HomeMy WebLinkAboutOrdinance No. 3221-2021KENAI
CITY OF KENAI
ORDINANCE NO. 3221-2021
Sponsored by: Administration
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, DETERMINING THAT
REAL PROPERTY DESCRIBED AS LOT 4A, BLOCK 3, COOK INLET INDUSTRIAL AIR PARK
2014 REPLAT, ACCORDING TO PLAT NO. 2014-21 CITY -OWNED AIRPORT LAND LOCATED
OUTSIDE THE AIRPORT RESERVE, IS NOT NEEDED FOR A PUBLIC PURPOSE AND
AUTHORIZING THE SALE OF THE PROPERTY TO SCHILLING RENTALS, AN ALASKA
PARTNERSHIP.
WHEREAS, the City of Kenai received a quitclaim deed from the Federal Aviation Administration
(FAA) on December 1, 1963, to nearly 2,000 acres of land subject to certain restrictions, including
that no property shall be used, leased, sold salvaged, or disposed of for reasons other than for
airport purposes; and,
WHEREAS, on August 20, 1970, the FAA executed a Deed of Release, for an area of land subject
to the Quitclaim Deed allowing for the lease, sale, or disposal of Lot 4A, Block 3, Cook Inlet
Industrial Air Park Subdivision, 2014 Replat, for other than airport purposes; and,
WHEREAS, the City has received a request to purchase Lot 4A, Block 3, Cook Inlet Industrial Air
Park 2014 Replat, according to Plat No. 2014-21 (the Property) from the current Lessee; and,
WHEREAS, KMC 22.05.110 — Determination as to need for public purpose, provides that the City
Council, may determine whether land is no longer needed for public purpose; and,
WHEREAS, the Property is leased to Schilling Rentals, an Alaska Partnership and developed for
private commercial use and is not needed for a public purpose; and,
WHEREAS, Resolution No. 2018-12 amended the City's Policy for sale of specific Airport Land
Lots and the subject property is one of the properties addressed in the policy; and,
WHEREAS, the sale of this property is in the best interest of the City and Airport and encourages
new development and/or improvements to the property; and,
WHEREAS, the Planning and Zoning Commission recommended Council approve that the
subject property is not needed for a public purpose and authorize its sale at their meeting on July
14, 2021; and,
WHEREAS, KMC 22.05.100 — Sale procedure, the minimum acceptable offer for the land shall
be the fair market value.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA,
as follows:
Section 1. Statement of Ownership: That the City of Kenai is the owner of Lot 4A, Cook Inlet
Industrial Air Park 2014 Replat, according to Plat No. 2014-21 (the Property).
r,
Ordinance No. 3221-2021
Page 2 of 3
Section 2. Public Purpose and Best Interest Findings: That the Property is not needed for future
public municipal or airport purposes. Under the Airport Layout Plan, the Property is designated
for non -aviation commercial or light -industrial uses. The sale of the Property is in the best interests
of the City and Airport, as it serves a purpose of continuing commercial growth and investment in
the City.
Section 3. Authorization of Sale: That the Kenai City Council hereby authorizes the City
Manager to sell the City -owned lands described as Lot 4A, Block 3, Cook Inlet Industrial Air Park
2014 Replat, according to Plat 2014-21, under the procedures and terms established for the sale
of lands, as set forth in KMC 22.05.100 et seq. and subject to the following additional essential
terms and conditions of sale under the Policy for Sale of Specific Airport Leased Lands approved
by City of Kenai Resolution No. 2018-12:
a) The sale will be made through a negotiated sale to Schilling Rentals, an Alaska
Partnership for a sum not less than the fair market value of the [and excluding lessee -
constructed improvements as determined by an appraisal and meet the minimum value of
improvements requirement greater than or equal to four times the appraised fair market
value of the land, which is $1,200,000.
Section 4. Title: That title shall be conveyed by quitclaim deed. Any instrument conveying title to
the Property shall include the following restrictions, promises, and/or covenants:
r a) that the City of Kenai reserves unto that the grantee expressly agree for itself and
its heirs, executors, administrators, successors, transferees, and assigns, for the
use and benefit of the public a right of flight for the passage of aircraft in the
airspace above the surface of the Property, together with the right to cause in said
airspace such noise as may be inherent in the operation of aircraft, now known or
hereafter used, for navigation of or flight in the said airspace, and for use of said
airspace for landing on or at and for taking off from or operating on Kenai Municipal
Airport; and,
b) that the grantee expressly agree for itself and its heirs, executors, administrators,
successors, transferees, and assigns to restrict the height of structures, objects of
natural grown, and other obstructions on the Property to a height of not more than
242 feet above mean sea level; and,
c) that the grantee expressly agree for itself and its heirs, executors, administrators,
successors, transferees, and assigns to prevent any use of the Property which
would interfere with landing or taking off of aircraft at the Kenai Municipal Airport,
or otherwise constitute an airport hazard; and,
d) that all covenants heretofore stated shall run with the land and shall inure to the
benefit of, and be binding upon the heirs, executors, administrators, successors,
transferees, and assigns of the parties to the contract for sale and conveyance.
Section 5. Proceeds of Sale: That should a sale of the Property be finalized, all revenues from
the sale shall be deposited in the Airport Land Sale Permanent Fund for use in the development,
improvement, and operation of the Kenai Municipal Airport and as otherwise required in the Deed
of Release dated August 20, 1970.
Section 6. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect 30
days after enactment.
New Text Underlined; [DELETED TEXT BRACKETED]
Ordinance No. 3221-2021
Page 3 of 3
ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 4' day of August, 2021.
ATTEST:
nz, MMC, City Clerk J F n
��•.••.. K Introduced: July 7, 2021
�bdED 119 Enacted: August 4, 2021
Effective: September 4, 2021
New Tent Underlined; [DELETED TEXT BRACKETED]
KENAI
City of Kenai 1210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 www kenaixity
MEMORANDUM
TO:
Mayor Brian Gabriel and Kenai City Council
THROUGH:
Paul Ostrander, City Manager
FROM:
Ryan Foster, Planning Director
DATE:
June 24, 2021
SUBJECT:
Ordinance No. 3221-2021 - Determining that real property described as
Lot 4A, Block 3, Cook Inlet Industrial Air Park 2014 Replat, city -owned
airport land located outside the airport reserve, is not needed for a
public purpose and authorizing the sale of the property to Schilling
Rentals, an Alaska Partnership
The City has received a request to purchase the above City -owned leased land outside the Airport
Reserve with substantial constructed leasehold improvements pursuant to the City's Policy for
Sale of Specific Airport Leased Lands, approved by Resolution No. 2018-12.
Schilling Rentals, an Alaska Partnership is the current lessee of Lot 4A, Block 3, Cook Inlet Air
Park 2014 Replat, which was entered into on March 1, 1967. The current use is for a medical
office and clinic building and includes substantial recent improvements to the building made by
the Lessee. The 55 -year lease term expires on June 30, 2022 and is in good standing.
On August 20, 1970, the Federal Aviation Administration (FAA), released the property for sale for
other than airport purposes, allowing the property to be sold at fair market value. All revenues
from the sale would be deposited in the Airport Land Sale Permanent Fund for use in the
development, improvement, and operation of the Kenai Municipal Airport as required by the Deed
of Release.
The City's Policy does not provide for the sale of any specific property, but only a method for such
sale, subject to the Ordinances of the City of Kenai. The policy is in effect until July 6, 2021. Any
specific sale must be separately approved by the City Council, which may approve or disapprove
any such sale, in its sole discretion. Schilling Rentals requests to purchase the property at its fair
market value excluding lessee -constructed improvements as determined by an appraisal and
value of improvements greater than or equal to four times the appraised fair market value of the
land.
Schilling Rentals submitted a good -faith deposit and the City ordered an appraisal to be performed
on the property as -if vacant. The fair market value of the property was determined to be $300,000
s by an appraisal performed by MacSwain Associates, LLC on May 18, 2021. Based on the amount
Li
of the appraisal, Schilling Rentals proposes to meet the minimum value of improvements
requirement greater than or equal to four times the appraised fair market value of the land, which
is $1,200,000. Attachment B identifies a total improvement value of $2,005,700.
If the City Council approves the sale, City Administration may proceed with a sale.
Thank you for your consideration.
Attachment A: Aerial Map of 100 Trading Bay Road
Attachment B: Email request to begin the process for purchasing 100 Trading Bay Road
Attachment C: Submitted value of improvements of 100 Trading Bay Road
Page 2 of 2
The City of Kenai I www.kenai.city
KENA
ATTACHMENT A
ORDINANCE 3221-2021
KPB # 04323031
Lot 4A, Block 3, Cook Inlet Industrial Air Park 2014 Replat
ATTACHMENT B
From: Duane Bannock
To: Ryan Foster
Subject: Purchase of city lease Lots - Schilling Rentals
Date: Wednesday, April 28, 20218:13:20 PM
CAUTION: This email originated from outside your organization. Exercise caution when
opening attachments or clicking links, especially from unknown senders.
Good Morning Mr Foster
Thank you for the time on the phone to discuss the process and procedure that may lead to Schilling
Rentals purchasing the following properties from the City of Kenai:
1. 100 Trading Bay Rd KPB Parcel ID: 04323031
2. 419 Frontage Rd KPB Parcel ID: 04705501
Schilling Rentals, an Alaska Partnership is the current leaseholder of the above properties.
Property #1 has met the improvement threshold; it has been suggested that KPB property tax values
may be acceptable to establish the city s requirement
Property #2 likely has not met the improvement threshold and we seek your guidance on the
necessary investment amount
e As discussed yesterday, the City will accept $1,750.00 for each of the above properties to initiate the
required appraisal as well as conform with the timeline as described in Resolution 2018-12. Also,
your office notified me that there a credit of $900.00 in the name of Schilling Rentals; we request
that credit be applied to this transaction.
Accordingly, I will deliver a check from Schilling Rentals in the amount of $2,600.00 as a deposit.
Once the appraisal has been reviewed and agreed to, we will cheerfully sign the Purchase and Sale
Agreement.
Thank you
Duane Bannock
Schilling Rentals
47 Spur View Drive
Kenai, AK 99611
907 283 3660 Uptown Motel office
907 398 2316 cell
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KENAI
City of Kenai 1 210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 www kenai.city
MEMORANDUM
TO: Mayor Brian Gabriel and Kenai City Council
THROUGH: Paul Ostrander, City Manager
FROM: Ryan Foster, Planning Director
DATE: July 26, 2021
SUBJECT: Ordinance No. 3221-2021 — Request to include the recommendation of
the Planning and Zoning Commission
On July 7, 2021 Ordinance No. 3221-2021 was introduced to City Council. At their regular meeting
on July 14, 2021, the Planning and Zoning Commission recommended Council approve the
subject property is not needed for a public purpose and authorizing its sale. This memorandum
requests the following amendment to Ordinance No. 3221-2021.
Move to add as the eighth whereas; WHEREAS, the Planning and Zoning Commission
recommended Council approve that the subject property is not needed for a public
purpose and authorizing its sale at their meeting on July 14, 2021; and
Thank you for your consideration.