HomeMy WebLinkAboutResolution No. 2011-75theory of
KENAI. ALASKA
Suggested by: Administration
CITY OF KENAI
RESOLUTION NO. 2011 -75
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING
THE CITY MANAGER TO ENTER INTO A LEASE OF TRACT A -2, KENAI SPUR
AIRPORT LEASE PROPERTY, T 5N R 11W SECTION 5, SEWARD MERIDIAN, THIRD
JUDICIAL DISTRICT, STATE OF ALASKA, ACCORDING TO ATTACHED PRELIMINARY
PLAT, WITH BUCCANEER ALASKA OPERATIONS, LLC.
WHEREAS, Buccaneer Alaska Operations, LLC (Buccaneer) submitted an application
to lease airport lands located outside of the Airport Reserve identified as Tract A -2 of
the preliminary plat titled Replat Tract "A" Kenai Spur Airport Lease Property; and,
WHEREAS, the Planning and Zoning Commission reviewed the application at its
October 26 meeting and found that the lease was in compliance with the Zoning
Ordinance and the Comprehensive Plan; and,
WHEREAS, KMC 21.15.160(b) states the following:
The City Manager may enter into a land lease that deviates from the standard
form adopted under subsection (a) of this section, if:
(1) The Manager believes the action is in the best interest of the City; and
(2) The lease is approved as to form by the City Attorney; and
(3) The lease is approved by resolution of the City Council.
WHEREAS, the City Manager believes that a deviation from the standard form is in the
best interest of the City and the City Attorney has approved the attached Lease as to
form, and,
WHEREAS, KMC 21.15.010(b) states the following:
The City may sell, convey, exchange, transfer, donate, dedicate, direct, or assign
to use, or otherwise dispose of airport land outside of the Airport Reserve,
including property acquired, held for, or devoted to a public use, in accordance
with this chapter. Disposal or sale of lands shall be made only when, in the
judgment of the City Council, such lands are not required by the City for a
public purpose.
; and,
WHEREAS, It is in the best interests of the City to lease Tract A -2 in order to generate
revenue for the Kenai Municipal Airport and the property to be leased to Buccaneer
LLC is not needed for a public purpose.
Resolution No. 2011 -75
Page 2 of 2
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA, that the Council Authorizes the City Manager to enter into a Lease of Tract
A -2, Kenai Spur Airport Lease Property, T 5N R 11W Section 5, Seward Meridian,
Third Judicial District, State of Alaska, According to Attached Preliminary Plat Marked
as "Exhibit A" with Buccaneer Alaska Operations, LLC.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 2nd day of
November, 2011.
ATTEST:
Lorene Hall, CMC, Deputy City Clerk
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PAT PORTER, MAYOR
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KENAI, ALASKA
MEMO:
Village with a Past, Ci y with a Frsttsre"
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
Telephone: (907) 283 -7535 / FAX: (907) 283 -3014
www.ci.kenai.ak.us
Kenai
TO: Rick Koch, City Manager
FROM: Christine Cunningham, Assistant to the City Manager
DATE: October 27, 2011
SUBJECT: Resolution No. 2011 -75 — Buccaneer Alaska Operations, LLC,
Tract A -2, Replat Tract "A" Kenai Spur - Airport Lease Property
Attached is a lease application and proposed lease for the referenced Airport property
located outside the Airport Reserve. Buccaneer Alaska Operations, LLC (Buccaneer)
wishes to lease the property in order to install a "pig catcher, metering skid with coalescing
filter and 6 inch pipeline for delivery of gas from Kenai Loop Field." The development plan
calls for a 8'x20'x 8' tall pre- fabricated metal building (metering skid), enclosed on three
sides, and painted to match the existing building with fencing material that matches existing
fencing.
A portion of the subject property is currently leased to Kenai Nikiski Pipeline, LLC (KNPL).
KNPL submitted a request to amend its current lease with the City to delete a portion of the
lease area to allow for Buccaneer to proceed with a lease for Tract A -2 as depicted in the
attached proposed replat submitted by Buccaneer. The application to amend KNPL's lease
with the City for Tract A -1 is being processed concurrent to Buccaneer's application for a
new lease. Tract A -3 identified on the proposed replat is an undeveloped portion of Tract A
which fronts the Kenai Spur Highway and is not requested for lease by either Buccaneer or
KNPL.
The Planning & Zoning Commission reviewed Buccaneer's lease application at its October
26 meeting. The Commission found that the lease was in compliance with the Zoning
Ordinance and the Comprehensive Plan. At the same meeting, the Commission voted
unanimously to proceed with the amendment to KNPL's lease concurrent with approval of
Buccaneer's lease.
October 27, 2011
Resolution No. 2011 -75 - Buccaneer Alaska Operations, LLC,
Tract A -2, Replat Tract "A" Kenai Spur - Airport Lease Property
Page 2 of 2
The standard lease form used for airport leases outside the Airport Reserve was approved
by Resolution No. 2007 -05, however, the attached lease was amended to raise the
insurance requirement for Comprehensive General Liability from 1,000,000 to 5,000,000 in
order to enhance insurance protection and includes a deviation from the rent
redetermination schedule to require that the first rent redetermination occur in 2015 rather
than 2017. Scheduling rent redeterminations in years ending in zero (0) or five (5) reduces
the cost of administering leases.
Buccaneer is current in their payments to the City and the Kenai Peninsula Borough. The
City Attorney has reviewed the attached Lease of Airport Lands and approved it as to form.
Should Council approve the Lease, the original would be forwarded to the Buccaneer for
signature.
cc: Mark Landt, Buccaneer Alaska Operations, LLC
Attachments
C1"1'Y OF KENAI
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
(907) 283 -7535 Ext. 223
LEASE APPLICATION
For Land Outside the Kenai Municipal Airport Reserve
1. Name (Applicant Buccaneer Alaska Operations, LLC
2. Busine6Is Name Same
3. Business Type (circle one) folc aroorieiot partnership corporation @ 4. AK Business License No. 951676
5. Mailing Address 952 Echo Lane, Suite 420, Houston, Texas 77024
6.TelephIlbne 713 468 -1678 7. Email Address mlandt @buccaneeralaska.com
8. Kenai Peninsula Borough Sales Tax No. (if applicable) 04501029
9. Land Requested:
If platted, give legal description Attached
I not planed, attach a site plan showing the proposed dimensions and location on the Airport
10. Proposed Use of the Property (Bespecific) Pig catcher, metering skid with coalescing
filter and 6 inch pipeline for delivery of gas from Kenai Loop Field.
11.LeaseTermDesired 20 years
I2. If yod I plan to construct improvements or otherwise develop the property:
a Attach a Development Plan (see attached checklist)
b. Describe the building type, construction materials, size, etc.
c
Construction beginning date November 2 , 2011
d Construction completion date (maximum of two years) ,cant to ry 1 2012
ei Estimated total cost of the proposed development & improvements S
14. If yob would like the City to consider any additional information relating to your proposal, please put it in writing and
submit it with this application.
APPLICANT'S SIGNATURE:
rinted name:
APPLICANT'S SIGNATURE: Date:
nted name: Title:
Page 1 of 3
CERTIFICATE OF OWNERSHIP AND DEDICATION
1 hereby certify that I em the o of the real property shown
and described hereon and that I hereby adopt this pion of
subdivision and by my free consent dedicate all rights -or -way
and public areas to public use end grant an easements to the
use shown.
CITY OF KENAI
NOTARY'S ACKNOW1EDGEMFNT
FOR:
Subscribed and sworn before me this
TRACT D
day of 2010. .' ,@ /
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PLAT APPROVAL o5'a.
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PENINSULA SOR0004 PLANNING COMMISSION
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JULY 19,
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NOTES
1) Water supply and sewage disposal systems shall be permitted only in
c.nfarmunce with applicable requirements of 18 AAC 72 and 18 AAC 80.
2) No direct across to state m-m.toiced ROWS permtted unless eppmved
by State of Alaska Department of Transportotrw, and Public Facilities.
3) No permo0rent structure shall be constocted or placed wrthia an
easement which would Interfere with the ability of a utility to use the
ast.
4) BUILDING SET BACK- A 5.01tia5 set bock of 25 ft. is required from all
streets rights-of -way unless 0 lesser standard Is approved by resnlutton
01 the agam50505 Piaeniog Commis5on.
KN -1531
15,849 SF 0.36 AC
REC D6T
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REPLAT TRACT '',1"
KENA/ SPUR -A /RPORT
LEASE PROPERTY
CITY Oi KENAI
250 FI0ALG0 AVE.
KENAI. AI( 95511
LOCATION
1.03 AC. MAL SITUATED VPTMN A
1 AND 2, SE 1)011 5, 055, 17118,
PENINSULA 502.0i)C0 IN 1140 KEN
ON OF 005/1 LOTS
AK AND THE KENAI
C0001110 015TRICT.
KENAI MUNICIPAL AIRPORT
Lease Application for
Land Outside the Kenai Municipal Airport Reserve
DEVELOPMENT PLAN CHECKLIST
(All items must be included before a lease application will be accepted.)
A DEVELOPMENT PLAN MUST INCLUDE A DRAWING AND A NARRATIVE.
1. Drawings must be drawn to scale, but need not be prepared by an architect or
engineer. Drawings must show the following:
a. The layout of the lot showing the height(s), size(s) and location(s) of all
D Existing buildings
D Proposed buildings
D Existing and proposed antennas, poles, and towers
b. Parking facilities (location and number of spaces) N/A
c. Site improvements
D Areas to be cleared and method of disposal
D Proposed gravel or paved areas
D Landscaping plan (retention of natural vegetation and /or
proposed planting areas)
d. Building set backs
e. Drainage plan and snow storage areas
f. Traffic circulation plan (all entrances, exits and on -site access)
g. Location of sign(s) — (sign permit required before installation)
h. Fencing — (permit required before installation if height exceeds 6 feet)
i. Curb cuts (where applicable)
2. Narrative must explain how your proposed use and development of the property will
conform with:
a. the zoning ordinance of the City
b. the comprehensive plan of the City
Installation of a 8'x20'x 8' tall pre fabricated metal building (metering skid), enclosed on three
sides, and painted to match the existing building with fencing material that matches existing
fencing.
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NO ES
1. PROPERTY 1S CURRENTLY O E
PARCEL. TRACT A%ENP SPUR-AIRPORT
MAIN ST CiC ET L.IO— OP LEASE P
PROPOSED LOT SHOWN
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LEASE OF
AIRPORT LANDS
(Outside the Kenai Municipal Airport Reserve)
THIS AGREEMENT, entered into this day of , 2011, by and between the
CITY OF KENAI, 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794, a home -rule municipal
corporation of Alaska (City), and BUCCANEER ALASKA OPERATIONS, LLC individually,
whose address is 952 Echo Lane, Suite 420, Houston, Texas 77024, (Lessee).
That the City, in consideration of the payments of the rents and performance of all the covenants
herein contained by the Lessee, does hereby demise and lease to the Lessee the following
described property (the demised premises) located in the Kenai Recording District, Third Judicial
District, State of Alaska:
Tract A -2, Kenai Spur Airport Lease Property, T 5N R 11W Section 5, Seward Meridian,
Third Judicial District, State of Alaska, According to attached preliminary plat marked as
"Exhibit A" and incorporated here by reference
A. PURPOSE: The purpose for which the Lease is issued is: Location of pig catcher,
metering skid (3 -sided metal structure that is approximately 8' x 20' x 8' in size) with
coalescing filter, and the installation of an underground 6 -inch pipeline for delivery of gas from
Kenai Loop Field to.
B. TERM: The term of this Lease is for twenty (20) years, commencing on the is
day of November, 2011, . and ending on June 30, 2021.
C. RENTAL PAYMENT: Subject to the terms of General Covenant No. D.9 of this
Lease, rent for the above - described land shall be payable as follows:
1. The annual rental rate shall be 8% of the fair market value (as set forth and
defined in General Covenant No. D.9) of the demised premises. The rent effective November 1,
2011, shall be $7,362.10 per year, plus applicable sales tax, based on the fair market value of
$92,026.31 as of the date of this Lease, and thereafter rent is subject to redetermination pursuant
to General Covenant No. D.9.
2. Annual rent for the fiscal year beginning July 1 and ending June 30 shall
be payable in advance on or before the first day of July of each year. If the annual rent exceeds
$2,400, then the Lessee may opt at the time of the execution hereof or at the beginning of each
new Lease year to pay rent in equal monthly installments, payable in advance on or before the
first day of July and on or before the first of each month thereafter.
Lease of Airport Lands — Page 1 of 19
Lessor:
Lessee:
3. Rent for any period that is less than one (1) year shall be prorated based on
the rate of the last full year.
4. In addition to the rents specified above, subject to General Covenant No.
D.9, Lessee agrees to pay to the appropriate parties all levies, assessments, and charges as
hereinafter provided:
(a) Taxes pertaining to the leasehold interest of the Lessee.
(b) Sales tax now enforced or levied in the future computed upon rent payable
in monthly installments whether rent is paid on a monthly or yearly basis.
(c) Lessee agrees to pay all taxes and assessments levied in the future by the
City of Kenai, as if Lessee was considered the legal owner of record of the leased
property.
(d) Interest at the rate of eight percent (8 %) per annum and ten percent (10 %)
penalties of any amount of money owed under this Lease which is not paid on or
before the date it becomes due.
D. GENERAL COVENANTS:
1. USES: Except as provided herein, any regular use of lands or facilities
without the written consent of the City is prohibited. This prohibition shall not apply to use of
areas designated by the City for specified public uses, such as passenger terminals, automobile
parking areas, and streets.
2. USES NOT CONTEMPLATED PROHIBITED: The promotion or
operation of any part or kind of business or commercial enterprise, other than as specifically set
forth herein, upon, in or above airport lands, without the written consent of the City is prohibited.
3. ASSIGNMENT OR SUBLETTING: Lessee with City's prior written
consent, which will not be unreasonably denied, may assign or sublet, in whole or in part, its
rights as Lessee hereunder.
Any assignee of part or all of the leased premises shall assume the duties and
obligations of the Lessee as to such part or all of the leased premises. No such assignment,
however, will discharge Lessee from its duties and obligations hereunder.
4. COSTS AND EXPENSES: Costs and expenses incident to this lease,
including but not limited to recording costs, shall be paid by Lessee.
Lease of Airport Lands — Page 2 of 19
Lessor:
Lessee:
5. TREATMENT OF DEMISE: The Lessee agrees to keep the premises
clean and in good order at its own expense, allowing no damage, waste, nor destruction thereof,
nor removing any material therefrom, without written permission of the City. At the expiration
of the term fixed, or any sooner determination of the Lease, the Lessee will peaceably and quietly
quit and surrender the premises to the City.
6. PAYMENT OF RENT: Checks, bank drafts, cash, or postal money orders
shall be made payable to the City of Kenai and delivered to the City Administration Building,
210 Fidalgo Avenue, Kenai, Alaska 99611.
7. CONSTRUCTION APPROVAL AND STANDARDS: Building
construction shall be neat and presentable and compatible with its uses and surroundings. Prior
to placing of fill material and /or construction of buildings on a leased area, the Lessee shall
submit a plan of proposed development of property to the City, which shall be approved in
writing for all permanent improvements. In addition to other improvements and requiretnents set
forth herein, construction shall include those structures and improvements set forth in the
Development Plan Check List marked as "Exhibit B" and incorporated here by reference.
8. DEFAULT RIGHT OF ENTRY: Should default be made in the payment
of any portion of the rent or fees when due, or in any of the covenants or conditions contained in
the Lease or in any regulations now or hereinafter in force, then in such event the City shall by
written notice give Lessee thirty (30) days to cure such default or defaults, after which if the
default is not cured, the City may terminate the Lease, reenter and take possession of the
premises, and remove all persons therefrom.
9. RENT ESCALATION: In the event this Lease is for a term in excess of
five (5) years, the amount of rents or fees specified herein shall, at the option of either party, be
subject to redetermination for increase or decrease based on the percentage rate (set in C.1 above)
of fair market value. No increase or decrease in the amount of rents or fees shall be effective,
until after thirty (30) days written notice. Fair Market Value is defined as "the highest price
estimated in teens of money which a property will bring if exposed for sale on the open market
allowing a reasonable period of time to find a purchaser who buys with knowledge of all the uses
to which it is adapted and for which it is capable of being used ". This Fair Market Value will be
based on the condition of the land on the date of this lease plus the value of improvements, if
any, made by the City subsequent to the date of this Lease which would affect the value of the
property.
Rent shall be first subject to redetermination for the fiscal year beginning July 1,
2015 based upon the fair market value of the premises. At each five (5) year interval thereafter,
the City will have the fair market value determined by a qualified independent appraiser.
Lease of Airport Lands — Page 3 of 19
Lessor:
Lessee:
10. LEASE UTILIZATION: Leased lands shall be utilized for purposes within
the scope of the approved application (made a part of this Lease and attached hereto), the terms
of the Lease, the terms of the deed under which the land was granted to the City (and any releases
pertinent thereto), in conformity with the ordinances of the City and Borough, with Kenai Airport
Regulations, and in substantial conformity with the comprehensive plan. Utilization or
development for other than the allowed uses shall constitute a violation of the Lease and subject
the Lease to cancellation at any time. Failure to substantially complete the development plan of
the land, consistent with the proposed use and terms of the Lease, shall constitute grounds for
cancellation.
11. CONDITION OF PREMISES: The premises demised herein are
unimproved and are leased on an "as is, where is" basis.
12. UNDERLYING TITLE: The interests transferred, or conveyed by this
Lease are subject to any and all of the covenants, terms, or conditions contained in the
instruments conveying title or other interests to the City.
13. RIGHT OF INSPECTION: City shall have the right at all reasonable
times to enter the premises, or any part thereof, for the purposes of inspection.
14. INDEMNIFICATION AND INSURANCE: Lessee covenants to
indemnify, defend, save and hold the City, its elected and appointed officials, agents and
employees harmless from all actions, suits, liabilities, or damages, or liability of any nature, kind
or character, including costs, expenses and attorney's fees resulting from or arising out of any
acts of commission or omission by Lessee, its agents, employees, customers, invitees, or arising
from or out of the Lessee's occupation, or use of the premises demised, or privileges granted, and
to pay all costs connected therewith.
Lessee, at the expense of Lessee, shall keep in force, during the term of this
agreement, insurance issued by responsible insurance companies authorized to do business in
Alaska, in forms, kinds and amounts as determined and directed by the City for the protection of
City and /or Lessee. Insurance requirement hereunder shall be subject to the sole determination of
the City.
Said insurance may include, but need not be limited to insurance coverages
commonly known as, or similar in kind to, public liability, products liability, property damage,
cargo, aircraft, fire, workmen's compensation, comprehensive, builders risk, and such other
insurance coverage as deemed required in the sole determination of the City. All policies
or endorsements thereto shall in all cases where possible name City as Additional Named Insured
thereunder and shall contain a waiver of subrogation against the City. All insurance shall be by a
company /corporation currently rated "A -" or better by A.M. Best.
Lease of Airport Lands — Page 4 of 19
Lessor:
Lessee:
Upon approval by City of all insurance required, in the forms, kinds and amounts
directed to be procured, Lessee shall deliver all policy originals or duplicate originals and
endorsements thereto to the City for incorporation within this agreement as attachment thereto.
In any event, Lessee is not to commence to exercise any of the rights and privileges granted
under this agreement until such time as all insurance directed and required to be furnished by
Lessee is in full force and effect.
Lessee expressly understands and agrees that any insurance protection furnished
by Lessee hereunder shall in no way limit its responsibility to indemnify and save harmless
Lessor under the provisions of this agreement.
No policy of insurance shall be cancelled or amended with respect to the City
without thirty (30) days written notice by registered or certified mail to City by the insurance
company.
Until otherwise directed in writing by the City Manager, Lessee shall provide
certificates of insurance within thirty (30) days of the date hereof as follows:
Comprehensive General Liability
Combined Single Limit (Bodily
Injury and Property Damage):
$5,000,000
Workmen's Compensation - As required by Alaska Statutes
Notwithstanding anything to the contrary, if Lessee fails or neglects to secure
required insurance or if said policy or policies are terminated, altered, or changed in any manner
not acceptable to the City, then and in that event this lease may be cancelled and terminated,
without penalty, on five (5) days written prior notice to Lessee.
The City may approve a self-insurance program in lieu of the insurance
requirements in this section, if the City finds in its sole discretion that such self - insurance
program adequately protects the City. The typical amount of insurance coverage required is
subject to review and adjustment at the discretion of the City at each five (5) year renegotiation
of the lease.
The City may, at intervals of not less than five years from the beginning date of
the term of this Lease and upon written notice to Lessee, revise the insurance requirements
required under this Lease. City's determination to revise the insurance requirements will be
based on the risks relative to the Lessee's operations, any insurance guidelines adopted by the
City, and/or any change in applicable law.
15. COLLECTION ON UNPAID MONIES: Any or all rents, charges, fees, or
other consideration which are due and unpaid at the expiration of voluntary or involuntary
Lease of Airport Lands — Page 5 of 19 Lessor:
Lessee:
termination or cancellation of this Lease, shall be a charge against the Lessee and Lessee's
property, real or personal, and the City shall have such lien rights as are allowed by law.
16. EASEMENT GRANTS RESERVED: City reserves the right to grant and
control easements in, or above the land leased. No such grant or easement will be made that will
unreasonably interfere with the Lessee's use of the land, and Lessee shall have free access and
use of any and all parking and loading rights, rights of ingress and egress now or hereafter
appertaining to the leased premises.
17. LEASE SUBORDINATE TO FINANCING REQUIREMENTS:
Lessee agrees that City may modify this Lease to meet revised requirements for Federal or State
grants, or to conform to the requirements of any revenue bond covenant. However, the
modification shall not act to reduce the rights or privileges granted the Lessee by this Lease, nor
act to cause the Lessee financial loss.
18. SURRENDER ON TERMINATION: Lessee shall, on the last day of the
term of this Lease or upon any earlier termination of this Lease, surrender and deliver upon the
premises into the possession and use of City without fraud or delay in good order, condition, and
repair, except for reasonable wear and tear since the last necessary repair, replacement,
restoration or renewal, free and clear of all lettings and occupancies unless expressly permitted
by the City in writing, and free and clear of all liens and encumbrances other than those created
by and for loans to City. Upon the end of the term of this Lease or any earlier termination
thereof, title to the buildings, improvements and building equipment shall automatically vest in
City without requirement of any deed, conveyance, or bill of sale thereon. However, if City
should require any such document in confirmation hereof, Lessee shall execute, acknowledge,
and deliver the same and shall pay any charge, tax, and fee asserted or imposed by any and all
governmental units in connection herewith.
Provided, however, that Lessee shall retain title to and remove from the Premises
at the Lessor's sole expense, any building, other improvement, or building equipment that the
City has determined in writing to the Lessor: 1) has exceeded its useful life; 2) is damaged
beyond reasonable repair; 3) is a hindrance to the future use of the Premises; and 4) is of
negligible value.
19. AIRCRAFT OPERATIONS PROTECTED:
(a) There is hereby reserved to the City, its successors and assigns, for the use
and benefit of the public, a right of flight for the passage of aircraft in the airspace
above the surface and all improvements approved by the City of the premises
herein conveyed, together with the right to cause in said airspace such noise as
may be inherent in the operation of aircraft, now or hereafter used for navigation
of or flight in the air, using said airspace for landing at, taking off from, or
operating on the Kenai Airport. (When the City approves plans for improvements
Lease of Airport Lands — Page 6 of 19
Lessor:
Lessee:
pursuant to paragraph 7, the City to the extent of those improvements releases the
easement here expressed.)
(b) The Lessee by accepting this conveyance expressly agrees for itself, its
representatives, successors, and assigns, that it will not erect nor permit the
erection of any structure or object, nor permit the growth of any trees on the land
conveyed hereunder, which would be an airport obstruction within the standards
established under the Federal Aviation Administration Regulations, Part 77, as
amended. In the event the aforesaid covenant is breached, the City reserves the
right to enter on the land conveyed hereunder and to remove the offending
structure or object, and to cut the offending tree, all of which shall be at the
expense of the Lessee or its heirs, successors or assigns.
20. RIGHT TO ENJOYMENT AND PEACEABLE POSSESSION: City
hereby agrees and covenants that the Lessee, upon paying rent and performing other covenants,
terms, and conditions of this Lease, shall have the right to quietly and peacefully hold, use,
occupy, and enjoy the said leased premises, except that any inconvenience caused by public
works projects in or about the leasehold premises shall not be construed as a denial of the right of
quiet or peaceable possession.
21. LESSEE TO PAY TAXES: Lessee shall pay all lawful taxes and
assessments which, during the term hereof may become a lien upon or which may be levied by
the State, Borough, City, or any other tax levying body, upon any taxable possessory right which
Lessee may have in or to the property by reason of its use or occupancy or the terms of this lease,
provided however, that nothing herein contained shall prevent Lessee from contesting any
increase in such tax or assessment through procedures outlined in State statutes.
22. SPECIAL SERVICES: Lessee agrees to pay the City a reasonable charge
for any special services or facilities not provided for herein if requested by Lessee in writing, and
if the City agrees to provide such services or facilities.
23. NO PARTNERSHIP OR JOINT VENTURE CREATED: It is expressly
understood that the City shall not be construed or held to be a partner or joint venturer of Lessee
in the conduct of business on the demised premises; and it is expressly understood and agreed
that the relationship between the parties hereto is, and shall at all times remain landlord and
tenant.
24. DEFAULT BANKRUPTCY, ETC.: If the Lessee shall make any
assignment for the benefit of creditors or shall be adjudged a bankrupt, or if a receiver is
appointed for the Lessee or Lessee's assets, or any interest under this Lease, and if the
appointment of the receiver is not vacated within thirty (30) days, or if a voluntary petition is
filed under Section 18(a) of the Bankruptcy Act by the Lessee, then and in any event, the City
may, upon giving the Lessee thirty (30) days' notice, terminate this lease.
Lease of Airport Lands — Page 7 of 19
Lessor:
Lessee:
25. NONDISCRIMINATION: The Lessee, for himself, his heirs, personal
representatives, successors in interest, and assigns, as a part of the consideration hereof, does
hereby covenant and agree as a covenant running with the land, that:
(a) No person on the grounds of race, color, or national origin shall be
excluded from participation in, denied the benefits of, or be otherwise subjected to
discrimination in the use of said facilities;
(b) In the construction of any improvements on, over or under such land and
the furnishing of services thereon, no person on the grounds of race, color, or
national origin shall be excluded from participation, denied the benefits of, or
otherwise be subjected to discrimination;
(c) The Lessee shall use the premises in compliance with all other
requirements imposed by or pursuant to Title 49, Code of Federal Regulations,
Department of Transportation, Subtitle A, Office of the Secretary, Part 21,
Nondiscrimination in Federally- assisted Programs of the Department of
Transportation- Effectuation of Title VI of the Civil Rights Act of 1964, and as
said Regulations may be amended.
(d) In the event facilities are constructed, maintained, or otherwise operated
on the said property described in this Lease, for a purpose involving the
provision of similar services or benefits, the Lessee shall maintain and
operate such facilities and services in compliance with all other
requirements imposed pursuant to Title 49, Code of Federal Regulations,
Department of Transportation, Subtitle A, Office of the Secretary, Part 21,
Nondiscrimination in Federally- assisted Programs of the Department of
Transportation - Effectuation of Title VI of the Civil Rights Act of 1964,
and as said Regulations may be amended.
26. PARTIAL INVALIDITY: If any term, provision, condition, or part of this
Lease is declared by a court of competent jurisdiction to be invalid or unconstitutional, the
remaining terms, provisions, conditions, or parts shall continue in full force and effect as though
such declaration was not made.
27. MODIFICATIONS: No lease maybe modified orally or in any manner
other than by an agreement in writing, signed by all parties in interest or their successors in
interest. Any such modification shall require Council approval.
28. WARRANTY: The City does not warrant that the property which is the
subject of this Lease is suited for the use authorized herein, and no guarantee is given or implied
that it shall be profitable or suitable to employ the property to such use.
Lease of Airport Lands — Page 8 of 19
Lessor:
Lessee:
29. RIGHT TO ADOPT RULES: City reserves the right to adopt, amend, and
enforce reasonable rules and regulations governing the demised premises and the public areas
and facilities used in connection therewith. Except in cases of emergency, no rule or regulation
hereafter adopted or amended by the City shall become applicable unless Lessee has been given
thirty (30) days notice of adoption or amendment thereof.
30. NON - LIABILITY: City shall not be liable to Lessee for any diminution or
deprivation of possession, or of Lessee's right hereunder, on account of the exercise of any such
right or authority as provided in this or the preceding section, nor shall Lessee be entitled to
terminate the whole or any portion of the leasehold estate herein created, by reason of the
exercise of such rights or authority, unless the exercise thereof shall so interfere with Lessee's use
and occupancy of the leasehold estate as to constitute a termination in whole or in part of this
lease by operation of law in accordance with the laws of the State of Alaska and of the United
States made applicable to the states.
31. FINANCING:
(a) For the purpose of interim or permanent financing or refinancing from
time to time of the improvements to be placed upon the leased premises, and for
no other purpose, Lessee, after giving written notice thereof to the City, may
encumber by mortgage, deed of trust, assignment or other appropriate instrument,
Lessee's interest in the leased premises and in and to this Lease, provided such
encumbrance pertains only to such leasehold interest and does not pertain to or
create any interest in City's title to the leased premises. if such mortgage, deed of
trust, or assignment shall be held by a bank or other established lending or
financial institution (which terms shall include an established insurance company
and qualified pension or profit sharing trust) and such institution shall acquire the
Lessee's interest in such Lease as a result of a sale under said encumbrance
pursuant to a foreclosure or other remedy of the secured party, or through any
transfer in lieu of foreclosure, or through settlement of or arising out of any
pending or contemplated foreclosure action, such lending institution shall have the
privilege of transferring its interest in such Lease to a nominee or a wholly owned
subsidiary corporation with the prior consent of the City, provided, however, such
transferee shall assume all of the covenants and conditions required to be
performed by the Lessee, whereupon such lending institution shall be relieved of
any further liability under such Lessee from any default after such transfer. Such
lending institution or the nominee or wholly owned subsidiary corporation to
which it may have transferred such Lease, or any other lending institution which
may at any time acquire such lease shall be relieved of any further liability under
such lease from and after a transfer of such lease.
Lease of Airport Lands — Page 9 of 19
Lessor:
Lessee:
(b) A leasehold mortgagee, beneficiary of a deed of trust or security assignee,
shall have and be subrogated to any and all rights of the Lessee with respect to the
curing of any default hereunder by Lessee.
(c) If the holder of any such mortgage, or the beneficiary of any such deed of
trust, or the security assignee shall give the City before any default shall have
occurred in the Lease, a written notice containing the name and post office address
of such holder, the City shall thereafter give to such holder a copy of each notice
of default by the Lessee at the same time as any notice of default shall be given by
the City to the Lessee, and the City will not thereafter accept any surrender or
enter into any modification of this Lease without the prior written consent of the
holder of any first mortgage, beneficial interest under a first deed of trust, or
security assignee, in this Lease.
(d) If, by reason of any default of the Lessee, either this lease or any extension
thereof shall be terminated at the election of the City prior to the stated expiration
therefor, the City will enter into a new Lease with the leasehold mortgagee for the
remainder of the term, effective as of the date of such termination, at the rent and
additional rent, and on the terms herein contained, subject to the following
conditions:
(1) Such mortgagee, beneficiary or security assignee, shall make written
request to the City for such new Lease within twenty (20) days after the
date of such termination and such written request shall be accompanied by
a payment to the City of all sums then due to the City under this Lease.
(2) Such mortgagee, beneficiary, or security assignee, shall pay to the
City, at the time of the execution and delivery of such new lease any and
all sums due thereunder in addition to those which would at the time of the
execution and delivery thereof be due under this Lease but for such
termination, and in addition thereto, any reasonable expenses, including
legal and attorneys' fees, to which the City shall have been subjected by
reason of such default.
(3) Such mortgagee, beneficiary, or security assignee shall, on or before
the execution and delivery of such new Lease, perform all the other
conditions required to be performed by the Lessee to the extent that the
Lessee shall have failed to perform such conditions.
(e) If a lending institution or its nominee or wholly owned subsidiary
corporation shall hold a mortgage, deed of trust, or similar security interest in and
to this Lease and shall thereafter acquire a leasehold estate, derived either from
such instruments or from the City, and if such institution, nominee, or corporation
Lease of Airport Lands — Page 10 of 19
Lessor:
Lessee:
shall desire to assign this Lease or any new Lease obtained from the City (other
than to a nominee or to a wholly owned subsidiary corporation as permitted by the
above provisions) to an assignee who will undertake to perform and observe the
conditions in such Lease required to be performed by the Lessee, the City shall not
unreasonably withhold its consent to such assignment and assumption, and any
such lending institution, nominee, or subsidiary shall be relieved of any further
liability under such Lease from and after such assignment. If the proposed
assignor shall assert that the City is unreasonably withholding its consent to any
such proposed assignment, such dispute shall be resolved by arbitration.
32. HAZARDOUS MATERIALS AND HAZARDOUS WASTE: City and
Lessee agree that each shall comply with all applicable laws and regulations concerning
hazardous chemicals and other hazardous materials, and shall properly store, transfer and use all
hazardous chemicals and other hazardous materials and not create any environmental hazards on
the lands leased herein.
Should any hazardous chemicals or hazardous materials of any kind or nature
whatsoever, or hazardous wastes to be released by Lessee upon the subject lands during the term
of this lease, Lessee shall immediately report such release to the City Manager or other
appropriate City official and to any other agency as may be required by law, and Lessee shall, at
its own cost, assess, contain and clean up such spilled materials in the most expedient manner
allowable by law.
City and Lessee agree to hold harmless and indemnify the other from, and to
assume all duties, responsibilities and liabilities at the indemnifying party's sole cost and expense
(for payment of penalties, sanctions, forfeitures, losses, costs or damages), for responding to any
action, notice, claim, order, summons, citation, directive, litigation, investigation or proceeding
which is related to (i) failure to comply with any local, state or federal statutes, regulations, or
ordinances pertaining to hazardous chemicals, hazardous materials, hazardous wastes, or any
environmental conditions or matters as may now or hereafter be in effect, and (ii) any
environmental conditions that arise out of or are in any way related to the condition of the
property or activities conducted by the party thereon, unless the environmental conditions that are
caused by the other party. The indemnifications of this paragraph specifically include reasonable
costs, expenses and fees incurred in connection with any investigation of property conditions or
any clean -up, remediation, removal or restoration work required by any governmental authority.
The provisions of this paragraph will survive the expiration or termination of this right to
terminate this Lease upon notice to the City of Kenai. Interference is defined as anything that
prohibits the uses specified in Section 3 of this lease.
As used herein, "hazardous chemical" means a chemical that is a physical hazard
or a health hazard.
Lease of Airport Lands — Page 11 of 19
Lessor:
Lessee:
As used herein, "hazard material" means a material or substance, as defined in 49
C.F.R. 171.8, and any other substance determined by the federal government, the state of Alaska
or City of Kenai, to pose a significant health and safety hazard.
As used herein, "hazardous waste" means a hazardous waste as identified by the
Environmental Protection Agency under 40 C.F.R. 261, and any other hazardous waste as
defined by the federal government, the state of Alaska or City of Kenai.
The covenants and obligations described in this article shall survive the
termination of this lease.
Notwithstanding anything to the contrary, in order to aid the Lessee in the
financing of the improvements to be situated herein, City agrees that in the event the proposed
mortgagee, beneficiary, or security assignee under any interim or permanent loan on the security
of the leasehold interest of the Lessee and the improvements to be situated thereon so requires,
the City will make a reasonable effort to amend this Lease in order to satisfy such requirements
upon the express condition and understanding, however, that such variance in language will not
materially prejudice the City's right hereunder nor be such as to alter in any way the rental
obligations of the Lessee hereunder nor its obligations to comply with all existing laws and
regulations of the City relating to the leasing of airport lands, and to all applicable Federal
statutes, rules and regulations, and all covenants and conditions of the deed by which the City
holds title to the land.
33. COMPLIANCE WITH LAWS: Lessee shall comply with all applicable
laws, ordinances, and regulations of public authorities now or hereafter in any manner affecting
the leased premises or the sidewalks, alleys, streets, and ways adjacent thereto or any buildings,
structures, fixtures and improvements or the use thereof, whether or not any such laws,
ordinances, and regulations which may be hereafter enacted involve a change
of policy on the part of the governmental body enacting the same. Lessee agrees to hold City
financially harmless:
(a) From the consequences of any violation of such laws, ordinances, and /or
regulations; and
(b) From all claims for damages on account of injuries, death, or property
damage resulting from such violation.
(c) Lessee further agrees it will not permit any unlawful occupation, business,
or trade to be conducted on said premises or any use to be made thereof contrary
to any law, ordinance, or regulation as aforesaid with respect thereto, including
zoning ordinances, rules and regulations.
Lease of Airport Lands — Page 12 of 19
Lessor:
Lessee:
34. CARE OF PREMISES: Lessee, at its own cost and expense shall keep the
leased premises, all improvements which at any time during the term of this Lease may be
situated thereon, and any and all appurtenances thereunto belonging, in good condition and repair
during the entire term of this Lease.
35. SANITATION: The Lessee shall comply with all regulations or
ordinances of the City that are promulgated for the promotion of sanitation. The premises of the
lease shall be kept in neat, clean, and sanitary condition, and every effort shall be made to
prevent the pollution of water.
36. LESSEE'S OBLIGATION TO REMOVE LIENS: Lessee will not permit
any liens including, but not limited to, mechanics', laborers', or materialmen's liens obtainable or
available under the then existing laws, to stand against the leased premises or improvements for
any labor or material furnished to Lessee or claimed to have been furnished to Lessee or to the
Lessee's agents, contractors, or sublessees, in connection with work of any character performed
or claimed to have been performed on said premises or improvements by or at the direction or
sufferance of Lessee, provided, however, Lessee shall have the right to provide a bond as
contemplated by Alaska law and contest the validity or amount of any such lien or claimed lien.
On final determination of such lien or such claim for lien, Lessee will immediately pay any
judgement rendered with all proper costs and charges and shall have such lien released or
judgement satisfied at Lessee's own expense.
37. CONDEMNATION: In the event the leased premises or any part thereof
shall be condemned and taken for a public or a quasi - public use, then upon payment of any award
or compensation arising from such condemnation, there shall be such division of the proceeds,
such abatement in rent payable during the term or any extension of the term hereof, and such
other adjustments as the parties may agree upon as being just and equitable under all the
circumstances. If the City and Lessee are unable to agree within thirty (30) days after such an
award has been paid into Court, upon what division, annual abatement in rent, and other
adjustments are just and equitable, the dispute shall be determined by arbitration.
38. PROTECTION OF SUBTENANTS: To protect the position of any
subtenant(s) hereafter properly obtaining any interests in the leasehold estate granted Lessee
hereunder, City agrees that in the event of the cancellation, termination, expiration, or surrender
of this Lease (the ground lease), the City will accept the Subtenant, its successors and assigns, as
its lessee for a period equal to the full unelapsed portion of the term of the sublease, including
any extensions or renewals thereof, not exceeding the term of this Lease, upon the same
covenants and conditions therein contained, to the extent that said covenants and conditions are
not inconsistent with any of the terms and conditions of this Lease, provided such subtenant shall
make full and complete attornment to the City for the balance of the term of such sublease so as
to establish direct privity of estate and contract between the City and the subtenant with the same
force and effect as though such sublease was originally made directly between the City and such
subtenant; and further provided such subtenant agrees to comply with all the provisions of the
Lease of Airport Lands — Page 13 of 19
Lessor:
Lessee:
ground lease and all the terns of any mortgage, deed of trust, or security assignment to which
such leasehold estate is subject, except the payment of rent under the ground lease and the
payment of any debt service under any such mortgage, deed of trust, or security assignment.
39. SUCCESSORS IN INTEREST: This Lease shall be binding upon and
shall inure to the benefit of the respective successors and assigns of the parties hereto, subject to
such specific limitations on assignment as are provided for herein.
40. GOVERNING LAW: This indenture of Lease shall be governed in all
respects by the laws of the State of Alaska.
Lease of Airport Lands — Page 14 of 19
Lessor:
Lessee:
41. NOTICES:
(a) Any notices required by this Lease shall be in writing and shall be deemed to
be duly given only if delivered personally or mailed by certified or registered mail
in a prepaid envelope addressed to the parties at the address set forth in the
opening paragraph of this lease unless such address has been changed pursuant to
sub - paragraph (b) hereafter, and in that case shall to the most recent address so
changed.
Any notice so mailed shall be deemed delivered on the date it is deposited in a
U.S. general or branch post office.
The City shall also mail a copy of any notice given to the Lessee, by registered or
certified mail, to any leasehold lender (mortgagee, beneficiary of a deed of trust,
security assignee) who shall have given the City notice of such mortgage, deed of
trust, or security assignment.
(b) Any such addresses may be changed by an appropriate notice in writing to all
other parties affected provided such change of address is given to the other
parties by the means outlined in paragraph (a) above at least fifteen (15) days prior
to the giving of the particular notice in issue.
42. RIGHTS OF MORTGAGEE OR LIENHOLDER: In the event of
cancellation or forfeiture of a lease for cause, the holder of a property recorded mortgage, deed of
trust, conditional assignment or collateral assignment will have the option to acquire the Lease
for the unexpired term thereof, subject to the terms and conditions as in the original lease.
43. ENTRY AND RE- ENTRY: In the event that the Lease should be
terminated as hereinbefore provided, or by summary proceedings or otherwise, or in the event
that the demised lands or any part thereof should be abandoned by the Lessee during said term,
the Lessor or its agents, servants, or representatives may, immediately or any time thereafter,
re- enter, and resume possession of said lands or such part thereof, and remove all persons and
property therefrom, either by summary proceedings or by a suitable action or proceeding at law
without being liable for any damages therefor. No re -entry by the Lessor shall be deemed an
acceptance of a surrender of the Lease.
44. RETENTION OF RENTAL: In the event that the Lease should be
terminated because of any breach by the Lessee as herein provided, the rental payment last made
by the Lessee shall be retained by the Lessor as partial or total liquidated damages for said
breach.
Lease of Airport Lands — Page 15 of 19
Lessor:
Lessee:
45. WRITTEN WAIVER: The receipt of rent by the Lessor with knowledge
of any breach of the Lease by the Lessee, or any default on the part of the Lessee in observance
or performance of any of the conditions or covenants of the Lease, shall not be deemed to be a
waiver of any provisions of the Lease. No failure on the part of the Lessor to enforce any
covenant or provision therein contained, nor any waiver of any right thereunder by the Lessor,
unless in writing, shall discharge or invalidate such covenants or provisions, or affect the right
of the Lessor to enforce the same in the event of any subsequent breach or default. The receipt,
by the Lessor, of any rent or any other sum of money after the termination, in any manner, of
the term therein demised, or after the giving of the Lessor of any notice thereunder to effect such
termination, shall not reinstate, continue, or extend the resultant term therein demised, or
destroy, or in any manner impair the efficacy of any such notice of termination as may have
been given thereunder by the Lessor to the Lessee prior to the receipt of any such sum of
money or other consideration, unless so agreed to in writing and signed by the Lessor.
46. BUILDING AND ZONING CODES: Leased lands shall be utilized in
accordance with the building and zoning ordinances and rules and regulations of said authority.
Failure to do so shall constitute default.
47. FIRE PROTECTION: The Lessee will take all reasonable precautions to
prevent, and take all necessary action to suppress destructive or uncontrolled fires and comply
with all laws, regulations, and rules promulgated and enforced by the City for fire protection
within the area wherein the leased premises are located.
48. PERSONAL USE OF MATERIALS: All coal, oil, gas and other
minerals and all deposits of stone or gravel valuable for extraction or utilization are excepted
from the operation of a surface Lease. Specifically, the Lessee of the surface rights shall not sell
or remove for use elsewhere any timber, stone, gravel, peat moss, topsoil or any other material
valuable for building or commercial purposes; provided, however, that material required for the
development of the leasehold may be used if its use is first approved by the City Manager.
49. MUTUAL CANCELLATION: Leases in good standing may be cancelled in
part at any time upon mutual written agreement by Lessee and the City Council.
50. UNLAWFUL USE PROHIBITED: Lessee shall not allow the leasehold
be used for an unlawful purpose.
whole or in
premises to
leases does
required by
leased land
said land at
Lease of Air
51. APPROVAL OF OTHER AUTHORITIES: The issuance by the City of
not relieve the Lessee of responsibility of obtaining licenses or permits as may be
duly authorized Borough, State or Federal agencies.
52. REQUEST TO PURCHASE: If the tract of land proposed to be sold is
where the lease sets forth a development schedule, the lessee may request the sale of
not less than fair market value. The current lessee obtains the right to request a sale
ort Lands — Page 16 of 19 Lessor:
Lessee:
only after, to the satisfaction of the City Manager, completed development as detailed in the
development schedule that has been incorporated into the lease agreement. The decision whether
or not to sell the property rests within the sole discretion of the City.
53. NOTICE OF CONSTRUCTION: Lessee agrees to notify the City in
writing three days prior to commencing any construction project valued in excess of $1,000.00
upon the property. Lessee agrees to assist in the posting of a notice of non - responsibility and
maintenance of the notice upon the property during construction. Lessee agrees that in the event
of the Lessee's failure to notify the City as provided above, Lessee shall indemnify the City
against any materialmen's Liens as defined in AS 34.35.050 which arise as a result of construction
upon the premises.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, the day and
year stated in the individual acknowledgments below.
LESSOR:
CITY OF KENAI
By:
Rick R. Koch
City Manager
LESSEE:
BUCCANEER ALASKA OPERATIONS, LLC
By:
Its:
(If Lessee is a corporate style entity)
ATTEST:
Name
Title
Lease of Airport Lands -- Page 17 of 19
Lessor:
Lessee:
STATE OF ALASKA )
) ss.
THIRD JUDICIAL DISTRICT )
The foregoing instrument was acknowledged before me this day of , 2011,
by , the of Buccaneer Alaska
Operations, LLC, an Alaska limited liability company, on behalf of the limited liability
company.
STATE OF ALASKA
) ss.
THIRD JUDICIAL DISTRICT
Notary Public for Alaska
My Commission Expires:
The foregoing instrument was acknowledged before me this day of , 2011,
by Rick R. Koch, City Manager for the City of Kenai.
Approved as to lease form by City Attorney:
Approved by Finance Director:
Notary Public for Alaska
My Commission Expires:
Lease approved by Council on
Lease of Airport Lands Page 18 of 19 Lessor:
Lessee:
Corene Hall, Acting City Clerk
Lease of Airport Lands — Page 19 of 19
Lessor:
Lessee:
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