HomeMy WebLinkAboutOrdinance No. 2200-2006SUBSTI'CUT~
Suggested by: Adininistralion
CITY OF KENAI
NO. 2200-2006
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, REPEALING
THE EXISTING TITLE 22 OF THE KENAI MUNICIPAL CODE AND REPLEICING IT WITH
A NEW TITLE 22 ENTITLED GENERAL FUND I,ANDS.
WHEREAS, the City of Kenai has undergone a long process of examining its city code
provisions regarding land ownership and disposition; and,
WHEREAS, the City of Kenai has re-written its land code regarding airport iand both
within the newly created airport reserve and outside of the airport reserve; and,
WHEREAS, the City of Kenai in its capacity as a general fund entity and in its capacity
as an airport both own land; and,
WHEREAS, the requirements for land ownership and disposition for general fund and
airport land are different; ai~d,
WHEREAS, the City of Kenai should update and revise the city code regarding land
ownership and disposition of general fund land; and,
WHEREAS, it is in the best interest of the City of Kenai to revise and replace its
e~sting Title 22 with a new Title 22 entitled "General Fund Lands.°
NOW, TH~REFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA that the exisYing Title 22 (City Owned Lands) is hereby repealed and re~~laced
by a new Title 22 (General Fund Lands) as shown on Attachment A.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, AI,ASKA, this 20~~ day of
Deeember. 2006.
~ ~ _ ~
PAT PORTER, MAYOR
ATTEST:
~/~'t c-- ~
Carol L. Freas, City Clerk
Introduced: November 1, 2006
Adopted: December 20, 2006
Effeclive: January 20, 2007
Titte 22
GENERAL FUND LA~DS
Chapters:
22.05 Dieposition of City Lands
SUBSTITUI'E Ordinance2300-2006 AYYachmentA
Page 1 of l l
Title 22.05
DISPOSITION OF CITY GENERAL FUND LANDS
Sections:
22.05.010 Power to dispose of real property.
22.05.015 Sale or disposal.
22.05.020 Qualifications of applicants oi~ bidders.
22.05.025 Applications.
22.05.030 Filing Fee and deposit.
22.05.040 Processing procedure.
22.05.045 Review.
22.05.050 Appraisal.
22.05.055 Terms of lease.
22.05.060 Aunual minimum rent.
22.OSA65 Bidding Procedure.
22.05.070 Prineipals and policy of lcase rates.
22.05.075 Reimbursement for city-constructed improvements.
22.05.080 Lease Execution.
22.05.085 Lease Utilization.
22.05.090 Conveyance to encourage new enterprises.
22.05.095 Sale.
22.05.100 Sale procedure.
22.05.105 Terms for finaneing sale of city lands.
22.OS.llO Determinations as to need for public use.
22.OS.llS Property exehanges.
22.05.120 Property sales to adjacent owners.
22.05.125 Grant or devotion.
22.05.~30 i7se Permits
22.05.135 Acquisition of Rcal Property.
22.OSA10 Power to dispose of real property.
(a) The provisions of this Chapter apply to general fund real property.
(b) I`he City may seil, convey, exchange, transfer, donate, dedicate, direct, or assign to use,
or otherwise dispose of City-owned real property, including property acqliired, held for, or
devoted to a public use, only in aecordance with this chapter, and, wifll respect to properties
aequired Yhrough foreclosure for taxes, in compliance with those terms and provisions af AS 29
which home-rule municipalities are required to comply with. Disposal or sale of lands sha11 be
made only when, in the judgincnt of the City Coimcii, sach Iands are not reqtiiired for a publie
purpose.
SUBSTITUTE Ordinance 2200-2006 Attachment A
Page 2 of I 1
22.05.015 Sale or disposal.
~ Tlie City may sell or dispose of real property by wan~anty or quit-claim dced, easement, lease,
~~ grant, permit, license, deed of trust, mortga~e contract of sale of real property, plat dedication,
tax deed [WILL], or any other lawful method or mode of conveyance or grant. Any iilstrument
requiring execution by the City shall be signed by the City Manager and atfested by the City
Clerk. The form of any instrument sha11 be approved by the City Attorncy.
22.05.020 Qualifications of applicants or biddere.
An applicant or biddcr for a lease is qualified if the applicant or bidder:
(a) Is an individual aC least eighteen (18) years of age or over; or
(b) Is a group, association, or corporation which is authorized to conduct business under the laws
of Alaska; or
(c) Is acting as an agent for another and has qualified by filing with the City Manager a proper
power of attorney or a IetCer of authorization creating such agency. The a~ent shall represeizt
only (1) one principal to the exclusion of himself. The term "agent" includes real estate brokers
and a~ents.
22.OSA25 Applications.
(a) Ali ap~lieations for lease of lands shall be filed with the City Manager on forms provided by
the City availabie at City Hall. Applications sha11 be dated on receipt and payment aFflli~zg fee
and deposit. No application will be accepted by the City Manager uniess if appears to the City
Mauager to be complete. Filing fees are not refundable.
(b) With every ap~lieation, the appiicant shall submit a development plan, showing and sYating:
~ ~~ (1) The purpose of the proposed lease;
~~~~ (Z) The use, value and nature of improvements to be constructed;
(3) The type of consYriicrion;
(4) The dates construetion is estim~2ed to eommence and be coinpleted (ardinarily a
maximum of two (2) years); and
(5) Whether intended use complies with the coning ordinance and comprehe~vsive plan of the
City. Applications shall become a part of the lease.
22.05.030 Filing fee and deposit.
(a) When submitting an application for lease of 1and, the applicant sha11
(1) pay a non-refundable filing fee in the amount of one hundred dollars ($100.00); and
(2) make a deposit to show good faith and secure the City in payment of any costs in the
following amounts:
(i) an appraisal cost recovery deposit o~f two thousand dollars ($2,000.00); and
(ii) an engineering, surveying and consulting cost recovery deposit o~F two thousand dollars
($2,000.00).
(b) If the City decides to reject Y1ie applicanYs application and no2 enter into a lease with tbe
applicant through no fault of the applicant or failure of the applic~uit to comply with any
requirement of this chapter, any deposit made under (a)(2) of tlvs section wi11 be returned to the
applicant.
(c) If the City enYers into a lease with the applicant any deposit inade by the a~plieant under
(a)(2) of this seetion will be applied to the City's engineering, appraisat, and consulting costs
~ ~ related to the pxocessing~ of the applicant's applicarion and entering into the lease. The City will
SUBSTITUTE Ordinance 2200-2006 Aetachment A
Pane 3 of 1 I
appiy any umised balance of a deposit to the rent payable under the lease. I~P the City's costs
exceed the amount of any deposit, the applicant sha11 pay the shortage to the City as a condition
of the lease.
(d) If Lhe applicant fails to comply with any requirement of this chapter, causes inordinate delay,
as determined by the City Manager, or refuses to sign a Iease offered Yo the applicant, tl~e City
Maziager will reject the applicant's applicatiou and ap~ly any deposit made by the applicant
undcr (a) of this section to the City's appraisal, engineering, and consulting costs incm•red 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 far these costs. The City
will return any unused deposit balance tc~ the applieant.
22.05.035 Rights prior to leasing.
The filing of an application for a lease shall give the applicant no right to lease or to tlie
use of the land for which they have applied. The application shall expire within twelve (12)
months after the application has been made if a lease has not been entered into between the City
and the applicant by that time m~less the City Council for good cause grants an extension. No
extension may be granted for a period longer than six (6) additional months. L,ease rates are
subject to change on the basis of an appraisal done every twelve (12) monThs on the property
applied for.
22.05.040 Processing procedure.
(a) Applications shail be forwarded to the Planning and Z,oning Commission upou reeeipt. 1"he
Planning and Zoning Commission shall normally consider applications for specific lands on a
first-come, fiist-served basis if the Commission fmds that the application is complete and
~~ conforms to the comprehEnsive ~lan and Lhe Kenai Zoning Code. Where there is difficulty in
obtaining a perfected appiication, details as to development plans, etc., or where the applicant
fails to comply with directions or requests of the Plaivlin~ and Zoning Commission, any such
priority wiil be lost. If an application for the purchase of City-owned lands, previously
authorized for sale by the Council, is received by the City prior to the I{enai Planning and
Zoning Commission making an affirmative or negative recommendation to the Council
regazding the lease application for the same property, the City may eiect to sell said property in
accardance with the provisions oP the Code.
(b) The City Couneil shall normally consider a lease proposai only after approval of the Planning
and Zoning Commission. However, appeals of Planning and 7oning Commission disapproval
may be made to 1he City Council. Completed lease applications mus2 be presented to the City
Council within thirty (30) days after approval by the Plannin~ and Zoning Commission.
(c) Where there are two (2) or more applications for the same lands for different uses, then if the
Pl~u7ing 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 thc
eitizens thereof, then the lease [WILL] mav bc issued to such applicant notwithstanding the
provisions of subparagraph (a) in this secrion which provide for leasing on a frs2-eoine, firs2-
served basis. Any applicant may appeai to the City Council from a finding~ or a refusal to find by
the Planning and Zoning Commission by filing an appeai with the City Clerk witlvn seven (7)
days after the finding is made or refused by the Planning and Zoning Commission.
(d) The decision whether or not to lease la~id rests in the sole discretion of the City Council.
SliBS'TITUTE Ordinauce 2200-2006 At~Yachment A
Page 4 of 1 I
22.05.045 Review.
No leased land may be changed in use, nor may any renewal lease be issued until the
proposed use or renewal has been reviewed by the Planning Commission and approved by the
CouncIl.
22.05.050 Appraisal.
No land shall be sold, leased, or a renewal of lease issued, unless the same has been
a~~praised within a twelve (12) month period prior to the sale or date fixed for beginning of the
term of the lease ar renewal lease. No land shall be ieased for less Than the approved appraised
annual rental. Appraisals shall reflect the mimber and vaiue of City services rendered the land in
question.
22.05.055 Terms of lease.
Allleases sha11 be approved by the City Council before the same shall become effective.
The tenn o~F any ~iven lease shall depend upon the durability of the proposed use, the amount of
investment in improvement proposed and made, and the nature of the improvement proposed
with respect to durability aud time required to amortize the proposed investment.
22.05.060 Annual minimum rental.
(a) Annual miniinum renf~als shali be computed from Che approved appraised market value
utilizing the method as described in KMC 22.05.070 below.
(b) Upon execution of the lease, the lauds become taxable to the exteat of its leasehold interest
and Iessee shail pay all real property taxes levied upon such leasehoid interest in these lands, and
~ sha11 pay any speciai assessments and faYes as if he were the owner of said land. ~
(c) Rent shall be paid annually in advance. Said payments shall be pxorated to conform fo the
City of Kenai's fiscal year begimling July 1 and ending June 30. If the equivalent monthly
payment exceeds two hundred dollars ($200.00), thcn the lessee shall have the option of making
payments on a monthly basis.
(d) Lessee shall be responsible for all sales taxes applicable to its operatious.
22.05.065 Bidding procedure.
As an exception to gencral policy listed above, the City Council may designate a specific
lot or iots to be made available only far bid. This provision shall apply only when there is no
outstanduig application pending on the Iot 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.
22.05.070 Principles and policy of leasc rates.
(a) A fair rettun to the General Fund is the policy of the City, unless deviation from that policy is
in the best interest of the City as determined by the City Coui~ciL To ensure a fair return, all
leases for a period in exe~ess of f ve (5) years shall include a redetermination clause as of the fifth
am7iversary of the Iease and ever, f~years thereafter, and all lands for Iease shall be appraised
priar to iease and again prior to redetermina2ion. I,ease rates:
(1) Shal1 be based on fair market value o~f the land, including~ an appropriate consideration oP
facilities and services availabie (public water, public sewer, storin sewexs, and ofher public
SIJBSTITUTE Ordinance 2200-2006 Attachment A
Page 5 of l 7
utilities) as deterinined by a qualified independent appraiser, considering the best use of the
specified land; aa1d,
~ (2) Shall bc cight percent (8 %) of fair market vaiue.
(b) For leases in existence prior to 2he effective date of Chis chapter, the iease rate
redetermination shall be as provided in the lease.
(c) The City Man~ger shall change the rent in a lease by giving the lessee written notice at least
thirty (30) days in advance of the effective date of the change.
(d) The "Fair Market Value" of the Premises shall be equal to the then-fair market rate for
simiiar commercial property in flie City of Kenai, Alaska (the "Relevant Area"). City shall give
notice to Lessee af City's estiination of the Fair Market Value not later than thirry (30) days prior
to the expiration of the then-applicable five-year period, as evidenced and supported by the
written opiniou of an independent real estate appraiser certified under Alaska Statute 8.87,
selected and paid far by the City, familiar with the Relevant Area (the "First Appraiser"). If
Lessee disagrees with such estimate, it sha11 advise the CiTy in writnig thereof wiThin thirry (30)
days of Lessee's receipt oF such estimate, as evidenced and supported by the written opiiuon of a
real estate appraiser certified under Alaska Statute 8.87 (seiected and paid for by Lessee) familiar
with the Relevant Area (the "Second Appraiser"). "T'he parties shall promptly meet to attempt to
resolve their differences between the First Appra~ser and the Second Appraiser concerning the
Pair Market Value of the Premises. If City and Lessee caimot agree upon such value then, with
al1 detiberate speed, they shall direct d~e First Appraiser and the Second Appraiser to
expeditiously and mutually select a third real estate a~praiser certified under Alaska Statute 8.87
(selected a~~d paid for jointly by the parties) familia~~ with the Relevant Area (the "Tl~ird
Appraisex"). VJithin thirfy (30) days after the Third Appraiser has been appointed, the Third
~ Appraiser shall decide which of the two respective appraisals from the First Appraiser and the
~~~ Second Appraiser most closely reflects the Fair Market Value of the Premises. T'he Fair Market
Value of the Premises shall irrebuttably be presumed to be the valuc contained in such appraisal
selected by the Third Appraiser, and the rental shall be redeterminecl based on such value.
Notwithstanding anything Co the eontrary herein, rental shall eonrinue to be paid at the then-
applicable rate until any such new rental rate is established, and I,essee and City shall promptly
pay or refiind, as the case may be, any variance in the rental, without interest thereon aceruing to
the extent to paid/refunded in a tiinely fashion.
22.05.075 Reiuebursement for city-constructed improvements.
(a) The City Manager may include in a lease a requirement for the lessee to rennburse the Cify
for the City's cost of
(1) land clearing, gi~avel fill, utility extensions and other improven2ents or amenities on ar in
direct conneetion with the premises, consfructed by the City prior to the effective date of the
lease; or
(2) iand elearing, 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 condition of the
lease, subject to Ciry Council approval.
(b) 'The Lessee shall reimburse the City for flie City's cost of constructing thc 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 ten (10) years, the repayment schedule may not be longer
than the term of the lease. The Lessee may pay the entire remaining balance to the City at any
~ time during the term of the lease.
SUBSTITUTE Ordina»ce 2200-2006 AYt~achment A
Page6ofli
22.05.080 Lease execution.
~ The lease applicant shall execute and xeturn the appropriate lease agreement with the City
of Kenai within thirty (30) days of mailing the agreement to said applicant. The lease agreement
shall be prepared in accordance with the requirements of this title. Faiiure to execute and return
the lease a~reement within the specified period shali result in the ~Forfeiture of all Ieasing rights.
22.05.085 Lease utilization.
Leased Iands shall be utilized for purposes within the scope of the application, the terms
of the lease and in conformity with the ordinances of the City, and in substantial conformiry with
the Cornprehensive Plau. Utilization or development for other than the allowed uses shall
constitute a violation o~f the Iease and subject fhe lease to eancellation at any time. Failure to
substantially compleCe the development plan for the ]and shall constitute grounds for
cancellation.
22.05.090 Conveyance to encourage new enterprises.
(a) Notwithstanding any other provisions of this chapter, where it is found That
encouragement of a new commercial or induslrial enterprise would be beneficial to the City of
ICenai, the City Council by ordinance so finding may dixect conveyance of one or more parcels
of City land by the City Manager to such enterprisc upon such terms as to price, condiTions of
conveyance, and with such contingencies as may be set forth in said ordinance.
22.05.095 Sale.
(a) Lands, Co which the City of Kenai hoids title which are not restricted from sale by the
~~~ ~~ Deed of Conveyance to the City, or which have been released from such restrictions, which the
City Council has determined are noY required for a public purpose, may be listed for sale by the
City Manager, excepC that lands which have been leased shall not be sold unless the Lessee has
inade a written request to the City to place the iand far sale.
(b) Sales of land piusuant to subsection (a) above shall be made at not Iess than fair markef
value. The purchaser shall execute the "Agreement For Sale of Land" within one (I) year of the
date of appraisaL 'I`he City Manager has the option to dispose of such properties in accardance
with the sale proeedures set out in this Title:
(I) By negotiated sale; or
(2) }3y ouYcry aucrion to the highest responsible bidder; or
(3) By competitive sealed bids to The highest responsible bidder.
In the event that the sale is not closed within six months of the date of appraisal, the buyer will
be charged, upon closing, interest computed in accordance with the applicable provisions of the
Kenai Municipal Code, based upon the total sales price for the number of days past the
expiration of the six-month period.
22.05100 Sale procedure.
(a) The City Manager will obtain such an appraisal for a determination of the minimum price
on said land.
(b) Wl~ere any party, hereinafter called "Applicant," requests that a tract or fracts of land be
sold for which an appraisal will be required, which wil( require subdividing, platting, or
SUBSTITUTE Ordinance 2200-2006 Atfacl~menf A
Page 7 of ll
surveying azid staking, or which will rec~uire advertisiizg or incurring any other expenditures by
~ ~ the Ciry prior to sale,
~ ~ {I) No actions in pxeparation for sale will be taken by the City until an agreement to
purchase shall be properly executed aud filed with the City Manager for the purchase of sucl~
land with payment of sufficient good faith deposit, which shall consist of cash ar its equivalent
deposited with the Finance Officer of Lhe Cify of Kenai, as inay be determined by the City
Manager, to cover al] expenses of the City and such agreement to purchase shall ft~rther contain
the agreement by appiicant to pay any additional costs if said good faith deposit is insu~fficient to
pay all costs incurred by the City.
(2) If at any time during the process of prepa~•ing for sale, Che applicant gives notice
to the City Manager of withdrawal of thc request for sale, the City Manager shall sCop all
procedi~res, shail pay expenses incurred prior to termination of sale procedures, and shall
reimburse applicanf for any good faith deposit advanced in excess of ali expenses incun~ed.
(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 therefor, then the prior applicant
will be reimbuxsed for expenscs charges which can be attributed to the subsequent applicant.)
(3) If ail actions necessary foc preparation far sale have been accomplished, and if
neither t1~e applicant nor any other party purchases said land when first offered for sate after such
request, then all expenses incurred in preparation for the sale will be paid from ti7e good-faith
deposit, and the balance, if any, shall be returned to the applicant. If the sums advanced as good
faith deposiY are insufficient fp pay all of the costs, the applicant will be billed for the balance
due and normal collection procedures iollowed.
(4) If the Iand 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 wili be refunded in totai to the applicant. The City's
expenses will be first deducted from the deposit of the successful bidder.
(5) If the iand in questiou is sold to applicant, the good-faith deposit advanced, after
deducting the City's expenses, wi11 be applied on the payment due at closing.
(6) If the land in question is to be sold by sealed bid ancl the applicant has submitted a
valid bid, but said applicant is not the high bidder, he may purchase the land by tendering the
City a bid equal to the high bid within ~Five days of the bid o~ening. If the land sale is initiated in
accordance with KMC 22.05.040(a), the applicant sha11 be defined as that party submitfi~ig the
iniYial lease application.
(e) If the tract of land proposed Yo be sold is leased Iand, the iessee may request the sale of
said land at not less than the fair market value. The current lessee obtains this right to request a
sale only after, to the satisfaction of the City Manager, development has been completed as
detailed in the deveiopment schedule which has been incorparated into the lease agreement. If
there is no development schedule, flie Iessee may purchase the property if thcre have been
substantial improvements as determined by the City Manager. The decision whether or not to
sell the land to the iessee rests with the sold discretion of the City.
(d) If the tract of land proposed to be sold is not leased 1and, or is ieased land withotirt
substantial improvements, then the traet of land may oniy be soid by outery auetion or by
competitive sealed bids. I~Pthe h•act is to be put up for such competitive auction or sealed bid
sa1e, notice of sale and the marmer in which the Iand is to be sold shall be published in a
newspaper of general circulation wiYhin the City once each week for two successive weeks noY
less than 30 days prior to the date of sale; such notice shall also be posted in at least thrce public
STITUTE Ordinance 2200-2006 Attachmenf A
Page 8 of ll
piaces within the City at least 30 days prior to the date of sale, and such other notice may be
given by such other ineans as may be considered advisable by the City Manager. Such iiotice
must contain:
(1) the legal description of the land,
(2) a brief physical description of the land,
(3) the area and general location of t~he land,
(4) the mnlimum 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) Che time and place set for the aucCion or bid opening,
(8) the amount of deposit to be subinitted with each bid 'n2 arder to cover the City's
expenses such as survey, appraisal, and reviews,
(9) any other matters concerning the sale of which the City iVianager believes fhe
public should be informed.
(e) If no offers are submitted nleeting the miniinum acceptable offer (or appraised valuation),
the City Manager may negotiate for sale of said tract or nacts of land with a modification of
proposed terms or for less than the appraised valuation provided that no such negotiated saie for
less than appraised valuc shall be binding upon the Ciry tiulless the Cerms and priee there'rn are
approved by resolution of the City Council.
(~ Where a real estate agent furnishes a buyer for City land, the closing agent shall be
authorized to pay said ag~ent a real estate commission of five percent (5%) of the purchase price
for the Iand or five percent (5%) of the appraised fair market value of the land, wlvchever is
lower, under the following terms and couditions:
~~~~ (1) The City Manager shali provide a non-exclusive Iisting of Iands available ~for saie.
(2) No comn2ission shall be paid to an agent where said agent is a party, or in privity
with a party, to said sale.
(g) Closing of sale of City lands shall be handled by a title or escrow company within the
city whieh specializes in closing of real estate sales.
(h) Conveyance of City iands shall be by quit claim or warranty deed furnished by the City,
and buyers are advised that all such eonveyances are subject to all liens, encumbrances,
restrictions, and covenants of record and are specifically, without being limited thereto, subject
Co any unreleased restrictions contained in d~e deed or deeds by which the City received title to
the land.
(i) Tf a buyer desires to obtain a preliminary commirinent for title insurance or title institxance
to the land, then it shall be the responsibility of the buyer to obtain such cominitment or
insura~~ce and to pay for tl~e same.
(j) If the tract or tracts of land 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 axi
attorney, but must be approved by the CiTy Attorney prior to closing.
(k) Said note shall be placed for collection with a ba~ik 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. The set-up fee to initiate coliection may be negotiated as specified in KMC
22.05.100(1), and the buyer shall pay the annual collection fees for such bank collection.
(1) The City Manager is hereby authorized to negotiate a division of the eosts of sale listed in
~ KMC 22.05100(g)(h)(i)(j) and (k) to a maYimum of fifiy percent (50%) of the required costs
SUBSTITUTE Ordi~ance 2200-2006 Attachment A
Page 9 of I 1
being horne by the City, provided however that no costs of saie will be paid by the City where a
sale is negotiated a1 aprice below appraised Fair Market Value.
22.05105 Terms for financing sale of City lands.
(a) In order to expedite and facilitate the sale of City iands, the City Manager is hereby
authorized to accept terms for said sales and may accept a note secured by a deed of trust for a
portion of the purchase price thereof, subject to the foliowing reshictions:
(1) If the salc is to a Iessee who has placed a lien far financing upon the Iand or
improvements, then the City Mana~er is not authorized to sell the Iand except for total cash
payment, provided, however, that the City Manager may accept a note secured by a deed of trust
subordinate to the existing securiry interest if the amount of the note dlereby secured is within
fl1e difference between the fair market value of the land with improvements, and the sum of all
prior security interests. The sale documents sha11 be subject to the same restrictions contained in
the lease as the lease provides at the time of sale.
(2) Except for property sold by the City subsequent to foxeclosure fox delinquent
taxes or assessments, prior to making a determination to accept a note and deed of trust from a
prospective purchaser, the City Manager sha11 secure a preliminary commihnent for title
insurance and a review of the grantee nldex covering the party desiring to purchase the land from
the title eompany in the loeal recocding district, and no credit will be advanceci on such sale if
thexe are any delinquenL liens or unpaidjudgments found in the title company reporC until any
such judgrnents or liens are pa'rd and releases therefor have been f led.
(3) In the event of a credit sa1e, the down payment required sha11 be determined by
the City Manager, but shall not be less than fifieen percenC (15%) of the sales price.
~ (4) The City Manager is not authorized to accept terms for the sale of tax-foxc;closed
~~~ lands unless fl1e down payment to be received thereunder, or other suins appropriated for the
purpose, are sufficient to make iminediate payment to the Kenai Peninsula Borough a~1d the
former record owner of the sums which are, or may become, due to them pursuant to the
provisions of AS 29.
(b) If the City Manager determines that it is in the City's interest to sell City lands, the sale
shall be either a cash transaction or by a note secured by a deed of trust, subject to paragraph (a)
above, and by no other means. The note and deed of trust shall carry tenns as follows:
(1) The term of such note may be set by thc City Manager, but is shall provide for
monthly payments and not exceed twenty (20) years wsless a longer period for a specific sale of
land is approved by resolution of the City Council.
(2) Such noYe sha11 bear interest aT a rate to be deferinn~ed by the City Council by
resolution.
22.05110 Determination as to need for pubtic use.
(a) Whether land shall be acquired, retained, devoted, or dedicated to a public use shall be
determined by ordinance which shall eontain the publie use for which said property is to be
dedicated, the legal description of the property, and the address or a general description of the
property sufficient to provide the public with notice o~l its location.
(b) Whether land previously dedicated to a public use should be dedicated to a different
public use or should no longer be needed for public use shall be determined by the City Council
by ordinance which shail contain the new public use for which said property is to be dedicated or
the reason the land is no longer needed for public use, the le~al description of the property, and
SUBSTITUTF Ordinance 2200-2006 Attachment A
Page 10 of 11
the address or a general description of the pxoperty sufficient to provide the public with noYice of
its location.
22.05115 Property exchanges.
The Council may approve, by ardinance, after pubiie notiee and an opportunity for public
hearing, the eonveyance a~ld exchange of a parcei of Ciry property for property owned by ~
a~iother person subject to such conditions as Council may impose on the exchange, whenever in
the judgment of the City Council it is advantageous to the City to make the property exchange.
22.05.120 Property sale to adjacent owners.
The council may approve, by ordinance, after pubiic noticc and an opportunity Lor public
hearing, tbe sale and conveyance oi' a parcel of City property at its appraised value fo the owner
of adjacent land whenever, in the judginent of the City Council, the parcei of iand is of such
small size, shape, ar location that it could not be put To practical use by any other parfy and, in
addirion thereto, where there is no foreseeable ilced of the land for any ~luture use by the City.
22.05.125 Grant or devotion.
The Couneil, by ordinance, may waive me ~rovisions of this chapter and lease, gra~lt or
devote real property no longer ~eeded by the City for public purpose to thc United Staxes, the
State of Alaska, a local politicai subdivision of the State of Alaska, or any agency of any of thesc
governments or a non-profit corporaYion, for a considcration agreed upon between the City and
grantee without a public saie if the grant, devotion or lease is advantageous to the City.
22.05.130 Use permits.
The comxil may autliorize the city manager to grant permits far tl~e tem~orary use aP real
property owned by Che city for a period not to exceed ~Five (5) years, wi2hout appraisai of the
value of the property or public auction, for any purpose comparible with the zoning of die land,
and on such terms and for such rentais as the council shall determine.
22.05.135 Acquisition of Real Property
(a) The city, by authorization of the city council, expressed in a resolu2ion for such pur}~ose,
may lease, purchase or acquire an interest in real property needetl for a public use on such terms
and conditions as the council shall determine, but no purchase shall be made until a qualitied
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 properiy, the city need not acqtiure or lease real
property by competitive bidding.
(c) Rights-of-way and easements may be accepted or issued by the City Manager after
appxoval by the City Council for utility Iines aild services of all types and for necessary rights-of-
way easements. ~
SUBS't'ITUTE Ordinance 2200-2006 Attachment A
Page 11 of I I
MElVIOI~NDUM
TO: Mayor Porter and the Kenai City Council
FROM: C!~ Cary R. Crraves, City AtCorney
DATE: December 13, 2006
RE: New General Fund Land Code
This memo is intended to be an outline the changes from the old general fimd land code in Title
22 to the new one as contained in Ord'nlance No. 2200-2006. The new general ~Pund land code is
a combiilation of the old general fund tand code (KMC 22.05), the old airport land code (KMC
21.05-IS) and the new airport non-reserve iand code (KMC 21.15). The changes in the
substitute ordinance from the original Ordinance 2202-2006 are underiined in this memora~~dum.
KMC 22.05.010 (Power to dispose of real property). This section is almost verbatim as
the existing KMC 22.05.010. It authorizes the Ciry to dispose of general fund Iand "only
in accordance with" the city code. It states that generai fund ia~sd may be sold only when
not needed for a public purpose. One of the provisions of this section states that the City
will follow state statutes in how we dispose of foreclosed property. The section now
refers to AS 29 (Municipai Government) of the Alaska Statutes instead of "AS
29.53.360-385." The Alaska Stahztes cited in the existing code were amended and
renumbered so they don't exist anymore.
2. KMC 22.05.015 (Sale or disposal). This section is related to the previous one. It allows
the City to dispose of real ~roperty by deed, easement, Iease, pennit, license, mortgage,
plaf or other lawful method of conveyance. This section is the same as the existin~ KMC
22.05.020 excent that the abilitv to transfer brouertv bv will was removed in the
substitute. I reallv could not envision how The Citv cotidd transfer awav nropertv bv a
wIll so I took that word out.
3. KMC 22.05.020 (Qualifications of applicants or bidders). This section is the same as the
existing KMC 21,15.020 (nl the new airport off-xeserve land code). IL sets out the
qualifications for lease applicants (i.e. being 18 years oid, or a group, association ar
corporation authorized to do business and allows agents to represent lessees).
4. KMC 22.05.025 (Applications). This section is the same as the existing KMC 2L15.030.
It sets out tl7e information tn be included in lease applications.
Mayor Porter and Kenai City Council
December13,20066
Page 2 of 4
~ 5. KMC 22.05.030 (Filing fee and deposit). This section is the same as the existing K1VIC
2L15.040. It requires a$100.00 filing fee, a$2,000 appraisal fec, and a~2,000
administrative fee. Any of the funds not spent in processing the Iease application is
refunded T~ the applicant. If the lease application is denied tl~rough no fault of the
applieant the deposits are returned to thc applicant.
6. KMC 22.05.035 (Rights prior Co leasing). 'This section is the san~e as thL e~isting KMC
21.] 5.050. It states the application does not give the applicant any right to have the lease
granted. The lease application is ~ood for one year and may be extended for six months.
7. KMC 22.05.040 (Processing procedure). "T'his section is the same as the existing KMC
21.15.060. It provides that lease applications go to Plamvng and 7,~ning for review and
theii are sent to the Council for approval or rejecfion. The decision to lease or not to
lease is in the sole discretion of the Council. The substitute chan~es the word "will" to
"mad' in the fourth line of KMC 22 OS 040(cl on pagc 4 of Attachment A. 1'he change
was made to give Council the flexibility to determine the best use of the property in flie
case of eompeting lease a~piications. Councilor Ross suggested the ehan~e.
8. KMC 22.05.045 (Review). TLus section is the same as the existing KMC 2115.070. It
requires any change in lease use or renewal to be reviewed by Planning and Zoning and
approved by the Council.
9. ICMC 22.05.050 (Appraisal). This secrion is the same as the exisrin~ KiVIC 21.15.080. It
provides that no land may be leased or sold without having bean appraised within a 12
~ month period prior to the lease or sale.
10. KMC 22.05.055 (Ternis of Iease). This section is the same as the existing KMC
21.15.090. It requires all leases to be approved by the City Com~cil and providcs that the
term of the lease is dependent on the nature of the improvements aud the time required to
amortize the lessee's investment.
1 L KVIC 22.05.060 (Annual minanuin rental). This section is the same as the Existing KMC
21.15.100. It states fl1e annual minimum rental is as set out in the new KMC 22.05.070
(i.e. 8% of fair inarket value).
12. KMC 22.05.065 (Bidding procedure). This section is the same as the existing KMC
21.15.110. This allows the City to have a competitive bid to lease property with a one-
time premium being Yhe determining ~Pactor in who gets the lease.
13. KMC 22.05.070 (Principles and policy of iease rates). This section is the same as the
existing KMC 2115.120. This sets the normal lease rate at 8% of fair market value. The
old rate was 6%. The substitute added the phrase "and everv five vears thereafter" to the
fourth line of KMC 22.05.070(c on ~age 4 of Attachment A to malce clearer that a lease
rate re-determination is done every five Years•
14. KMC 22.05.075 (Reimbursement for eity-constructed projects). 'T'his is the same as the
existing KMC 2115.130. This allows the City to improve City property and add the cost
of the iinprovements to the lease rate in order to reimburse the City.
15. KMC 22.05.08~0 (Lease execution). This is the same as the existing KMC 2115140. It
requires the Iessee to execute and retum tbe lease within thirty (30) days of being mailed
the approved lease.
~ 16. KMC 22.05.085 (Lease utilizatiou). This is the same as the existing KMC 21.15.150. It
~~ requires the lease to be used in comptiance with the approved lease application and states
Mayor Porter and Kenai City Counci]
December 13, 20066
Page 3 of 4
that failure to substantially complete the development plan lor the lease appiicatiou is
grounds for cai~cellation of the lease.
17. KMC 22.05.090 (Conveyance to eucourage new enterprises). This is the similar to the
existing KMC 21.15.170. It aiiows the City to convey property to encourage new
cominercial or industrial enterprises with the terms and conditions to be set out in an
ordinance. It allows the property to be sold withouC a competitive process. The
difference between this section and the exisfing KMC 21.15.170 is that since tlris is
geueral fund land, there is no requirement for the general fund to pay the airport fund the
difference between the fair markef value of the property and the sale price.
18. KMC 22.05.095 (Sale). This section is the same as the exisring KMC 21.15180. This
section allows sale of City general fund lands for fair market value at the discretion of the
City Council. Sales may be by negotiation (to lessees at fair market vaiue), outcry
auction, or competitive sealed bid. Under this code lessees get ~e ability to request
parchase of the land after improvement, they do not acquire any right to purchase the
la~~d.
19. KMC 22.05.100 (Sale procedure). Tius section is the saine as the existing KMC
2115.190. lt sets otirt the procedure ~For sale of City general fund land. The substitute
deietes the phrase "In order fo conlpete on an equal basis with privaCe enterprise in land
disposaP' from line one of KVIC 22.05.100(1) on pa~e 10 of Attaclunent A. Councilor
Ross su~~ested the change.
20. KMC 22.05.105 (Terms for financing sale of City lands). This is the same the existing
KMC 22.05.045 except that the reference to AS 29.53.380 was changed to reflecT the re-
numbering in the state statute. It sets out the procedure for City financed land sales.
Down payments of 15% are required and notes must be paid off in twenty years. Interest
rates are set by eouncil resoiution.
21. KMC 22.05.110 (Deterniination as to need for publie use). This is the same as the
existing KMC 22.15.210. 7'his section states that the Council shall determine by
ordinance what property is or is not needed for a public purpose. Subsection (c) was
deleted in the subsntute to remove a provision regardin~ foreclosed property that was
unnecessary due to Alaska statutorv requirements.
22. K,~VIC 22.OS.ll 5(Properry exehanges). This is the same as the existing KMC 22.05.070.
The substitute requires an ordinance rather than a resolution to authorize an exchange. It
allows the CiTy to engage land trade when advantageous to the City.
23. KMC 22.05.120 (Pro~erty sale to adjacent owners). This is the same as the existing
KMC 22.05.0'75. The substittiite re~c uires an ordinaxice xather than a resolutiou fo
authorize a sa1e. It allows sale of a parcei of iand to an adjoining land owner that is "such
a sma11 size, shape, or location" that is can not be put to practical use by any other party
and is not needed by the City.
24. KMC 22.05.125 (Grant or devotion). This section is similar to the existing KMC
22.05.080. It allows the Ciry by ordinance to grant, douate or lease property to the
United Stales, the State oP Alaska, a poliCical subdivision of the state or a non-profiL
corporation without a coinpetitive process. The old version listed 501(c) (3) non-profits
instead of just non-profits. Subsection (b) was removed from the new version. It was a
special sub-section allowing donation of tax-foreciosed land worth under $10,000 to non-
Mayor PorCer and IZenai City Counci]
Decembtr13,20066
Page 4 of 4
pxofit housing corporation. It was redundant with some of the new additions to the Iand
code.
25. KMC 22.05.130 (Use permits). This section is simila~• to KMC 2115.250 except that is
aliows for five year special use permits rather than one year as allowed in the airport land
code. The idea was that the Ciry should have greater flexibility on issiung special use
permits for general fund land than airport land.
26. KMC 22.05.135. (Acquisition of real property). This is the same as I{MC 2115.260. It
authorizes t11e Ciry to purchase land by ordina~lce after an appraisal has been done on the
pxoperty. Because of the unique; nature of properry, Iand purohase does not need to be by
competitive bid. The substitute adds a process for receiving and issuin~ easements and
r~hts-of-way It requires the Couilcil to give its approval prior to the City Manager
issuing or accepting an easements or rights-of-way.
Please let me know if you have any questions or if there are any changes you wouid like to the
general fund land code.