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HomeMy WebLinkAboutResolution No. 2022-444 / w KENAI CITY OF KENAI RESOLUTION NO. 2022-44 Sponsored by: Administration A RESOLUTION APPROVING THE EXECUTION OFA LEASE OF AIRPORT RESERVE LANDS USING THE STANDARD LEASE FORM BETWEEN THE CITY OF KENAI AND SWANSON PROPERTIES, LLC ON LOT 6, BLOCK 5, GENERAL AVIATION SUBDIVISION NO. 1 AMENDED. WHEREAS, the lease to Swanson Properties, LLC for Lot 6, Block 5, General Aviation Subdivision No. 1 Amended expires on June 30, 2022; and, WHEREAS, on April 15, 2022, Swanson Properties, LLC submitted an application for a lease of City owned properties within the Airport Reserve, described as Lot 6, Block 5, General Aviation Subdivision No. 1 Amended; and, WHEREAS, the Swanson Properties, LLC lease application states the intention to maintain current warehouse and office operations; and, WHEREAS, the appraised value of existing improvements that allows a maximum lease term of 45 years according to the term table in Kenai Municipal Code 22.05.055 although a term of only 9 years is requested; and, WHEREAS, the proposed development would be mutually beneficial and would conform with the Kenai Municipal Code for zoning and Kenai's Comprehensive Plan; and, WHEREAS, the City of Kenai did not receive a competing lease application within thirty (30) days of publishing a public notice of the lease application from Swanson Properties, LLC; and, WHEREAS, at their regular meeting on May 11, 2022, the Planning and Zoning Commission reviewed the lease application and recommended approval by the City Council; and, WHEREAS, at their regular meeting on May 12, 2022, the Airport Commission reviewed the lease application and recommended approval by the City Council. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, as follows: Section 1. That a Lease of Airport Reserve Lands is approved and the City Manager is authorized to execute a lease between the City of Kenai, Lessor, and Swanson Properties, LLC, Lessee, as follows: The lease term will be 9 years; Lj Lot developments will prevent unauthorized access to the airfield; Resolution No. 2022-44 Page 2 of 2 Structures will be built behind the 100 foot building restriction line; Swanson Properties, LLC is responsible for all snow removal, and snow may not touch the perimeter security fence or be piled to a height that would allow access to the airport, and Section 2. That this Resolution takes effect immediately upon passage. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS V DAY OF JUNE, 2022. Michell er, MC, City Clerk � `'�� x - Brian Gabriel Sr., Mayor [DELETED TEXT BRACKETED] I V ��**v KENAI City of Kenai 1 210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 wwwkenaixity MEMORANDUM TO: Mayor Brian Gabriel and Kenai City Council THROUGH: Paul Ostrander, City Manager FROM: Ryan Foster, Planning Director DATE: May 24, 2022 SUBJECT: Resolution No. 2022-44 - Approving the Execution of a Lease to Swanson Properties, LLC On April 4, 2014, Swanson Properties, LLC entered into an assignment of lease for Lot 6, Block 5, General Aviation Subdivision No. 1 with Jacqueline Ann Swanson. The lease term for an office and warehouse use was effective on April 14, 1967, for a term of 55 years and terminates on June 30, 2022. Swanson Properties, LLC proposes to maintain the current office and warehouse operations; with the appraised value of existing improvements allowing a lease term of 45 years according to the term table in Kenai Municipal Code 22.05.055, though the applicant is requesting a shorter lease term to June 30, 2031, in order to align with another existing lease they have on the adjacent property at 149 N Willow Street. At that time, the lease for non -aeronautical uses with direct airfield access can be evaluated. Pursuant to Kenai Municipal Code 21.10.060 Lease application review, notice of the lease application was posted in the Peninsula Clarion and stated competing applications may be submitted for the parcel within 30 -days to the City. The 30 -day window from publication ended on May 21, 2022, and no competing applications were submitted to the City. The parcel is within the Airport Light Industrial (ALI) Zone. Pursuant to KMC 14.20.065, the purpose of the ALI Zone is to protect the viability of the Kenai Municipal Airport as a significant resource to the community by encouraging compatible land uses and reducing hazards that may endanger the lives and property of the public and aviation users. The proposed use, rental and equipment sales as an Airport Compatible Use, is a permitted and compatible use in the ALI Zone. The Imagine Kenai 2030 Comprehensive Plan outlines goals, objectives, and action items for the City, including this one pertaining to the Kenai Municipal Airport: Objective T- 1: Support future development near or adjacent to the airport when such development is in alignment with the Kenai Municipal Airport's primary mission, "To be the V commercial air transportation gateway to the Kenai Peninsula Borough and Cook Inlet." The proposed use complies with the Imagine Kenai 2030 Comprehensive Plan by supporting development on lease lots with development that is in alignment with the Kenai Municipal Airport's marketing strategy. The Airport Land Use Plan was developed to identify the highest and best uses of Kenai Municipal Airport land. The Airport Land Use Plan discusses leasing land and enhancing opportunities for local economic development. The proposed use by Swanson Properties, LLC complies with the Airport Land Use Plan and would enhance local economic development. At their regular meeting on May 11, 2022, the Planning and Zoning Commission reviewed the lease application and recommended approval by the City Council. At their regular meeting on May 12, 2022, the Airport Commission reviewed the lease application and recommended approval by the City Council. Thank you for your consideration. Attachments: City of Kenai Land Lease Application from Swanson Properties, LLC 145 N Willow St Map Page 2 of 2 �� The City of Kenai I wwwlenai.city KEGEIVE •/ enai Application for: ❑ New Lease CITY OnFd �HT�� ppllc tion ❑ Amendment Extension CANNING DEPARTMENTL ❑ Assignment IK E N / �- IN Application Date: ❑ Renewal +-t _ I S - ZZ Applicant Name of Applicant: t9 S t✓Li e; � VI �0.re, � J Warr SG✓l Mailing Address: I `i 5 , W ((o w S City: Q/Lf� State: l� Zip Code: °I t Phone Number(s): Home Phone: Work/ Message Phone: 010 E-mail: (Optional) j a� e r� S (m ✓s �`e.�i : } , Name to Appear on Lease: R0-1:& en (� L trL� ¢r T ✓L Mailing Address: City: State: Zip Code: Phone Number(s): Home Phone: Work/ Message Phone: E-mail: (Optional) Type of Applicant: ❑ Individual (at least 18 years of age) ❑ Partnership Corporation I Government ❑ Limited Liability Company (LLC) ❑ Other Property Information and Term Requested Legal description of property (or, if subdivision is required, a brief description of property): i4S. N. W; dlov, Si. Does the property require subdivision? (if Yes, answer next questions) Subdivision costs are the responsibility of the applicant unless the City Council ❑ YES ,N2 NO determines a subdivision serves other City purposes: 1. Do you believe the proposed subdivision would serve other City purposes? ❑ YES ❑ NO 2. If determined it does not, applicant is responsible for all subdivision costs. Initials If an appraisal is required to determine the minimum price on the land, applicant is responsible for the deposit to cover costs associated with appraisal. If a sale is approved, the cost of the appraisal will be either refunded or credited to the applicant. Initials It is the responsibility of the applicant to cover recording costs associated with lease. Initials Do you have or have you ever had a Lease with the City? (if Yes, answer next question) )< YES ❑ NO 1. Legal or brief description of property leased: MR Q- tKs, N. w ka-v Request a Lease with an Option to Purchase once development requirements are met? ❑ YES ❑ NO Requested term for Initial Lease or Renewal (based on Term Table, not to exceed 45 years): Requested term for Lease Extension (based on Term Table, not to exceed a total of 45 Years): Cl t ex { Requested Starting Date: Proposed. . Proposed Use (check one): I Aeronautical I Non -Aeronautical X Do you plan to construct new or additional improvements? (it Yes, answer next five questions) L YES YNO 1. Will the improvement change or alter the use under an existing lease? C YES f -I NO 2. What is the proposed use of the improvement? 3. What is the estimated value of the improvement? 4. What is the nature and type of improvement? 5. What are the dates construction is estimated to commence and be completed? (generally, construction must be completed within two years) Estimated Start Date: Estimated Completion Date: Describe the proposed business or activity intended: rt)lra' (/ e- p"' to^+e.-,+ ren w l 546 S How does the proposed lease support a thriving business, residential, recreational, or cultural community? Lease Assignment Only: What is the name of the individual or legal entity the lease is to be assigned? Lease Renewal Only I Renewal of an Existing Lease (at least one year of term remaining): Requires new development. Lease Term based on: Estimated cost of new improvements and I I Purchase Price (optional) Renewal of an Expiring Lease (less than one year of term remaining): Does not require new development. Lease Term based on: F Purchase Price I I Professional Estimate of Remaining Useful Life —i Fair Market Value appraisal and/or 71 Estimated cost of new improvements (optional) Requested Term for Renewal Based on Term Table, not to exceed 45 Years: qt es Submitting an application for a lease does not give the applicant a right to lease or use the land requested In the application. The application shall expire twelve (12) months after the date the application has been made if the City and the applicant have not, by that time, entered into a lease, unless the City Council for good cause grants an extension for a period not to exceed six (6) months. The City has no obligation to amend, renew or extend a lease and may decline to do so upon making specific findings as to why a lease renewal, extension, or amendment is not In the best Interest of the Pity Signature: Date: Print Name: p, -e Swan S b Title: l J 2 S; VA For City Use Only: Date Application Fee Received: ❑ General Fund ❑ Airport Reserve Land Date Application Determined Complete: ❑ Airport Fund ❑ Outside Airport Reserve 30 -Day Notice Publication Date: Account Number: City Council ActionlResolution: Broker's Opinion Of Value 145 N. Willow St., Lot 6 Blk.5 General Aviation Apron, Kenai, Ak., 99611 Prepared for Swanson Properties (STRUCTURE ONLY)—AS OF SEPT. 2021 Fred Braun Jack White Real Estate Kenai 10419 Kenal Spur Highway #8 Kenai, AK 99611 907-395.0655 Y1. brauncom@ptialaska.net �•Y http:Itwww.kenaipenimularealestate.com L•i•I'.1u14:ltILI Subject metal fabricated retail/shop/ofrice structure was constructed during the 1967 year and is situated on a 0.54 acre City Of Kenai Airport Leased parcel, The shop area measures 3,300 sq. R. in size and the retaitloffice area measures 5,040 sq. ft. in size for a total interior gross usable area of 8,340 sq. ft. The Fair Market Value of this Report shows structure value only and does not include the value of the City owned land. The 2021 Kenai Peninsula Borough Tax Assessed value was $32,400 for the structure only. Because of this being City Lease land the assessed value shows a significant annual decrease as the 30 year term with the City draws closer to Ws expiration date. The overall condition of the 54 year old building appears to be in average to poor condition with a Borough rating of an L meaning Low in a quality rating. (see attached chart & Assessment pages) Some of the most noted deferred maintenance items/issues Include many stained ceiling tiles which indicates a roof leakage or a condensation issue. This appears to be from prior to current years of occupancy. Also noted were several open areas where there is a mold of some type as well as rotten wood In many locations. The MLS Listed and Sold Commercial properties used in this Report include both the structure and the land values but an adjustment excluding the land value was deducted or subtracted from each listing and the total sq. ft. sale price of each. The City of Kenai is bound by FAA Guidelines in that it does not allow or permit the sale of surrounding Airport parcels including this lot Identified as Lot 6, Elk, 5 General Aviation Apron til Amd. This Guideline has been a major concern of investors or builders wishing to locate near the Airport in that Banks and Lenders are reluctant to loan or hold a mortgage on a structure that is not situated on a Fee Simple property. The overall likely hood of a potential buyer or tenant for a lease property or one on City lease land is seldom even a consideration. The conclusion and determination of the Fair Market Value as of the date of SEPTEMBER 2021 is $338,000 This report is not an appraisal and is not intended to meet the requirements set out in the Uniform Standards of Appraisal Practice. it an appraisal is desired. the services of a licensed appraiser should be obtained. UMA Nrepare0 ror bwanson Yroperues LLU (J I Kut; I UKe UNLY) DY FreO Braun 14b NOrIn VVIIIOW (51 KUG I UKL UNLY) LOt 6, BIk. b (General Aviation Apron #1 Amd., Kenai AK 99611 Subject Address 145 North Willow (STRUCTURE ONLY) Lot 6, Bilk. 5 General Aviation Apron #1 Amd., Komi, AK 98611 Beds NIA Baths 2 SF -Res 8,340 total SF -Lot NOT INCLUDED IN PRICE - STRUCTURE ONLY Garage # 3,300 Shop Pin. Year Built 1967 Construction Status Fin. GRADE L per BOROUGH Fred Braun 1 907-395-0655 1 brauncom@ptialaska.net Page 3 of 18 j / .. • • k.:, • fi� ��'/ �1 �'_-r ''j � it d ,' ••� �•'Sy/ �b'n' '�'/off/ -• __ i _ �d�iF�j� _ ✓ , ; �� o � � 3gRm�y ® 7 N• R` `�' : s ✓ oogoSo °•�° Fra° ®� "� ®® 0�i z z »> Z 411-",o h� mmwwmm M�'••• ASN: o€€��€ ��� `3 Y��� © • .%Its. �3gg3� :::g:: ® " < I ,Vol ® " .y; u •, n M (IA ®1 e j << I CD I ryp e U W co K I w O a ' 2 N s 3 e ?� IN a• s oa u IM lksrrh lirtNy Sriett 4+4k.fru.Nnf�9%L4 r %I, u Map title goes here. alwo Legend e Mileposts 0 City Limits Highways — Major Roads Roads — Town Medium Vdume — Town loM3eenonel; GBr� proposed Parcels Image Red: Bard_d Green: Band_2 Blue: Band -3 This map is a user generated static output from an Intemet mapping site and is for reference only. beta layers that appear on this map may or may rpt be accurate, current or otherwise reliable. It is not to be used for navigation. Notes Type any notes here. DATE PRINTED: 2/23/2022 Borough Quality Ranking Exe- Executive Exc -Excellent VG- Very Good AVG- Average F- Fair L- Low P- Poor Cabin Quality CMA Prepared for Swanson Properties LLC (STRUCTURE ONLY) by Fred Braun 145 North Willow (STRUCTURE ONLY) Lot 6, Blk. 5 General Aviation Apron #1 Amd., Kenai AK 99611 Comparable Properties Subject 145 North Willow (STRUCTURE ONLY) Lot 6, Bik. 5 General Aviation Apron #1 Amd. Kenai AK 99611 20-17657 20-1847 19-6409 33077 Sterling Highway 36254 Kenai Spur Highway 50455 Onslow Avenue Sterling AK Soldotna AK Kenai AK Distance From Subject I 17.48 6.87 3.14 List Price $199,500 $265,000 $295,000 Original List Price $199,500 $299,000 $295,000 Sold Pdce $183,000 $235,000 $271,000 Status Closed Closed Closed Status Date 01106/2021 08/2012021 03/252021 Agent Days on Marke[ I 281 6051 642 Adjustment +1- t!- N - Beds NIA Baths 21 SF -Res 8,340 3,456 3,6481 3,430 SF -Lot 53,143 9,147.6 79,279.2 Garage # 3,300 Shop Pm. Year Built 19671 1990 0 0 Construction Status Fin. GRADE L peri Existing Structure Existing Structure Existing Structure BOROUGH Adjusted Price 1 $338,0001, $153,0001 $235,0001 $271,000 Price Per SF -Res 40.531 $52.951 $64.42 $79.01 Fred Braun 1 907-395-0655 1 brauncom@ptialaska.net Page 4 of 18 CMA Prepares Tor Swanson Properties LLU (S I RUC I UK& UNLY) by Pred Braun 145 North Willow (STRUCTURE ONLY) Lot 6, Blk. 5 General Aviation Apron #1 Amd., Kenai AK 99611 Subject 145 North willow (STRUCTURE ONLY) Lot 6, Blk. 5 General Aviation Apron #1 Amd. Kenai AK 99611 1844639 43637 Kalifornsky Beach Road Soldotns AK 34622 Kalifornsky Beach Road Kenai AK 15.14413 34995 KUSTATAN Street soldntna AK Distance From Subject I 5.94 6.59 5.45 List Price $1,500,000 $339,900 $315,000 Original List Price $1,500,000 $345,000 $429,000 Sold Price $1,300,000 $300,000 $275,000 Status Closed Closed Closed Status Date 12114/2018 092812018 04/13/2018 Agent Days on Markel 71 2431 614 Adjustment +/- +/. +l - Beds N/A Baths 2 SF -Res 8,340 26,000 6,000 4,280 SF -Lot 108,900 56,628 190,357.2 Garage # 3,300 Shop Ptn. Year BuIO 1967 0 1981 I 0I Construction Status Fin. GRADE L per Existing Structure Existing Structure Existing Structure i BOROUGH Adjusted Price $338,000 $1,300,000 $300,0NI $275,000 Price Per SF -Res 40.53 $50.00 $50.00 $64,25 Fred Braun 1 907-395-0655 1 brauncom@ptialaska.net Page 5 of 18 CMA Prepared for Swanson Properties LLC (STRUCTURE ONLY) by Fred Braun 145 North Willow (STRUCTURE ONLY) Lot 6, Rik. 5 General Aviation Apron #1 Amd., Kenai AK 99611 Subject 17.8030 20-4182 145 North Willow (STRUCTURE ONLY) Lot 6, Blk. 5 General Aviation Apron #1 Amd. 115$5 Kenai Spur Highway 8847 Kenai Spur Highway Kenai AK 99611 Kenai AK Kenai AK Distance From Subject 0.58 2.01 List Price $349,000 $599,000 Original List Price $529,000 $599,000 Sold Price $268,500 $599,000 Status Closed Closed Status Date 05/1812018 0310W021 Agent Days on Market 3591 3051 undefined Adjustment Beds WA Baths 2 SF -Res 8,340 7,000 8,814 SF -Lot 163,350 68,824.8 Garage # 3,300 Shop Pin. �. Year Built 1967 1962 0 Construction Status Fin. GRADE L per Existing Structure Existing Structure BOROUGH Adjusted Price $338,000 $268,5001 {6991000 Price Per SF -Res j 40.53 $38.36 $67.96 Fred Braun 1 907-395-0655 1 brauncom@ptialaska.nel Page 6 of 18 CMA Prepared for Swanson Properties LLC (STRUCTURE ONLY) by Fred Braun 145 North Willow (STRUCTURE ONLY) Lot 6, Blk. 5 General Aviation Apron #1 Amd., Kenai AK 99611 Price Analysis List, Sold and Adjusted Prices Closed Listings $2 000 000 $1 500 000 $1 000 000 $500000 _Recommended Price: ; W N N $0 20-17657 20-1847 19-6409 33077 Sterling 36254 Kenai 50455 Onslow Highway Spur Highway Avenue Sterling AK Soldotna AK Kenai AK $1 500 000 $1 250 000 $1 000 000 $760000 $500000 $260000 $0 0 List ! Sold Adjusted _ - - Y- 18-14639 18578 15-14413 17-6030 20.4192 43637 34622 34995 11595 Kenai 8847 Kenai Kalifomsky Kalifornsky KUSTATAN Spur Highway Spur Highway Beach Road Beach Road Street Kenai AK Kenai AK Soklotna AK Kenai AK Sokfolna AK Low, High and Recommended List Price, Subject Property Low, Average, Median, and High Sold Prices Closed Listings Low Average Median High 0 Sold Price Low, High and Recommended List Price, Subject Property Fred Braun 1 907-395-0655 1 brauncom@ptialaska.net Page 7 of 18 II d CMA Prepared for Swanson Properties LLC (STRUCTURE ONLY) by Fred Braun 145 North Willow (STRUCTURE ONLY) Lot 6, Bilk. 5 General Aviation Apron #1 Amd., Kenai AK 99611 Summary of Closed Listings Address Total Adjusted List Price ADOM Sold Date Sold Price Adjustments Price 20.17657 33077 Sterling Highway, Sterling AK $199,500 28 01/04/2021 $183,000 - $183,000 20-1847 36254 Kenai Spur Highway, Soldotna AK $265,000 505 08/2012021 $235,000 - $235,000 19-6409 50455 Onslow Avenue, Kenai AK $295,000 642 03/25/2021 $271,000 - $271,000 18-14639 43637 Kalifomsky Beach Road, Soldotna AK $1,500,000 71 12/14/2018 $1,300,000 - $1,30000 18-578 34622 Kalifomsky Beach Road, Kenai AK $339,900 243 09/2812018 $300,000 - $300,000 15-14413 34995 KUSTATAN Street, Soldotna AK $315,000 614 04/13/2018 $275,000 - $275,000 17-6030 11595 Kenai Spur Highway, Kenai AK $349,000 359 05/16/2018 $268,500 - $268,500 20-4192 8847 Kenai Spur Highway, Kenai AK $599,000 306 03/05/2021 1 $599,000 - $599,000 Low, Average, Median, and High Comparisons Closed Overall Low $183,000 $183,000 Average $428,938 $428,938 Median $273,000 $273,000 High $1,300,000 $1,300,000 Overall Market Analysis (Unadjusted) Status # List Vol. Avg. List Price Sold Vol. Avg. Sold Price Avg. Sale/List Price Avg. SF -Res Avg. List $/SF -Res Avg, Sold $ISF-Res Avg. ADOM Closed 1813,862,4001 482,80013,431 ' 500 428,938 0.89 7,828 65.27 51137 346 Overall 8 3,862,400 482,800 3,431,500 428,938 0.89 7,828 65.27 58.37 346 SELECTION CRITERIA FOR COMPARABLE PROPERTIES Specified listings from the following search: Property type Commercial Sale; MLS # in 20-17657, 20-1847, 20-7684, 19-6409,18-14639, 18-578,15-14413, 17-6030, 20A 192. Fred Braun 1 907-395-0655 1 brauncom@ptialaska.net Page 8 of 18 " CMA Prepared for Swanson Properties LLC (STRUCTURE ONLY) by Fred Braun 145 North Willow (STRUCTURE ONLY) Lot 6, Blk. 5 General Aviation Apron #1 Amid., Kenai AK 99611 Comparison Based on SF -Res Price Per MLS # Address Adjusted Price SF -Res 20-17657 33077 Sterling Highway, Sterling AK $783,000 $52.95 20-1847 36254 Kenai Spur Highway, Soldotna AK $235,000 $64.42 19-6409 50455 Onslow Avenue, Kenai AK $271,000 $79.01 18-14639 43637 Kalifornsky Beach Road, Soldotna AK $1,300,000 $50.00 18-578 34622 Kalifomsky Beach Road, Kenai AK $300,000 $50.00 15-14413 34995 KUSTATAN Street. Soldotna AK $275,000 $64.25 17-6030 11595 Kenai Spur Highway, Kenai AK $268,500 $38.36 20-4192 8847 Kenai Spur Highway, Kenai AK $599,000 $67.96 Average $428,938 $58.37 Subject Has 8,340 total Indicated Price $486,793.85 Fred Braun 1 907-395-0655 1 brauncom@ptialaska.net Page 9 of 18 CMA Prepared for Swanson Properties LLC (STRUCTURE ONLY) by Fred Braun 145 North Willow (STRUCTURE ONLY) Lot 6, BI4. 5 General Aviation Apron #1 Amd., Kenai AK 99611 Listing Price Recommendation Low $324,874 High $336,688 Recommended $338.000 Fred Braun 1 907-395-0655 1 brauncom@ptialaska.net Page 10 of 18 KENA *7 LEGEND 0 Subject Parcel r-T—r—T7 0 20 40 Feet Date: 514/2022 145 N Willow St Lot 6, Block 5, General Aviation Subdivision No 1 Amended Parcel 04324020 .Imagery may not match true f.