:
1. Subject to the requirements of (A) of this Article VI, the Lessee may assign a
security interest in this Lease. The security interest may be in the form of a
mortgage, deed of trust, assignment or other appropriate instrument, provided
a. the security interest pertains only to the Lessee’s leasehold interest;
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b. the security interest does not pertain to or create any interest in City's
title to the Premises; and
c. the documents providing for the security interest are acceptable to the
City.
2. If the assignment of a security interest to which the City has consented shall be
held by an established lending or financial institution, including a bank, an
established insurance company and qualified pension or profit sharing trust,
and the lending institution acquires the Lessee's interest in this Lease as a
result of a foreclosure action or other remedy of the secured party, or through
any transfer in lieu of foreclosure, or through settlement of or arising out of any
pending or contemplated foreclosure action, the lending institution may transfer
its interest in this Lease to a nominee or a wholly owned subsidiary corporation
with the prior written consent of the City, provided, the transferee assumes all
of the covenants and conditions required to be performed by the Lessee
(including payment of any monies owed by Lessee to the City under the lease).
In the event of such a transfer, the lending institution shall be relieved of any
further liability under this Lessee.
3. A holder of a security interest in this Lease consented to by the City shall have,
and be subrogated to, any and all rights of the Lessee with respect to the curing
of any default of this Lease by Lessee.
4. A holder of a security interest consented to by the City that takes possession of
this Lease shall not be released from the obligations and liabilities of this Lease
unless the holder assigns its leasehold estate to an assignee who is financially
capable and otherwise qualified to undertake to perform and observe the
conditions of this Lease and the City consents to the assignment. The City’s
consent will not be unreasonably withheld.
ARTICLE VII
MAINTENANCE, SNOW REMOVAL & UTILITIES
A. MAINTENANCE:
1. At no cost to the City, the Lessee will keep the Premises and all improvements
on the Premises clean, neat and presentable, as reasonably determined by the
City.
2. At no cost to the City, the Lessee will provide for all maintenance and services
at the Premises as may be necessary to facilitate the Lessee's compliance with
this Lease and the Lessee’s use of the Premises.
3. The Lessee shall comply with all regulations or ordinances of the City that are
promulgated for the promotion of sanitation. At no cost to the City, the Lessee
shall keep the Premises in a clean and sanitary condition, and control activities
on the Premises to prevent the pollution of water.
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4. The Lessee agrees to comply with all decisions and directions of the City's
Airport Manager regarding maintenance and operation of the Airport, and the
use of the Airport by the Lessee.
B. SNOW REMOVAL:
1. At no cost to the City, the Lessee is responsible for snow removal on the
Premises. The Lessee shall dispose of snow in an off-Premises location
approved in writing by the City or provide suitable snow storage within the
boundaries of the Premises in accordance with all applicable federal and state
laws. At the request of the Airport Manager, the Lessee shall submit a snow
removal plan for the Premises to the Manager for review. Upon approval of the
Lessee’s plan by the Airport Manager, the Lessee shall conduct all snow
removal operations on the Premises in accordance with the approved plan.
2. Lessee shall not deposit snow on an apron, taxiway, safety area, or other
aircraft-maneuvering surface provided for common use by others without the
prior written of the Airport Manager.
3. Lessee agrees to not allow an accumulation of snow on the Premises that would
cause interference with adjoining leaseholders or other users of the Airport.
C. UTILITIES: Unless specifically provided otherwise in this Lease, the Lessee shall,
at no cost to the City, provide for all utilities at the Premises necessary to facilitate the Lessee's
use of the Premises.
ARTICLE VIII
OPERATIONS
A. OPERATIONS ON THE AIRPORT: The Lessee will ensure that the Lessee, its
employees, guests, contractors, sub-lessees, and vendors that perform any activity or function
authorized under this Lease shall do so in a manner that ensures the safety of people, the
protection of public health and the environment, and the safety and integrity of the Airport and
the Premises.
B. LESSEE'S CONTROL AND RESPONSIBILITY:
1. The Lessee will assume full control and sole responsibility as between Lessee
and City for the activities of the Lessee, the Lessee's personnel and employees,
and anyone else acting by, on behalf of, or under the authority of the Lessee on
the Airport, including the Premises.
2. The Lessee will immediately notify the City of any condition, problem,
malfunction or other occurrence that threatens the safety of people or the
Airport, harm to public health or the environment, or the safety or integrity of the
Premises.
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C. RADIO INTERFERENCE: The Lessee will discontinue the use of any machine or
device that interferes with any government-operated transmitter, receiver, or navigation aid
until the cause of the interference is eliminated.
D. WILDLIFE: The Lessee acknowledges that a concentration of birds or other wildlife on
an airport constitutes a significant hazard to aircraft operations. The Lessee agrees to keep
the Premises clean of fish slime, fish waste, or any other material that might attract birds or
other wildlife. The Lessee accepts full responsibility to maintain the Premises, control
operations, and take all reasonable measures to prevent a concentration of birds or other
wildlife on the Premises.
E. PARKING: The Lessee will provide adequate vehicle, equipment, and aircraft parking
space on the Premises for Lessee’s business or activities, or confine parking to such other
places on the Airport as may be approved or designated in writing by the Airport Manager.
ARTICLE IX
ENVIRONMENTAL PROVISIONS
A. HAZARDOUS SUBSTANCE:
1. The lessee will conduct it business and/or operation on the Premises in
compliance with all environmental laws and permits. If hazardous substances
are handled on the Premises, the Lessee agrees to have properly trained
personnel and adequate procedures for safely storing, dispensing, and
otherwise handling Hazardous Substances in accordance with all applicable
federal, state and local laws.
2. Lessee will promptly give the City notice of proceeding to abate or settle matters
relating to the presence of a Hazardous Substance on the Premises or from
Lessee’s operations on the Airport. The Lessee will allow the City to participate
in any such proceedings.
B. REMEDIATION:
1. In the event of a Hazardous Substance spill on the Premises, the Lessee will
immediately notify the City and the Alaska Department of Environmental
Conversation and act, promptly, at its sole expense, to contain the spill, repair,
any damage, absorb and clean up the spill area, and restore the Premises to a
condition satisfactory to the City and otherwise comply with the applicable
portions of any environmental law.
2. In addition to any notices required by this Lease, the Lessee will immediately
notify and copy the City in writing of any of the following:
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a. Any permit, enforcement, clean up, lien, removal or other governmental
or regulatory action instituted, completed, or threatened pursuant to an
Environmental Law.
b. Any claim made or threatened by any person against the Lessee or
arising from the Lessee’s operations authorized by this Lease, relating
to damage, contribution, compensation, loss or injury resulting, from, or
claimed to result from any Hazardous Substances in, on, or under the
Airport; or
c. Any report made by, or on behalf of, the Lessee to any environmental
agency arising out of or in connection with any Hazardous Substances
in, on, or removed from the Premises, including any complaints, notices,
warnings, or asserted violations.
3. Remediation and restoration of the contaminated area must meet all applicable
state and federal regulations and must meet the requirements of all governing
regulatory authorities.
C. ENVIRONMENTAL AUDIT: The Lessee will provide the City with all investigative data,
test results, reports, and any other information gathered or analyzed as part of or in relation to
any Environmental Assessment, characterization or audit on the Premises or the Airport that
Lessee performs or causes to be performed after the starting date of this Lease. The Lessee
will submit the data, result, report or information to the City within 60 days following the date
on which it becomes available to the Lessee.
D. RELEASE OF LESSEE: The City releases the Lessee from liability to the City for
Contamination and the presence of Hazardous Substances that existed prior to the
commencement date of this lease unless caused or materially contributed to by the Lessee.
E. SURVIVAL OF OBLIGATIONS: The obligations and duties of the City and Lessee
under Article IX of this lease shall survive the cancellation, termination or expiration of this
lease.
ARTICLE X
INSURANCE
B. INSURANCE: At no expense to the City, the Lessee will obtain and keep in force during
the term of this Lease, insurance of the type and limits required by this provision or
demonstrate to the City that its self insurance policy provides equal or better coverage. Where
specific limits are set, they will be the minimum acceptable limits. If the Lessee’s policy
contains higher limits, the City will be entitled to coverage to the extent of the higher limits. At
the time insurance in obtained by the Lessee, all insurance shall be by a company/corporation
rated “A-” or better by A.M. Best. The following policies of insurance are required with the
following minimum amounts:
1. Commercial General Liability, including Premises, all operations, property
damage, products and completed operations, and personal injury and death,
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broad-form contractual, with a per-occurrence limit of not less than $1,000,000
combined single limit. If this lease authorizes the Lessee to engage in the sale
or the commercial dispensing or storage of aviation fuel, the policy must not
exclude of Lessee’s fuel handling activities. This policy must name the City as
an additional insured.
2. Commercial Automobile Coverage with not less than $1,000,000 combined
single limit per occurrence. This insurance must cover all owned, hired, and
non-owned motor vehicles used by the Lessee.
3. Workers Compensation Insurance. The Lessee will provide and maintain, for
all employees, coverage as required under AS 23.30.045, and, where
applicable, any other statutory obligations. The policy must waive subrogation
against the City.
4. The Lessee will provide the City with proof of insurance coverage in the form of
an insurance policy or a certificate of insurance, together with proof that the
premiums have been paid, showing the types and monetary limits of coverage
secured. All insurance required by this provision must provide that the City be
notified at least 30 days prior to any termination, cancellation, or material
change in the insurance coverage.
5. If the Lessee's insurance coverage lapses or is canceled, Lessee will
immediately, upon written notice by the City, halt all operations on the Airport,
including the Premises. The Lessee will not resume operations until the City
receives evidence that the Lessee has obtained current insurance coverage
meeting the requirements of this Lease.
6. The City may, at intervals of not less than five years from the beginning date of
the term of this Lease and upon written notice to Lessee, revise the insurance
requirements required under this Lease. City’s determination to revise the
insurance requirements will be based on the risks relative to the Lessee's
operations, any insurance guidelines adopted by the City, and any applicable
law.
7. If the Lessee subleases all or any portion of the Premises under the provisions
of this Lease, the Lessee will require the sub-lessee to provide to the insurance
coverage required of the Lessee under this Article X.
ARTICLE XI
LAWS & TAXES
A. COMPLIANCE WITH LAW: Lessee shall comply with all applicable laws, ordinances,
and regulations of public authorities now or hereafter in any manner affecting the Airport, the
Premises or the sidewalks, alleys, streets, and ways adjacent to the Premises, or any buildings,
structures, fixtures and improvements or the use thereof, whether or not any such laws,
ordinances, and regulations which may be hereafter enacted involve a change of policy on the
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part of the governmental body enacting the same. Lessee agrees to hold City financially
harmless:
1. From the consequences of any violation of such laws, ordinances, and/or
regulations; and
2. From all claims for damages on account of injuries, death, or property damage
resulting from such violation.
B. UNLAWFUL ACTIVITY: The Lessee shall not permit any unlawful use, occupation,
business, or trade to be conducted on the Premises contrary to any law, ordinance, or
regulation, including zoning ordinances, rules and regulations.
C. LICENSES AND PERMITS: The Lessee will obtain all necessary licenses and permits,
pay all taxes and special assessments lawfully imposed upon the Premises, and pay other
fees and charges assessed under applicable law. Nothing in this Lease prevents the Lessee
from challenging any taxes or special assessments to the appropriate authority.
D. LITIGATION: The Kenai municipal code, including regulations promulgated
thereunder, and the laws of the State of Alaska will govern in any dispute between the Lessee
and City. If a dispute continues after exhaustion of administration remedies, any lawsuit must
be brought in the courts of the State of Alaska, in Kenai, Alaska.
E. LESSEE TO PAY TAXES: Lessee shall pay all lawful taxes and assessments which,
during the term of this Lease may become a lien upon or which may be levied by the State,
Borough, City, or any other tax levying body, upon any taxable possessory right which Lessee
may have in or to the Premises or improvements on the Premises by reason of its use or
occupancy or the terms of this Lease provided, however, that nothing in this provision shall
prevent Lessee from contesting any increase in a tax or assessment under any applicable law,
ordinance, or regulation.
F. PARTIAL INVALIDITY: If any term, provision, condition, or part of this Lease is
declared by a court of competent jurisdiction to be invalid or unconstitutional, the remaining
terms, provisions, conditions, or parts shall continue in full force and effect as though the
declaration had not been made.
ARTICLE XII
LEASE TERMINATION
A. CANCELLATION: The City may, after 30 days’ written notice to the Lessee, cancel
this Lease and recover possession of the Premises if any of the following violations occur,
unless the violation is cured within the 30 days:
1. The Lessee fails to pay when due the rents, additional rents, charges, or other
sums specified in this Lease, including any increases made under this Lease.
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2. The Lessee's check for payment of any sum due under this Lease is returned
for insufficient funds.
3. The Lessee uses or authorizes the use of the Premises for any purpose not
authorized by this Lease.
4. The Lessee fails to fully perform and comply with any provision in this Lease.
5. The Lessee violates a provision of Kenai Municipal Code applicable to this
Lessee.
6. The court enters a judgment of insolvency against the Lessee.
7. A trustee or receiver is appointed for the Lessee's assets in a proceeding
brought by or against the Lessee, or the Lessee files a voluntary petition in
bankruptcy.
8. Failure by the Lessee to comply with any land development or permanent
improvement construction required by this Lease.
B. ENTRY AND RE-ENTRY: In the event that the Lease should be terminated in
accordance with this Article XII, or by summary proceedings or otherwise, or upon the Lessee’s
abandonment of the Premises or a portion of the Premises, the City or its agents, servants, or
representatives may, immediately or any time thereafter, re-enter, and resume possession of
the Premises or portion thereof, and remove all persons and property therefrom, without being
liable for any damages therefore. No re-entry by the City shall be deemed an acceptance of a
surrender of the Lease.
C. CONTINUING OBLIGATIONS UNTIL PREMISES VACATED: The Lessee will
continue to pay City rent after the expiration, termination, or cancellation of this lease and to
abide by the lease obligations, including providing proof of insurance coverage, through the
date Lessee relinquishes possession of and completely vacates the Premises. City will
consider the Premises completely vacated if the Lessee has
1. Remediated any environmental contamination for which the Lessee is
responsible;
2. Restored the Premises to a neat and clean physical condition acceptable to the
City.
D. REASONABLE CURE:
1. In the case of a violation that cannot be reasonably cured within 30 days, a
notice of cancellation issued by the City to the Lessee under this Article is
stayed if, within the 30-day notice period, the Lessee begins and continues
expeditious action to cure the violation. The City will determine if a violation
cannot be reasonably cured within 30 days and what constitutes expeditious
action.
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2. In the case where, in City’s sole determination, Lessee’s violation is considered
an imminent threat to the airport, public health or safety, or the environment,
City will direct the Lessee to stop the activity immediately and may reduce the
period to cure the violation, or the City may correct the violation pursuant to (E)
of this Article.
E. RIGHT OF CITY TO PERFORM:
1. If, after 30 days following notice the Lessee fails or refuses to perform any action
required by this Lease, the City will have the right, but not the obligation, to
perform any or all such actions required by this Lease at the sole expense of
the Lessee. The City will not take action if the Lessee begins and continues
expeditious action to perform any action required by this Lease that cannot be
reasonably completed within 30 days. The City will, at its sole discretion,
determine what constitutes expeditious action and if an action cannot be
reasonably performed in 30 days. The City will submit to the Lessee an invoice
for the expenses incurred by the City in the performance by the City of any
required action. The Lessee will pay the amount of each invoice within 30 days
from issuance.
2. If Lessee fails or refuses to perform any action that has been deemed an
imminent threat the City will have the right, but not the obligation, to perform
any or all such actions required to expeditiously correct the imminent threat.
Lessee shall reimburse the City for any cost, including legal fees and
administrative costs reasonably incurred by the City in acting to correct the
imminent threat violation.
F. WAIVER: A waiver by the City of any default by the Lessee of any provision of this
Lease will not operate as a waiver of any subsequent default. If the City waives a default, the
City is not required to provide notice to the Lessee to restore or revive any term or condition
under this Lease. The waiver by the City of any provision in this Lease cannot be enforced or
relied upon unless the waiver is in writing and signed on behalf of the City. The City's failure
to insist upon the strict performance by the Lessee of any provision in this Lease is not a waiver
or relinquishment for the future, and the provision will continue in full force.
G. AIRPORT CLOSURE:
1. If the City closes the airport to aircraft operations for sixty days or less, this
Lease will remain in full force and effect without adjustment
2. If the City closes the Airport to aircraft operations for more than sixty days, but
not permanently, and this Lease is for aviation or direct aviation support uses,
the Lessee may, upon written notice to the City, either terminate the Lease or
retain the Lease and receive a fifty (50%) percent rent reduction or credit for
that portion of the closure that exceeds sixty days.
3. If the City permanently closes the Airport to aircraft operations and
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a. this Lease is for aviation or direct aviation support uses, the Lessee may
terminate this agreement by written notice to the City; or
b. this Lease is for non-aviation uses, the Lessee may request in writing to
have the Lease terminated. The City will consider the Lessee’s request
in light of the City’s best interest and either terminate the Lease, or deny
the Lessee’s request in writing.
H. DISASTERS: The Lessee or City may cancel this lease upon written notice to the other
party if:
1. the Premises becomes unusable through no fault of either party and
performance under this lease becomes impossible; or
2. the Airport becomes unusable through no fault of either party and the
performance under this lease becomes impossible.
If the Lessee elects in writing that it will continue to operate after notice from City to Lessee
that the Airport has become unusable, the Lessee’s obligations under the Lease will continue,
but City shall be under no obligation to continue to perform.
Causes for termination of the lease under this provision (G) include acts of God, the public
enemy, and the United States.
I. NATIONAL EMERGENCY: If the federal government declares a national emergency,
neither party may hold the other liable for any inability to perform any part of this Lease as a
result of the national emergency.
J. SURRENDER ON TERMINATION: Except as provided otherwise in this Article XII,
Lessee shall, on the last day of the term of this Lease (including any extension or renewal
thereof) or upon any earlier termination of this Lease, surrender and deliver up the premises
into the possession and use of City without fraud or delay in good order, condition, and repair,
except for reasonable wear and tear since the last necessary repair, replacement, restoration
or renewal, free and clear of all lettings and occupancies unless expressly permitted by the
City in writing, and free and clear of all liens and encumbrances other than those created by
and for loans to City.
K. OWNERSHIP AND DISPOSITION OF IMPROVEMENTS:
1. Ownership of Permanent Improvements: Permanent improvements on the
Premises, excluding Site Development Materials, constructed, placed, or
purchased by the Lessee remain the Lessee’s property as long as this
Lease remains in effect, including any period of extension or holdover with
the consent of the Lessor.
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2. Disposition of Site Development Materials: The Lessee acknowledges that,
once placed by the Lessee, the removal from the Premises of Site
Development Materials can damage the Premises, adversely affect surface
water drainage patterns, and destabilize adjacent structures. When placed
on the Premises by the Lessee, Site Development Materials, including
building pads, parking areas, driveways, and similar structures:
a. become a part of the realty and the property of the City of Kenai;
b. unless otherwise directed by the Lessor, must be maintained by the
Lessee throughout the term of this Lease, including any extensions and
periods of holdover; and
c. may not be removed by the Lessee without the prior written approval of
the Lessor.
3. Disposition of Personal Property and Permanent Improvements Other Than
Site Development Materials:
a. Unless the Lessor otherwise directs as provided below, when this Lease
expires, terminates, or is cancelled and is neither extended nor followed
by a successive lease, the departing Lessee may do one or more of the
following:
i. 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 Lessor within 60 days
after the expiration, cancellation, or termination date of this
Lease;
ii. with written approval from the Lessor, 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 Lessor within 60
days after notice from the Lessor that the Lessor 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 180 days after the expiration, termination, or
cancellation date of this Lease;
iii. elect to have the Lessor sell Lessee-owned Permanent
Improvements at public auction as provided below, remediate
any Contamination for which the Lessee is responsible, and
restore the premises to a clean and neat physical condition
acceptable to the Lessor. If the Lessor sells Permanent
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Improvements under this Paragraph for removal from the
Premises, the departing Lessee's obligation under this
Paragraph continues until the Premises are remediated and
restored to a clean and neat physical condition acceptable to
the Lessor after the improvements have been removed.
b. If the departing Lessee elects to have the Lessor sell Lessee-owned
Permanent Improvements at public auction per this Section, the Lessee
shall, within 30 days after the expiration, cancellation, or termination of
this Lease:
i. submit to the Lessor a written request and authorization to sell
the Permanent Improvements by public auction;
ii. provide to the Lessor an executed conveyance document
transferring clear title to the Permanent Improvements to the
successful bidder at the public auction, along with
authorization to the Lessor, as agent for the Lessee for
purposes of the sale only, to endorse the name of the
successful bidder on the conveyance document upon receipt
of payment of the successful bid price; and
iii. before the date of the public auction, remove all personal
property, remediate any Contamination for which the Lessee
is responsible and leave the Premises in a neat and clean
physical condition acceptable to the Lessor.
c. When selling Lessee-owned Permanent Improvements at public auction
for the departing Lessee, the Lessor will establish the terms and
conditions of the sale. The Lessor shall pay the Lessee any proceeds of
the sale of the Permanent Improvements, less the administrative costs
of the public auction and any financial obligation the Lessee owes to the
Lessor under this Lease. Payment will be made within a reasonable
time after the Lessor completes the sale transaction and receives the
proceeds, but not to exceed 60 days. If all or a portion of the Permanent
Improvements do not sell at public auction, the Lessee will remove those
Permanent Improvements, remediate any Contamination for which the
Lessee is responsible and restore the Premises to a clean and neat
physical condition acceptable to the Lessor within 60 days after the
auction.
d. If the Lessee shows good cause to the Lessor and if it is not inconsistent
with the best interest of the City of Kenai, the Lessor will grant an
extension of time that is sufficient to allow the Lessee to remove or sell
Lessee-owned Permanent Improvements, remediate any
Contamination for which the Lessee is responsible and to restore the
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Premises to a clean and neat physical condition acceptable to the
Lessor.
e. The Lessor will, by written notice, direct the departing Lessee to remove
Lessee-owned Permanent Improvements from the Premises, to
remediate, consistent with applicable law, any Contamination for which
the Lessee is responsible and to restore the Premises to a clean and
neat physical condition acceptable to the Lessor if the Lessor
determines in writing:
i. that the continued presence of the Permanent
Improvements on the Premises are not consistent with any
written Airport program or plan required for compliance
with applicable federal, state, or local law;
ii. that the continued presence of the Permanent Improvements
on the Premises is not in the best interest of the City of
Kenai; or
iii. that the Permanent Improvements present a hazard to public
health or safety.
f. The departing Lessee to whom the Lessor has issued direction under
Paragraph e of this Section shall comply with the Lessor's direction
within 60 days after issuance of the direction and at no cost to the
Lessor. If the departing Lessee shows good cause to the Lessor,
continues to work diligently to comply with Lessor’s direction, and if it is
not inconsistent with the best interest of the City of Kenai, the Lessor will
allow in writing a longer period that is sufficient to allow the Lessee to
comply with the Lessor’s direction. A departing Lessee who fails to
comply with a direction issued by the Lessor under Paragraph e of this
Section, shall, within 30 days of being billed by the Lessor, reimburse
the Lessor for any costs reasonably incurred by the Lessor, including
legal fees and administrative costs, to enforce the Lessor’s direction or
to remove and dispose of unremoved Lessee-owned improvements,
remediate any Contamination for which the Lessee is responsible and
restore the Premises.
g. If the departing Lessee does not timely remove or sell the Lessee-owned
Permanent Improvements on the 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 Lessor may sell, lease,
demolish, dispose of, remove, or retain the abandoned property for
Airport use as the Lessor determines is in the best interest of the City of
Kenai. The departing Lessee shall, within 30 days after being billed by
the Lessor, reimburse the Lessor for any costs reasonably incurred by
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the Lessor, including legal and administrative costs, to demolish,
remove, dispose, clear title to, or sell the abandoned property and to
remediate and restore the Premises.
h. After the expiration, termination, or cancellation of the Lease, including
any holdover, the departing Lessee loses all right to occupy or use the
premises without the express or implied consent of the Lessor. Except
as the Lessor notifies the departing Lessee otherwise in writing, the
Lessor consents to the departing Lessee's continued use and
occupancy of the Premises to diligently accomplish the requirements of
this Section. Until the departing Lessee relinquishes possession of and
completely vacates the Premises and notifies the Lessor in writing that
it has relinquished and vacated the Premises, the departing Lessee shall
perform the following as if the lease were still in effect,
i. pay rent to the Lessor;
ii. maintain the premises;
iii. provide the Lessor with evidence of each insurance coverage,
if any, required under the Lease; and
iv. cease using the premises other than to diligently accomplish
the requirements of this Section, and to comply with the other
requirements of the Lease.
i. A departing Lessee will not be considered to have relinquished
possession and completely vacated the Premises until
i. the departing Lessee has:
(a) remediated, consistent with applicable law, any
Contamination for which the Lessee is
responsible; and
(b) restored the Premises to a clean and neat
physical condition acceptable to the Lessor; and
ii. either
(a) removed all of the Lessee's Permanent Improvements
and personal property from the premises or sold the
Permanent Improvements and personal property to a
succeeding Lessee under the provisions of this Lease; or
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(b) transferred title to the Lessee's Permanent Improvements
and personal property that remain on the premises to the
Lessor.
ARTICLE XIII
GENERAL COVENANTS
A. USE OF THE AIRPORT: Except as provided herein, any regular use of Airport lands
or facilities without the written consent of the City is prohibited. This prohibition shall not apply
to use of areas designated by the City for specified public uses, such as passenger terminals,
automobile parking areas, and streets.
B. COSTS AND EXPENSES: Costs and expenses incident to this lease, including but
not limited to recording costs, shall be paid by Lessee.
C. CARE OF THE PREMISES: The Lessee shall keep the Premises clean and in good
order at the Lessee’s own expense, allowing no damage, waste, nor destruction thereof, nor
removing any material therefrom, without written permission of the City. At the expiration of
the term fixed, or any earlier termination of the Lease, the Lessee will peaceably and quietly
quit and surrender the premises to the City.
D. CONSTRUCTION APPROVAL AND STANDARDS: Any building construction on the
Premises by the Lessee must be compatible with its surroundings and consistent with the uses
authorized under this Lease, as determined by the City. The Lessee must obtain the City’s
written approval before placing fill material, beginning any land development, or constructing
or demolishing any improvements on the Premises, and before beginning any alterations,
modifications, or renovation of existing structures on the Premises. The Lessee must submit
to the City detailed drawings of the proposed development, alteration, modification, or
renovation, together with specifications or any other information the City reasonably requires.
Further, the Lessee will submit to City evidence of the Lessee’s compliance with Federal
Aviation Administration regulation 14 CFR Part 77.
E. LEASE SUBORDINATE TO AIRPORT FINANCING REQUIREMENTS: Lessee
agrees that City may modify this Lease to meet revised requirements for Federal or State
grants, or to conform to the requirements of any revenue bond covenant. However, the
modification shall not act to reduce the rights or privileges granted the Lessee by this Lease,
nor act to cause the Lessee financial loss.
F. RIGHT TO ENJOYMENT AND PEACEABLE POSSESSION: City hereby agrees and
covenants that the Lessee, upon paying rent and performing other covenants, terms, and
conditions of this Lease, shall have the right to quietly and peacefully hold, use, occupy, and
enjoy the Premises, except that the following shall not construed as a denial of the right of
quiet or peaceable possession:
1. Any inconvenience caused by public works projects in or about the Premises;
and
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2. Any other entries by the City on the Premises reserved or authorized under
other provisions of this Lease.
G. NO PARTNERSHIP OR JOINT VENTURE CREATED: It is expressly understood that
the City shall not be construed or held to be a partner or joint venture of Lessee in the conduct
of the Lessee’s activities or business on the Premises. The relationship between the City and
the Lessee is, and shall at all times remain, strictly that of landlord and tenant, respectively.
H. DISCRIMINATION: The Lessee will not discriminate on the grounds of race, color,
religion, national origin, ancestry, age, or sex against any patron, employee, applicant for
employment, or other person or group of persons in any manner prohibited by federal or state
law. The Lessee recognizes the right of the City to take any action necessary to enforce this
provision, including actions required pursuant to any federal or state law.
I. AFFIRMATIVE ACTION: If required by 14 CFR Part 152, subpart E, the Lessee will
undertake an affirmative action program to insure that no person will be excluded from
participating in any employment activities offered by the Lessee on the grounds of race, creed,
color, national origin, or sex. No person may be excluded on these grounds from participating
in or receiving the services or benefits of any program or activity covered by subpart E. The
Lessee further agrees that it will require its sub-organization(s) provide assurance to the City
to the same effect that they will also undertake affirmative action programs and require
assurances from their sub-organization(s) as required by 14 CFR, Part 152, subpart E. Tenant
shall use the premises in compliance with all other requirements imposed by or pursuant to
title 49, code of Federal Regulations, DOT, Subtitle A, Office of the Secretary, Part 21,
Nondiscrimination in Federally-Assisted programs of the Department of Transportation-
Effectuation of Title VI of the Civil Rights Act of 1964, and as the Regulation may be amended.
J. INTEGRATION, MERGER, AND MODIFICATION: This Lease sets out all the terms,
conditions, and agreements of the parties and supersedes any previous understandings or
agreements regarding the Premises whether oral or written. No modification or amendment
of this Lease is effective unless in writing and signed on behalf of the City and the Lessee.
K. RIGHT TO ADOPT RULES: City reserves the right to adopt, amend, and enforce
reasonable rules and regulations governing the Airport, including the Premises. The City shall
not be liable to Lessee for any diminution or deprivation of possession, or of Lessee's rights
under this Lease, on account of the exercise of the City’s authority reserved under this
provision. Furthermore, the Lessee shall not be entitled to terminate the whole or any portion
of the leasehold estate created under this Lease, by reason of the exercise of the City’s
authority reserved under this provision, unless the exercise thereof so interferes with Lessee's
use and occupancy of the Premises as to constitute a termination, in whole or in part, of this
Lease by operation of law under the laws of the State of Alaska and of the United States made
applicable to the states.
L. LESSEE'S OBLIGATION TO PREVENT AND REMOVE LIENS: Lessee will not permit
any liens including, but not limited to, mechanics', laborers', or materialmen's liens obtainable
or available under the then existing laws, to stand against the Premises or improvements on
the Premises for any labor or material furnished to Lessee or claimed to have been furnished
to Lessee or to the Lessee's agents, contractors, or sub-lessees, in connection with work of
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any character performed or claimed to have been performed on the Premises or improvements
by or at the direction or sufferance of Lessee. Provided, however, the Lessee shall have the
right to provide a bond as contemplated by Alaska law and contest the validity or amount of
any such lien or claimed lien. Upon a final determination of the lien or claim for lien, the Lessee
will immediately pay any judgment rendered with all proper costs and charges and shall have
such lien released or judgment satisfied at Lessee's own expense.
M. CONDEMNATION: In the event the Premises or any part thereof shall be condemned
and taken for a public or a quasi-public use, then upon payment of any award or compensation
arising from the condemnation or taking, the City and the Lessee shall make a good faith effort
to agree upon
1. the division of the proceeds;
2. the abatement in rent payable during the term or any extension of the term of
this Lease; and
3. other adjustments as the parties may agree upon as being just and equitable
under all the circumstances.
If, within thirty days after the award has been paid into Court, the City and Lessee are unable
to agree upon what division, abatement in rent, and other adjustments as are just and
equitable, the dispute shall be determined by arbitration.
N. SUCCESSORS IN INTEREST: This Lease shall be binding upon and shall inure to the
benefit of the respective successors and assigns of the parties hereto, subject to such specific
limitations on assignment as are provided for in this Lease.
O. NOTICES:
1. Any notices required by this Lease must be in writing and must be delivered
personally or mailed by certified or registered mail in a prepaid envelope. A
mailed notice
a. must be addressed to the respective party at the address written on the
first page of this Lease or to the latest address designated in accordance
with (2) of this Provision (O); and
b. shall be deemed delivered on the date it is deposited in a U.S. general
or branch post office.
2. The City or the Lessee may, from time to time, designate a new address at
which they will receive notices by providing the other party with written notice at
least 15 days prior to the effective date of the change. An address change
notice must be delivered according to the procedure set out in (1) of this
Provision (O).
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P. RETENTION OF RENTAL: In the event the City terminates this Lease because of any
breach by the Lessee, the City shall retain any unused balance of the rental payment last made
by the Lessee City as partial or total liquidated damages for the breach.
Q. FIRE PROTECTION: The Lessee will take all reasonable precautions to prevent, and
take all necessary action to suppress destructive or uncontrolled fires and comply with all laws,
regulations, and rules promulgated and enforced by the City for fire protection on the Airport.
R. PERSONAL USE OF MATERIALS: No interest in coal, oil, gas or any other mineral,
or in any deposit of stone or gravel valuable for extraction or utilization is included in the
Premises or in the rights granted by this lease. The Lessee shall not sell or remove from the
Premises for use elsewhere any timber, stone, gravel, peat moss, topsoil or any other material
valuable for building or commercial purposes.
S. APPROVAL OF OTHER AUTHORITIES: The granting of this lease by the City does
not relieve the Lessee of the responsibility to obtain any license or permit as may be required
by federal, state, or local law.
T. EXECUTION BY THE PARTIES: This Lease is of no effect unless signed by the
Lessee, or a duly authorized representative of Lessee, and an authorized representative of the
City.
U. CAPTIONS: The captions of the provisions of this Lease are for convenience only and
do not necessarily define, limit, describe, or construe the contents of any provision.
V. RIGHTS OF CONSTRUCTION: This Lease is intended to make public property
available for private use, while at all times protecting the public interest to the greatest extent
possible. Following the rule that transfers of interest in public property are to be strictly
construed in favor of the public property landlord, all rights granted to the Lessee under this
Lease will be strictly construed, and all rights of the City and the protections of the public
interest will be liberally construed.
W. LESSEE ACKNOWLEDGEMENT: The Lessee acknowledges that the Lessee has
read this Lease and fully understands its terms, that the Lessee has been fully advised or has
had the opportunity of advice by separate legal counsel, and voluntarily executes this Lease.
Lessee also acknowledges and agrees that the rule of interpretation under which a document
is construed against the drafter will not apply to this Lease.
X. APPROVAL BY LESSOR: Any approval required of the Lessor by this Lease will not
be unreasonably withheld. The Lessor’s approval does not waive the Lessee's legal
responsibility or liability to comply with all applicable federal and state laws and regulations.
ARTICLE XIV
SURVEY, IMPROVEMENTS AND PERFORMANCE BOND
A. SURVEY: The Lessee is solely responsible, at its sole expense, to confirm or establish
the physical location of the boundaries of the Premises prior to beginning any construction
thereon, including clearing grubbing, back-filling and environmental sampling. Any survey of
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the Premises shall be performed by a Land Surveyor registered in the State of Alaska. The
Lessee shall furnish the City with a copy of the plat of any survey performed on the Premises
by, or on behalf of, the Lessee.
B. IMPROVEMENTS:
1. REQUIRED IMPROVEMENTS: At no cost to the City, Lessee agrees to
complete land development and construction of Permanent Improvements
including NON-APPLICABLE by no later than NON-APPLICABLE, with an
aggregate cost of at least $ NON-APPLICABLE, excluding financing costs. In
addition to the as-built drawings required by this Lease, the Lessee must submit
to the City written evidence that the Lessee has completed the land
development and constructed improvements on the Premises with an
aggregate cost or investment of not less than $ NON-APPLICABLE.
The evidence of cost must be submitted to the City within sixty days of the
completion of the development and improvements, but by no later than NON-
APPLICABLE.
a. Costs considered toward the aggregate cost of permanent
improvements include building construction, design, labor, materials,
materials shipping, permits, equipment, soil testing, environmental
baseline report, and environmental assessment directly related to the
construction; premises and as-built surveys; site preparation, including
excavation, geotextile fabric, filling, grading, fill material, gravel, and
pavement, remediation of environmental contamination (unless Lessee
caused or Materially Contributed To the Contamination); and utility
connection costs.
b. The cost of Permanent Improvements excludes:
1. work performed by the City and not reimbursed by the Lessee;
and
2. work performed by the Lessee and reimbursed by the City.
2. NON-APPLICABLE FAILURE TO COMPLETE IMPROVEMENTS: If the
Lessee fails to complete the required construction within the time allowed under
(b)(1) of this Article, including any extensions granted, the City will execute
against and the Lessee will forfeit, any bond or other guarantee given by the
Lessee and, as applicable, City will:
a. initiate cancellation of the lease; or
b. reduce the term of the lease to a period that is consistent with the portion
of the required construction timely completed.
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Division of Forestry – Lot 4, FBO Subd. No. 7 Initials:____
3. APPEARANCE: When completed, all improvements on the Premises must be
neat, presentable, and compatible with the authorized use of the Premises
under this Lease, as determined by the City.
4. CITY APPROVAL REQUIRED: The Lessee must first obtain the City’s written
approval before beginning any land development, construction or demolition of
any improvements on the Premises, or before beginning any alterations,
modifications, or renovation of existing structures on the Premises. The Lessee
must submit to the City detailed drawings of the proposed development,
alteration, modification, or renovation. Further, the Lessee will submit to City
evidence of the Lessee’s compliance with the FAA regulation 14 CFR Part 77.
5. CITY APPROVAL WITHHELD: The City’s approval of any construction,
alteration, modification, or renovation will not be withheld unless
a. the Lessee fails to demonstrate adequate financial resources to
complete the project;
b. the project plans, specifications, and agency approvals are incomplete;
c. the proposed project would result in a violation of an applicable
ordinance, regulation, or law;
d. the proposed project would interfere with or is incompatible with the
safety, security, maintenance, or operation of the airport;
e. the proposed project is inconsistent with the Airport Master Plan;
f. the proposed project is inconsistent with the terms of the lease, zoning
ordinances, or the City’s Comprehensive Plan;
g. the project plans do not make sufficient provision for drainage, aircraft,
vehicle, and equipment parking, or for snow storage; or
h. the proposed project does not conform to generally recognized
engineering principles or applicable fire or building codes.
6. DEMOLITION: Prior to any demolition of any structure(s) on the Premises,
Lessee will deliver to City a written scope of work that, at a minimum, lists the
structure(s) that are to be demolished and the timeframe for demolition and
removal of the debris from the Airport. City will review Lessee’s scope for
demolition and issue Lessee written approval for the work to be done.
7. BUILDING SETBACK: No building or other permanent structure may be
constructed or placed within twenty feet of any lot of the Premises without City’s
prior written approval. In addition, no building or other permanent structure may
LEASE OF AIRPORT LANDS Page 26 of 28
Division of Forestry – Lot 4, FBO Subd. No. 7 Initials:____
be constructed or placed within twenty feet of any boundary line of the Premises
which fronts on a landing strip, taxiway, or apron.
8. AS-BUILT DRAWINGS: Within sixty days after completion of construction or
placement of improvements upon the Premises, the Lessee will deliver to the
City a copy of an as-built drawing, acceptable to the City, showing the location
and dimensions of the improvements, giving distances to all Premises’
boundaries. If the Lessee constructs underground improvements, the Lessee
will appropriately mark the surface of the land with adequate surface markers.
The type, quantity, and distance between such markers will be subject to
approval of the City.
9. AIRPORT SECURITY FENCING: If any construction by the Lessee requires a
realignment or alteration of an existing security fence on the Premises or
boundary of the Premises, the Lessee agrees to realign or alter the fence in a
manner approved in writing by the Airport Manager. Anytime the fence must
be breached to allow the Lessee to complete improvement construction or
fence modifications, the Lessee shall, at the Lessee’s sole expense place
temporary barriers to maintain the security of the Airport, as determined by the
Airport Manager. If damage occurs to a security fence on the Premises or
boundary of the Premises in connection with the Lessee’s use or occupation of
the Premises, the Lessee shall promptly repair the fence to the satisfaction of
the Airport Manager.
10. DAMAGE TO IMPROVEMENTS: If Lessee’s improvements on the Premises
are damaged or destroyed, Lessee will cause the improvements to be repaired
or rebuilt, and restored to normal function within two years following the damage
or destruction. If the Lessee fails to timely rebuild or restore the improvements,
the City may, at its sole discretion, either reduce the term of this Lease
commensurate with the estimated value of the Lessee’s remaining, fully
functional improvements on the Premises, or cancel this Lease.
11. DAMAGE NEAR EXPIRATION: If Lessee’s improvements are damaged to the
extent that more than 50% of the space is unusable and the damage occurs
within five years of the expiration of the term of this Lease, Lessee may remove
the damaged improvements, restore the Premises and terminate this Lease.
C. PERFORMANCE BOND (Optional): Prior to beginning the construction of permanent
improvements required under (1) of this Article, the Lessee shall submit to the City a
performance bond, deposit, or other security in the amount of $ NON-APPLICABLE. The form
of the bond or other security shall be subject to the City’s approval.
D. SURRENDER ON TERMINATION: Lessee shall, on the last day of the term of this
Lease or upon any earlier termination of this Lease, surrender and deliver upon the premises
into the possession and use of City without fraud or delay in good order, condition, and repair,
except for reasonable wear and tear since the last necessary repair, replacement, restoration
or renewal, free and clear of all lettings and occupancies unless expressly permitted by the
City in writing, and free and clear of all liens and encumbrances other than those created by
LEASE OF AIRPORT LANDS Page 27 of 28
Division of Forestry – Lot 4, FBO Subd. No. 7 Initials:____
and for loans to City. Upon the end of the term of this Lease, including any extension or
renewal, or any earlier termination thereof, title to the buildings, improvements and building
equipment shall automatically vest in City without requirement of any deed, conveyance, or bill
of sale thereon. However, if City should require any such document in confirmation hereof,
Lessee shall execute, acknowledge, and deliver the same and shall pay any charge, tax, and
fee asserted or imposed by any and all governmental unites in connection herewith.
E. NOTICE OF CONSTRUCTION: The Lessee agrees to notify the City in writing three
days prior to commencing any construction project valued in excess of $1,000.00 on the
Premises. The Lessee agrees to assist in the posting of a notice of non-responsibility and
maintenance of the notice on the Premises during construction. Lessee agrees that in the
event the Lessee fails to notify the City as required by this Provision (f), the Lessee shall
indemnify the City against any materialmen's liens as defined in AS 34.35.050 which arise as
a result of construction on the premises.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, the day
and year stated in the individual acknowledgments below.
LESSEE: LESSOR:
State of Alaska, Division of Forestry City of Kenai
By: By:
RASHAAD ESTERS Date PAUL OSTRANDER Date
State of Alaska Contracting Officer City Manager
ACKNOWLEDGMENTS
STATE OF ALASKA )
) ss.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this ____ day of _________, 2020, Rashaad Esters,
Contracting Officer with the State of Alaska, being personally known to me or having produced
satisfactory evidence of identification, appeared before me and acknowledged the voluntary
and authorized execution of the foregoing instrument.
Notary Public for Alaska
My Commission Expires: _______________
STATE OF ALASKA )
) ss.
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Division of Forestry – Lot 4, FBO Subd. No. 7 Initials:____
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this ____ day of _________, 2020, Paul Ostrander, City
Manager of the City of Kenai, Alaska, being personally known to me or having produced
satisfactory evidence of identification, appeared before me and acknowledged the voluntary
and authorized execution of the foregoing instrument on behalf of said City.
Notary Public for Alaska
My Commission Expires:
ATTEST:
____________________________ After Recording, Return to:
Jamie Heinz, City Clerk City of Kenai
210 Fidalgo Ave.
SEAL: Kenai, AK 99611
Approved as to Lease Form:
_________________________
Scott Bloom, City Attorney
City of Kenai I 210 l=idalgo Ave, Kenai , AK 99611 -77941907.283.7535 I www.kenai .city
MEMORANDUM
TO:
THROUGH:
FROM:
DATE:
SUBJECT:
Mayor Brian Gabriel and Kenai City Council
Paul Ostrander, City Manager
Elizabeth Appleby, City Planner
May 14, 2020
Resolution No. 2020-31 -Non Standard Lease Conversion
The attached proposed lease conversion between the City of Kenai and the State of Alaska
Department of Natural Resources, Division of Forestry, deviates from the City's standard lease
form to remove lease clauses related to indemnification. The Division of Forestry has requested
to convert to the new lease form as an option allowed to all existing lessees when the new
standard lease form for Airport lands was adopted with Resolution No. 2018-10 and changes
were made with Ordinance No. 2998-2018 to Title 21, City Airport Reserve Lands. However, the
State of Alaska is unable to execute the new standard lease form because of two indemnification
requirements the State asserts it may not agree to that were not included in the original lease .
The Division of Forestry through the State of Alaska has provided a letter of self-insurance that
technically deviates from the insurance requirements in the standard lease form and requires
modification to the insurance terms in the standard lease form. The letter of self-insurance
comparatively fulfills the standard lease clauses for indemnification included in the standard lease
form. This letter is attached for reference.
Kenai Municipal Code Section 21.10.140-Form of Lease, allows for a lease form that deviates
from the standard form if the City Manager believes it is in the best interest of the City, the lease
is approved to form by the City Attorney, and the lease is approved by resolution of the City
Council. It is in the best interest of the City to deviate from the standard lease form in this
conversion for the indemnification language because of the unique case of a self-insured program
of the State of Alaska and because the benefits of a stable and competitive lease environment
with standard lease formats will still be achieved with all of the other standard lease clauses not
related to indemnification that are part of this lease conversion following the conversion option
available to existing lessees with Resolution No. 2018-10.
A map of the parcel is also attached to th is memorandum. The parcel is within the Airport Light
Industrial (IH) Zone of the City and within the Airport Reserve. The Airport Commission
recommended the City Council adopt Resolution No. 2020-31 at their meeting on May 14, 2020.
If City Council consents to the non-standard lease conversion, the attached non-standard lease
conversion will be implemented to convert the lease of Lot 4, FBO Subdivision No. 7, consistent
with the option offered to existing lessees with Resolution No . 2018-10 .
Cc: Mary Bondurant, Airport Manager
Page 2 of 2
The City of Kenai I www.kenai.city
T H E STA TE
~~L ASKA
GOVERNOR .\1JKE DUNLEAVY
March l l , 2020
C it y of Kenai
210 Fidalgo A ve nu e
Kenai, AK 99611
Department of Admini s tra tion
DIVISION OF RISK MANAGEMENT
Scott Jo rda n, Di r ector
P.O. Box 110218
Juneau, Alaska 9981 1-0218
M a in: 907.465 .2180
Fox: 907.465.3690
C ERTIFICATE O F SELF-INS URANCE
To Whom It May Concern:
The State of Alaska and its agencies are covered for property and liability expos ures through
major worldwide insurance programs with large se lf-insured retentions . Losses that fall within
these self-insured (deductible) levels, including th o se for which we are contractually liable, are
covered by the financial resources of the State and are administered under the self-insured claims
program handled by this office. Workers ' Compensation coverage is also provided through the
State of Alaska self-in s ured program (authori zed by AS 23 .30.090) and includes wa iver of
subrogation.
This letter is to advise you that the liabi lity insurance coverages stipulated in your Kenai
Municipal Airport use agreement for the lease by the Department of Natural Re so urces , Di v is ion
of Forestry , fall within the deductible levels of the State's excess in surance program and are
covered under the State 's self-insured program .
Given the State of Alaska self-insures the liability insurance protection you are requesting
evidence for , we are unable to produce a standard certificate of in surance that you would
commonly receive from other lessees. The State of Alaska, through this office will prov ide
comprehensive general liability insurance coverage through our program of self-insurance for the
activities and operations of the Department of Natural Resources, Divis ion of Forestry on y our
premises.
If you have any ques tions or nee d further clarificatio n of the State's self-in suran c e progra m , you
may email me Sh eri.Gray@alaska.gov or call (907) 465-5724 .
Sincerely ,
~lbd~m#
Sheri Gray
Risk Manager
;e
K~NAI
Leased Parcel to ADNR-Div. of Forestry
525 N. Willow St.
Parcel 04336040
Lot 4, FBO Subd. No. 7
I I I I I
0 25 50 Feet