HomeMy WebLinkAboutORDINANCE 0532-1979ii
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CITY Ui•' Ki:iJAI
ORDINANCE N0. 532-79
AN ORDINANCE OF 'fHE CUUIJCIL or' THE CITY OF KEAIAI, ALASY.A
ESTAIILISIiING A PROCEDURE FOR THE 7.FASING OF TIDE LANDS.
47IiEREAS, the City of Kenai zeceive~l title to tide and submerged
lands within the Cfty lirnits from the State on January 6,
1977, and
• V7HEREAS, it is appropriate and in the public fntere~t that
policies and procedures be developed for the leasing of said
lands on a long term basis to individuals or entities who
will construct improveme,its or beneficial industries thereon,
NO4P, THEREFORE, BE ZT ENACTED BY THE COUNCIL OF THE CITY OF
KENAI, ALASKA as follows;
Section 1: Anew chapter 20 is added to Title 11 of
~ the Kena~Co'de of 1979 (Harbor and Harbor Facilities) which
' ~ chapter shall be called "Leasing of Tidelands" in the form
as attached hereto and made a part hereof.
I
PASSED SY THE COUNCIL OF THE CITY KENAI, ALASKA this 7th
day of November, 1979. ~ 7 ~
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VI CrNT O'RE7LLY,
ATTEST:
C y C erk
I
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First Reading: October 17, 1979
Second Reading: November 7, 1979
EffecL•ivc Date: December 7, 1979
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LI;ASII3C OF TIb1;LATJbS:
11.20.010 Policy: The City, in order to maye sites
available for beneficial industries, may lease City-owned
tidelands to persons who agree to operate a beneficial
industry upon the terms and conditions the Council considers
advantageous to the City. •
11.20.020 Lands Available for Leasin All classified
tide and contiguous suhmex'ged land within the limits of the
City to which the City holds title may be leased as hereinafter
provided, for surface use only, and under the condition that
said lease is subject and inferior to preference right
claims that may be made wi*.h?n a two year filing period for
preference rights and subject to the rights of existinc set
-~et site holders within the city limits.
11.20.030 Qualifications of Applicants: An applicant
for a lease is qualified if the applicant (1) is an individual
at least 19 years of age or over, or (2) is a group, association
or corporation which is authorized to conduct business under
the laws of Alaska.
i 11.20.040 Classification Prior to Lease Required:
;~ Before accepting applications to lease tidelands, tha^area
involved shall haves first been classified for leasing by the
1 City Council with the approval of the Advisory Planning and
Harbor Commissions, and their availability advertised in a
newspaper of general circulation in the area once each week
fer 2 successive weeks not less than 30 days prior to the
time set for the closing of tae acceptance of applications,
and that all applications are available for public inspection
-- at the City Hall offices.
11.2U.O5U Applications: All applications for lease of
tidelands shall be filed with the Clerk on forms provided by
her and available at City IIa~.l which shall upon execution of
the lease become part of the lease document. Only forms
completed in full and accompanied by a $IQO filing fee wiii
be accepted for filing. Filing fees are not refundable.
With every application the applicant shall submit a development
plan showing and stating (1) the purpose of the proposed
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lease (2) the use, value and nature ~f in:~rovemer,ts to be
constructed (3) the type of construction and (4) dates
construction is estimated to commence and be completed (5)
whether intended use comp'. as with the zoning ordinance and
comprehensive plan ~~f t.i~ city (6) describe by reference to
the plat the area to be leased (7) a detailed financial plan
showing ability to carry through with the development plan
(8) a performance bond or 5s of the project's estimated cost
(which bond shall not exceed $50,000) payable to the City.
11.20.060 Ris ghts Prior t-o T.,easin Neither t ze
filing of an applicatio~i for a lease nor the holding of a
public hearing thereon as provided below, shall give ttie
applicant a right to a lease or to the use of the land
applied for. Any use not authorized by a lease shall
constitute a trespass against the City.
11.20.070 Procedure: 1. Advisory Planning and
Zoning Commission: All lease applications shall be reviewed
first by the City of Kenai Advisory Planning & Zoning
Commission to determine whether the contemplated use falls
within that permitted under the zoning ordinance.
2. Advisory Harbor Commission: All lease applications
shall be reviewed by the Advisory Harbor Commission. If the
egmmission after considering the lease applications determines
at a public hearing as set forth in the section below thaw
any one lease will be in the best interests of the City of
Kenai, the Commission may make a recommendation to the City
Council o£ applicant along with any modifications or conditions
recommended by the Commission.
3. ~~ity Council: The City Council shall make the final
determination of the selection of the applicant based upon
the Advisory Harbor Commission`s recommendation and approve
or reject the choice of application made.
11.20.080 Publ.?c Notica-Public Hearing: Notice of the
lease application shall be published in a newspaper of
general circulation within the City not less than 10 nor
more than 30 days prior to tl'ia dace of public hearing. The
notice must contain the name of the applicant, a brief
description of the land, proposed use, term, and a declaration
that the Advisory Harbor Commission will consider the lease
to the applicant or. the basis of the applicant's agreement
to operate a beneficial industry upon the terms and conditions
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11.20.130 Appraisal: No land shall be leas~:d, or a
renewal lease issued, unless the same has been appraised
within a six month period prior to the 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, according to the method as described in
section 150(1) below except to State or Federal agencies or
their subdivisions if it is in the public interest to do so.
Appraisals shall reflect the number and value of City services
rendered the land in question.
11.20.140 Review: No leased land may be changed in
use, nor may any renewal Iease be issued until the proposed
use or renewal has been reviewed by the Planning Commission
and approved by the Council.
11.20.150 Annual Minimum Rental: 1. Annual minimum
rentals shall be computed from the approved appraised market
value utilizing the method as described in section 160(1)
below. Annual minimum rental shall include:
(a) Taxes pertaining to the leasehold interest of the
Lessee.
(b) Sales tax now enforced or levied in the future
computed upon rent payable in monthly installments whether
rent is paid on a monthly or yearly basis.
(c) All taxes and assessments levied in the future by
the City of Kenai, Gs if Lessee was considered the legal
owner of record of the Leased Property.
(d) Ynterest at the rate of eight percent (8~) per
annum and ten percent (10~) penalties of any amount of money
owed under this Lease which is not paid on or before the
date it becomes due.
(e) All sales taxes due on payments under this lease
an~i to all sales taxes applicable to its operations.
(f) A21 special assessments for public improvements
levied by the City of Kenai, as if Lessee were considered
legal owner of leased property.
2. Upon execution of the lease the lands demised
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, that the City as part of
the consideration of rental payments depends and relies upon
the payment by the lessee of said assessments and taxes as
if he were the owner of said demised land.
3. Rent shall be paid annually in advance. Said
payments shall be prorated to conform with the City of
Kenai`s fiscal year beginning July 1 and ending June 30. If
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as set forth in its application which is available for
public inspection at the City Hall offices. The notice
shall state the date upon which public hearing will be held
before the Advisory Harbor Commission fox consideration of
the application.
11.20.090 Selection of A licant: After the hearing
provided in sect on 080 above, the Advisory Harbor Commission
may make its recommendation of the applicant to the City
Council if in the Advisory Harbor Commission's opinion, on
the basis of all the testimony presented, the award of the
prospective lease will be a3vantageous to the City and in
the best interests of the public welfare, health and safety.
In the alternative, the Advisory Harbor Commission may elect.
to make no recommendation for any applicant giving its
reasons therefor. The Advisory Harbor Commission may impose
additional conditions upon the applicant before making its
award. The decision of the Council shall be posted on the
City Bulletin Board the day after the hearing and remain
posted for 10 days.
11.20.100 AAPeal: Any person disagreeing with the
decision of the Council may appeal the decision by filing
s~iit in the Superior Court, Third Judicial District at
Kenai, within 10 days from the date of the posting of Council's
decision:
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11.20.110 Appraisal and Survev of Teased Lands: The
~ity will furnish a survey and appraisal of the land in
question prior to leasing. Any resurveying or replotting
required will be the applicant's responsibility and expense.
11.20.120 The Lease Document-Terms: Leases may be
issued for a term of not less than 2 years nor more than 99
years. T:ie applicant shall state in his application the
term desired. In deterrtining whether to grant a lease for
the requested term, the Council shall consider the nature,
extent and cost of the improvements which the applicant
agrees to construct thereon as a condition of the lease the
time required to amortize the proposed investment, the value
of the applicant's proposeed use to the economy of the City
and other relevant factoz•s. The term of the lease may be
extended for a number of successive periods for a set
number of years each as long as tP:e appropriate extensions
and original term do not exceed 99 years.
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11.20.130 Appraisal: No land shall be leased, or a
renewal lease issued, unless the same has been appraised
within a six month period prior to the 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, according to the method as described in
section 150(1) below except to State or Federal agencies or
their subdivisions if it is in the public interest to do so.
Appraisals shall reflect the number and value of City services
rendered the land in question.
11.20.140 Review: No leased land may be changed in
use, nor may any renewal lease be issued u~itil the proposed
use or renewal has been reviewed by the Planning Commission
and approved by the Council.
11.20.150 Annual Minimum Rental: 1. Annual minimum
rentals shall be computed from the approved appraised market
value utilizing the method as described in section 160(1)
below. Annual minimum rental shall include:
(a) Taxes pertaining to the leasehold interest o_° the
Lessee.
(b) Sales tax now enforced or levied in the future
computed upon rent payable in monthly installments whether
rent is paid on a monthly or yearly basis.
(c) AlI taxes and assessments levied in the future by
the City of Kenai, as if Lessee was considered the legal
owner of record of.. the Leased Property.
(d) Interest at the rate of eight percent (8$) per
annum and ten percent (100) penalties of any amount of money
owed under this Lease which is not paid on or before the
date :.t becomes due.
(e) All sales taxes due on payments under this lease
and to all sales taxes applicable to its operations.
(f) All special assessments for public improvements
levied by the City of Kenai, as if Lessee were considered
legal owner of leased property.
2. Upon execution of the lease the lands demised
become taxable to the extent of its leasehold interest and
lessee shall pay alI real ~,roperty taxes levied upon such
leasehold interest in these lands, that the City as part of
the consideration of rental payments depends and relies upon
the payment by the lessee of said assessments and taxes as
if he were the owner of said demised land.
3. Rent sh~311 be paid annually in advance. Said
payments shall be prorated t:o conform with the City of
Kenai's fiscal year beginning July 1 and ending June 30. If
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tha equivalent monthly payment exceeds $200, then the lessee
shall have the option of m~!::.ng payments on a monthly or
quarterly basis.
11.20.160 Princi les and Polic of Lease Rates: 1.
To insure a fair return, all leases for a period n excess
of 5 years shall include a redetermination clause as of the
fifth anniversary of each lease, normally set fur the 1st of
July of that fifth year. in pursuing a fair return, all
lands for lease shall be appraised prior to lease and again
prior to redetermination. Therefore, lease rates shall be
based on: (a) fair market va;.ue 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 specific land; and (b) the
actual rate of return determined to be a fair return to the
City shall be set annually by resolution of the City Council
and shall apply to all leases thereafter requested.
The evaluation shall discount not only structural
improvements made to the land by lessee but improvements
made by way of gravel or other approved fill placed on the
land.
2. Realizing that investors, developers and other
potential lessees need a reasonable assurance of stability
in future lease rates, the redetermination clause of all
future leases shall include the following language:
"At each 5-year interval, thE: fair market value shall
be determined by qualified, independent appraisers.
The redetermined Lease rate, (annual rent) under this
provision shall be limited to a 50~ increase in'`the
prior lease rate until the 30th year anniversary of the
lease after which the 50~ cap provision shall no longer
apply and the lease rate shall be redetermined every 5
years en the basis of fair market evaluation as deter-
mined in Section 080(a)(a) and (b)."
City leases of tidelands existing at the time of the
enactment of this chapter shall have a 30 year period
determined from the date from which the lease wa.s originally
entered into.
3. Failure by the City to insist upon renegotiation at
the end of any given five-year period shall not consta.tute a
waiver of the right of the City to insist upon renegotiation
in any subsequent year, provided that neither the City nor
the lessee shall have the right to insist upon renegotiation
until 5 years shall have elapsed from the date the rental
was last adjusted.
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11.20.170 Responsibility to Properly Locate: It shall
be the responsibility of the lessee to properly locate
himself and his improvements on the leased land. Zt shall
be unlawful to encroach on other lands of the City, or on
lands owned or leased by another.
11.20.18 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 Borough, 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 of
the land within the specified time from the date of execution
of the lease, consistent with the proposed use and terms of
the lease, shall constitute grounds for cancellation. The
lease shall set forth in detail with appropriate plans and
specificaticns the improvements to be made within the time
period described above.
11.20.190 Subleasing: Leases may provide for subleasing
a portion of the leased land without prior Council approval.
Subleases shall be in writing and be subject to the terms
and conditions of the original lease. No approval of the
City shall be given to the sublease of property until the
lessee has substantially complied with the development plan.
11.20.200 Assigr_ments: Except for assignments for
collateral purposes, no lessee may assign the lands leased
to him without prior Council approval. The assignee shall
be subject to all of the provisions of the lease. Any
attempted assignment made in violation of this section shall
be void. Any assignment requiring ~'*?:incil approval will not
be unreasonably denied.
11.2
orally or
signed by
interest.
approval.
x.210 Modification: No lease may be modified
in any manner other than by an agreement in writing,
all parties in interest or their successors in
Any such modification shall require Council
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11.20.220 Cancellation-Forfeiture: 1. Leases iri good
standing may be cancelled in c.~hole, or in part, at any time
upon mutual written agreement by lessee a_zd the City Council.
2, Any lease used for an unlawful }purpose may be
cancelled.
3. Zf the lessee shall default in the performance or
observance of any of the lease terms, covenants or stipulations
thereto, or of the regulations now or hereafter in force,
and should said default continue fcr 30 calendar days after
service of written notice by the City without remedy by
lessee of the conditions warranting default, the City shall
subject lessee to appropriate Iegal action, including, but
not limited to, forfeiture of the lease. No improvements
may be removed by lessee or other person during any time the
lessee is in default. Th::s provision shall not be construed
to prohibit the City from taking any appropriate legal
action, including, but not Limited to, forfei.i;lire of the
lease, immediately upon the occurrence of a default.
11.20.230 Default-Right Of Entry: Should default be
made in the payment of any portion of the rent or fees when
due or in any of the covenants or conditions contained in
the lease or in any regulations now or hereinafter in force,
then in such event the City shall give lessee 30 days after
such written notice to cure such default or defaults, after
which if the default is not cured, the City may terminate
the lease, reenter and take possession of the premises,
remove all persons therefrom.
11.20.240 Notice or Demand: Any notice or demand
which under the terms of a lease or under any statute must
be given or made by the parties thereto, shall be in writing
and be given or made by registered or certified mail, addressed
to the other party at the address of record. However,
either party may designate in writing such new or other
address to which such notice or demand shall thereafter be
so given, made or mailed. A notice given hereunder shall be
deemed delivered when deposited in a U.S.'general or branch
post office, enclosed in a registered or certified mail
envelope, addressed as hereinabove provided.
11.10.250 Financing-Rights of Mortgagee or Lienholder_:
1. For the purpose of interim or permanent financing
or refinancing from time to time of the improvements to be
placed upon the leased premises, and for no other purpose, a
lessee, after giving written notice thereof io the City, may
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encumber by mortgage, deed of trust, assignment or other
appropriate instrument, the lessee's interest fn the leased
premises and in and to the lease, provided such encumbrance
pertains only to such leasehold interest and does not pertain
to or create any interest in the City's title to the leased
premises. If such mortgage, deed of trust, or assignment
shall be held by a bank or other established lending or
financial institution (which terms shall include an established
insurance i:o:~pany and qualified pension or profit sharing
trust) and such institution shall acquire the lessee's
interest in such lease as a result of a sale under said
encumbrance pursuant to a foreclosure or other remedy of the
secured party, or through any transfer in lieu of fc~Xgclot3i~re,
or through settlement. of or arising out of any pending or
contemplated foreclosure action, such lending institution
shall have the privilege of transferring its interest in
such lease to a nominee or a wholly owned subsidiary corporation
with the prior consent of the City, provided, however, such
transferee shall assume all of the covenants and conditions
required to be performed by the lessee, whereupon such
lending institution shall be relieved of any further liability
under such lease from any after such transfer. Such lending
institution or the nominee or wholly owned s»bsidiary corporation
to which it may have transferred such lease, or any other
lending institution which may at any time acquire such
lease, shall be relieved of any further liability under such
lease from and after a transfer of such lease.
2. A lE:aseP~old mortgagee, beneficiary of a deed of
trust or security assignee, shall have and be subrogated to
any and all rights of the lessee with respect to the curing
of any default hereunder by lessee.
3. If the holder of any such mortgage, or the beneficiary
of any such deed of trust, or the security assignee shall
give the City before any default shall have occurred in the
lease, a written notice containing the name and post officE
address of such holder, and City shall thereafter give to
such holder a ^opy of each notice of default by the Lessee
at the same time as any notice of default shall be given by
the City to the lessee, and the City will not thereafter
accept any surrender: or enter into any modification of this
lease without the ;=:ior written consent of the holder of any
first mortgage, beneficial interest under a first deed of
trust, or security assignee, in this lease.
4. IE, by reason of any default of the lessee, either
this lease or any extension thereof shall be terminated at
the election of the City prior to the stated expiration
therefor, the City will enter into a new lease with the
leasehold mortgagee for the remainder of the term, effective
as of the date of. such termination, at thn rent and additional
rent, and on the terms herein contained, subject to the
following conditions:
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(a) Such mortgagee, bene:ficit~ry or security as~tignee,
shall make written request to the City for such new lease
within 20 days after the date of such terminaticn and such
written request shall be accompanied by a payment to the
City of all sums then due to the City under the lE:ase.
(b) Such mortgagee, beneficiary oz• se~uiity assignee,
shall pay to the City, at the mime of the execution and
delivery of such new lease, any and all sums due thereunder
in addition to those which would at the time of the execution:
and delivery thereof be due under this lease; but for such
termination and in addition thereto, any reasonable expenses,
including legal and attorneys' fees, tc which the City shall
have been subjected by reason of such default.
(c) Such mortgagee, beneficiary or security assignee
shall, on or before the execution and delivery of such new
lease, perform all the other conditions required to be
performed by the lessee to the extent that the lessee shall
have failed to perform such conditions.
5. If a lending institution or its nominee or wholly
owned subsidiary corporation shall hold a mortgage, deed of
trust, or similar security interest in and to this lease and
shall thereafter acquire a leasehold estate, derived either
front such instruments or from the City, and if such institution,
nominee, or corporation shall desire to assign ±his lease or
any new lease obtained from the City (other than to a nominee
or to a wholly owned subsidiary corporation as permitted by
the above provisions) to an assignee who will undertake to
perform and observe the conditions in such lease required to
be performed by the lessee, the City shall not unreasonably
withhold its consent to such assignment and assumption, and
any such lending institution, nominee, or subsidiary shall
be relieved of any further liability under such lease from
and after such assignment. If the proposed assignor shall
assert that the City in unreasonably withholding its consent
Go any such proposed assignment; such dispute shall be
resolved by arbitration.
11.20.260 Enter and Re-entry: In the event teat the
lease should be terminated as hereinbefore provided by
summary proceedings or otherwise, or in the event that the
demised lands or any part thereof should be abandoned by the
lessee during the said term, the lessor or its agents,
servants or representatfveA may, immediately or any time
thereafter, re-enter and re:;ume possession of said landa or
such part thereof, ar_d remove all persons and property
therefrom, either summary proceedings or by a suitable
action or proceeding at law without being liable for any
damages therefor. No re-entry by the lessor Shall be deemed
an acceptance of a surrender of the lease.
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11.20.270 Re-lease: In the event that a lease should
be terminated as herein provided, or by summary proceedings,
or otherwise, the Harbor Commission may offer said "lands for
lease or other appzopriate disposal, pursuant to the provisions
of this ordinance.
11.20.280 i~vr'citure of Rental: Zn the event that the
lease should be terminated because of any breach by the
lessee as herein provided, the annual rental payment last
made by tY,e lessee st'iall be forfeited and retained by the
lessor as partial or total liquidated damages for said
breach.
11.20.240 Ri Yet of Ins ection: City shall have the
right at all reasonab e t mes to enter the premises, oz any
part thereof, for the purposes of inspection.
11.20.300 Basement Grants Reserved: City reserves the
right to grant and control easements n, or above the land
leased. No such grant or easement will be made that will
unreasonably interfere with the lessee's ixse of the land,
and lessee shall have free access and u:se of any and all
parking and loading rights, rights of ingress and egress now
or hereafter appertaining to the leased premises.
11.20.310 Lease Subordinate to Financin Re uirements:
Lessee agrees that City may mod fy the 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.
11.20.320 Written w~~ver: The receipt of rent by the
lessor with knowledge o any breach of the lease by the
lessee, or any default on the part of the lessee in observance
or s~erformance of any of the conditions or covenants of the
lease, shall not be deemed to be a waiver of any provisions
of the lease. No failure on the part of the lessor to
enforce any covenant or provision therein contained, nor any-
waiver of any right thereunder by the lessor, unless in
writing, shall di~~harge or invalidate such covenants or
provisions, or affect the right of the lessor to enforce the
11-33
same in the event of any subsequent breach or default. The
receipt, by the lessor, of any rent or any otY~er sum of
money after the termination, in any manner, of ~hA term
therein demised, or after the giving by the lessor of any
notice thereunder to effect such termination, shall not
reinstate, continue or extend the resultant term therein
demised, destroy or in any manner impair the efficacy of any
such no*_ire c?r tprminatic~n as may have bPt?n civet: thpt'r»~ncii3r
by the lessor to the lessee prior to the zeceipt of any such
sum of money or other consideration, unless so agreed to in
writing and signed by the lessor.
11.20.330 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 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 City
in writing, and free and clear of all liens and encumbrances
other than those created by City for loans to the City.
Upon the end of the term of this lease or any earlier
termination thereof, title to the buildings, improvements
and building equipment shall automatically vest in the City
without requirement of any deed, conveyance or bill of sale
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 goverxmental
units in connection therewith.
11.20.340 Sanitation: The lessee shall comply with
all regulations or ordinances of the City which are pro-
mulgated for the promotion of sanitation. The premises of
the lease shall be kept in a neat, clean and sanitary condition,
and every effort shall be made to prevent the pollution oi•
water.
11.20.350 Buil~din and Zoning Codes: Leased lands
shall be utilized in accordance with the buildin5 and zoning
ordinances and rules and regulations of said authority.
Failure to do so shall constitute a violation of the lease.
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11.20.360 Rules: T;;e lessee sha17. observe, obey and
comply with all applicable rules, etc., of the State or
Federal governments.
1. City reserves the right to adopt, amend and enforce
r~:asonable rules and regulations ga~erning the demised
premises and the public areas and facilities used in connection
th~arewith. Except in cases of emergency, no rule or regulation
hereafter aeiopted or amended by r.hP City shall become applicable
unless it has been given 30 days notice of adoption or
amendment thereof.
2. Lessee, in the conduct of. its operations on the
demised premises, shall observe, obey and comply with any
and all applicable rii].es, regulations, laws, ordinances, or
orders of any governmental authority, fedcrwl or state,
lawfully exercising authority over lessee o:: lessee`s conduct
of its business.
3. City shall not be liable to lessee for any diminution
or deprivation of possession, or of its rights hereunder, on
account of the exercise of any such right or authority as in
this section provided, nor shall lessee be entitled to
terminate the whole or any portion of the leasehold estate
herein created, by reason of the exercise of such rights or
authority, unless the exercise thereof shall su interfere
with lessee`s use and occupancy of. the leasehold estate as
to constitute a termination in whole or in part of this
lease by operation of law in accordance with the Laws of the
State of Alaska and of the United States made applicable to
the states.
11.20.370 Aircraft Q erations Protected: 1. The City
shall reserve to tsel is 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 and
all improvements approved by the City of the premises conveyed,
together with the right to cause in said airspace such noise
as may be inherent in the operation of aircraft, now or
hereaftez used for navigation of or flight in the air., using
said airspace of landing at, taking off from, or operating
on the Kenai Airport. (S9hen plans for improvements pursuant
to section 230 are approved by the City, the City to tre
extent of those improvements releases the easements here
expressed.)
2. The lessee by accepting conveyance expressly agrees
for itself, its representatives, successors, and assigns,
that it will not erect nor permit the erection of any structure
or object, on the lard conveyed, which would be an airport
obstruction withi:~ the standards established under the
Federal Aviation Administration Regulations, Part 77, as
amended. In the event the aforesaid covenant is breached,
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the City reserves the right to enter on th:~ land conveyed
hereunder and to remove the offending strscture or object,
all of which shall be at the expense of the lessee or its
heirs, s~xccessors, or assigns.
11.20.380 Right to En o•ment And Peaceable Possession:
The City shall agree and covenant 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 said leased premises, except
that any inconvenience caused by public works projects in or
about the leasehold premises shall not be construed as a
denial of the right of quiet or peaceable possession.
11.20.390 Lessee To Pa Taxes: Lessee shall pay all
lawful taxes and assessments wh ch, during the term thereof
may become a lien upon or which may be levied by the State,
Borough, City or any other taxlevying body, upon any taxable
possessory right which lessee may have in or to the reason
of its use or occupancy, provided, however, that nothing
herein contained shall prevent lessee from contesting as any
other land owner an;~ increase in such tax or assessment
through procedures outlined in State statutes.
11.20.400 No Partnershi or Jofnt Venture Created:
The City shall not a construed or held to be a part en r or
joint venturer of lessee in the conduct of business on the
demised premisest and it is expressly understood and agreed
that the relationship between the parties thereto fs, and
shall at all times remain that of landlord and tenant.
11.20.410 Default Bankru tc If the lessee shall
make any assignment or t e benef t of creditors or shall be
adjudged a bankrupt, or if a receiver is appointed for the
lessee or lessee's assets, or any interest under this lease,
and if the appointment of the re^.eiver fs not vacated within
30 days, or if a voluntary petition is filed under Suction
18(ay of the Bankruptcy Act by the lessee, then and in any
event, the City may, upon giving the lessee 30 days' notioe,
terminate this lease.
11.20.420 Nondiscrimination: The lessee, for himself,
his heirs, persona represen at ves, successors in interest,
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and assigns, as a part of the consideration hereof, does
hereby covenant and agree as a covenant running 4/it21 the
land, that:
1. No person on the grounds of race, color, or national
origin shall be excluded from participation in, denied the
benefits of, or be otherwise subjected to discrimination in
the use of said facilities;
2. In the construction of any improvements on, over,
or ~,ider such land an3 the furnishing of services thereon,
no person on the grounds of race, color, or national origin
shall be excluded from participation, denied the benefits
of, or otherwise be subjected to discrimination;
s. The lessee shall use the premises in compliance
with all other requirements imposed by or pursuant to Title
49, Code of Federal Regulations, Department of Transportation,
Subtitle A, Office of the Secretary, Part 21, Nondiscrimination
in Federally-assisted Programs of the Department of Trans-
portation--Effectuation of Title VI of the Civil Rights Act
of 1964, and as said Regulations may be amended;
4. In the event facilities are constructed, maintained,
or otherwise operated on the said property described in this
lease, for a purpose involving the provision of similar
services or benefits, the lessee shall maintain and operate
such facilities and services in Compliance with all other
requirements imposed pursuant to Title 49, Code of Federal
Regulations, Department of Transportation, Subtitle A,
Office of the Secretary, Part 21, Nondiscrimination in
Federally-asaisted Progxams of the Department of Trans-
portation -- Effectuation of Title VI of the Civil Rights
Act of 1964, and as said Regulations may be arnended.
11.20.430 Partial Invalidit It any term, prevision,
condition or part of the lease s 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 such declaration
was not made.
11.20.440 Parole Modifications: It shall be mutually
understood anti agreeu between +~~ parties that the agreement,
as i/ritten, shall cover all the agreements and stipulations
between the parties; and no representations, oral or written,
have been made modifying, adding to, or changing the terms
thereof.
11.20.450 Amendment of Lea€e: Notwithstanding anything
to the contrary, n order to aid the lessee in the financing
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of the impr.'ov;:!nr~nts to be witua.ted herein, the ~ity shall
agree that in the event the proposed mortgagee, beneficiarf
or security assignee under any interim or perma:lent loan on
the security of the leasehold interest of the 11~ssee and the
improvements to be situated thereon so requires, the City
will make a reasonable effort to amend this lease in order
to satisfy such requirements upon the express condition and
understanding, however, that such variance in language will
not materially pr~:juc:ice the City's rights thereunder nor be
such as *_o alter in a.ny way the rental obligations of the
lessee hereunder nor its obligations to comply with all
existing laws and regulations of the City relating to the
leasing of airport lands, and to all applicable Federal.
statutes, rulers, and regulations, and all covenants and
conditions of the deed by which the City holds title to the
land.
11.2.460 Com liance with Laws: Lessee shall comply
with all applicab a laws, ord nuances, and regulations of
public authorities now or hereafter in any manner affecting
the leased premises or the sidewalks, alleys, Streets, and
way adjacent thereto 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 par;; 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 claisns for damages on account of injuries,
death, or property damage resulting from such violation.
Lessee further agrees it will not permit any unlawful
occupation, business or trade to be conducted on said premises
or any use to be made thereof Contrary to any law, ordinance
or regulation as aforesaid with respect thereto.
11.20.470 ^~'~c of Premises: Lessee, at its own cost
and expense, s}zall keep the leased premises, all improvements
which at any tit~:e during the term of this lease may b:
situated thereon:, and any and all appurtenances there~~nt~~
bRlonginy, in good condition and repair during the entir~s
term of this lease.
11.20.480 Lessee's Ohli anon to Remove Liens: Lessee
will not permit any 1 ens xnclud ng, but not- li- m ted to,
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mechanics`, laborers', or materialmen`s liens obtainak~le or
available under the thou existin~3 laws, to stand against the
leased premises or improvements for any labor or material
furnished to lessee or claimed to have been furnished to
lessee ~?r to lessee's agents, contractors, or sublessees, in
connection with work of any character performed or claimed
to have been performed on said premises or improvements by
or at the direction or sufference of lessee, provided,
however, 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. On final determination
of such lien or such claim for lien, lessee will immediately
pay ary judgment rendered with all proper costs and charges
and shall have such lien released or judgment satisfied at
lessee's own expense.
11.20.490 Condemnation: In the event the leased
premises or any part the shall be condemned and taken
for a public or a quasi-public use, then upon payment of any
award or compensation arising from such condemnation, ti,ere
shall be such division of the proceeds, such abatement in
rent payable during the term or any extension of the term
hereof, and such other adjustments as the pasties may agree
upon as being just and equitable under all the circumstances.
If the City and lessee are unable to agree within 30 days
after such an award has been paid into court, upon whit
division, annual abat;;r,:ent in rent, and other adjustments
are just and equitable, ttie dispute shall be determined by
arbitration provided in section 660 hereof.
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11.20.500 Protection of Subtenants: To protect the
position of any subtenants hereafter properly obtaining
any interests in the leasehold estate granted lessee hereunder,
the City agrees that in the event of the cancellation,
termination, expiration or surrender of this lease (the
ground lease), the City will accept the subtenant, its
successors and assigns, as its lessee for a period equal to
the full elapsed portion of the term of the sublease, including
any extensions or renewals thereof not exceeding the term of
this lease, upon the same covenants and conditions therein
Lvntdirr~d, to tine extent that said covenants and conditions
are not inconsistent with any of the terms and condi.tf.ons of
this lease, provided such subtenant shall make full and
complete attornment to thn--, city for the balance of the term
of such sublease so as tc ~ur~hlisit direct privity of estate
and contract between the ~:ity and the subtenant with the
same force and effect as ~:}iough such sublease was originally
11-39
made directly between the City and such subtenant; and
further provided such subtenant agrees to comply wfth all
the provisions of the ground lease and all the terms of any
mortgage, deed of trust or security assignment to which such
?easehold estate is subject, except the payment of rent
under the ground lease and the payment of any debt service
under any such mortgage, deed of trust or security assignment.
11.20.510 Successors In Interest: This lease shall be
binding upon and shall pure to the benefit of the respective
successors and assigns of the parties hereto, subject to
such specific limitations or assignment as are provided for
herein.
11.20.520 Governing Law: The indenture of lease shall
be governed in all respect3 by the laws of the State of
Alaska.
11.20.530 Notices: 1. Any notices rEquired by the
lease shall be in writing and shall be deemed to be duly
given only if delivered personally or mailed by certified or
registered mail in a prepaid envelope addressed as follows:
To City: City Hall-City of Kenai
P O Box 580
Kenai, Ak 99611
To Tenant:
The City shall also mail a cony of any r~~*_ice given to the
lessee, by registered or certified mail, to any leasehold
lender (mortgagee, beneficiary of a deed of trust, security
assignee) who shall have given the Cfty notice of such
mortgage, deed of trust or security assignment.
2. Any such addresses may be changed by an appropriate
notice in writing to all ^ther parties affected provided
such charge of address is given to the other parties by the
means outlined in paragraph 1 above at least 15 days prior
to the giving of the particular notice fn issue.
11.20.540 Ffre Protection: The lessee will take all
reasonablE nrecaut~t-n to prevent and take all necessary
action to ~+~•~rr~~~g clggtrl}ctive or uncontrolled grass, brush
or other f:i.i~s on leased lands, and comply with all laws,
regulatia»s. and rules promulgated and enforced by the City
for fire 1:~•otection within the area wherein the ].eased
premises ai•e located.
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11.20.550 I~ection: The lessee shall allow authorized
repr~esentati.ves of the City to enter the leased land £or
irsr~ection at any reasonable time.
1?..20.560 Personal Use of Materials: A7.1 coal, oil,
gas and other minerals and all depos is of stone or gravel
valuable far extraction or utilization and all materials
subject to Title ZI, Division I, Chapters 4, 5 and 6 of the
Alaska Administrati~:; Code are excepted from the operation
of a surface lease. Specifically, the lessee of the surface
rights shall not sell or remove for use elsewhere any timber,
stone, gravel, peat moss, topsoil or any other material
valuable for building or commercial purposc;a; provided,
however, that materia]. required for the development of the
leasehold may be used if its use is first approved by the
City.
11.20.570 Restrictions and Reservations: The lease
shall contain suc restr ct ons an reservat ons as are
necessary to protect the public intrrest.
11.20.580 Waste and Injury to Land: Zf any person
shall commit waste, trespa~-rs or other injury upon Ciby land,
the person so offending, in addition to being civilly liable
for any damages caused, shall be deemed guilty of a misdemeanor.
11.20.590 Warran}~~: The City does not warrant by its
classification or eas~g of land that the land is ideally
suited for the use authorized under said classification or
lease, and no guarznty is given or implied that it shall be
profitable to emplay land to said usa. City bears no responsibility
£or any water erosion of land.
11.20.600 Approval o£ Other Authorities; The issuance
by the Cfty of leases does not relieve the q~rantee or lessee
of responsibility of obtaining licenses or p~~rmfts as may be
xequired by duly authorized Borough, State or Federal agencies.
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1I.2~.610 Title Restrictions: All leases or sales of
property shall be made subject to restrictions and reservations
in the patent, deed or other instrument under which the City
tw~~s.
11.20.620 Insurance-Hold Harmless: Lessee shall
covenant to save the City harmless from all actions, suits,
liabilities, or damages resulting from or arising out of any
acts of commission or omission by the lessee, his agents,
employees, customers, invitpeR, nr arising from or out of
the lessee's occupation, or use of the premises demised, or
privileges granted, and to pay all ousts connected therewith.
In this connection, the lessee shall agree to arrange and
pay for all the following:
1. Public liability insurance protecting both the City
and/or its agents and the lessee, such insurance to be
evidenced by a certificate showing the insurance in force.
The amount of such public liability insurance shall have
limits not less than those known as $250,000/$500,000/$100,000.
2. Liquor liability (where applicable).
3. LeRSee agrees to carry employer's liability insurance
and Workmen's Compensation insurance, and to furnish a
certificate thereof to the City, if applicable.
4. Insurance contracts providing liability insurance
and Workmen's Compensation shell provide for not less than
30 days written notice to the City of cancellation or
expiration or substantial change in policy conditions and
coverage.
5. Lessee agrees that waiver of subrogation against
the C:.:,y shall kie requested of lessee's insuror, and shall
be vrovided at no cost to the City.
6. Cross Liability: It is understood and agreed that
the insurance afforded by this policy or policies for more
than one named insured; shall not operate to increase the
limits of the company's liability, but otherwise shall not
operate to limit or void the coverage of any one named
insured as rep^ccts claims against the same named insured or
employees of such other named insured.
7. The insurance procured by t!:e lessee as herein
required shall be issued irr %i1e nary of the lessee and the
City by a company licensed to do business in the State of
Alaska, and shall contain endorsements that (a) such insurance
may not be cancelled er amended with respect to L•he City
without 30 days written notice by registered or certified
mail to the City by the insurance company; and (b) Lessee
shall be solely responsible for payment of premiums and that
City shall not be required to pay .zny premiums for such
insurance.
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8. n'he amount of insurance
be subject: to review for increase
of the lease.
coverage required above may
at each 5 year renegotiation
9. Upon review by the Kenai Advisory Harbor Commission,
the lessee may be required to obtain such other insurance
protecting the City and lessee that may be necessarily
required or advisable owing to the particularities of the
harbor related activities on the lease hold interest.
11.20.630 Insurance of Users-Subtenants: Lessee, for
its own protection, may requ re bona fide public users and
subtenants to execute agreemen*_=~ holding lessee harmless
from actions arising out of user's operations and may require
such bona fide public users and subtenants to show proof of
public liability insurance covering their operations on the
demised premises in such amounts as will adequately protect
them.
11.20.640 Annual Re ort: The lessee may be required
to submit to the C ty each year on or about March 15, an
annual report on its operations, particularly those services
and facilities offered to the public, whether on a fee or
non-fee basis.
11.20.650 Tidelands Claims: The City shall lease the
subject land subject to any pre ercnce rights claims made
pursuant to the provisions of Alaska Statute 38.05.320 or
Ordinance #455-78 dated September 5, 1979 of the City of
Kenai adopted pursuant thereto, and the lessee holds lessor
harmless for any damages, legal Expenses, or compensation
necessitated by the resolution or satisfaction of said
claims, if any.
11.20.660 Sub'ection to Harbor Ordinance: All leases
are subject to the terms, cond t ons and regulations imposed
' by Title II, Harbor and Harbor Facilities, of the 1979 Kenai
Code of ordinances as amended of which this section is a
part.
11.20.670 Arbitration: In the event the City and
_ I lessee shall be unable to r::groe as to any matter providec.
for in the lease except as to the amount of the 5 year rent
redetermination amount which is handled pursuant to section
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.,. __ .._P._~._-~- --------- - --- ---- -- . .
180, such dispute shall, be determf ncd by 3 di.s;intcrefstccl
arbitr.:stors, (unless the parties: can agree an onG arbitrator).
Such arbitration shall be conducted upon rcctuc:rst of. either
the City or the lessee, bofcro 3 art;itrators~ (unle~srt the
City or the lessee agree to one arbitrator) designated by
the American Arbitration Ar~~sariation and in accordance with
the rules of such Association. The arbitrators designated
and acting under this leans shall make their award i» strict
conformity with such rules .end shall have no powcsr to depart
.from or change any of the provisions thereof. The expons3e
of arbitration proceedings conducted hereunder shall be
borne equally by the parties. '."he proceedings shall take
place in Kenai, Alaska unless otherwise agreed upon by the
parties.
11.20.680 Provisions Reaulatin Public Use Pur owes
The City Council rea izes twat on y a m toga of t delnnds
bor~3;~ring navigable waters are available within the Gity of
Kenai and which are ovmed by the City of Kenai. It would -ae
in th•s public interest to insure that these lands3 do not
pass out of community control at least to the extent that
the public would not be deprived of harbor services at
reasonable rates in the futare. Therefore, areas of City
owned tidelands which are developable for the bona fide
public purposes as enumerated below shall kse 1ear~ed only
with the following covenants defined to insure public use
and access at reasonable rates.
11.20.690 TY~c following provision :,hall be included in
leases whore harbor facilities are conrstructed to be utilized
all or in part for bona fide public uses.
11.20.700 Public Uses Defined: Puiilic urge shall mcsan
a use limited in part or n whole to the followings
In general the lessee may use the demised premises or
part thereof far any of the following purposes only:
(1) Public dock facilities
(2) Maritime commerce
(3) mransportation
(4) Fishing
(5) Boat harbor
(6) Port and water front development purposes
Before lessee m~-sy conduct any activities which fall
under this general criteria, but are not speciPiczlly men-
tioned above, lessee must obtain written convent of the
City.
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11.20.710 Conrr.olled Access: Lessee, for its own
protection, may construct o+z mall fences, gates or other
typer~ of barriers to restrict access to portions of the
demised premir~es teat are not designated for a public use
and may provide reasonable controls for access to public use
areas to allow for security for such areas while insuring
reasonable public access. Reasonable public access includes
accommodations made for fishing operations during fishing
season.
11.20.720 Use Charges: Lessee shall make reasonable
an8 non-dir~criminatory charge3 to the public for use of any
of its facilities. Zt is expressly recognized that lessee
is entitled to a margin of profit, which should be fair,
reasonable and competitive, and that City will cooperate to
this end in consfd~sring rates and fees. The Commission
shall review all rite szzuctures annually. The lease shall
contain an arbitrat±^n provision as set forth in section 670
to resolve disputes arising hereunder.
11.20.730 Maintenance of Dock: Lessee covenants that
it will maintain the ock actin a safe condition and
fn accordance with applicable state and federal standards.
11.20.740 Modifications of Rxfstin Leases: Leases
shall only be mo ed to that extent deemed to be necessary
to protect the public's interest.
`' ~ 11.20.750 Unauthorized Removed of Material prohibited;
•~ Any person, firm or corporat on w o w t out written auti~ty
I~ from tho City removes rock, gravel or other material from
tho lands owned by the Cfty without the express consent of
thQ City shall be doomed guilty of a misdemeanor. Any
criminal aeti^n taken against such person shall not preclude
i the institution of civil proceedings by the City.
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11.20.760 Removal Not Authorizeu By Lease: No deed or
lease granted by the City to any person shall contain terms
or be construed as granting any right to remove material
from City lands.
11.20.770 Disposition of Rights By Council: In recognition
that conditions may ex st from time to time whereby use of
such lands and the material comprising the same may be
beneficial to the public interest and promote the progress
and development of the City, applications for the use thereof
may be received and considered by the Harbor Commission,
providing such applications fully discloses to the City all
material facts and plans for the proposed use. Such applications
shall be consistent with the. Comprehensive Plan of the City
and referred to the City Flann~rg Commission for its recommendations.
Disposition of such applications shall be made by the Council
after recommendation from the Harbor Commission.
11.20.780 Penalties: 1. It is unlawful for any
person to violatee an~the provisions of this chapter and
upon conviction thereof shall be fined in an amount not
exceeding $100. Each day such violation is committed or
permitted to continue shall constitute a separate offense
and shall be punishable as such hereunder.
2. In addition to or as an alternative to the above
penalty provision, the City may impose a civil penalty not
to exceed $100 per day for the violation of any provision of
this chapter and seek injunctive relief for any infraction
thereof for which the offending party will be charged for
reasonable attorney's fees and costs incurred by the City as
awarded by the court.
3. Nothing in this section shall be deemed to restrict
the City's exercise of any of its rights pursuant to the
lease agreement including those enumerated in section 220
and 240 hereof.
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