HomeMy WebLinkAboutOrdinance No. 2180-2006SUBSTITUTE
Suggested by: Administration
CITY OF KENAI
NO. 2180-2006
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
KMC 21.20 (POLICY GOVERNING MODIFICATION OF EXISTING LEASES), AND
REPLACING THEM WITH KMC 21.05 (AIRPORT ADMINISTRATION AND OPERATION),
KMC 21.10 (LEASING OF AIRPORT RESERVE LANDS) AND KMC 2 L 15 (LEASE AND
SALE OF AIRPORT LAND OUTSIDE OF THE AIRPORT RESERVE).
WHEREAS, 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,
F~UHERF,AS, numerous pubiic hearir~gs w~.-e heid during the process, including
meelings with the Kenai City Council, Airport Cornxnission, Planning and Zoning
Conunission, the Kenai Economie Development Strategies group, and members of the
public, in order to increase public 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,
WHEREAS, 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 eliminate the ability of
new lessees to have the vested right to purchase the leased property once the
property's development plan has Ueen 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,
WHEREAS, it is not the intent of this ordinance to alter or amend existing leases
during their original terms; and,
WHEREAS, extensions or renewals of existing leases not governed by the terms of that
lease shall be processed according to the provisions of this ordinance, and,
WH~REAS, it is in the best interest of the City of Kenai to enact the new policies and
procedures as shown in Attachment A.
NOW, THER~FORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY 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ALASKA that KMC 21.05, 21.10, 21.15 and 21.20 are hereby repealed and KMC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 Attachment A are hereby enacted.
Ordinance No. 2180-2006 SUBSTITUTE
Page 2 of 2
PASSED BY THE COUNCIL OF THE CITY OF KENAI, AI,ASKA, this 6ti~ day of
September, 2006.
~"~~~--~~~ ~-.~~
PAT PORTER, MAYOR
ATTEST:
~Z ~
Carol L. Freas, City Clerk
Introduced: August 2, 2006
Second reading: August 16, 2006
Adopted: September 6, 2006
Effective: October 6, 2006
Title 21
KENAI MUNICIPAL AIRPORT AND THE AIRPORT R~SERVE
Chapters:
21A5 Airport Administration and Operation
2114 Leasiilg of Airport Reserve Lands
21.15 Leasing of Non-Airport Reserve Lands
21.20 Airport Commission
Chapter 21.05
AIRPORT ADMINISTR~TION AND OP~RATION
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
21.05.090
Airport Reserve.
Airport Reserve boundary map.
Definitions.
Regulation of the airport.
Use or occupancy of the Airport Reserve.
Parl~ing automobiles and aircrafL
Environmental requirements.
Off-airport vehicle renCal permit.
Penalfies.
21.05.010 Airport Reserve.
(a) There is established an Airport Reseive 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 coclified as 21.05.020.
(b) No city-owned land within the AirporC Reserve shall be sold or otherwise conveyed out of
City ownership for any purpose, except as provided in a lease executed by Che Ciry before die
effective date of this section.
21.05.020 Airport Reserve Boundary Map.
(See Appendix I~ to this Chapter.)
21.05.030 De~initions.
Uniess the context requires otherwise, Che ~Pollowing wc~rds or phrases have the meaning
given below when used in this TiLle 21.
(a) "AirporC" means all the facilities and land of the Kenai Municipal Airport within the Airport
Reserve.
Ordinance 2180-2006 SUBSTITUTE Attachment A
Page 1 of 27
(b) "Airpart Manager" means Yhe official to whom fhe City Manager has delegated the authority
and responsibility of managing and directing the activities of the airpoit. "Airport Manager"
~ includes thatperson's authorizedrepresentative.
(c) "Airport Reserve" means the city-owned land reserved from sale and designated under
21.05.010 and 21.05.020.
(d) "City Manager" means the official to whom the Ciry Council has delegated the responsibility
of managing and direc[ing a11 activities of the City. "City Managei" includes those persons to
whom the Manager has delegated responsibility to perform funcCions under this Title 21.
21.05.040 Regulation of airpork
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
authoiized to adopt, amend, and repeal such rules and regulations as may be necessary.
Regulations promulgated under authority of this section are effective on the date design~ted by
ti~e City Manager. The City Council may by resolution at any meeCing revise ar repeal any
regulation adopted under authority of this section. Tn this connecfion, the rules and regulations
adopted prior to the enactment of this section are hereby ratified, approved, and condnued in full
force and effect until further amended or repealed by subsequent action of the Ciry Manager.
21.OSA50 Use or Occupancy of the Airport Reserve.
No person may use or occupy city-owned land or facilities within the Airport Reserve Por
any purpose unless,
(a) the parCion of the tand or facility being used or occupied is designated by the ciCy for public
~~ use and the person's use or occupaney confoims to thaC public use; or
~~~ (b) the person first obtains a lease, permit, concession, or other written permission froin the City
authorizing Che use or occupancy; or
(c) Che person is on a premises with the express or implied consent of the lessee, permittee, or
concessionaire.
21.05.060 Parking automobiles and aircraft.
It shall be unlawful for a person to park an aircraft or automobile on the airpart in any
location or in any manner contrary to a regulaCion adopted under KMC 21.05.040, or a rule or
order issued by the Airport Manager pursuanC to a regulation adopted under KMC 21.05.040.
The Airport Manager, inciuding 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 environmenCal 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 poCential violation of an environmentai
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
pcrson's use of the airport shall, within ten (10) days of receipt of the pcrmit, provide a copy of
the permiC fo the City Manager.
(c) A lessee, permittee, or concessionaire shall provide to the City Manager a copy of
Ordinanee 2130-2006 SUBSTITUTE Attachment A
Page 2 of 27
(1) any notice of violation or other notice, claim, or citadon alleging a violation of an
~ environmental ]aw a~f~Pecting aiiport property that a regulatory agency issues to or files
against Chat ]essee, permittee, or concessionaire; and
(2) any complaint filed in a court that alleges violation by the lessee, permittee, ar
concessionaire of an environmental law affecting aiiport properCy.
(d) The City Manager shall require a person responsible for the contamination of airport
propcrty to remediate and return contaminated airport property to an environmentally acceptable
condition to the satisfacuon of any regulatory agency having jurisdiction. However, any
regulafory a~ency approval of a proposed remediati~n plan that limits the future use of airport
propcrty is subject to approval by the City Manager before the responsible peison may begin
remediation activities on the airport. A person rernediating 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 firsf expressly consents; or
(2) the operation or developmenC of the airpoit unless the City Manager firsC expressly
consents.
(e) If the City Manager has cause to believe a premises or other properry on the airport may
have been contaminated, the Manager may cause to be perfarmed an environmental assessment
on the premises or properCy to establish the presence and source of any contamination and to
describe the environmental condition of the premises or properCy. While pcrforming the
assessment, the City will not unreasonably interfere with a lessee's use of, or access to, the
tessee's premises unless Che lessee fiist 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 contaminaCion is found on the premises or property, the person responsible for the
contamination shall, upon notice from the City Manager,
(1) reimburse Yhe Ciry for the cost of the assessment and
(2) clean np the contamination.
(~ For purposes of this section, interference with
(] ) a Iessee's use of, or access Co, 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 maYerially decreasing thc
effectiveness of the efforC Yo achieve remediation satisfactory to al1 agencies having
jurisdiction, or a reasonable environmental assessment, as applicable;
(2) the operation or development of ti~e airpoil is unreasonable if the interference poses a
safety hazard or a material disruption of the operarion or developmenC of the aiiport.
(g) Far the purposes of this chapter 21.05, the following terms are defined as follows:
(1) "Contamination"-the unpermitted presence of any released Hazardous SubsLance.
(2) "Environmental AssessmenY' - an assessment of property, prepared in a manner
consistent with generally accepted professional practices, that is supported by reports and
tests that determine the environmental condirion of property and the presence, Cype,
concentration, and extent of a Hazardous Substance in, on, and under the surface of the
property.
Ordinance 2180-2006 SUBSTITUTE Attachment A
Page 3 of?7
~ (3) "Environmental Law"-any applicable federal, state, or local statute, law, regulation,
ordinance, code, permit, order, decision, judgment of any governmental entity relaCing to
environmental matYers, including littering and dumping.
(4) "Hazardous Substance"-any substance thaT is defined under an Environmental Law as
hazardous wasCe, Hazardous Substance, hazardous material, toxic, pollutant, conCaminant,
peCroleum, petroleum product, or oil.
(5) "Materially ConCributed Td'-to cause the release or migration of a Hazardous Substance
in a reportable quantity as defined under applicable Environmental Law.
(6) "Responsible"-when used in regard to environmental contamination, means l~aving
materially contribuCed Yo, assumed under an assignment, or being otherwise liable for by law
or contract.
2L05.080 Off-airport vehicle rental nerr~it.
(a) To operate a vehicle rental btiisiness on the Kenai Nlunicipal Aiiport, a person who does not
have a concession Co operate a vehicle rental business in the te~minal building must hold a
currenC vehicle rental business permit issued under this seclion.
~b) A person must submit an application for a vehicle renCal business permit in writin tg o the
Airport Mana~er and include:
(1) A list of vehicles that the applicant proposcs to operate on the airport under the eimit
~ A description of the services that the applicant proooses to offer timder the pervlit.
(3) An~pplication fee established by the Cit~
(c) The Aiiport Manager shall approve an avolication for a vehicle rental business permit unless
the Mana~er determines that:
~ (1) TheapplicanYis
~~ (i) In violation of a material teim of a contraet with the City,
(ii) In arrears to a payment (incladin~ City or Borou~h sales or properfy tax) or oCher
financial obligation due to the Citv or
~iri) In default of a material obli~ation under any lease, contract, permiC or concession
the Citv has issued to Che ap Iip cant;
(2) The ~roposed use wouid interfere with or is otherwise incompatible with the security,
s~fetV, maintenance, or operation of the airport;
3 The proposed use would violate an ap~licable FAA ~rant assurance or Che CiC~
obligations under revenue bonds;
{4) The proposed use would result in a violation oP applicable law; or
(5) The proposed use is inconsistent with sound aiiport planning.
(d) A decision by the Airport Manager to deny an application for a vehicle rental business
permit must be in writin~
(e) A vehicle rental business permit is not transferable and may not exceed a term of ~Five (5)
ey ars.
(f) An off-a'rrport rental business permitfee shali pa~percenC (10%) of gross revenue derived
froin rentals ori~inating at or from the Kenai Municipal Airport.
(Q) Upon reasonable notice, the City shall have the right to audit a permittee's book.s and records
re~ardin~ the permit for verif 'nLn~ the gross revenue.
(h) A vehicle rental business permittee sha11 provide such evidence of insurance covera~e for the
~eimittee's operations on che airport as the AirporC Manager determines approoriate.
Ordinance 2180-2006 SUBSTITUTE Attachment A
Page 4 of 27
(i) A vehicle rental business permittee operating a vehicle on airport property shall keep the
vehicle in safe operafine condition.
(j) A vehicie rental business permittee ma~park, wait, and drop off ar pick up a passenger only
at a premises or in an area the Airport Mana~er has desi~nated for that qurpose.
p<) A vehicle renCal business permittee may cancel a permit and cease operations at the airport at
any tiine on written notice fo Che Airport Manaaer.
Q) The Airport Mana~er shall, after written notice to the permittee, cancel a vehicle rental
business permit and invalidate all vehicle identification issued to the permittee if the Mana~er
determines that Yhe permittee:
(1) Is not in comoliance with the vehicle rental business permiY and has not corrected the
noncomnliance within ten (10) days after receit~C of the notice; or
(2) Has ceased vehicle rentai operations on the airport.
(m) Cancellation aL a vehicle rental business permit bv the Aiiport Manager must be in writing
and state [he reasons for the cancellation.
(n) An applicant or permittee ma~procest the Airport Manager's decision to den~pplication
or canccl a vehiele rental business permit in accordance with KMC 14.20.290.
(o) In this section, "~ross revenue" means and includes, but is not limited to the followine:
~1) All monies paid ar pavable to the oermrttee from a transaction initiated under an off-
airport vehicie renCal business permit, regazdless of either the assigned location of the rental-
car ar where the customer returns the rentai car•
(2) Charges for any service performed in, on or through the business conducted under this
agreement, and includes all other income and proceeds from or incidental to any business
conducted in whole or in part in, on or in connecrion with the rights QranCed under a~ermit;
(3) Goods, work ar services furnished bY anv person in lieu of payment in exchan~e for
~~~ value received;
(4) Saies or fees for automobile liability insurance and personal accident insurance.
(p) No deductions from g~•oss revenue other Chan Chose specifically identified below shall be
allowed:
(1) The amount of Federai, State, Borough or munieinal sales or other similar taxes
separately sYatcd and colleeted and/or reimbursed from customers;
(2) Any sums reeeived from sales of capital assets;
3 Any sums received from insurance or other seCtlements from damage to automobiles or
other property of the concessionaire, or for the loss, conversion or abandonment of such
automobiles, or an~ees collected from a customer for dama~es to the autoinobile rented;
(4) Any sums received for loss damaee waiver insurance;
~5) Rc~lacement fuei cha~ges.
(q) In this secCion, "airport" means the area of land or water that is used or intended to be used
for the landing and take-off of aircraft and includes its buildings and facilities such as the
terminal, ramps, taxiways, parking lots and the float piane basin.
21.05.090 Penalties.
Violations of this chapter shall be punished as provided for violations in KMC 13.05.010.
Ordi~ance 2180-2006 SUBSTPI'UTE Attachment A
Page 5 of 27
Chapter 21.10
LEASING OF AIRPORT RESERVE LANDS
Sections:
2L10A10 Airport reserve land.
21.10.020 Lands avai(able for leasing.
21.10.030 Qualifications of applicants or bidders.
21.10.040 Applications.
21.10.050 riling fee and deposit.
21.10.060 No right of occupancy; Application expiration.
21.10.070 Processing procedure.
21.10.080 Lease amendment or renewal.
21.10.090 Length of lease term.
2L10.100 Rental rate determination.
21.10.110 Reimbursement for city-constructed improvements.
2110.120 ~ 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~
2110.170 Annual minimum rental.
21.10.180 Use permits.
2110.190 Acquisition of real property.
21.10.010 Airport reserve land.
(a) This chapter applies to airport-owned land within the Airport Reserve.
(b) The provisions of Chis chapter shall not alter or amend the terms or z7ghCS granted under
leases existing prior Co the effective date of this chapter.
(c) Pending lease applications for airport land filed prior to the efFective date of this [CHAPTER]
ordinanee shall [COME] be proeessed and issued under the provisions of KMC 21 [.10-20] and
22 in existence immediatelyprior to the effective date of this ordinance. Ofherwise the
provisions of this chapter shall apply.
21.10.020 Lands available for leasing.
(a) Subject Co the provisions of this chapter, city-owned land within the Airport Reserve may be
Ieased 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 the latest Airport Land Use
Plan as being required for the operation ar sa~Pety of the airport, or for the construction,
preservation, future construckion, or future expansion of facilities on the airport, including
(1) runways, runway safety areas, taxiways, aprons, water lanes, water taxiways, and other
aircraft operational areas;
(2) access roads, public streets, parldng lots, and other facilities for use by moCOr vehicles;
and
(3) public Yerminal buildings.
Ordinance 2180-2006 SUBSTITUTE AtYachment A
Page 6 of 27
(b) NoCwithstanding (a) of tiiis section,
(1) apron space may be leased, but only for aircraft fueling, loading, unloading, parking and
maneuvering purposes; and
(2) land required for the future construcfion or future expansion of airport faciliries:
(i) may be leased for an interim period not extending beyond the date on which the City
Manager deCermines Yhe land will be required for the construction or expansion; but
(ii) may not be leased if the City Manager determines that granCing Yhe iease would
interfere with, or jeopardize, the safe operation of the airport.
21.10.030 Qualifications of applicanYs or Uidders.
An applicant or bidder for a lease is qualified if the applieant or bidder:
(a) Is an individual aC least eighteea (18) yeacs of age;
(b) Is a group, association, or cor-poration 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 pr-oper
power of attorney or a ietter 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.
2110.040 Applications.
(a) All applications for lcase of lands shall be submitted to the City Manager on forms provided
by the Ciry Manager, together with the non-refundable filing fee and any applicable deposiC
required under 21.10.050. The City Manager shall not accept an application that the Manager
determines to l~e incomplete. Upon receipt of a complete application, filing fee, and any
~~~ applicable deposit, Che CiCy Manager shall cause the application to be stamped with ti~e date and
time of its receipt.
(b) With every application, the applicant shall submit
(1) a developmentplan, 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 Cype of construction;
(iv) The anticipated construction beginning and eompietion dates (ordinaril,~vears);
and
(v) Whefher the intended use and proposed development conforms with the
(i) zoning ordinance of the City;
(ii) comprehensive plan of the City;
~ (iii) latest Federal Aviation AdminisCration-approved Airport Layout Plan for the
airport; and
(iv) the latesY Airpor[ Land Use Plan.
(2) A business plan, if d1e applicant proposes to operate a business on the proposed premises.
The plan must include
(i) a comprehensive description of the proposed business;
(ii) the number of people the applicant expects to employ in the business during its first
full year of operation;
Ocdinanee 2180-2006 SUBSTPI'UT~ Atfachment A
Page 7 of 27
(3) A site plan, if the land the applicant desires Co iease 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 KF'B tax eompliance certificate and statement that Che applieant is eurcent with any
charges, fees, rents, taxes ar other sums due and payable to the City.
(c) Anytime during the processing of a lease application, the City Manager may request, and the
applicant sha11 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, fhe applicant shall
(1) pay a non-refundable filing fee in the amount of one hundred dollars ($100.00); and
(2) make a deposit Co show good faith and secure the CiYy in payment of any costs in the
following amounts:
(i) An appraisal cost recovery deposiC 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 rejeeC the applicanYs application and not enCer into a lease with the
applicant Chrough no fault of the applicanC or failure of the applicant ro comply with any
requirement of this chapter, a~iy deposit made under (a)(2) of this section will be returned to the
applicant.
(c) If the City enters into a lease wifh the appiicant any deposit made by the applicant under (a)
of this secTion will be applied to the City's engineering, appraisal, and consulting costs related to
~ the processing of the applicant's applicarion and entering into Yhe lease. The City will apply any
~~~ ~ unused balance of a deposit to the rent payable under the lease. If the City's costs exceed fhe
amount of any deposit, the applicant shall pay the shortage to the City as a condition of Che lease.
(d) If the applicant fails ro comply with any requirement of th~s chapter, causes inordinate delay,
as deYerniined by the City Manager, ar refuses to sign a iease offered to the applicant, the City
'Vlanager will reject the applicanYs application and apply any deposit made by the applicant
under (a) of this section to fhe City's appraisal, engineering, and consulting cosCS incuned in
connection with the applicant's application. If the City's costs for appraisal, engineering and
consulting costs exceed the deposits, the applicant will be responsible for these costs. The City
will return any unused deposif balance to the applicant.
21.10A60 No right of occupancy; Application e~cpiration.
(a) Submitting an appiication for a lease does not give the applicant a righC Co lease or use the
land requested in the application.
(b) If the City does not reject the application, an applrcation shall expire on the earlier of the
following
(1) twelve (12) months after the date stamped on thE application under 21.10.040(a) if the
City and the applieant have not, by that time, entered into a lease, unless the Council for good
cause grants an extension for a period not to exceed six (6) months; or
(2) the deadline date established under KMC 21.10.140, induding any extension of time
granted thereunder.
21.10.070 Applicalio-~ processing procedure.
~ ~ (a) IniYial Applieadon Review by:
Ordinance 2180-2006 SUBSTITUTE Attaehment A
Page 8 of 27
~ (1) Assistant to the City Manager (for applicaCion completeness; conformance with Title 21);
(3) Airport Manager (for conformance with the Airport Land Use Plan, Airport Layout Plan,
Airpart Master Plan, FAA regulations, Al'P grant assurances, and airport operations);
(3) City Planner (for conformance with the Airport Land Use Plan, Comprehensive Plan,
municipal zoning, and future airport improve~nent projects); and
(4) City Manager (for adequacy of Che applicant's business plan and construction financing
plans).
(b) The above staff shall present to fhe CiCy Manager their joint recommendation for action on
the application, such as Rejecrion, Approval, or Approval of a staff alternative.
(c) If the Ciry Manager concurs with the staff recommendation, the Manager wi11:
(1) issue a rejection letter, stating the reasons for rejecflon; or
(2) refer the application to the Airport Commission and the Planning & Zoning Commission
for review and comment, together with the Manager's recommendaCion for Approvai or
Approval of the staff alternafive; and
(3) Inform the City Council of the Manager's recommendation.
(d) If the City Manager refers the application to Che Commissions, the City Manager wIll
cons'rder the recommendations of fhe Commissions and
(1) Issue a rejection lefter, stating the reasons for rejection; or
(2) Approve the application or sta~ff alCernative, and direct the staff to issue the lease; and
(3) Inform the City Council of tY~e Manager's decision to approve or reject the application; or
(4) Obtain the City Council's concuiTence i~f Che Manager's decision to approve ar reject Che
application is contrary to the recommendations of the Commissions.
(e) An applicant whose application is rejected by the City Manager may appeal Co the City
~ Council within fifteen (15) days following the daCe on which the Manager's rejection letter was
hand delivered or placed in Che U.S. mail.
(~ If another complete and otherwise applrovable application for lease of the same property is
submitted by a different applicant before Lhe City Manager enters into a lease wifh the first
applicant, the City Manager will forward the applicalions, Che Manager's recommendarion and
the commissions' recommendafions to the Ciry Council For approval of the application
a~iticipated to best serve the interests o~f fhe City. Thc Council may approve one of the
applications or direct the City Manager to award a lease of the property by sealed bid.
(g) Grounds for the City Manager to reject an application include,
(1) Yhe applicanC's failure to provide any clarification or information required under this
chapter;
(2) the applicant's proposed development or use of the iand is inconsistent with
(i) the zoning ordinance of the City;
(ii) the comprehensive plan of the City;
(iii) the latest Federal Avi~tion At~ninistration-approved Airport Layout Plan for the
airport;
(iv) any obligation of the CiCy under the Airport Sponsor Grant Assurances to the Federal
Aviation Administration;
(v) the latest Airport Land Use Plan; or
(vi) a regulation of the Federal Aviation Administration applicable to the airport.
(3) the applicant's proposed development or use of che land would violate a federal, state, or
local law, including an ordinance or regulation of the City;
Ordinance 2180-2006 SUBSTITUTE ACtachment A
Page 9 of 27
(4) Che applicant's failure to reasonabiy demonstraCe the financiat viabiiity of the appiicant's
proposed development or of the business Che applicant proposes to operate;
(5) the applicant is in default of any charges, fees, rents, faxes, or other sums due and payable
to the City;
(6) the applicant is in default of a requirement of any lease or contracC with the City;
{7) the applicaYion is rejected by the City Council in favor of another application for the same
land under paragraph (f) above;
(8) the City Council decides, under (f) above, to rejcct a11 applications and award a lease of
the land by sealed bid; and
(9) the City Manager or the City Councii determines that approval of tt~e application is noC in
the best interest of the CiCy.
(h) The City Council may waive provisions of tl~is chapter to lcase property or interests in real
property with the United SYates, the state or an Alaska political subdivision when in the judgment
of the council it is advanCageous to Che municipaliCy to do so.
21.10.080 Lease Amendment or Renewal.
An application submitted by an existing tenant for an amendmenC, [erm extension, or
renewal of the tenant's lease shall be eubject to the requirements and procedures of KMC
21.10.010 - 21.10.070, except that
(a) KMC 2L10.040(b)(1), (2) and (3) shall not apply to an application that does not include a
proposal to construct new improvements on the premises.
(b) KMC 2110.040(b)(3) shall not apply to an applica~ion Chat 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 application
~~~ 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) shail not be required for an application
for a lease amendment that, if approved, will make only administraCive changes in the lease and
will not alter the authorired use, size, or value of the premises or if the City Manager determines
the CiCy will not incur any engineering, surveying or consulting costs.
Ordinance 2180-2006 SUBSTITIITE AtCachmenC A
Page 10 of 27
21.10.090 Length of Lease Term.
(a) Unless the City determines a shorter iease term is in the best interest of the City, the lengfh of
Cerm for a iease granted for land wiChin khe AirporC Reserve will be based on the amount of
investment the applicant proposes Yo make in the construction of new permanent improvements
on the premises during the firet 2A months following the beginning date of fhe lease or lease
extension.
(b) [THE LENGTH OF TERM FOR A LEASE RENEWAL SHALL BE BASED ON] Unless
the City determines a shorter lease term is in the best interest of the Citv, the len~th of term for a
lease renewal shall be based on a cit ~}_-approved ap~raisal of the [APPRAISED] value of the
permanent improvements on Che property as set forfY~ in the table in subsection (d)(1). The
appraisal shall be performed by an independent a~praiser certified under Alaska Statute 8.87
with experience appraisine air~ort improvements. The appraisal shall be uaid for bv the lessee.
(c) If the applicant proposes to malce less than $100,000 in new permanent improvements on the
premises, the maximum teim of a new lease shall be five (5) years.
(d) If the applicant proposes to invest $100,000 or more in new permanent improvemenes on the
premises,
(1) the maximum term of a new lease or a renewal of an expiring lease shall be determined
according to Ule following table:
[Applicant's Tnvestment
(in U.S. Dollars) [ Maximum
~ is at Least] Term of Years]
~ ~ ~ [Less than $100,000 5
$ ] 00,000 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
$475,000 30
$500,000 31 ~
$525,000 32
$550,000 33
$575,000 34
~ ~ $600,000 or more 35]
Ordinance 2180-2006 SUSSTITUTE Attachment A
Page 11 of 27
ApnlicanY's Investment/
Value (in U.S. Dollars) Maximum
is at Least Term of Years
Less than $100,000 5
$1.00,000 - $199,000 15
$200.000 - $299,000 20
$300,000 - $399,000 25
$400,000 - $500,000 30
More than ~500 000 35
(2) the maximum term extension for an existing Iease shall be one (1) year for each $25,000
of additional investment, provided that the total of the remaining lease term and the extension
shall not exceed 35 years.
(3) a bona fide third part~purchaser of aii~port im,provements maygeC an extension for an
existing lease acquirecl with improvements based on a city-approved appraisal of the
improvemenCS purchased. Unless the Citv determines a shorter lease term is in the best
interest of the Citv, the extension shall be based on the table in subsection (d)(1) ~rovided no
exCension sha]i exYend a lease term past 35 vears. The appraisal shall be pei-foi7ned b~
inde~~endenf appraiser certified under Alaska SCaYUCe 8.87 with expeiience aporaisin~ airporC
improvements. The appraisal shall be paid for by the lessee.
(e) In the lease granted to the applieant, the City Manager will include a provision requiring Yhe
applicant to substantially complete the proposed permanent improvements within a reasonable
~ period of time, consirlering the cosY and natnre of the improvements. Provided however, that CI1e
~~~ time allowed shall not ordinarily exceed 24 months afCer the effective date of the lease.
(t) In the lease extension granCed Co Che applicant, the City Manager will include a provision
requii7ng the applicanC to complete the additional plroposed permanent improvements within a
reasonable time period, considering the cost and nature of the improvements provided YhaC Che
time period shail noC ordinarilv exceed twenty-four (24) months after the effective date of the
lease extension.
(g) The City Manager will 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 fhe applicant's completion of fhe
permanent improvements within the time period set under (e) or (f) of this section. The Ciey
Manager will determine the form and amount of the security according to the best interest of the
City, considering Che nature and scope of Yhe proposed improvements and the financial
respons'rbility of the applieant.
(h) The applicanY shall, within 30 days after completion of the permanent improvements, submit
to the City Manager written documen2ation that the improvements have been completed as
required under (e) or (t) of this secCion.
(i) 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, Che Manager may granC an extension that is
sufficient to allow for the completion of the permanent improvements or for submission of
docnmentation that the permanent improvements have been completed under this secYion. No
extension or combination of extensions granted [UNDER EI'I`HER SUBSECTION (e) OR (~]
will exceed 12 months.
Ordinance 2180-2006 SUBSTITUTE Attachment A
Page 12 of 27
(j) If, within the time required under (e) or (f) of this section, including any extension granted
under (i) of this section, the applicant faIls to complete the required permanent improvements,
the City Manager will execuYe the forfeiture of the performance bond, deposiC, personai
guaran[ee, or other security posted by the applicant under (g) of fhis section to the extent
necessary to reimburse the City for all cosCS and damages, including administrative and legal
costs, arising from the applicant's failure to complete the required improvements, and initiate
eancellation of tl1e lease or reduce the ferm of the lease to a period consistent with the portion of
Che improvements substantially compieted in a timely manner according to the best inCerests of
the City.
(k} The Cit~~er shali review rates, char^es and the invescmendvalue in the cha~ter every
five years to see if adjustments should be made.
~ When used in this section, the following terms shall have the meanings given:
(1) "expiring iease," means a lease with less than one (1) year of term remaining;
(2) "existing lease," means a iease wiCh at least one (1) year of term remaining;
(3) "permanent improvement," a fixed addition or change to land that is not temporar•y or
portable;
(i) "permanent improvement" includes
(A) a building, building addifion, retaining wall, starage tank, earthwork, fili
material, gravel, and pavemenC; and
(B) remediation of conCaminaCion for which Che applicant is not responsible;
(ii) "permanent improvemenP' excludes items of ordinary maintenance, suct~ as glass
replacement, painCing, roof repairs, door repairs, plumbing repairs, floor covering
replacement, or pavement patching.
~ 21.10.100 Rental rate determination.
(a) Beginning in 2007 and at intervals of approximaCely five (5) yeais thereafter, the City
Manager shall retain the services of an independent, qualified real estate appraiser cert'rfied under
Aiaska Statute 08.87 w determine a zone-based square foot lease rate for all land within the
Airport Reserve that is nnder lease or available for lease based on the fair ~narlcet value of the
property and the appropriate market lease rate for property wiYhin fhe Airport Reserve. Lease
applications filed after the effective date of this chapter but priar to completion of the initial lease
rate determination shall have a rental rate of eight percent (8°Io) of fair market value until the first
June 30 after the zone based sauare foot lease raYe is established under this subsection, after
which the lease rate shall be as established in the zone-base sauare foot method described above.
(b) Foliowing the daCe on which fhe City Manager accepts the determinations made under (a) of
this section, the Manager shall establisl~ rental amounts for leases as follows:
(1) far each new lease granted by the City under this chapCer, the rentai shall be as
determined under (a) of Chis secfion; and
(2) for leases in existence prior to fhe effective date of this chapter, the iease rate shall be
determined as provided in the lease.
(c) Under this section, when determining the fair market value of the premises of an existing
lease, an appraiser shall appraise the property
(i) in its condition as of the incepCion of the lease;
(2) plus any improvements or amenities subsequently provided by the City; but
Ordinance 2180-2006 SUBSTITUTE Attaehment A
Page 13 of 27
(3) excluding any improvements or amenifies provided by the City under 21.10.ll0, if lessee
has reimbursed the City, or entered into an agreement to reimburse the City, for the cost of
~ ~ ~ the improvements or amenities.
21.10.110 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 fil1, utility extensions and other imp~rovements or amenities on or in
direct connecCion with Che premises, constructed by Che Ciry prior to the effective date of the
lease; or
(2) land clearing, gravel fill, utility extensions and other improvements or amenities on ar in
direct connection with the premises, which the City agrees to construct as a condirion of fhe
lease, subject to City Council approval.
(b) The Lessee shall reimburse the Ciry for the City's cost of constructing the improvements in
ten (10) equai annual payments, plus interest at eight percent (8%} per year on the unpaid
balance. If the lease is for less than ten yeus, the re-~aymene schedule may not be longer than
the term of the lease. The Lessee may pay the entire remaining balance to Che Cify at any time
durrng the term of the lease.
21.10120 Lease utilization.
I.eased lands shall be utilized for purposes wiChin Che scope of fhe application, the terms
of the lease and in conformity with the ordinances of the Ciry, and in substantial conformity wiCh
the Comprehensive Plan and Airport Master Plan. UCilization or development for other than the
~ allowed uses shall constitute a violaYion of the lease and subject the lease to cancellation at any
~~~~ time. Failure to substanCially complete the development plan for the land sha11 constitute
grounds for cancellation.
21.10.130 Bidding procedure.
With the approval of the City Council, the City Nlanager may designate a specific lot or
lots to be leased through eompetitive sealed bid. In a sealed bid offering, the City Manager shall
award the lease to the qualified bidder that offers the highest one-tiine premium payment, in
addition to the lease rent esYablished under this chapter. Provided however, that high bidder and
thc bidder's lease proposal shall be subject to all provisions of lease application review and
approval under this chapter.
2110.140 Lease execution.
When issuing a lease to an applicant, the City Manager shall hand deliver or mail the
document to the applicant. The applieant 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
retuin the lease to the City Manager. If the applicant shows good cause to the Ciry Manager,
and the Ivlanager deterniines the action is not inconsistent with the City's besC interest, the
Manager will grant an extension not exceeding thirry (30) days for the applicant to execute and
return Che lease. Upon Yhe failure of the applicant to timely execute and return the lease
agreement, Che Cify Manager shall wifhdraw the offer of the lease in writing.
Ordinance 2180-2006 SUBSTITUTE Attachlnent A
Pnge 14 of27
~ 21.10.150 Form of lease.
'~~~ ~ (a) When leasing land under this chapter, 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, effeetive, and efficient operation of the airport;
(iii) conform wiCh the appiicable xequiremenfs af the K1VIC, including this chapter, Alaska
statutes, Federal Aviation Administration regulations, and ocher 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 Ciry Council.
(b) The City Manager may enter into a land lease that deviates from the standard form adopCed
under (a) of Chis section, if
(1) the Manager believes the action is in the bcst interest of the City;
(2) the lease is approved as Co form by the City Attorney; and
(3) Che lease is approved by resolution of the City Council.
21.10.160 Re-evaluation of rent.
(a) [AT ~TERVALS OP NOT LESS THAN] Be ~i~ nninQ in 2007 and every five (5) years [OR
AT SUCH OTHER TIME AS MAY BE SPECIFIED IN A LEASE EXECUTED BEFORE THE
~FFECTIVE DATE OF THE ENACTMENT OF THIS SL~CTION] thereafter, the City Manager
shall increase or decrease the rent charged in the lease to the amount determined under
2110100.
~~~ (b) The Ciry Manager sl~all change the rent in a lease by giving the lessee written notice at least
Yhirty (30) days in advance of the effective date o~f the change.
(c) The "Fair Market Value" of the Premises shall be equal Co the then-fair markeY rate tor
simiiar commercial property in the City of Kenai, Aiaska (the "Relevant Area"). City sha11 give
noCice to Lessee of City's estimation of the Fair Marlcet Va]ue not later than thirty (30) days prior
to the expirafion of the then-applicabie five-year period, as evidenced and supported by the
[WRITTEN OPINION OF] zone-base square foot lease rate appraisal done under KMC
21.10.100(a) [A REAL ESTATE APPRAISER CERTIFIED UNDER ALASKA STATUTE
8.87, SELECTED AND PAID FOR BY THE CITY, FAMILIAR WITH THE RELEVANT
AREA AND WHO WOULD QUALIFY AS AN EXPERT WITNESS (THE "FiRST
APPRAISER")1. If Lessee disaa ees with such estimate, it shall advise fhe City in writing
thereof within ninety (90) days of Lessee's receipC of such estimate, as evidenced and supported
by the written opinion c~f a real estate appraiser certified imder Alaska Statute 8.87 with
e~erience in a~praising airport property (selected and paid for by Lessee) familiar with Che
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 Market Value of Che Prem'rses. If
City and Lessee 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 Chird
qualified real estate appraiser [QUALIFIED] certified under Alaska Statute 8.87 with experience
in ap~raising airport propertv (selecCed and paid for jointly by fhe parties) famiiiar with the
~ ~ RelevanY Area (the "Third Appraiser"). Within thirty (30) days after the Third Appraiser has
Ordinance 2180-2006 SUBSTLTUTE AtWChment A
Page IS of 27
been appoinCed, the Third Appraiser shall decide which of the Cwo respective appraisals from the
First Appraiser and the Second Appraiser mosf closely reflects the Fair Market Value of the
Premises. The Fair Market Value of the Premises shall ir-rebuttably 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. Notwithstanding anything to the conl~•ary herein, rental shall continue to be
paid at the then-applicable rate until any such new rental rate is established, and Lessee and CiYy
shall promptly pay or refund, as the case may be, any variance in the rental, withouf inCerest
thereon aceruing to the exCent Co paid/refunded in a timely fashion.
21.10.170 Annual minimum rental.
(a) Annual minimum rentals shall be computed from the approved aopraised market value
utilizing the method as described in KMC 21.100, 110 and 160.
(b) Upon execution of the lease, the lands become t~able to the extent of its leasehold interest
and lessee shall pay ali real property taxes levied unon such leasehold interest in these lands, and
shall pa ~~an~pecial assessments and taxes as if he were the owner of said land.
{c) Rent shall be paid annuallv in advance. Said payments shall be prorated to conform to the
City of Kenai's fiscal year be~innin~ 7ulv 1 and endin~ 7une 30. If the equivalent monthly
~ayment exce~ls Cwo hundred dolla~~s ($200), then the lessee shall have the option of makin~
payments on a inonthly basis.
{d) Lessee shall be responsible for all saies taxes applicabie to its operaCions or due on payments
under the lease.
21.10.180 Use Permits
[THE COUNCIL MAY AUTHORIZB 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) YEAR, WITHOUT APPRAISAL OF TIiE VALUE OF
THE PROPERTY OR COMPETITIVE PROCESS, FOR ANY PURPOSE COMPATIBLE
WITH THE ZONII~TG OF THE LAND, AND ON SUCH TERMS AND FOR SUCH RENTALS
AS THE COUNCIL SHALL DETERMI'VE]. Subieet to the approval by Che CiCy Council of the
terms and rent, the Citv Manager mak, without subjecting Che propertv to appraisal or
competitive ~rocess, ~ranC a permit for the temporary use of real properCy owned by the Cit~
a pcriod not to excced one (1) year and far any purpose not in conflict with the zoning of the
land.
21.10190 Acquisition of Real Property
(a) The city, by authorization of the city council, expressed in a resolufion for such purpose, may
purchase or acguire an interest in, lease or real property needed for a public use within the aiiport
reserve on such Yerms and condifions 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 fu11 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 SUBSTITUTE Attachment A
Page 16 of 27
Chapter 21.15
LEASE AND SALE OF AIRPORT LAND OUTSIDE
OP' THI; AIRPORT RESERVE
Sections:
21.15.010 Airport land outside of the Airport Reserve.
2115.020 Quali~cations of applicants or bidders.
2L15.030 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 Appraisal.
21.15.090 Terms of lease.
21.15100 Annual minimum rental.
21.15.110 Bidding procedure.
21.15.120 Principles and policy of lease rates.
21.15.130 Reimbursement for city-constructed improvements.
2L15.140 Lease execution.
21.15.150 Lease utilization.
2115.160 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.
2115.260 Acquisition of real property.
21.15.010 Airport tand outside of the Airport Reserve.
(a) This ehapter appiies to airport land outside of thc AirporC Reserve.
(b) The City may sel1, convey, exchange, transfer, donate, dedicate, direct, or assign to use, or
otherwise dispose of airport Iand outside of the Airport Reserve, including property acquired,
held for, or devoted Yo a public use, in accordance with this chapter. Disposai or sale of lands
shall be made only when, in the judgment of the City Council, such iands are 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 trust, mortgage, contract 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 shall be approved by the City Attorney.
Ordinance 2180-2006 SUBSTITUT~ Attachment A
Page 17 of 2~
~ (d) The provisions of this chapter shall not alter or amend the terms or rights granted under
leases existing priar to the effeetive date of this chapter.
(e) Pending lease applications for airport land filed prior to the effective date of this [CFIAPTER]
ordinance shall [COME] be ~rocessed and issued under the [CURRENTLY EXISTING]
provisions of KMC 21 [.10-20] and KMC 22 in existence immediatelypriar to the effective
date o~f this ordinance. Otherwise the provisions of this chapter shall apply.
21.15.020 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 or over; or
(b) Is a group, association, or corporation which is authorized Yo conduct business under the laws
of Alaska;or
(c) Is aeting as an agent for another and has qualified by f'rling with the City Manager a proper
power of attorney or a letter of authorization creating such agency. The agent shall represent
oniy (1) one principal to the exclusion of himself. The term "agent" includes real esCate brokers
and agents.
21.15.030 A~plications.
(a) All applications for lease of lands shall 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 aceepted by fhe City Manager unless it appears to the City
Manager to be complete. Filing fees are not refundable.
~ (b) With eveiy application, the applicant shall submit a development plan, showing and stating:
(1) The puLpose of the proposed lease;
~~~ (2) The use, value and nature of impirovements to be constructed;
(3) The type of construction;
(4) The dates construction is esCimaced Co commence and be completed (ordinarily a
maximum of two (2) years); and
(5) Whether intended use complies with the zoning ardinance 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, thc 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 faiCh and secure the City in payment of any costs in the
following amounts:
(i) an appraisal cost recovery deposit of Cwo Chousand dollars ($2,000.00); and
(ii) an engineering, surveying and consulting cost recovery deposit of Ywo thousand dollars
($2,000.00).
(b) If the City decides to reject fhe applicanY's application and nof enter into a lease with Che
applicant through no fault of the applicant or failure of Che applicant to compiy with any
requirement of this chapter, any deposit made under (a)(2) of this section will be returned to the
applicant.
(c) If Che City enters into a lease with the applicant any deposit made by the applicant nnder
(a)(2) of this section will be applied to the City's engineering, appraisal, and consulting costs
related Co the processing of the applicant's application and entering into the lease. The City will
Ordinance 2180-2006 SUBSTITUTE Attachment A
~ ~ Page 18 of 27
app]y any unused balance of a deposit to the rent payable under the lease. Tf the City's costs
~ exceed the amount of any deposit, the applicant shall pay the shor~Cage 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 to sign a lease offered to the applicant, the City
Manager will reject the appiicant's application ~nd apply any deposie made by the applicant
under (a) of Chis section to the City's appraisal, engineering, and consulting costs incurred in
connection with the applicanYs application. If the City's costs for appraieal, engineering and
consulYing costs exceed the deposiLs, [he applicant wi11 be responsible for these costs. The Ciry
will return any unused deposit balance to Che applicant.
21.15.050 Rights prior to leasing.
The filing of an application for a Iease shall give the applicant no right to lease or to the
use of the land Par which they have appiied. The application sha11 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 eause grants an extension. No
extension may be granCed for a period longer than six (6) additional months. I.ease rates are
subjeet 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. fihe
Planning and Zoning Commission shall normally consider applieations 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 di~Fficulty in
obtaining a perfected application, details as to development plans, etc., or where the appiicant
fails to comply with directions or requests of Che Planning and Zoning Commission, any such
priority will be lost. If an applicaCion for the purchase of City-owned lands, previous]y
authorized for sale by the Council, is received by the City prior Lo Che Kenai Planning and
Zoning Commission making an affirmative or negative recommendation to the Councii
regarding the lease applieation for the same property, the City may elect to sell said property in
accordance with the provisions of Che Code.
(b) The City Council shall noimally consider a lease proposal only after approval 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 Yo the City
Council within Chirty (30) days after approval by the Planning and Zoning Commission.
(c) Where there are two (2) or rnare applications for the same aiiport 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 wiil 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 Ciry Couucil fi•om a finding or a refusa] to find by
the Planuing and Zoning Commission by filing an appeal with the City Clerk within seven (7)
days after the finding is made or refused by the Planning and Zoning Commission.
(d) The decision whether or not to lease land rests in the sole diseretion of Che Ciry Council.
Ordioance 2180-2006 SUSSTITUTE Attachment A
Page 19 of 27
21.15A70 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 th~ Planning Commission and approved by Che
Council.
21.15.080 Appraisal.
No land shall be sold leased, or a renewal of lease issued, unless the same has been
appraised within a twelve (12) month period prior to the sale or date fixed for beginning of the
term of the lease or rene,wal lease. No land shall be leased for less than the approved ap~raised
annual rental. Appraisals shall reflect the number and value of Ciry services rendered the land in
question.
2115.090 Terms of lease.
All leases shall be approved by the City Council before the same shall become efFective.
The Cerm of any given lease shall depend upon the durability of fhe proposed use, the amount of
investment in improvement proposed and made, and the nature of the improvement proposed
with respcct ro durability and time required to amortize the proposed investment.
21.15100 Annual minimum rental.
(a) Annual minimnm rentals shall be computed from the approved appraised market value
utilizing the method as described in KVIC 21.15120 below.
(b) Upon execution of the lease, the lands become Yaxable to the extent of its leasehold interest
and lessee shall pay all real properCy taxes Ievied upon such leasehold interest in these lands, and
shall pay any speeial assessments and taxes as if he were the owner of said land.
(c) Rent shall be paid annually in advance. Said paymenCS shall be prorated to confonn to the
Ciry of Kenai's fiscal year beginning July 1 and ending June 30. If the equivalent monthly
payment exceeds two hundred dollars ($200.00), then fhe lessee shall have the option of making
paymenCs on a monthly basis.
(d) Lessee shall be responsible for all sales taxes applicable to its operations.
21.15.ll0 Bidding procedure.
As an excepCion co genera] policy listed above, Che CiCy Council may designate a specific
lot or lots Co be made available only for bid. This provision shall apply only when there is no
outstanding application ~ending 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,
shall be subject to all provisions of review and approval established for all other lease
applications.
21.15.120 Principles and policy of lease rates.
(a) A fair return to the Airport System is mandated by the terms and conditions of the quitclaim
deed and appropriate deeds of release, granting these lands to the Airport System by the Federal
Government. To ensure a fair return, all leases for a period in excess of five (5) years shall
include a redetermination clause as of thc fifth anniversary, and all lands for Iease shall be
appraised prior to lease and again prior to redetermination. Lease rates:
(1) Shall be based on fair market value of the land, including an appropriate coasideration of
~ faciliries and services availabie (public water, public sewer, storm sewers, and other pubiic
Ordinance 2180.2006 SUBSTTTUTE Attachment A
Page 20 of 27
utilities) as determined by a qualified independent appraiser, considering the best use of the
specified land; and,
(2) Shall be eighC percent (8 %) of ~fair maiket value.
(b) For leases in existence priar to Yhe ePPective date of this chapter, the lease rate
redeterminarion shall be as provided in the lease.
(c) The City Manager shall change the rent in a lease by giving the lessee wiitten noCice at least
Chirry (30) days in advance of the effecCive daYe of the chan~e.
(d) 7'he "Fair Market Value" of the Premises shall be equal tc~ the then-fair market rate ~for
similar commercial property in the City of Kenai, Alaska (the "Relevant Area"). City shall give
notice to Lessee of City's estimation of the Fair Market Value not later than thirty (30) days prior
To the expiration of the Yhen-applicable five-year period, as evidenced and supported by the
written opinion of an independenC real esCate appraiser certified under Alaska SCatute 8.87,
selected and paid for by the Ciry, familiu with the Relevant Area [AND WHO WOiJLD
QUALIFY AS AN EXPERT WITNESS] (the "FirsC Appraiser"). If Lessee disagrees with such
estimate, it shall advise the City in writing thereof within thirty (30) days of Lessee's receipt of
such estimate, as evidcnced and supported by the written opinion of a real estate appraiser
certified under Alaska Statute 8.8'7 (selected and paid for by Lessee) familiar 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 5econd Appraiser concerning the Fair Market Value of the Premises. If City
and Lessee cannot agree upon such value then, with all deliberate speed, they shall direct the
First Appraiser and Che Second Appraiser to expeditiously and mutualiy seiect a third real estate
appraiser certified under Alaska Statute 8.87 (selected and paid for jointly by the parties) familiar
with the Relevant Arca (ehe "Third Appraiser"). Within thirty (30) days after the Third
~~ Appraiser has been appointed, the Third Appraiser shall decide which of the two respecfive
appraisals from the FirsC Appraiser and the Second Appraiser most closely re~flects Che Fair
Market Value of the Premises. The Fair Market Value of the Premises shall irrebuttably 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. I~~otwithstanding anything Co the contrary
here'rn, renta] sha11 continue to be paid at the then-applicable rate until any such new rental rate is
esCablished, and L.essee and City shall promptly pay or refund, as the case may be, any variance
in the rental, without inCerest thereon accruing to Yhe extent to paidh-efunded 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 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
lcase; ar
(2) land clearing, gravei fill, utility extensions and other improvements or amenities on or in
direct connection with the premises, which the CiCy 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 construcring the improvements in
ten (10) equal annual payments, plus interest at eight percent (8%) per year on the unpaid
balance. If the lease is for less than Cen (10) years, the repayment schedule mav not be lon~er
Ordinance 2180-2006 SUBSTI'I'UTE Attaehment A
Page 21 of 27
than the term of the lease. The Lessee may pay the enCiie remaining baiance to fhe Cify aC any
' time during the term of the lease.
21.15.140 Lease execution.
The lease applicant shall execute and return the appropriate lease agreement with the City
of Kenai within thirty (30) days of mailing~ Che agreement to said applicant. The lease ag-eement
shall be prepared in accordance with the requirements of this title. Failure to execute and return
the lease agreement within the specif7ed period shall result in the ~farfeiture of all leasing rights.
21.15150 Lease utilization.
Leased lands shall be utiiizzd for purposes within the [SCOPE OF THE APPLICATION,
THE] terms of the lease and in conformity with the ordinances of fhe City, and in substantial
conformity with the comprehensive plan. Utilization or development for other than the allowed
uses shall constituYe a violation of the lease and subject the lease to cancellation at any time.
Failure to substantially complete the development p1an for the land, consistent with the proposed
use and terms of the lease, shall constitute grounds for cancellarion.
21.15.160 Form of lease.
(a) 4Vhen leasing land under this chapter, the City Manager shall use a standard lease form that is
(1) drafted to
(i) provide a reasonable basis far the Iessee's use of the premises;
(ii) fosYer Yhe safe, effective, and efficient operation of the airport;
(iii) conform with the applicable requirements of the KMC, including this chapter, Alaska
statutes, Federal AviaCion ~dminishation regulations, and oCher applicable federal law;
and
(iv) provide for the best iuterest 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 adopYed
under (a) of this section, if
(1) the Manager believes the action is in Yhe best interest of the City; and
(2) the lease is approved as to form by the City Attomey; and
(3) the lease is al~proved by resolution of the City Council.
2I.15.170 Conveyance to encourage new enterprises.
(a) Notwithstanding any other provisions oF this chapter, where it is found that encouragement of
a new eommercial or industrial [OR NON-PROFIT] enterprise would [INCREASE THE
ECONOMIC STABII,ITY OF THE CITY OF KENAI AND WOIILD] be beneficial to the City
of Kenai, the City Council by [RESOLUTION] ordinance so finding may direct conveyance of
one or more parcels of City Iand by the City Mana~er to such entetpiise upon such Terms as to
price, conditions of conveyance, and with such contingencies as may be set forth in said
[RESOLUTION] ordinance.
(b) In the event fhe land directed to be conveyed under subsection (a) above consists in part or in
~ whole of airport lands, Yhen the [RfiSOLUTION] ordinance ordering its conveyance will not be
effective until Che City Council by [RESOLUTION] ordinance has appropriated from the general
Ocdinance 2180-2006 SUBSTITUTE Attachment A
Page 22 oY 27
fund to be dedicated to the airport fhe difference between the appraised fair market vahie of said
airport lands ~nd the purchase price, if any, set forth in said [RESOLUTION] ordinance.
21.15.180 Sale.
(a) Airport land outside the airport reserve to which the City of Kenai holds tifle 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 noC required for a public purpose,
may be listed for sale by the City Manager, except thaC lands which have been Ieased shall not be
sold unless the Lessee 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 Yhe sole discretion of Che City.
(b) Sales of land pursuant to subsecCion (a) above shall be made at not less than fair markeC
value. The purchaser shall execute the "AgreemenY For Sale of Land" within [SIX MONTHS]
one (1) ~ of the daCe of appraisal. The City Manager has the option to dispose of snch
properties in accordance wiYh 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 Chat the sale is not closed within [SIX MONTHS] one (1) year 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 o'f the six-month peiiod.
2115.190 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 Iandbe sold
for which an appraisal will be required, which will require subdividing, platting, or surveying
and staldng, or which will requ'rre advertising or incurring any other expenditures by the City
prior to sale,
(1) No actions in preparation for sale will be Yaken 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 Che City and such agreement to purchase shall furfher
contain Yhe a~eemenC by appiicant to pay any additional costs if said good faith deposit is
insufficient to pay ail costs incun•ed 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 teimination of sale procedures, and shall
reimburse applicant far any good faith deposit advanced in exeess of all expenses incurred.
(However, if another party desires the sale to proceed, files an application for sale, executes
and files an a~reement to purchase, and advances sufficient funds therefore, Yhen Che pi7ar
applicant will be reimbursed for expenses charges which can be attributed to the subsequenC
applicant.)
Ordinance 2180-2006 SUBSTI'I`IITE Attachment A
Pa~e 23 of 27
~ (3) If all acCions necessary for preparation for sale have been accomplished, and if neither the
applicant nor any othei party purchases said land when first offered for sale after such
request, then all expenses inenrred in preparation for the sale will be paid from the good faith
deposit, and the balance, if auy, shall be reCUrned to Yhe applicant. If the sums advanced as
good faith deposit a~-e 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 saie, Che good-faith deposit will be refunded in
total to the applicant. The City's expenses will be first deducted from the deposit of the
successful bidder.
(5) If fhe land in quesrion is sold to applicant, the good-faith deposit advanced, after
deducCing the City's expenses, will be applied on the payment due at closing.
(6) If thc land in question is to be sold by sealed bid and the applicant has submitted a valid
bid, but said applicant is nol the high bidder, he may purchase Che land by Cendering the City
a bid equal to the high bid within five days of the bid opening. If the land sale is iniriated in
accordance with K1YTC 21.15.060(a), the applicant shall be defined as that party submitting
~ the initia7 lease applieation.
(c) If the tract of land proposed to be sold is leased land, the lessee may request the sale of said
land at not less than the fair market value. The current 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 incoxporated into the lease agreement. If there is no
development schedule, the lessee may request to purchase the properry if there have bcen
subs[anriai improvemenYS as detcrmined by the City Manager. The decision whether or not Co
~ sell the land to the lessee rests in the sole diseretion of Che City.
~~~ (d) If the tract of land proposed to be soid is not leased land, or is leased land without substantial
improvernents, then Che 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 ehe sole discretion of the City. If fhe
tract is to be put up for such competitive auction or sealed bid sale, noGCe of sale and the manner
in which the land is to be sold shall be published in a newspaper of general circulation within the
Ciry once each week for two successive weeks noY iess than 30 days prior to Che date of sale;
such notice shall also be posted in at least three public places within the City at Ieast 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 no~ice must contain:
(1) the legal description of The land,
(2) a brief physieal description of the land,
(3) the area and general loeation of the land,
(4) t6e minimum acceptable offer for the land (which shali be its appraised ~fair marlcet
value),
(5) the Cerms under which the land will be sold,
(6) any limiCations on fhe sale of said land,
(7) the time and place seC for ehe auction or bid openin~,
(8) the amount of deposit to be submitted with each bid in order to cover thc CiCy'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 infoimed.
Ordinance 2180-2006 SUBSTITtiTE Attachment A
Page 2A oY 27
(e) Where a real estate agent furnishes a buyer for City land, the ciosing agent shall be authorized
'~~ to pay said agent a real estate commission of five percent (5%) of Che purchase price for the land
~ or five percent (5%) of the appraised fair market value of the ]and, whichever is lower, under the
following Cerms and conditions:
(1) The City Manager shall provide a non-exclusive Iistang of lands available for saie.
(2) No commission shall be paid to an agent where said agent is a party, or in privity with a
party, to said sale.
(t) 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 l~e by quit claim or wairanry deed furnished by die City, and
buyers ue advised that all such conveyances are subject to all liens, encurnbrances, restrictions,
and covenants of record and are specifically, withont t~eing limited thereto, subject to any
unreleased restrictions contained in Che deed or deeds by which the City received tifle to the land.
The deed shall be signed Uy the City Manager and attested by the City Clerk. The form of the
deed shall be approved by the City ACYorney.
(h) If a buyer desires to obtain a preliminary commitment for title insurance or title insnrance Co
the land, Yhen it shall be the responsibility of the buyer Yo obtain such commihnent or insurance
and to pay for the same.
(i) If the tract or tracts of land are sold under terms by which Che Ciry 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 shali 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 are deposited.
Tl~e set-up fee to initiate coliection may be negotiated, and the buyer shall pay the annual
collection fees for such bank collecCion.
(k) To enable the City to compete on an equal basis wiYh private enteiprise in lands disposal, the
City Manager is hereby authorized to negotiate a division of Che costs of sale listed in KMC
31.15190(f~(g)(h)(i) and (j) to a maximum of fifty percent (50%) of the required cosCs being
borne by the City.
2115.200 Terms for financing sale of City lands.
(a) In order to expedite and facilitatc the sale of City Iands, the City Manager is hereby
authorized to accept terms for said sales and may accept a note secm~ed by a deed of trust for a
partion of the purchase price thereof, subject to the following restrictions:
(1) If the sale is to a Iessce who has placed a lien far financing upon the land or
improvements, then the City Manager is not authorized to sell the land except for Cotal cash
paymenC, 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 muket value of Che 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 Co making a determination to accept a note and deed of trust from a prospective
purchaser, the City Manager shall secure a preliminary commitment for Citle insurance (at
purchaser's expense) and a review of the grantee index covering the party desiring to
purehase the land from the tifle company in the local recording district, and no credit will be
~ ' advanced on such sale if there are any delinquent liens or unpaid judgments found in the title
Ordinance 2180-2006 SUBSTITUTE Attachment A
Page 25 of 27
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 pay~nent required shall be deterniined by the Ciry
Manager, l~nt shall not be less than fifteen percent (15%) of the sales price.
(b) If ~l~e City Manager determines that it is in the City's interest to sell City lands, the sale shall
be either a cash transacrion or by a note secured by a deed of t~ust, subject to paragraph (a)
above, and by no other means. The note and deed of Crust shall carry terms as follows:
(1) The term of such note may be set by the City Manager, buY is shall provide for monthly
payments and not exceed twenty (20) years unless a longer peliod for a specific sale of land
is approved by resolution of the City Council.
(2) Such note shall bear interest at a raCe to be determined by the City Council by resolution.
21.15.210 Determination as to need for public use.
(a) Whether land shall be acquired, retained, devoYed, 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 descripfion of the property, and the address or a general description of the
property sufficient Co provide the pubiic with notice of its ]ocation.
(b) VJhether land previously dedicaYed to a public use shonld be dedicated to a different publie
use or should no longer be needed by the City for public use shall be deCermined by the City
Council by ordinance which shall contain Che new public use for which said property is to be
dedicated ar the reason the land is no longer needed for public use, Che legal descript~on oF the
property, and th~ address or a general description of the property sufficient to provide the public
with notice of its location.
2115.220 Property exchanges.
The Council may approve, by resolution, after public notice and an opportunity for public
hearing, the conveyance and exchange of a parcel of City property for property owned by
another person subject to such conditions as Council may impose on the exchange, whenever in
the judgmenC of the City Council it is advantageous to the City to malce the property exchange
and the City shall receive property (including a portion of money) at least equivalenc to Che value
of the property exchanged by the Cify.
21.15.230 Property sale to adjacent owners.
The council may approve, by resolution, after public notice and an opportunity for public
l~earing the sale and conveyance of a parcel of City property at its appraised value to the owner
of adjacenC land whenever, in the judgment of the City Council, the parcel of land is of such
small size, shape, or location Yhat ic could not be put to practical use by any other party and, in
addiCion thereto, where there is no foreseeabie need o~P Che land for any future use by the CiCy.
21.15.240 Grant or devotion.
(a) The Council, by ordinance, may lease, grane or devote real property no longer needed by Che
City for a public purpose to the United States, the StaYe of Alaska, a local political subdivision of
the SLate of Alaska (including the CiYy of Kenai general fund), or any agency of any of these
governments or non-profit corporation, for a consideration agreed upon belween Che City and
grantee withouC a public sale if the grant or devotion is advantageous to the Cify.
Ordinance 2180-2006 SUBSTITUTE Attachment A
Puge 26 of 27
(b) In the event the land direcYed 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 ehe general fund to be dedicated to the alrport
the difference between the appraised fair market value of said airport lands and the purchase
price, if any, set forth in said resolution.
21.15.250 Use permits.
The council may authorize the city manager Co grant permits far the Cemporary use of reai
property owned by the ciry for a period not to exceed one (1) year, without appraisal of the value
of thc property or public auction, for any purpose compatible with the zoning of the land, and on
such terms and ~Por such rentals as the council shall determine.
21.15.260 Acquisition oF Real Property
(a) The eity, by authorization o~f the city council, expressed in a resolntion for such purpose, may
purchase or acquire an inYerest in, Iease or real property needed for a public use within the airporC
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 propcrty, the ciYy need not acquire or lease real property
by eompetitive bidding. ~
Ordinance 2180-2006 SUBSTITUTE Attachment A
~ Page 27 of 27
KMC 21.05.020
AIRPORT RESERVE BOUNDARY MAP
APPENDIX I
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