HomeMy WebLinkAboutOrdinance No. 3527-2026Sponsored by: Administration
CITY OF KENAI
ORDINANCE NO. 3527-2026
AN ORDINANCE DETERMINING THAT AN APPROXIMATELY 7,682 SQUARE FOOT PORTION OF
CITY -OWNED PROPERTY DESCRIBED AS THAT PORTION OF GOVT LOT 10 LYING SOUTHWEST
OF BRIDGE ACCESS RD & LYING NORTH & NORTHWEST & NORTHEAST OF USS 4563 AMENDED,
IS NOT NEEDED FOR A PUBLIC PURPOSE AND AUTHORIZING THE SALE AND EXCHANGE OF
THE PROPERTY TO RABUF, LLC.
WHEREAS, the City's Land Management Plan identifies City -owned property described as That Portion
of Govt Lot 10 Lying Southwest of Bridge Access Rd & Lying North & Northwest & Northeast of USS
4563 Amended (Kenai Peninsula Borough Parcel 04901131) as suitable for potential disposal, noting it
is currently under a long-term lease; and,
WHEREAS, RABUF, LLC is the current lessee of the subject property and two City -owned parcels to the
south; and,
WHEREAS, RABUF, LLC also owns adjacent KPB Parcel No. 04901123; and,
WHEREAS, RABUF, LLC has approached the City regarding development of water and wastewater utility
connections to support existing and planned development; and,
WHEREAS, development of utility infrastructure on the leased parcel is impractical due to the presence
of tidal wetlands, a shallow water table, and the location of an anadromous stream; and,
WHEREAS, RABUF, LLC has requested a property exchange in which approximately 7,164 square feet
of KPB Parcel No. 04901123 would be exchanged for approximately 7,682 square feet of the City -owned
KPB Parcel 04901131 (Exhibit A) to facilitate utility access and improve property configuration in the
area; and,
WHEREAS, Kenai Municipal Code 22.05.095(b)(3) allows for property exchanges when the City Council
finds such exchange to be in the best interest of the City and may impose conditions on such exchange;
and,
WHEREAS, RABUF, LLC has agreed to compensate the City for any difference in fair market value
between the exchanged properties; and,
WHEREAS, Kenai Municipal Code 22.05.100(b)(1) authorizes the City to share in subdivision costs when
the Council determines a reasonable benefit to the City exists; and,
WHEREAS, because the proposed subdivision will facilitate road and utility infrastructure, increase the
long-term taxable value and usability of City -owned land, and allow for the completion of public right-of-
way improvements, sharing in fifty percent of subdivision costs is reasonable and in the best interest of
the City; and,
WHEREAS, the exchange and sale will benefit the City by completing a standard 60-foot right-of-way for
Ervin Circle and allowing the completion of a cul-de-sac at the southern terminus of the right-of-way; and,
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Ordinance No. 3527-2026
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WHEREAS, Kenai Municipal Code 22.05.010(b) provides that City -owned land may be sold only when,
in the judgement of the City Council, such lands are not or are no longer needed for a public purpose;
and,
WHEREAS, the subject property is no longer needed for a public purpose, the proposed development
supports commercial growth, infrastructure investment, and the completion of public right-of-way
improvements, and the property exchange and sale are in the best interests of the City.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, AS
FOLLOWS:
Section 1. Statement of Ownership: That the City of Kenai is the owner of That Portion of Govt Lot
10 Lying Southwest of Bridge Access Rd and Lying North & Northwest & Northeast of USS 4563
Amended (the Property).
Section 2. Public Purpose and Best Interest Findings: That an approximately 7,682 square foot
portion of Property depicted on Exhibit A is no longer needed for a public purpose and may be sold.
Under the 2016 Comprehensive Plan, the Property is designated for non -aviation industrial uses. The
exchange and sale of the Property are in the best interest of the City, as it supports commercial growth,
infrastructure development, and completion of public right-of-way improvements.
Section 3. Authorization of Exchange and Sale: That the Kenai City Council authorizes the City
Manager to negotiate and execute a property exchange and sale of an approximately 7,682 square foot
portion of City -owned property described as That Portion of Govt Lot 10 Lying Southwest of Bridge
Access Rd and Lying North & Northwest & Northeast of USS 4563 Amended, under the procedures and
terms established for the sale of City -owned lands outside of the Airport Reserve, as set forth in KMC
22.05.100 et seq. at not less than $2.15 per square foot; the fair market value of the land, excluding
lessee -constructed improvements, as determined by the appraisal of parcel 04901131, completed in
September 2025.
Section 4. Subdivision Cost Sharing: Pursuant to KMC 22.05.025, the Council authorizes the City to
share in fifty percent of eligible subdivision costs as approved by the City Manager.
Section 5. Title: That title shall be conveyed by quitclaim deed. Any instrument conveying title to the
Property shall include the following restrictions, promises, and/or covenants:
a) That the City of Kenai reserves unto that the grantee expressly agree for itself and its heirs,
executors, administrators, successors, transferees, and assigns, for the use and benefit of the
public right of flight for the passage of aircraft in the airspace above the surface of the Property,
together with the right to cause in said airspace such noise as may be inherent in the operation
of aircraft, now known or hereafter used, for navigation of or flight in the said airspace, and
for use of said airspace for landing on or at and for taking off from or operating on Kenai
Municipal Airport; and,
b) that the grantee expressly agrees for itself and its heirs, executors, administrators,
successors, transferees, and assigns to restrict the height of structures, objects of natural
growth, and other obstructions on the Property to a height of not more than 242 feet above
mean sea level; and,
c) that the grantee expressly agrees for itself and its heirs, executors, administrators,
successors, transferees, and assigns to prevent any use of the Property which would interfere
with landing or taking off of aircraft at the Kenai Municipal Airport, or otherwise constitute an
airport hazard; and,
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Ordinance No. 3527-2026
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d) that all covenants heretofore stated shall run with the land and shall inure to the benefit of,
and be binding upon the heirs, executors, administrators, successors, transferees, and
assigns of the parties to the contract for sale and conveyance; and,
e) that the City reserves all subsurface and mineral rights, if any.
Section 6. Proceeds of Sale: That should a sale of the Property be finalized, all revenues from the
sale shall be deposited in the General Government Land Sales Permanent Fund.
Section 7. Severability: That if any part or provision of this ordinance or application thereof to any
person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall
be confined in its operation to the part, provision, or application directly involved in all controversy in
which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder
of this title or application thereof to other persons or circumstances. The City Council hereby declares
that it would have enacted the remainder of this ordinance even without such part, provision, or
application.
Section 8. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect 30 days
after enactment. Z)
ENACTED BY THE COUNCIL OF THE CITY OF KEN.
ATTEST:
ner M , City Clerk dex
Approved y b Finance:
Introduced: May 20, 2026
Enacted: June 3, 2026
Effective: July 3, 2026
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L
I000,
City of Kenai
MEMORANDUM
K E N 4
210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.75351 www.kenai.city
TO: Mayor Knackstedt and Council Members
THROUGH: Terry Eubank, City Manager
FROM: Kevin Buettner, Planning Director
DATE: May 12, 2026
SUBJECT: Ordinance 3527-2026 — Determining That a Portion of the Real Property
Described as That Portion of Govt Lot 10 Lying Southwest of Bridge Access
Rd & Lying North & Northwest & Northeast of USS 4563 Amended, City -
Owned Land is Not Needed for a Public Purpose and Authorizing the Sale of
the Property to RABUF, LLC.
In 2025, RABUF, LLC, approached the City inquiring about the possibility of establishing utility
connections. Initial discussions with the Planning & Zoning and Public Works Departments
centered on the connection of the processing plant on Kenai Peninsula Borough (KPB) Parcel
04901131 to the utility mains along Bridge Access Road. These connections could be made
through the existing lease lot or through the adjacent parcel, 04901123, which led to the public
right-of-way at Ervin Circle, a platted right-of-way.
Connection to utilities utilizing the leased parcel was determined to be infeasible due to the
presence of tidal wetlands, a shallow water table, and an anadromous stream. Further
discussions with the City resulted in a determination that running a service line within the public
right-of-way is not allowed by Kenai Municipal Code (KMC). KMC 17.05.010(b) and KMC
17.15.010(b) state that water and sewer connections must be made to a main abutting the
property lot line. It was also noted at this time that the right-of-way for Ervin Circle was not
complete, as a portion of the cul-de-sac at the southern terminus was incomplete and would
require a portion of land from RABUF, LLC's owned parcel, 04901123.
The City and RABUF, LLC continued discussions, and it was determined that a property exchange
may be in the best interest of both parties, as it would allow for the completion of a right -of way in
the Working Waterfront zoning district, which could spur future commercial development, and the
property exchange would also allow RABUF, LLC to access the utility mains along Bridge Access
Road, through a platted right-of-way.
Preliminary calculations have determined that RABUF, LLC would exchange approximately 7,164
square feet of their owned parcel to complete the cul-de-sac on Ervin Circle for approximately
7,682 square feet of the City -owned parcel, 01901131, to establish a 30 foot frontage along Bridge
Access Road to access utility mains.
This exchange would also require the vacation of a portion of Ervin Circle's right-of-way at the
northern junction with Bridge Access Road, which is 155 feet. The standard right-of-way in the
City is typically 60 feet, with exceptions for major roads and section lines. This process is done
concurrently with the platting process and would require separate action from Council at a later
date, once the KPB Planning Commission makes its determination on the preliminary plat. This
vacated area totals approximately 8,665 square feet.
If approved, the total area of all land exchanged from the City to RABUF, LLC would be 16,346
square feet. The total area of land exchanged from RABUF, LLC to the City would be 7,614 square
feet. This results in a difference of 8,732 square feet with RABUF, LLC receiving more than the
City.
The City's consultant, CBRE, completed an appraisal in September 2025, establishing a fair
market value of $2.15 per square foot for KPB Parcel 04901131, which was used to determine
the lease rate. This appraisal also complies with Kenai Municipal Code 22.05.100 — Sale
Procedures, which required an independent appraisal to determine the minimum sale price.
RABUF, LLC has agreed to pay the City the fair market value of the approximate 8,732 square
foot difference between the exchanged properties, calculated as approximately $18,773.80.
The approximate cost of the subdivision is $9,000. Funding for the subdivision is available within
the FY 2026 budget. If approved, the cost share for the City would be approximately $4,500. If
the City's cost share amount is credited towards the RABUF, LLC purchase price, the City would
net a total of $14,273.80.
Also, if approved, RABUF, LLC has sought permission to proceed with land clearing and site prep
work prior to the subdivision. The Administration has no objection to this request, provided a right-
of-way permit is obtained from the Public Works Department for any work done within the existing
Ervin Circle right-of-way. Furthermore, the Administration's non -objection is predicated on
RABUF, LLC assuming all risk for any work completed. The City has also requested notification
of any tree clearing work to be done on KPB Parcel 04901131, which is currently leased by
RABUF, LLC.
Thank you for your consideration.
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