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HomeMy WebLinkAboutOrdinance No. 3222-2021KENAI CITY OF KENAI ORDINANCE NO. 3222-2021 Sponsored by: Administration AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, DETERMINING THAT REAL PROPERTY DESCRIBED AS LOT 1A, BLOCK 1, DESHKA SUBDIVISION, ACCORDING TO PLAT NO. K-1577 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 (2016), LLC. 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 May 20, 1966, 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 1A, Block 1, Deshka Subdivision, for other than airport purposes; and, WHEREAS, the City has received a request to purchase Lot 1A, Block 1, Deshka Subdivision, according to Plat K-1577 (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 (2016), LLC 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 1A, Block 1, Deshka Subdivision, according to Plat K-1577 (the Property). Ordinance No. 3222-2021 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 1A, Block 1, Deshka Subdivision, according to Plat K-1577, under the procedures and terms established for the sale of [ands, 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 (2016), LLC for a sum not less than the fair market value of the [and excluding lessee -constructed improvements as determined by an appraisal and a minimum new investment in the construction of new permanent improvements on the premises equal to 25% of the fair market value of the [and within three (3) years of sale. 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: 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 leve[; 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 May 20, 1966. 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. 3222-2021 Page 3 of 3 r. ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 4'h day of August, 2021. ATTEST: \_J City Clerk h L3. BRIAN GABRIEL SR., MAYOR 'tCEMq f �✓1y0E9 119^ Introduced: July 7, 2021 Enacted: August 4, 2021 Effective: September 4, 2021 New Text Underlined; [DELETED TEXT BRACKETED] K I N A City of Kenai 1210 Fidalgo Ave, Kenai, AK 99611-77941907.283.75351 wwwkenaixity 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. 3222-2021 - Determining that real property described as Lot 1A, Block 1, Deshka Subdivision, 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 (2016), LLC 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 (2016), LLC is the current lessee of Lot 1A, Block 1, Deshka Subdivision, which was entered into on November 3, 1975, with assignment to Schilling Rentals on July 7, 2017. The current use is for a jewelry store. The 55 -year lease term expires on June 30, 2030 and is in good standing. On May 20, 1966 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 a minimum new investment in the construction of new permanent improvements on the premises equal to 25% of the fair market value of the land within three years of sale. 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 $250,000 by an appraisal performed by MacSwain Associates, LLC on May 18, 2021. Based on the amount LJ of the appraisal, Schilling Rentals (2016), LLC proposes to meet the minimum new investment requirement equal to $62,500 on the premises. If the City Council approves Ordinance 3222-2021, City Administration may proceed with a sale. Thank you for your consideration. Attachment A: Aerial Map of 419 Frontage Road Attachment B: Email request to begin the process for purchasing 419 Frontage Road Page 2 of 2 The City of Kenai I www.6nai.city 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 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. Thankyou Duane Bannock Schilling Rentals 47 Spur View Drive Kenai, AK 99611 907 283 3660 Uptown Motel office 907 398 2316 cell r L I *V K E N A 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. 3222-2021 — Request to include the recommendation of the Planning and Zoning Commission On July 7, 2021 Ordinance No. 3222-2021 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. 3222-2021. 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.