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HomeMy WebLinkAboutResolution No. 2024-24KENAI CITY OF KENAI RESOLUTION NO. 2024-24 Sponsored by: Administration A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A LEASE OF AIRPORT RESERVE LANDS BETWEEN THE CITY OF KENAI AND SCHILLING RENTALS, LIMITED LIABILITY CORPORATION FOR LOT 5A, BLOCK 1, FBO SUBDIVISION 2018 REPLAT. WHEREAS, on May 1, 2024, Schilling Rentals, LLC ("Schilling") submitted an application to lease a City - owned property within the Airport Reserve, described as Lot 5A, Block 1, FBO Subdivision 2018 Replat; and, WHEREAS, Schilling intends to use the premises for an airplane hangar to support a local airline, such as Kenai Aviation, with an estimated investment value of $1,000,000 that allows for the maximum lease term of 45 years in accordance with the Kenai Municipal Code (KMC) 21.10.050(b) [Lease] Term Table; and, WHEREAS, the proposed development would be mutually beneficial and would conform with the Kenai Municipal Code for Titles 14 and 21, Kenai Comprehensive Plan, Airport Land Use Plan, Airport Master Plan, Federal Aviation Administration (FAA) regulations applicable to the airport, airport improvement projects, airport sponsor grant assurances to the FAA, and airport regulations and operations; and, WHEREAS, the City did not receive any competing lease applications within 30 days of publishing noticing as required in KMC 21.10.060(c) Lease Application Review; and, WHEREAS, pursuant to KMC 21.10.070(a) the applicant has provided evidence of financial resources to complete the proposed project; and, WHEREAS, at their regular meeting on May 8, 2024, the Planning and Zoning Commission recommended approval to the City Council on the consent agenda; and, WHEREAS, at their regular meeting on May 9, 2024, the Airport Commission reviewed the lease application and recommended approval to City Council; and, WHEREAS, it is in the best interest of the City to enter into a lease agreement with Schilling for the development of the subject property to promote the growth and development of the Kenai Municipal Airport. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. That a Lease of Airport Reserve Lands is approved and the City Manager is authorized to execute a lease between the City of Kenai and Schilling Rentals, LLC for the property described as Lot 5A, Block 1, FBO Subdivision 2018 Replat, as follows: 1. The construction of an airplane hangar with an estimated value of improvement of $1,000,000 will be completed within three (3) years of lease execution, unless City Council has approved a time extension. 2. The written documentation must be submitted to the City within 30 days of the completion of the permanent improvements. New Text Underlined; [DELETED TEXT BRACKETED] Resolution No. 2024-24 Page 2 of 2 3. The lease term will be 45 years. 4. Prevent unauthorized access to the airfield during and after site improvements. 5. Structures are prohibited to encroach into the 100-foot building restriction line. 6. Lessee is responsible for all snow removal, and snow may not touch the perimeter security fence or be piled to a height that would allow access to the airport. Section 2. That this Resolution takes effect immediately upon passage. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, TI-ii$ DAY 0.6 ce Mayor ATTEST: Mic e e . San M , City Clerk New Text Underlined; [DELETED TEXT BRACKETED] i N A City of Kenai 1 210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 wwwkenaixity MEMORANDUM TO: Mayor Gabriel and Council Members THROUGH: Terry Eubank, City Manager FROM: Linda Mitchell, Planning Director DATE: May 31, 2024 SUBJECT: Resolution No. 2024-24 — Approving the Execution of a Lease of Airport Reserve Lands for the Property Described as Lot 5A, Block 1, FBO Subdivision 2018 Replat Schilling Rentals, LLC ("Schilling") submitted a land lease application of Airport Reserve Land for the property described as Lot 5A, Block 1, FBO Subdivision 2018 Replat, located at 413 N. Willow Street (KPB Parcel No. 04336049). The applicant is requesting a term of 45 years and proposing an investment amount of approximately $1,000,000 to erect an airplane hangar. Pursuant to Kenai Municipal Code (KMC) 21.10.080(b) [Lease] Term Table, the maximum term for the proposed investment value is 45 years. The 30-day notice of competitive land lease application expired on June 3, 2024. The City did not receive any competing lease applications for the subject property. Pursuant to KMC 21.10.070(a) the applicant has provided evidence of the financial resources to complete the proposed project. The subject property was under a lease; therefore, it was not listed in the FY2024 Fee Schedule. Pursuant to KMC 21.10.090 Principles and Policy of Lease Rates, the annual rent is computed by multiplying the fair market value of the land based on the latest appraisal by the lease rate percentage and adjusted annually by the Consumer Price Index (CPI). The last appraisal was conducted in 2020 with a fair market value of $185,000 and the lease rate percentage is eight percent (8%). The annual lease rate in 2020 (i.e., FY 2021) would be $14,800 and adjusted annually by CPI to FY2025 would result in an annual lease rate of $16,852.09. In the Land Management Plan, the subject property has a retention status of lease only. It is a cleared and level lot with frontage on North Willow Street and the airport runway. The applicant intends to use the premises for an airplane hangar to support a local airline, such as Kenai Aviation. Schilling is in compliance with the terms and conditions of their leases. The subject property is approximately 1.80 acres and located within the Airport Light Industrial (ALI) Zone. The intent of the ALI Zone is to protect the viability of the Kenai Municipal Airport as a significant resource to the community by encouraging compatible land uses and reducing hazards that may endanger the lives and property of the public and aviation users. The proposed use of an aircraft hangar is a permitted use in the ALI Zone and is an airport compatible use. A new hangar with the intent to support a local airline will further promote the viability of the Kenai Municipal Airport. Furthermore, the proposed use is consistent with the 2016 Imagine Kenai 2030 Comprehensive Plan. It supports Goal 5- Transportation, which has a vision for Kenai Municipal Airport as a gateway to the Kenai Peninsula. The Airport Land Use Plan was developed to identify the highest and best uses of Kenai Municipal Airport land. The Airport Land Use Plan discusses leasing land and enhancing opportunities for local economic development. The proposed use by Schilling complies with the Airport Land Use Plan. The Planning and Zoning Commission recommended approval of the lease application at their May 8, 2024 regular meeting. The Airport Commission recommended approval of the lease at their May 9, 2024 regular meeting. Resolution No. 2024-24 would authorize the City Manager to execute a lease of city -owned property within Airport Reserve between the City of Kenai and Schilling Rentals, LLC for the property described as Lot 5A, Block 1, FBO Subdivision 2018 Replat. Thank you for your consideration. Attachments Aerial Map Application Page 2 of 2 The City of Kenai www.kenai.city KENAI Lease of Airport Reserve Land 413 N. Willow Street KPB Parcel ID: 04336049 Approximately 1.80 acres N Map for Reference Only NOT A LEGAL DOCUMENT 0 150 300 600 Feet RECEIVED CITY OF KPIunt �" Cityof Kenai Application for. 21 New Lease %."Land Lease Application ❑ Amendment ❑ Extension nY- ❑ Assignment X F N`= Application Date: ❑ Renewal - Applicant Name of Applicant: Schilling Rentals LLC Mailing Address: , PO Box 3426 City: Kenai State: I AK Zip Code:[99611 Phone Number(s): Home Phone: 907-283-7556 Work/ Message Phone: E-mail: (Optional) dlunt@glmenergyllc.00m Name to Appear on Lease: Schilling Rentals LLC Mailing Address: PO Box 3426 City: Kenai State: [AK Zip Code: 99611 Phone Number(s): Home Phone: 907-283-7556 Work/ Message Phone: E-mail: (Optional) Type of Applicant: ❑ Individual (at least 18 years of age) ❑ Partnership Corporation I Government M Limited Liability Company (LLC) ❑ Other Property-. Legal description of property (or, if subdivision is required, a brief description of property): T 06N R 11 W SEC 32 SEWARD MERIDIAN KN 2019002 FBO SUB 2018 REPLAT LOT 5A BLK 1 413 N Willow Street Kenai, AK 99611 Does the property require subdivision? (if Yes, answer next questions) ❑ YES R NO Subdivision costs are the responsibility of the applicant unless the City Council determines a subdivision serves other City purposes: 1. Do you believe the proposed subdivision would serve other City purposes? ❑ YES ❑ NO 2. If determined it does not, applicant is responsible for all subdivision costs. Initials If an appraisal is required to determine the minimum price on the land, applicant is responsible for the deposit to cover costs associated with appraisal. If a sale is approved, the cost of the Initials,f appraisal will be either refunded or credited to the applicant. It is the responsibility of the applicant to cover recording costs associated with lease. Initials Do you have or have you ever had a Lease with the City? (if Yes, answer next question) 0 YES ❑ NO 1. Legal or brief description of property leased: multiple parcels on airport Request a Lease with an Option to Purchase once development requirements are met? ❑ YES [ENO 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): Requested Starting Date.6/6/2024 Proposed Use and Improvements Proposed Use (check one): xl Aeronautical I I Non -Aeronautical Do you plan to construct new or additional improvements? (if Yes, answer next five questions) L YES LJ NO 1. Will the improvement.change or alter the use under an existing lease? EYES E NO 2. What is the proposed use of the improvement? Airplane hangar 3. What is the estimated value of the improvement? 1,000.000 4. What is the nature and type of improvement? Erect an airplane hangar for local carrier, such as Kenai Aviation 5. What are the dates construction is estimated to commence and be completed? (generally, construction must be completed within two years) Estimated Start Date: 6/6/2024 Estimated Completion Date:10/1/2024 Describe the proposed business or activity intended: Aircraft support How does the proposed lease support a thriving business, residential, recreational, or cultural community? Provides airplane storage for aircrafts for a local airline, such as Kenai Aviation. Lease Assignment Only: What is the name of the individual or legal entity the lease is to be assigned? Lease Renewal Only Renewal of an Existing Lease (at least one year of term remaining): Requires new development. Lease Term based on: Estimated cost of new improvements and I Purchase Price (optional) -1 Renewal of an Expiring Lease (less than one year of term remaining): Does not require new development. Lease Term based on: F Purchase Price I I Professional Estimate of Remaining Useful Life --I Fair Market Value appraisal and/or -1 Estimated cost of new improvements (optional) Requested Term for Renewal Based on Term Table, not to exceed 45 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 Signature: Date: 4/30/2024 Print Name: M,Kt Sc �i �fy► Title: Member ,For Citv Use OnK, Date Application Fee Received: 10 General Fund ❑ Airport Reserve Land Date Application Determined Complete: i 0 Airport Fund ❑ Outside Airport Reserve 30-Day Notice Publication Date: Account Number: City Council Action/Resolution: