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HomeMy WebLinkAboutOrdinance No. 2219-2007Suggested by: Councilor Ross CITY OF KENAI ORDINANCE NO. 2219-2007 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AMENDING KMC 21.15.190 BY ADDING A NEW SUBSECTION (d) THAT ALLOWS A LEASE APPLICANT TO REQUEST A CONTRACTUAL RIGHT TO PURCHASE THE LEASED PROPERTY AT NOT LESS THAN FAIR MARKET VALUE WITHIN TWELVE MONTHS AFTER COMPLETION OF THE DEVELOPMENTS AS DETAILED IN THE LEASE'S DEVELOPMENT SCHEDULE. WHEREAS, KMC 21.15.190(c) allows a lessee to request a sale of the leased land following completion of the developments set forth in the lease's development schedule; and, WHEREAS, the lessee does not have a right to purchase the lease property and may only request a sale following completion of the required developments; and, WHEREAS, some lessees may require the contractual right to purchase the property following development of the property; and, WHEREAS, inability to grant a contractual right to purchase the property for not less than fair market value following completion of the required developments may discourage economic development with the City of Kenai; and WHEREAS, the City Council should have the ability to grant the contractual right by resolution for a sale of leased property at not less than fair market value if it feels such a contractual right is in the best interest of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that KMC 21.15.190 is amended as shown on Attachment "A" by adding a new subsection (d). PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this fourth day of April, 2007. j ~ "~ h ~~ i t~~ ,~~~ ~~rJ~ PAT PORTER, MAYOR ATTEST: Carol L. Freas, ity Clerk Introduced: March 21, 2007 Adopted: April 4, 2007 Effective: May 4, 2007 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 landbe sold for which an appraisal will be required, which will require subdividing, platting, or surveying and staking, or which will require advertising or incurring any other expenditures by the City prior to sale, (1) No actions in preparation for sale will betaken 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 its equivalent deposited with the Finance Officer of the City of Kenai, as may be determined 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, the City Manager shall stop all procedures, shall pay expenses incurred prior to termination of sale procedures, and shall 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 applicanC will be reimbw-sed for expenses chu-ges which can be attribuCed to the subsequent applicant.) (3) Tf 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 incmredin 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 advanced as good faith deposit are insufficienC 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, the good-faith deposit will be refunded in [otal to the applicant. 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 deposit advanced, after deducting the City's expenses, will be applied on the payment due at closing. (6) If the land in question is to be sold by sealed bid and Che applicant has submitted a valid bid, but said applicant is not Che 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 land, the lessee may request the sale of said Land aC not less than Che fair market value. The cun~ent 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. Ordinance No. 2219-2006 Attachment A Page 1 of 3 (d) An applicant maw nest the lease of city land include a ri hg t to purchase the leased land within twelve months of the completion of the development as detailed in the development schedule. A sale under this subsection shall be at not less than fair market value as determined b~ppraiser qualified under AS 8.87. The City may charee additional consideration for r~ antina the right to pm~chase the property. The land must be appraised within twelve (12) months of sale as required under KMC 21.15.070. An applicant's request to have a contractual right to purchase the lease property must be approved by an ordinance of the Council. The Council may_grant the request if it determines it is in the best interest 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 competitive 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 other notice may be given by such other means as may be considered advisable by the City Manager. Such notice must contain: (1) 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 land will 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 Che sale of which the City Manager believes the public should be informed. [(E)]~f~ 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 market value of the land, whichever is lower, under the following terms and conditions: (1}The City Manager shall provide anon-exclusive listing of lands available for sale. (2) No commission shall be paid to an agent where said agent is a party, or in privity with a pa7~ty, to said sale. [(F)]~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 furnished 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, withouC 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 shall be signed by the City Manager and attested by the City Clerk. The form of the deed shall be approved by the City Attorney. Ordinance No. 2219-2006 Attachment A Page 2 of 3 [(H)]~ If a buyer desires to obtain a preliminary commitment for title insurance or title insm-ance 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 o~f ]and are 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)]~k) Said note shall be placed for collection with a bank selected by the City Manager, which may be changed from time Co lime, and which shall be the bank in which City funds are 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(f)(g)(h)(i) and (j) to a maximum of fifty percent (50°Io) of the required costs being borne by the City. Ordinance No. 2219-2006 Attachment A Page 3 of 3