HomeMy WebLinkAbout2022-09-14 Planning & Zoning PacketKenai Planning & Zoning Commission –
Regular Meeting
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September 14, 2022
Kenai Planning & Zoning Commission -
Regular Meeting
September 14, 2022 ꟷ 7:00 PM
Kenai City Council Chambers
210 Fidalgo Avenue, Kenai, Alaska
**Telephonic/Virtual Information on Page 3**
www.kenai.city
Agenda
A. CALL TO ORDER
1. Pledge of Allegiance
2. Roll Call
3. Agenda Approval
4. Consent Agenda
5. *Excused Absences
*All items listed with an asterisk (*) are considered to be routine and non-controversial by the
Commission and will be approved by one motion. There will be no separate discussion of these
items unless a Commission Member so requests, in which case the it em will be removed from
the Consent Agenda and considered in its normal sequence on the agenda as part of the
General Orders.
B. APPROVAL OF MINUTES
1. *Regular Meeting of August 24, 2022
C. SCHEDULED PUBLIC COMMENT
(Public comment limited to ten (10) minutes per speaker)
D. UNSCHEDULED PUBLIC COMMENT
(Public comment limited to three (3) minutes per speaker;
thirty (30) minutes aggregated)
E. CONSIDERATION OF PLATS
F. PUBLIC HEARINGS
1. Resolution PZ2022-23 – Recommending the Kenai City Council Enact Ordinance 3316-
2022 Amending Kenai Municipal Code 14.20.150-Conditional Use Permits, To Further
Clarify Roles And Responsibilities Of Applicants, The Planning Director, And The Planning
Commission In The Conditional Use Process.
G. UNFINISHED BUSINESS
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Kenai Planning & Zoning Commission –
Regular Meeting
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September 14, 2022
H. NEW BUSINESS
1. Action/Approval – Recommending the Kenai City Council Approve Ordinance 3311-2022
Determining That Real Property Described as Lot 5, Block 1, Gusty Subdivision Addition
No. 1, According to Plat No. 83-126 Kenai Recording District, City-Owned Airport Land
Located Outside The Airport Reserve, is Not Needed for a Public Purpose, Waiving KMC
22.05.095 Methods of Sale or Disposal and Authorizing The Sale of The Property to Aaron
Swanson dba Forever Business Plaza LLC.
2. Action/Approval – Recommending the Kenai City Council Approve Ordinance No. 3312-
2022 Determining Lot 4, Block 1, Gusty Subdivision Addition No. 1 Amended Is Not Needed
for a Public Purpose and Approving The Execution of a Lease With an Option to Purchase
Between The City Of Kenai And Aaron Swanson for The Property.
3. Action/Approval – Recommending the Kenai City Council Approve Resolution No. 2022-
XX – Approving the Renewal of a Lease on Airport Reserve Lands between the City of
Kenai and the Federal Aviation Administration for the Automated Flight Service Station
Facility on Lot 7A-1, FBO Subdivision No. 5.
4. Action/Approval – Recommending the Kenai City Council Enact Ordinance 3314-2022
Extending The Time Period for Completion of The Action Items Necessary for The
Conditional Donation of An Approximate 2 Acre Parcel to be Subdivided From A Portion Of
The 6.8 Acre More or Less Portion of The East of Tract 4a, Baron Park 2020 Replat (KPB
Parcel No. 04501035) to Triumvirate Theatre for The Development of a Theatre Facility.
I. PENDING ITEMS
J. REPORTS
1. City Council
2. Kenai Peninsula Borough Planning
3. City Administration
K. ADDITIONAL PUBLIC COMMENT
(Public comment limited to five (5) minutes per speaker)
L. INFORMATIONAL ITEMS
M. NEXT MEETING ATTENDANCE NOTIFICATION
1. Next Meeting Date: September 28, 2022
N. COMMISSION COMMENTS AND QUESTIONS
O. ADJOURNMENT
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Kenai Planning & Zoning Commission –
Regular Meeting
Page 3 of 3
September 14, 2022
The agenda and supporting documents are posted on the City’s website at www.kenai.city. Copies of
resolutions and ordinances are available at the City Clerk’s Office or outside the Council Chamber prior
to the meeting. For additional information, please contact the City Clerk’s Office at 907-283-8231.
Join Zoom Meeting
https://us02web.zoom.us/j/82600437361 OR Call: (253) 215-8782 or (301) 715-8592
Meeting ID: 826 0043 7361 Passcode: 927191
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KENAI PLANNING & ZONING COMMISSION –
REGULAR MEETING
AUGUST 24, 2022 – 7:00 P.M.
KENAI CITY COUNCIL CHAMBERS
210 FIDALGO AVE., KENAI, AK 99611
CHAIR JEFF TWAIT, PRESIDING
Planning & Zoning Commission Meeting Page 1 of 3
August 24, 2022
MINUTES
A. CALL TO ORDER
A Regular Meeting of the Kenai Planning & Zoning Commission was held on August 24, 2022, in City
Hall Council Chambers, Kenai, AK. Chair Twait called the meeting to order at approximately 7:00 p.m.
1. Pledge of Allegiance
Chair Twait led those assembled in the Pledge of Allegiance.
2. Roll Call
There were present:
Commissioners present: J. Twait, A. Douthit, G. Woodard, D. Fikes, V. Askin, J. Halstead
Commissioners absent: G. Greenberg
Staff/Council Liaison present: Interim Planning Director M. Best, Vice Mayor J. Glendening,
Deputy Clerk M. Thibodeau
A quorum was present.
3. Agenda Approval
MOTION:
Commissioner Halstead MOVED to approve the agenda as written. Vice Chair Douthit SECONDED the
motion. There being no objection; SO ORDERED.
4. Consent Agenda
MOTION:
Vice Chair Douthit MOVED to approve the consent agenda. Commissioner Halstead SECONDED the
motion. There being no objection; SO ORDERED.
*All items listed with an asterisk (*) are considered to be routine and non-controversial by the Commission
and will be approved by one motion. There will be no separate discussion of these items unless a
commission member so requests, in which case the item will be removed from the consent agenda and
considered in its normal sequence on the agenda as part of the General Orders.
5. *Excused Absences – None.
B. APPROVAL OF MINUTES
1. *Regular Meeting of August 10, 2022
Approved by the consent agenda.
C. SCHEDULED PUBLIC COMMENTS – None.
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Planning & Zoning Commission Meeting Page 2 of 3
August 24, 2022
D. UNSCHEDULED PUBLIC COMMENTS – None.
E. CONSIDERATION OF PLATS – None.
F. PUBLIC HEARINGS – None.
G. UNFINISHED BUSINESS – None.
H. NEW BUSINESS
1. Resolution PZ2022-22– Application for a Home Occupation Permit for music instruction
submitted by Deborah Sounart, 112 Linwood Lane, Kenai, Alaska 99611, for property
described as Lot 1A, Eventyr Subdivision Sounart Replat.
MOTION:
Commissioner Askin MOVED to approve Resolution PZ2022-22. Vice Chair Douthit SECONDED the
motion.
Director Best explained that the application was for a Home Occupation Permit for music instruction; the
application met all standards for home occupation, and staff recommended approval with the following
conditions:
1. Applicant must comply with all federal, State of Alaska, and local regulations.
2. Pursuant to KMC 14.20.230(f), a home occupation permit is not transferable to another person or
location.
3. If the applicant decides to put up a sign for her business, she will first obtain a sign permit
from the City.
Applicant Deborah Sounart noted that she is a retired schoolteacher and a private music teacher. She
explained that through her work on the City Council she learned that a home occupation permit was
required for the private lessons she had been conducting, and submitted an application to become
compliant. She noted that she does not teach lessons full time; she has 20 students total and explained
how transportation to her home would not add significant traffic. She also noted that she owns adjoining
property on either side of her home that serves as a buffer for sound.
Director Best discussed home occupation permits within the City, and asked for suggestions on how the
City can improve public awareness and compliance with the home occupation permitting process. Sounart
noted that it would be helpful to learn about City permits during the State licensing process or when
registering with the Kenai Peninsula Borough for sales tax.
Clarification was provided that there had been no noise complaints from neighbors, and that operating
hours are between 9:00 A.M. and 5:00 P.M.
The Commission discussed whether it would be beneficial to add quiet hours as a condition of the permit.
Arguments in favor of adding the condition included keeping consistent standards with conditional use
permits that have been issued, setting a standard precedent for future home occupation permits, and that
it would place no burden on the applicant as she is already operating within the suggested quiet hours
Arguments against adding the condition included that it was unnecessary, that the applicant had come
forward voluntarily with an application that had met all the standards, and that setting rules and regulations
preemptively may dissuade people from applying for permits in the future. Clarification was provided on
differences between conditional use permits and home occupation permits.
VOTE:
YEA: Woodard, Douthit, Fikes, Halstead, Twait, Askin
NAY: None.
MOTION PASSED UNANIMOUSLY.
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Planning & Zoning Commission Meeting Page 3 of 3
August 24, 2022
I. PENDING ITEMS – None.
J. REPORTS
1. City Council – Vice Mayor Glendening reported on the actions of the August 17, 2022 City
Council Meeting. He noted that a Joint Work Session has been tentatively scheduled for
September 21, 2022 to discuss the Kenai Waterfront Revitalization project, the upcoming
Silver Salmon Derby and dipnet wrap-up meeting.
2. Kenai Peninsula Borough Planning – Commissioner Fikes reported on the actions of the
August 22, 2022 Kenai Peninsula Borough Planning Meeting.
3. City Administration – Planning Director Best reported on the following:
• The new Planning Director has been hired; her first Planning & Zoning Commission
Meeting will be on September 28, 2022.
• Expressed appreciation for the discussion on home occupation permits, and will discuss
possible improvements to permitting process with Administration.
• Met with FEMA representatives regarding the flood plain ordinance to discuss next
steps.
• Department of Transportation will be upgrading areas south and west of the Warren
Ames Bridge, including improving the gravel surface of bridge and installing boardwalk
and steps.
• Issued drilling permit to Hilcorp.
• Three Bears has applied for a gas station facility, will be meeting with them next week.
K. ADDITIONAL PUBLIC COMMENTS – None.
L. INFORMATION ITEMS – None.
M. NEXT MEETING ATTENDANCE NOTIFICATION
1. September 14, 2022
N. COMMISSION COMMENTS & QUESTIONS
Commissioner Askin noted that it had been good discussion.
O. ADJOURNMENT
There being no further business before the Commission, the meeting was adjourned at 7:42 p.m.
Minutes prepared and submitted by:
____________________________
Meghan Thibodeau
Deputy City Clerk
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_____________________________________________________________________________________
CITY OF KENAI
PLANNING AND ZONING COMMISSION
RESOLUTION NO. 2022-23
A RESOLUTION OF THE PLANNING AND ZONING COMMISSION OF THE CITY OF
KENAI RECOMMENDING THE COUNCIL OF THE CITY OF KENAI AMEND KENAI
MUNICIPAL CODE 14.20.150-CONDITIONAL USE PERMITS, TO FURTHER CLARIFY
ROLES AND RESPONSIBILITIES OF APPLICANTS, THE PLANNING DIRECTOR, AND
THE PLANNING COMMISSION IN THE CONDITIONAL USE PROCESS.
WHEREAS, Council recently, through Ordinance No. 3243-2021, amended KMC 14.20.150-
Conditional Use Permits, to improve the conditional use process for applicants and the public;
and,
WHEREAS, recent public hearings at the Planning and Zoning Commission’s meetings and board
of adjustment hearings demonstrate further changes are needed to define the roles and
responsibilities within the process and improve decisions made by the Commission; and,
WHEREAS, the amendments within this Ordinance are primarily intended to ensure decisions are
made based on applicable standards within city code based on substantial evidence; and,
WHEREAS, other changes include reporting requirements to Council and that public hearings are
held prior to any permit revocations.
NOW, THEREFORE, BE IT RECOMMENDED BY THE PLANNING AND ZONING COMMISSION
OF THE CITY OF KENAI, ALASKA:
Section 1. Amendment of Section 14.20.150 of Kenai Municipal Code: That Kenai Municipal
Code, Section 14.20.15 Conditional Use Permits, is hereby amended as follows:
14.20.150 Conditional use permits.
(a) Intent. It is recognized that there are some uses that may be compatible with designated
principal uses in specific zoning districts provided certain conditions are met. The conditional
use permit procedure is intended to allow flexibility in the consideration of the impact of the
proposed use on surrounding property and the application of controls and safeguards to
assure that the proposed use will be compatible with the surroundings. The Commission may
permit this type of use if the conditions and requirements listed in this chapter are met. The
conditional uses are listed in the Land Use Table. Before a conditional use permit may be
granted, the procedures specified in this chapter must be followed. The grant, denial,
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Resolution No. PZ2022-23
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New Text Underlined; [DELETED TEXT BRACKETED]
modification, or revocation of a conditional use permit is discretionary but must be based on
findings supported by substantial evidence and City ordinances.
(b) Pre-Application Meeting. Every conditional use permit applicant must contact the
Planning Director for a pre-application meeting with the Planning Director or designee before
the application is submitted to the Commission in order to ensure applications are complete
and the applicant is familiar with the conditional use permit public hearing process. If an
application is determined to be incomplete by the Planning Director, the application may be
resubmitted to the Planning Director with changes or new information as many times as
necessary, or the applicant may request a review with the City Manager whose determination
shall be final and reported to the City Council. The review by the Planning Director is to
determine that sufficient information is presented to allow the Commission a meaningful
review [AND HAS NO BEARING ON WHETHER AN APPLICATION SHOULD BE GRANTED
OR DENIED BY THE COMMISSION].
(c) Applications. Applications for a conditional use permit shall be filed in writing with the
Planning Department. The application shall include, but is not limited to, the following:
(1) Name and address of the applicant and name and address of the property owner if
not the applicant;
(2) Verification by the owner of the property concerned if other than the applicant;
(3) The street address and a legal description of the property involved;
(4) A description of the proposed use and how the use satisfies the review criteria
including any applicable evidentiary support;
(5) Dimensioned plot plans showing the location of all existing and proposed buildings
or alteration, conceptual drawing and such data as may be required; and
(6) The appropriate fee as set forth in the City’s schedule of fees adopted by the City
Council.
The application and its plans shall be posted to the City’s website at time of publication of
Commission packet.
(d) Public Hearing. If the application is in order, a public hearing shall be scheduled in
accordance with the requirements of KMC 14.20.280. An applicant or representative of the
applicant must be present in person or by remote device for the application to be considered
at the public hearing. If the applicant or representative is not present at the scheduled public
hearing and has not provided reasonable timely notice of unavailability to the Planning
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Resolution No. PZ2022-23
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New Text Underlined; [DELETED TEXT BRACKETED]
Department or Commission, the application will be dismissed by the Commission without a
public hearing and the applicant may reapply at any time after paying a new application fee.
(e) Review Criteria. Prior to granting a conditional use permit, it shall be established by
substantial evidence that the use satisfies all the following criteria:
(1) The use is consistent with the purpose of this chapter and the purposes and intent
of the zoning district;
(2) The economic and noneconomic value of the adjoining property and neighborhood
will not be significantly impaired;
(3) The proposed use is in harmony with the Comprehensive Plan;
(4) Public services and facilities are adequate to serve the proposed use;
(5) The proposed use will not be harmful to the public safety, health or welfare; and
(6) Any and all specific conditions deemed necessary by the Commission to fulfill the
above-mentioned conditions. These may include, but are not limited to, measures
relative to access, screening, site development, building design, operation of the use and
other similar aspects related to the proposed use as provided for in City ordinance,
including the Land Use Table.
The Commission may approve, approve with conditions, dismiss, or deny the application.
The Commission must make specific findings in its decision addressing all six (6) of the
required criteria stated above. Any relevant evidence may be considered by the Commission
in its decision.
(f) Burden of Proof. The applicant for a conditional use permit has the burden to show by
substantial evidence that the six (6) criteria above are satisfied. Substantial evidence is such
relevant evidence a reasonable mind might accept as adequate to support a conclusion.
(g) Staff Report. The Planning Director or designee will provide a staff report on the
application to the Commission at the public hearing. The staff report may contain any
information deemed pertinent by the Planning Director or designee, and may include a
recommendation and proposed findings on whether the requirements of this chapter have
been met and whether any additional specific conditions are recommended. The Commission
may consider the recommendations of the Planning Director or designee, but shall accord it
no deference. Evidentiary findings by the Planning Director or designee shall be considered.
The staff report does not relieve the applicant’s burden of proof.
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Resolution No. PZ2022-23
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New Text Underlined; [DELETED TEXT BRACKETED]
(h) Issuance of the Permit. Following approval by the Commission, the administrative official
shall not issue the permit until the expiration of the fifteen (15) day appeal period contained
in KMC 14.20.290. After approval by the Commission and before the issuance of the permit,
the administrative official must determine that the applicant is current on all obligations (e.g.,
sales tax, property tax, lease payments, utility payments) to the City or has entered into an
approved payment plan with the City on any obligations owed and the applicant is in
compliance with the payment plan and (if the permit is for a use required to collect sales tax)
must show a valid borough sales tax account. If a timely appeal is filed pursuant to KMC
14.20.290, the permit shall not be issued unless authorized by the Board of Adjustment.
(i) Yearly Reports. The permit holder shall submit a yearly report between October 1st and
December 31st to the administrative official. Such report shall include a summary of the on-
site activity.
(j) Revocation for Noncompliance/Compliance Notices. If the Commission determines after
a public hearing, based on the yearly review or any other investigation undertaken by the
official, that the conduct of the operation(s) is not in compliance with: (1) the terms and
conditions of the permit; (2) the provisions of the Kenai Zoning Code; (3) or that the permit
holder is not current on any obligations (e.g., sales tax, property tax, utility payments, lease
payments) to the City unless the applicant has entered into an approved payment with the
City on any obligations owed and the applicant is in compliance with the payment plan, the
Commission may revoke the permit. The Commission shall not revoke the permit until the
permit holder has been notified and given reasonable opportunity to correct the deficiency(s)
or to provide information relating to or rebutting the alleged deficiency(s). Appeals from
decisions under this section shall be made in accordance with the provisions of KMC
14.20.290. If the administrative official determines the permit holder is in compliance with the
conditions in this subsection, or notifies the permit holder of a potential violation in writing,
the administrative official shall send any notice of compliance or notice of violation to the
Commission and the permit holder in a timely manner.
(k) Modification of Final Approval.
(1) An approved conditional use permit may, upon application by the permittee, be
modified by the Planning and Zoning Commission:
(i) When changed conditions cause the conditional use to no longer conform to the
standards for its approval;
(ii) To implement a different development plan conforming to the standards for its
approval;
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Resolution No. PZ2022-23
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New Text Underlined; [DELETED TEXT BRACKETED]
(2) The modification application shall be subject to a public hearing and the appropriate
fee as set forth in the City’s schedule of fees adopted by the City Council in order to help
cover the costs of the public hearing notice.
(l) Expiration—Extensions—Transferability.
(1) An approved conditional use permit lapses twelve (12) months after approval if no
building permit is procured or if the allowed use is not initiated.
(2) A conditional use permit shall automatically expire if for any reason the conditioned
use ceases for a period of one (1) year or longer.
(3) The Commission may grant time extensions to stay the lapse or the expiration of a
permit for periods not to exceed one (1) year each upon a finding that circumstances
have not changed sufficiently to warrant reconsideration of the approval of the conditional
use permit or that good cause exists to grant the time extension. A permittee must
request a time extension in writing, and submit any supporting materials, within ninety
(90) days of the date of the administrative official’s written notice to the permittee that
either the permit has lapsed under subsection (l)(1) of this section or that the permit has
expired under subsection (l)(2) of this section by a date certain. If the administrative
official does not issue a written notice concerning lapse or expiration, the permittee may
request a time extension at any time within two (2) years of the date the permit was
issued or the use ceased, whichever is later. A permittee may be granted time extensions
not to exceed a total of two (2) years from the date of the Commission’s grant of the first
time extension. The Commission may, but is not required to, hold a public hearing prior
to issuing a decision under this subsection.
(4) A permittee who disputes the administrative official’s determination that the
conditioned use has not been timely initiated or has ceased for a period of one (1) year
or longer may appeal the official’s determination to the Board of Adjustment in
accordance with KMC 14.20.290. If the permittee has requested a stay under subsection
(l)(3) of this section, the time for appeal of the administrative official’s determination of
lapse or expiration shall not run until such time as the Commission has made a final
decision on the request for a stay.
(5) A conditional use permit is not transferable from one (1) parcel of land to another.
Conditional use permits may be transferred from one (1) owner to another for the same
use, but if there is a change in use on the property, a new permit must be obtained.
(6) Appeals from decisions of the Commission under this section shall be made in
accordance with the provisions of KMC 14.20.290.
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Resolution No. PZ2022-23
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New Text Underlined; [DELETED TEXT BRACKETED]
(m) A proposed conditional use permit shall not be considered if a substantially similar
conditional use permit has been considered and denied within the nine (9) months
immediately preceding.
Section 2. That a copy of Resolution PZ2022-23 be forwarded to the Kenai City Council.
PASSED BY THE PLANNING AND ZONING COMMISSION OF THE CITY OF KENAI, ALASKA,
THIS 14TH DAY OF SEPTEMBER, 2022.
JEFF TWAIT, CHAIRPERSON
ATTEST:
______________________________________
MEGHAN THIBODEAU, DEPUTY CITY CLERK
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MEMORANDUM
TO: Planning and Zoning Commission
FROM: Paul Ostrander, City Manager
DATE: August 30, 2022
SUBJECT: Resolution No. 2022-23 – Recommending the Amendment of KMC
14.20.150 – Conditional Use Permits
Resolution No. 2022-23 recommends the Council amend Kenai Municipal Code 14.20.150 –
Conditional Use permits, to further clarify roles and responsibilities of applicants, the Planning
Director, and the Planning Commission in the conditional use process.
Please find the attached memo from Vice Mayor Glendening outlining the changes proposed in
Ordinance No. 3316-2022, the Ordinance that would make these amendments, along with the
Ordinance itself.
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MEMORANDUM
TO: Mayor Gabriel and Council Members
FROM: Jim Glendening, Vice Mayor
DATE: August 25, 2022
SUBJECT: Ordinance No. 3316-2022 Amending the Conditional Use Permits
Process
Council recently enacted Ordinance No. 3243-2021 amending KMC 14.20.150- Conditional Use
Permits, to improve the conditional use process for applicants and the public. Recent public
hearings at the Planning and Zoning Commission’s meetings and board of adjustment hearings
demonstrate further changes are needed to define the roles and responsibilities within the process
and improve decisions made by the Commission. The following outlines the proposed changes:
1. Amend 14.20.150(a) to clarify that while the Commission has the discretion to grant, deny,
modify or revoke a conditional use permit, such discretion must be based on substantial
evidence and City Code supported by findings.
2. Amend 14.20.150(b) to require the City Manager report the results of any CUP application
appeals made to him or her to the City Council.
3. Amend 14.20.150(b) by removing the language in the last sentence that states “and has
no bearing on whether an application should be granted or denied by the commission” as
it is unnecessary. It is already clearly stated that the Planners job in his review is to ensure
that sufficient information is provided in the application to allow the Commission to have a
meaningful review of the application.
4. Amend 14.20.150(c)(4) by adding that applicable evidentiary support for the granting of a
conditional use permit should be included within the application process.
5. Amend 14.20.150(e) by emphasizing that the Commission must find that all required
criteria in code are met and supported by substantial evidence prior to granting a
conditional use permit.
6. Amend 14.20.150(e)(6) by adding language that clarifies that conditions placed on
conditional use permits by the Commission must be based on applicable City Code.
7. Amend 14.20.150(g) by adding language to clarify that while the Commission does not
have to give weight or deference to recommendations of the Planning Director with regard
to whether a conditional use permit should be a granted or not, evidence presented to the
Commission must be considered. This means that if the Planner provides evidence and
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Page 2 of 2
the Commission choses to rely on other evidence or disagrees with the Planner regarding
the evidence presented, the Commission must explain its decision in this regard.
8. Amend 14.20.150(j) to require that a public hearing is held prior to the revocation of any
conditional use permit.
I request this Ordinance be removed from the Consent Agenda for introduction, so that it can be
referred to the Planning and Zoning Commission to make a recommendation at its September
14, 2022 meeting, prior to Council’s public hearing at its September 21, 2022 meeting.
Your consideration is appreciated.
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Sponsored by: Vice Mayor Glendening
New Text Underlined; [DELETED TEXT BRACKETED]
CITY OF KENAI
ORDINANCE NO. 3316-2022
AN ORDINANCE AMENDING KENAI MUNICIPAL CODE 14.20.150-CONDITIONAL USE PERMITS, TO
FURTHER CLARIFY ROLES AND RESPONSIBILITIES OF APPLICANTS, THE PLANNING
DIRECTOR, AND THE PLANNING COMMISSION IN THE CONDITIONAL USE PROCESS.
WHEREAS, Council recently, through Ordinance No. 3243-2021, amended KMC 14.20.150- Conditional
Use Permits, to improve the conditional use process for applicants and the public; and,
WHEREAS, recent public hearings at the Planning and Zoning Commission’s meetings and board of
adjustment hearings demonstrate further changes are needed to define the roles and responsibilities
within the process and improve decisions made by the Commission; and,
WHEREAS, the amendments within this Ordinance are primarily intended to ensure decisions are made
based on applicable standards within city code based on substantial evidence; and,
WHEREAS, other changes include reporting requirements to Council and that public hearings are held
prior to any permit revocations; and,
WHEREAS, at its meeting on September 14, 2022, the Planning and Zoning Commission recommended
__________of this Ordinance.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, AS
FOLLOWS:
Section 1. Amendment of Section 14.20.150 of Kenai Municipal Code: That Kenai Municipal Code,
Section 14.20.15 Conditional Use Permits, is hereby amended as follows:
14.20.150 Conditional use permits.
(a) Intent. It is recognized that there are some uses that may be compatible with designated
principal uses in specific zoning districts provided certain conditions are met. The conditional use
permit procedure is intended to allow flexibility in the consideration of the impact of the proposed use
on surrounding property and the application of controls and safeguards to assure that the proposed
use will be compatible with the surroundings. The Commission may permit this type of use if the
conditions and requirements listed in this chapter are met. The conditional uses are listed in the Land
Use Table. Before a conditional use permit may be granted, the procedures specified in this chapter
must be followed. The grant, denial, modification, or revocation of a conditional use permit is
discretionary but must be based on findings supported by substantial evidence and City ordinances.
(b) Pre-Application Meeting. Every conditional use permit applicant must contact the Planning
Director for a pre-application meeting with the Planning Director or designee before the application
is submitted to the Commission in order to ensure applications are complete and the applicant is
familiar with the conditional use permit public hearing process. If an application is determined to be
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Ordinance No. 3316-2022
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New Text Underlined; [DELETED TEXT BRACKETED]
incomplete by the Planning Director, the application may be resubmitted to the Planning Director
with changes or new information as many times as necessary, or the applicant may request a review
with the City Manager whose determination shall be final and reported to the City Council. The review
by the Planning Director is to determine that sufficient information is presented to allow the
Commission a meaningful review [AND HAS NO BEARING ON WHETHER AN APPLICATION
SHOULD BE GRANTED OR DENIED BY THE COMMISSION].
(c) Applications. Applications for a conditional use permit shall be filed in writing with the Planning
Department. The application shall include, but is not limited to, the following:
(1) Name and address of the applicant and name and address of the property owner if not the
applicant;
(2) Verification by the owner of the property concerned if other than the applicant;
(3) The street address and a legal description of the property involved;
(4) A description of the proposed use and how the use satisfies the review criteria including
any applicable evidentiary support;
(5) Dimensioned plot plans showing the location of all existing and proposed buildings or
alteration, conceptual drawing and such data as may be required; and
(6) The appropriate fee as set forth in the City’s schedule of fees adopted by the City Council.
The application and its plans shall be posted to the City’s website at time of publication of
Commission packet.
(d) Public Hearing. If the application is in order, a public hearing shall be scheduled in accordance
with the requirements of KMC 14.20.280. An applicant or representative of the applicant must be
present in person or by remote device for the application to be considered at the public hearing. If
the applicant or representative is not present at the scheduled public hearing and has not provided
reasonable timely notice of unavailability to the Planning Department or Commission, the application
will be dismissed by the Commission without a public hearing and the applicant may reapply at any
time after paying a new application fee.
(e) Review Criteria. Prior to granting a conditional use permit, it shall be established by substantial
evidence that the use satisfies all the following criteria:
(1) The use is consistent with the purpose of this chapter and the purposes and intent of the
zoning district;
(2) The economic and noneconomic value of the adjoining property and neighborhood will not
be significantly impaired;
Page 17
Ordinance No. 3316-2022
Page 3 of 5
New Text Underlined; [DELETED TEXT BRACKETED]
(3) The proposed use is in harmony with the Comprehensive Plan;
(4) Public services and facilities are adequate to serve the proposed use;
(5) The proposed use will not be harmful to the public safety, health or welfare; and
(6) Any and all specific conditions deemed necessary by the Commission to fulfill the above-
mentioned conditions. These may include, but are not limited to, measures relative to access,
screening, site development, building design, operation of the use and other similar aspects
related to the proposed use as provided for in City ordinance, including the Land Use Table.
The Commission may approve, approve with conditions, dismiss, or deny the application. The
Commission must make specific findings in its decision addressing all six (6) of the required criteria
stated above. Any relevant evidence may be considered by the Commission in its decision.
(f) Burden of Proof. The applicant for a conditional use permit has the burden to show by substantial
evidence that the six (6) criteria above are satisfied. Substantial evidence is such relevant evidence
a reasonable mind might accept as adequate to support a conclusion.
(g) Staff Report. The Planning Director or designee will provide a staff report on the application to
the Commission at the public hearing. The staff report may contain any information deemed pertinent
by the Planning Director or designee, and may include a recommendation and proposed findings on
whether the requirements of this chapter have been met and whether any additional specific
conditions are recommended. The Commission may consider the recommendations of the Planning
Director or designee, but shall accord it no deference. Evidentiary findings by the Planning Director
or designee shall be considered. The staff report does not relieve the applicant’s burden of proof.
(h) Issuance of the Permit. Following approval by the Commission, the administrative official shall
not issue the permit until the expiration of the fifteen (15) day appeal period contained in KMC
14.20.290. After approval by the Commission and before the issuance of the permit, the
administrative official must determine that the applicant is current on all obligations (e.g., sales tax,
property tax, lease payments, utility payments) to the City or has entered into an approved payment
plan with the City on any obligations owed and the applicant is in compliance with the payment plan
and (if the permit is for a use required to collect sales tax) must show a valid borough sales tax
account. If a timely appeal is filed pursuant to KMC 14.20.290, the permit shall not be issued unless
authorized by the Board of Adjustment.
(i) Yearly Reports. The permit holder shall submit a yearly report between October 1st and
December 31st to the administrative official. Such report shall include a summary of the on-site
activity.
(j) Revocation for Noncompliance/Compliance Notices. If the Commission determines after a public
hearing, based on the yearly review or any other investigation undertaken by the official, that the
conduct of the operation(s) is not in compliance with: (1) the terms and conditions of the permit; (2)
Page 18
Ordinance No. 3316-2022
Page 4 of 5
New Text Underlined; [DELETED TEXT BRACKETED]
the provisions of the Kenai Zoning Code; (3) or that the permit holder is not current on any obligations
(e.g., sales tax, property tax, utility payments, lease payments) to the City unless the applicant has
entered into an approved payment with the City on any obligations owed and the applicant is in
compliance with the payment plan, the Commission may revoke the permit. The Commission shall
not revoke the permit until the permit holder has been notified and given reasonable opportunity to
correct the deficiency(s) or to provide information relating to or rebutting the alleged deficiency(s).
Appeals from decisions under this section shall be made in accordance with the provisions of KMC
14.20.290. If the administrative official determines the permit holder is in compliance with the
conditions in this subsection, or notifies the permit holder of a potential violation in writing, the
administrative official shall send any notice of compliance or notice of violation to the Commission
and the permit holder in a timely manner.
(k) Modification of Final Approval.
(1) An approved conditional use permit may, upon application by the permittee, be modified by
the Planning and Zoning Commission:
(i) When changed conditions cause the conditional use to no longer conform to the
standards for its approval;
(ii) To implement a different development plan conforming to the standards for its approval;
(2) The modification application shall be subject to a public hearing and the appropriate fee as
set forth in the City’s schedule of fees adopted by the City Council in order to help cover the
costs of the public hearing notice.
(l) Expiration—Extensions—Transferability.
(1) An approved conditional use permit lapses twelve (12) months after approval if no building
permit is procured or if the allowed use is not initiated.
(2) A conditional use permit shall automatically expire if for any reason the conditioned use
ceases for a period of one (1) year or longer.
(3) The Commission may grant time extensions to stay the lapse or the expiration of a permit
for periods not to exceed one (1) year each upon a finding that circumstances have not changed
sufficiently to warrant reconsideration of the approval of the conditional use permit or that good
cause exists to grant the time extension. A permittee must request a time extension in writing,
and submit any supporting materials, within ninety (90) days of the date of the administrative
official’s written notice to the permittee that either the permit has lapsed under subsection (l)(1)
of this section or that the permit has expired under subsection (l)(2) of this section by a date
certain. If the administrative official does not issue a written notice concerning lapse or expiration,
the permittee may request a time extension at any time within two (2) years of the date the permit
was issued or the use ceased, whichever is later. A permittee may be granted time extensions
Page 19
Ordinance No. 3316-2022
Page 5 of 5
New Text Underlined; [DELETED TEXT BRACKETED]
not to exceed a total of two (2) years from the date of the Commission’s grant of the first time
extension. The Commission may, but is not required to, hold a public hearing prior to issuing a
decision under this subsection.
(4) A permittee who disputes the administrative official’s determination that the conditioned use
has not been timely initiated or has ceased for a period of one (1) year or longer may appeal the
official’s determination to the Board of Adjustment in accordance with KMC 14.20.290. If the
permittee has requested a stay under subsection (l)(3) of this section, the time for appeal of the
administrative official’s determination of lapse or expiration shall not run until such time as the
Commission has made a final decision on the request for a stay.
(5) A conditional use permit is not transferable from one (1) parcel of land to another.
Conditional use permits may be transferred from one (1) owner to another for the same use, but
if there is a change in use on the property, a new permit must be obtained.
(6) Appeals from decisions of the Commission under this section shall be made in accordance
with the provisions of KMC 14.20.290.
(m) A proposed conditional use permit shall not be considered if a substantially similar conditional
use permit has been considered and denied within the nine (9) months immediately preceding.
Section 2. Severability: That if any part or provision of this ordinance or application thereof to any
person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall
be confined in its operation to the part, provision, or application directly involved in all controversy in
which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder
of this title or application thereof to other persons or circumstances. The City Council hereby declares
that it would have enacted the remainder of this ordinance even without such part, provision, or
application.
Section 3. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect 30 days
after enactment.
ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 21ST DAY OF SEPTEMBER,
2022.
___________________________________
Brian Gabriel Sr., Mayor
ATTEST:
___________________________________
Michelle M. Saner, MMC, City Clerk
Introduced: September 7, 2022
Enacted: September 21, 2022
Effective: October 21, 2022
Page 20
MEMORANDUM
TO: Planning and Zoning Commission
FROM: Max Best, Interim Planning Director
DATE: September 14, 2022
SUBJECT: Action/Approval: Recommending the City Council Approve Ordinance
No. 3311-2022 - Determining that real property described as Lot 5, Block
1, Gusty Subdivision Addition No. 1, City-owned airport land located
outside the airport reserve, is not needed for a public purpose and
authorizing the sale of the property to Aaron Swanson, dba as Forever
Business Plaza LLC
The City has received a request to purchase the above City-owned leased land outside the Airport
Reserve with substantial constructed leasehold improvements.
Aaron Swanson, dba Forever Business Plaza, LLC, is the current lessee of Lot 5, Block 1, Gusty
Subdivision Addition No. 1, 11568 Kenai Spur Highway, which was obtained by transfer on April
27, 2022. The current use is for an office building and includes substantial recent improvements
to the building made by the Lessee. The 99-year lease term expires on October 10, 2082 and is
in good standing.
On January 16, 1984, 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.
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. The policy did 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 was 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. Administration recommends sale of the property under the same terms and conditions
established by Resolution No. 2018-12 to encourage responsible growth and development to
support a thriving business community. Aaron Swanson, dba Forever Business Plaza, LLC,
requests to purchase the property at fair market value of the land excluding lessee-constructed
improvements as determined by an appraisal and a minimum new investment in the construction
Page 21
Page 2 of 2
of new permanent improvements on the premises equal to 25% of the fair market value of the
land within three (3) years of sale.
Aaron Swanson, dba Forever Business Plaza, LLC, 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 of $135,000 was determined by an appraisal performed by MacSwain Associates, LLC
on May 18, 2021. Based on the amount of the appraisal, Aaron Swanson, dba Forever Business
Plaza, LLC, to invest a minimum of $33,750 in the construction of new permanent improvements
on the premises.
Pursuant to Kenai Municipal Code 22.05.040 application review, notice of the 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 ends on August 29, 2022,
and to-date, no competing applications have been submitted to the City.
The parcel is within the Central Mixed Use (CMU) Zone. Pursuant to KMC 14.20.125, the purpose
of the CMU Zone is established to provide a centrally located area in the City for general retail
shopping, personal and professional services, entertainment establishments, restaurants and
related businesses. The use of the existing structure is consistent with the zone.
The Imagine Kenai 2030 Comprehensive Plan outlines goals, objectives, and action items for the
City, including the following supporting this application:
Objective Q- 4: Promote the siting and design of land uses that are in harmony and scale
with surrounding uses.
Objective LU-2: Promote the infill of existing, improved subdivision lots
Does the Commission recommend Council enact Ordinance 3311-2022?
Thank you for your consideration.
Attachments:
Draft Ordinance No. 3311-2022
11568 Kenai Spur Highway aerial map
City of Kenai Land Competitive Purchase Application from Aaron Swanson
Resolution No. 2018-12
Plat of Gusty Subdivision Addition No. 1 Amended
Deed of Release
Appraisal Report, Lot 5, Block 1, Gusty Subdivision
Page 22
Sponsored by: Administration
New Text Underlined; [DELETED TEXT BRACKETED]
CITY OF KENAI
ORDINANCE NO. 3311-2022
AN ORDINANCE DETERMINING THAT REAL PROPERTY DESCRIBED AS LOT 5, BLOCK 1, GUSTY
SUBDIVISION ADDITION NO. 1, ACCORDING TO PLAT NO. 83-126 KRD, CITY-OWNED AIRPORT
LAND LOCATED OUTSIDE THE AIRPORT RESERVE, IS NOT NEEDED FOR A PUBLIC PURPOSE,
WAIVING KMC 22.05.095 METHODS OF SALE OR DISPOSAL AND AUTHORIZING THE SALE OF
THE PROPERTY TO AARON SWANSON DBA FOREVER BUSINESS PLAZA 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, the City of Kenai received a deed of release from the Federal Aviation Administration (FAA)
on January 16, 1984, for Gusty Subdivision Addition No.1, subject to certain reservations and conditions,
that protect the Airports continued use for airport purposes; and,
WHEREAS, the City has received a request to purchase Lot 5, Block 1, Gusty Subdivision Addition No.
1, according to Plat No. 83-126, 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 Aaron Swanson, dba Forever Business Plaza, 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, Resolution No. 2018-12 did not authorize the sale of these lands but only a method for sale;
and,
WHEREAS, Resolution No. 2018-12 had a sunset of July 6, 2021 however the prior, now deceased
lessee, was unable to take advantage of the policy timely; and,
WHEREAS, the sale of this property under the same terms and conditions established by Resolution No.
2018-12 is in the best interest of the City and Airport and encourages new development and/or
improvements to the property; and,
WHEREAS, all provisions of KMC 22.05.100 - Sale procedure, shall be followed; and,
WHEREAS, the provision of KMC 22.05.095, Methods of Sale or Disposal, are hereby waived in
recognition of the City’s prior policy regarding the parcel and unique circumstances of the prior lessee
and is in best interest of the City; and,
WHEREAS, at their regular meeting on September 14, 2022, the Planning and Zoning Commission
reviewed the sale application and recommended ______ by the City Council; and,
Page 23
Ordinance No. 3311-2022
Page 2 of 3
New Text Underlined; [DELETED TEXT BRACKETED]
WHEREAS, at their regular meeting on September 8, 2022, the Airport Commission reviewed the sale
application and recommended ______ by the City Council.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, AS
FOLLOWS:
Section 1. Form: That this is a non-code ordinance waiving KMC 22.05.095 – Methods of Sale or
Disposal.
Section 2. Statement of Ownership: That the City of Kenai is the owner of Lot 5, Block 1, Gusty
Subdivision Addition No.1, according to plat 83-126 KRD, (the Property).
Section 3. 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 4. Authorization of Sale: That the Kenai City Council hereby authorizes the City Manager to
sell the City-owned lands described as Lot 5, Block 1, Gusty Subdivision Addition No. 1, according to
Plat No. 83-126, 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 Aaron Swanson, dba Forever Business
Plaza LLC, for a sum not less than fair market value of the land 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 (3) years of sale.
Section 5. Title: That title shall be conveyed by quitclaim deed. Any instrument conveying title to the
Property shall include the conditions covenants and reservations as described Deed of Release, recorded
in Book 227, Page 416 and 417 KRD.
Section 6. 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 December 12, 1984.
Section 7. Severability: That if any part or provision of this ordinance or application thereof to any
person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall
be confined in its operation to the part, provision, or application directly involved in all controversy in
which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder
of this title or application thereof to other persons or circumstances. The City Council hereby declares
that it would have enacted the remainder of this ordinance even without such part, provision, or
application.
Section 8. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect 30 days
after enactment.
ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 21ST DAY OF SEPTEMBER,
2022.
___________________________________
Brian Gabriel Sr., Mayor
ATTEST:
Page 24
Ordinance No. 3311-2022
Page 3 of 3
New Text Underlined; [DELETED TEXT BRACKETED]
___________________________________
Michelle M. Saner, MMC, City Clerk
Approved by Finance: SB, Acting
Introduced: September 7, 2022
Enacted: September 21, 2022
Effective: October 21, 2022
Page 25
•':;'-c
&uity
IEIW.IWKA
'v
CITY OF KENAI
Sponsored by: Mayor Brian Gabriel
Vice Mayor Tim Navarre
Council Member Henry Knackstedt
RESOLUTION NO. 2018-12
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, APPROVING AN
AMENDED POLICY FOR THE SALE OF TEN SPECIFIC CITY-OWNED AIRPORT FUND
LEASED LANDS OUTSIDE THE AIRPORT RESERVE WITH SUBSTANTIAL CONSTRUCTED
LEASEHOLD IMPROVEMENTS.
WHEREAS, the City of Kenai received a Quitclaim Deed through the Federal Aviation
Administration (FM) 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, in 2016, the City identified ten specific leases on Airport lands, as identified on
Attachment A, that were, or were intended to be outside the Airport Reserve in the very near
future, on which the lessees had constructed substantial improvements; and,
WHEREAS, the ten leased properties have been, or are available to be released for sale by the
FM; and,
WHEREAS, the City Council passed Resolution No. 2016-32, approving and adopting a policy for
ten specific Airport owned leased lands on July 6, 2016 to provide an equitable and uniform
purchase procedure for the current lessees to purchase the specific ten Airport-owned parcels;
and,
WHEREAS, since the policy was adopted, none of the current lessees subject to the policy have
elected to purchase the property they lease from the City; and,
WHEREAS, Administration formed a working group of City staff involved in land management to
evaluate and develop recommendations related to the City 's land sale and lease program to
encourage growth, development, and a thriving business community through reasonable and
responsible land policies and practices; and
WHEREAS, an alternative whereby the net present value of the leasehold is partially offset by the
economic benefits provided by existing thriving businesses in the City such as job creation,
economic activity, and stimulation of the business climate meets these goals; and,
WHEREAS, a third alternative that encourages investment in existing businesses on these
leaseholds meets these goals as well ; and,
WHEREAS, it is in the best interest of the City, Airport and lessees to approve an amendment to
the temporary policy that provides alternative methods for the sale of these properties consistent
with a City-wide land management approach.
Page 29
Resolution No. 2018-12
Page 2 of 3
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA:
Section 1. That the following policy adopted for the specific ten City-owned leased lands as
identified on Attachment A attached hereto shall be amended as follows:
POLICY FOR SALE OF SPECIFIC AIRPORT LEASED LANDS
Purpose: To implement a policy regarding the sale of Airport owned property outside the
Airport reserve currently leased with substantial leasehold improvements. This Policy is intended
to provide an equitable and uniform purchase procedure for the current Lessees to purchase the
specific ten Airport owned parcels identified in Attachment A.
Disclaimer: This 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. Any specific sale must be separately
approved by the City Council, which may approve or disapprove any such sale, in its sole
discretion. It is intended that this Policy remain in effect [FOR A PERIOD OF NO MORE THAN
FIVE YEARS] until July 6, 2021, however, it is recognized by the City Council and Administration,
and should be recognized by any affected Lessee, that the City Council of Kenai may amend,
modify, or rescind this Policy, or applicable City Ordinances which could affect this Policy, at any
time.
Sale Conditions:
A. If a sale is approved by the City Council of any one of the ten specified leased
properties, the sales price acceptable to the City shall be one of the following
alternatives:
i. 125% of [A] the fair market value of the [RAW] land excluding lessee-constructed
improvements as determined by an appraisal[.t...ru:i
ii. The fair market value of the land excluding lessee-constructed improvements as
determined by an appraisal for properties in which minimum development requirements
have been met according to the following calculation:
Value of Improvements greater than or equal to four times the Appraised Fair Market Value
of the Land
: or,
iii. The fair market value of the land 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 (3) years of sale.
8. In order for such sale to occur subject to this Policy, the following conditions must be met:
New Text Undertined; [DELETED TEXT BRACKETED]
Page 30
Page 2 of 2
Resolution No. 201a~12
The second added alternative allows for a sale of the land at fair market value with required
minimum new investment in the construction of new improvements such as storefront
improvements, building remodels, or parking lot improvements equal to 25% of the fair market
valµe of the land within three years of sale. For example, land appraised at $100,000 would
require new investment equal to $25,000.
Resolution No. 201S.:12 also makes minor changes to the policy to cfarify appraisal instructions
and conditions that must be met in order for a sale to occur so that the policy is consistent with
.the City Code ancf land practices. In particular, City land appraisals are performed with the
assumption thatthe land is vacant and unencumbered by the lease, lands deeded to the City by
the FAA must be released for sale, and land must be determined as not needed for a public
purpose.
Like the prior Resolution in 2016, this Resolution does not authorize the sale of any property, but
instead establishes a · methodology for sale should the lessee desire to purchase the property and
Council determine that it is in the City's best interest to sell the property,
Page 33
MACSWAIN ASSOCIATES LLC
4401 Business Park Boulevard, Suite 22, Anchorage, Alaska 99503
APPRAISAL REPORT
Kenai Lot: 25,663± SF (0.59± Acre)
Lot 5, Block 1, Gusty Subdivision
Kenai, Alaska
\
Date of Value: May 16, 2022 File No. 22-3698
Submitted To:
Ryan Foster, Planning Director
City of Kenai
210 Fidalgo Avenue
Kenai, AK 99611
N
Kenai Spur Highway Lot 5
25,663 SF (0.59 Acre)
Cohoe Avenue
Page 38
MacSwain Associates LLC
22-3698 – Lot 5, Block 1, Gusty Subdivision, Kenai, Alaska
4401 Business Park Blvd., Suite 22
Anchorage, Alaska 99503
Phone: 907-561-1965
Fax: 907-561-1955
s.macswain@macswain.com
June 15, 2022
Ryan Foster, Planning Director
City of Kenai
210 Fidalgo Avenue
Kenai, AK 99611
Re: Kenai Lot: 25,663± SF (0.59± Acre)
Lot 5, Block 1, Gusty Subdivision
Kenai, Alaska
Dear Mr. Foster:
We have prepared an Appraisal Report of the above-referenced lot located in Kenai, Alaska.
The appraised parcel contains 25,663± square feet or 0.59± acre. At the request of the client,
we disregard the improvements and land lease and appraise only the subject land. The type
of value estimated is market value. The property rights appraised is the fee simple estate.
The report is prepared in accordance with the Uniform Standards of Professional Appraisal
Practice (USPAP).
Based on the data, reasoning, and analysis that follows, the market value of the appraised
property, as of May 16, 2022, is estimated as follows.
ONE HUNDRED THIRTY FIVE THOUSAND DOLLARS $135,000
Your attention is directed to the Assumptions Limiting Conditions of this report located in
the addendum. We also direct your attention to the Statement of COVID-19 in the
addendum. We hope the appraisal report assists your evaluation of the properties. If you
have any questions regarding this report, please contact this office.
Respectfully submitted,
Steve MacSwain, MAI
State of Alaska Certificate No. 42
Page 39
MacSwain Associates LLC
22-3698 – Lot 5, Block 1, Gusty Subdivision, Kenai, Alaska
Appraiser Certification
The undersigned certifies that to the best of their knowledge and belief:
➔ The statements of fact contained in this report are true and correct.
➔ The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are our personal, impartial, and unbiased
professional analyses, opinions, and conclusions.
➔ We have no present or prospective interest in the property that is the subject of this report,
and no personal interest with respect to the parties involved.
➔ We have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
➔ MacSwain Associates, LLC previously performed services as an appraiser on the subject
property in September 2021.
➔ Our engagement in this assignment was not contingent upon developing or reporting
predetermined results.
➔ Our compensation for completing this assignment is not contingent upon the development
or reporting of a predetermined value or direction in value that favors the cause of the client,
the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
➔ The reported analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the requirements of the Code of Professional Ethics and
Standards of Professional Appraisal Practice of the Appraisal Institute.
➔ The reported analyses, opinion, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
➔ The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
➔ Dwayne Roberts with MacSwain Associates, LLC inspected the appraised property on May
16, 2022. Steve MacSwain, MAI has previously inspected the property.
➔ Dwayne Roberts provided significant real property appraisal assistance to the person signing
this certification.
➔ As of the date of this report, Steve MacSwain, MAI, is a certified General Real Estate
Appraiser in the State of Alaska and has completed the education requirements through June
2023.
Page 40
MacSwain Associates LLC
22-3698 – Lot 5, Block 1, Gusty Subdivision, Kenai, Alaska
➔ As of the date of this report, Steve MacSwain, MAI has completed the Standards and Ethics
Education requirements for Designated Members of the Appraisal Institute.
➔ As of the date of this report, Steve MacSwain, MAI has completed the continuing education
requirements for Designated Members of the Appraisal Institute.
➔ As of the date of this report, Steve MacSwain, MAI is a certified General Real Estate
Appraiser in the State of Alaska and has completed the education requirements through June
2023.
6/15/22
Steve MacSwain, MAI
State of Alaska Certificate No. 42
Date
Page 41
MacSwain Associates LLC
22-3698 – Lot 5, Block 1, Gusty Subdivision, Kenai, Alaska
Table of Contents
Title Page
Transmittal Letter
Appraiser Certification
Table of Contents
Appraisal Summary 1
Chapter 1: Definition of the Appraisal Problem 5
Chapter 2: Kenai Area Analysis and Industry Outlook 9
Chapter 3: Neighborhood Description and Analysis 15
Chapter 4: Site Description and Analysis 17
Chapter 5: Highest and Best Use Analysis 21
Chapter 6: Land Valuation - Sales Comparison Approach 22
Addendum
Assumptions and Limiting Conditions
Statement on COVID-19
Short Form Agreement
Appraiser Qualifications
Page 42
22-3698 – Lot 5, Block 1, Gusty Subdivision, Kenai, Alaska
MacSwain Associates LLC
1
Appraisal Summary
Value Type: Market value
Property Type: Commercial
Property Rights Appraised: Fee simple estate
Location: North side of Kenai Spur Highway between Coral Street and
Main Street Loop Road, Kenai, Alaska
Legal Description: Lot 5, Block 1, Gusty Subdivision
Tax Parcel No: 043-270-15
Physical Address: 11568 Kenai Spur Highway
Property Owner: City of Kenai (per KPB)
Zoning: Central Mixed-Use District (CMU)
Site Description: Nearly-rectangular shaped lot containing 25,663 square
feet or 0.59± acre
Topography: Level and near grade with surrounding streets and properties
Frontage/Exposure: 120± feet of Kenai Spur Highway frontage and 105± feet of
Cohoe Avenue frontage
Access: Access via paved ingress/egress from Kenai Spur Highway
on southern boundary and Cohoe Avenue, a gravel road on
northern boundary
Utility Service: All public utilities available
Soil and Subsurface
Conditions:
Based on observations of surrounding development, soils
appear to be suitable for development.
Hazardous Substances: None observed or known, parcel is appraised as if
“environmentally clean”
Wetland Designation: None
Flood Hazard Restrictions: Zone D, an area of undetermined, but possible flood hazard
Easements and Restrictions: 20-foot utility easement along north boundary
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Sale/Lease History: The leasehold interest was assigned from Mary Jane Doyle
and Carolyn Lucille Doyle to Don Moffis and Joann Doyle
in 2019. No details of this transaction were provided.
Highest and Best Use: Commercial
Extraordinary Assumption: None
Hypothetical Condition: None
Date of Property Inspection: May 16, 2022
Effective Appraisal Date: May 16, 2022
Date of Report: June 15, 2022
Market Value Estimate: $70,000 ($2.78/SF)
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Subject Property Photographs
Date: May 16, 2022 Taken By: Dwayne Roberts
Northeast view of property from Kenai Spur Highway
North view of property from Kenai Spur Highway
---------------------------------
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Subject Property Photographs
Date: May 16, 2022 Taken By: Dwayne Roberts
Southwest view of property from Cohoe Avenue
South view of property from Cohoe Avenue
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Chapter 1: Definition of the Appraisal Problem
We prepare an Appraisal Report that analyzes a 25,663± square foot
(0.59± acre) lot in Kenai, Alaska. At the request of the client, we
disregard the improvements and appraise only the subject land. The
type of value estimated is market value. The report is intended to
comply with the Uniform Standards of Professional Appraisal
Practice (USPAP).
Market value
City of Kenai
Assist with a potential sale of the property
City of Kenai
May 16, 2022
May 16, 2022
June 15, 2022
The appraised property is an improved lot owned by the City of Kenai.
At the request of the client, we disregard the improvements and
appraise only the land. The subject property is located on the north
side of Kenai Spur Highway between Coral Street and Main Street
Loop Road in Kenai, Alaska. The subject’s physical address is 11568
Kenai Spur Highway and identified as Parcel ID 043-270-15 by the
City of Kenai.
Overview
Value Type
Client
Intended Use of
Appraisal Report
Intended User of
Appraisal Report
Property Inspection
Date
Effective Appraisal
Date
Date of Report
Identification of Real
Estate Appraised
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The type of value estimated is market value. Market value is defined
as follows.
The most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair
sale, the buyer and seller each acting prudently and knowledgeably,
and assuming the price is not affected by undue stimulus. Implicit in
this definition is the consummation of a sale as of a specified date and
the passing of title from seller to buyer under conditions whereby:
a. buyer and seller are typically motivated;
b. both parties are well informed or well advised, and acting in
what they consider their own best interests;
c. a reasonable time is allowed for exposure in the open market;
d. payment is made in terms of cash in US dollars or in terms of
financial arrangements comparable thereto; and
e. the price represents the normal consideration for the property
sold unaffected by special or creative financing or sales
concessions granted by anyone associated with the sale. 1
We estimate the market value of the fee simple estate, which is defined
as follows.
Absolute ownership unencumbered by any other interest or estate,
subject only to the limitations imposed by the governmental powers of
taxation, eminent domain, police power, and escheat.2
Per DNR records, the legal description is as follows:
Lot 5, Block 1, Gusty Subdivision, Kenai Recording District, Third
Judicial District, State of Alaska.
1 Appraisal of Real Estate, Fifteenth Edition (2020), by the Appraisal Institute, p. 49.
2 Appraisal of Real Estate, Fifteenth Edition (2020), by the Appraisal Institute, p. 60.
Definition of
Market Value
Property Rights
Appraised
Legal Description
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Public Records indicate the owner of the appraised property is as
follows.
City of Kenai
210 Fidalgo Avenue, Suite 200
Kenai, AK 99611
The table below summarizes the historical KPB property assessment
for the appraised property.
KPB Historical Assessed Value (043-270-15)
The leasehold interest was assigned from Mary Jane Doyle and
Carolyn Lucille Doyle to Don Moffis and Joann Doyle in 2019. No
details of this transaction were provided.
This Appraisal Report develops the sales comparison approach to
estimate market value. Neither the cost nor the income capitalization
approach reflects market behavior for vacant land. Qualitative
techniques are used to measure differences between the comparable
sales and the subject. The appraisal report is a summary of the
appraisers’ data, analyses, and conclusions with supporting
documentation retained on file.
Dwayne Roberts of MacSwain Associates, LLC performed the
inspection of the appraised property and assisted Steve MacSwain,
MAI with data collection and analysis. Steve MacSwain, MAI
administered the appraisal process, reviewed draft appraisals, and
concurred with an opinion of value. Preparation of this report
encompassed the following scope of work that concluded with an
opinion of market value.
➔ Inspected the appraised property on May 16, 2022;
➔ Discussed the property with Ryan Foster, Planning Director with
the City of Kenai;
Property Owner
Assessed
Value
Year Land Improvements Total
2022 $105,300 ($4.10/SF) N/A $105,300
2021 $126,400 ($4.93/SF) N/A $126,400
2020 $120,400 ($4.69/SF) N/A $120,400
Three Year Sale
History
Report Type and
Methodology
Scope of Appraisal
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➔ Reviewed KPB assessor map 043-270-15;
➔ Reviewed plat 83-126;
➔ Reviewed City of Kenai’s Official Zoning Map and zoning codes;
➔ Gathered data from the KPB Assessor’s office and State of Alaska
Recorder’s office regarding ownership, assessments, and general
property information;
➔ Interviewed Kenai real estate Brokers, agents, and property owners
regarding land sales;
➔ Interviewed Kenai market participants regarding current
commercial and light industrial land market conditions, trends, and
expectations;
➔ Gathered and confirmed information on comparable land sales;
➔ Inspected the primary comparable sales we relied upon in our
comparative analysis; and
➔ Applied the sales comparison approach to arrive at a market value
indication.
We have collected and analyzed market and economic data that
projects real estate trends and activity for similar vacant parcels.
Discussions with Brokers and analysis of similar property sales
indicate that a period of approximately 6-9 months prior to our
effective date of value is a reasonable exposure period.
Exposure Time
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Chapter 2: Kenai Area Analysis and Industry Outlook
The appraised property is located in Kenai, Alaska. A demographic
and economic summary of the Kenai Peninsula Borough (KPB) and
City of Kenai follows. The reader is referred to the map below and on
following pages that illustrate the location and assist in the description
and analysis. We note that due to lack of funding, the KPB ceased
economic and financial publications.
Kenai Location Map
The Kenai Peninsula Borough is comprised of the Kenai Peninsula and
Cook Inlet including areas northeast of the Alaska Peninsula. The
borough also includes portions of Chugach National Forest, Kenai
Wildlife Refuge, Kenai Fjords National Park, Lake Clark National
Park, and Katmai National Park. Encompassing 24,800 square miles,
there are 16,000± square miles (65%) of land and 8,700± square miles
(35%) of water. Three distinct communities and population centers
are established within the Borough. Seward is located at the terminus
of the Seward Highway on the Gulf of Alaska coast, Kenai/Soldotna
are located on Cook Inlet and surrounding the mouth of the Kenai
River, and Homer is located at the terminus of the Sterling Highway
on Cook Inlet and Kachemak Bay. A large portion of the Borough
Overview
Kenai Peninsula
Borough Summary
Kenai
Soldotna
Anchorage N
r1jNM
Cook
Inlet
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population is scattered along the road systems rather than in
identifiable cities or communities.
Population
Together, Kenai, Soldotna, Nikiski, Salamatof, and Kasilof have the
largest population base in the Borough with an estimated 17,000±
residents in 2019. Population within the Kenai census area is 7,056
residents and has remained flat over the past two decades. Similarly,
surrounding communities have experienced population stability.
Employment
Borough employment is characterized as relatively diverse with no
single dominant industry, with the exception of government. The five
industry categories that have the highest economic influence, based on
total wages, within the borough are Federal, State, and local
government (29%) trade, transportation, and utilities (17%), education
and health services (16%), natural resources and mining (11%), leisure
and hospitality (6%), and manufacturing (6%). Supporting
employment sectors include construction (5%), professional and
business services (4%), and financial activities (4%). The table below
indicates 2018 Borough wages by industry.
KPB Total Wages by Industry (2018)
Source: Alaska Department of Labor and Workforce Development, Research and
Analysis Section, January – December 2018
KPB WORKERS BY INDUSTRY (2018)
Natural Resources and Mining
11%
Constructlon
5%
Manufacturing
6%
Trade, Transportation, and
Utllltl es
17%
Other/Unclassified
'"
■nd Businen
Stirvices
""
Leisure and Hospitality
6%
Education and Health Services
16%
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Similar to most rural Alaska economies, government is one of the key
employment factors. Leisure and hospitality (tourism) remains as a
driving economic force of the Kenai Peninsula Borough’s economy.
Both residents and non-residents utilize the Peninsula for its vast
fishing, camping, sightseeing, and other recreational opportunities.
The visitor industry is cyclical with most activity occurring during
summer months. However, sales in the visitor industry are an
important source of municipal revenues as both city and borough
government use collected sales taxes to support government
operations. The oil and gas industry is scattered throughout the
Peninsula. Natural gas endeavors marked increases in new exploration
projects in Kenai, on the Westside of Cook Inlet as well as lower
Kenai Peninsula between Clam Gulch and Ninilchik. However,
negative aspects of the industry exist that include closing oil platforms
due to poor production levels. Overall, the outlook for Kenai
Peninsula Borough’s oil and gas industry is continued steady natural
gas exploration and production with stagnant oil efforts. Capital
investment in storage development, reserves replacement, and pipeline
infrastructure are necessary and pressure exploration cost and
development upward.
Location Map
Kenai is located on the western coast of the Peninsula, and is often
associated with Soldotna, which is located 11± miles to the southeast.
These two cities have become known as the “twin cities”, sharing an
City of Kenai
Summary
Kenai
Cook Inlet
Soldotna Kenai River
N
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integrated economy, while maintaining their independence. Kenai is a
home rule city with a population of 7,056. In the summer months, the
area benefits from with tourists fishing the Kenai River. Kenai is also
the center for the oil and gas industry on the Peninsula, providing
services and supplies for Cook Inlet’s oil and natural gas drilling and
exploration. Nikiski, which lies north of Kenai, has two refineries
established to process oil from the Cook Inlet oil platforms and the
Swanson River oil fields. There are numerous oil field support
businesses located in the area as well as the refineries. Kenai has the
largest airport on the peninsula, the Kenai Municipal Airport, which
has regular scheduled flights to/from Anchorage and other
communities in the region.
The Nikiski industrial district located north of Kenai extends along the
shore of Cook Inlet for 1.5± miles and one-mile inland. Despite the
relatively small area, the value of industrial development exceeds $1
billion. The Agrium, Inc. nitrogen plant, Tesoro Alaska refinery and
former ConocoPhillips LNG export plant are the principal industrial
development. The LNG plant ceased operations in 2011, and reopened
for intermittent natural gas shipments until 2015. The plant was sold
to Andeavor in 2018 for $10M±, a significantly below market price.
Agrium merged with PotashCorp in 2018, forming a new company
called Nutrien, who currently owns the former Agrium plant.
In 2014, Homer Electric Association began generating its own power
at the Nikiski Combined Plant, producing 80 megawatts of power. In
addition, HEA purchased the Bernice Lake Power Plant from Chugach
Electric Association for $12M±. These facilities are primary
employers in Nikiski and account for nearly 10% of KPB total
employment. As Nikiski remains a hub for power generation in the
Kenai Peninsula, we do not anticipate major change to the Nikiski
industrial district in the near term. The potential Alaska LNG Project
is on the horizon, with optimism remaining on the Kenai Peninsula for
eventual construction. The project entails a gas processing plant on
the North Slope, an 800-mile gas pipeline and a liquefaction facility in
the Nikiski area. Tentatively, the total project cost is estimated at
$45B±. To date, 570± acres have been acquired in Nikiski to develop
the project. The City of Kenai passed a resolution in December 2018,
giving unanimous support to the LNG project; however, this joint
venture between the State of Alaska and private oil and gas industry
appears to have stalled, with no definite timetable for development.
In 2012, ENSTAR Natural Gas Company began injecting natural gas
into their new storage facility in Kenai. The Cook Inlet Natural Gas
Storage Alaska facility (CINGSA) is Alaska’s first independent gas
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storage facility with 11 billion cubic feet of capacity. The project cost
is estimated at $160M±.
Although most oil and gas fields in the Cook Inlet Basin are well past
their peak, annual production has not declined significantly in the past
decade. Moreover, smaller independent oil companies are prospecting
in the Cook Inlet basin with the intent of using new technology to
enhance production profitability. However, the maturing life-cycle of
oil and gas production has caused attrition in smaller businesses that
support this industry. More importantly, this economic trend has
created a market imbalance for industrial and commercial real estate.
For example, we observed several smaller industrial or commercial
properties that are vacant or abandoned because of contraction in the
oil and gas industry. Recent capital investments made by larger energy
companies have helped revitalize Kenai Peninsula’s oil and gas sector.
Natural gas prices gradually recovered into summer 2014 from their
lows in early 2012. Late 2014 to early 2015 saw another downturn in
natural gas prices before a mid-2016/17 recovery. After briefly
spiking in 4th quarter 2018, natural gas prices trended downward into
2020, where they reached record low prices in March, and again in
July due to lack of demand driven by the COVID-19 pandemic. Prices
made a slight recovery in the second half of 2020, but continue to
remain much lower than the 20-yaer average. If demand for natural
gas from Asia and the Lower 48 recovers, additional capital
investment in the Kenai Peninsula will become more viable. Expressed
in the table below is the U.S. Average Natural Gas Price over the past
ten-year period, which has experienced significant volatility.
Historical Natural Gas Price ($/MMBTU)
Source: macrotrends
$5.50
$5
$4.50
$4
$3.50
$3
$2 .50
$2
2012 2014 2016 2018 2020
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Optimism has been created by renewed investment in the Kenai
Peninsula. Sale activity remains relatively scarce with assemblage,
expansion, or special-purpose use representing the principal
components of demand. Short-term uncertainty will likely continue to
dampen the Kenai economy, which benefits from anglers and
sightseeing tourism. Travel restrictions, and decreasing demand linked
to the COVID-19 virus are slowly recovering from 2021 with cautious
optimism for continued recovery in 2022. After analysis, we
determined that industrial and commercial property values have been
relatively stable over the past decade, but have declined from the
1980s peak.
Conclusion
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Chapter 3: Neighborhood Description and Analysis
The appraised land is located just south of the Kenai Municipal
Airport and southwest of the Kenai Business District. This chapter
will focus on the supply and demand factors of these neighborhoods,
which affect the valuation process.
Kenai Neighborhood Map
The subject neighborhood is bound by the Kenai Airport to the north,
the Kenai Spur Highway to the south and east, and the Kenai Business
District to the northeast. The Kenai Business District is the
commercial core of Kenai. Development includes many types of
commercial and industrial uses including big box retailers, strip and
enclosed malls, restaurants, convenience stores, small businesses, and
airport-related businesses. The Kenai Airport was recently remodeled
modernizing the terminal building. Lowes, which was constructed in
2008, closed in 2011. After eight years of vacancy, the property sold to
U-Haul in 2019. This City-owned, public-use airport contains a 7,855-
foot asphalt paved runway, as well as an additional gravel runway and
seaplane basin. Currently, scheduled flight service to Anchorage is
available on both Ravn Alaska and Grant Aviation. Development in
Overview
Neighborhood
Description
N Kenai Airport
Subject
Kenai Business District
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the immediate neighborhood consists of both aviation and non-aviation
related uses.
The zoning map below assists in visualizing neighborhood zoning
districts. The immediate neighborhood is zoned Central Mixed-Use
established to provide a centrally located area in the City for general
retail shopping, personal and professional services, entertainment,
restaurants, and related businesses. This district is also intended to
accommodate a mixture of residential and commercial uses. The CMU
Zone shall be designed to encourage pedestrian movement throughout
the area. Building and other structures within the district should be
compatible with one another and the surrounding area
Zoning Map
To summarize, the Kenai Business District is the commercial core of
Kenai. The neighborhood is well-located and benefits from its
proximity to the Kenai Spur Highway, as well as the airport and other
commercial districts in the area. The outlook for the neighborhood is
favorable as it continues to be a good commercial district for Kenai
Summary
Light Industrial
Airport Light Industrial N
Suburban Residential
Conservation General Commercial
Central Mixed-Use
Appraised Parcel
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Chapter 4: Site Description and Analysis
Analysis of land describes the characteristics that enhance or detract
from its utility or marketability. The site description and analysis is
based on our property inspection and review of plat 83-126, aerial,
Borough and other mapping. The plat map below and aerial mapping
on the following pages assist in the description and analysis of the
parcel that follows.
Plat 83-126
Location: North side of Kenai Spur Highway between
Coral Street and Main Street Loop Road, Kenai,
Alaska
Physical address: 11568 Kenai Spur Highway, Kenai, Alaska
Shape and Land
Area:
Nearly-rectangular shaped lot containing
25,663 square feet or 0.59± acre
Access: Access via paved ingress/egress from Kenai
Spur Highway on southern boundary and Cohoe
Overview
Site Description
N
Subject
Kenai Spur Highway
Cohoe Avenue
Main Street
Coral Street
t
NS:.18.
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Avenue, a gravel road on northern boundary
Zoning: Central Mixed-Use District (CMU)
Frontage and
Exposure:
120± feet of Kenai Spur Highway frontage and
105± feet of Cohoe Avenue frontage
Easements and
Restrictions:
20-foot utility easement along north boundary
Public Utilities: All public utilities available
Topography: Level and near grade with surrounding streets and
properties
GIS Aerial Map (Kenai Peninsula Borough)
Soil Conditions: Soils mapped as urban lands, and appear suitable
for construction based on surrounding development
Wetland
Designation:
None
Flood Hazard: Zone D, an area of undetermined, but possible
flood hazard per FEMA
N
Subject
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Environmental
Conditions:
The existence of any hazardous material or other
type of environmental contamination, which may
or may not be present on the property, was not
observed by the appraisers nor do the appraisers
have any knowledge of the existence of such
substances. Our value conclusion assumes that the
property is free of environmental and hazardous
contaminants.
Site Utility: The subject site’s positive attributes include good
location, size, and access near the Kenai Airport
and Downtown Kenai. Overall, physical character
makes the site well suited for commercial
development.
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Chapter 5: Highest and Best Use Analysis
Highest and best use is a market-driven concept rather than a
subjective conclusion based on the experience of the appraiser or a
property owner’s wishes. Economic incentive is the motivation that
has a market-effect on the productivity or profitability of the land. The
Dictionary of Real Estate Appraisal (Seventh Edition) defines highest
and best use as follows.
The reasonably probably use of a property that results in the highest
value. The four criteria that the highest and best use must meet are
legal permissibility, physical possibility, financial feasibility, and
maximum productivity.
A property’s highest and best use as vacant may differ from that as
improved. It is the appraiser’s responsibility to analyze each scenario;
then identify, explain, and justify the conclusion of each type of use.
Per client instructions, the subject property is analyzed as though
vacant.
Determination of a property’s most profitable use requires analyzing
all feasible alternatives. The criteria for testing potential uses as
though vacant are legally permissible, physically possible, financially
feasible, and maximally productive. The following highest and best
use analysis is the foundation of the appraisal process for the subject
properties.
Physical Possibility: The appraised parcel contains 25,663 square feet
or 0.59± acre fronting the Kenai Spur Highway. Frontage measures
120± feet, which enhances access, exposure, and development
potential. Demand along the Kenai Spur Highway commercial corridor
is high when compared to alternative interior commercial locations.
Highway frontage and linkage to alternative commercial locations in
Kenai are positive characteristics.
Legal Permissibility: Although the appraised property is within the
City of Kenai, zoning regulations do not generally apply to current
ownership because the property remains in restricted status. The
subject parcel is zoned Central Mixed Use (CMU) which encourages
commercial-type development in a centrally located area in the City of
Kenai, primarily for shopping, personal and professional services,
entertainment services, entertainment establishments and restaurants
and related businesses. The CMU district is also intended to
accommodate a mixture of residential and commercial uses, and
designed in a manner that encourages pedestrian movement throughout
Overview
Highest and Best Use
Analysis As If Vacant
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the area. Although certain industrial use are allowed., most within the
CMU zone require a conditional use permit to ensure compatibility
with surrounding land uses. We are not aware of any recorded plat
restrictions that may affect development potential of the subject
property.
Financial Feasibility: Physically possible uses permitted are all
financially viable. Financially feasible commercial uses include
restaurants (both dining and fast food), hotel/motel, retail, and office
use. Other commercial uses are possible, which may offer greater risk
and lack economic feasibility. In conclusion, the Commercial
neighborhood’s location, existing land use trends, and physical
characteristics all support commercial development, which we
consider to by the highest and best use.
The subject’s physical characteristics, surrounding land use, CMU
zoning, location, access, etc., encourage commercial development.
Based on these factors, the highest and best use, as vacant, is for
commercial development.
Highest and Best Use: Commercial
Highest and Best Use
As Though Vacant
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Chapter 6: Land Valuation - Sales Comparison Approach
The sales comparison approach is a systematic procedure of estimating
the subject’s market value by comparing it directly to property sales
afforded similar physical and economic character. The approach is
founded on the principle of substitution, theorizing value is a function
of a knowledgeable investor’s (buyer) intent to pay no more for a
specific property than the cost of acquiring an alternative property
offering similar utility (economic satisfaction). The sales comparison
approach is the best approach for valuing vacant land.
Our sales search focused on vacant land with similar physical and
economic character to the subject, located in the immediate
neighborhood. In order to facilitate a comparative analysis, we
expanded our search to include commercial and light industrial
properties in other Kenai neighborhoods. These criteria produced five
sales that transpired in from 2016 to 2022. The primary land sales we
relied upon are listed in the table below. Additional details of the
comparables are retained on file.
Summary of Primary Land Sales
No. Location Zone Sale
Date
Sale
Price
Size
(SF)
$/SF
1 Northeast corner of Trading Bay Road and
Main Street Loop
CMU 5/22 $300,000 114,497 $2.62
2 Northwest corner of Kenai Spur Highway and
Main Street Loop Road (east)
CMU 1/20 $605,000 121,091 $5.00
3 Southwest corner of Kenai Spur Highway and
S. Forest Drive
CG 2/19 $455,000 219,107 $2.08
4 Northeast corner of Kenai Spur Highway and
Coral Street
CMU 8/18 $180,000 35,851 $5.02
5 Northwest corner of Kenai Spur Highway and
Main Street Loop Road (west)
CMU 8/16 $170,400 28,520 $5.97
North side of Kenai Spur Highway between
Coral Street and Main Street Loop Road
(Subject)
CMU -- -- 25,663 -- --
Overview
Comparative Market
Analysis
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The elements of comparison that have the greatest influence on market
behavior and the price paid for similar land in Kenai is location and
physical character, including clearing/grading, frontage/access, and
size. Importantly, the subject lot has highway frontage with very good
exposure and access. We use a qualitative comparison technique that
rates elements of comparison as superior, inferior, or similar.
Comparable Land Sales Map
Land Sale 1
Land Sale 1 is the May 2022 sale located on the northeast corner of
Trading Bay Road and Main Street Loop Road. Northeast of the
subject, the irregular-shaped parcel consists of 114,497 square feet.
All public utilities are available in the immediate neighborhood.
Topography is generally level, and the parcel is partially cleared and
developed with a retail strip mall. Zoning is CMU, Central Mixed-
Use. The sale was between the City of Kenai and former land lessee
who purchased the land underlying the improvements. The sale price
of $300,000 indicates a unit value of $2.62 per square foot. By
comparison, this sale lacks highway frontage, and no improvements
were included in the sale. Conversely, its good corner location with
Elements of
Comparison
N
Subject
3
Kenai Spur Highway
Kenai Municipal
Airport
4 2
1
5
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frontage near the Kenai Airport and within the Kenai Commercial
Core. Overall, Land Sale 1 is rated inferior, indicating a unit value
greater than $2.62 per square foot for the appraised land.
Land Sale 2
Land Sale 2 is the January 2020 sale located on the northwest corner
of Kenai Spur Highway and Main Street Loop Road (east), proximate
to the Commercial Core of Kenai. Located 1.3± road miles south of
the subject, the nearly rectangular-shaped parcel consists of two
totaling 121,091 square feet. All public utilities are available in the
immediate neighborhood. Topography is generally level, and the
parcel is cleared and developed with a motel. Zoning is CMU, Central
Mixed-Use. The sale was between the City of Kenai and former land
lessee who purchased the land underlying the improvements. The sale
price of $605,000 indicates a unit value of $5.00 per square foot. By
comparison, this sale is inferior for size, and similar to the subject for
location with highway frontage near the Kenai Commercial Core.
Overall, Land Sale 2 is rated similar, indicating a unit value
approximating $5.00 per square foot for the appraised land.
Land Sale 3
Land Sale 3 is the February 2019 sale located on the southwest corner
of Kenai Spur Highway and S. Forest Drive, west of the Kenai
Commercial Core. This location is 2.2± road miles southwest of the
subject. The nearly rectangular-shaped lot contains 219,107± square
feet. All public utilities are available in the immediate neighborhood.
Topography is generally level, and the property was cleared and
leveled at the time of sale. The property is zoned CG, General
Commercial. Originally listed for $499,000, the property sold after
132 days of market exposure. The sellers previously purchased the
property in 2007 for $175,000, and subsequently cleared the site. The
price appreciation is attributed to passage of time, as well as value
added due to clearing and leveling. The 2019 sale price of $455,000
indicates a unit value of $2.08 per square foot. By comparison, this
sale is rated inferior for size differential and location. Land Sale 3 is
rated inferior, indicating a unit value greater than $2.08 per square foot
for the appraised land.
Page 66
22-3698 – Lot 5, Block 1, Gusty Subdivision, Kenai, Alaska
MacSwain Associates LLC
25
Land Sale 4
Land Sale 4 is the August 2018 sale located at the northeast corner of
Kenai Spur Highway and Coral Street, just outside of the Airport
Reserve. This location is adjacent to the subject. The irregular-shaped
site contains 35,851± square feet. The site is cleared and improved
with a commercial building. All public utilities are available in the
immediate neighborhood. Zoning is CMU, Central Mixed-Use. Per
the plat, no direct Kenai Spur Highway access is permitted, although
curb cuts allow for direct physical access. The sale was between the
City of Kenai and former land lessee who purchased the land
underlying the improvements. The sale price of $180,000 indicates a
unit value of $5.02 per square foot. By comparison, this sale has good
corner location with highway frontage proximate to the Commercial
Core. Land Sale 4 is slightly inferior for size, superior for corner
location, and similar in terms of physical character and access. Thus,
Land Sale 4 is rated similar, indicating a unit value approximating
$5.02 per square foot for the appraised land.
Land Sale 5
Land Sale 5 is the August 2016 sale located on the northwest corner of
Kenai Spur Highway and Main Street Loop Road (west) just south of
the Airport Reserve and the Commercial Core. The property is located
near the subject with similar access and frontage. The nearly
rectangular-shaped lot contains 28,520± square feet. All public
utilities are available in the immediate neighborhood. The property is
cleared and zoned CMU, Central Mixed Use. The property was
purchased from the City of Kenai by the land lessee, who owned two
small commercial structures on the property. The sale price of
$170,400 was based on a 2015 appraisal, with a 20% premium paid.
Land Sale 5 is similar in size and superior for location and access
indicating a unit value less than $5.97 per square foot for the appraised
land.
Page 67
22-3698 – Lot 5, Block 1, Gusty Subdivision, Kenai, Alaska
MacSwain Associates LLC
26
Presented below is a rating grid and analysis of the land sales used in
comparative analysis.
Land Sale $/SF Rank Net Adjustment
5 $5.97 Superior
Subject -- -- -- -- -- --
4 $5.02 Similar -- --
2 $5.00 Similar -- --
1 $2.62 Inferior
3 $2.08 Inferior
The comparable land sales indicate a value range from $2.08 to $5.97
per square foot. Land Sale 5 is rated superior indicating a unit value
less than $5.97 per square foot. Conversely, Land Sales 1 and 3 are
rated inferior indicating a unit value greater than $2.62 per square foot.
Land Sales 2 and 4 are rated similar indicating a unit value
approximating $5.00 per square foot. After comparative analysis and
making the necessary adjustments, we conclude with a market value
between $5.00 and $5.50 per square foot, which develops the
following indicators.
25,663 SF × $5.00/SF = $128,315
25,663 SF × $5.50/SF = $141,147
Based on the preceding analysis, the market value of the appraised
land, as of May 16, 2022, is estimated as follows.
Market Value Estimate $135,000 (R)
Estimated 6 to 12 months
Reconciliation of
Comparative Market
Analysis
Marketing and
Exposure Time
Page 68
22-3698 – Lot 5, Block 1, Gusty Subdivision Addition No. 1, Kenai, Alaska
MacSwain Associates LLC
Assumptions and Limiting Conditions
This appraisal is subject to the following assumptions and limiting conditions.
➔ No responsibility is assumed for the legal description provided or for matters pertaining to
legal or title considerations. Title to the property is assumed to be marketable unless
otherwise stated.
➔ The property is appraised free and clear of all liens or encumbrances unless otherwise
stated.
➔ The information furnished by others is believed to be reliable, but no warranty is given for
its accuracy.
➔ All maps, plot plans, and other illustrative material are believed to be accurate, but are
included only to help the reader visualize the property.
➔ It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or
structures that render it more or less valuable. No responsibility is assumed for such
conditions or for obtaining the engineering studies that may be required to discover them.
➔ It is assumed the property is in full compliance with all applicable federal, state, and local
environmental regulations and laws unless the lack of compliance is stated, described, and
considered in the appraisal report.
➔ It is assumed the property conforms to all applicable zoning, land use regulations, and
platting restrictions unless the nonconformity is identified, described, and considered in the
appraisal report.
➔ Possession of this report, or a copy thereof, does not carry with it the right of publication.
➔ The appraisers, by reason of this appraisal, is not required to give consultation or testimony
or to be in attendance in court with reference to the property in question unless
arrangements have been previously made.
➔ Neither all nor any part of the contents of this report shall be disseminated to the public
through advertising, public relations, news, sales, or other media without the prior written
consent and approval of the appraisers.
➔ The existence of any hazardous material or other type of environmental contamination,
which may or may not be present on the property, was not observed by the appraisers nor
do the appraisers have any knowledge of the existence of such substances. However, the
presence of these substances may affect the value of the property. Therefore, the client is
urged to retain an environmental assessment for discovery and evaluation.
Page 69
22-3698 – Lot 5, Block 1, Gusty Subdivision Addition No. 1, Kenai, Alaska
MacSwain Associates LLC
Statement of COVID-19
This appraisal was performed following public awareness that COVID-19 was affecting
residents in the United States. At the time of the appraisal, COVID-19 is having widespread
health and economic impacts. The effects of COVID-19 on the real estate market in the subject
neighborhood are not yet measurable based on reliable data. The analysis and value opinion in
this appraisal are based on the data available to the appraisers at the time of the assignment and
apply only as of the effective date indicated. No analysis or opinions contained in this
appraisal should be construed as predictions of future market conditions or value.
Page 70
MacSwain Associates LLC
4401 Business Park Boulevard, Suite 22, Anchorage, Alaska 99503
Appraiser: Steve MacSwain, MAI
Member of Appraisal Institute - No. 5700
State of Alaska, Certified General Real Estate Appraiser - No. 42
Professional Experience: 1986 to Present - MacSwain Associates LLC
1976 to 1986 - Appraisal Company of Alaska - President
1970 to 1975 - Real Estate Services Corporation – Appraiser
1969 to 1970 - State of Alaska Department of Highways - Right of Way Agent
Real estate appraiser and consultant of all property types throughout Alaska including commercial, industrial,
subdivisions and special-purpose properties. Appraisals have been performed for financing, leasing, insurance,
condemnation, taxation, property damages, investment analysis, and buy-sell decisions. Appraisals include valuation
of both real property and business enterprises. Professional experience totals 49 years. Life-long Alaskan resident
of Alaskan Native descent.
Education: Bachelor of Business Administration, Finance (1969), University of Alaska Fairbanks
Appraisal Education: The following is a list of completed appraisal courses and seminars.
2021 – Cool Tools: New Technology for Real Estate Appraisers by the Appraisal Institute
2021 – Desktop Appraisals (Bifurcated, Hybrid) and Evaluations by the Appraisal Institute
2021 – Hot Topics & Myths in Appraiser Liability by LIA Administrators & Insurance Services
2020 – Uniform Standards of Professional Appraisal Practice – Update by the Appraisal Institute
2019 – How Tenants Create or Destroy Value: Leasehold Valuation and its Impact on Value –by the Appraisal Institute
2017 – Appraising Environmentally Contaminated Properties by the Appraisal Institute
2017 – Residential & Commercial Valuation of Solar by the Appraisal Institute
2017 – Right of Way Acquisition for Pipeline Projects by the International Right of Way Association
2015 – Litigation Appraising: Specialized Topics and Applications by the Appraisal Institute
2015 – Business Practices and Ethics by the Appraisal Institute
2013 – Complex Litigation Appraisal Case Studies by the Appraisal Institute
2013 – Uniform Appraisal Standards for Federal Land Acquisitions (Yellow Book) by the Appraisal Institute
2012 – Appraisal Curriculum Overview by the Appraisal Institute
2010 – Reviewing Appraisals in Eminent Domain by the International Right of Way Association
2010 – Commercial Appraisal Engagement and Review Seminar for Bankers and Appraisers by the Appraisal Institute
2009 – The Appraiser as an Expert Witness: Preparation and Testimony by the Appraisal Institute
2009 – Attacking and Defending an Appraisal in Litigation by Whitmer Education
2008 – Uniform Standards of Professional Appraisal Practice by the Appraisal Institute
2007 – Business Practices and Ethics by the Appraisal Institute
2007 – Eminent Domain Law for Right of Way Professionals by the International Right of Way Association
2007 – Appraisal Review for Federal Aid Programs by the International Right of Way Association
2007 – Analyzing Operating Expenses by the Appraisal Institute
1969-2006: Numerous appraisal classes pertaining to principles, income capitalization, cost analysis, sale
comparison approach, and highest and best use analysis by the Appraisal Institute, Society of Real Estate Appraisers,
International Right-of-Way Association, International Association of Assessing Officers, and Marshall Valuation
Service
Page 71
Membership and Organizations: Member of Appraisal Institute – No. 5700, International Right of Way
Association (IRWA), and Building Owners and Managers Association (BOMA)
Public Service: Past Chairman of the State Board of Certified Appraisers
Past Member of Board of Equalization, Municipality of Anchorage, National Experience Review Committee of
the Appraisal Institute, and Regional Ethics and Counseling Panel of the Appraisal Institute
Past President of Alaska Chapter 57 of the Appraisal Institute
Significant Assignments:
è Appraised Pacific Spaceport Complex-Alaska (PSCA) land and facilities for Alaska Aerospace Corporation on
Kodiak Island.
è Appraised proposed LNG Pipeline, a FERC-regulated 860-mile pipeline transporting liquefied natural gas.
è Appraised the Trans-Alaska Pipeline System, a FERC-regulated 800- pipeline that transports crude oil from
Prudhoe Bay to Valdez, for TAPS ownership.
è Appraised remote lands (65,000± acres) owned by three Native corporations damaged by the Selendang Ayu
grounding and subsequent oil spill.
è Appraised Calais Company, Inc., a real estate holding company consisting of 39 commercial parcels in Anchorage.
è Principal real estate consultant and expert witness for all lands affected by the Exxon Valdez oil spill. Project
involved over 2,000,000 acres of remote land and nearly 2,000 private property owners.
è Appointed as a representative of a three-member panel that analyzed and valued over 1,000,000 acres and 8,000
parcels for the Mental Health Lands Settlement.
è Contract assessor for the North Slope Borough, Kodiak Island Borough, City of Nome, and the City of Valdez.
è Represented Seibu Alaska, Inc. (Alyeska Resort and Alyeska Prince Hotel) in preparing of their property tax
appeal with the Municipality of Anchorage that resulted in a $65 million reduction in assessed value.
è Appraised submerged tideland parcels and wetlands parcels located in Womens Bay on Kodiak Island for the
purpose of an exchange between Koniag, Inc. and U.S. Fish and Wildlife Service.
è Appraised Common Carrier Pipeline right-of-ways leased and operated by BP Transportation Alaska and
ConocoPhillips Alaska.
è Appraised 3,600 acres consisting of the former Adak Naval Air Station and Submarine Base conveyed to the City
of Adak and the State of Alaska.
Expert Witness Experience: Steve MacSwain, MAI is qualified as an expert witness in both the United States
Federal Court and the State of Alaska Superior Court. Steve has testified as an expert witness in State and Federal
courts. In addition, Steve has testified as expert witness in numerous Alaskan municipal tax courts, public hearings,
and depositions on matters related to real property.
Arbitrator Experience: Appointed a Master by the Superior Court of Alaska and Municipality of Anchorage to
serve as an arbitrator in determining just compensation.
State of Alaska Ucenae #: APRG42
Effecti~: 61812021
Expires: 06/30/2023 Department of Commerce, Community, and Economic Development
Division of Corporations, Business, and Professional Licensing
Board of Certified Real Estate Appraisers
Licensee : STEVEN JAMES MACSWAIN
License Type : Certified General Real Estate Appraiser
Status : Active
Relationships
No relat ionships fo und .
Commissioner: Julie Anderson
Designations
No designations found .
Page 72
MEMORANDUM
TO: Planning and Zoning Commission
FROM: Max Best, Interim Planning Director
DATE: July17, 2022
SUBJECT: Action/Approval: Recommending the City Council Approve Ordinance
No. 3312-2022 – Approving the Lease with a Sale option of 11536 Kenai
Spur Highway to Aaron Swanson
On June 28, 2022, staff received a competitive Lease with Sale Purchase Option application
pursuant to KMC 22.05.095(i) for 11536 Kenai Spur Highway, Lot 4, Block 1, Gusty Subdivision
Addition No. 1 Amended, from Aaron Swanson. The proposed use of the parcel, which is currently
vacant, is to construct a Pita Pit restaurant.
11536 Kenai Spur Highway is a 24,829 square foot (.57 ac.) cleared lot south of the baseball
fields with 120’ of Kenai Spur Highway frontage. The Lot has additional access from Cohoe
Avenue. City water and sewer is available. This parcel is located outside the Airport Reserve.
The parcel is within the Central Mixed-Use District (CMU). Per KMC 14.20.125, the purpose of
the CMU Zone is intended to provide for a centrally located area in the City for general retail
shopping, personal and professional services, entertainment establishments, restaurants and
related businesses.
Pursuant to Kenai Municipal Code 22.05.040 application review, notice of the 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 August 29, 2022,
and no competing applications were submitted to the City.
The recently adopted City of Kenai Land Management Inventory and Recommendations lists the
property as not needed for a public purpose and recommends disposal for lease or sale. Funds
from the sale will benefit the Airport fund. The property is deed restricted with covenants and
conditions that protect the ongoing operation of the airport.
The Imagine Kenai 2030 Comprehensive Plan outlines goals, objectives, and action items for the
City, including the following supporting this application:
Objective Q- 4: Promote the siting and design of land uses that are in harmony and scale
with surrounding uses.
Page 73
Page 2 of 2
Objective Q-14: Continue to foster a compact, intensive mix of private and public uses in
the downtown core area.
Objective ED-1: Promote projects that create workforce development opportunities.
Objective LU-2: Promote the infill of existing, improved subdivision lots.
Please review the attached materials.
Does the Commission recommend Council enact Ordinance 3312-2022?
Attachments:
Draft Ordinance No. 3312-2022
City of Kenai Lease of City Owned Lands with Option to Purchase
11536 Kenai Spur Highway aerial map
City of Kenai Land Competitive Purchase Application from Aaron Swanson
Plat of Gusty Subdivision Addition No. 1 Amended
Deed of Release
Appraisal Report, Lot 4, Block 1, Gusty Subdivision
Page 74
Sponsored by: Administration
New Text Underlined; [DELETED TEXT BRACKETED]
CITY OF KENAI
ORDINANCE NO. 3312-2022
AN ORDINANCE DETERMINING LOT 4, BLOCK 1, GUSTY SUBDIVISION ADDITION NO. 1
AMENDED IS NOT NEEDED FOR A PUBLIC PURPOSE AND APPROVING THE EXECUTION OF A
LEASE WITH AN OPTION TO PURCHASE BETWEEN THE CITY OF KENAI AND AARON SWANSON
DBA FOREVER BUSINESS PLAZA LLC. FOR THE PROPERTY.
WHEREAS, Kenai Municipal Code 22.05.095(b)(2)(iv) provides for a land lease in which the lease is
subject to competition through the lease application review process and which contains an option to
purchase once the minimum development requirements have been met for the fair market value of the
land excluding permanent improvements made by the lessee; and,
WHEREAS, on June 28, 2022, Aaron Swanson submitted an application for a lease of City owned
properties with the option to purchase, described as Lot 4, Block 1, Gusty Subdivision Addition No. 1
Amended; and,
WHEREAS, the Applicant’s application states the intention is to construct a Pita Pit restaurant, with initial
construction being site preparation and a temporary building; 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 Aaron Swanson; and,
WHEREAS, the property has been released by the Federal Aviation from its Deed Restriction and is
available for sale or lease; and,
WHEREAS, the property is no longer needed for a public purpose for airport uses and is suitable for
private development; and,
WHEREAS, at their regular meeting on September 14, 2022, the Planning and Zoning Commission
reviewed the lease application and recommended_______ by the City Council; and,
WHEREAS, at their regular meeting on September 8, 2022, the Airport Commission reviewed the lease
application and recommended ________ by the City Council; and,
WHEREAS, funds from the lease and sale will benefit the Airport Fund.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, AS
FOLLOWS:
Section 1. Form: This is a non-code ordinance.
Section 2. That a Lease with an option to purchase City owned lands described as Lot 4, Block 1
Gusty Subdivision Addition No. 1 Amended is approved as attached hereto and the City Manager is
authorized to execute a lease with an option to purchase between the City of Kenai, Lessor, and Aaron
Swanson DBA Forever Business Plaza, Lessee, as follows:
Page 75
Ordinance No. 3312-2022
Page 2 of 2
_____________________________________________________________________________________
New Text Underlined; [DELETED TEXT BRACKETED]
The lease or sale shall be subject to the reservations and covenants as contained in Federal
Aviation Administration Deed of Release, Book 227, Page 416, Kenai Recording District;
Section 3. That the Council determines that the property is no longer needed for a public purpose by
the airport and is available for lease or sale.
Section 4. Any sale will be made at fair market value of the land only, as determined by a professional
appraiser from an appraisal made not more than one year prior to the date of sale. Any sale will be
conveyed through a quitclaim deed. Further Council authorization is not required for a sale; however,
completion of all required improvements is required prior to sale. All proceeds from the sale will be
deposited in the Airport Land Sale Permanent Fund.
Section 5. The following improvements are required to be completed within two years of execution
of the lease, and the option to purchase cannot be made until the improvements are completed:
Section 6. Severability: That if any part or provision of this ordinance or application thereof to any
person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall
be confined in its operation to the part, provision, or application directly involved in all controversy in
which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder
of this title or application thereof to other persons or circumstances. The City Council hereby declares
that it would have enacted the remainder of this ordinance even without such part, provision, or
application.
Section 7. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect 30 days
after enactment.
ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 21ST DAY OF SEPTEMBER,
2022.
___________________________________
Brian Gabriel Sr., Mayor
ATTEST:
___________________________________
Michelle M. Saner, MMC, City Clerk
Introduced: September 7, 2022
Enacted: September 21, 2022
Effective: October 21, 2022
Page 76
LEASE OF CITYLANDS Page 1 of 30
CITY OF KENAI LEASE OF CITY OWNED LANDS
WITH OPTION TO PURCHASE
THIS LEASE AGREEMENT entered into this ________ day of ___________, 20__, by
and between the CITY OF KENAI, 210 Fidalgo Avenue, Kenai, Alaska 99611-7794, and
_____________________________________, whose address is
________________________
__________________________________ (“Lessee”).
DEFINITIONS
For the purposes of this Lease the following terms are defined in KMC 22.05.005 (effective as
of the date of execution of the lease) as follows:
1. “Amendment” means a formal change to a lease of lands other than a lease extension
or renewal.
2. “Annual rent” means an amount paid to the City annually according to the terms of the
lease and Kenai Municipal Code.
3. “Assignment” means the transfer of all interest in a lease from one person or entity to
another.
4. “City” means the City of Kenai, its elected officials, officers, employees or agents.
5. “Consumer Price Index (CPI)” means the annual CPI for all urban consumers (CPI-U)
for Anchorage, Alaska.
6. “Existing lease” means a lease with at least one (1) year of term remaining.
7. “Expiring lease” means a lease with less than one (1) year of term remaining.
8. “Fair market value” means the most probable price which a property should bring in a
competitive and open market as determined by a qualified independent appraiser, or
the value as determined by the latest appraisal adjusted by the change in Consumer
Price Index from the date of the latest appraisal.
9. “Lease extension” means extending the term of an existing lease.
10. “Lease rate percent” means a percentage that when applied to the fair market value of
land establishes a rate of rent commensurate with rental rates prevalent in the local
area as determined by a qualified real estate appraiser.
11. “Lease renewal” means a new lease of property currently under an existing or expiring
lease to an existing lessee or a purchaser.
12. “Market analysis” means an analysis of data collected from other land leases to
determine whether a market adjustment in either fair market value or lease rate
percentage reflects the market.
13. “Permanent improvement” means a fixed addition or change to land that is not
temporary or portable, including a building, building addition, retaining wall, storage
tank, earthwork, fill material, gravel, and pavement, and remediation of contamination
for which the applicant is not responsible and excluding items of ordinary maintenance,
such as glass replacement, painting, roof repairs, door repairs, plumbing repairs, floor
covering replacement, or pavement patching.
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LEASE OF CITYLANDS Page 2 of 30
14. “Professional estimate of the remaining useful life of the principal improvement” means
an estimate of the number of remaining years that the principal improvement will be
able to function in accordance with its intended purpose prepared by a qualified real
estate appraiser, engineer, or architect licensed in Alaska.
15. “Qualified independent appraiser” means a general real estate appraiser certified by
the State of Alaska under AS 08.87.
16. “Site development materials” means materials used for preparing a lease site for
building construction or to provide a firm surface on which to operate a vehicle or
aircraft, including geotextile, fill, gravel, paving, utilities and pavement reinforcement
materials.
17. “Site preparation work” means work on the leased premises to include clearing and
grubbing, unclassified excavation, classified fill and back fill, a crushed aggregate base
course and utility extensions.
ARTICLE I
PREMISES LEASED
A. PREMISES: In consideration of Lessee’s payment of the rents and performance of all
the covenants of this Lease, the City leases to the Lessee, and the Lessee leases from the
City, the following described property (“Premises”) in the Kenai Recording District, Third
Judicial District, State of Alaska ; to wit:
Description of Lease Property
B. NO WARRANTY: Except as may be provided in this Lease, the City makes no specific
warranties, expressed or implied, concerning the condition of the Premises including, survey,
soils, wetlands, access, and suitability or profitability for any use including those authorized by
this Lease, its environmental condition, or the presence or absence of Hazardous Substances
in, on, and under the surface. The Lessee takes the Premises on an “as is” basis and without
warranty, subject to any and all of the covenants, terms, and conditions affecting the City's title
to the Premises.
ARTICLE II
RIGHTS AND USES
A. AUTHORIZED USES:
1. USE OF PREMISES: The City authorizes the Lessee to use the Premises for
the following purposes only:
List authorized uses and limitations
2.
B. RIGHTS RESERVED TO THE CITY:
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LEASE OF CITYLANDS Page 3 of 30
2. EASEMENTS: The City reserves the right to make grants to third parties or
reserve to the City easements or rights of way through, on, or above the
Premises. The City will not grant or reserve any easement or right of way that
unreasonably interferes with the Lessee’s authorized uses of the Premises.
3. INGRESS, EGRESS AND INSPECTION: The City reserves the right of ingress
to and egress from the Premises and the right to enter any part of the Premises,
including buildings, for the purpose of inspection or environmental testing at any
time. Except in the case of an emergency, all inspections and environmental
testing will be coordinated with the Lessee to minimize interference with the
Lessee’s authorized uses of the Premises.
4. RIGHT OF FLIGHT [Include for FAA Restricted Land only]: There is hereby
reserved to the City, its successors and assigns, for the use and benefit of the public,
a right of flight for the passage of aircraft in the airspace above the surface of the
Premises. This public right of flight will include the right to cause in the airspace any
noise inherent in the operation of any aircraft used for navigation or flight through the
airspace or landing at, taking off from, or operation on the Airport. The lease or sale
shall be subject to the reservations and covenants as contained in Federal
Aviation Administration Deed of Release, Book 227, Page 416, Kenai Recording
District;
C. PROHIBITED USES: Unless specifically authorized by this Lease or an amendment
to this Lease, the following are prohibited:
1. Any use of the Premises other than those authorized in this Lease.
2. Any use of the Premises that is in violation of a City Ordinance.
3. The outside storage on the Premises of junk, non-operational support
equipment, unused or damaged equipment or material, or solid waste or debris
unless allowed pursuant to a conditional use permit under KMC 14.20.
4. The disposal on the Premises of waste, including any Hazardous Substance,
slash, overburden, and construction waste.
5. The stripping, wasting, or removing any material from the Premises without the
prior written approval of the City.
6. [Include for FAA Restricted Land only]Erecting structures or allowing growth of
natural objects that would constitute an obstruction to air navigation, or allowing
any activity on the Premises that would interfere with or be a hazard to the flight
of aircraft, or interfere with air navigation or communication facilities, serving
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LEASE OF CITYLANDS Page 4 of 30
the Airport.
7. Any use or activity that is prohibited by applicable law or regulation.
ARTICLE III
TERM & HOLDOVER
A. TERM: The initial term of this Lease is for __________ years, from the 1st day
of ________________, 20__, to the 30th day of _______________, 20__.
B. HOLDOVER: If the Lessee holds over and remains in possession of the Premises after
the expiration, cancellation or termination of this Lease, the holding over will not operate as an
extension of the term of this Lease, but only creates a month-to-month tenancy, regardless of
any rent payments accepted by the City. The Lessee's obligations for performance under this
Lease will continue during the month-to-month tenancy. The City or Lessee may terminate the
Lessee’s holdover with ten days’ advance written notice.
ARTICLE IV
RENTS AND FEES
A. RENT: The initial rent for the Premises is $________.00 per year, as established by
the City pursuant KMC 22.05.060 and as subject to annual adjustment on July 1 of each year
under Article V of this Lease, plus applicable sales tax. The rent shall be payable annually in
advance of the first day of each year of the term of this Lease. All payments required by this
Lease must be made in U.S. dollars. If the annual rent exceeds $2,400, the Lessee may, upon
written notice to the City, choose to pay the rent in equal monthly installments, payable in
advance on or before the anniversary date of the term of this Lease and thereafter at monthly
intervals. No conversion of the payment schedule from annual to monthly shall result in the
City receiving less rent than it would have received had the conversion not taken place.
1. Rent Credit: A rent credit may be applied for a maximum of five years of lease
payments as provided in KMC 22.05.070 (as effective at the time this lease is
executed). Once the work is completed and value determined, a credit will be
applied to the lease payments, prorated as necessary for the successive five
years.
B. RENT PRORATED: Rental for any period less than one year shall be prorated on the
basis of the rent payable under this Lease in last full year previous to the prorating.
C. ADDITIONAL RENT: In addition to the rent specified in (a) of this Article, Lessee
agrees to pay to the appropriate parties all levies, assessments, and charges as follows:
1. Taxes pertaining to the leasehold interest of the Lessee.
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LEASE OF CITYLANDS Page 5 of 30
2. Sales tax now enforced or levied in the future, computed upon rent payable in
monthly installments whether the Lessee pays rent under this Lease on a
monthly or annual basis.
3. All taxes and assessments levied in the future by the City, as if Lessee was the
legal owner of record of the Premises.
D. PAYMENTS: The Lessee shall make checks, bank drafts, or postal money orders
payable to the City of Kenai and deliver payments to City of Kenai, Finance Department, 210
Fidalgo Avenue, Suite 200, Kenai, Alaska 99611-7794 or any other address the City may
designate in writing to the Lessee.
E. INTEREST: Beginning the day after payment is due, all unpaid rents, charges, and
fees required under this Lease will accrue interest at the rate of eight percent (8.0%) per
annum. Interest on disputed amounts will not be charged to the Lessee if the dispute is
resolved in the Lessee’s favor.
F. LATE PAYMENT PENALTY: In addition to any interest payable under Provision (E) of
this Article, each time the Lessee fails to pay any rent or fee by the date required in this Lease,
the City will charge, and the Lessee shall pay, an administrative penalty of ten percent (10.0%)
of the amount due and unpaid.
G. COURTESY BILLINGS: Lessee acknowledges that any billing statement issued by the
City is provided only as a courtesy. The Lessee is obligated to pay all rents and fees when
due, regardless of whether or not the Lessee receives a billing statement from the City.
H. LIEN AGAINST LESSEE: Any rent, charge, fee, or other consideration which is due
and unpaid at the expiration, termination, or cancellation of this Lease will be a lien against the
Lessee’s property, real or personal.
I. PAYMENT OF CITY’S COSTS: The Lessee will pay all reasonable actual expenses,
costs, and attorney fees City may incur, with or without formal action, to enforce, defend, or
protect this Lease or City's rights under this Lease, including any expense incurred with respect
to environmental compliance, bankruptcy or any proceeding that involves the Lessee, the
Lease, the Premises, or improvements or personal property on the Premises. The Lessee will
make payment within 30 days of the date of each notice from City of any amounts payable
under this provision.
J. PAYMENT FOR SPECIAL SERVICES: Lessee agrees to pay the City a reasonable
fee for any special services or facilities the City agrees to perform, which the City is not
otherwise obligated by this Lease to provide and which the Lessee requests from the City in
writing.
ARTICLE V
ADJUSTMENT OF RENT AND FEES
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A. RENT OR FEE ADJUSTMENT: The City shall adjust rent or fees payable by the
Lessee under Article IV or other provisions of this lease on July 1 of each year of the lease as
proved in KMC 22.05.060 (as effective at the time this lease is executed) and shall make any
other adjustments to rent as allowed for in KMC 22.05.060.
No rent or fee change shall be effective until 30 days after the date of the City’s written notice
to the Lessee. If the Lessee believes that any changed rent exceeds the fair market rent for
the Premises, the Lessee may appeal a rent change to the City as provided in KMC 22.05.060.
ARTICLE VI
ASSIGNMENT & SUBLETTING
A. INVALID WITHOUT CITY’S CONSENT: The Lessee may not assign, sublet, or grant
a security interest in, by grant or implication, the whole or any part of this Lease, the Premises,
or any improvement on the Premises without the written consent of the City. Any proposed
assignment, sublease, or security interest must be written and must be submitted to the City
bearing the original, notarized signature of all parties. The Lessee may submit unsigned draft
documents for the City’s conceptual review. However, the City’s conceptual approval of a draft
document may not be construed as the City’s consent to any assignment, sublease, or security
interest. All provisions in this Lease extend to and bind the assignees and sub-lessees of the
Lessee.
B. NO WAIVER OF CONSENT: The City’s consent to one assignment, sublease, or
security interest will not waive the requirement for the Lessee to obtain the City’s consent to
any other assignment, sublease, or security interest.
C. ASSIGNEE / LESSEE OBLIGATIONS: An assignment must include a provision stating
that the assignee accepts responsibility for all of the assignor’s (Lessee’s) obligations under
this Lease, including environmental liability and responsibility. However, unless the City
specifically releases the Lessee in writing, the City may hold the Lessee responsible for
performing any obligation under this lease which an assignee fails to perform.
D. OCCUPANCY BEFORE CITY CONSENT: An assignee or sub-lessee may not occupy
the Premises before the City consents to the assignment or sublease in writing.
E. CONFLICT OF PROVISIONS: In the event of a conflict between this Lease and an
assignment or a sublease, the terms of this Lease control.
F. LESSEE NOT RELIEVED OF OBLIGATIONS: The City’s consent to any sublease
does not relieve or otherwise alter the Lessee’s obligations under this Lease.
G. SECURITY ASSIGNMENTS AND FINANCING:
1. Subject to the requirements of (A) of this Article VI, the Lessee may assign a
security interest in this Lease. The security interest may be in the form of a
mortgage, deed of trust, assignment or other appropriate instrument, provided
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a. the security interest pertains only to the Lessee’s leasehold interest;
b. the security interest does not pertain to or create any interest in City's
title to the Premises; and
c. the documents providing for the security interest are approved and
acceptable to the City.
2. If the assignment of a security interest to which the City has consented shall be
held by an established lending or financial institution, including a bank, an
established insurance company and qualified pension or profit sharing trust,
and the lending institution acquires the Lessee's interest in this Lease as a
result of a foreclosure action or other remedy of the secured party, or through
any transfer in lieu of foreclosure, or through settlement of or arising out of any
pending or contemplated foreclosure action, the lending institution may transfer
its interest in this Lease to a nominee or a wholly owned subsidiary corporation
with the prior written consent of the City, provided, the transferee assumes all
of the covenants and conditions required to be performed by the Lessee
(including payment of any monies owed by Lessee to the City under the lease).
In the event of such a transfer, the lending institution shall be relieved of any
further liability under this Lessee.
3. A holder of a security interest in this Lease consented to by the City shall have,
and be subrogated to, any and all rights of the Lessee with respect to the curing
of any default of this Lease by Lessee.
4. A holder of a security interest consented to by the City that takes possession of
this Lease shall not be released from the obligations and liabilities of this Lease
unless the holder assigns its leasehold estate to an assignee who is financially
capable and otherwise qualified to undertake to perform and observe the
conditions of this Lease and the City consents to the assignment. The City’s
consent will not be unreasonably withheld.
ARTICLE VII
MAINTENANCE, SNOW REMOVAL & UTILITIES
A. MAINTENANCE:
1. At no cost to the City, the Lessee will keep the Premises and all improvements
on the Premises clean, neat and presentable, as reasonably determined by the
City.
2. At no cost to the City, the Lessee will provide for all maintenance and services
at the Premises as may be necessary to facilitate the Lessee's compliance with
this Lease and the Lessee’s use of the Premises.
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3. The Lessee shall comply with all regulations or ordinances of the City that are
promulgated for the promotion of sanitation. At no cost to the City, the Lessee
shall keep the Premises in a clean and sanitary condition, and control activities
on the Premises to prevent the pollution of water.
4.
B. SNOW REMOVAL:
1. At no cost to the City, the Lessee is responsible for snow removal on the
Premises. The Lessee shall dispose of snow in an off-Premises location
approved or provide suitable snow storage within the boundaries of the
Premises in accordance with all applicable federal and state laws.
2. Lessee shall not deposit snow in right-ow-ways, easements, roads or on City
property without written approval of the City..
3. Lessee agrees to not allow an accumulation of snow on the Premises that would
cause interference with adjoining leaseholders or the public.
C. UTILITIES: Unless specifically provided otherwise in this Lease, the Lessee shall,
at no cost to the City, provide for all utilities at the Premises necessary to facilitate the Lessee's
use of the Premises.
ARTICLE VIII
OPERATIONS
A. OPERATIONS: The Lessee will ensure that the Lessee, its employees, guests,
contractors, sub-lessees, and vendors that perform any activity or function authorized under
this Lease shall do so in a manner that ensures the safety of people, the protection of public
health and the environment, and the safety and integrity of the Premises.
B. LESSEE'S CONTROL AND RESPONSIBILITY:
1. The Lessee will assume full control and sole responsibility as between Lessee
and City for the activities of the Lessee, the Lessee's personnel and employees,
and anyone else acting by, on behalf of, or under the authority of the Lessee.
2. The Lessee will immediately notify the City of any condition, problem,
malfunction or other occurrence that threatens the safety the public or City
employees, harm to public health or the environment, or the safety or integrity
of the Premises.
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C. RADIO INTERFERENCE: The Lessee will discontinue the use of any machine or
device that interferes with any government-operated transmitter, receiver, or navigation aid
until the cause of the interference is eliminated.
D. PARKING: The Lessee will provide adequate vehicle and equipment, parking space
on the Premises for Lessee’s business or activities.
ARTICLE IX
ENVIRONMENTAL PROVISIONS
A. HAZARDOUS SUBSTANCE:
1. The lessee will conduct it business and/or operation on the Premises in
compliance with all environmental laws and permits. If hazardous substances
are handled on the Premises, the Lessee agrees to have properly trained
personnel and adequate procedures for safely storing, dispensing, and
otherwise handling Hazardous Substances in accordance with all applicable
federal, state and local laws.
2. Lessee will promptly give the City notice of proceeding to abate or settle matters
relating to the presence of a Hazardous Substance on the Premises or from
Lessee’s operations on the Premises. The Lessee will allow the City to
participate in any such proceedings.
B. ENVIRONMENTAL INDEMNIFICATION: If Contamination of the Premises or other
property by a Hazardous Substance occurs from the Lessee’s operations on the Premises the
Lessee will indemnify, defend, and hold the City harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities, or losses, including, but not limited to, sums paid
in settlement of claims, attorney’s fees, consultant fees, and expert fees, which arise during or
after the term of this Lease as a result of such Contamination. This indemnification of the City
by Lessee includes, but is not limited to, costs incurred in connection with any investigation of
site conditions or any cleanup, remediation, removal, monitoring, or restorative work required
by any federal, state, or local governmental agency because of a Hazardous Substance being
present in the soil or groundwater or under the Premises or other properties affected by the
Contamination.
C. REMEDIATION:
1. In the event of a Hazardous Substance spill on the Premises, the Lessee will
immediately notify the City and the Alaska Department of Environmental
Conversation and act, promptly, at its sole expense, to contain the spill, repair,
any damage, absorb and clean up the spill area, and restore the Premises to a
condition satisfactory to the City and otherwise comply with the applicable
portions of any environmental law.
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2. In addition to any notices required by this Lease, the Lessee will immediately
notify and copy the City in writing of any of the following:
a. Any permit, enforcement, clean up, lien, removal or other governmental
or regulatory action instituted, completed, or threatened pursuant to an
Environmental Law.
b. Any claim made or threatened by any person against the Lessee or
arising from the Lessee’s operations authorized by this Lease, relating
to damage, contribution, compensation, loss or injury resulting, from, or
claimed to result from any Hazardous Substances in, on, or under the
Premises; or
c. Any report made by, or on behalf of, the Lessee to any environmental
agency arising out of or in connection with any Hazardous Substances
in, on, or removed from the Premises, including any complaints, notices,
warnings, or asserted violations.
3. Remediation and restoration of the contaminated area must meet all applicable
state and federal regulations and must meet the requirements of all governing
regulatory authorities.
D. ENVIRONMENTAL AUDIT: The Lessee will provide the City with all investigative data,
test results, reports, and any other information gathered or analyzed as part of or in relation to
any Environmental Assessment, characterization or audit on the Premises that Lessee
performs or causes to be performed after the starting date of this Lease. The Lessee will submit
the data, result, report or information to the City within 60 days following the date on which it
becomes available to the Lessee.
E. RELEASE OF LESSEE: The City releases the Lessee from liability to the City for
Contamination and the presence of Hazardous Substances that existed prior to the
commencement date of this lease unless caused or materially contributed to by the Lessee.
F. SURVIVAL OF OBLIGATIONS: The obligations and duties of the City and Lessee
under Article IX of this lease shall survive the cancellation, termination or expiration of this
lease.
ARTICLE X
INDEMNIFICATION & INSURANCE
A. INDEMNIFICATION:
1. The Lessee will indemnify, save harmless, and defend the City, its officers,
agents, and employees from and against any and all liabilities, losses, suits,
administrative actions, claims, awards, judgments, fines, demands, damages,
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injunctive relief or penalties of any nature or kind to the full extent of the loss or
obligation for property damage, personal injury, death, violation of any
regulation or grant agreement, or any other injury or harm resulting from or
arising out of any acts or commission of or omission by the Lessee, Lessee’s
agents, employees, customers, invitees or arising out of the Lessee’s
occupation or use of the premises demised or privileges granted, and to pay all
costs connected therewith. This indemnification of the City by the Lessee shall
include sums paid in settlement of claims, attorney fees, consultant fees, expert
fees, or other costs and expenses, directly or indirectly arising from, connected
to or on account of this Lease as it relates to the Lessee, the Lessee’s activities
at or relating to the Premises, or any act or omission by the Lessee, or by any
of Lessee’s officers, employees, agents, contractors or sub-lessees. These
indemnity obligations are in addition to, and not limited by, the Lessee’s
obligation to provide insurance, and shall survive the expiration or earlier
termination of this Lease.
2. The Lessee shall give the City prompt notice of any suit, claim, action or other
matter affecting the City to which Paragraph 1, above, may apply, together with
a copy of any letter by an attorney on behalf of a complainant, any complaint
filed in court, and any notice or complaint by any regulatory agency. The City
shall have the right, at its option, to participate cooperatively in the defense of,
and settlement negotiations regarding, any such matter, without relieving the
Lessee of any of its obligations under this provision.
3. As to any amount paid to others for personal injury or property damage with
respect to which an act or omission of the City is a legal cause, notwithstanding
Paragraph 1 of this section, the Lessee and the City shall reimburse each other
according to the principles of comparative fault. If liability to a third party is
subject to apportionment according to comparative fault under this provision,
the Lessee and the City shall seek in good faith to achieve non-judicial
agreement as to apportionment of fault as between themselves. This
apportionment of liability between the City and the Lessee shall not be
construed to affect the rights of any person who is not a party to this Lease.
B. INSURANCE: At no expense to the City, the Lessee will obtain and keep in force during
the term of this Lease, insurance of the type and limits required by this provision. Where
specific limits are set, they will be the minimum acceptable limits. If the Lessee’s policy
contains higher limits, the City will be entitled to coverage to the extent of the higher limits. At
the time insurance in obtained by the Lessee, all insurance shall be by a company/corporation
rated “A-” or better by A.M. Best. The following policies of insurance are required with the
following minimum amounts:
1. Commercial General Liability, including Premises, all operations, property
damage, products and completed operations, and personal injury and death,
broad-form contractual, with a per-occurrence limit of not less than $1,000,000
combined single limit. If this lease authorizes the Lessee to engage in the sale
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or the commercial dispensing or storage of aviation fuel, the policy must not
exclude of Lessee’s fuel handling activities. This policy must name the City as
an additional insured.
2. Commercial Automobile Coverage with not less than $1,000,000 combined
single limit per occurrence. This insurance must cover all owned, hired, and
non-owned motor vehicles used by the Lessee.
3. Workers Compensation Insurance. The Lessee will provide and maintain, for
all employees, coverage as required under AS 23.30.045, and, where
applicable, any other statutory obligations. The policy must waive subrogation
against the City.
4. The Lessee will provide the City with proof of insurance coverage in the form of
an insurance policy or a certificate of insurance, together with proof that the
premiums have been paid, showing the types and monetary limits of coverage
secured. All insurance required by this provision must provide that the City be
notified at least 30 days prior to any termination, cancellation, or material
change in the insurance coverage.
5. If the Lessee's insurance coverage lapses or is canceled, Lessee will
immediately, upon written notice by the City, halt all operations on the the
Premises. The Lessee will not resume operations until the City receives
evidence that the Lessee has obtained current insurance coverage meeting the
requirements of this Lease.
6. The City may, at intervals of not less than five years from the beginning date of
the term of this Lease and upon written notice to Lessee, revise the insurance
requirements required under this Lease. City’s determination to revise the
insurance requirements will be based on the risks relative to the Lessee's
operations, any insurance guidelines adopted by the City, and any applicable
law.
7. If the Lessee subleases all or any portion of the Premises under the provisions
of this Lease, the Lessee will require the sub-lessee to provide to the insurance
coverage required of the Lessee under this Article X.
ARTICLE XI
LAWS & TAXES
A. COMPLIANCE WITH LAW: Lessee shall comply with all applicable laws, ordinances,
and regulations of public authorities now or hereafter in any manner affecting the Premises or
the sidewalks, alleys, streets, and ways adjacent to the Premises, or any buildings, structures,
fixtures and improvements or the use thereof, whether or not any such laws, ordinances, and
regulations which may be hereafter enacted involve a change of policy on the part of the
governmental body enacting the same. Lessee agrees to hold City financially harmless:
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1. From the consequences of any violation of such laws, ordinances, and/or
regulations; and
2. From all claims for damages on account of injuries, death, or property damage
resulting from such violation.
B. UNLAWFUL ACTIVITY: The Lessee shall not permit any unlawful use, occupation,
business, or trade to be conducted on the Premises contrary to any law, ordinance, or
regulation, including zoning ordinances, rules and regulations.
C. LICENSES AND PERMITS: The Lessee will obtain all necessary licenses and permits,
pay all taxes and special assessments lawfully imposed upon the Premises, and pay other
fees and charges assessed under applicable law. Nothing in this Lease prevents the Lessee
from challenging any taxes or special assessments to the appropriate authority.
D. LITIGATION: The Kenai Municipal Code, including regulations promulgated
thereunder, and the laws of the State of Alaska will govern in any dispute between the Lessee
and City. If a dispute continues after exhaustion of administration remedies, any lawsuit must
be brought in the courts of the State of Alaska, in Kenai, Alaska.
E. LESSEE TO PAY TAXES: Lessee shall pay all lawful taxes and assessments which,
during the term of this Lease may become a lien upon or which may be levied by the State,
Borough, City, or any other tax levying body, upon any taxable possessory right which Lessee
may have in or to the Premises or improvements on the Premises by reason of its use or
occupancy or the terms of this Lease provided, however, that nothing in this provision shall
prevent Lessee from contesting any increase in a tax or assessment under any applicable law,
ordinance, or regulation.
F. PARTIAL INVALIDITY: If any term, provision, condition, or part of this Lease is
declared by a court of competent jurisdiction to be invalid or unconstitutional, the remaining
terms, provisions, conditions, or parts shall continue in full force and effect as though the
declaration had not been made.
ARTICLE XII
LEASE TERMINATION
A. CANCELLATION: The City may, after 30 days’ written notice to the Lessee, cancel
this Lease and recover possession of the Premises if any of the following violations occur,
unless the violation is cured within the 30 days:
1. The Lessee fails to pay when due the rents, additional rents, charges, or other
sums specified in this Lease, including any increases made under this Lease.
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2. The Lessee's check for payment of any sum due under this Lease is returned
for insufficient funds.
3. The Lessee uses or authorizes the use of the Premises for any purpose not
authorized by this Lease.
4. The Lessee fails to fully perform and comply with any provision in this Lease.
5. The Lessee violates a provision of Kenai Municipal Code applicable to this
Lessee.
6. The court enters a judgment of insolvency against the Lessee.
7. A trustee or receiver is appointed for the Lessee's assets in a proceeding
brought by or against the Lessee, or the Lessee files a voluntary petition in
bankruptcy.
8. Failure by the Lessee to comply with any land development or permanent
improvement construction required by this Lease.
B. ENTRY AND RE-ENTRY: In the event that the Lease should be terminated in
accordance with this Article XII, or by summary proceedings or otherwise, or upon the Lessee’s
abandonment of the Premises or a portion of the Premises, the City or its agents, servants, or
representatives may, immediately or any time thereafter, re-enter, and resume possession of
the Premises or portion thereof, and remove all persons and property therefrom, without being
liable for any damages therefore. No re-entry by the City shall be deemed an acceptance of a
surrender of the Lease.
C. CONTINUING OBLIGATIONS UNTIL PREMISES VACATED: The Lessee will
continue to pay City rent after the expiration, termination, or cancellation of this lease and to
abide by the lease obligations, including providing proof of insurance coverage, through the
date Lessee relinquishes possession of and completely vacates the Premises. City will
consider the Premises completely vacated if the Lessee has
1. Remediated any environmental contamination for which the Lessee is
responsible;
2. Restored the Premises to a neat and clean physical condition acceptable to the
City.
D. REASONABLE CURE:
1. In the case of a violation that cannot be reasonably cured within 30 days, a
notice of cancellation issued by the City to the Lessee under this Article is
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stayed if, within the 30-day notice period, the Lessee begins and continues
expeditious action to cure the violation. The City will determine if a violation
cannot be reasonably cured within 30 days and what constitutes expeditious
action.
2. In the case where, in City’s sole determination, Lessee’s violation is considered
an imminent threat topublic health or safety, or the environment, City will direct
the Lessee to stop the activity immediately and may reduce the period to cure
the violation, or the City may correct the violation pursuant to (E) of this Article.
E. RIGHT OF CITY TO PERFORM:
1. If, after 30 days following notice the Lessee fails or refuses to perform any action
required by this Lease, the City will have the right, but not the obligation, to
perform any or all such actions required by this Lease at the sole expense of
the Lessee. The City will not take action if the Lessee begins and continues
expeditious action to perform any action required by this Lease that cannot be
reasonably completed within 30 days. The City will, at its sole discretion,
determine what constitutes expeditious action and if an action cannot be
reasonably performed in 30 days. The City will submit to the Lessee an invoice
for the expenses incurred by the City in the performance by the City of any
required action. The Lessee will pay the amount of each invoice within 30 days
from issuance.
2. If Lessee fails or refuses to perform any action that has been deemed an
imminent threat the City will have the right, but not the obligation, to perform
any or all such actions required to expeditiously correct the imminent threat.
Lessee shall reimburse the City for any cost, including legal fees and
administrative costs reasonably incurred by the City in acting to correct the
imminent threat violation.
F. WAIVER: A waiver by the City of any default by the Lessee of any provision of this
Lease will not operate as a waiver of any subsequent default. If the City waives a default, the
City is not required to provide notice to the Lessee to restore or revive any term or condition
under this Lease. The waiver by the City of any provision in this Lease cannot be enforced or
relied upon unless the waiver is in writing and signed on behalf of the City. The City's failure
to insist upon the strict performance by the Lessee of any provision in this Lease is not a waiver
or relinquishment for the future, and the provision will continue in full force.
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G. NATIONAL EMERGENCY: If the federal government declares a national emergency,
neither party may hold the other liable for any inability to perform any part of this Lease as a
result of the national emergency.
H. SURRENDER ON TERMINATION: Except as provided otherwise in this Article XII,
Lessee shall, on the last day of the term of this Lease (including any extension or renewal
thereof) or upon any earlier termination of this Lease, surrender and deliver up the premises
into the possession and use of City without fraud or delay in good order, condition, and repair,
except for reasonable wear and tear since the last necessary repair, replacement, restoration
or renewal, free and clear of all lettings and occupancies unless expressly permitted by the
City in writing, and free and clear of all liens and encumbrances other than those created by
and for loans to City.
I. OWNERSHIP AND DISPOSITION OF IMPROVEMENTS:
1. Ownership of Permanent Improvements: Permanent improvements on the
Premises, excluding Site Development Materials, constructed, placed, or
purchased by the Lessee remain the Lessee’s property as long as this
Lease remains in effect, including any period of extension or holdover with
the consent of the Lessor.
2. Disposition of Site Development Materials: The Lessee acknowledges that,
once placed by the Lessee, the removal from the Premises of Site
Development Materials can damage the Premises, adversely affect surface
water drainage patterns, and destabilize adjacent structures. When placed
on the Premises by the Lessee, Site Development Materials, including
building pads, parking areas, driveways, and similar structures:
a. become a part of the realty and the property of the City of Kenai;
b. unless otherwise directed by the Lessor, must be maintained by the
Lessee throughout the term of this Lease, including any extensions and
periods of holdover; and
c. may not be removed by the Lessee without the prior written approval of
the Lessor.
3. Disposition of Personal Property and Permanent Improvements Other Than
Site Development Materials:
a. Unless the Lessor otherwise directs as provided below, when this Lease
expires, terminates, or is cancelled and is neither extended nor followed
by a successive lease, the departing Lessee may do one or more of the
following:
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i. remove Lessee-owned Permanent Improvements from the
Premises, remediate any Contamination for which the Lessee
is responsible, and restore the Premises to a clean and neat
physical condition acceptable to the Lessor within 60 days
after the expiration, cancellation, or termination date of this
Lease;
ii. with written approval from the Lessor, sell Lessee-owned
Permanent Improvements to the succeeding lessee, remove
all personal property, remediate, any Contamination for which
the Lessee is responsible and leave the Premises in a clean
and neat physical condition acceptable to the Lessor within 60
days after notice from the Lessor that the Lessor has approved
an application for a lease of the Premises by another person
or such longer period specified in the notice, but in no event
more than 180 days after the expiration, termination, or
cancellation date of this Lease;
iii. elect to have the Lessor sell Lessee-owned Permanent
Improvements at public auction as provided below, remediate
any Contamination for which the Lessee is responsible, and
restore the premises to a clean and neat physical condition
acceptable to the Lessor. If the Lessor sells Permanent
Improvements under this Paragraph for removal from the
Premises, the departing Lessee's obligation under this
Paragraph continues until the Premises are remediated and
restored to a clean and neat physical condition acceptable to
the Lessor after the improvements have been removed.
b. If the departing Lessee elects to have the Lessor sell Lessee-owned
Permanent Improvements at public auction per this Section, the Lessee
shall, within 30 days after the expiration, cancellation, or termination of
this Lease:
i. submit to the Lessor a written request and authorization to sell
the Permanent Improvements by public auction;
ii. provide to the Lessor an executed conveyance document
transferring clear title to the Permanent Improvements to the
successful bidder at the public auction, along with
authorization to the Lessor, as agent for the Lessee for
purposes of the sale only, to endorse the name of the
successful bidder on the conveyance document upon receipt
of payment of the successful bid price; and
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iii. before the date of the public auction, remove all personal
property, remediate any Contamination for which the Lessee
is responsible and leave the Premises in a neat and clean
physical condition acceptable to the Lessor.
c. When selling Lessee-owned Permanent Improvements at public auction
for the departing Lessee, the Lessor will establish the terms and
conditions of the sale. The Lessor shall pay the Lessee any proceeds of
the sale of the Permanent Improvements, less the administrative costs
of the public auction and any financial obligation the Lessee owes to the
Lessor under this Lease. Payment will be made within a reasonable
time after the Lessor completes the sale transaction and receives the
proceeds, but not to exceed 60 days. If all or a portion of the Permanent
Improvements do not sell at public auction, the Lessee will remove those
Permanent Improvements, remediate any Contamination for which the
Lessee is responsible and restore the Premises to a clean and neat
physical condition acceptable to the Lessor within 60 days after the
auction.
d. If the Lessee shows good cause to the Lessor and if it is not inconsistent
with the best interest of the City of Kenai, the Lessor will grant an
extension of time that is sufficient to allow the Lessee to remove or sell
Lessee-owned Permanent Improvements, remediate any
Contamination for which the Lessee is responsible and to restore the
Premises to a clean and neat physical condition acceptable to the
Lessor.
e. The Lessor will, by written notice, direct the departing Lessee to remove
Lessee-owned Permanent Improvements from the Premises, to
remediate, consistent with applicable law, any Contamination for which
the Lessee is responsible and to restore the Premises to a clean and
neat physical condition acceptable to the Lessor if the Lessor
determines in writing:
i. that the continued presence of the Permanent
Improvements on the Premises are not consistent with any
written City program or plan required for compliance with
applicable federal, state, or local law;
ii. that the continued presence of the Permanent Improvements
on the Premises is not in the best interest of the City of
Kenai; or
iii. that the Permanent Improvements present a hazard to public
health or safety.
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f. The departing Lessee to whom the Lessor has issued direction under
Paragraph e of this Section shall comply with the Lessor's direction
within 60 days after issuance of the direction and at no cost to the
Lessor. If the departing Lessee shows good cause to the Lessor,
continues to work diligently to comply with Lessor’s direction, and if it is
not inconsistent with the best interest of the City of Kenai, the Lessor will
allow in writing a longer period that is sufficient to allow the Lessee to
comply with the Lessor’s direction. A departing Lessee who fails to
comply with a direction issued by the Lessor under Paragraph e of this
Section, shall, within 30 days of being billed by the Lessor, reimburse
the Lessor for any costs reasonably incurred by the Lessor, including
legal fees and administrative costs, to enforce the Lessor’s direction or
to remove and dispose of unremoved Lessee-owned improvements,
remediate any Contamination for which the Lessee is responsible and
restore the Premises.
g. If the departing Lessee does not timely remove or sell the Lessee-owned
Permanent Improvements on the Premises in accordance with the
requirements of this Section, any remaining Permanent Improvements
and any remaining personal property of the departing Lessee will be
considered permanently abandoned. The Lessor may sell, lease,
demolish, dispose of, remove, or retain the abandoned property for use
as the Lessor determines is in the best interest of the City of Kenai. The
departing Lessee shall, within 30 days after being billed by the Lessor,
reimburse the Lessor for any costs reasonably incurred by the Lessor,
including legal and administrative costs, to demolish, remove, dispose,
clear title to, or sell the abandoned property and to remediate and restore
the Premises.
h. After the expiration, termination, or cancellation of the Lease, including
any holdover, the departing Lessee loses all right to occupy or use the
premises without the express or implied consent of the Lessor. Except
as the Lessor notifies the departing Lessee otherwise in writing, the
Lessor consents to the departing Lessee's continued use and
occupancy of the Premises to diligently accomplish the requirements of
this Section. Until the departing Lessee relinquishes possession of and
completely vacates the Premises and notifies the Lessor in writing that
it has relinquished and vacated the Premises, the departing Lessee shall
perform the following as if the lease were still in effect,
i. pay rent to the Lessor;
ii. maintain the premises;
iii. provide the Lessor with evidence of each insurance coverage,
if any, required under the Lease; and
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LEASE OF CITYLANDS Page 20 of 30
iv. cease using the premises other than to diligently accomplish
the requirements of this Section, and to comply with the other
requirements of the Lease.
i. A departing Lessee will not be considered to have relinquished
possession and completely vacated the Premises until
i. the departing Lessee has:
(a) remediated, consistent with applicable law, any
Contamination for which the Lessee is
responsible; and
(b) restored the Premises to a clean and neat
physical condition acceptable to the Lessor; and
ii. either
(a) removed all of the Lessee's Permanent Improvements
and personal property from the premises or sold the
Permanent Improvements and personal property to a
succeeding Lessee under the provisions of this Lease; or
(b) transferred title to the Lessee's Permanent Improvements
and personal property that remain on the premises to the
Lessor.
ARTICLE XIII
GENERAL COVENANTS
A. COSTS AND EXPENSES: Costs and expenses incident to this lease, including but
not limited to recording costs, shall be paid by Lessee.
B. CARE OF THE PREMISES: The Lessee shall keep the Premises clean and in good
order at the Lessee’s own expense, allowing no damage, waste, nor destruction thereof, nor
removing any material therefrom, without written permission of the City. At the expiration of
the term fixed, or any earlier termination of the Lease, the Lessee will peaceably and quietly
quit and surrender the premises to the City.
E. CONSTRUCTION APPROVAL AND STANDARDS: Any building construction on the
Premises by the Lessee must be compatible with its surroundings and consistent with the uses
authorized under this Lease, as determined by the City. The Lessee must obtain the City’s
written approval before placing fill material, beginning any land development, or constructing
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or demolishing any improvements on the Premises, and before beginning any alterations,
modifications, or renovation of existing structures on the Premises. The Lessee must submit
to the City detailed drawings of the proposed development, alteration, modification, or
renovation, together with specifications or any other information the City reasonably requires.
[Include for FAA Restricted Land only]Further, the Lessee will submit to City evidence of the
Lessee’s compliance with Federal Aviation Administration regulation 14 CFR Part 77.
E. LEASE SUBORDINATE TO CITYFINANCING REQUIREMENTS: Lessee agrees that
City may modify this Lease to meet revised requirements for Federal or State grants, or to
conform to the requirements of any revenue bond covenant. However, the modification shall
not act to reduce the rights or privileges granted the Lessee by this Lease, nor act to cause
the Lessee financial loss.
F. RIGHT TO ENJOYMENT AND PEACEABLE POSSESSION: City hereby agrees and
covenants that the Lessee, upon paying rent and performing other covenants, terms, and
conditions of this Lease, shall have the right to quietly and peacefully hold, use, occupy, and
enjoy the Premises, except that the following shall not construed as a denial of the right of
quiet or peaceable possession:
1. Any inconvenience caused by public works projects in or about the Premises;
and
2. Any other entries by the City on the Premises reserved or authorized under
other provisions of this Lease.
G. NO PARTNERSHIP OR JOINT VENTURE CREATED: It is expressly understood that
the City shall not be construed or held to be a partner or joint venture of Lessee in the conduct
of the Lessee’s activities or business on the Premises. The relationship between the City and
the Lessee is, and shall at all times remain, strictly that of landlord and tenant, respectively.
H. DISCRIMINATION: The Lessee will not discriminate on the grounds of race, color,
religion, national origin, ancestry, age, or sex against any patron, employee, applicant for
employment, or other person or group of persons in any manner prohibited by federal or state
law. The Lessee recognizes the right of the City to take any action necessary to enforce this
provision, including actions required pursuant to any federal or state law.
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I. [Include for FAA Restricted Land only]AFFIRMATIVE ACTION: If required by 14 CFR
Part 152, subpart E, the Lessee will undertake an affirmative action program to insure that no
person will be excluded from participating in any employment activities offered by the Lessee
on the grounds of race, creed, color, national origin, or sex. No person may be excluded on
these grounds from participating in or receiving the services or benefits of any program or
activity covered by subpart E. The Lessee further agrees that it will require its sub-
organization(s) provide assurance to the City to the same effect that they will also undertake
affirmative action programs and require assurances from their sub-organization(s) as required
by 14 CFR, Part 152, subpart E.
Tenant shall use the premises in compliance with all other requirements imposed by or
pursuant to title 49, code of Federal Regulations, DOT, Subtitle A, Office of the Secretary, Part
21, Nondiscrimination in Federally-Assisted programs of the Department of Transportation-
Effectuation of Title VI of the Civil Rights Act of 1964, and as the Regulation may be amended.
J. INTEGRATION, MERGER, AND MODIFICATION: This Lease sets out all the terms,
conditions, and agreements of the parties and supersedes any previous understandings or
agreements regarding the Premises whether oral or written. No modification or amendment
of this Lease is effective unless in writing and signed on behalf of the City and the Lessee.
K. RIGHT TO ADOPT RULES: City reserves the right to adopt, amend, and enforce
reasonable rules and regulations governing the City, including the Premises. The City shall
not be liable to Lessee for any diminution or deprivation of possession, or of Lessee's rights
under this Lease, on account of the exercise of the City’s authority reserved under this
provision. Furthermore, the Lessee shall not be entitled to terminate the whole or any portion
of the leasehold estate created under this Lease, by reason of the exercise of the City’s
authority reserved under this provision, unless the exercise thereof so interferes with Lessee's
use and occupancy of the Premises as to constitute a termination, in whole or in part, of this
Lease by operation of law under the laws of the State of Alaska and of the United States made
applicable to the states.
L. LESSEE'S OBLIGATION TO PREVENT AND REMOVE LIENS: Lessee will not permit
any liens including, but not limited to, mechanics', laborers', or materialmen's liens obtainable
or available under the then existing laws, to stand against the Premises or improvements on
the Premises for any labor or material furnished to Lessee or claimed to have been furnished
to Lessee or to the Lessee's agents, contractors, or sub-lessees, in connection with work of
any character performed or claimed to have been performed on the Premises or improvements
by or at the direction or sufferance of Lessee. Provided, however, the Lessee shall have the
right to provide a bond as contemplated by Alaska law and contest the validity or amount of
any such lien or claimed lien. Upon a final determination of the lien or claim for lien, the Lessee
will immediately pay any judgment rendered with all proper costs and charges and shall have
such lien released or judgment satisfied at Lessee's own expense.
M. CONDEMNATION: In the event the Premises or any part thereof shall be condemned
and taken for a public or a quasi-public use, then upon payment of any award or compensation
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arising from the condemnation or taking, the City and the Lessee shall make a good faith effort
to agree upon
1. the division of the proceeds;
2. the abatement in rent payable during the term or any extension of the term of
this Lease; and
3. other adjustments as the parties may agree upon as being just and equitable
under all the circumstances.
If, within thirty days after the award has been paid into Court, the City and Lessee are unable
to agree upon what division, abatement in rent, and other adjustments as are just and
equitable, the dispute shall be determined by arbitration.
N. SUCCESSORS IN INTEREST: This Lease shall be binding upon and shall inure to the
benefit of the respective successors and assigns of the parties hereto, subject to such specific
limitations on assignment as are provided for in this Lease.
O. NOTICES:
1. Any notices required by this Lease must be in writing and must be delivered
personally or mailed by certified or registered mail in a prepaid envelope. A
mailed notice
a. must be addressed to the respective party at the address written on the
first page of this Lease or to the latest address designated in accordance
with (2) of this Provision (O); and
b. shall be deemed delivered on the date it is deposited in a U.S. general
or branch post office.
2. The City or the Lessee may, from time to time, designate a new address at
which they will receive notices by providing the other party with written notice at
least 15 days prior to the effective date of the change. An address change
notice must be delivered according to the procedure set out in (1) of this
Provision (O).
P. RETENTION OF RENTAL: In the event the City terminates this Lease because of any
breach by the Lessee, the City shall retain any unused balance of the rental payment last made
by the Lessee City as partial or total liquidated damages for the breach.
Q. FIRE PROTECTION: The Lessee will take all reasonable precautions to prevent, and
take all necessary action to suppress destructive or uncontrolled fires and comply with all laws,
regulations, and rules promulgated and enforced by the City for fire protection.
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R. PERSONAL USE OF MATERIALS: No interest in coal, oil, gas or any other mineral,
or in any deposit of stone or gravel valuable for extraction or utilization is included in the
Premises or in the rights granted by this lease. The Lessee shall not sell or remove from the
Premises for use elsewhere any timber, stone, gravel, peat moss, topsoil or any other material
valuable for building or commercial purposes.
S. APPROVAL OF OTHER AUTHORITIES: The granting of this lease by the City does
not relieve the Lessee of the responsibility to obtain any license or permit as may be required
by federal, state, or local law.
T. EXECUTION BY THE PARTIES: This Lease is of no effect unless signed by the
Lessee, or a duly authorized representative of Lessee, and an authorized representative of the
City.
U. CAPTIONS: The captions of the provisions of this Lease are for convenience only and
do not necessarily define, limit, describe, or construe the contents of any provision.
V. RIGHTS OF CONSTRUCTION: This Lease is intended to make public property
available for private use, while at all times protecting the public interest to the greatest extent
possible. Following the rule that transfers of interest in public property are to be strictly
construed in favor of the public property landlord, all rights granted to the Lessee under this
Lease will be strictly construed, and all rights of the City and the protections of the public
interest will be liberally construed.
W. LESSEE ACKNOWLEDGEMENT: The Lessee acknowledges that the Lessee has
read this Lease and fully understands its terms, that the Lessee has been fully advised or has
had the opportunity of advice by separate legal counsel, and voluntarily executes this Lease.
Lessee also acknowledges and agrees that the rule of interpretation under which a document
is construed against the drafter will not apply to this Lease.
X. APPROVAL BY LESSOR: Any approval required of the Lessor by this Lease will not
be unreasonably withheld. The Lessor’s approval does not waive the Lessee's legal
responsibility or liability to comply with all applicable federal and state laws and regulations.
ARTICLE XIV
SURVEY, IMPROVEMENTS AND PERFORMANCE BOND
A. SURVEY: The Lessee is solely responsible, at its sole expense, to confirm or establish
the physical location of the boundaries of the Premises prior to beginning any construction
thereon, including clearing grubbing, back-filling and environmental sampling. Any survey of
the Premises shall be performed by a Land Surveyor registered in the State of Alaska. The
Lessee shall furnish the City with a copy of the plat of any survey performed on the Premises
by, or on behalf of, the Lessee.
B. IMPROVEMENTS:
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1. REQUIRED IMPROVEMENTS: At no cost to the City, Lessee agrees to
complete land development and construction of Permanent Improvements
including ____________________________________________________, by
no later than ____________________________, with an aggregate cost of at
least $__________________, excluding financing costs. In addition to the as-
built drawings required by this Lease, the Lessee must submit to the City written
evidence that the Lessee has completed the land development and constructed
improvements on the Premises with an aggregate cost or investment of not
less than $_____________.
The evidence of cost must be submitted to the City within sixty days of the
completion of the development and improvements, but by no later than
________________.
a. Costs considered toward the aggregate cost of permanent
improvements include building construction, design, labor, materials,
materials shipping, permits, equipment, soil testing, environmental
baseline report, and environmental assessment directly related to the
construction; premises and as-built surveys; site preparation, including
excavation, geotextile fabric, filling, grading, fill material, gravel, and
pavement, remediation of environmental contamination (unless Lessee
caused or Materially Contributed To the Contamination); and utility
connection costs.
b. The cost of Permanent Improvements excludes:
1. work performed by the City and not reimbursed by the Lessee;
and
2. work performed by the Lessee and reimbursed by the City.
2. FAILURE TO COMPLETE IMPROVEMENTS: If the Lessee fails to complete
the required construction within the time allowed under (b)(1) of this Article,
including any extensions granted, the City will execute against and the Lessee
will forfeit, any bond or other guarantee given by the Lessee and, as applicable,
City will:
a. initiate cancellation of the lease; or
b. reduce the term of the lease to a period that is consistent with the portion
of the required construction timely completed.
3. APPEARANCE: When completed, all improvements on the Premises must be
neat, presentable, and compatible with the authorized use of the Premises
under this Lease, as determined by the City.
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4. CITY APPROVAL REQUIRED: The Lessee must first obtain the City’s written
approval before beginning any land development, construction or demolition of
any improvements on the Premises, or before beginning any alterations,
modifications, or renovation of existing structures on the Premises. The Lessee
must submit to the City detailed drawings of the proposed development,
alteration, modification, or renovation. [Include for FAA Restricted Land
only]Further, the Lessee will submit to City evidence of the Lessee’s compliance
with the FAA regulation 14 CFR Part 77.
5. CITY APPROVAL WITHHELD: The City’s approval of any construction,
alteration, modification, or renovation will not be withheld unless
a. the Lessee fails to demonstrate adequate financial resources to
complete the project;
b. the project plans, specifications, and agency approvals are incomplete;
c. the proposed project would result in a violation of an applicable
ordinance, regulation, or law;
d. the proposed project would interfere with or is incompatible with the
safety, security, maintenance, or operations of the City;
e. [Include for FAA Restricted Land only]the proposed project is
inconsistent with the Airport Master Plan;
f. the proposed project is inconsistent with the terms of the lease, zoning
ordinances, or the City’s Comprehensive Plan;
g. the project plans do not make sufficient provision for drainage, vehicle,
and equipment parking, or for snow storage; or
h. the proposed project does not conform to generally recognized
engineering principles or applicable fire or building codes.
6. DEMOLITION: Prior to any demolition of any structure(s) on the Premises,
Lessee will deliver to City a written scope of work that, at a minimum, lists the
structure(s) that are to be demolished and the timeframe for demolition and
removal of the debris from the Premises. City will review Lessee’s scope for
demolition and issue Lessee written approval for the work to be done.
7. BUILDING SETBACK: No building or other permanent structure may be
constructed or placed in violation of the City’s setback requirements.
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8. AS-BUILT DRAWINGS: Within sixty days after completion of construction or
placement of improvements upon the Premises, the Lessee will deliver to the
City a copy of an as-built drawing, acceptable to the City, showing the location
and dimensions of the improvements, giving distances to all Premises’
boundaries. If the Lessee constructs underground improvements, the Lessee
will appropriately mark the surface of the land with adequate surface markers.
The type, quantity, and distance between such markers will be subject to
approval of the City.
9. DAMAGE TO IMPROVEMENTS: If Lessee’s improvements on the Premises
are damaged or destroyed, Lessee will cause the improvements to be repaired
or rebuilt, and restored to normal function within two years following the damage
or destruction. If the Lessee fails to timely rebuild or restore the improvements,
the City may, at its sole discretion, either reduce the term of this Lease
commensurate with the estimated value of the Lessee’s remaining, fully
functional improvements on the Premises, or cancel this Lease.
10. DAMAGE NEAR EXPIRATION: If Lessee’s improvements are damaged to the
extent that more than 50% of the space is unusable and the damage occurs
within five years of the expiration of the term of this Lease, Lessee may remove
the damaged improvements, restore the Premises and terminate this Lease.
C. PERFORMANCE BOND (Optional): Prior to beginning the construction of permanent
improvements required under (1) of this Article, the Lessee shall submit to the City a
performance bond, deposit, or other security in the amount of $_______________. The form
of the bond or other security shall be subject to the City’s approval.
D. SURRENDER ON TERMINATION: Lessee shall, on the last day of the term of this
Lease or upon any earlier termination of this Lease, surrender and deliver upon the premises
into the possession and use of City without fraud or delay in good order, condition, and repair,
except for reasonable wear and tear since the last necessary repair, replacement, restoration
or renewal, free and clear of all lettings and occupancies unless expressly permitted by the
City in writing, and free and clear of all liens and encumbrances other than those created by
and for loans to City. Upon the end of the term of this Lease, including any extension or
renewal, or any earlier termination thereof, title to the buildings, improvements and building
equipment shall automatically vest in City without requirement of any deed, conveyance, or bill
of sale thereon. However, if City should require any such document in confirmation hereof,
Lessee shall execute, acknowledge, and deliver the same and shall pay any charge, tax, and
fee asserted or imposed by any and all governmental unites in connection herewith.
E. NOTICE OF CONSTRUCTION: The Lessee agrees to notify the City in writing three
days prior to commencing any construction project valued in excess of $1,000.00 on the
Premises. The Lessee agrees to assist in the posting of a notice of non-responsibility and
maintenance of the notice on the Premises during construction. Lessee agrees that in the
event the Lessee fails to notify the City as required by this Provision (f), the Lessee shall
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LEASE OF CITYLANDS Page 28 of 30
indemnify the City against any materialmen's liens as defined in AS 34.35.050 which arise as
a result of construction on the premises.
ARTICLE XV
OPTION TO PURCHASE
A. At any time during the term of this Lease after construction of the minimum
improvements required in Article XIV, the Lessee may purchase the property from the
City for fair market value as determined by an appraisal made by a licensed professional
appraiser within one year of the purchase. No lease payments or other payments to the
City prior to the purchase will be credited towards the purchase price.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, the day
and year stated in the individual acknowledgments below.
LESSEE: LESSOR:
City of Kenai
By: By:
Lessee Name Date Paul Ostrander Date
Its: Director Its: City Manager
ACKNOWLEDGMENTS
STATE OF ALASKA )
) ss.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this ____ day of _________, 20__, Name: Lessee Name,
Director, of____________________________________, being personally known to me or
having produced satisfactory evidence of identification, appeared before me and
acknowledged the voluntary and authorized execution of the foregoing instrument on behalf of
Page 104
LEASE OF CITYLANDS Page 29 of 30
said corporation.
Notary Public for Alaska
My Commission Expires:
STATE OF ALASKA )
) ss.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this ____ day of _________, 20__, Paul Ostrander, City
Manager of the City of Kenai, Alaska, being personally known to me or having produced
satisfactory evidence of identification, appeared before me and acknowledged the voluntary
and authorized execution of the foregoing instrument on behalf of said City.
Notary Public for Alaska
My Commission Expires:
ATTEST:
____________________________
Shellie Saner, City Clerk
SEAL:
Approved as to Lease Form:
_________________________
Scott Bloom, City Attorney
AFTER RECORDING RETURN TO:
Page 105
LEASE OF CITYLANDS Page 30 of 30
City of Kenai
210 Fidalgo Avenue
Kenai, AK 99611
Page 106
Proposed Use and Improvements
Proposed Use (check one): D Aeronautical IEI Non-Aeronautical
Type of Land Use: IEI Commercial D Residential D Industrial D Public/Institutional D Tidelands D Other
Do you plan to construct new or additional improvements? (if Yes, answer next 3 questions) DYES C NO
1. What is the estimated value of the improvement? ~ 300,~oo
2. What is the type of improvement?~uilding ~and D Other:
3 . What are the dates construction is estimated to commence and be completed? (Generally within two years)
Estimated Start Date: ~~S .\~ \ \ Estimated Completion Date: ~W'l'~c '2..0 '2--3:-
If you do not plan to construct new improvements, how does the proposed use benefit the community?
'N(A
Describe the proposed business or activity intended:
~\\o.-'"JC> ~ls-~e.s..\~"'"c.· .. ~
How does the proposed purchase benefit the City of Kenai and support a thriving business, residential, recreational,
or cultural ".°mmunity? ('l"c.-kS ..,,._ "\''\"',4,-~~ .(:'..,-~'<>':'\..._s, ~oef-\~ v.A-;l.L_
~~"~"''~ "'"~~,~·\ov-J (\.""\.~l°'-/~vJ-0~~0<~""~1{S u..J\~'tv-.. ~ .
Submitting an application to purchase does not give the applicant a right to purchase or use the land requested in the application. If the land is
sold in a competitive public sale set in response to this Competitive Land Purchase Application to anyone other than the applicant , the
application fee and any deposit m~~ ~ l~praisal or subdivision will be refunded in total to the applicant. If the land is so ld to
the appl icant , any deposit, after de u t ng t ity's expenses , will be credited to the purchaser at closing .
'
Signature: I)~ I Date: ~(1--%' { '2..D'V'Z-
, v
Print Name: Aaron Swanson Title: owner
For City Use Only: Date Application Fee Received : r,., I i elz.t-
Account: 0 General Fund ~Airport Fund Date Appl.ication Determined Complete:
Method of Sale (check one): 30-Day Notice Publication Date:
0 Public Auction 0 Over-the-Counter City Council Ordinance :
0 Leased Land with Option to Purchase Account Number:
Page 109
MACSWAIN ASSOCIATES LLC
4401 Business Park Boulevard, Suite 22, Anchorage, Alaska 99503
APPRAISAL REPORT
Kenai Lot: 25,144± SF (0.58± Acre)
Lot 4, Block 1, Gusty Subdivision
Kenai, Alaska
\
Date of Value: May 16, 2022 File No. 22-3697
Submitted To:
Ryan Foster, Planning Director
City of Kenai
210 Fidalgo Avenue
Kenai, AK 99611
N
Kenai Spur Highway
Lot 4
25,144 SF (0.58 Acre)
Cohoe Avenue
Page 113
MacSwain Associates LLC
22-3697 – Lot 4, Block 1, Gusty Subdivision, Kenai, Alaska
4401 Business Park Blvd., Suite 22
Anchorage, Alaska 99503
Phone: 907-561-1965
Fax: 907-561-1955
s.macswain@macswain.com
June 15, 2022
Ryan Foster, Planning Director
City of Kenai
210 Fidalgo Avenue
Kenai, AK 99611
Re: Kenai Lot: 25,144± SF (0.58± Acre)
Lot 4, Block 1, Gusty Subdivision
Kenai, Alaska
Dear Mr. Foster:
We have prepared an Appraisal Report of the above-referenced vacant lot located in Kenai,
Alaska. The appraised parcel contains 25,144± square feet or 0.58± acre. The type of value
estimated is market value. The property rights appraised is the fee simple estate. The report
is prepared in accordance with the Uniform Standards of Professional Appraisal Practice
(USPAP).
Based on the data, reasoning, and analysis that follows, the market value of the appraised
property, as of May 16, 2022, is estimated as follows.
ONE HUNDRED TEN THOUSAND DOLLARS $110,000
Your attention is directed to the Assumptions Limiting Conditions of this report located in
the addendum. We also direct your attention to the Statement of COVID-19 in the
addendum. We hope the appraisal report assists your evaluation of the properties. If you
have any questions regarding this report, please contact this office.
Respectfully submitted,
Steve MacSwain, MAI
State of Alaska Certificate No. 42
Page 114
MacSwain Associates LLC
22-3697 – Lot 4, Block 1, Gusty Subdivision, Kenai, Alaska
Appraiser Certification
The undersigned certifies that to the best of their knowledge and belief:
➔ The statements of fact contained in this report are true and correct.
➔ The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are our personal, impartial, and unbiased
professional analyses, opinions, and conclusions.
➔ We have no present or prospective interest in the property that is the subject of this report,
and no personal interest with respect to the parties involved.
➔ We have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
➔ MacSwain Associates, LLC previously performed services as an appraiser on the subject
property in September 2021.
➔ Our engagement in this assignment was not contingent upon developing or reporting
predetermined results.
➔ Our compensation for completing this assignment is not contingent upon the development
or reporting of a predetermined value or direction in value that favors the cause of the client,
the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
➔ The reported analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the requirements of the Code of Professional Ethics and
Standards of Professional Appraisal Practice of the Appraisal Institute.
➔ The reported analyses, opinion, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
➔ The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
➔ Dwayne Roberts with MacSwain Associates, LLC inspected the appraised property on May
16, 2022. Steve MacSwain, MAI has previously inspected the property.
➔ Dwayne Roberts provided significant real property appraisal assistance to the person signing
this certification.
➔ As of the date of this report, Steve MacSwain, MAI, is a certified General Real Estate
Appraiser in the State of Alaska and has completed the education requirements through June
2023.
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➔ As of the date of this report, Steve MacSwain, MAI has completed the Standards and Ethics
Education requirements for Designated Members of the Appraisal Institute.
➔ As of the date of this report, Steve MacSwain, MAI has completed the continuing education
requirements for Designated Members of the Appraisal Institute.
➔ As of the date of this report, Steve MacSwain, MAI is a certified General Real Estate
Appraiser in the State of Alaska and has completed the education requirements through June
2023.
6/15/22
Steve MacSwain, MAI
State of Alaska Certificate No. 42
Date
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Table of Contents
Title Page
Transmittal Letter
Appraiser Certification
Table of Contents
Appraisal Summary 1
Chapter 1: Definition of the Appraisal Problem 5
Chapter 2: Kenai Area Analysis and Industry Outlook 9
Chapter 3: Neighborhood Description and Analysis 15
Chapter 4: Site Description and Analysis 17
Chapter 5: Highest and Best Use Analysis 20
Chapter 6: Land Valuation - Sales Comparison Approach 22
Addendum
Assumptions and Limiting Conditions
Statement on COVID-19
Short Form Agreement
Appraiser Qualifications
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Appraisal Summary
Value Type: Market value
Property Type: Commercial
Property Rights Appraised: Fee simple estate
Location: North side of Kenai Spur Highway between Coral Street and
Main Street Loop Road, Kenai, Alaska
Legal Description: Lot 4, Block 1, Gusty Subdivision
Tax Parcel No: 043-270-14
Physical Address: 11536 Kenai Spur Highway
Property Owner: City of Kenai (per KPB)
Zoning: Central Mixed-Use District (CMU)
Site Description: Nearly-rectangular shaped lot containing 25,144 square
feet or 0.58± acre
Topography: Partially cleared with some spruce and birch trees, lot is
nearly level and at grade with surrounding streets and
properties
Frontage/Exposure: 120± feet of Kenai Spur Highway frontage and 105± feet of
Cohoe Avenue frontage
Access: Access via Cohoe Avenue, a gravel road on northern
boundary. No improved access from Kenai Spur Highway
Utility Service: All public utilities available
Soil and Subsurface
Conditions:
Based on observations of surrounding development, soils
appear to be suitable for development.
Hazardous Substances: None observed or known, parcel is appraised as if
“environmentally clean”
Wetland Designation: None
Flood Hazard Restrictions: Zone D, an area of undetermined, but possible flood hazard
Easements and Restrictions: 20-foot utility easement along north boundary
Sale/Lease History: No known sales or leases in the previous three years
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Highest and Best Use: Commercial
Extraordinary Assumption: None
Hypothetical Condition: None
Date of Property Inspection: May 16, 2022
Effective Appraisal Date: May 16, 2022
Date of Report: June 15, 2022
Market Value Estimate: $110,000 ($4.37/SF)
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Subject Property Photographs
Date: May 16, 2022 Taken By: Dwayne Roberts
Northeast view of property from Kenai Spur Highway
South view of property
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Subject Property Photographs
Date: May 16, 2022 Taken By: Dwayne Roberts
Southeast view of Cohoe Avenue frontage (property on the right)
Southeast view of Kenai Spur Highway frontage (property on the left)
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Chapter 1: Definition of the Appraisal Problem
We prepare an Appraisal Report that analyzes a 25,144± square foot
(0.59± acre) vacant lot in Kenai, Alaska. The type of value estimated is
market value. The report is intended to comply with the Uniform
Standards of Professional Appraisal Practice (USPAP).
Market value
City of Kenai
Assist with a potential sale of the property
City of Kenai
May 16, 2022
May 16, 2022
June 15, 2022
The appraised property is a vacant lot owned by the City of Kenai. The
subject property is located on the north side of Kenai Spur Highway
between Coral Street and Main Street Loop Road in Kenai, Alaska. The
subject’s physical address is 11536 Kenai Spur Highway and identified
as Parcel ID 043-270-14 by the City of Kenai.
Overview
Value Type
Client
Intended Use of
Appraisal Report
Intended User of
Appraisal Report
Property Inspection
Date
Effective Appraisal
Date
Date of Report
Identification of Real
Estate Appraised
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The type of value estimated is market value. Market value is defined as
follows.
The most probable price which a property should bring in a competitive
and open market under all conditions requisite to a fair sale, the buyer
and seller each acting prudently and knowledgeably, and assuming the
price is not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby:
a. buyer and seller are typically motivated;
b. both parties are well informed or well advised, and acting in what
they consider their own best interests;
c. a reasonable time is allowed for exposure in the open market;
d. payment is made in terms of cash in US dollars or in terms of
financial arrangements comparable thereto; and
e. the price represents the normal consideration for the property
sold unaffected by special or creative financing or sales
concessions granted by anyone associated with the sale. 1
We estimate the market value of the fee simple estate, which is defined
as follows.
Absolute ownership unencumbered by any other interest or estate,
subject only to the limitations imposed by the governmental powers of
taxation, eminent domain, police power, and escheat.2
Per DNR records, the legal description is as follows:
Lot 5, Block 1, Gusty Subdivision, Kenai Recording District, Third
Judicial District, State of Alaska.
1 Appraisal of Real Estate, Fifteenth Edition (2020), by the Appraisal Institute, p. 49.
2 Appraisal of Real Estate, Fifteenth Edition (2020), by the Appraisal Institute, p. 60.
Definition of
Market Value
Property Rights
Appraised
Legal Description
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Public Records indicate the owner of the appraised property is as
follows.
City of Kenai
210 Fidalgo Avenue, Suite 200
Kenai, AK 99611
The table below summarizes the historical KPB property assessment for
the appraised property.
KPB Historical Assessed Value (043-270-15)
No known sales or leases in the previous three years.
This Appraisal Report develops the sales comparison approach to
estimate market value. Neither the cost nor the income capitalization
approach reflects market behavior for vacant land. Qualitative
techniques are used to measure differences between the comparable
sales and the subject. The appraisal report is a summary of the
appraisers’ data, analyses, and conclusions with supporting
documentation retained on file.
Dwayne Roberts of MacSwain Associates, LLC performed the
inspection of the appraised property and assisted Steve MacSwain, MAI
with data collection and analysis. Steve MacSwain, MAI administered
the appraisal process, reviewed draft appraisals, and concurred with an
opinion of value. Preparation of this report encompassed the following
scope of work that concluded with an opinion of market value.
➔ Inspected the appraised property on May 16, 2022;
➔ Discussed the property with Ryan Foster, Planning Director with the
City of Kenai;
➔ Reviewed KPB assessor map 043-270-14;
➔ Reviewed plat 83-126;
Property Owner
Year Land Improvements Total
2022 $105,300 ($4.10/SF) N/A $105,300
2021 $126,400 ($4.93/SF) N/A $126,400
2020 $120,400 ($4.69/SF) N/A $120,400
Assessed
Value
Three Year Sale and
Lease History
Report Type and
Methodology
Scope of Appraisal
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➔ Reviewed City of Kenai’s Official Zoning Map and zoning codes;
➔ Gathered data from the KPB Assessor’s office and State of Alaska
Recorder’s office regarding ownership, assessments, and general
property information;
➔ Interviewed Kenai real estate Brokers, agents, and property owners
regarding land sales;
➔ Interviewed Kenai market participants regarding current
commercial and light industrial land market conditions, trends, and
expectations;
➔ Gathered and confirmed information on comparable land sales;
➔ Inspected the primary comparable sales we relied upon in our
comparative analysis; and
➔ Applied the sales comparison approach to arrive at a market value
indication.
We have collected and analyzed market and economic data that projects
real estate trends and activity for similar vacant parcels. Discussions
with Brokers and analysis of similar property sales indicate that a period
of approximately 6-9 months prior to our effective date of value is a
reasonable exposure period.
Exposure Time
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Chapter 2: Kenai Area Analysis and Industry Outlook
The appraised property is located in Kenai, Alaska. A demographic and
economic summary of the Kenai Peninsula Borough (KPB) and City of
Kenai follows. The reader is referred to the map below and on following
pages that illustrate the location and assist in the description and
analysis. We note that due to lack of funding, the KPB ceased economic
and financial publications.
Kenai Location Map
The Kenai Peninsula Borough is comprised of the Kenai Peninsula and
Cook Inlet including areas northeast of the Alaska Peninsula. The
borough also includes portions of Chugach National Forest, Kenai
Wildlife Refuge, Kenai Fjords National Park, Lake Clark National Park,
and Katmai National Park. Encompassing 24,800 square miles, there
are 16,000± square miles (65%) of land and 8,700± square miles (35%)
of water. Three distinct communities and population centers are
established within the Borough. Seward is located at the terminus of
the Seward Highway on the Gulf of Alaska coast, Kenai/Soldotna are
located on Cook Inlet and surrounding the mouth of the Kenai River,
and Homer is located at the terminus of the Sterling Highway on Cook
Inlet and Kachemak Bay. A large portion of the Borough population is
scattered along the road systems rather than in identifiable cities or
communities.
Overview
Kenai Peninsula
Borough Summary
Kenai
Soldotna
Anchorage N
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Population
Together, Kenai, Soldotna, Nikiski, Salamatof, and Kasilof have the
largest population base in the Borough with an estimated 17,000±
residents in 2019. Population within the Kenai census area is 7,056
residents and has remained flat over the past two decades. Similarly,
surrounding communities have experienced population stability.
Employment
Borough employment is characterized as relatively diverse with no
single dominant industry, with the exception of government. The five
industry categories that have the highest economic influence, based on
total wages, within the borough are Federal, State, and local government
(29%) trade, transportation, and utilities (17%), education and health
services (16%), natural resources and mining (11%), leisure and
hospitality (6%), and manufacturing (6%). Supporting employment
sectors include construction (5%), professional and business services
(4%), and financial activities (4%). The table below indicates 2018
Borough wages by industry.
KPB Total Wages by Industry (2018)
Source: Alaska Department of Labor and Workforce Development, Research and
Analysis Section, January – December 2018
Similar to most rural Alaska economies, government is one of the key
employment factors. Leisure and hospitality (tourism) remains as a
driving economic force of the Kenai Peninsula Borough’s economy.
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Both residents and non-residents utilize the Peninsula for its vast
fishing, camping, sightseeing, and other recreational opportunities. The
visitor industry is cyclical with most activity occurring during summer
months. However, sales in the visitor industry are an important source
of municipal revenues as both city and borough government use
collected sales taxes to support government operations. The oil and gas
industry is scattered throughout the Peninsula. Natural gas endeavors
marked increases in new exploration projects in Kenai, on the Westside
of Cook Inlet as well as lower Kenai Peninsula between Clam Gulch
and Ninilchik. However, negative aspects of the industry exist that
include closing oil platforms due to poor production levels. Overall, the
outlook for Kenai Peninsula Borough’s oil and gas industry is continued
steady natural gas exploration and production with stagnant oil efforts.
Capital investment in storage development, reserves replacement, and
pipeline infrastructure are necessary and pressure exploration cost and
development upward.
Location Map
Kenai is located on the western coast of the Peninsula, and is often
associated with Soldotna, which is located 11± miles to the southeast.
These two cities have become known as the “twin cities”, sharing an
integrated economy, while maintaining their independence. Kenai is a
home rule city with a population of 7,056. In the summer months, the
area benefits from with tourists fishing the Kenai River. Kenai is also
the center for the oil and gas industry on the Peninsula, providing
City of Kenai
Summary
Kenai
Cook Inlet
Soldotna Kenai River
N
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services and supplies for Cook Inlet’s oil and natural gas drilling and
exploration. Nikiski, which lies north of Kenai, has two refineries
established to process oil from the Cook Inlet oil platforms and the
Swanson River oil fields. There are numerous oil field support
businesses located in the area as well as the refineries. Kenai has the
largest airport on the peninsula, the Kenai Municipal Airport, which has
regular scheduled flights to/from Anchorage and other communities in
the region.
The Nikiski industrial district located north of Kenai extends along the
shore of Cook Inlet for 1.5± miles and one-mile inland. Despite the
relatively small area, the value of industrial development exceeds $1
billion. The Agrium, Inc. nitrogen plant, Tesoro Alaska refinery and
former ConocoPhillips LNG export plant are the principal industrial
development. The LNG plant ceased operations in 2011, and reopened
for intermittent natural gas shipments until 2015. The plant was sold to
Andeavor in 2018 for $10M±, a significantly below market price.
Agrium merged with PotashCorp in 2018, forming a new company
called Nutrien, who currently owns the former Agrium plant.
In 2014, Homer Electric Association began generating its own power at
the Nikiski Combined Plant, producing 80 megawatts of power. In
addition, HEA purchased the Bernice Lake Power Plant from Chugach
Electric Association for $12M±. These facilities are primary employers
in Nikiski and account for nearly 10% of KPB total employment. As
Nikiski remains a hub for power generation in the Kenai Peninsula, we
do not anticipate major change to the Nikiski industrial district in the
near term. The potential Alaska LNG Project is on the horizon, with
optimism remaining on the Kenai Peninsula for eventual construction.
The project entails a gas processing plant on the North Slope, an 800-
mile gas pipeline and a liquefaction facility in the Nikiski area.
Tentatively, the total project cost is estimated at $45B±. To date, 570±
acres have been acquired in Nikiski to develop the project. The City of
Kenai passed a resolution in December 2018, giving unanimous support
to the LNG project; however, this joint venture between the State of
Alaska and private oil and gas industry appears to have stalled, with no
definite timetable for development.
In 2012, ENSTAR Natural Gas Company began injecting natural gas
into their new storage facility in Kenai. The Cook Inlet Natural Gas
Storage Alaska facility (CINGSA) is Alaska’s first independent gas
storage facility with 11 billion cubic feet of capacity. The project cost is
estimated at $160M±.
Although most oil and gas fields in the Cook Inlet Basin are well past
their peak, annual production has not declined significantly in the past
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decade. Moreover, smaller independent oil companies are prospecting
in the Cook Inlet basin with the intent of using new technology to
enhance production profitability. However, the maturing life-cycle of
oil and gas production has caused attrition in smaller businesses that
support this industry. More importantly, this economic trend has
created a market imbalance for industrial and commercial real estate.
For example, we observed several smaller industrial or commercial
properties that are vacant or abandoned because of contraction in the oil
and gas industry. Recent capital investments made by larger energy
companies have helped revitalize Kenai Peninsula’s oil and gas sector.
Natural gas prices gradually recovered into summer 2014 from their
lows in early 2012. Late 2014 to early 2015 saw another downturn in
natural gas prices before a mid-2016/17 recovery. After briefly spiking
in 4th quarter 2018, natural gas prices trended downward into 2020,
where they reached record low prices in March, and again in July due
to lack of demand driven by the COVID-19 pandemic. Prices made a
slight recovery in the second half of 2020, but continue to remain much
lower than the 20-yaer average. If demand for natural gas from Asia
and the Lower 48 recovers, additional capital investment in the Kenai
Peninsula will become more viable. Expressed in the table below is the
U.S. Average Natural Gas Price over the past ten-year period, which has
experienced significant volatility.
Historical Natural Gas Price ($/MMBTU)
Source: macrotrends
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Optimism has been created by renewed investment in the Kenai
Peninsula. Sale activity remains relatively scarce with assemblage,
expansion, or special-purpose use representing the principal
components of demand. Short-term uncertainty will likely continue to
dampen the Kenai economy, which benefits from anglers and
sightseeing tourism. Travel restrictions, and decreasing demand linked
to the COVID-19 virus are slowly recovering from 2021 with cautious
optimism for continued recovery in 2022. After analysis, we
determined that industrial and commercial property values have been
relatively stable over the past decade, but have declined from the 1980s
peak.
Conclusion
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Chapter 3: Neighborhood Description and Analysis
The appraised land is located just south of the Kenai Municipal Airport
and southwest of the Kenai Business District. This chapter will focus
on the supply and demand factors of these neighborhoods, which affect
the valuation process.
Kenai Neighborhood Map
The subject neighborhood is bound by the Kenai Airport to the north,
the Kenai Spur Highway to the south and east, and the Kenai Business
District to the northeast. The Kenai Business District is the commercial
core of Kenai. Development includes many types of commercial and
industrial uses including big box retailers, strip and enclosed malls,
restaurants, convenience stores, small businesses, and airport-related
businesses. The Kenai Airport was recently remodeled modernizing the
terminal building. Lowes, which was constructed in 2008, closed in
2011. After eight years of vacancy, the property sold to U-Haul in 2019.
This City-owned, public-use airport contains a 7,855-foot asphalt paved
runway, as well as an additional gravel runway and seaplane basin.
Currently, scheduled flight service to Anchorage is available on both
Ravn Alaska and Grant Aviation. Development in the immediate
neighborhood consists of both aviation and non-aviation related uses.
Overview
Neighborhood
Description
N Kenai Airport
Subject
Kenai Business District
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The zoning map below assists in visualizing neighborhood zoning
districts. The immediate neighborhood is zoned Central Mixed-Use
established to provide a centrally located area in the City for general
retail shopping, personal and professional services, entertainment,
restaurants, and related businesses. This district is also intended to
accommodate a mixture of residential and commercial uses. The CMU
Zone shall be designed to encourage pedestrian movement throughout
the area. Building and other structures within the district should be
compatible with one another and the surrounding area
Zoning Map
To summarize, the Kenai Business District is the commercial core of
Kenai. The neighborhood is well-located and benefits from its proximity
to the Kenai Spur Highway, as well as the airport and other commercial
districts in the area. The outlook for the neighborhood is favorable as it
continues to be a good commercial district for Kenai
Summary
Light Industrial
Airport Light Industrial N
Suburban Residential
Conservation General Commercial
Central Mixed-Use
Appraised Parcel
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Chapter 4: Site Description and Analysis
Analysis of land describes the characteristics that enhance or detract
from its utility or marketability. The site description and analysis is
based on our property inspection and review of plat 83-126, aerial,
Borough and other mapping. The plat map below and aerial mapping
on the following pages assist in the description and analysis of the parcel
that follows.
Plat 83-126
Location: North side of Kenai Spur Highway between Coral
Street and Main Street Loop Road, Kenai, Alaska
Physical address: 11536 Kenai Spur Highway, Kenai, Alaska
Shape and Land
Area:
Nearly-rectangular shaped lot containing 25,144
square feet or 0.58± acre
Access: Access via paved ingress/egress from Kenai Spur
Highway on southern boundary and Cohoe
Avenue, a gravel road on northern boundary
Overview
Site Description
N
Subject
Kenai Spur Highway
Cohoe Avenue
Main Street
Coral Street
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Zoning: Central Mixed-Use District (CMU)
Frontage and
Exposure:
120± feet of Kenai Spur Highway frontage and
105± feet of Cohoe Avenue frontage
Easements and
Restrictions:
20-foot utility easement along north boundary
Public Utilities: All public utilities available
Topography: Partially cleared with some spruce and birch trees,
lot is nearly level and at grade with surrounding
streets and properties.
GIS Aerial Map (Kenai Peninsula Borough)
Soil Conditions: Soils mapped as urban lands, and appear suitable for
construction based on surrounding development
Wetland
Designation:
None
Flood Hazard: Zone D, an area of undetermined, but possible flood
hazard per FEMA
N
Subject
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Environmental
Conditions:
The existence of any hazardous material or other
type of environmental contamination, which may or
may not be present on the property, was not
observed by the appraisers nor do the appraisers
have any knowledge of the existence of such
substances. Our value conclusion assumes that the
property is free of environmental and hazardous
contaminants.
Site Utility: The subject site’s positive attributes include good
location, size, and access near the Kenai Airport and
Downtown Kenai. Overall, physical character
makes the site well suited for commercial
development.
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Chapter 5: Highest and Best Use Analysis
Highest and best use is a market-driven concept rather than a subjective
conclusion based on the experience of the appraiser or a property
owner’s wishes. Economic incentive is the motivation that has a
market-effect on the productivity or profitability of the land. The
Dictionary of Real Estate Appraisal (Seventh Edition) defines highest
and best use as follows.
The reasonably probably use of a property that results in the highest
value. The four criteria that the highest and best use must meet are legal
permissibility, physical possibility, financial feasibility, and maximum
productivity.
A property’s highest and best use as vacant may differ from that as
improved. It is the appraiser’s responsibility to analyze each scenario;
then identify, explain, and justify the conclusion of each type of use. Per
client instructions, the subject property is analyzed as though vacant.
Determination of a property’s most profitable use requires analyzing all
feasible alternatives. The criteria for testing potential uses as though
vacant are legally permissible, physically possible, financially feasible,
and maximally productive. The following highest and best use analysis
is the foundation of the appraisal process for the subject properties.
Physical Possibility: The appraised parcel contains 25,144 square feet
or 0.58± acre fronting the Kenai Spur Highway. Highway frontage
measures 110± feet, which enhances access, exposure, and development
potential. Demand along the Kenai Spur Highway commercial corridor
is high when compared to alternative interior commercial locations.
Highway frontage and linkage to alternative commercial locations in
Kenai are positive characteristics.
Legal Permissibility: Although the appraised property is within the City
of Kenai, zoning regulations do not generally apply to current
ownership because the property remains in restricted status. The subject
parcel is zoned Central Mixed Use (CMU) which encourages
commercial-type development in a centrally located area in the City of
Kenai, primarily for shopping, personal and professional services,
entertainment services, entertainment establishments and restaurants
and related businesses. The CMU district is also intended to
accommodate a mixture of residential and commercial uses, and
designed in a manner that encourages pedestrian movement throughout
the area. Although certain industrial use are allowed., most within the
CMU zone require a conditional use permit to ensure compatibility with
Overview
Highest and Best Use
Analysis As If Vacant
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surrounding land uses. We are not aware of any recorded plat
restrictions that may affect development potential of the subject
property.
Financial Feasibility: Physically possible uses permitted are all
financially viable. Financially feasible commercial uses include
restaurants (both dining and fast food), hotel/motel, retail, and office
use. Other commercial uses are possible, which may offer greater risk
and lack economic feasibility. In conclusion, the Commercial
neighborhood’s location, existing land use trends, and physical
characteristics all support commercial development, which we consider
to by the highest and best use.
The subject’s physical characteristics, surrounding land use, CMU
zoning, location, access, etc., encourage commercial development.
Based on these factors, the highest and best use, as vacant, is for
commercial development.
Highest and Best Use: Commercial
Highest and Best Use
As Though Vacant
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Chapter 6: Land Valuation - Sales Comparison Approach
The sales comparison approach is a systematic procedure of estimating
the subject’s market value by comparing it directly to property sales
afforded similar physical and economic character. The approach is
founded on the principle of substitution, theorizing value is a function
of a knowledgeable investor’s (buyer) intent to pay no more for a
specific property than the cost of acquiring an alternative property
offering similar utility (economic satisfaction). The sales comparison
approach is the best approach for valuing vacant land.
Our sales search focused on vacant land with similar physical and
economic character to the subject, located in the immediate
neighborhood. In order to facilitate a comparative analysis, we
expanded our search to include commercial and light industrial
properties in other Kenai neighborhoods. These criteria produced five
sales that transpired in from 2016 to 2022. The primary land sales we
relied upon are listed in the table below. Additional details of the
comparables are retained on file.
Summary of Primary Land Sales
No. Location Zone Sale
Date
Sale
Price
Size
(SF)
$/SF
1 Northeast corner of Trading Bay Road and Main
Street Loop
CMU 5/22 $300,000 114,497 $2.62
2 Northwest corner of Kenai Spur Highway and
Main Street Loop Road (east)
CMU 1/20 $605,000 121,091 $5.00
3 Southwest corner of Kenai Spur Highway and S.
Forest Drive
CG 2/19 $455,000 219,107 $2.08
4 Northeast corner of Kenai Spur Highway and
Coral Street
CMU 8/18 $180,000 35,851 $5.02
5 Northwest corner of Kenai Spur Highway and
Main Street Loop Road (west)
CMU 8/16 $170,400 28,520 $5.97
North side of Kenai Spur Highway between
Coral Street and Main Street Loop Road
(Subject)
CMU -- -- 25,144 -- --
Overview
Comparative Market
Analysis
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The elements of comparison that have the greatest influence on market
behavior and the price paid for similar land in Kenai is location and
physical character, including clearing/grading, frontage/access, and
size. Importantly, the subject lot has highway frontage with very good
exposure and access. We use a qualitative comparison technique that
rates elements of comparison as superior, inferior, or similar.
Comparable Land Sales Map
Land Sale 1
Land Sale 1 is the May 2022 sale located on the northeast corner of
Trading Bay Road and Main Street Loop Road. Northeast of the subject,
the irregular-shaped parcel consists of 114,497 square feet. All public
utilities are available in the immediate neighborhood. Topography is
generally level, and the parcel is partially cleared and developed with a
retail strip mall. Zoning is CMU, Central Mixed-Use. The sale was
between the City of Kenai and former land lessee who purchased the
land underlying the improvements. The sale price of $300,000 indicates
a unit value of $2.62 per square foot. By comparison, this sale lacks
highway frontage, and no improvements were included in the sale. Size
differential and location are inferior to the subject. Overall, Land Sale
Elements of
Comparison
N
Subject
3
Kenai Spur Highway
Kenai Municipal
Airport
4 2
1
5
Page 140
22-3697 – Lot 4, Block 1, Gusty Subdivision, Kenai, Alaska
MacSwain Associates LLC
24
1 is rated inferior, indicating a unit value greater than $2.62 per square
foot for the appraised land.
Land Sale 2
Land Sale 2 is the January 2020 sale located on the northwest corner of
Kenai Spur Highway and Main Street Loop Road (east), proximate to
the Commercial Core of Kenai. Located 1.3± road miles south of the
subject, the nearly rectangular-shaped parcel consists of two totaling
121,091 square feet. All public utilities are available in the immediate
neighborhood. Topography is generally level, and the parcel is cleared
and developed with a motel. Zoning is CMU, Central Mixed-Use. The
sale was between the City of Kenai and former land lessee who
purchased the land underlying the improvements. The sale price of
$605,000 indicates a unit value of $5.00 per square foot. By
comparison, this sale is superior for access, inferior for size, and similar
to the subject for location with highway frontage near the Kenai
Commercial Core. Overall, Land Sale 2 is rated superior, indicating a
unit value less than $5.00 per square foot for the appraised land.
Land Sale 3
Land Sale 3 is the February 2019 sale located on the southwest corner
of Kenai Spur Highway and S. Forest Drive, west of the Kenai
Commercial Core. This location is 2.2± road miles southwest of the
subject. The nearly rectangular-shaped lot contains 219,107± square
feet. All public utilities are available in the immediate neighborhood.
Topography is generally level, and the property was cleared and leveled
at the time of sale. The property is zoned CG, General Commercial.
Originally listed for $499,000, the property sold after 132 days of
market exposure. The sellers previously purchased the property in 2007
for $175,000, and subsequently cleared the site. The price appreciation
is attributed to passage of time, as well as value added due to clearing
and leveling. The 2019 sale price of $455,000 indicates a unit value of
$2.08 per square foot. By comparison, this sale is rated inferior for size
differential and location. Land Sale 3 is rated inferior, indicating a unit
value greater than $2.08 per square foot for the appraised land.
Page 141
22-3697 – Lot 4, Block 1, Gusty Subdivision, Kenai, Alaska
MacSwain Associates LLC
25
Land Sale 4
Land Sale 4 is the August 2018 sale located at the northeast corner of
Kenai Spur Highway and Coral Street, just outside of the Airport
Reserve. This location is adjacent to the subject. The irregular-shaped
site contains 35,851± square feet. The site is cleared and improved with
a commercial building. All public utilities are available in the
immediate neighborhood. Zoning is CMU, Central Mixed-Use. Per the
plat, no direct Kenai Spur Highway access is permitted, although curb
cuts allow for direct physical access. The sale was between the City of
Kenai and former land lessee who purchased the land underlying the
improvements. The sale price of $180,000 indicates a unit value of
$5.02 per square foot. By comparison, this sale has good corner location
with highway frontage proximate to the Commercial Core. Land Sale
4 is slightly inferior for size, superior for corner location, physical
character and access. Thus, Land Sale 4 is rated superior, indicating a
unit value less than $5.02 per square foot for the appraised land.
Land Sale 5
Land Sale 5 is the August 2016 sale located on the northwest corner of
Kenai Spur Highway and Main Street Loop Road (west) just south of
the Airport Reserve and the Commercial Core. The property is located
near the subject with superior access and frontage. The nearly
rectangular-shaped lot contains 28,520± square feet. All public utilities
are available in the immediate neighborhood. The property is cleared
and zoned CMU, Central Mixed Use. The property was purchased from
the City of Kenai by the land lessee, who owned two small commercial
structures on the property. The sale price of $170,400 was based on a
2015 appraisal, with a 20% premium paid. Land Sale 5 is similar in size
and superior for location and access indicating a unit value less than
$5.97 per square foot for the appraised land.
Page 142
22-3697 – Lot 4, Block 1, Gusty Subdivision, Kenai, Alaska
MacSwain Associates LLC
26
Presented below is a rating grid and analysis of the land sales used in
comparative analysis.
Land Sale $/SF Rank Net Adjustment
5 $5.97 Superior
4 $5.02 Superior
2 $5.00 Superior
Subject -- -- -- -- -- --
1 $2.62 Inferior
3 $2.08 Inferior
The comparable land sales indicate a value range from $2.08 to $5.97
per square foot. Land Sales 2, 4, and 5 are rated superior indicating a
unit value less than $5.00 per square foot. Conversely, Land Sales 1
and 3 are rated inferior indicating a unit value greater than $2.62 per
square foot. After comparative analysis and making the necessary
adjustments, we conclude with a market value between $4.00 and $4.50
per square foot, which develops the following indicators.
25,144 SF × $4.00/SF = $100,576
25,144 SF × $4.50/SF = $113,148
Based on the preceding analysis, the market value of the appraised land,
as of May 16, 2022, is estimated as follows.
Market Value Estimate $110,000 (R)
Estimated 6 to 12 months
Reconciliation of
Comparative Market
Analysis
Marketing and
Exposure Time
Page 143
22-3697 – Lot 4, Block 1, Gusty Subdivision Addition No. 1, Kenai, Alaska
MacSwain Associates LLC
Assumptions and Limiting Conditions
This appraisal is subject to the following assumptions and limiting conditions.
➔ No responsibility is assumed for the legal description provided or for matters pertaining to
legal or title considerations. Title to the property is assumed to be marketable unless
otherwise stated.
➔ The property is appraised free and clear of all liens or encumbrances unless otherwise stated.
➔ The information furnished by others is believed to be reliable, but no warranty is given for
its accuracy.
➔ All maps, plot plans, and other illustrative material are believed to be accurate, but are
included only to help the reader visualize the property.
➔ It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or
structures that render it more or less valuable. No responsibility is assumed for such
conditions or for obtaining the engineering studies that may be required to discover them.
➔ It is assumed the property is in full compliance with all applicable federal, state, and local
environmental regulations and laws unless the lack of compliance is stated, described, and
considered in the appraisal report.
➔ It is assumed the property conforms to all applicable zoning, land use regulations, and platting
restrictions unless the nonconformity is identified, described, and considered in the appraisal
report.
➔ Possession of this report, or a copy thereof, does not carry with it the right of publication.
➔ The appraisers, by reason of this appraisal, is not required to give consultation or testimony
or to be in attendance in court with reference to the property in question unless arrangements
have been previously made.
➔ Neither all nor any part of the contents of this report shall be disseminated to the public
through advertising, public relations, news, sales, or other media without the prior written
consent and approval of the appraisers.
➔ The existence of any hazardous material or other type of environmental contamination, which
may or may not be present on the property, was not observed by the appraisers nor do the
appraisers have any knowledge of the existence of such substances. However, the presence
of these substances may affect the value of the property. Therefore, the client is urged to
retain an environmental assessment for discovery and evaluation.
Page 144
22-3697 – Lot 4, Block 1, Gusty Subdivision Addition No. 1, Kenai, Alaska
MacSwain Associates LLC
Statement of COVID-19
This appraisal was performed following public awareness that COVID-19 was affecting residents
in the United States. At the time of the appraisal, COVID-19 is having widespread health and
economic impacts. The effects of COVID-19 on the real estate market in the subject
neighborhood are not yet measurable based on reliable data. The analysis and value opinion in
this appraisal are based on the data available to the appraisers at the time of the assignment and
apply only as of the effective date indicated. No analysis or opinions contained in this appraisal
should be construed as predictions of future market conditions or value.
Page 145
MacSwain Associates LLC
4401 Business Park Boulevard, Suite 22, Anchorage, Alaska 99503
Appraiser: Steve MacSwain, MAI
Member of Appraisal Institute - No. 5700
State of Alaska, Certified General Real Estate Appraiser - No. 42
Professional Experience: 1986 to Present - MacSwain Associates LLC
1976 to 1986 - Appraisal Company of Alaska - President
1970 to 1975 - Real Estate Services Corporation – Appraiser
1969 to 1970 - State of Alaska Department of Highways - Right of Way Agent
Real estate appraiser and consultant of all property types throughout Alaska including commercial, industrial,
subdivisions and special-purpose properties. Appraisals have been performed for financing, leasing, insurance,
condemnation, taxation, property damages, investment analysis, and buy-sell decisions. Appraisals include valuation
of both real property and business enterprises. Professional experience totals 49 years. Life-long Alaskan resident
of Alaskan Native descent.
Education: Bachelor of Business Administration, Finance (1969), University of Alaska Fairbanks
Appraisal Education: The following is a list of completed appraisal courses and seminars.
2021 – Cool Tools: New Technology for Real Estate Appraisers by the Appraisal Institute
2021 – Desktop Appraisals (Bifurcated, Hybrid) and Evaluations by the Appraisal Institute
2021 – Hot Topics & Myths in Appraiser Liability by LIA Administrators & Insurance Services
2020 – Uniform Standards of Professional Appraisal Practice – Update by the Appraisal Institute
2019 – How Tenants Create or Destroy Value: Leasehold Valuation and its Impact on Value –by the Appraisal Institute
2017 – Appraising Environmentally Contaminated Properties by the Appraisal Institute
2017 – Residential & Commercial Valuation of Solar by the Appraisal Institute
2017 – Right of Way Acquisition for Pipeline Projects by the International Right of Way Association
2015 – Litigation Appraising: Specialized Topics and Applications by the Appraisal Institute
2015 – Business Practices and Ethics by the Appraisal Institute
2013 – Complex Litigation Appraisal Case Studies by the Appraisal Institute
2013 – Uniform Appraisal Standards for Federal Land Acquisitions (Yellow Book) by the Appraisal Institute
2012 – Appraisal Curriculum Overview by the Appraisal Institute
2010 – Reviewing Appraisals in Eminent Domain by the International Right of Way Association
2010 – Commercial Appraisal Engagement and Review Seminar for Bankers and Appraisers by the Appraisal Institute
2009 – The Appraiser as an Expert Witness: Preparation and Testimony by the Appraisal Institute
2009 – Attacking and Defending an Appraisal in Litigation by Whitmer Education
2008 – Uniform Standards of Professional Appraisal Practice by the Appraisal Institute
2007 – Business Practices and Ethics by the Appraisal Institute
2007 – Eminent Domain Law for Right of Way Professionals by the International Right of Way Association
2007 – Appraisal Review for Federal Aid Programs by the International Right of Way Association
2007 – Analyzing Operating Expenses by the Appraisal Institute
1969-2006: Numerous appraisal classes pertaining to principles, income capitalization, cost analysis, sale
comparison approach, and highest and best use analysis by the Appraisal Institute, Society of Real Estate Appraisers,
International Right-of-Way Association, International Association of Assessing Officers, and Marshall Valuation
Service
Page 146
Membership and Organizations: Member of Appraisal Institute – No. 5700, International Right of Way
Association (IRWA), and Building Owners and Managers Association (BOMA)
Public Service: Past Chairman of the State Board of Certified Appraisers
Past Member of Board of Equalization, Municipality of Anchorage, National Experience Review Committee of
the Appraisal Institute, and Regional Ethics and Counseling Panel of the Appraisal Institute
Past President of Alaska Chapter 57 of the Appraisal Institute
Significant Assignments:
è Appraised Pacific Spaceport Complex-Alaska (PSCA) land and facilities for Alaska Aerospace Corporation on
Kodiak Island.
è Appraised proposed LNG Pipeline, a FERC-regulated 860-mile pipeline transporting liquefied natural gas.
è Appraised the Trans-Alaska Pipeline System, a FERC-regulated 800- pipeline that transports crude oil from
Prudhoe Bay to Valdez, for TAPS ownership.
è Appraised remote lands (65,000± acres) owned by three Native corporations damaged by the Selendang Ayu
grounding and subsequent oil spill.
è Appraised Calais Company, Inc., a real estate holding company consisting of 39 commercial parcels in Anchorage.
è Principal real estate consultant and expert witness for all lands affected by the Exxon Valdez oil spill. Project
involved over 2,000,000 acres of remote land and nearly 2,000 private property owners.
è Appointed as a representative of a three-member panel that analyzed and valued over 1,000,000 acres and 8,000
parcels for the Mental Health Lands Settlement.
è Contract assessor for the North Slope Borough, Kodiak Island Borough, City of Nome, and the City of Valdez.
è Represented Seibu Alaska, Inc. (Alyeska Resort and Alyeska Prince Hotel) in preparing of their property tax
appeal with the Municipality of Anchorage that resulted in a $65 million reduction in assessed value.
è Appraised submerged tideland parcels and wetlands parcels located in Womens Bay on Kodiak Island for the
purpose of an exchange between Koniag, Inc. and U.S. Fish and Wildlife Service.
è Appraised Common Carrier Pipeline right-of-ways leased and operated by BP Transportation Alaska and
ConocoPhillips Alaska.
è Appraised 3,600 acres consisting of the former Adak Naval Air Station and Submarine Base conveyed to the City
of Adak and the State of Alaska.
Expert Witness Experience: Steve MacSwain, MAI is qualified as an expert witness in both the United States
Federal Court and the State of Alaska Superior Court. Steve has testified as an expert witness in State and Federal
courts. In addition, Steve has testified as expert witness in numerous Alaskan municipal tax courts, public hearings,
and depositions on matters related to real property.
Arbitrator Experience: Appointed a Master by the Superior Court of Alaska and Municipality of Anchorage to
serve as an arbitrator in determining just compensation.
Page 147
MEMORANDUM
TO: Planning and Zoning Commission
FROM: Max Best, Interim Planning Director
DATE: August 15, 2022
SUBJECT: Resolution No. 2022-XX – Approving the Renewal of a Lease on Airport
Reserve Lands between the City of Kenai and the Federal Aviation
Administration for the Automated Flight Service Station Facility on Lot
7A-1, FBO Subdivision No. 5.
The City has received a request for a renewal of the Federal Aviation Administration (FAA) lease
of the Automated Flight Service Station (AFSS). The FAA has leased the space for the purpose
of operating the AFSS and Satellite Communication Network (SACOM) facilities dating back to
1983.
The lease agreement if for Lot 7A-1, FBO Subdivision No. 5, a 3.445 acre parcel and the
Automated Flight Service Station a 10,812 square foot building.
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 July 16, 2022, and to-date, no competing applications have been 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 aeronautical 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
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.
Page 148
Page 2 of 2
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 continued use by the FAA complies with the Airport Land Use
Plan and would enhance local economic development.
The Airport Commission will be reviewing the lease application and providing a recommendation
during their meeting on September 8, 2022.
Please review the attached materials.
Does the Commission recommend Council approve the renewal of a lease to the FAA?
Attachments:
Draft Resolution 2022-XX
City of Kenai Land Lease Application from FAA
470 N. Willow Street Map
Plat – FBO Subdivision No. 5
Page 149
Sponsored by: Administration
New Text Underlined; [DELETED TEXT BRACKETED]
CITY OF KENAI
RESOLUTION NO. 2022-XX
A RESOLUTION APPROVING THE RENEWAL OF A LEASE ON AIRPORT RESERVE LANDS
BETWEEN THE CITY OF KENAI AND THE FEDERAL AVIATION ADMINISTRATION FOR THE
AUTOMATED FLIGHT SERVICE STATION AND SATELLITE COMMUNICATION NETWORK
FACILITIES ON LOT 7A-1 FBO SUBDIVISION NO. 5.
WHEREAS, the lease to the Federal Aviation Administration (FAA) for Automated Flight Service Station
(AFSS) and Satellite Communication Network facilities on Lot 7A-1 FBO Subdivision No. 5, expires on
September 30, 2022; and,
WHEREAS, on June 8, 2022, the FAA submitted an application for a lease renewal of the City owned
facility within the Airport Reserve, described as the AFSS, a 10,812 square foot building located on Lot
7A-1 FBO Subdivision No. 5; and,
WHEREAS, the proposed development would be mutually beneficial and would conform with the Kenai
Municipal Code for zoning, Kenai's Comprehensive Plan, the Airport Land Use Plan, Airport Layout Plan,
Federal Aviation Administration regulations, Airport Master Plan, Airport Improvement Program grant
assurances, and Airport operations; 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 the FAA; and,
WHEREAS, at their regular meeting on September 14, 2022, the Planning and Zoning Commission
reviewed the lease application and recommended ________ by the City Council.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA:
Section 1. That a lease of the AFSS located on Airport Reserve Lands is approved and the City
Manager is authorized to execute a lease between the City of Kenai, Lessor, and the FAA, Lessee, as
follows:.
Section 2. That this Resolution takes effect immediately upon passage.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 21st DAY OF SEPTEMBER,
2022.
___________________________________
Brian Gabriel Sr., Mayor
ATTEST:
___________________________________
Michelle M. Saner, MMC, City Clerk
Page 150
Name of Applicant:
City:State:Zip Code:
City:State:Zip Code:
Type of Applicant: Individual (at least 18 years of age) Partnership Corporation Government
Limited Liability Company (LLC) Other _________________________________
Legal description of property (or, if subdivision is required, a brief description of property):
Does the property require subdivision? (if Yes, answer next questions YES NO
2.,IGHWHUPLQHGLWGRHVQRWDSSOLFDQWLV responsible for all VXEGLYLVLRQcosts
YES NO
,QLWLDOVBBBBBBB
,QLWLDOVBBBBBBB
,WLVWKHUHVSRQVLELOLW\RIWKHDSSOLFDQWWRFRYHU recording costs associated with lease,QLWLDOVBBBBBBB
Do you have or have you ever had a Lease with the City? (if Yes, answer next question) YES NO
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):
Extension
Renewal
City of Kenai
Land Lease Application
Mailing Address:
Mailing Address:
E-mail: (Optional)
1. Legal or brief description of property leased:
New Lease
Requested Starting Date:
Property Information and Term Requested
Applicant Information
Home Phone: Phone Number(s):
E-mail: (Optional)
Subdivision costs are the responsibility of the applicant unless the City Council
determines a subdivision serves other City purposes:
Amendment
Assignment
1. Do you believe the proposed subdivision would serve other City purposes?
If an appraisal is required to determine the minimum price on the land, DSSOLFDQWLV responsible
for the deposit to cover costs associated with appraisal ,IDVDOHLVDSSURYHGWKH cost of the
appraisal will be either refunded or credited WRWKHDSSOLFDQW
Application for:
Work/ Message Phone:
Work/ Message Phone:
Application Date:
Name to Appear on Lease:
Phone Number(s):Home Phone:
5/25/2022
Department of Transportation - Federal Aviation Administration
2200 S 216th St Des Moines WA 98198
Federal Aviation Administration
2200 S 216th St Des Moines WA 98198
206-231-3058
7A-l,Block 2 FBO Subdivision No. 5, according to Plat No. 92-60, in the Kenai Recording District, Third Judicial
District, State of Alaska. Comprising more or less 3.445 acres, and a 3.214 acre building restr. clear zone easement
7A-l,Block 2 FBO Subdivision No. 5, according to Plat No. 92-60, in the Kenai Recording District, Third Judicial District, State of Alaska. Comprising more or less 3.445 acres, and a 3.214 acre building restriction clear zone easement at 470 North Willow Street, Kenai, Alaska.
TBD
10/01/2022
Page 151
Do you plan to construct new or additional improvements? (if Yes, answer next five questions) YES NO
1. Will the improvement change or alter the use under an existing lease? YES 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?
Estimated Start Date: Estimated Completion Date:
Describe the proposed business or activity intended:
How does the proposed lease support a thriving business, residential, recreational, or cultural community?
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 Purchase Price (optional)
Renewal of an Expiring Lease (less than one year of term remaining): Does not require new development.
Lease Term based on: Purchase Price Professional Estimate of Remaining Useful Life
Fair Market Value appraisal and/or Estimated cost of new improvements (optional)
Requested Term for Renewal Based on Term Table, not to exceed 45 Years:
Signature:Date:
Print Name:Title:
For City Use Only:
General Fund Airport Reserve Land
Airport Fund Outside Airport Reserve
Date Application Fee Received:
Account Number:
Date Application Determined Complete:
30-Day Notice Publication Date:
City Council Action/Resolution:
Proposed Use and Improvements
(generally, construction must be completed within two years)
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 City
Lease Assignment Only: What is the name of the individual or legal entity the lease is to be assigned?
Proposed Use (check one): Aeronautical Non-Aeronautical
Lease Renewal Only
&RUL%HHNPDQ
N/A
N/A
N/A
This space will be used by the Federal Aviation Administration for our Automated Flight Service Station and Satellite
Communications Center (currently in place under prior lease with the City of Kenai)
FAA is tasked with supporting the safety of the National Airspace. The operations are critical for flight safety in the
local area of Kenai as well as for national flights throughout the country.
N/A
TBD
06/08/2022
RECO
CORI A BEEKMAN
Digitally signed by CORI A
BEEKMAN
Date: 2022.06.08 06:30:16 -07'00'
Page 152
MEMORANDUM
TO: Planning and Zoning Commission
FROM: Paul Ostrander, City Manager
DATE: August 30, 2022
SUBJECT: Ordinance 3314-2022 – Extending the Time Period for Completion of
Improvements for Triumvirate Theatre
Ordinance 3219-2021 authorized the City Manager to execute, upon completion of a subdivision
and necessary proof of financing for the development, the transfer of title an approximate 2-acre
parcel near Daubenspeck Family Park to Triumvirate Theatre, for less than fair market value
($1.00) and for the sole purpose of developing a theatre facility. It further required that Triumvirate
Theatre must complete at its own expense all actions necessary for the subdivision and
development of the properties by July 16, 2023; and to provide proof of financing sufficient for the
projects as prior conditions of the transfer of title; and to pay all closing costs and fees for said
property and said consideration to the City for the property.
Triumvirate Theatre has had a very successful capital campaign to date, but has asked the City
to extend the time that they have to complete their development to July 16, 2025 to allow them
time to complete their fundraising.
Joe Rizzo, the Executive Director of Triumvirate Theatre has kept the Administration and Council
apprised of their progress over the past year and will be providing another update on their capital
campaign and current plans for development to Council at the September 21 meeting where this
ordinance is scheduled for a public hearing.
Does the Commission recommend Council enact Ordinance 3314-2022?
Attachments:
Draft Ordinance No. 3314-2022
Original Council Packet – Ordinance No 3219-2021
Page 155
Sponsored by: Administration
New Text Underlined; [DELETED TEXT BRACKETED]
CITY OF KENAI
ORDINANCE NO. 3314-2022
AN ORDINANCE EXTENDING THE TIME PERIOD FOR COMPLETION OF THE ACTION ITEMS
NECESSARY FOR THE CONDITIONAL DONATION OF AN APPROXIMATE 2 ACRE PARCEL TO BE
SUBDIVIDED FROM A PORTION OF THE 6.8 ACRE MORE OR LESS PORTION OF THE EAST OF
TRACT 4A, BARON PARK 2020 REPLAT (KPB PARCEL NO. 04501035) TO TRIUMVIRATE THEATRE
FOR THE DEVELOPMENT OF A THEATRE FACILITY.
WHEREAS, Council enacted Ordinance 3219-2021 at their meeting of August 6, 2021 conditionally
donating an approximate 2-acre parcel of land to the Triumvirate Theatre for the sole purpose of
developing a theatre facility; and,
WHEREAS, Ordinance 3219-2021 required that development of the property be completed by July 16,
2023; and,
WHEREAS, while the Triumvirate Theatre has raised significant funds for construction of the theatre and
has identified several other opportunities to significantly increase the amount of capital funds they have
available, it will not be possible for them to complete construction by July 16, 2023; and,
WHEREAS, Triumvirate Theatre has requested that the deadline for completion of their facility be
extended two years to July 16, 2025; and,
WHEREAS, administration is not aware of any other entities interested in developing this land; and,
WHEREAS, at its meeting on September 14, 2022, the Planning and Zoning Commission recommended
__________of this Ordinance; and,
WHEREAS, giving the Triumvirate Theatre time to complete their capital campaign will give them the
greatest possibility of building a facility that meets all of the needs of the theatre community and is in the
best interests of the City.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, AS
FOLLOWS:
Section 1. That the Kenai City Council extends the time period granted in Ordinance 3219-2021 for
completion of the action items necessary for the conditional donation of an approximate 2-acre parcel to
be subdivided from a portion of the 6.8 acre more or less portion of the east of Tract 4A, Baron Park 2020
Replat (KPB Parcel No. 04501035) to Triumvirate Theatre for the development of a theatre facility from
July 16, 2023 to July 16, 2025.
Section 2. That all other provisions of Ordinance 3219-2021 remain unchanged.
Section 3. Severability: That if any part or provision of this ordinance or application thereof to any
person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall
be confined in its operation to the part, provision, or application directly involved in all controversy in
which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder
of this title or application thereof to other persons or circumstances. The City Council hereby declares
Page 156
Ordinance No. 3314-2022
Page 2 of 2
New Text Underlined; [DELETED TEXT BRACKETED]
that it would have enacted the remainder of this ordinance even without such part, provision, or
application.
Section 4. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect 30 days
after enactment.
ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 21ST DAY OF SEPTEMBER,
2022.
___________________________________
Brian Gabriel Sr., Mayor
ATTEST:
___________________________________
Michelle M. Saner, MMC, City Clerk
Approved by Finance: SB, Acting
Introduced: September 7, 2022
Enacted: September 21, 2022
Effective: October 21, 2022
Page 157
Sponsored by: Administration
CITY OF KENAI
ORDINANCE NO. 3219-2021
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, CONDITIONALLY
DONATING CERTAIN CITY OWNED PROPERTY DESCRIBED AS ONE APPROXIMATE 2
ACRE PARCEL TO BE SUBDIVIDED FROM A PORTION OF THE 6.8 ACRE MORE OR LESS
PORTION OF THE EAST OF TRACT 4A, BARON PARK 2020 REPLAT (KPB PARCEL NO. 045
01 035) TO TRIUMVIRATE THEATRE FOR THE DEVELOPMENT OF A THEATRE FACILITY.
WHEREAS, Kenai Municipal Code 22.05.110, Determination as to need for public purpose, allows
the Council, by Ordinance, to donate real property that is no longer needed by the City for a public
purpose, to a non-profit corporation for consideration; agreed upon between the City and grantee
without a public sale if the devotion is advantageous to the City; and,
WHEREAS, Triumvirate Theatre is a 501(c)3 non-profit corporation with a mission to provide
performing arts opportunities with an emphasis on theatre with and for children; and,
WHEREAS, there is a need for a community theatre in the City of Kenai; and,
WHEREAS, the City desires fo support performing arts in the community; and,
WHEREAS, donating the subject parcel to Triumvirate Theatre at less than fair market value is in
the best interest of the City, and;
WHEREAS, the Planning and Zoning Commission recommended approval of the conditional land
donation at their meeting on June 23, 2021; and
WHEREAS, conditions must be placed on the transfer or condition the transfer to ensure a theatre
facility is developed or the property is returned to the City including in the event of a land sale, to
a for profit entity, the value of the property shall be reimbursed to the City, if the sale occurs within
twenty years after transfer to Triumvirate Theatre.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA,
as follows:
Section 1. Form: That this is a non-code ordinance.
Section 2. That the Kenai City Council hereby authorizes the City Manager to execute, upon
completion of a subdivision and necessary proof of financing for the development, the transfer of
title for the property: one approximate 2 acre parcel to be subdivided from a portion of the 6.8
acre more or less portion of the east of Tract 4A, Baron Park 2020 Replat (KPB PARCEL No. 045
01 035), to Triumvirate Theatre, on a form approved by the City Attorney, for less than fair market
value ($1.00) and for the sole purpose of developing a theatre facility.
Page 158
1he Property
At your suggestion and working with Ryan Foster, we have considered four possible donated sites for the new facility in the
City of Kenai. Afier careful consideration and in consultation with you, John Conway and our architect, we believe KPB Parcel
No. 04501035 would best suit the purposes of the new theatre. This facility would require approximately 2 acres ro accomodate
adequate parking and the footprint of the building. Triumvriate would pay ro have Parcel No. 04501035 subdivided so that we
would occupy the east part of the parcel.
The following information comes fiom Ryan Foster:
Legal Description: Tract 4, Baron Park Subdivision 2012 Addition Physical Address: 450 Marathon Road
Size: 6.85 acres (298,386 square feet)
City Zoning: Light Industrial
Land Value: $417,500 (from KPB)
This parcel would likely require a subdivision of the 6.85 acres for a theater project/donation. The new Kenai Dog Park is
being constructed on this parcel and the City is amending the plat to remove the dog park from Tract 4 and add it ro Tract 5.
Water and sewer is adjacent to the property from Marathon Road and Daubensbcck Road. Theaters are allowed in the Light
Industrial wning district with a conditional use permit.
Advmitages for the City of Kenai
Theatres are economic engines for communities. Noc only would Triumvirate Thearre patronize hardware stores and gro-
cery stores in the course of our operations but our patrons will eat at local restaurants before or after shows. In addition to paying
property tax, Triumvirate would also hire locals in teaching drama camps, running operations and conducting maintenance on
the building.
The other advantage, of course, is having the arts in the community and the educational opponunities for local kids.
We have no doubt that being in town will increase the number of children we serve with our programs.
Thank you for considering this proposal. If you need further information, please contact me on my cell at:
(907) 394-1159 or by email.
~~·~
Joe Rizzo
Executive Director
ACIPA
p.o. box 322 kenai, alaska 99611 907.394.1159 www.triumviratetheatre.org herehesdrama19)hotmail.com
triumvirate
THEATRE
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Page 163
Kenai City Council - Regular Meeting Page 1 of 3
September 07, 2022
Kenai City Council - Regular Meeting
September 07, 2022 ꟷ 6:00 PM
Kenai City Council Chambers
210 Fidalgo Avenue, Kenai, Alaska
** Telephonic/Virtual Information on Page 3**
www.kenai.city
Action Agenda
A. CALL TO ORDER
1. Pledge of Allegiance
2. Roll Call
3. Agenda Approval
4. Consent Agenda (Public comment limited to three (3) minutes per speaker; thirty (30) minutes
aggregated)
*All items listed with an asterisk (*) are considered to be routine and non-controversial by the council
and will be approved by one motion. There will be no separate discussion of these items unless a
council member so requests, in which case the item will be removed from the consent agenda and
considered in its normal sequence on the agenda as part of the General Orders.
B. SCHEDULED PUBLIC COMMENTS (Public comment limited to ten (10) minutes per speaker)
C. UNSCHEDULED PUBLIC COMMENTS (Public comment limited to three (3) minutes per
speaker; thirty (30) minutes aggregated)
D. PUBLIC HEARINGS
1. ENACTED WITHOUT OBJECTION. Ordinance No. 3304-2022 - Increasing Estimated
Revenues and Appropriations in the Airport Special Revenue and Airport Improvements
Capital Project Funds for Kenai Municipal Airport Disadvantage Business Enterprise Program
Updates. (Administration)
2. ENACTED WITHOUT OBJECTION. 3305-2022 - Conditionally Granting Certain Foreclosed
City-Owned Properties Described as Lots 8 & 11, Block 9 and Lot 4, Block 10, Mommsen’s
Replat of Additions No. 1 & 2 (Parcel Numbers 03910211, 03910208 and 03910304) to Central
Peninsula Habitat for Humanity, Inc. for Construction of Housing. (Administration)
3. ADOPTED WITHOUT OBJECTION. Resolution No. 2022-62 - Supporting the Kenai
Peninsula Borough’s Application for a Safe Streets and Roads for All Action Plan Grant and
Authorizing the City of Kenai to be Included as a Joint Applicant. (Administration)
4. ADOPTED WITHOUT OBJECTION. Resolution No. 2022-63 - Awarding a Professional
Services Agreement and Corresponding Purchase Order for Professional Mechanical and
Electrical Engineering Services for the Kenai Municipal Airport (KMA) Operations Building
HVAC Controls and Boiler Replacement Project. (Administration)
E. MINUTES
1. *Regular Meeting of August 17, 2022. (City Clerk)
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Kenai City Council - Regular Meeting Page 2 of 3
September 07, 2022
F. UNFINISHED BUSINESS
G. NEW BUSINESS
1. *Action/Approval - Bills to be Ratified. (Administration)
2. *Action/Approval - Purchase Orders Over $15,000. (Administration)
3. *Ordinance No. 3306-2022 - Amending Kenai Municipal Code 7.15.020 Purchases Requiring
Council Approval, to Provide Increased Flexibility for the Administration to Conduct City
Business while Maintaining Sufficient Safeguards to Protect the Public Interest. (Baisden)
4. *Ordinance No. 3307-2022 - Amending Kenai Municipal Code 7.25.020 – City Budget Control,
to Provide Increased Flexibility in the Expenditure of Funds and Management of City Budgets
while Maintaining Adequate Internal Controls to Protect the Public’s Interest. (Baisden)
5. *Ordinance No. 3308-2022 - Accepting and Appropriating a Grant from the State of Alaska for
the Purchase of Library Materials. (Administration)
6. *Ordinance No. 3309-2022 - Accepting and Appropriating Funds from the Public Library
Association and AT&T for the Kenai Community Library’s Participation in the PLA Digital
Literacy Workshop Training Incentive. (Administration)
7. *Ordinance No. 3310-2022 - Increasing Estimated Revenues and Appropriations in the
General Fund, Police Department, for the Receipt of a Vehicle Forfeited to the State of Alaska.
(Administration)
8. *Ordinance No. 3311-2022 - Determining that Real Property Described as Lot 5, Block 1,
Gusty Subdivision Addition No. 1, According to Plat No. 83-126 KRD, City-Owned Airport Land
Located Outside the Airport Reserve, is not Needed for a Public Purpose, Waiving KMC
22.05.095 Methods of Sale or Disposal and Authorizing the Sale of the Property to Aaron
Swanson DBA Forever Business Plaza LLC. (Administration)
9. *Ordinance No. 3312-2022 - Determining Lot 4, Block 1, Gusty Subdivision Addition No. 1
Amended is not Needed for a Public Purpose and Approving the Execution of a Lease with an
Option to Purchase between the City of Kenai and Aaron Swanson for the Property.
(Administration)
10. *Ordinance No. 3313-2022 - Accepting and Appropriating Funds from the State of Alaska
Department of Natural Resources, Division of Forestry and the United States Department of
Agriculture, Forest Service to Support the City’s Spruce Beetle Mitigation and Hazard Fuel
Reduction Program and Authorizing the City Manager to Execute a Memorandum of
Agreement for this Funding. (Administration)
11. *Ordinance No. 3314-2022 - Extending the Time Period for Completion of the Action Items
Necessary for the Conditional Donation of an Approximate 2 Acre Parcel to be Subdivided from
a Portion of the 6.8 Acre More or Less Portion of the East of Tract 4A, Baron Park 2020 Replat
(KPB Parcel No. 04501035) to Triumvirate Theatre for the Development of a Theatre Facility.
(Administration)
12. *Ordinance No. 3315-2022 - Increasing Estimated Revenues and Appropriations in the
General Fund and Public Safety Capital Project Fund for Costs in Excess of Budgeted Amounts
for the fire Department Apparatus Bay Floor Refinishing Project. (Administration)
13. INTRODUCTED AND REFERRED TO THE PLANNING AND ZONING COMMISSION FOR
RECOMMENDATION/PUBLIC HEARING SET FOR 9/21/22. Ordinance No. 3316-2022 -
Amending Kenai Municipal Code 14.20.150-Conditional Use Permits, to Further Clarify Roles
Page 167
Kenai City Council - Regular Meeting Page 3 of 3
September 07, 2022
and Responsibilities of Applicants, the Planning Director, and the Planning Commission in the
Conditional Use Process. (Glendening)
H. COMMISSION / COMMITTEE REPORTS
1. Council on Aging
2. Airport Commission
3. Harbor Commission
4. Parks and Recreation Commission
5. Planning and Zoning Commission
6. Beautification Committee
7. Mini Grant Steering Committee
I. REPORT OF THE MAYOR
J. ADMINISTRATION REPORTS
1. City Manager
2. City Attorney
3. City Clerk
K. ADDITIONAL PUBLIC COMMENT
1. Citizens Comments (Public comments limited to five (5) minutes per speaker)
2. Council Comments
L. EXECUTIVE SESSION
M. PENDING ITEMS
N. ADJOURNMENT
O. INFORMATION ITEMS
1. Purchase Orders Between $2,500 and $15,000
The agenda and supporting documents are posted on the City’s website at www.kenai.city. Copies of
resolutions and ordinances are available at the City Clerk’s Office or outside the Council Chamber prior
to the meeting. For additional information, please contact the City Clerk’s Office at 907-283-8231.
Join Zoom Meeting OR
https://us02web.zoom.us/j/83817445954 Dial In: (253) 215-8782 or (301) 715-8592
Meeting ID: 838 1744 5954 Passcode: 821903 Meeting ID: 838 1744 5954 Passcode: 821903
Page 168
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SEPTEMBER 14, 2022
PLANNING & ZONING COMMISSION
ADDITIONAL MATERIAL/REVISIONS
REQUESTED ADDITIONS TO THE PACKET
ACTION ITEM REQUESTED BY PAGE
Add to Item H2
Improvement Description Applicant 2
Improvement Sketch Applicant 3
Substitute Ordinance 3312-2022 Administration 4
Ordinance 3312-2022 Planning Memo to Council Administration 6
Substitute Ordinance 3312-2022 City Manager Memo to
Council Administration 8
Kenai Planning & Zoning Commission -
Regular Meeting
September 14, 2022
Laydown Pg. 1
Lot 4 Gusty Sub improvements description
As a general description of the development for Lot 4 Gusty Sub:
If approved my intention is to develop a restaurant space capable of providing drive thru and carry out
service. Additionally the site development would have outdoor eating space and parking. This would
consist of:
A U shaped drive thru around the building structure.
A restaurant type building structure of approximately 450 square feet which will be developed in a
manor to allow for expansion.
Estimated development cost of tis project for site improvements and construction but excluding land
cost and restaurant equipment is $200,000 which becomes significantly higher with the excluded items.
2Kenai Planning & Zoning Commission -
Regular Meeting
September 14, 2022
Laydown Pg. 2
Kenai Planning & Zoning Commission -
Regular Meeting
September 14, 2022
Laydown Pg. 3
Sponsored by: Administration
New Text Underlined; [DELETED TEXT BRACKETED]
CITY OF KENAI
ORDINANCE NO. 3312-2022 SUBSTITUTE
AN ORDINANCE DETERMINING LOT 4, BLOCK 1, GUSTY SUBDIVISION ADDITION NO. 1
AMENDED IS NOT NEEDED FOR A PUBLIC PURPOSE AND APPROVING THE EXECUTION OF A
LEASE WITH AN OPTION TO PURCHASE BETWEEN THE CITY OF KENAI AND AARON SWANSON
DBA FOREVER BUSINESS PLAZA LLC. FOR THE PROPERTY.
WHEREAS, Kenai Municipal Code 22.05.095(b)(2)(iv) provides for a land lease in which the lease is
subject to competition through the lease application review process and which contains an option to
purchase once the minimum development requirements have been met for the fair market value of the
land excluding permanent improvements made by the lessee; and,
WHEREAS, on June 28, 2022, Aaron Swanson submitted an application for a lease of City owned
properties with the option to purchase, described as Lot 4, Block 1, Gusty Subdivision Addition No. 1
Amended; and,
WHEREAS, the Applicants application states the intention is to construct a Pita Pit restaurant, with initial
construction being site preparation and a temporary building; 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 Aaron Swanson; and,
WHEREAS, the property has been released by the Federal Aviation from its Deed Restriction and is
available for sale or lease; and,
WHEREAS, the property is no longer needed for a public purpose for airport uses and is suitable for
private development; and
WHEREAS, at their regular meeting on September 14, 2022, the Planning and Zoning Commission
reviewed the lease application and recommended_______ by the City Council; and,
WHEREAS, at their regular meeting on September 8, 2022, the Airport Commission reviewed the lease
application and recommended ________ by the City Council; and,
WHEREAS, funds from the lease and sale will benefit the Airport Fund.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, AS
FOLLOWS:
Section 1. Form: This is a non-code ordinance.
Section 2. That a Lease with an option to purchase City owned lands described as Lot 4, Block 1
Gusty Subdivision Addition No. 1 Amended is approved as attached hereto and the City Manager is
authorized to execute a lease with an option to purchase between the City of Kenai, Lessor, and Aaron
Swanson DBA Forever Business Plaza, Lessee, as follows:
Kenai Planning & Zoning Commission -
Regular Meeting
September 14, 2022
Laydown Pg. 4
Ordinance No. 3312-2022
Page 2 of 2
_____________________________________________________________________________________
New Text Underlined; [DELETED TEXT BRACKETED]
The lease or sale shall be subject to the reservations and covenants as contained in Federal
Aviation Administration Deed of Release, Book 227, Page 416, Kenai Recording District;
Section 3. That the Council determines that the property is no longer needed for a public purpose by
the airport and is available for lease or sale.
Section 4. Any sale will be made at fair market value of the land only, as determined by a professional
appraiser from an appraisal made not more than one year prior to the date of sale. Any sale will be
conveyed through a quitclaim deed. Further Council authorization is not required for a sale; however,
completion of all required improvements is required prior to sale. All proceeds from the sale will be
deposited in the Airport Land Sale Permanent Fund.
Section 5. The following improvements are required to be completed within two years of execution
of the lease, and the option to purchase cannot be made until the improvements are completed:
Develop a restaurant space capable of providing drive thru and carry out service with outdoor eating
space and parking, including a U-shaped drive thru around the building structure, and a restaurant type
building structure of approximately 450 square feet which will be developed in a manner to allow for
expansion.
Estimated development cost of this project for site improvements and construction but excluding land
cost and restaurant equipment is $200,000.
Section 6. Severability: That if any part or provision of this ordinance or application thereof to any
person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall
be confined in its operation to the part, provision, or application directly involved in all controversy in
which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder
of this title or application thereof to other persons or circumstances. The City Council hereby declares
that it would have enacted the remainder of this ordinance even without such part, provision, or
application.
Section 7. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect 30 days
after enactment.
ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 21ST DAY OF SEPTEMBER,
2022.
___________________________________
Brian Gabriel Sr., Mayor
ATTEST:
___________________________________
Michelle M. Saner, MMC, City Clerk
Introduced: September 7, 2022
Enacted: September 21, 2022
Effective: October 21, 2022
Kenai Planning & Zoning Commission -
Regular Meeting
September 14, 2022
Laydown Pg. 5
MEMORANDUM
TO: Mayor Gabriel and City Council Members
FROM: Max Best, Interim Planning Director
DATE: July17, 2022
SUBJECT: Ordinance No. 3312-2022 – Approving the Lease with a Sale option of
11536 Kenai Spur Highway to Aaron Swanson
On June 28, 2022, staff received a competitive Lease with Sale Purchase Option application
pursuant to KMC 22.05.095(i) for 11536 Kenai Spur Highway, Lot 4, Block 1, Gusty Subdivision
Addition No. 1 Amended, from Aaron Swanson. The proposed use of the parcel, which is currently
vacant, is to construct a Pita Pit restaurant.
11536 Kenai Spur Highway is a 24,829 square foot (.57 ac.) cleared lot south of the baseball
fields with 120’ of Kenai Spur Highway frontage. The Lot has additional access from Cohoe
Avenue. City water and sewer is available. This parcel is located outside the Airport Reserve.
The parcel is within the Central Mixed-Use District (CMU). Per KMC 14.20.125, the purpose of
the CMU Zone is intended to provide for a centrally located area in the City for general retail
shopping, personal and professional services, entertainment establishments, restaurants and
related businesses.
Pursuant to Kenai Municipal Code 22.05.040 application review, notice of the 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 August 29, 2022,
and no competing applications were submitted to the City.
The recently adopted City of Kenai Land Management Inventory and Recommendations lists the
property as not needed for a public purpose and recommends disposal for lease or sale. Funds
from the sale will benefit the Airport fund. The property is deed restricted with covenants and
conditions that protect the ongoing operation of the airport.
The current fair market value of the property as determined by MacSwain Associates, LLC on
May 18, 2021 is $110,000. The lease rate will be 8% of the fair market value.
The applicant will be responsible for completing development of the property within two years of
the execution of the lease and the option to purchase cannot be made until the improvements are
completed. The Ordinance will be updated to provide the required improvements for the public
Kenai Planning & Zoning Commission -
Regular Meeting
September 14, 2022
Laydown Pg. 6
Page 2 of 2
hearing on September 21, 2022. Pursuant to Kenai Municipal Code 22.05.070, site preparation
work on the leased premises to include clearing and grubbing, unclassified excavation, classified
fill and back fill, crushed aggregate base course, and utility extensions may be applied toward
rent for a maximum of five years.
Your consideration is appreciated.
Kenai Planning & Zoning Commission -
Regular Meeting
September 14, 2022
Laydown Pg. 7
MEMORANDUM
TO: Mayor Gabriel and Council Members
FROM: Paul Ostrander, City Manager
DATE: September 14, 2022
SUBJECT: Ordinance No. 33125-2022 Substitute – Lease With an Option to
Purchase of Lot 4 Block 1, Gusty Subdivision
This substitute ordinance changes the original title by adding “DBA Forever Business Plaza LLC”
to the title to clarify that Aaron Swanson does business as Forever Business Plaza LLC. It also
adds the specific improvement requirements that must be completed within two years of execution
of the lease in Section 5.
Thank you for your consideration.
Kenai Planning & Zoning Commission -
Regular Meeting
September 14, 2022
Laydown Pg. 8