HomeMy WebLinkAbout2006-08-21 Airport Commission PacketKENAI AIItPORT CONIIvIISSION
SPECIAL MEETING
AUGUST 21, 2006
KENAI CITY COUNCIY, CH[~NIBERS
3:00 P.M.
AGENDA
ITEM 1: CALL TO ORDER AND ROLL CALL
YTEM 2: AGENDA APPROVAL
ITEM 3: OLD BUSINESS
a. Discussion/Recommendations -- Proposed Amendments to Kenai
Munlcipal Code Title 21 Entitled, "Kenai Municipal Airport and the
Airport Reserve." ~
ITEM 4: ADJOURNMENT
PLEASE CONTACT US IF YOU WILL NOT BE ABI.E TO
ATTEND THE MEETING:
CAROL -- 283-8231 OR,
REBECCA/MARY -- 283-7951
,~ ~
Suggested by: Administration
CITY OF KENAI
xo. 2 aso-zoo6
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, REPEALING
THE EXISTING KMC 21.05 (AIRPORT ADMINISTRATION AND OPERATION), KMC
21.10 (LEASING OF AIRPORT LANDS), KMC 21.15 (PROVISIONS REQUIRED) AND
I$VIC 21.20 (POLICY GOVERNING MODIFICAT'ION OF EXISTING LEASES), AND
REPLACING THEM WPI'H KMC 21.05 (AIRPORT ADMINISTRATION AND OPERATION),
KNIC 21.10 (LEASING OF AIRPORT RESERVE LANDS) AND KiVIC 2I.15 (LEASE AND
SALE OF AIRPORT LAND OUISIDE OF THE AIRPORT RESERVE).
WHERFt1S, the City of Kenai has undertaken a Supplemental Airport Master Plan
process in which a comprehensive review of city policies regarding the use, lease and
sale of airport lands was completed; and,
WHEREAS, numerous public hearings were held during the process, including
meetings with the Kenai City Council, Airport Commission, Planning and Zoning
Commission, the Kenai Economic Development Strategies group, and members of the
public, in order to increase pubiic comment and participation during the process: and,
WHEREAS, it is in the best interest of the City of Kenai to create an Airport Reserve
and modernize the leasing provisions regarding Airport Reserve land and to prohibit
land sales within the reserve; and,
WHEFtEAS. it is in the best interest of the City of Kenai to modernize its leasing
procedures for airport land outside the Airport Reserve and to eluni~iate the ability of
new lessees to have the vested right to purchase the leased property once the
property's development pian has been completed: and.
WHEREAS, there may be instances where it is in the best interest of the City of Kenai
to sell or convey some airport property outside of the Airport Reserve; and.
WI-IEREAS, it is not the intent of this ordinance to alter or amend existing leases
during their original terms: and.
WfiEE2EAS, eactensions or renewals af existing leases not governed by the terms af that
lease shall be processed according to the provisions of this ordinance, and,
VJHEREAS, it is in the best interest of the City of Kenai to enact the new policies and
procedures as shown in Attachments A. B and G
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CI'1'Y OF KENAI,
ALASKA that: KMC 21.05, 21.10, 21.15 and 21.20 are hereby repealed and KMC
21.05, 21.10 and 21.15 as shown on Attachments A, B and C are hereby enacted.
Ordinance No. 2180-2006
Page 2 of 2
PASSED BY THE COUNCIL OF THE CI'I'Y OF KENAI, ALASKA, this 16th day of August,
2006.
PAT PORTER. MAYOR
~1'fTEST:
Carol L. Freas, City Cierk
Introduced: August 2, 2006
Adopted: August 16, 2006
Effective: September 16, 2006
(7/27/06 sp)
Title 21
KENAI MUNICIPAL AIRPORT AND THE AIRPORT RESERV~
Chapters:
21.05 Airport Administration and Operation
2~.10 Leasing of Airport Reserve Lands
2I.15 Leasing of Non-Airport Reserve Lands
21.20 Airport Commission
Chapter 21.05
AIRPORT ADMINISTRATION AND OPERATION
Sections:
21.05.010
21.05.020
21.05.030
21.05.040
21.05.050
21.05.060
21.05.070
21.05.080
Airport Reserve.
Airport Reserve boundary map.
De~nitions.
Regulation of the airport.
Use or occupancy of the Airport Reserve.
Parking automobiles and aircraft.
Environmental requirements.
Penalties.
21.05.010 Airport Reserve.
(a) There is established an Airport Reserve for the development, expansion, maintenance,
operation, protection, and perpetuation of the Kenai Municipal Airport. The boundaries of the
Airport Reserve are established as shown on the map codified as 21.05.020.
(b) No city-owned land within the Airport Reserve shall be sold or otherwise conveyed out of
City ownership for any purpose, except as provided in a lease executed by the City before the
effective date of this section.
21.05.020 Airport Reserve Boundary Map.
(See Appendix I to this Chapter.)
21.05.030 De~nitions.
Unless the context requires otherwise, the foilowing words or phrases have the meaning
given below when used in this Title 21.
(a) "Airport" means all the facilities and land of the Kenai Municipal Airport within the Airport
Reserve.
(b) "Airport Manager" means the official to whom the City Manager has delegated the authority
and responsibility of managing and directing the activities of the airport. "Airport Manager"
- includes that person's authorized representative.
Ordinance 2180-2006 Attachment A
Page 1 of 4
(c) "Aitport Reserve" means the ciry-owned land reserved from sale and designated under
21.05.010 and 21.05.020.
(d) "City Manager" means the official to whom the City Council has delegated the responsibility
of managing and directing all acCivities of Che City. "City Manager" includes those persons to
whom the Manager has delegated responsibiliry to perform functions under this TiCle 21.
21.05.040 Regulation of airport.
The City Manager may regulate the manner in which the airport is operated with
reference to safety, accommodation, user fees, and service to the public. The City Manager is
a'uthorized to adopt, amend, and repeal such rules and regulations as may be necessary.
Regulations promulgated under authority of this section ue effective on the date designated by
the City Manager. The City Council may by resolution at any meeting revise or repeal any
regulation adopted under authority of this section. In this connection, the rules and regulations
adopted prior to the enactment of this section are hereby ratified, approved, and continued in full
force and effect until further amended or repealed by subsequent action of the City Manager.
21.05.050 Use or Occupancy of the Airport Reserve.
No person may use or occupy city-owned land or facilities within the Airport Reserve for
any purpose unless,
(a) [he portion of the land or faciliry being used or occupied is designated by the city for public
use and the person's use or occupancy conforms to that public use; or
(b) the person first obtains a lease, permit, concession, or other written permission from the City
authorizing the use or occupancy; or
(c) the person is on a premises with the express or implied consent of the lessee, pernuttee, or
concessionaire.
21.05.060 Parking automobiles and aircraft.
It shall be unlawful for a person to pazk an aircraft or automobile on the airport in any
location or in any manner contrary to a regulation adopted under KMC 21.05.030, or a rule or
order issued by the Airport Manager pursuant to a regulation adopted under KMC 21.05.030.
The Airport Manager, including the manager's designated representative, shall be vested with
full police powers under the authority of the City to enforce the provisions of this section.
21.05.070 Environmental requirements.
(a) A person using the airport shall comply with all applicable environmental laws.
(b) A lessee, permittee, or concessionaire who is required under any environmental law to
submit a report or other document about a violation or potential violation of an environmental
law to a regulatory agency shall provide a copy of the document to the City Manager. Any
person who receives a permit from an environmental regulatory agency in connection with the
person's use of the airport shall, within ten (10) days of receipt of the pernut, provide a copy of
the pernut to the City Manager.
(c) A lessee, permittee, or concessionaire shall provide to the City Manager a copy of
(i) any notice of violation or other notice, claim, or citation alleging a violation of an
environmental law affecting airport property that a regulatory agency issues to or files
against that lessee, permittee, or concessionaire; and
Ordinance 2180-2006 Attachment A
Page 2 of 4
(2) any complaint filed in a court that alleges violation by the lessee, permittee, or
concessionaire of an environmental law affecting airport property.
(d) The City Manager shall require a person responsible for the contamination of airport
property to remediate and return contaminated aicport property to an environmentally acceptable
condition to the satisfaction of any regulatory agency having jurisdiction. However, any
regulatory agency approval of a proposed remediation plan that limits the future use of aitport
property is subject to approval by the City Manager before the responsible person may begin
remediation activities on the airport. A person remediating contaminated airport property may
not unreasonably interfere with
`(1) a lessee's use of, or access to, the lessee's premises, unless
(i) the contamination is a direct result of the lessee's operations; or
(ii) the lessee first expressly consents; or
(2) the operation or development of the airpoR unless the City Manager first expressiy
consents.
(e) If the City Manager has cause to believe a premises or other property on the airport may
have been contaminated, the Manager may cause to be performed an environmental assessment
on the premises or property to establish the presence and source of any contamination and to
describe the environmental condition of the premises or property. While perfornung the
assessment, the City will not unreasonably interfere with a lessee's use of, or access to, [he
lessee's premises unless the lessee first expressly consents. The City will assume the cost of the
assessment of a premises or property if contamination is not found on the premises or property:
If contamination is found on the premises or property, the person responsible for the
contamination shall, upon notice from the City Manager,
(i) reimburse the City for the cost of the assessment; and
(2) clean up the contamination.
(f~ For purposes of this section 21.05.060, interference with
(1) a lessee's use of, or access to, the lessee's premises is unreasonable if the interference
(i) poses a safety hazard or a substantial disruption of the lessee's use of, or access to, the
lessee's premises; or
(ii) can be avoided without materially increasing the cost or materially decreasing the
effectiveness of the effort to achieve remediation satisfactory to ali agencies having
jurisdiction, or a reasonable environmental assessment, as applicable;
(2) the operation or development of the airport is unreasonable if the interference poses a
safety hazazd or a material disruption of the operation or development of the airport.
(g) For the purposes of this chapter 21.05, the following terms are defined as follows:
(1} "Contamination"-the unpermitted presence of any released Hazardous Substance.
(2) "Environmental Assessment" - an assessment of property, prepared in a manner
consistent with generaliy accepted professional practices, that is supported by reports and
tests that determine the environmental condition of property and the presence, [ype,
concentration, and extent of a Hazardous Substance in, on, and under the surface of the
propeRy.
(3) "Environmental Law"-any applicable federal, state, or local statute, law> regulation,
ordinance, code, permit, order, decision, judgment of any governmental entity relating to
environmental matters, including littering and dumping.
Ordinance 2180-2006 Attachment A
Page 3 of 4
(4) "Hazardous Substance"-any substance that is defined under an Environmental Law as
hazardous waste, Hazardous Substance, hazazdous material, toxic, pollutant, contaminant,
petroleum, petroleum product, or oiL
(5) "Materially Contributed To"-to cause the release or migration of a Hazazdous Substance
in a reportable qaantity as defined under applicable Environmentai Law.
(6) "Responsible"-when used in regard to environmental contamination, means having
materially contributed to, assumed under an assignment, or being otherwise liable for by law
or contract.
2I.05.080 Penalties.
Violatlons of this chapter shall be punished as provided for violations in KNIC 13.05.010.
Ordinance 2180-2006 Attachment A
Page 4 of 4
Chapter 21.10
LEASING OF AIRPORT RESERVE LANI3S
5ections:
21.10.010 Airport reserve land.
21.10A20 Lands availabie for leasing.
21.10.030 Qualifications of applicants or bidders.
21.10.040 Applications.
2~.10.050 Filing fee and deposit.
21.10.060 No right of occupancy; Application expiration.
21.10.070 Processing procedure.
2L10.080 Lease amendment or renewal.
21.10.090 Length of lease term.
21.10.100 Rental rate determination.
21.10.110 Reimbursement for cityconstructed improvements.
21.10.120 Lease utilization.
21.10.130 Bidding procedure.
21.10.140 Lease execution.
21.10.150 Form of lease.
21.10.160 Re-evaluation of rent.
21.10.170 Use permits.
21.20.180 Acquisition of reai property.
21.10.010 Airport reserve land.
(a} This chapter applies to airport-owned land within the Airport Reserve.
(b) The provisions of this chapter shali not alter or amend the terms or rights granted under
leases existing prior to the effective date of this chapter.
(c) Pending lease applicakions filed prior to the effective date of this chapter shall come under the
provisions of KMC 21.10-20. Otherwise the provisions of this chap[er shall apply.
21.10.020 Lands available for leasing.
(a) Subject to the provisions of this chapter, city-owned land within the Airport Reserve may be
leased as provided in this chapter unless the land is identified in the latest Federal Aviation
Administration-approved Airport Layout Plan for the airport or in [he latest Airport Land Use
Plan as being required for the operation or safety of the airport, or far the construction,
preservation, future construction, or future expansion of facilities on the airport, inciuding
(1) runways, runway safety areas, taJCiways, aprons, water lanes, water taxiways, and other
aircraft operational areas;
(2) access roads> public streets, parking lots, and other facilities for use by motor vehicles;
and
(3) public ternunal buildings.
(b) Notwithstanding (a) of this section,
(1) apron space may be leased, but only for aircraft fueling, loading, unloading, parking and
maneuvering purposes; and
Ordinance No. 2180-2006 Attachment B
Page 1 of 10
(2) land required for the future construction or future expansion of airport facilities:
(i) may be leased for an interim period not extending beyond the date on which the City
Manager deternunes the land will be required for the construction or expansion; but
(ii) may not be leased if the City Manager determines that granting the lease would
interfere with, or jeopazdize, the safe operation of the airport.
21.10.030 Qualifications of applicants or bidders.
An applicant or bidder for a lease is qualified if the applicant or bidder:
(a) Is an individual at least eighteen (18) years of age;
(b~1s a group, association, or corporation which is authorized to conduct business under the laws
of Alaska; or
(c) Is acting as an agent for another and has qualified by filing with the City Manager a proper
power of attomey or a letter of authorization creating such agency. The agent shall represent only
one (1) principal to the exclusion of himself. The term "agent" includes real estate brokers and
agents.
21.10.040 Appiications<
(a) All applications for lease of lands shall be submitted to the City Manager on forms provided
by the City Manager, together with the non-refundable filing fee and any applicable deposit
required under 21.1.0.050. The City Manager shall not accept an application that the Manager
determines to be incomplete. Upon receipt of a complete application, filing fee, and any
applicable deposit, the City Manager shall cause the application to be stamped with the date and
time of its receipt.
(b) With every application, the applicant shall submit
(1) a development pian, showing and stating:
(i) The purpose of the proposed lease;
(ii) The use, nature, proposed location on the premises, and estimated cost of
improvements to be constructed;
(iii) The type of construction;
(iv) The anticipated construction beginning and completion dates; and
(v) Whether the intended use and proposed development conforms with the
(i) zoning ordinance of the City;
(ii) comprehensive plan of the City,
(iii) latest Federai Aviation Administration-approved Airport Layout Plan for the
airport; and
(iv) the latest Airport Land Use Plan.
(2) A business plan, if the applicant proposes to operate a business on the proposed premises.
The plan must include
(i) a comprehensive description of the proposed bnsiness;
(ii) the number of people the applicant expects to employ in the business during its first
full year of operation;
(iii) the number of customers the applicant expects business to serve during its first full
yeaz of operation;
(iv) the applicant's source of capital. Tf the applicant plans to bonow funds, inciude a
(etter from a bank or other lending institution expressing interest in providing capatai; and
Ordinance No.2180-2006 AttactunentB
Page 2 of 10
(v) the applicant's estimate of the gross receipts of the business during its first year of full
operation;
(3) A site plan, if the land the applicant desires to lease is not a platted lot or tract. The site
plan must show the location and dimensions of the proposed lease site, but need not be
prepared by an engineer or surveyor; and
(4) A KPB tax compliance certificate and statement that the applicant is current with any
charges, fees, rents, ta~ces or other sums due and payable to the City.
(c) Anytime during the processing of a lease application, the City Manager may request, and the
a~plicant shall supply, any clarification or additional information that the City Manager
reasonably determines is necessary for the City to make a final decision on the application.
21.10.050 Filing fee and deposit.
(a) When submitting an application for lease of land, the applicant shail
(1) pay a non-refundable filing fee in the amount of one hundred dollars ($100.00); and
(2) make a deposit to show good faith and secure the City in payment of any costs in the
following amounts:
(i) An appraisal cost recovery deposit of two thousand dollars ($2,000.00); and
(ii) An engineering, surveying and consulting cost recovery deposit of two thousand
dollars ($2,000.00).
(b) If the City decides to reject the applicant's application and not enter into a lease with the
applicant through no fault of the appiicant or failure oP the applicant to comply with any
requirement of this chapter, any deposit made under (a)(2) of this Section .050 will be returned to
the applicant.
(c) If the City enters into a lease with the applicant any deposit made by the applicant under (a)
of this section .050 will be applied to the City's engineering, appraisal, and consulting costs
related to the processing of the applicant's application and entering into the lease. The City will
apply any unused balance of a deposit to the rent payable under the lease. If the City's costs
exceed the amount of any deposit, the applicant shall pay the shortage to the City as a condition
of the lease.
(d) If the applicant fails to comply with any requirement of this chapter, causes inordinate delay,
as deternuned by the City Manager, or refuses to sign a lease offered to the applicant, the City
Manager will reject the applicant's application and apply any deposit made by the applicant
under (a) of this section ro the City's appraisal, engineering, and consulting wsts incurred in
connection with the applicant's application. If the City's costs for appraisal, engineering and
consulting costs exceed the deposits, the applicant wili be responsibie for these costs. The City
will return any unused deposit balance to the applicant.
21.10.060 No right of occupancy; Application expiration.
(a) Submitting an application for a lease does not give the applicant a right to lease or use the
land requested in the application.
(b) If the CiCy does not reject Che application, an application shall expire on Che earlier of the
following
(1) twelve (12) months after the date starnped on the application under 21.10.040(a) if the
City and the applicant have not, by that time, entered into a lease, unless the Councii for good
cause grants an extension for a period not to exceed six (6) months; or
Ordinance No. 2180-2006 Attachment B
Page 3 of 10
(2) the deadline date established under KMC 21.10140, including any extension of Cime
granted thereunder.
21.10.070 Application processing procedure.
(a) Initial Application Review by:
(1) Assistant to the City Manager (for application completeness; conformance with Title 21);
(2) Airport Manager (for conformance with the Airport Land Use Plan, Airport Layout Plan,
Airport Master Plan, FAA regulations, AIl' grant assurances, and airport operations);
.(3) City Planner (for conformance with the Airport Land Use Plan, Comprehensive Plan,
- municipal zoning, and future airport improvement projects); and
(4) City Manager (for adequacy of the applicant's business plan and construction financing
plans).
(b) The above staff shall present to the City Manager their joint recommendation for action on
the application, such as Rejection, Approval, or Approval of a staff alternative.
(c) If the City Manager concurs with the staff recommendation, the Manager will:
(1) issue a rejection letter, stating the reasons for rejection; or
(2) refer the application to the Airport Commission and the Planning & Zoning Commission
for review and comment, together with the Manager's rewmmendation for Approval or
Approval of the staff alternative; and
(3) Inform the City Council of the Manager's recommendation.
(d) If the City Manager refers the application to the Commissions, the City Manager will
consider the recommendations of the Commissions and
(1) Issue a rejectlon letter, stating the reasons for rejection; or
(2) Approve the application or staff alternative, and direct the staff to issue the lease; and ~
(3} Inform the City Council of the Manager's decision to approve or reject the application; or
(4) Obtain the Ciry Council's concurrence if the Manager's decision to approve or reject the
application is contrary to the recommendations of the Commissions.
(e) An applicant whose application is rcjected by the City Manager may appeal to the City
Council within fifteen (15) days foilowing the date on which the Manager's rejection letter was
hand delivered or placed in the U.S. mail.
(fl If another complete and otherwise approvable application for lease of the same property is
suhmitted by a different applicant before the City Manager enters into a lease with the first
applicant, the City Manager will forward the applications, [he Manager's recommendation and
the commissions' recommendations to the City Council for approval of the application
anticipated to best serve the interests of the City. The Council may approve one of the
applications or direct the City Manager to awazd a lease of the property by sealed bid.
(g) Grounds for the City Manager to reject an application include,
(1) the applicant's failure to provide any clarification or information required under this
chapter;
(2) the appticant's proposed development or use of the land is inconsistent with
(i} the zoning ordinance of the City;
(ii) the comprehensive plan of the City;
(iii) the latest Federai Aviation Administration-approved Airport Layout Plan for the
airport;
(iv) any obligation of the City under the Airport Sponsor Grant Assurances to the Federal
Aviation Administration;
Ordinance No. 2180-2006 Attachment B
Page 4 of 10
(v) the latest Airport Land Use Plan; or
(vi) a regulation of the Federal Aviadon Administration applicable to the airport.
(3) the applicant's proposed development or use of the land would violate a federal, state, or
local law, including an ordinance or regulation of the City;
(4) the appiicant's failure to reasonably demonstrate the financial viability of the applicanYs
proposed development or of the business the applicant proposes to operate;
(5) the applicant is in default of any charges, fees, rents, taxes, or other sums due and payable
to the City;
-(6) the applicant is in default of a requirement of any lease or conuact with the City;
~(7) the application is rejected by the City Council in favor of another application for the same
land under paragraph (~ above;
(8) the City Councii decides, under (~ above, to reject all applications and awazd a lease of
the land by sealed bid; and
(9) the City Manager or the City Council deternunes that approval of the application is not in
the best interest of the City.
(h) The City Council may waive provisions of this chapter to lease property or interests in real
property with the United States, the state or an Alaska political subdivision when in the judgment
of the councit it is advantageous to the municipality to do so.
21.10.080 Lease Amendment or Renewal.
An application submitted by an exisung tenant for an amendment, term extension, or
renewal of the tenant's lease shall be subject to the requirements and procedures of KMC
21.10.010 - 21.10.070, except that
(a) KMC 21.10.040(b)(1) and (2) shall not apply to an application that does not include a
pmposal to construct new improvements on the premises.
(b) KMC 21.10.040(b)(2) shall not apply to an application that does not include a proposal to
add, delete, or alter a business authorized under the lease.
(c) the appraisal deposit under KMC 21.10.050(a)(2)(i) shall not be required for an applica6on
for a lease amendment that, if approved, will not alter the size or value of the premises; and
(d) the deposits under KMC 21.10.050(a)(2)(i) and (ii) shall not be required for an application
for a lease amendment that, if approved, will make only administrative changes in the lease and
will not alter the authorized use, size, or value of the premises or if the City Manager determines
the City will not incur any engineering, surveying or consulting costs.
21.10.090 Length of Lease Term.
(a) The length of term for a lease granted for land within the Airport Reserve wili be based on
the amount of investment the applicant proposes to make in the construction of new permanent
improvements on the premises during the first 24 months fotlowing the beginning date of the
lease or lease extension.
(b) The length of term for a lease renewal shall be based on the appraised value of the
permanent improvements on the property as set forth in the table in subsection (d)(1).
(c) ff the applicant proposes to make less than $100,000 in new pertnanent improvements on the
premises, the maximum term of a new lease shall be five (5) years.
(d) If the applicant pmposes to invest $100,000 or more in new permanent improvements on the
premises,
Ordinance No. 2180.2006 Attachment B
Page 5 of 10
(1) the maximum term of a new lease or a renewal of an expirin~ lease shall be deternuned
according to the following table:
Applicant's Investment
(in U.S. Do(lars) Maximum
is at Least Term of Years
L,ess than $100,000 5
$100,000 15
- $125,000 16
$150,000 17
$175,000 18
$200,000 19
$225,000 20
$250,000 21
$275,000 22
$300,000 23
$325,000 24
$350,000 25
$375,000 26
$400,000 27
$425,000 28
$450,000 29
$4'75,000 30
$500,000 31
$525,000 32
$550,000 33
$575,000 34
$600,000 or more 35
(2) the maximum term extension for an existing lease shall be one (1) year for each $25,000
of additional investment, provided that the total of the remaining lease term and the extension
shail not exceed 35 years.
(e) In the lease granted to the applicant, the City Manager will include a provision requiring the
applicant to substantially complete the proposed permanent improvements within a reasonabie
period of time, considering the cost and nature of the improvements. Provided however, that the
time allowed shall not exceed 24 months after the effective date of the lease.
(Y~ In the lease extension granted to the applicant, the City Manager wili include a provision
requiring the applicant to complete the additional proposed permanent improvements within a
reasonable time period, considering the cost and nature of the improvements provided that the
time period shall not exceed twenty-four (24) months after the effective date of the lease
extension.
(g) The City Manager wiil include a provision in a lease or lease extension requiring the lessee to
provide a performance bond, deposit, personal guarantee, or other security if the Manager
determines security is necessary or prudent to ensure the applicant's completion of the
permanent improvements within the time period set under (e) or (~ of this section. The City
Manager will deternune the form and amount of the security according to the bast interest of the
Ordinance No. 2180-2006 Attactunent B
Page 6 of 10
City, considering the nature and scope of the proposed improvements and the financial
cesponsibility of the applicant.
(h) The applicant shall, within 30 days after compleCion of the permanent improvements, submit
to the City Manager written documentation that the improvements have been completed as
required under (e) or (~ of this section.
(i) If the applicant shows good cause to the City Manager, and the Manager deternunes the
action is not inconsistent with Yhe City's best interest, the Manager may grant an extension that is
sufficient to allow for the completion of the permanent improvements or for submission of
dpcumentation that the permanent improvements have been completed under this section. No
extension or combination of extensions granted under either subsection (e) or (~ will exceed 12
months.
(j) If, within the time required under (e) or (~ of this section, including any extension granted
under (i) of this section, the applicant faiis to complete the required permanent improvements,
the City Manager will execute the forfeiture of the performance bond, deposit, personal
guarantee, or other security posted by the applicant under (g) of this section to the extent
necessary to reimburse the City for all costs and damages, including administrative and legal
costs, arising from the applicant's failure to complete the required improvements, and initiate
canceilation of the lease or reduce the term of the lease to a period consistent with the portion of
the improvements substantially completed in a timely manner according to the best interests of
the City.
(k) When used in this section, the following terms shall have the meanings given:
(1) "expiring lease," means a lease with less than one (1) yeaz of term remaining;
(2) "existing lease," means a lease with at least one (1) year of term remaining;
(3) "permanent improvement," a fixed addition or change to land that is not temporary or
portable;
(i) "permanent improvement" includes
(A) a building, building addition, retaining wall, storage tank, earthwork, fill
material, gravel, and pavement; and
(B) remediation of contamination for which the applicant is not responsible;
(ii) "permanent improvement" excludes items of ordinary maintenance, such as glass
replacement, painting, roof repairs, door repairs, plumbing repairs, floor covering
replacement, or pavement patching.
21.10.100 Rental rate determination.
(a) Beginning in 200'7 and at intervals of approximately five (5) yeazs thereafter, the City
Manager shall retain the services of an independent, qualified real estate appraiser, certified
under Alaska 5tatute 08.87 to determine a zone-based squaze foot lease rate for all land within
the Airport Reserve that is under lease or available for lease based on the fair mazket value of the
property and the appropriate market lease rate for property within the Airport Reserve. Lease
applications filed after the effective date of this chapter but prior to completion of the initial lease
rate deternunation shall have a rental rate of eight percent (8%) of fair market value.
(b) Following the date on which the City Manager accepts the determinations made under (a) of
this section, the Manager shall establish rental amounts for leases as follows:
(1) for each new tease granted by the City under this chapter, the rental shall be as
deternuned under (a) of this section; and
Ordinance No. 2180-2006 Attachment B
Page 7 of 10
(2) for leases in existence prior to the effective date of this chapter, the lease rate shall be
determined as provided in the lease.
(c) Under this section, when deternuning the fair market value of the premises of an existing
lease, an appraiser shall appraise the property
(1) in its condition as of the inception of the lease;
(2) plus any improvements or amenities subsequently provided by the City; but
(3) excluding any improvements or amenities provided by the City under 21.10.110, if lessee
has reimbursed the City, or entered 'anto an agreement to reimburse the City, for the cost of
_1he improvements or amenities.
Z1.10.110 Reimbursement for city-constructed improvements.
(a) The City Manager may include in a lease a requirement for the lessee to reimburse the City
for the City's cost of:
(1) land clearing, gravel fill, utility extensions and other improvements or amenities on or in
direct connection with the premises, constructed by the City prior to the effective date of the
lease;or
(2) land clearing, gravel fill, utility extensions and other improvements or amenities on or in
direct connection with the premises, which the City agrees to consuuct as a condition of the
lease, subject to City Council approval.
(b) The l.essee shall reimburse the City for the City's cost of constructing the improvements in
ten (10) equal annual payments, plus interest at eight percent (8%) per year on the unpaid
balance. The I..essee may pay the entire remaining balance to the City at any time during the
term of the lease. .
21.10.120 Lease utilization.
Leased lands shall be utilized for purposes within the scope of the application, the terms
of the lease and in confornuty with the ordinances of the City, and an substantial conformity with
the Comprehensive Plan and Airport Master Plan. Utilization or development for other than the
allowed uses shail consritute a violation of the lease and subject the lease to cancellation at any
time. Failure to substandally complete the development plan for the land shall consdtute
grounds for cancellation.
21.10.130 Biddfng peocedure.
With che approval of the City Councii, the City Manager may designate a specific lot or
lots to be leased through competitlve sealed bid. In a sealed bid offering, the City Manager shall
award the lease to the qualified bidder that offers the highest one-time premium payment, in
addition to the lease rent established under this chapter. Provided however, ehat high bidder and
the bidder's lease proposal shail be subject to all pmvisions of lease application review and
approval under this chapter.
21.10.140 Lease execution.
When issuing a lease to an applicant, the City Manager shall hand deliver or mail the
document Yo the applicant. The applicant shall have thirty (30) days from the date on which the
lease is hand delivered to the applicant or deposited in the U.S. mail within which to execute and
return the lease to the City Manager. If the applicant shows good cause to the City Manager, and
the Manager determines the action is not inconsistent with the City's best interest, the Manager
Ordinance No. 2180-2006 Attachment B
Page 8 of 10
will grant an extension not exceeding thirty (30) days for the applicant to execute and return the
lease. Upon the failure of the applicant to timely execu[e and retum the lease agreement, the
City Manager shall withdraw the offer of the lease in writing.
21.10.150 Form of lease.
(a) When leasing land under this Title 21, the City Manager shall use a standard lease form that
is:
(1) drafted to
(i) provide a reasonable basis for the lessee's use of the premises;
" (ii) foster the safe, effective, and efficient operation of the airport;
(iii) conform with the applicable requirements of the KMC, including this Title 21,
Alaska statutes, Federal Aviation Administration regulations, and other applicable federal
law; and
(iv) provide for the best interest of the City.
(2) approved as to form by the City Attomey; and
(3) adopted by resolution of the City Council.
(b) The City Manager may enter into a land lease that deviates from the standard form adopted
under (a) of this section, if
(1) the Manager believes the action is in the best interest of the City;
(2) the lease is approved as to form by the City Attorney; and
(3} the lease is approved by resolution of the City Council.
2L10.160 Re-evaluation of rent.
(a) At intervals of not less than five (5) years, or at such other time as may be specified in a lease
executed before the effective date of the enactment of this section, the City Manager shall
increase or decrease the rent chazged in the lease to the amount determined under 21.10.100.
(b) The City Manager shali change the rent in a lease by giving the lessee written notice at least
thirty (30) days in advance of the effective date of the change.
(c) The "Fair Mazket Value" of the Premises shall be equal to the then-fair market rate for
similaz commercial property in the City of Kenai, Alaska (the "Relevant Area"). City shall give
notice to L.essee of City's estimation of the Fair Market Value not later than thirty (30} days prior
to the expiration of the then-applicable five-yeaz period, as evidenced and supported by the
written opinion of a real estate appraiser certi~ed under Alaska Statute 8.8'7, selected and paid
for by the City, fanuliaz with the Relevant Area and who would qualify as an expert witness ([he
"First Appraiser"). If Lessee disagrees with such estimate, it shail advise the City in writing
thereof within thirty (30) days of I.essee's receipt of such estimate, as evidenced and supported
by the written opinion of a real estate appraiser certified under Alaska S[atute 8.87 (selected and
paid for by I.essee) familiaz with the Relevant Area and who would qualify as an expert witness
(the "Second Appraiser"). The parties shall promptly meet to attempt to resolve [heir differences
between the First Appraiser and the Second Appraiser concerning the Fair Market Value of the
Premises. If City and I.essee cannot agree upon such value then, with all deliberate speed, they
shall direct the First Appraiser and the Second Appraiser to expeditiously and mutually select a
third real estate appraiser qualified under Alaska Statute 8.87 (selected and paid for jointly by the
parties) familiar with the Relevant Area (the `"I'hird Appraiser"). Within thirty (30) days after
the Third Appraiser has been appointed, the Third Appraiser shall decide which of the two
respective appraisais from the First Appraiser and the Second Appraiser most closely reflects the
Ordinance No. 2180-2006 Attachment B
Page 9 of 10
Fair Market Value of the Premises. The Fair Market Value of the Premises shall isebuttably be
presumed to be the value contained in such appraisal selected by the Third Appraiser, and the
rental shall be redetermined based on such value. Notwiths[anding anything to the contrary
herein, rental shall continue to be paid at the then-applicable rate until any such new rental rate is
established, and Lessee and City shall promptly pay or refund, as the case may be, any variance
in the rental, without interest thereon accruing to the extent to paid/refunded in a timely fashion.
21.10.170 Use Permits
= The councii may authorize the city manager to grant permits for the temporary use of real
property owned by the city for a period not to exceed one (i) year, without appraisal of the value
of the property or competitive process, for any purpose compatible with the zoning of the land,
and on such terms and for such rentals as the council shall determine.
21.10.180 Acquisition of Real Property
(a) The city, by authorization of the city council, expressed in a resolution for such purpose, may
purchase or acquire an interest in, lease or real property needed for a public use within the airport
reserve on such terms and conditions as the council shall detemvne, but no purchase shall be
made until a qualified appraiser has appraised the property and given the councit an independent
opinion as to the full and true value thereof;
(b) Because of the unique value of real property, the city need not acquire or lease real property
by competitive bidding.
Ordinance No. 2180-2006 Attachment B
Page 10 of 10
Chapter 21.15
LEASE AND SALE OF AIRPORT LAND OUTSIDE
OF THE AIRPORT RESERVE
Sections:
21.15.010 Airport land outside of the Airport Reserve.
21.15.020 Qualifications of applicants or bidders.
2~15.030 Applications.
21.15.040 Filing fee and deposit.
21.15.050 Rights prior to leasing.
21.15.060 Processing procedure.
21.15.070 Review.
21.15.080 Appraisat.
21.15.090 Terms of lease.
21.15.100 Annual minimum rentat.
21.15.110 Bidding procedure.
21.15.120 Principles and policy of lease rates.
21.15.130 Reimbursement for city-constcucted improvements.
21.15.140 Lease execution.
21.15.150 Lease utiliaation.
21.15.160 Form of lease.
21.15.170 Conveyance to encourage new enterprises.
21.15.180 Sale.
21.15.190 Sale procedure.
21.15.200 Terms for financing sale of City lands.
21.15.210 Determination as to need for public use.
21.15.220 Property exchanges.
21.15.230 Property sale to adjacent owners.
21.15.240 Grant or devotion.
21.15.250 Use permits.
21.15.260 Acquisition of real property.
21.15.010 Airport land outside of the Airport Reserve.
(a) This chapter applies to aiiport land outside of the Airport Reserve.
(b) The City may sell, convey, exchange, transfer, donate, dedicate, direct, or assign to use, or
otherwise dispose of airport land outside of the Airport Reserve, including property acquired,
held for, or devoted to a public use, in accordance with this chapter. Disposal or sale of lands
shall be made only when, in the judgment of the City Council, such lands aze not required by the
City for a public purpose.
(c) The City may lease, sell or dispose of real property by warranty or quit-claim deed, easement,
grant, permit, license, deed of tnast, mortgage, conttact for sale of real property> plat dedication,
lease, or any other lawful method or mode of conveyance or grant. Any instrument requiring
execution by the City shall be signed by the City Manager and attested by the City Clerk. The
form of any instrument shail be approved by the City Attorney.
Ordanance 2180-2006 Attachme~t C
Page I of 11
(d} The provisions of this chapter shall not alter or amend the terms or rights granted under
leases existing prior to the effective date of this chapter.
(e) Pending lease applications filed prior to the effective date of this chapter shall come under the
cunently existing provisions of KNIC 21.10-20 and KMC 22.05.030-.045. Otherwise the
pmvisions of this chapter shall apply.
21.15.020 Qualifications of appl'ecants or bidders.
An applicant or bidder for a lease is qualified if the appiicant nr bidder:
(a~Is an individual at least eighteen (18) yeazs of age or over; or
(b) Is a group, association, or corporation which is authorized to conduct business under the laws
of Alaska;or
(c) Is acting as an agent for another and has qualified by filing with the City Manager a proper
power of attorney or a letter of authorization creating such agency. The agent shall represent
only (1) one principal to the exclusion of himself. The term "agenP' inctudes real estate brokers
and agents.
21.15.030 Apptications.
(a) Atl applications for lease of lands shail be filed with the City Manager on forms provided by
the City available at City Hall. Applications shall be dated on receipt and payment of filing fee
and deposit. No application will be accepted by the City Manager unless it appears to the City
Manager to be complete. Filing fees aze not refundable.
(b) With every application, the applicane shali submit a development plan, showing and stating:
(1) The purpose of the proposed lease;
(2) The use, value and nature of improvements to be constructed;
(3) The type of construction;
(4) The dates construction is estimated to commence and be completed (ma~cimum of two (2)
yeazs); and
(5) Whether intended use complies with the zoning ordinance and comprehensive plan of the
City. Applications shall become a part of the lease.
21.15.040 Filing fee and deposit.
(a) When submitting an application for lease of land, the applicant shall
(1) pay a non-refundable filing fee in the amount of one hundred dollars ($100.00); and
(2) make a deposit to show good faith and secure the City in payment of any costs in the
following amounts:
(i) an appraisal cost recovery deposit of two thousand dollazs ($2,000.00); and
(ii) an engineering, surveying and consulting cost recovery deposit of two thousand
dollars ($2,000.00).
(b) If the City decides to reject the applicant's application and not enter into a lease with the
applicanC through no fault of the applicant or failure of the applicant to comply with any
requirement of this chapter, any deposit made under (a)(2) of this secaon wiil be returned to the
applicant.
(c) If the City enters into a lease with the applicant any deposit made by the applicant under
(a)(2) of this section will be applied to the City's engineering, appraisal, and consulting costs
related to the processing of the applicant's application and entering into the lease. The City will
apply any unused balance of a deposit to the rent payable under the lease. If the City's costs
Ordinance 2180-2006 Attachment C
Page 2 of 11
exceed the amount of any deposit, the applicant shall pay the shortage to the City as a condition
of the lease.
(d) If the applicant fails to comply with any requirement of this chapter, causes inordinate delay,
as determined by the City Manager, or refuses [o sign a lease offered to the applicant, the City
Manager wiil reject the applicant's application and apply any deposit made by the applicant
under (a) of this section to the City's appraisal, engineering, and consulting costs incurred in
connection with the applicant's application If the City's costs for appraisal, engineering and
consulting costs exceed [he deposits, the applicant will be responsible for these costs. The City
will return any unused deposit balance to the applicant.
21.15.050 Rights prior to leasing.
The filing of an application for a lease shall give the applicant no right to lease or to the
use of the land for which they have applied. The application shall expire within twelve (12}
months after the application has been made if a lease has not been entered into between the City
and the applicant by that time unless the City Council for good cause grants an extension. No
extension may be granted for a period longer than six (6) additional months. I,ease rates are
subject to change on the basis of an appraisal done every twelve (12) months on the property
applied for.
21.15.060 Processing procedure.
(a) Applications shall be forwarded to the Planning and Zoning Commission upon receipt. The
Planning and Zoning Commission shall normally consider applications for specific lands on a
first-come, first-served basis if the Commission finds that the application is complete and
conforms to the comprehensive plan and the Kenai Zoning Code. Where there is difficulty in
obtaining a perfected application, details as to development plans, etc., or where the applicant
fails to comply with directions or requests of the Planning and Zoning Commission, any such
priority will be lost. If an application for the purchase of City-owned lands, previously
authorized for sale by the Council, is received by the City prior to the Kenai Planning and
Zoning Commission making an affirmative or negative recommendation to the Council
regarding the lease application for the same property, the City may elect to sell said property in
accordance with the provisions of the Code.
(b) The City Council shall normally consider a lease proposal only after approvai of the Planning
and Zoning Commission. However, appeals of Planning and Zoning Commission disapproval
may be made to the City Council. Completed lease applications must be presented to the City
Council w'rthin thirty (30) days after approval by the Planning and Zoning Commission.
(c) Where there aze two (2) or more applications for the same airport lands for different uses,
then if the Planning and Zoning Commission makes a finding that a subsequent application
would result in use of the lands for a higher and better purpose with a greater benefit to the City
of Kenai and the citizens thereof, then the lease witl be issued to such applicant notwithstanding
the provisions of subparagraph (a) in this section which provide for leasing on a first-come, first-
served basis. Any applicant may appeal to the City Councii from a finding or a refusal to find by
the Planning and Zoning Commission by filing an appeal with the City Clerk within seven (7)
days after the finding is made or refused by the Pianning and Zoning Commission.
(d) The decision whether or not to lease land rests in the sole discretion of the City Council.
Ordinance 2180-2006 Attachment C
Page 3 of 11
21.15.070 Review.
No leased land may be changed in use, nor may any renewal lease be issued until the
proposed use or renewal has been reviewed by the Planning Commission and approved by the
Council.
21.15.080 Appraisal.
No land shali be leased, or a renewal lease issued, unless che same has been appraised
within a twelve (12) month period prior to the date fixed for beginning of the term of the lease or
repewal lease. No land shall be leased for less than the approved appraised annual rental.
Appraisals shall reflect the number and value of City services rendered the land in question.
21.15.090 Terms of lease.
All leases shall be approved by the City Council before the same shall become effective.
The term of any given lease shall depend upon the durability of the proposed use, the amount of
investment in improvement proposed and made, and the nature of the improvement proposed
with respect to durability and time required to amortize the proposed investment.
21.15.100 Annual menimum rentaL
(a) Annual minimum rentals shali be computed from the approved appraised mazket value
utilizing the method as described in KMC 21.15.120 below.
(b) Upon execution of the lease, the lands become tasable to the extent of its leasehold interest
and lessee shall pay atl reai property taxes levied upon such leasehold interest in these lands, and
shall pay any special assessments and ta7ces as if he were the owner of said land.
(c) Rent shall be paid annually in advance. Said payments shall be prorated to conform to the
City of Kenai's fiscal yeaz beginning July 1 and ending June 30. If the equivalent monthly
payment exceeds two hundred dollars ($200.00), then the lessee shall have the option of making
payments on a monthly basis.
(d) I,essee shall be responsible for all sales taxes applicable to its operations.
21.15.110 Bidding procedure.
As an exception to general policy listed above, the City Council may designate a specific
lot or lots to be made available only for bid. This provision shall apply only when there is no
outstanding application pending on the lot or lots. As designated, sealed bids shall be received
offering a one-time premium in addition to the established lease rate. Highest bid, however,
shali be subject to all pmvisions of review and approval established for all other lease
applications.
21.15.120 Principles and policy of tease rates.
(a) A fair return to the Aitport System is mandated by the terms and conditions of the quitclaim
deed and appmpriate deeds of release, granting these lands to the Airport System by the Federal
Govemment. To ensure a fair return, ail leases for a period in excess of five (5) years shall
include a redeternunation clause as of the fifth anniversary, and all lands for lease shall be
appraised prior to lease and again prior to redeterminadon. Lzase rateso
(1) Shall be based on fair market value of the land, including an appropriate consideradon of
facilities and services available (public water, public sewer, storm sewers, and other
Ordinance 2180-2Q06 Attachment C
Page 4 of I 1
public utilities) as determined by a qualified independent appraiser, considering the besC
use of the specified land; and,
(2} Shall be eight percent (8 %) of fair mazket value.
(b} For leases in existence prior to the effecCive date of this chapter, the lease rate
redeternunation shall be as provided in the lease.
(c) The City Manager shall change the rent in a lease by giving the lessee written notice at least
thirty (30) days in advance of the effective date of the change.
(d) The "Fair Mazket Value" of the Premises shall be equal to the then-fair mazket rate for
similar commercial property in the City of Kenai, Alaska (the "Relevant Area"). City shall give
notice to I.essee of City's estimation of the Fair Market Value not later than thirty (30) days prior
to the exgiration of the then-applicable five-year period, as evidenced and supported by the
written opinion of a real estate appraiser certified under Alaska Statute 8.87, selected and paid
fot by the City, familiar with the Relevant Area and who would qualify as an expert witness (the
"First Appraiser"). If I.essee disagrees with such estimate, it shall advise the City in writing
thereof within thirty (30) days of Lessee's receip[ of such estimate, as evidenced and supported
by the written opinion of a real estate appraiser certified under Alaska Statute 8.87 (selected and
paid for by I.essee) familiaz with the Relevant Area and who would qualify as an expert witness
(the "Second Appraiser"). The parties shall promptly meet to attempt to resolve their differences
between the First Appraiser and the Second Appraiser concerning the Fair Mazket Value of the
Premises. If City and L,essee cannot agree upon such value then, with all deliberate speed, they
shall direct the First Appraiser and the Second Appraiser to expeditiously and mutually select a
third real estate appraiser certified under Alaska Statute 8.87 (selected and paid for jointly by the
parties) familiar with the Relevant Area (the "Third Appraiser"). Within thirty (30) days after
the Third Appraiser has been appointed, the Third Appraiser shall decide which of the two
respective appraisais from the First Appraiser and the Second Appraiser most closely reflects the
Fair Mazket Value of the Premises. The Fair Market Value of the Premises shall irrebuttabiy be
presumed to be the value contained in such appraisal selected by the Third Appraiser, and the
rental shali be redetermined based on such value. Notwithstanding anything to the contrary
herein, rental shall continue to be paid at the then-applicable rate until any such new rental rate is
established, and Lessee and City shall promptly pay or refund, as the case may be, any variance
in the rental, without interest thereon accruing to the extent to paid(refunded in a timely fashion.
21.15.130 Reimbursement for city-constructed improvements.
(a) The City Manager may include in a lease a requirement for the lessee to reimburse the City
for the City's cost of
(1) land ciearing, gravel fill, utility extensions and other improvements or amenities on or in
direct connection with the premises, constructed by the City prior to the effective date of
the lease; or
(2) land clearing, gravel fill, utility extensions and other improvements or amenities on or in
direct connection with the premises, which the City agrees to construct as a condition of
the lease, subject to City Council approval.
(b) The I.essee shall reimburse the City for the City's cost of constructing the improvements in
ten (10) equal annual payments, plus interest at eight percent (8%) per yeaz on the unpaid
balance. The Lessee may pay the entire remaining balance to the City at any time during the
term of the lease.
Ordinance 2180-2006 Attachment C
Page 5 of I 1
21.15.140 Lease execution.
The lease applicant shall execute and return the appropriate lease agreement w;th the City
of Kenai within thirty (30) days of mailing the agreement to said applicant. The lease agreement
shall be prepazed in accordance with the requirements of this title. Failure to execute and return
the lease agreement within the specified period shall result in the forfeiture of all leasing rights.
21.15.150 Lease utilization.
Leased lands shall be utilized for puiposes within the scope of the application, the terms
of~he lease and in confomrity with the ordinances of the City, and in substantial confornuty with
the comprehensive plan. Utilization or development for other than the allowed uses shall
constitute a violation of the lease and subject the lease to canceliation at any time. Failure to
substantially complete the development plan for the land, consistent with the proposed use and
terms of the lease, shali constitute grounds for cancellation.
21.15.160 Form of lease.
(a) When leasing land under this Title 21, the City Manager shali use a standacd lease form that
is
(1) drafted to
(i) provide a reasonable basis for the lessee's use of the premises;
(ii) foster the safe, effective, and efficient operation of the airport;
(iii) conform with the applicable requirements of the KMC, inciuding this Title 21,
Alaska statutes, Federal Aviation Administration reguladons, and other applicable
federal law; and °
(iv) provide for the best interest of the City.
(2) approved as to form by the City Attorney; and
(3) adopted by resolution of the City Council.
(b) The City Manager may enter into a land lease that deviates from the standard form adopted
under (a) of this section, if
(1) the Manager believes the action is in the best interest of the City; and
(2) the lease is approved as to form by the City Attomey; and
(3) the lease is approved by resolution of tfie City Council.
21.15.170 Conveyance to encourage new enterprises.
(a) Notwithstanding any other provisions of this chapter, where it is found that encouragement of
a new commerciai, industrial or non-profit enteiprise would increase the economic stability of
the City of Kenai and would be beneficial to the City of Kenai, the City Council by resolution so
findang may direct conveyance of one or more pazcels of City land by t6e City Manager to such
eneerprise upon such terms as to price, conditions of conveyance, and with such contingencies as
may be set forth in said resolution.
(b) In the event the land directed to be conveyed under subsection (a) above consists in patt or in
whole of airport lands, then the resolution ordering its conveyance will not be effective undl the
City Council by ordinance has appropriated from the general fund ro be dedicated to the airport
the difference between the appraised fair mazket value of said airport lands and the purchase
price, if any, set forth in said resolution.
Ord'enance 2180-2006 Attachment C
Page 6 of 11
; 21.15.180 Sale.
(a} Airport land outside the airport reserve to which the City of Kenai holds title which are not
restricted from sale by the Deed of Conveyance to the City, or which have been released from
such restrictions, which the City Council has determined are not required for a public purpose,
may be listed for sale by the City Manager, except that lands which have been leased shall not be
sold unless the I.essee has made a written request to the City to place the land for sale. The
decision whether or not to sell the land rests in the sole discretion of the City.
(b) Sales of land pursuant to subsection (a) above shail be made at not less than fair mazket
vatue. The purchaser shall execute the "Agreement For Sale of Land" within six months of the
date of appraisai. The City Manager has the opdon to dispose of such properties in accordance
with the sale procedures set out in this Title:
(1) By negotiated sale; or
(2) By outcry auction to the highest responsible bidder; or
(3) By competitive sealed bids to the highest responsible bidder.
In the event that the sale is not closed within six months of the date of appraisal, the buyer will
be charged, upon closing, interest computed in accordance with the applicable provisions of the
Kenai Municipal Code, based upon the total sales price for the number of days past the
expiration of the six-month period.
21.15.190 Sale procedure.
(a) The City Manager will obtain such an appraisal for a determination of the minimum price on
said land.
(b) Where any party, hereinafter called "Applicant," requests that a tract or tracts of land be sold
for which an appraisal wili be required, which wiii require subdividing, platting, or surveying
and staking, or which will require advertising or incutring any other expenditures by the City
prior ta sale,
(1) No actions in preparation for sale will be taken by the City until an agreement to purchase
shall be properly executed and filed with the City Manager for the purchase of such land
with payment of sufficient good faith deposit, which shall consist of cash or i[s equivalent
deposited with the Finance Officer of the City of Kenai, as may be deternuned by the
City Manager, to cover all expenses of the City and such agreement to purchase shall
further contain the agreement by applicant to pay any additional costs if said good faith
deposit is insufficient to pay all costs incurred by the City.
(2) If at any time during the process of preparing for sale, the applicant gives notice to the
City Manager of withdrawal of the request for sale, ths City Manager shall stop all
procedures, shali pay expenses incuaed prior to termination of sale procedures, and shatl
reimburse applicant for any good faith deposit advanced in excess of all expenses
incurred. (However, if another party desires the sale to proceed, files an application for
sale, executes and files an agreement to purchase, and advances sufficient funds
therefore, then the prior applicant will be reimbursed for expenses charges which can be
atuibuted to the subsequent applicant.)
(3) If all actions necessary for preparation for sale have been accomplished, and if neither the
applicant nor any other party purchases said land when first offered for sale after such
request, then all expenses incurred in preparation for the sale will be paid from the good-
faith deposit, and the balance, if any, shall be returned to the applicant. If the sums
Ordinance 2180-2006 Attac6ment C
Page 7 of 11
advanced as good faith deposit are insufficient to pay all of the costs, the applicant will
be billed for the balance due and normal collection procedures followed.
(4) If the land applied for is sold on public sale set in response to such request to anyone
other than applicant, then on closing of said sale, Che good-faith deposit will be refunded
in total to the appiicant. The City's expenses will be first deducted from the deposit of
the successful bidder.
(5) If the land in question is sold to applicant, the good-faith deposiC advanced, after
deducting the City's expenses, will be appiied on the payment due at closing.
(6) If the land in question is to be sold by sealed bid and the applicant has submitted a valid
~ bid, but said applicant is not the high bidder, he may purchase the land by tendering the
City a bid equal to the high bid within five days of the bid opening. If the land sale is
initiated in accordance with KMC 21.15.060(a), the applicant shall be defined as that
party submitting the initial lease application.
(c) If the tract of land proposed to be sold is leased ]and, the lessee may request the sale of said
land at not less than the fair market value. The cunent lessee may request to negotiate a sale
only after, to the satisfaction of the City Manager, development has been completed as detailed
in the development schedule which has been incorporated into the lease agreement. If there is no
development schedule, the lessee may request to purchase the property if there have been
substantial improvements as determined by the City Manager. The decision whether or not to
sell the land to the lessee rests in the sole discretion of the City.
(d) If the tract of land proposed to be sold is not leased land, or is leased land without substantial
improvements, then the tract of land may only be sold by outcry auction or by competitive sealed
bids. The decision whether or not to sell the land rests in the sole discretion of the City. If the
tract is to be put up for such competltive auction or sealed bid sale, notice of sale and the manner
in which the land is to be sold shall be published in a newspaper of general circulation within the
City once each week for two successive weeks not less than 30 days prior to the date of sale;
such notice shall also be posted in at least three public places within the City at least 30 days
prior to the date of sale, and such o[her notice may be given by such other means as may be
considered advisable by the City Manager. Such notice must contain:
(i} the legal description of the land,
(2) a brief physical description of the land,
(3) the area and general location of the land,
(4) the minimum acceptable offer for the land (which shall be its appraised fair market
value),
(5) the terms under which the (and wili be sold,
(6) any limitations on the sale of said land,
(7} the time and place set for the auction or bid opening,
(8) the amount of deposit to be submitted with each bid in order to cover the City's expenses
such as survey, appraisal, and reviews,
(9) any other matters concerning the sale of which the City Manager believes the public
should be informed.
(e) Where a real estate agent furnishes a buyer for City land, the closing agent shall be authorized
to pay said agent a real estate commission of five percent (5%) of the purchase price for the land
or five percent (5%) of the appraised fair mazket value of the land, whichever is lower, under the
following terms and conditions:
(1) The City Manager shall provide a non-exclusive listing of lands available for sale.
Ordinance 2180-2006 Attachment C
Page 8 of 11
(2) No commission shall be paid to an agent where said agent is a party, or in privity with a
party, to said sale.
(~ Closing of sale of City lands shall be handled by a title or escrow company within the city
which specializes in closing of real estate sales.
(g) Conveyance of City lands shall be by quit claim or warranty deed fumished by the City, and
buyers are advised that all such conveyances are subject to all liens, encumbrances, restrictions>
and covenants of record and are specifically, without being limited thereto, subject to any
unreleased restrictions contained in the deed or deeds by which the City received title to the land.
The deed shali be signed by the City Manager and attested by the City Clerk. The form of the
deed shali be approved by the City Attorney.
(h) If a buyer desires to obtain a preliminary commitment for title insurance or title insurance to
the land, then it shall be the responsibility of the buyer to obtain such commitment or insurance
and to pay for the same.
(i) If the tract or tracts of land aze sold under terms by which the City is to accept a note as a
portion of the purchase price, the note and accompanying deed of trust must be prepared by an
attorney, but must be approved by the City Attorney prior to closing.
(j) Said note shall be placed for collection with a bank selected by the City Manager, which may
be changed from time to time, and which shall be the bank in which City funds aze deposited.
The set-up fee to initiate collection may be negotiated, and the buyer shall pay the annual
collection fees for such bank collection.
(k) To enable the City to compete on an equal basis with private enterprise in lands disposal, the
City Manager is hereby authorized to negotiate a division of the costs of sale listed in KMC
21.15.190(~(g)(h)(i) and (j) to a maximum of fifty percent (50%) of the required costs being
borne by the City.
21.15.200 Terms for ~nancing sale of City lands.
(a) In order to expedite and facilitate the sale oP City lands, Che City Manager is hereby
authorized to accept terms for said sales and may accept a note secured by a deed of trust for a
portion of the purchase price thereof, subject to the following restrictions:
(1) If the sale is to a lessee who has placed a lien for financing upon the land or
improvements, then the City Manager is not authorized to sell the land except for total
cash payment, provided, however, that the City Manager may accept a note secured by a
deed of trust subordinate to the existing security interest if the amount of the note thereby
secured is within the difference between the fair mazket value of the land with
improvements, and the sum of all prior security interests. The sale documents shall be
subject to the same restrictions contained in the lease as the lease provides at the time of
sale.
(2) Prior to making a determination to accept a note and deed of trust from a prospective
purchaser, the City Manager shall secure a preliminary commitment for titie insurance (at
purchaser's expense) and a review of the grantee index covering the party desiring to
purchase the land from the titie company in the local recording district, and no credit will
be advanced on such sale if there aze any delinquent liens or unpaid judgments found in
the title company report until any such judgments or liens are paid and releases therefore
have been filed.
(3) In the event of a credit sale, the down payment required shall be deternuned by the City
Manager, but shall not be less than fifteen percent (15%) of the sales price.
Ordinance 2180-2006 Attachment C
Page 9 of I 1
(b) If the CiCy Manager determines that it is in the City's intsrest to sell City lands, the sale shall
be either a cash transaction or by a note secured by a deed of trust, subject to paragraph (a)
above, and by no other means. The note and deed of trust shall carry terms as follows:
(1) The term of such note may be set by the City Manager, but is shall provide for monthly
payments and not exceed twenty (20) years unless a longer period for a specific sale of
land is approved by resolution of the City Council.
(2) Such note shall beac interest at a rate to be deternuned by the City Council by resolution.
21.15.210 Determination as to need for public use.
(aj Whether land shall be acquired, retained, devoted, or dedicated to a public use shall be
determined by ordinance which shall contain the public use for which said property is to be
dedicated, the legal description of the property, and the address or a general description of the
property sufficient to provide the public with notice of its location.
(b) Whether land previously dedicated to a public use should be dedicated to a different public
use or should no longer be needed by the City for public use shall be deternuned by the City
Council by ordinance which shall contain the new public use for which said property is to be
dedicated or the reason the land is no longer needed for public use, the legal description of the
property, and the address or a general description of the property sufficient to provide the public
with notice of its location.
21.15.220 Property exchanges.
The Councii may approve, by resolution, after public notice and an opportunity for public
hearing, the conveyance and exchange of a pazcel of City property for property owned by
another person subject to such conditions as Council may impose on the exchange, whenever in
the judgment of the City Council it is advantageous to the City to make the property exchange
and the City shall receive property (including a portion of money) at least equivalent to the value
of the property exchanged by the City.
21.15.230 Property sate to adjacent owners.
The council may approve, by resolution, after public notice and an opportunity for public
hearing, the sale and conveyance of a parcel of City property at its appraised value to the owner
of adjacent land whenever, in the judgment of the City Council, the parcel of land is of such
small size, shape, or location that it could not be put to practical use by any other party and, in
addition thereto, where there is no foreseeable need of the land for any future use by the City.
21.15.240 Grant or devotion.
(a) The Council, by ordinance, may lease, grant or devote real property no longer needed by the
City for a public purpose to the United States, the State of Alaska, a local political subdivision of
the State of Alaska (including the City of Kenai general fund), or any agency of any of these
governments or non-profit corporation, for a consideration agreed upon between the City and
grantee without a public sale if the grant or devotion is advantageous to the City.
(b) In the event the land directed to be conveyed under subsection (a) above consists in part or in
whole of airport lands, then the ordinance ordering its conveyance will not be effective until the
City Council by ordinance has appropriated from the general fund to be dedicated to the airport
the difference between the appraised fair market value of said airport lands and the purchase
price, if any, set forth in said resolution.
Ordinance 21 SO-2006 At[achment C
Page 10 of 11
21.15.250 Use permits.
The council may authorize the city manager to grant permits for the temporary use of real
property owned by the city for a period not to exceed one (1) yeaz, wiChout appraisal of the value
of the property or public auction, for any purpose compatible with the zoning of the land, and on
such terms and for such rentals as the council shall deternune.
21.15.260 Acquisition of Real Property
(a~ The city, by authorization of the city council, expressed in a resolution for such purpose, may
purchase or acquire an interest in, lease or real property needed for a public use within the airport
reserve on such terms and conditions as the council shall determine, but no purchase shall be
made until a qualified appraiser has appraised the property and given the council an independent
opinion as to the full and true value thereof;
(b) Because of the unique value of real property, the city need not acquire or lease real property
by competitive bidding.
Ordinance 2180-2006 Attachment C
Page 11 of I1
KMC 21.05.020
AIRPORT RESERVE BOUNDARY MAP
APPENDIX I
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, "V lla9e wit~t a Past, ~cpla~no-++
~~ ~~ ~~~~~, 210 Fidalgo Avenue, Kenai, Al~~ka 99611-7794
~ Telephone: (907) 283-7535 / Fax: (907) 283-3014
" www.ci.kenai.ak.us
theu~af
KENA~ SKA
MEMORANDUM
TO: Mayor Porter and Councilors
FROM: G'~ Cary R. Graves, City Attorney
DATE: August 10, 2006
RE: Airport Code Changes
This memorandum is intended to summazize the changes to KMC 21.05 (Airport Administration
and Operation), KMC 21.10 (Leasing of Airport Reserve Lands) and KMC 21.15 (Lease and
Sale of Airport Land Outside of the Airport Reserve). Because of the comprehensive nature of
the changes, a traditional legislative format would be too confusing to be a helpful toot in
tracking the changes. Instead, this memorandum will describe the differences in a narrative
fashion with references to the retevant code sections and the consultant's recommendations. I
hope this approach will be more user-friendly than legistative format.
Attached to this memorandum are the consultant's recommendations for changes to KMC 21.05
and KMC 21.10. The consultant (Steve Pavish) did not provide recommended changes to KMC
21.15 that will deal with airport land outside of the Airport Reserve. The Administration's
recommendations for KMC 21 are a combination of ideas taken from the consultant's
suggestions for the Airport Reserve and internal suggestions for management of those lands.
I should also note that the Administration does not expect this ordinance to be approved without
changes and that a substitute ordinance reflecting the concerns and issues brought up by Council,
Administration, commissioners and the pubiic could be prepared for the second public hearing.
1. KMC 21.05 AIRPORT ADMINISTRATION AND OPERATION
The primary change to this chapter of the code is the establishxnent of the Airport Reserve. The
new KMC 21.OSA10 establishes the reserve and KMC 21.05.020 sets the reserve boundaries.
No city-owned land within the reserve can be sold unless pursuant to a pre-existing lease
granting purchase rights to the lessee. See the new KMC 21.05.010(b). Much of the debate on
this issue has centered on the boundazies of the Airport Reverse. I anticipate a good deal more
debate and discussion will occur regarding the boundaries of the reserve.
Mayor Porter and Councilors
August 10, 2006
Page 2 of 10
The second major change to this chapter is the addition of the environmental regulations (the
new KMC 21.05.070). This section provides stricter environmental controls and regulation on
the airport.
The new KMC 21.05.040 deals with airport regulations. The current system is that the City
Manager (CM) has the power to adopt regulations for the airport and the Council has the
authority to repeal or revise those regulations by resolution. The consuitant reworded that
section but kept the same basic procedure in place for adoption and repeal or revision of
regulations.
There are no significant changes from the consultant's recommendations for KMC 21.05 in the
new KMC 21.05. A caveat to the above is that Mr. Pavish did not send a map recommendation
for the Airport Reserve boundazy with his proposals, so the map attached to the new KMC 21.05
is not a recommendation of his. The consultants did attach a map to the draft Supplemental
Master Plan and that is Attachment 1 to this memo. Attachment 2 is the map attached to
Ordinance 2180-2006. That map was generated after the joint Airpor[ Commission/KEDS
meeting.
It also should ba noted that Mr. Pavish's recommendations did not include the now-existing
KMC 21.05.045. That section deals with regulation of off-airport rental cazs. That section was
adopted in 2003 after a great deal of work by the Airport Commission and Councii. The .
Administration feels the omission of that section was an oversight and will recommend inclusion
of the old KMC 21.05.045 in the new ordinance.
2. KMC 21.10 LEASING OF AIRPORT RESERVE LANDS
This section is a comprehensive change to the City's leasing policies and procedures. It covers
land in the new Airport Reserve. Because of the comprehensive changes, section by section
review of the new ordinance is useful.
a. KMC 21.10.010 (Airport reserve land). This is a new housekeeping section, not included
in the consultanYs recommendations, that Administration thought was needed. It states:
I) the chapter regulates land in the Airport Reserve; 2) that rights under existing leases
aze not changed by the ordinance; and 3) pending lease applications remain under the
system in effect at the time the lease was filed.
b. KMC 21.10.020 (Lands available for leasing). This section specifies which land within
the reserve may be leased (i.e. land not currently used by the City such as runways, roads,
etc. or anticipated to be used by it). The old section stated that all airport land was
potentially available for lease. The change simply recognizes some reserve land should
be off the table for consideration for leasing. This new section is as recommended by the
consultant.
Mayor Porter and Councibrs
August 10, 2006
Page 3 of ]0
c. KMC 21.10.030 (Qualifications of applicants or bidders). This section covers the
qualifications of lease applicants. The only change from the existing code and
recommendations of the consultant are that the age of lease applicants was changed in the
new section from 19 to 18. That is to reflect that 18 is the age of majority now rather
than 19.
_ d. KMC 21.10.040 (Applications). There are some significant changes from the current
KMC 21.10.030. The new section KMC 21.10.040(b)(1)(iv) drops the two-year
mandatory wmpletion date for improvements. Airport Reserve property may not be
purchased upon completion of improvements. The City may still require a lease
applicant to change his proposed completion date in order to get lease approval. The
lease still may be canceled for failure to complete the developments within the approved
time frame (new KMC 2110.120).
The new lease application must state whether the intended use complies with the Airport
Layout Plan and the Airport Land Use Plan in addition to the zoning code and
comprehensive plan as now required (new KMC 21.10.040(b)(1)(v)).
The new KMC 21.10.040(b) requires a business plan, a site plan and a KPB tax
compliance certificate. It also states the CM may require submission of additional
information for the application. My understanding is that the KEDS group opposed the
inclusion of the business plan requirement because of the proprietary nature of the
financing and gross revenue provisions.
The only section deleted from the consultant's proposal was a section that required
inclusion of "an explanation of how that applicant intends to finance the construction of
the proposed improvements. If the applicant intends to borrow funds, the applicant must
include a letter from a bank or other lending institution expressing interest in providing
financing for the improvement." That subsection was removed because it was redundant.
The new KMC 21.10.040(b)(2)(iv) also requires that information.
e. KMC 21.10.050 (Filing Fee and Deposit). The new section has a$100 filing fee instead
of $20. The deposit to cover expenses is $4,000 ($2,000 for appraisal costs and $2,000
for engineering, surveying and consulting). The old deposit was $2,000 for land already
subdivided or $3,000 for un-subdivided land. The consultant recommended a$50 fiting
Fee with a$2,000 appraisal cost recovery fee and a$1,000 engineering, legal and
administrative fee.
£ KMC 21.10.060 (No right of occupancy; Application expiration). This section is
substantially similaz to old KMC 21.10.040. That section says lease applications are
good for one year and may be extended for six additional months. Lease appraisals are
good for tweive months. A thirty-day extension may be granted under the new section.
The consultanYs version was submitted prior to the ordinance extending the application
Mavor Porter and Councilors
August IQ 2006
Page 4 of 10
and appraisal time period from six months to one year. His version had the old time
frames in it. Otherwise the new version of KMC 21.10.060 is like the consultanYs.
g. K1~IC 21.10.070 (Application processing procedure). This process is substantially
changed from the old process in KMC 21.10.060 (Processing procedure). The old system
sent leases to the Airport Commission and to the Planning & Zoning Commission to see
_ if the proposed use was the highest and best use and if it conformed to the Airport Master
Plan and any other "goals set by the Commission or Council." Under the old system the
lease application, if approved, went to the Council. If the Planning & Zoning
Commission disapproved the appiication, the appiicant could appeal to the Council. The
old system aliows "conceptual applications" to be filed. Pve never seen one of them
actually filed. It also provides for the Commission and Council to choose the application
with the highest and best use if there are competing lease applications.
The new procedure has an initial review by the Assistant to the CM (for application
completeness and compliance with Title 21), the Airport Manager (for conformance with
the Airport Land Use Plan, Airport Layout Pfan, Airport Master Plan, FAA airport
regulations, AIP grant assurances, and airport operations), City Planner (for conformance
with the comprehensive plan, City zoning code, Airport Land Use Plan and future airport
developments), and the CM (for adequacy of business plan and construction financing).
The various staff inembers will recommend lease application approval, rejection or
alternatives to the CM.
The CM can then reject the application (stating his/her reasons) or refer the application to
the Airport Commission and Planning & Zoning Commission for review and comment
with recommendations from staff. The CM shall inform the Council of his/her
recommendations.
If the CM refers the application to the commissions, he/she shall consider their
recommendations and approve or reject the lease. If the CM's decision goes against the
commission's recommendations, the CM will refer the decision to Councii for their
concurrence. An applicant may appeal a rejection by the CM to the City Council.
Competing lease applications wilt be decided by the Councii after review of the CM's
and the commission's recommendations.
The new section adds the grounds for rejection of the lease appiication (KMC
21.10.070(g)). It also provides that the application procedure may be waived for leases to
government entities.
The process in the new KMC 21.10.070 added the following to the consuitant's
recommendations: I) the CM reviews the application's business plan and financing
arrangements; 2) the lease application goes to P& Z for review; 3) the appeal period is
15 days rather than 10; 4) "not in the best interest of the City" is added as a basis to denp
a lease appiication; and 5) the waiver process for government lease applicants.
Mayor Porter and Councilors
August (0, 2006
Page 5 of t0
It should be noted that a lease application is reviewed by Council oniy if the CM's
decision to approve or reject the lease is contrary to the recommendations of the
commission, or the applicanC appeals a rejection to the Council.
h. KMC 21.10.080 (Lease Amendment or Renewal). The old code said lease renewals went
to P& Z and the Council for review or changes in use (old KMC 21.10.070). KMC
21.10.080 is a new section that specifies the process is the same as applications (new
KMC 21.10.070) with some exceptions. The exceptions are: 1) a development plan and
business plan aze not required for applications not proposing new improvements on the
premises; 2) applications not adding a new business need not submit a business plan; 3)
an appraisal is not required for an appiication that will not change the size of the leased
premises; and 4) appraisal and engineering, surveying, and consulting deposits are not
required for lease changes that aze only administrative in nature and do not alter the use,
size or value of the premises or if no administrative costs will be incurred.
i. KMC 21.10.090 (Length of lease term). T'his section is significantly different than we
currently use. The old KMC 21.10.080 only provided that the term of the lease be based
on the amount and nature of investment in the improvement. The City adopted some
guidelines used by the State regarding a ma~cimum lease term of 55 years for investments
of $375,000 or more. The matrix included here as Attachment 3 is what is currently
used.
The consultant recommended a matrix beginning with a minimum 6-year term for
$12,000 investment with one additional year for each additional $12,000 invested, up to a
35-year lease for $360,000. The Administration did not agree with that recommendation
and changed it in the new KMC 21.10.090. Investments of less than $100,000 only get a
5-year lease term. The idea is that less than $100,000 is not really a major investment
and should only get a relatively short-term lease. Investments over $100,000 get IS
years. After that, each additional $25,000 investment adds another year to the lease term
for a maximum of 35 yeazs. Under the Administration's proposal, a 35-year lease would
require a$600,000 investment rather that $360,000 as suggested by the consultant.
Lease improvements must be completed in two yeazs and the CM may require security
(i.e. performance bonds, deposit, or personal guarantees) to ensure devetopment. A
maximum extension of 12 months is allowed for development.
Lease extensions will be based on the value of new improvements to the premises under
the new code. Lease renewals will be based on the value of the existing improvements to
the premises rather than new improvements (new KMC 21.10.090(b)). The consultant
recommended renewals be based on new improvements. The KEDS group thought that
would penalize existing businesses on the airport, and the Administration agreed with
that position.
Mayor Porter and Councilors
August 10, 2006
Page 6 of t0
j. KMC 21.10100 (Rental rate determination). This is a major change from the current
system, which is 6% of fair market value. The consultants recommended a new system
based on a five-yeaz reserve-wide based appraisal that would determine the fair mazket
value of property and then apply a"capitalization rate." The "capitalization rate" would
not be fixed by ordinance but would be whatever the appraiser thought was the
appropriate rate when the appraisal was done.
The Administration took a different approach. The new ordinance in KMC 21.10.100(a)
also uses a five-yeaz reserve-wide appraisal. The difference is that the appraiser would
divide the reserve into zones and come to a square-foot lease value for each zone. Here's
how it is envisioned to work. A lessee would come in and apply to lease a lot. Staff
would look up the appraisal zone it is in and multiply the squaze-foot rate by the square
Feet to be leased and come up with the annual rate. The State uses a similar system.
Existing leases would continue under the system in their lease. Any lease applications
filed prior to the first reserve-wide appraisal would be handled on an 8% (up from 6%) of
fair market value approach.
k. KMC 21.10.110 (Reimbursement for City-constructed projects). This is a new provision
that would allow the Ciry to recapture money spent on developing land by adding a
surcharge to the lease rate. The draft ordinance is the same as the consultant .
recommended.
1. KMC 21.10.120 (Lease Utilization). This is based on the old KMC 21.15.020. It
provides that the lease must be used for the purpose in the application and in compliance
with the comprehensive plan. The new version adds that the lease must also compfy with
the Airport Master Plan.
m. KMC 21.10.130 (Bidding Procedure). This is based on the existing KMC 21.10.120.
The new section is substantially the same as the old. It allows the City to bid a leased lot,
with the winner to be determined by the person bidding the highest one-time premium to
be paid in addition to the normal rent. It is as recommended by the consuitant.
n. KMC 21.10.140 (Lease execution). This is based on the old KMC 21.10.140. It requires
the lease be signed within 30 days. The new section allows a 30-day extension to be
granted. It is as recommended by the consultant.
o. KMC 21.10.150 (Form of Lease). This is new. The existing code has a laundry list of
items to be covered in leases (old KMC 21.15.010-240 and KMC 21.20.010-350).
The consultant recommended changing that approach. This ordinance provides that the
City adopt a standard lease form. The lease form will be approved by the Council. Any
lease that deviates from the form must be authorized by a resolution of the Council. The
new ordinance is as recommended by the consultant.
Mavor Porter and Councilors
August 10, 2006
Page 7 of 10
p. KMC 21.10.160 (Re-evaluation of Rent). This is the provision that requires re-evatuation
of lease rates every five years. The old section is KNIC 21.10.130. The old section has a
cap on the increase of leases for aeronautical purposes of 50%. The cap was instituted
during the "boom" years when real estate values were climbing rapidly. The general
fund had to pay the airport for any losses due to the cap. The new ordinance eliminates
that cap.
The old ordinance did not have an appeal method if the lessee did not agree with the re-
evaluation of rent. The new ordinance has an appeal mechanism. The lessee would get
an appraisal. The City's appraiser and the lessee's appraiser would meet to see if they
could resolve the dispute. If not, a third appraiser would be hired to choose between the
City's or lessee's valuation estimate. The consultant recommended that rent appeals go
to the Council to resolve instead of the method in the new ordinance.
q. KMC 21.10.170 (Use permits). This is a new section authorizing the CM to issue
special use permits for periods of less than one yeaz without appraisal or competitive
process. There is no provision in the old code about special use permits. 1'his issue was
not covered in the consultant's recommendation.
r. (KMC 21.10.180 (Acquisition of real property). This is a new section of the code
recognizing the City's ability to purchase real property. It states that because of the
unique nature of real property, the City need not purchase land by a competitive process.
An appraisal of the property's value must be presented to the Councii prior to any
resolution authorizing a purchase.
3. KMC 21.15 LEA5E AND SALE OF AIRPORT LAND OUTSIDE
OF THE AIRPORT RESERVE
This is the chapter dealing with airport land outside of the Airport Reserve. The consultant did
not send any recommended code revisions to us. The changes were drafred by the
Administration from the consultanYs recommendations regarding the Airport Reserve and our
own ideas about needed changes.
a. KMC 21.15.010 (Airport Iands outside of the Airport Reserve). This section is similar to
the old sections KMC 22.05.010-020. It refers to the City's ability to manage and
dispose of its airport land outside of the Airport Reserve. It provides that the new chapter
KMC 21.15 will not alter or amend the rights under existing leases and that pending
leases will be processed and awarded under the rules existing at the time of the
application.
b. KMC 21.15.020 (Qualifications of applicants or bidders). This is the same as the new
KMC 21.10:030. The only real change is that the age is changed from 19 to 18.
a KMC 21.15.030 (Applications). This section is the same as the old KMC 21.10.030.
Mayor Porter and Councilors
August lQ 2006
Page 8 of 10
d. KMC 21.15.040 (Filing fee and deposiC). This section raises filing Yees from $20 to
$100. The deposit is raised from $2,000 for subdivided property or $3,000 for un-
subdivided property to $4,000 (a $2,000 appraisal deposit and a$2,000 engineering,
surveying and consulting deposit). The requirements of the lease application are
unchanged from the old KMC 21.10.010.
~
e. KMC 21.15.050 (Rights prior to Leasing}. This section is the same as the old KMC
21.10.040.
f. KMC 21.15.060 (Processing procedure). This is lazgely the same as the existing KMC
21.10.060. It eliminated a phrase about the Pianning & Zoning considering "other goals
set by the Commission or City Council" in their review of the lease application. That
phrase was eliminated because it was too uncleaz what constituted "other goals."
g. KMC 21.15.070 (Review). This section is the same as the current KMC 21.10A`70.
h. KMC 21.15.080 (Appraisal). This section is the same as the old KMC 21.10.090.
i. KMC 21.15.090 (Terms of Lease). This section is the same as the old KMC 21.10.080.
j. KMC 21.15.100 (Annual Minimum Rental). This section is based on the current KMC
21.10.100. It eliminates some outdated language about sales taY and assessments.
k. KMC 21.15.110 (Bidding procedure). This section is the same as the old KMC
21.10.120.
I. KMC 21.15120 (Principles and policy of lease rates). This is based on the old KMC
21.10.130 with two major changes. The lease rate is determined by taking the fair market
value of the property times 8%. The old rate was 6%. The Administration felt 8% better
reflected current leasing practices. 'This section has also added the same lease rate appeal
provisions as the new KMC 21.10.160.
m. KMC 21.15.130 (Reimbursement for city-constructed improvements). This is a new
section. It is the same as the new KMC 21.10.110. It allows the City to impose a
surchazge to the lease rate to recover some costs of improving the property.
n. KMC 21.15.140 (Lease execution). This section is the same as the current KMC
21.10.040.
o. KMC 21.15.150 (Lease utilization). This is the same as the old KMC 21.15.020.
Mavor Porter and Councilors
August l0, 200G
Page 9 of I O
p. KMC 21.15.160 (Form of lease). This section is new. It is the same as the new KMC
21.10.150. It envisions the City using a Counci- approved lease form with leases entered
into deviating from the form requiring a resolution from Council.
q. KMC 21.15.170 (Conveyance to encourage new enterprises). This section is based on
the old KMC 22.05.025. That section allowed sale of property without competitive bid
z where "encouragement of a new industrial enterprise would be beneficial to the City of
Kenai." The Council sets the terms, prices and condiCions of sale and conveyance that it
determines are appropriate. The new section adds commercial or non-profit enterprises
to industriat enterprise as qualifying. If the sale is for less than fair mazket value, the
general fund would have to pay the airport fund for the difference.
An example of how the amended section could be used is a sale of "Millennium 5quare."
For that development the Council may wish to set the price at fair market value and
awazd the sale to the developer whose plans conform to the City's development goals for
the property rather than merely sell it to the highest bidder. The sale wouid have
development requirements and a reversion clause and compensation if the development
was not completed.
r. KMC 21.15.180 (Sale). This section is similar to the old KMC 22.05.030 except that it
makes it cleazer that the sale of land "rests in the sole discretion of the city."
s. KMC 21.15.190 (Sale Procedure). This section is based on the old KMC 21.15.040. The
major change is that a lessee will not automatically get the right to purchase leased
property for fair market value once the developments are completed. He/she may apply
to purchase, but the City has "sole discretion" in determining whether to sell the property.
That is a major change in City land policy.
t. KMC 21.15.200 (Terms for financing of City lands). This is the same as the old section
KMC 22.05.045.
u. KMC 21.15.210 (Determination as to need for public use). This section is the same as
the old section KMC 22.05.050 with one exception. The reference to tax foreclosed
pazcels was rernoved to reflect that the City will simply follow state law regarding the ta~c
foreclosure process.
v. KMC 21.15.220 (Property exchanges). This is the same as the old section KMC
22.05.070.
w. KMC 21.15.230 (Property sale to adjacent owners). This is the same as the old section
KMC 22.05.070.
x. KNIC 21.15.240 (Grant or devotion). This section is based on the old KMC 22.05.080. It
" allows conveyance of property upon terms and conditions set by the City (including
Mayor Porter and Councilors
August 10, 2006
Page 10 of 10
price) to federal, state or local government or non-profit entities without a wmpetitive
process if it is advantageous to the City. If the conveyance is for less than fair mazket
value, the general fund must make up the difference to the airport fund.
y. KMC 21.15.250 (Use permits). This is a new section and is the same as the new KMC
21.10.170. It allows the City Manager to issue special use permits for up to one yeaz
~ without a competitive process or appraisal.
z. KMC 21.15.260 (Acquisition of Real Property). This is the same as the new section
KMC 21.10.180. It recognizes the City's ability to purchase real properry. Given the
unique nature of land, a competitive process is not required; but an appraisai must be
given to the Council prior to the resolution authorizing the purchase.
Please let me know if you have questions.
CRG/sp
Attachments
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Attachment 1
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KMC 21.05.620
AIRPORT RESERVE BOUNDARY MAP
APPENDIX i
Faie Market Value, '
Purchase Price, or
Investment of at
Least the Following Terms of
~oflarAmount Years
u.oo 5
~,soo.oo s
~s,ooo.o0 7
22.500.00 B
30,000.00 9
37,500.00 10
45,000.00 11
52,500.00 12
60,000.00 13
67,500.00 14
75,000.00 75
82,500.00 i6
90,000.00 17
97,500.D0 18
105,000.00 79
712,500.00 20
~20,000.0o z~
127,500.00 22
135,000.00 23
142,500.00 24
150,000.00 25
157,500.00 26
165,000.00 27
172,500.00 28
180,000.00 29
187,500.00 30
795,000.00 31
202,500.00 32
210,000.00 33
217,500.00 34
225,000.00 35
232,500.00 36
240,000.00 37
247,500.00 38
255,000.00 39
262,500.00 40
270,000.00 41
277,500.00 42
285,000.00 43
292,500.00 44
300,000.00 45
307,500.00 46
375,000.00 47
322,500.00 48
330,000.00 49
337,500.00 50
345,000.00 51
352,500.00 52
360,000.00 53
367,500.00 54
375,000.00 55
Attachment 3
Kenai Municipal Airport
Supplemental Planning Assessment
Phase II
Recommended Changes to the
Kenai Municipal Code
(February 13, 2006)
ConsultanYs Note: In this set of recommended KMC changes, additions and deletions
are presented in MS Word Track Changes format, with deletions from existing code text
shown in crossed-out text (exessed-ec+~) and new wording shown in underiined text
(undertined). Code text that appears in 6/ack font is wording drawn from the existing
code.
Per a November 2005 verbal agreement wrth Cify Aftorney Cary Graves, in some cases
where I'm recommending a major departure from the existing code, I have presented an
outline of the essential etements, leaving the drafting of the actual code wording to Mr.
Graves.
Where the purpose of a change or new provision may not be immediately apparent, I
have inserfed explanations in Italics.
This document proposes that a separate Title be adopted to apply exclusively to the
land and facilities within the Airport Reserve. Since the number of the new Title wasn't
known at the time this document was prepared, the new Title is referred to as Title XX.
Stephen L. Pavish
Northern Horizon Co.
February 13, 2006
Title 21 CITY AIRPORT AND AIRPORT LANDS
Chapter 21.05 AIRPORT ADMINISTRATION AND OPERATION.
Repeal the entire chapter. (29.05.030 - 050 will be covered in Title XX. 1
understand that 21.05.010 & 020 have not been enforced, as written, for some time and
should be repealed. A provision requiring City approval prior to lessee construcfion of
improvements is included in Chapter XX.15.)
Chapter 21.10 LEASING OF AIRPORT LANDS
Add a new section 21.10.0o5:
21.10.005 Cha~ter not applicable to Airoort Reserve. ~
Nothinq in this ~hapter 21.10 shai( a~ptv to anv Citv-otivned land within the
Airpor[ Reserve, as defined under Chaoter XX.05.
Chapter 21.15 PROVISIONS REQUIRED
Add a new section 29.15.005:
21.15.005 Chapter not applicable to Airport Reserve.
Nathina in this Chapter 21.15 shali aopiv to anv City-owned land within the
Airport Reserve, as defined under Chaoter XX.d5.
Chapter 21.20 POLICY GOVERNING MODIFICATIONS OF EXISTING LEASES
Add a new section 21.20.005:
21.20.005 ChaQter not applicable to Airport Reserve
Nothinq in this Chapter 21.20 shail apolv to anv Citv-awned land within the
Airport Reserve, as defined under Chanter XX.05.
Chapter 21.25 AIRPORT COMMISSION
Repeai entire chaqter. (The Airport Commission is addressed in XX.20.)
Chapter 22.05 DISPOSITION OF CITY LANDS.
Add a new section 22.05.005:
22.05.005 Chapter not appiicable to Airport Reserve.
Nothino in this Chapter 22.d5 shail appiv to a~v Citv-owned land within the
Airport Reserve. as defined under Chapter XX.05.
(The above amendments to Chapters 21.10, 21.15, 21.20, 21.25, & 22.05 are
proposed as a quick way for the City to implement Title XX for facilities and land
inside fhe Airport Reserve, while allowing all the exrsting land leasing and sate
2
ordinances to remain in force (as to airport /and oufside the Airport Reserve).
Later, if the City desired to adopt some of the features of Tifle XX for use in
connection with airport land outside the Reserve, appropriate amendments to the
above chapters could be adopted.)
Title XX
KENAI MUNICIPAL AIRPORT AND THE AIRPORT RESERVE
Chapters:
XX.Q5 Airport Administratio~ and Operation
XX.10 ~easinq of Airport ~ands
XX.15 Form and Conditions of Lease
XX.20 Airport Commission
Chapter XX.05
AIRPORT ADMINISTRATION AND OPERATION
Sections:
XX.05.010
XX.05.015
XX.05.020
XX.05.025
XX.05.030
XX.05.040
XX.05.050
XX.05.~60
XX.Q5.07Q
Airport Reserve.
Airport Reserve boundarv map.
Applicabilitv of Tit1e XX.
Definitions.
Requlation of the Airport.
Use or occupancv of the Airport Reserve
Parkinq automobiles and aircraft.
Environmental requirements.
Penalties.
XX.05.010 Airport Reserve.
(a) There is established an Airport Reserve for the development, expansion,
maintenance oqeration qrotection, and perpetuation of the Kenai Municipal
Airport. The boundaries of the Airport Reserve are established as shown on the
map codified as XX.05.015.
f b) No Citv-owned land within the Airport Reserve shall be sold or otherwise
conveyed out of Citv ownership for any purpose, except as provided in a lease
executed bv the City before the effective date of this section.
XX.d5.015 Airport Reserve Boundarv Map. (The map depicting the Airport Reserve
boundaries would be referenced here.)
3
XX.05A20 Applicabilitv of Titie XX.
This Title XX applies to aII facilities of the Airpart and ail Citv-owned iand within the
Airport Reserve.
XX.05.025 Definitions.
Uniess the context requires otherwise the followinq words or phrases have the
meaninq qiven below when used in this Title XX.
~
(a) °Airport" means aii the facifities and land of the Kenai Municipai Rirport within
the Airpo~t Reserve.
(b) "Airport Manaqer' means the offici~l to wham the Gitv Manaqer has deleqated
the authoritv and resoonsibility of manaqinq and directinq the activities of the
Airport. "Airport Manaqer" includes that person's authorized represe~tative
(c) "Airport Reserve" means the Citv-owned land reserved from saie and
desiqnated under XX.05.010 and XX.05.015.
(d} "Citv Manaqer means the officiai to whom the Citv Council has deleqated the
responsibilitv of manaqinq and directina ali activities of the Citv "Citv Manaqer"
includes those persons to wham the Manaqer has deleqated resoonsibilitv to
perform functions under this Titie XX.
XX~1-.05.030 Regulation of airport.
The City Manager may regulate the manner in which the Alrport{~e+~a+-A+r~ar-t-aa~
se~pa#i~4e-ae~-avia~isra-€aslli~iesare is operated with reference to t#e-safety,
accommodation, user fees, and service to the public.
a~~er+Ey-~The City Manager is authorized to adopt, amend. and
repeai such rules and regulations as may be necessary to carry out the duties under
this grant. Regulations promulgated under authority of this section are effective on the
date desiqnated bv the Citv Manaqer
. The City Council may
by resolution at any meeting revise or repeal any regulation adopted aad-a{~pr$ved
under authority of this section. In this connection, the rules and regulations adopted
prior to the enactment of this section are hereby
ratified, approved, and continued in fuli force and effect until further amended or
repealed by subsequent action of the City Manager-++3-ac-eo~~^^~ ^,~;;~-,~a~sep#a~
~r$eed{ir-es-#ar-EWe a~o~iea-e€~ai~.~s-aad-~eg~+~abioa~.
The delefed portion of the third sentence is unclear and unnecessary. As ~
21.05.030 is written in the existing KMC, regulations adopted by the City
Manager are "effective" (whicH normally would be understood to mean
4
"enforceable') on the date fhe Manager indicates. However, "at fhe next meet+ng
following their effective dafe" the regulafions "are subject to approval by the City
CounciP'. This suggests that the regu/ations are not actually enforceable
("effective') until they are approved by the Council. Furthermore, the specific
reference to the "next meeting" raises the quesfion of whether the regulations are
enforceable or are vorded if fhe Council fails to take action on the regulations at
the "next meeting". To eliminate this i~ternal conflict in the senfence, /
recommend deleting the reference to City Council approval. The fourth sentence
allows the Council to amend or repeal a regulation at any time, so no Manager-
_ adopted regulation would be beyond the Council's power to amend or repeal,
whefher af the "next meeting" or anytime.
Regarding the deleted portion of the last sentence, what are "acceptabie
procedures"? "Acceptable" to whom? lf the Cify has a regulation adoption
process, it should Be specifically cifed here. If the City doesn't have a procedure,
it is best to delete the last portion of fhe sentence, as recommended, or add a
regulation adoption procedure to 030.
XX.d5.040 Use or Occupancv of the Airport Reserve.
No person mav use or occupv Citv-owned land or faciiities within the Airport Reserve for
any purpose unless.
(a) the portion of the land ar facilitv being used or occupied is desiqnated bV the CitV far
a public purpose and the person's use or occupancv canforms to the public purpose;
(b) the person first obtains a lease. qermit concession. or other written permissio~ from
the Citv authorizing the use or occupancy; or
(c} tha person is on a premises with the express or impiied consent of the Iessee,
permittee. or concessionaire.
XX2a-.05.050 Parking automobiles and aircraft.
It shail be uniawful for aa~ person to park an aircraft or aajr-automobile-e~
airc-xa#~ on the Airpart in any iocation or in anv mannera~ea contrary to a requiation
adopted under XX.05.030, or a rule or order issued bv the Airport Manaqer pursuant to
a requlatio~ adopted under XX.05.030.t^'~~~'^^^` ^^ f^-~"^+ ^~^^ ^^'~^'~^^°
,
o#e~-tlae-Pre~er-r~~{a~i f-gre~^„p-z,r~,;s-a~stRVl;~°~-~~~he-/~ir-~er#
~1ar+ager-er-l~is-desi~aaE.,a-;ti^-,~:~~~^¢^~~ i heSai~ Airport Manager, includinq-s~ the
manager's#is designated representative~ shall be vested with fuil police powers under
the authority of the#~+s City to enforceeader-se the provisions of this section. (KC 17-34;
Ord. 531)
5
(The following environmental section was adapted from 17 AAC 45.045)
XX.05.060 Environmental requiremen2s.
(a} A person usinq the Airport shal! complv with aii applicable environmental laws
(b) A lessee. qermittee, or concessionaire ~vho is required under anV environmental law
to submit a report or other document about a violatian or potential vialation af an
~vironmental law to a requlatorv aqencv shail provide a capy of the document to the
C~ Manaqer. AnV person who receives a oermit from an environmentai requlatorv
agencv in cannection with the oerson's use of the Airport shail, within ten (1Q) davs of
receipt of the permit provide a coov of the qermit to the Citv Manaqer
{c) A lessee, permittee. or concessionaire shail qrovide to the Citv Manaqer a copY of
(1) anv notice of violation or other notice ciaim or citation alleqinq a violation of
an environmental law affectinq Airport propertv that a requlatorv ac7ency issues to
or fiies aqainst that lessee permittee, ar concessionaire~ and
(2} any compiaint filed in a court that alleqes violation bV the lessee permittee or
concessionaire af an environmental law affectinq Airport property
td) The Citv Manaqer shall require a persan responsible for the contamination of Airport
property to remediate and return contaminated Airqort property to an environmentaliv
acceptable condition to the satisfaction of anv requiatorv agencY havinq iurisdiction
However any requlatorV aqencV approva) of a qroposed remediation plan that limits the
future use of Airport propertv is subiect to approval bv the Citv Manaqer before the
responsibie person mav beqin remediation activities on the Airport. A qerson
remediating contaminated Airport propertv mav not unreasonabiv interfere with
(1 } a lessee's use of. or access to, the Iessee's premises unless
(A) the contamination is a direct result of the lessee's operations~ or
tBi the lessee first ex~resslv consents: or
(2) the operation or development of the Airpart unless the Citv Manaqer first
expressly consents.
(e} If the Citv Manaqer has cause to believe a premises or othar property on the Airport
may have been cantaminated, the Manager mav cause to be performed an
environmental assessment on the premises or propertv to establish the presence and
source of anv contamination and to describe the environmentai condition of the
premises or propertv. While performinq the assessment. the City wifl ~ot unreasonablv
interfere with a lessee's use of, or access ta, the lessee's premises unless the lessee
6
first expressiy consents The City wiil assume the cost of the assessment of a premises
or property if contamination is not found on the aremises or oroperty. if contamination is
founci an the premises or r~ropertv the oerson responsinle for the contamination shall.
upon notice from the Citv Manager.
~1) reimburse the City for the cost of the assessment: and
(21 clean up the contamination,
!f~ For purposes of this section XX.05.060. interference with
j1~ a lessee's use of or access to, the lessee's oremises is unreasonable if the
interference
(A} poses a safetv hazard or a substantial disruption of the lessee's use
af or access to the lessee's nremises; or
(B} can be avoided without materialiV increasinq the cost or materially
decreasinq the effectiveness of the effort to achieve remediation
satisfactorv to all aqencies havinc7 iurisdiction. or a reasonabfe
environmental assessment, as aqplicable:
(2) the oqeration or development of the Airport is unreasonabie if the
interference poses a safety hazard or a materiai disruption of the operation or
develoqment of the Airport.
jg} For the purposes of this chapter XX.05, the followinq terms are defined as follows:
(1) "Contamination" - the unpermitted oresence of anV released Hazardous
Substance.
21 "Environmental Assessment" - an assessmer~t of property,_prepared_ in a
manner consistent with qeneraily accepted professionai practices, that is
supported bV reports and tests that determine the environmental condition of
property and the presence. tvpe. concentration. and extent of a Hazardous
Substance in on, and under the surface of the propertv.
{3} "Environmental Law" - anv applicabie federal. state. or local statute, law
repulation. ordinance, code. permit, order, decision, iudqment of anv
governmental entitv relating to environmental matters. includinq litterinp and
dumpinq.
~4) "Nazardous Substance" - any substance that is defined under an
Environmentai Law as hazardous waste Hazardous Substance hazardous
material toxic, qollutant, contaminant, petroleum, petroleum product, or oii.
7
(5) "Materiailv Contributed l'o" - to cause the reiease or miqration of a Hazardous
Substance in a reqortabie quantitv as defiined under applicable Environmental
Law.
(6) "Responsible" when used in regard ta environmantal contamination. means
having materialiy contributed to. assumed under an assiqnment. or beinq
otherwise liabie for bV law or contract.
X~G2~.05.070 Penalties.
Violations of this chapter shall be punished as provided for violations in KMC
13.05.010. (Ords. 263, 531, 697, 874, 1240)
Chapter XX.10
LEASING OF AIRPORT RESERVE LANDS
Sections:
XX.10.010 Lands available for leasinq.
XX.10.020 QuaVifications of appiicants or bidders.
XX.10.030 Applications.
XX.10.035 Filinq fee and deposit.
XX.10.040 No right of occupancv' Application expiration.
XX.10.060 Processing procedure.
XX.10.070 ~ease amendment or renewal.
XX.10.080 ~enqth of lease term.
XX.10.090 Rental rate determination.
XX.10.100 Reimbursement for Citv-constructed improvements.
XX.10.110 Additionai rent.
XX.10.120 Biddinq procedure.
XX.10.130 Lease execution.
XX.10.010 Lands available for leasinq.
(a) Subjsct to the provisions of this chapter. Citv-owned land within the Airport Reserve
mav be leased as provided in this chapter unless the land is identified in the latest
Federal Aviatian Administration-approved Airport Lavout Plan for the Airport or in the
latest Airport Land Use Plan as beinp required for the operation or safetv of the Airport,
or for the construction preservation. future construction, or future expansion of facilities
on the Airport. includinq
t1) runwavs, runway safetv areas, taxiwavs, aprans, water Ianes, water taxiwavs,
and other aircraft operational areas:
8
{2) access roads public streets. pGrkinq iots, and other faciiities iar use bv motor
vehicles: and
(3) qublic terminal buildinqs.
~b) Notwitnstandinct (a) of this section.
(1) apron spaca may be leased but oniv for aircraft fueiina. loadinq unloadinq
parkinq and maneuverinq purpases~ and
(2) land required for the future construction or future expansion of airport facilities
(Aj mav be leased for an interim oeriod not extendinq bevond the date on
which the Citv Manaqer determines the land will be required for the
construction or expansion: but
{B) maV not be Ieased if the Citv Manaqer determines that arantinq the
lease would interfere with. or ieopardize, the safe operation of the Airport.
XX~1-.10.020 Qualifications of applicants or bidders.
An applicant or bidder for a lease is qualified if the applicant or bidder:
(a) is an individ~al at least nineteen (19) years of age-o~eue~; e~
(b) Is a group, association, or corporation which is authorized to conduct business
under the laws of Alaska; or
(c) Is acting as an agent for another and has qualified by filing with the City Manager
a proper power of attorney or a letter of authorization creating such agency. The agent
shall represent only (1) one principal to the exclusion of himself. The term "agenY'
includes reai estate brokers and agents.
(Ords. 258, 400, 531, 1878-2000)
XX~1-.10.030 Appiications.
(a) Ali applications for lease of lands shall be submitted to#+le~--w+#~ the City Manager
on forms provided by the City Manaqer. toqether with the non-refundable filinq fee and
any applicabie deposit required under XX.10 035. .
. The Citv Manaqer shall
not accept anAle application that the Mana9er determines to be incomqlete. Upon
recefpt of a complete application filinq fee and anv applicable deposit the Citv
Manaqer shali cause the application to be stamped with the date and time of its receipt
I t C'I' f nro nn# raf~~nll~hl~
~ v..~.~~...............~.~~__.._..__._._..__._._.
(b)
With every application, the applicant shall submit
(1) a development plan, showing and stating:
(A) The purpose of the proposed lease;
(B) The use, valae-a~d-nature, ~rooosed Iacation an the premises and
estimated cost of improvements to be constructed;
(C) The type of construction;
(D) The anticipated construction beqinninq and comqletion
dateseaastrt~^~~;,~d-t
e#~'-~i~i~dr~
ef +,^,^ ~,z,oo-tz'J-~g.-.a; ~7; and
(E) Whether the intended use and proposed development conforms
cem~{+es-with the
~zoning ordinance of the Citv.aad
ii comprehensive plan of the City.
(iii) latest Federai Aviation Administration-anproved Airport L~out
Plan for the Airport: and
(iv) the latest Airport Land Use Pian.
2~ an explanation of how the appticant intends_ta finance the construction of the
proposed improvements if the applicant plans to borrow funds the aqplicant
must include a letter fram a bank or other lendinq institution expressinq interest in
providinq financinq for the improvements:
(3) a business plan, if the aqqlicant proposes to operate a business on the
propased premises. The plan must include
(A} a comprehensive description of the praposed business:
(B) the number of people the appiicant exoects to emplov in the business
durinq its first full vear of operation•
(C) the number of customers the appiicant expects business to serve
durinq its first full year of oqeration:
(D) the applicanYs source of operatinq capital If the applicant plans to
borrow funds, include a letter from a bank or other lendinq institution
expressinq interest in providinq operatinq capital~ and
(E) the applicanYs estimate of fhe qross receipts of the business during its
first vear of full operation; and
(The reason for requiring a business plan is twofold: (1)it gives the City some
clue as to the potential viability of the lessee's lease proposal; and (2) if forces an
applicant to think about his plans more fhoroughly before applying. Both (1) ~(2)
10
may save the City from signing a lease with someone who will default after
making a mess of the premises.)
(4) a site plan. if the land the applicant desires to lease is not a platted Iot ar tract.
The site pian must show the locatian and dimensions of the proposed lease site.
but need not be prepared bv an enqineer or survevor.
(c) Anvtime durinq the processing of a lease applicatio~. the CitV Manaqer mav request
and the apqlicant shali suppiv anv ciarification or additianai information that the Citv
(~lanaqer reasonablV determines is necessarV for the Citv to make a finai decision on
the application.
~p~4iEat+ai~s-~•,k~alt-~ese~~~-a-par#~#-t~e-iease- (There mav be etements of the
applicant's proposa/ that the GitV does not authorrze in the (ease. (n such a case.
having an ordinance thaf makes the appticatron `a part of fhe /ease" could create
confusion or conflict in the lease, to the CitV's detrrment in litiqatron.?
XX~-.10.035 Filing fee and deposit.
(a) When submittinq an application for lease of land, the applicant shail
1 a aA filing fee in the amount of fiftyt~ver~ dolfars (550.00~<8:88)~~~1aal~
(1 doubt if $20 even recovers the City's cost of sefting up a file for the
application. The state has been charging a$50 application fee for about
fouryears and is currently in the process of raising it to $100. 1
recommend the Cify's filing fee be increased to at least $50.00.)
~make a deposit to show good faith and secure the City in payment of any
costs in the following amounts:
(A) An appraisal cost recovery deposit of I
two
thousand dollars ($2,000.00)~~ and.-
(B1 An engineerinq, legal, and administrative cast recoverv deposit of one
thousand dollars t$1,000.00)
dellafis-f~;888~9).
(These redraffed deposit provisions will work under the existing
platting / appraisal system, as well as under the platting exemption /
airport-wide appraisal system proposed by the DOWL feam.
11
Under the DOWL recommendation, there would not be individual lot
appraisals for which the City could seek reimbursement. Therzfore, the
City would need to establish a reasonable portion of the airport-wide
appraisa! costs fo allocate to a new (ease. A fixed allocation based on the
square footage of the land being leased would be a fair method.
Although there would be no p(atting costs involved under the DOWL
recommendation, the City would have some engineering expense in
_ preparing a metes & bounds description and / or a lease exhibit drawing.)
~}~} If the City decides to reiect the applicanYs application and not~s~szo enter into
a lease with the applicant~~^~^~~-te-the~~~~+saat through no fault of the
applicant or failure of the applicant to comply with anv requirement of this chapter
,, .~~f:~^~ ~f±~,~ t~a.,... oiu .,;,,y ~.,a ~~^ ^^y ~~~^;;;;~..,., *"", .h~.~ deposit made
under (a) of this section .035 will be returned to the appiicant.
(c~ If the Citv enters into a lease with the applicant cor~pl+es-w+t~-a{I-o#-t~e-~e~tireaa2r~#s
,~.,r~ +„ +ti., ~~.,,~ +ti,,., +ti„ a~deposit made bv the applicant under (a) of this sectian
035 will be applied to the City's ses~s-e€-engineering,suwey; appraisal, Ieqai, and
administrative costsaay-~elatn~~+~ related to the processinp of the appiicant's
application and entering into the lease. ~-a+~~The Citv will apply anv unused
balance of a~~ deposit-a{~4ied to the rent Ravable under the lease. If the Citv's
costs exceed the amount of anv deposit, and-a+~-s#eKtage-~i~e-the applicant shall
pav the shortape to the Citv as a condition of the Iease.
(The real test for the above provision is that the City and the applicant execute a
lease. 1 assume the City would not grant a lease to an applicanf who failed to
comply with applicable law or a Plannrng Commission directive, so there's no
need to reference those other issues.}
~~f the appiicant fails~e#efses to compiy with any requirements of this chapter,~#ae
er~d+aaaces-er~be-E4eFla' °~-~o+~ir~c~-Ga+~~sioa-aad-eit~ef causes inordinate
delay, as determined bv the Citv Manaqer: or ei",-,~,=::;~~refuses to sipn a lease offered
to the applicant°°^~ •^ ~~^°c^ ~^ +~^ ^-^^^~*~, +~^^^, the Citv Manager wili reiect the
aAplicant's application and appiv anv deposit made bv the applicant under (a} of this
section to the City's administrative. appraisal. enqineerinq and leqal costs incurred in
con~ection with the applicanfs application.
Tne Citv will return a~v unused deposit balance-~k~e
h~~„~v ."e; °e#; if-an~-shall~e--r-ett~r~ to the appiicant.
(Ords. 689, 1290-88, 1802-98}
XX~-.10.040 No riqht of occupancv; ' Appiication expiration.
12
(a) Submittinq -T-I~e-Etl+ag-e€ an applicatio~ for a lease acessk~ll not give the
applicant a~a right to lease or ta-t~ie-use af-the land requested in the application#e~
(b) If the Citv does not reject the appiication anT-k~a application shail expire on
the eariier of the followinq
(1) one-hundred-eiahtV t180) days after the date stamped on the
a~plication under XX.10.030(a?w+t#~+a-s
= h~.,~~,:-,~.,~Q~ if ~'~~ ",~.^~-,=~ *~~-e.a~e~~te-betweea-the City and the
applicant have nat, by that time, entered into a lease: or. '^^°n ~~t~~ ^r^ ~";^^+
(2) the deadline date established under XX.10.130, inciudinq anv
extension of time qranted thereunder:
(The above changes make it clear, in one subsection, that the application will
expire before the 180-day period ends if the City has issued a lease and the
applicant faiis fo sign and return it. In the existing KMC, this is inferred, but not
made unmistakably clear, by a combined reading of 21.10.040 and 29.10.140.)
XX~.10.060 Appiication ~processing procedure.
(Given the facts that:
1. Title XX will only apply to Airport Reserve lands;
2. Reserve lands will never be sold; and
3. Reserve lands will only be leased for aviation and airport-related purposes in
accordance with the airport land use plan, and certain limited interim uses;
there is no reason why al1 applicafions should have to be run through a P& Z
Commission review process. The long-term function of Airport Reserve lands will be fo
support aviation and the airport, yet the P& Z brings no aviation or airport expertise to
the leasing process. About the only thing the existing system of P& Z review would do
for Airport Reserve lease applications is delay their processing. As an alternative to the
exisfing P& Z review system, I recommend the City use a complefely different
appiicafion processing procedure> structured around the City Manager, the City's
administrafive staff, and the Airport Commission.
Here is an outline of the applicafion process l recommend:
1. Initiai Appiication Review bv:
L) Assistant to the Citv Manaqer (for application completeness• conformance
with Title XX};
13
(b} Airport Manaqer (for conformance with the Airport LaVOUt Plan. FAA
r~uiations. AIP qrant assurances, and airport operations: and
(c) Planninq & Zoninq Administratar iN9s. KebschuU's position) (for conformance
with the Airqort Land Use Plan. municipat zonina, and future airport improvement
ro'ects .
2. The above staff would present to the Citv Manaqer their ioint recommendation for
~tion on the aqpiication (Rejection. Approval. or Approval af a staff a{ternative}
3. If the Citv Manaqer concurs with the staff recommendation the Manaqer will:
(a} issue a reiection Ietter, statinq the reasons for rejection: or
(b) refer the appiication to the Airport Commission for review and comment.
toqether with the Manaqers recommendatian for Approvai or Approval of the
staff alternative: and
(c1 Inform the City Council of the Manaper's recomme~dation to the Airport
Commission.
4. The CitV Manaqer wili consider the recommendations of the Airport Commission and
(a) Issue a rejection letter, stating the reasons for rejection; or
(b) Approve the application or staff aiternative. and direct the staff to issue the
lease: and
jc) Inform the City Council of the Manaqer's decision to approve or reject the
application: or
(d) Obtain the City Councit's concurrence if the Manaqer's decision to approve or
reiect the application is contrarv to the recommendations of the Airport
Commission.
5. An aqplicant whose application is reiected bY the Citv Manaqer may appeal to the
CitV Council within ten (10i davs followinq the date on which the Manager's reiection
letter was hand delivered or placed i~ the U.S. mail.
6. If another compiete and otherwise approvable appiication for leasa of the same
propertY is submitted by a different applicant before the Citv Mana9er enters into a
lease with the first applicant, the City Manaaer wiil forward the applications and the
Manaqer s recommendations to the City Council for approval of the appiication
anticipated Yo best serve fhe interests of the Citv. The Counci! may approve one of the
appiications or direct the Citv Manaqer to award a lease of the propertv bv sealed bid.
14
7. Grounds for the Citv Manaqer ta reiect an application inciude.
(Ai the appiicant s failure to provide anv ciarification or i~formation required
under this chapter:
(B) the applicanfs praposed development or use of the Iand is inconsistent with
(i) the zoninq ordinance of the Citv;
(ii) the comprehensive plan of the CitV'
(iii) the Iatest Federai Aviation Administration-approved Airport LaVOUt
Plan for the Airport;
(ivi anv obiiqation of the Citv under tne Airqort Sponsor Grant Assurances
to the Federai Aviation Administration;
(v) the IatesC Airport Land Use Pian; or
{vi) a requlation af the Federal Aviation Administration applicable to the
Airport•
{C) the appiicant's proposed deveiopmenf or use of the land would vioiate a
federal, state, or local law inciudina an ordinance or requlation af the Citv;
Dl the aoolicanYs failure to reasonabiv demonstrate the financial viability of the
applicant's proposed development ar of the business the applicant proposes to
operate;
{El the aRplicant is in default of any charqes, fees, rents. taxes, or other sums
due and pavable to the City;
jF) the applicant is in default of a requirement of anv lease or contract with the
City;
(G) the application is reiected bv the City Council in favor of another application
for the same land under paraqraph #6 above; and
UH the Citv Council decides, under #6 above. to reiect all appiications and award
a lease of the land by sealed bid.
(Consultanf's Note: The procedures outlined above would seldom require the
Cify CounciPs invofvement in application approval / rejection decisions.
Applications forland inside the Airport Reserve would have to conform to the
Airport Layout Plan, Airport Land Use Plan, FAA regulations, AIP granf
assurance requirements, and other relatively narrow airport-related requirements.
Therefore, a City Manager's decision, backed with a review by the administrative
staff and the Airport Commission should be su~cient ior the vast majorify of
applications. i"here is no real need to require the Councrl's approvaf of every
15
lease applrcation when the applicable airport requirements will determine the
outcome for most of them.)
,
XX.10.070 ~ease Amendment or Renewal.
(Applications from existing tenants for lease amendments, term extensions, and
renewats would be run through the same process outlined in (1) through (6)
above.)
~X.10.0&0 Le~qth af Lease Term.
(Nofe: The following section is based on the /ease term guideline
recommendations (dated August 4, 2~05) l presented af a City Counci!/Airport
Commission work session in Augusf 2005.)
ta 1 The lenqth of term fnr a lease or fease extension qranted for land within the Airoort
Reserve will be based on the amount of investme~t the applicant praposes to make in
the canstruction of new permanent improvements on the premises durinq the first 24
months foliowinq the beqinning date of the Iease or lease extension.
(b) if the appiicant proposes to make no investment in new qermanent improvements on
the premises or proposes to invest less than 512,000. the maximum term of a new
lease or a renewal of an expirinq lease shall be five f5) years.
(Provision (b) above reasonably accommodates non-investor or minima!-investor
applicants.)
(c} If the applicant propases to invest 512,000 or more in new qermanent improvements
on the premises,
{1) the maximum term of a new lease or a renewai of an expirinq fease shall be
determined accordinp to the foilowinq table:
ApplicanYs Investment
tin U.S. Dollars) Maximum
is at Least Term of Years
~2.oao s
36 000 8
48 000 9
60 000 10
72.000 11
$4 000 12
96 000 13
10$ 000 14
16
120.000 15
132 000 16
144,Od0 17
156 000 18
168 000 19
180.000 ~0
192 000 21
204 000 22
216.000 23
228.000 24
240.000 25
252.Od0 26
264 000 27
276.000 2$
288.000 29
300 000 30
312.000 31
324 000 32
336.000 33
348.000 34
360 000 35
(2) the maximum term extension for an existinq lease shall be one f 1) vear for
each $12,000 of additionai investment, provided that
(A1 anv resultinq fractio~ of a vear shall be rounded up to the nearest one-
quarter ('/~i year, and
(B} the total of the remaininq lease term and the extension shall not
exceed 35 vears.
(Note the definitions of "existing lease" and "expiring lease" in subsection (i)
below.
The disfinction between (c)(9) &(c)(2) above is necessary because the term
fable begins at 6 years (giving 5"free"years to lessees who make subsfanfia/
investments, just as is provided to non-investor lessees under (b) above). lf the
table was used for granting mid-term lease extensions, the lessee would gain 5
"free"years with every extension and create a disunity among lessees who make
the same fotal investmenf. For example, compare fhe results of applying the
table to two applicants who invest the same total amount of money, but at
different times.
Lessee X invesfs $300,000 in improvements at the beginning of his lease and is
g~anted a total lease term of 30 years, according to the table.
17
Lessee Y makes an initial investment of $900,000 at the beginning of his lease
and is granted a ferm of 13 years (from the table). Six years later, "Y" invests
another $100,000 and obtains an extension (from the table) of 13 mcre years.
Three years after that, "Y" invests anofher $100,000 and obtains a further
extension (from the table) of 13 years. `X" and "Y" both invested a total of
$300, 000, but "Y" obtained a tofal term of 39 years, while `X" received only 30
years.
This problem is avoided by (c)(1) &(c)(2), above, under which the City would
_ grant an initial lease term to `~C" under (c)(9) (from the fable, $300, 000 = 30
years). For "Y'; the City would grant
A. an initial term under (c)(1) (from the tab/e, $100,000 = 13 years); and
B. the two term extensions under (c)(2) at one year per $12, 000 (two
investments of $100,000 each: $100,000 = 12,000 = 8.34 years, rounded
up to 8.5 years; 8.5 years x 2= 17 years); thus
C. resulting in a total term of 30 years.
ln the above example, `X" and "Y" ended up with identical term totals. However,
the combined affects of the rounding required by (c)(2)(A) and the various ways
$200, 000 could be divided lnto different investments for the two extensions, the
total term granted to "Y" could be slightly more or less than the 30-year total
granfed to "X" Nevertheless, the equivalency of (c)(1) &(c)(2) is sufficient fa
satisfy fhe AIP grant assurance requirements for reasonable uniformity.]
(d) In the lease or lease extension granted to the applicant, the CitY Manaqer wiil
include a provision requirinq the applicant to compiete the propased permanent
improvements within a reasonable period of time. considerinq the cost and nature of the
improvements. Provided however, that the time ailowed shali not excead 24 months
after the effective date of the lease or lease extension.
(e) The City Manaqer wili include a provision in a lease or lease extension requirinq the
lessee to provide a performance band. deposit, personal quarantee or other securit~if
the Manaaer determines securitv is necessarv or prudent to ensure the appiicant's
compietion of the permanent improvements within the time period set under (d of this
section. The Citv Manaqer will determine the form and amount of the securitv accordinq
to the best interest of the Citv, considering the nature and scope of the proposed
improvements and the financial responsibility of the aopiicant.
(f) The appiicant shail. within 30 davs after completion of the permanent improvements.
submit to the Citv Manaqer written documentation that the improvements have been
compieted as required under (d) of this section.
18
(q~ If the aaplicanf shows qood eause to the Citv Man~c~er, and tne Manac~er determines
the acfion is not inconsistent with the City's best interest, the Uianaqer wii( qrant ~n
extension that is sufficient to ailow For the compietion of the t~ermanent improvements or
for submission of documentation that the permanent improvements have been
comqteted under this section. No extension or combination oT extensions qranted under
this subsection (p) will exceed 12 months.
(h) if. within the time required under (dl of this secCion, inciudina anV extension qranted
under (q) of this section. the appiicant fails to complete the reauired permanent
ic~provements, the Citv Manaqerwill
{~ execute the forfeiture of the performance bond, deposit, personal quarantee,
or other security posted by the applica~t untler te) of this section to the extent
necessary to reimburse the Citv for aii costs and damaqes, includinq administrative and
Ieaal costs. arisinq from the applicant's failure to complete the required improvements,
and
(2) take one of the foliowinq actions. as applicable,
jA) if the Manaqer determines that ane-third or less of the required
investment in improvements has been completed. initiate cancellation of
the lease;
(B) if the Manaqer determines that at least two-thirds of the required
investment in imqrovements has been campleted. reduce the term of the
lease to a period under (b) or (c1 of this section that is consistent with the
ortion of the improvements timelv completed
(C) if the Manaqer determines that more than one-third but less than two-
thirds of the repuired investment in improvements has been completed.
apply the best interests of the CitV to take the action described in either
(A) or {B) of this subsection.
(i) When used in this section. the followinq terms shall have the meaninqs qiven:
(1) °expirinq lease" means a lease with less than one (1? vear of term remaininc7;
{2) "existing lease", means a lease with at least one (1) Vear of term remaining:
(3} "permanent improvemenY', a fixed addition or chanqe to land that is not
temporarv or portabie:
(A) "permanent improvemenY' inciudes
(i) a buildinq, building addition retaininq wail. storage tank,
earthwork fill materiai qravel, and pavement: and
19
(ii} remediation of cont~minatiQn for which the applicant is not
responsibie:
(B1 "permanent improvement" excludes items of orainary maintenance,
such as qlass replacement. paintinq, roof repairs, door repairs, pfumbinq repairs.
floor coverinq replacement or pavement patchinq.
XX.10.090 Rental rate determination.
(a) Beqinninq in 2006 and at intervals of aoproximately five (5) vears thereafter, the
Citv Manaqer shall retain the services of an independent. qualified qeneral real estate
appraiser certified under Alaska Statute 08.87, to determine
(1) the fair market value of all the land within tha Airport Reserve that is under
lease or available for lease; and
(21 the contemPOrarv capitalization rate. in terms of a percentaqe, tVpicaily
applied to fair market value to estabiish the rental rate for land feased bv
landlords in the Kenai Peninsula Borouqh reai estate market.
(b) Durinq the first 12 months foilowinq the date on which the Citv Manaqer accepts the
determinations made under (ai of this section the Manaqer shall estabiish the rental
amounts for leases as follows:
(11 for each new lease qranted bv the Citv under this chaoter. the rental shall be
the fair market value of the premises multiplied bv the capitalization rate, both as
determined under (a) of this section: and
j2j for each existinq lease that becomes subject ta a rent re-evaluation under the
provisions of the lease the rental shail be the feir market value of the premises,
as determined under tal of this section, multiplied bv
(A~ the capitalization rate determined under fa) of this section, if the lease
does not include a fixed capitalization rate; or
(B) the fixed capitalization rate specified in the lease.
(ci At the beqinninq of the second, third, fourth, and fifth 12-month period followinq the
date on which the Citv Manaqer accepts the determinations made under (a) of this
section the Manaqer shall adiust the fair market vafue of ail the land within the Airport
Reserve that is under lease or available for lease.
L) The Manaqer shall make the adjustment b~~lyinq the Anchoraqe
Consumer Price index for the previous calendar ~ear:
20
(2) The result af the adiustment shall be considered the appraised fair market
value af each propertv durina the resoective 12-month qeriod for which the
adjustmenT is made: and
(3} If the State of Alaska substantially alters the manner in which the State
calculates the Anchoraqe Gonsumer Price Index or ceases to annuallv qrovide
the Anchoraqe Cansumer Price Index the City Manaqer mav with the
concurrence bv resolution of the Citv Council use a reasonabiy similar
_ aitemative index to make the adiustments required under this subsection (c)
(d) durinq each of the secand. third fourth and fifth 12-month periods foliowinq the
date on which the Citv Manaqer accepts the detarminations made under ia) of this
sectian. the Manaqer shall establish the rental amounts for leases in the same manner
as provided in (b) of this section. except that the Man_aqer shall applv the fair market
vaiue as adiusted under (c) of this section
e) Under this section. when determininp the._fair market value of the premises of an
existinq lease, an appraiser shall appraise the propettV
f 1) in its condition as of the inception of the lease:
(2) plus anv improvements or ameniYies subsequentlv provided bv the CitV' but
(3) exciudinq anv improvements or amenities provided by the City under
XX.10.100, if fessee has reimbursed th_e_City,_or entered into an aareement to
reimburse the Citv for the cost of the improveme~ts or amenities.
(The intent of (e)(3) above is to exclude from the scope of an appraisa!
improvements that are constructed by the City and paid for by the lessee.
Regardless of whether improvements are Built by the City or the lessee, if the
lessee pays for them, they are not part of the premises the City leased to the
lessee an~', therefore, are ordinanly excluded irom the appraisal.)
XX.10.100 Reimbursement for Citv-constructed improvements
(a1 The CitV Manaqer mav include in a lease a requirement for the lessee to reimburse
the City for the Citv's cost af
(1) land clearinq, qravei fiil, utilitv extensions and other imarovements or
amenities on or in direct connection with the premises constructed bv the City
prior to the effective date of the lease: or
21
;2) ~a~d cieari~q, nravel fili. utilitv extensions and other improvements or
amenities on or in direct conneciion with the premises, wnich the Citv aprees ta
construct as a condition of the lease. subiect to CitV Council approval.
(b) The Lessee shall reimburse the Gitv for the CitV's cost af consiructin ihe
i~rovements in ten t10) equal annuai qaVments. pius interest at eiqht percent (8%1 per
vear an the unpaid balance. The Lessee mav pav the entire remaininq balance to the
Citv at anv fime.
XX.10.110 Additional rent.
(a) In addition to rent established under XX.10.090 and any reimbursement for Citv-
constructed improvements or amenities under XX.10.1 d0, a lessee shail pav
{11 taxes pertaining to the ieasehold interest of the lessee~
(2) interest at the rate of eiqht percent (8%) per annum for ail past due rents.
charqes and fees;
(3) an administrative penalty of ten percent (10%} of the amount due and unpaid
each time the lessee fails to timelV pay any rent or fee when due; and
~4) sales taxes due on pavments under a lease.
(b) Anv rent. charqe, fee, or other consideration which is due and unpaid at the
expiration, termination, or cancellation of a lease will be a lien aqainst the lessee's
property rea) or personal.
cl The lessee wiil pav all reasonable actual expenses, costs, and attornev fees the Cit
mav incur, with or without formai action, to entorce, defend, or protect the lease or Citv's
rights under the lease, includinq any expense incurred with respect to environmentat
compliance. bankruptcv or any proceedinc7 that invoives the lessee the lease, the
premises. or improvements or personai propertv on the premises. The lessee will make
pavment within 30 davs of the date of each notice from CitV of anv amounts payabie
under this subsection (c
(d) A Iessee shall paV the Citv a reasonable fee for anv special services or faciiities.
which the City is not otherwise obliqated under the lease to ~rovide and which the
lessee requests from the Citv in writing and the Citv provides.
XX.10.120 Biddinq procedure.
a + ~ tn ndnornl .,.,c..., r~+~a .,h,,,,o With the approvai of the City Council, the
..,..~, ..,.....p,...,., y........... i.._.._J . .,. .
Citv Manaqer may designate a specific lot or lots, which are not subiect to a pendinq
22
appiication. to be leased made-aava+lable-at~i~-~orthrouqh comqetitive sealed bid. T-krls
~3f8W&t9R-SRr~~~-8(3~(3{y~~~9R4~-~~~n trc~.^cr"^v-~~a~;0-8kF~5~3f~ii~~-8{~~IE3ti9{~-~3GR~Ffl$-BFl-~~~i2-~6~-8~
}„+~, n ~,~~~ ,,,,.,+,,,~ ~n a sealed bid offerinq, the Citv Manaqer shaii award tF~ lease s-to
the aualified bidder that offers the hiqhest~^"a„-a~ ~°;~.~°~ ~~~r;^y u one-time premium
pavment, in addition to tne lease rent established under this chapter. es#ah~,-",u~~~
+-a#~ -H~~~;Provided however, that hiqh bidder and the bidder's lease proposal
shall be subject to all provisions of lease aqplication review and approval under this
CihaQter.....`.._H'i,...~'...~ f.... ...II Fh.., ~..,,...... ~, ~~.
urr•
(The part of the existing 21.10.130 are covered in XX.10.090, but most of the
existing 130 seems either unnecessary or very much outdated, so I didn't bring it
across to Tife XX.)
XX.10.130 Lease execution.
When issuinp a lease to an appiicant, the Citv Manaqer shall hand deliver or mail the
document to the applicant. The lease-appiicant shall have thirtv (30) davs from the date
on which the lease is hand delivered to the aopiicant or deposited in the U.S. mail within
which to execute and return the ap~rs{~~ia-te-lease a^~^~ ~'~ to the City Manaaer.
-F#a,=~n~.~rom~n} ~{ ~";., ti~,~ If the
N
apqficant shows qood cause to the Gitv Manaqer, and the Manaqer determines the
actian is ~at inconsistent with the Citv's best interest the Manaper will gra~t an
extension not exceedinq thirtv (301 davs for the applicant to execute and return the
lease. Uqon the failureF-ailure of the applicant to timeiv execute and return the lease
agreement. the Citv Manaqer shail withdraw the offer of the lease in writinq.-w~e
"~;fl J-r{g#~s-
Chapter XX.15 FORM AND CONDITIONS OF LEASE
XX.15.010 Form of lease.
XX.15.015 Re-evaluation of rent.
XX.15.420 Assiqnments and subleases.
XX.15.030 Construction of improvements bv a lessee.
XX.15.040 Indemnification and insurance.
XX.15.05d Lease termination.
XX.15.060 Damaqe to lessee improvements.
XX.15.070 Disposition of improvements upon termination.
NOTE: l recommend against placing all the lease provisions in the KMC. ln
general, having /ease provisions explicitly presented in law, ordinance, or regulation
tends to "fossilize"lease language and retard fhe incorporation airport leasing industry
innovations. /t also tends to burden the negotiatron of unusua/ /eases wrth inflexibility.
A better altemative is to present only the essential issues of leasing poficy in the
23
ordinance along with a provision requiring leases to be issued on a form approved by
the City Aftorney and adopted by City Council resolution. The following is my
recommended alternative to the existing Chapters 21.15 and 21.20, as applied to the
Airport Reserve.
XX.15.010 Form of lease.
~a) When leasinq land under this Title XX the CitV Manaqer shall use a standard lease
form thatis
~ (1) draffed to
(A} provide a reasonable basis for the lessee's use of the premises~
{B) foster the safe effective and efficient operation of the Airport:
{C) conform with the aqplicable requirements of the KMC, inciudinp this
Title XX Alaska statutes. Federai Aviation Administration requlations, and
ather applicabie federal law~ and
(D) provide for the best interest of the CitV.
(2) approved as to form bV the Citv AttorneV; and
(3) adopted by resoiutio~ of the Citv Councii.
b) The Citv Manaqer may enter into a land lease that deviates from the standard form
adopted under (a) of this section. if
(1) the Manaqer believes the action is in the best interest of the CitV:
(21 the lease is approved as to form by the City Attomey: and
(3) the lease is approved bv resolution of the Citv Council.
XX.15.015 Re-evaiuation of rent.
L) At intervals of not less than five (5} years. or at such other time as mav be sqecified
in a lease executed before the effective date of the enactment of this section. the Citv
Manaqer shall increase or decrease the rent charaed in the lease to the amount
determined under XX.10.090.
(b) The Citv Manaper shall chanqe the rent in a lease bv aivinq the lessee written notice
at ieast thirtv (301 davs in advance of the effective date of the chanqe.
24
(c) A lessee who believes the rent resultina fram a chanqe bv the CitV Manaqer exceeds
market rent mav appeai to the Citv Council bv deliverinq a written notice ofi rent appeal
to the Citv Cierk bv no later than the e~fective daCe of the rent chanaE. A rent appeal
must inciude
{~ } the name mailinq address. and teiephone number of the lessee;
(2) a copy of the CitV Manaqer s rent chanqe notice:
_ (31 a summarv of the lessee's basis for appealinq the rent. includinq any facts or
evidence in support of the Iessee's position that the chanped rent exceetls
market rent; and
(4) if the lessee intends to present an aopraisal in support of the aqpeal. the date
bv whieh the appraisal report wiil be made available for the Cifv Council to
consider. not to exceed ninetv (901 davs after the date an which the appeai is
delivered to the City Clerk. Failure bv the lessee to submit the appraisai report
bv the stated date will void the appeal.
(d) The City Council will consider the lessee's aqpeai and the basis for the Citv
Manaqer's rent chanqe; and
(1) If the Councii finds ac7ainst the lessee. the lessee shall beqin pavinq the rent
established by the City Manaqer, as of the effective date of the Manaqer's
oriqinai rent change notice: or
(2) If the Councii finds in favor of the lessee, the City Manaqer shail issue a
written notice to the lessee, rescindinq the oriqinal rent chanqe notice and
estabiishinq the renta! rate at the amount determined bv the Cauncil. The
effective date af the revised rent shali be the effective date of the Manaqer's
oriqinal rent chanqe notice.
{e) For fha purpase of this section XX.15.015. "market renY' means the fair market value
of a Iease premises multiplied bv the appropriate capitaiization rate as qrovided under
XX.10.090.
XX.15.020 Assiqnments and subleases.
(Repardinp securitv assiqnments: As indicated in the DOWL Phase l1
project report, the existing KMC 21.15.100 provides some unusually beneficial
rights to mortgagees, which are not necessary and could compromise the best
interests of the City. With respect to mortgagees, 21.15.100 does not require the
City's written consent to a security assignment or deed of trust (only notice by the
lessee to the City). !t is the norm in the airport industry to require airport consent
for this kind of transaction because the process allows the airport operator to
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know, in detail, the ferms of any financial encumbrance on an airport lease
before it is set in place. Requiring prior consent also allows an airport operator to
prevent a lessee from accepting security provisions that may be adverse to the
airport operator's interests. l strongly recommend the City make consent
mandatory for ail security assignments.
Also, with respect to mortgagees, the existing code allows a mortgagee to come
in after the City cancels a lease for breach and obtain a new lease of its own.
The mortgagee can choose to save the existing lease or fake out a new one with
_ the Cify.
The more common practice in the airport industry is to allow a mortgagee the
opportunity to cure the lessee's breach (if fhe lessee doesn't) and preserve the
original lease. lP the mortgagee chooses not to do so, the /ease ends and the
mortgagee /oses its security interest. This is bene~cial to fhe airport operator
because it keeps the interests of the mortgagee more paral/e! to those of the
airport operator, and results in fewer cases where the airport operator gets stuck
with the problems in a lessee bankruptcy. This requirement also allows a
defaulted lease to be cleanly ended by the airport operator, if neifher fhe lessee
or the morfgagee fimely cure the breach. The operator can then prompfly
proceed with acfions in its own interest. The State of Alaska has followed fhis
common industry practice for at least 25 years without hindering the financing of
leasehold developments. At the same time, fhe practice saved the State from
substantial financial loses in tenant bankruptcies.
Reqardinp subteases: The existing code assures a subtenant thaf the City witl
accept them as a lessee (to fhe extent of tHe subiease) if the City cancels the
lessee's lease. !'ve not seen a similar provision in any other airport operator's
ordinances or regulations. It opens the door to all kinds of problems. tt
presupposes that every sublessee is financially viable. The failure of a
sublessee to perform under the sublease may have contributed to the lessee's
breach of the lease, but the City would still have to take the sublessee on as its
own tenant. What if a smali avionics business subleased a single room of the
lessee's large hangar and the Cify cancelled the /ease? The existing code would
appear to require the City to recognize the sub/ease as its own and retain the
sublessee in his one-room space, with the City having to heat and maintain the
rest of the building solely for the bene~t of the sublessee. The mere presence of
the sublessee could hinder the City from leasing the property to a quali~ed
applicant who wants fo use all the space on fhe premises.
The industry norm is for subleases to automatically end if a lease is terminafed.
That way, the airport operator is free to negotiate a new lease with any qualified
applicant, including a former sublessee.
For the above reasons, l didn't bring KMC 21.15. 900 or 2120.950 into Tifle XX.)
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(a} A lessee maV not. bv clrant or implication. without the nrior writte~ consent of the Citv
Manaqer,
t1) assian aIl or anv portion of the Iease:
(2) assiqn or convev anY mortqaqe or securitv interest in the lease: or
~3) SUbIG'8S8 all OI' 811Y pOftl011 Ofi th8 pC81711S@S OI" Ifl'ipfOV@fTtBf1{S Otl th8 pl'8l1lIS0S
(b) For the purpose af this section anv sinale or cumulative transfer of more than a 50%
interest in a joint venture qartnership limited liabilitv companv corporation or other
multi-partV entitv which is a lessee constitutes an assiqnment of lease interest that is
subiect to the consent of the City under this section.
~c} Anv proqosed assiqnment. securifv assiqnment, or sublease must be written and
must be submitted to the Citv Manaqer bearinq the oriqinat notarized signatures of all
parties. A lessee mav submit unsiqned draft documents for the Citv Manager's
conceptuat review. However, the City Manaqer's conceqtual approvai of a draft
document mav not be construed as the Citv's consent to anv assiqnment securitv
assignment, or subiease.
(d) An assignment of a lease must inGude a provision statinq that the assiqnee accepts
responsibilitv for all of the assipnors (lessee's) obligations under the lease includinq
environmental liabilitv and responsibilitv. However uniess the Citv sqecificaliv releases
the lessee in writinq the Citv may hold the lessee resoonsibie for perForminq any
obliqation under the lease which an assiqnee faiis to perform
(e) An assiqnee or sublessee mav not occupy the premises before the CitV Manaper
consents to the assiqnment or subiease in writinq.
(f) in the event of a confiict beiween the lease and an assiqnment securitv assiqnment
or sublease the terms of the lease wili control
{p} The Citv Manaper's consent to anv subiease does not relieve or otherwise after the
lessee's obiigations under the lease.
(h) No security assiqnment, inciudinq any related document may encumber the Citv's
underlyinq title to the land. A securitv assiqnment to which the Citv Manaqer consents
shali be valid only until the lease expires or is terminated for breach provided that the
holder of such a security assi9nment may act to cure anv breach The City Manaqer
shall not consent to a securitv assiqnment that obliqates the Citv to qrant a new lease to
the holder of the securitv assiqnment after the Citv has terminated the oriqinal lease
(i) Reqardless of anv term stated in a sublease, the term of a sublease wiil end at the
expiration or eariier termination of the lease, unless the Git extends or renews the
27
lease tsrm or reinstates the lease after cancellation. A subfessee desirinq to remain on
the premises after the cancellation. expiratian ar termination of the lease. must applv
for, and execute a new iease from the City.
(j) Before consentinq or denvinq consent to an assiqnment security assiqnment or
sublease, the Gity Manaqer will consider
(1) the best interests of the Citv:
_ j2} in the case of an assiqnment or security assiqnment. the qualifications and
financial capabilitv of the assiqnee to perform the requirements of the lease;
(31 the compatibility af the proposed use of the premises bv an assiqnee or
sublessee with the uses authorized in the lease: and
j4} anv recommendations resultinq from a review of the assipnment. securitv
assiqnment, or sublease documents by the Citv Attornev.
jk) The Gitv Manaaer shafl not unreasonabiv withhoid consent to an assipnment.
security assiqnment or sublease.
jl~A deniai of consent to an assiqnment, securitv assiqnment, or sublease must be in
writinq and state the reasons for the action. A lessee whose request for consent is
denied bv the Citv Manaqer mav appeal to the City Council bv submittinq a written
appeal to the Citv Cierk within thirt~(30) davs foilowinq the date of the Manaqer's
written deniai.
(m) For the purposes of this section. "secuntv assignment° means an assiqnment for
securitV deed of trust, mortqaqe, or other document that prants to a creditor an interest
in a lease as collateral to assure pavment or ~erformance of a debt, loan. or other
obliqation of the Iessee.
XX.15.030 Construction of imqrovements bv a lessee.
(a~ Any buildinq construction by a lessee must be compatible with its surroundinqs and
consistent with the uses authorized under the ~ease, as determined by the City
Manager.
bl A lessee must obtain the Citv Manaqer's written_app_roval before placing_fiil_material
beqinninq anv lend development or constructing or demolishinq anv improvements on
the leased premises and before beqinninq any alterations, modifications, or renovation
of existinq structures on the premises. When submittinq a repuest for the Citv
Manaqer's approval, a lessee must provide the Manaqer with
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(1) deta+led drawinqs qf fhe qroposed deveiopmenf, aiteration, modification or
renovation:
(2) evidence that the oraqosed deveioament. aiteration, modification. or
renovation will conform to the requirements of the KMC reiated to the Airport
zoning, and buildinq construction standards;
(3) evidence of the lessee s compliance with Federal Aviation Administration
requlation 14 CFR Part 77, if applicabie to the aroposed devetoqment, aiteration,
modification or renavation• and (Part 77 deals with airspace clearances and
obstructions. The "evidence" is usually a Form 7460-1 bearing the approvai of
Alaska Region ~AA.)
(4) anv other information the City Manager reasonabiV repuires.
tc) The City Manaqer's approvai or denial of a lessea's request under this section musf
be in writinq. A deniai must state the reasons for the action. A lassee whose repuest
for approval is denied bv the Citv Manaaer mav apqeal to the City Council bv submittina
a written appeal to the Citv Cierk within thirtV (30) daVS foilowinq the date of the
Manaqer's written denial.
XX.15.040 Indemnification and insurance.
(a) Ali land leases shall indude a provision requirinq the lessee to indemnify the Citv
from claims reiated to the lease and the lessee.
(b) Except as provided in (c) of this section all land leases shall reauire the lessee to
provide insurance coveraqe of the foilowinq tvpes and minimum coverage limits. If a
lessee's qoli~ contains niqher limits, the City will be entitled to coveraqe to the extent of
the hiqher Iimits.
f1) Commerciat Generai Liabilitv, inclutlinq premises, all operations, propertv
damaqe, personal injury and death, broad-farm contractual, with a per-
occurrence limit of not less than 51.000,000 combined sinqle limit, if the lease
authorizes the lessee to enqape in the sale or the commercial dispensinq or
storage of aviation fuel, the policv must include an endorseme~t under which the
insurer extends coveraqe to the lessee's fuel handlinq activities. The policv must
name the City as an additional insured.
(21 Commercial Automobile Coveraqe with not less than ~1,000,000 combined
sinqle limit per occurrence. This insurance must cover a{I owned, hired, and non-
owned motor vehicles the lessee uses on the Airport.
29
(3) Workers Compensation Insurance. for all the iessee's emplovees,
coveraqe as required under AS 23.34.045. and. where aqpiicable. any other
statutoN obliqations. The policv must waive subroaation aqainst the Citv.
41 Products and Completed Operations Liabilitv Insurance. If the lease
authorizes the lessee to enqaqe in the sale or the commercial dispensinp or
storaqe of aviation fuei, the lessee shall provide Products and Compieted
Operations Liabilitv Insurance in at least the followinq coverage timits:
A. $100,000 bodily injury combined sinqle limit qer occurrence;
8. ~300.000 bodilv iniurv aqqreqate: and
C. ~100.000 propertv damaqe combined sinqle limit per occurrence.
(The insurance requirements above are used by the Stafe for rural airport land
feases and are similar to fhose of other airport operators interviewed during my
airport comparison research under the DOWL Phase ll project.)
L} The City Manaqer mav with the counsel of the CitV Attomev waive or reduce the
insurance requirements under (b) of this section for a lease qranted for strictiV non-
commercial individual use purposes.
(d) The lessee will provide the CitV With proof of insurance coverage in the form of an
have been paid showinq the types and monetarV limits of coverage secured. All
insurance required bv this section must provide that the Citv be notified at least 30 days
prior ta anv termination, canceilation, or materiai change in the insurance coveraqe.
el A lease shall include a provision ailowinq the Citv, at intervals of not less than five
(51 vears from the beqinninq date of the term of the lease and upon written notice to
lessee, revise the i~surance requirements required under the Lease. The determination
to revise the insurance requirements wili be made bv the City Manager with the counsel
of the City Attornev and shaii be based on the risks relative to the Iessee's operations
anv insurance auidelines adopted bv the Citv, and anv change in applicabie law.
XX.15.050 Lease termination.
(a) Anv of the followinq sha11 be qrounds for the Citv Manager to cancel a lease and
recover possession of the premises upon 30 days' written notice to the lessee. unless
the violation is cured within the 30 days:
t1) The lessee fails to pay when due the rents, additional rents, charqes, ar other
sums specified in the lease;
j2) The lessee's check for pavment of anv sum due under the lease is returned
for insufficient funds; or if the lessee's credit or debit card is not accepted bv the
issuinq financial institution•
30
(3) The lessee uses, or auYhorizes others to use, the premises fior anv purpose ~
not authorized bv fhe lease; ~~ ~
{4} The lessee fails to fully qerform ar comply with ~nv qrovision in the lease
(5) The lessee uses the qremises for an ilieqal purpose or otherwise materialiv
violates an aqpiicable law;
(6) A court enters a judgmen# of insolvency aqainst the lessee:
t7) A trustee or receiver is apqointed for the lessee's assets in a proceedinq
brouqht by or aqainst the lessee, or the lessee files a voluntarv petition in
bankruqtcv; or
{8} Failure bv the lessee to timelv comqlete anv land develapment or permanent
impravement construction required by the iease.
(bt The lessee will continue to paV the City rent after the expiration. termination, or
cancellation of this lease and to abide by the lease obliqations. includinq providinq proof
of insurance coveraqe throuqh the date lessee relinquishes possession of and
completelv vacates the premises. The premises will be considered comqletelv vacated
when the lessee has
t1 } remediated anv environmental contamination for which the Lessee is
responsibie;
t2) removed or othernrise disposed of any lessee-owned permanent or
removable improvements and personai qropertv which the lease allows to be
removed or the Citv Manager directs to be removed; and
(3~ restored the qremises to a neat and clean physical condition acceatable to
the Citv Manayer.
(The above provision was adapted from a State of Alaska lease form. It is not an
uncommon practice in fhe airport industry to hold a lessee responsible for the payment
of rent until a new lessee can be found to lease the property. If the City wants to go that
route, (b) above will need to be revised accordingly.)
XX.15.060 Damaae to lessee improvements.
{a1 Except as provided under (b) of this section, if a lessee's improvements on the
premises are damaqed or destroved, the lessee shail cause the imqrovements to be
reaaired or rebuilt, and restored to normai function within two (2} vears followinq the
damaqe or destruction. If the lessee fails to timelv rebuiid or restore tne improvements.
the Citv Manaqer maV, at the Manaqer's soie discretion, either
31
(1) reduce the term of the lease commensurate with fhe esiimated vaiue of the
lessee's remaininq, fullV functionai improvements on the premises. using the
term table in XX.10.080: or
(2) cance! the tease.
(b} if a lessee's improvements are damaqed to the extent that more than 50% of the
space is unusable and the damaqe occurs within five {5) years of the expiration of the
tErm of the lease the lessee mav remove the damaaed improvements. restore the
premises and terminate this lease.
XX.15.070 Disposition of improvements upon termination.
Upon the expiration of ths term of a lease or anv earlier termination, title to the
buildinqs other improvements, and buildinq equipment shail automaticaliV vest in City
without requirement of anv deed, conveVance. or bili of sale. However, if City Manager
reauests anv such document, the lessee shali promptlv execute, acknowledqe, and
deliver the document to the City Manaqer and pav anv charqe, tax. and fee lawfuliv
asserted or imposed on the convevance evidenced bv the document. Provided
however that the lessae shall retain titie to. and remove from the premises at the
lessee's sole expense, anv buildinq other improvement or buildinq equipment that the
Citv Manaqer determines in writina to the lessee
1. has exceeded its useful life:
2. is damaged bevond reasonable repair:
3. is a hindrance to the future use of the premises: or
4. is of negliqible value.
Chapter XX.20 AIRPORT COMMISSION
XX.20.010 Duties and powers.
XX.20.020 Qualifications.
XX.25.030 Membership.
XX.20.010 Duties and powers.
The Commission shall:
(a) Develop, adopt, alter or revise, subject to approvai by the City Council, a master
plan for the airport development. This may include:
32
(1) Development of type, location and sequence of all airport terminal
facilities; and
(2) Development and use of all Citv-awned land wifhin the Airqort
Reserveair~o r~-at~eraa~{ea!-lat~ s.
(b) Observe, oversee and guide in an advisory capacity, any matters relating to use
of airport runways, airport terminal, and Citv-owned land within the Airqort
Reserveai~~srt a .
(c) Act in an advisory capacity to the Gitv Council, the Citv Manaqer. and the Airport
Manager.
(d} Review tease aqplications and make recommendations to the City Manaqer as
provided under XX.10.d60.
XX.20.020 Qualifications.
Members of the Airport Commission wili conform to the requirements of the City of
Kenai Boards, Commissions, and Committees Standard Procedures as established by
KMC 1.90, except that members of the Airport Commission need not be residents of the
City of Kenai. (Ord. 1531-93)
~'
XX.25.030 Membership.
The Commission shali comprise of seven (7) members who shali be chosen so as to
represent broadly the foilowing areas:
(a) One member, fixed base operator (FBO)
(b) One member, lessee of airport aeronautical lands or terminal facility.
(c) One member, with expertise in Federai Aviation Administration functions.
(d} One member, representing the Civil Air Patrol.
(e) Three members, at-large, representing the business and professional
community.
(f) One non-voting member, representing ad hoc member of the Kenai City Councii.
(Ord. 1531-93)
(NOTE: Except for the reference to lease application reviews and narrowing the
Commission's scope to fhe Airport Reserve, l am not recammending changes to
this Airport Commission chapter at this time. As the City moves through the
Implementation Plan, changes to fhis chapter will have to be made from time to
time to reflect increases in Commission authorify & responsibility, changes in
membership, etc.)
~
33
?? ?? ?? ~ease Development Incentives (Temporarv waiver of Citv propert~taxes~
(1 didn't know where in the KMC this should be addressed. The following is the
general outline of the program recommended in the Phase 11 project report.)
A. The lessee must commit to camplete permanent impravements costinq at
least ~250.000 on the premises:
B. The lessee must commit to complete the improvements within 24 months of
the Iease beqinninq date;
C. The lessee must submit to the Citv written evidence that the impravements
have been timely completed, toqether Gvith evidence of the iessee s total cost of
constructinq the improvements~
D. Upan receivinq satisfactorv evidence of timelv comoletion from the lessee, the
Citv will grant the lessee a waiver of the CitV property taxes applicable to the
im~rovements for a period of time immediatelv followinq the date on which the
Iessee campleted the improvements. The propertv tax waiver period would
deoend on the lessee's improvement construction cost, as fo8ows:
COST TRX WAIVER PERIOD
At least $25Q 000, but less than ~500,000 ....................... 2 vears
At least $500.OQ0 but less than $750.Q00 ....................... 3 vears
At least ~750.000 ............................................................. 4 vears
(This graduated approach to tax waivers would encourage larger
developmenfs while providing some incentives for smaller ones.)
E. The waiver would not appiv to any improvements constructed on the
premises after the date in B, above.
F. If the lessee commits a breach of the lease, anv unexpired waiver would end
on the date the Citv terminates the lease.
34