HomeMy WebLinkAboutOrdinance No. 2730-2013Suggested by: Administration
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING
AN EXTENSION AND AMENDMENT OF THE LEASE OF CERTAIN CITY -OWNED
LAND, IDENTIFIED AS A PORTION OF LOT 3, BLOCK 17, ORIGINAL TOWNSITE OF
KENAI AND THE BUILDING KNOWN AS THE "FINE ALTS CENTER," TO THE
PENINSULA ART GUILD, INC. WITHOUT A CURRENT APPRAISAL AND DECLARING
AN EXTENSION AND AMENDMENT OF THE LEASE IS IN THE BEST INTEREST OF
THE CITY.
WHEREAS, since December 5, 1991 and until the Lease was assigned to the Peninsula
Arts Guild, Inc. on September 8, 2000, the City has leased the Fine Arts Center to the
Kenai Arts & Humanities Council for one dollar ($1.00) per year to provide a building
to hawse the Fine Arts Center for the benefit of the local community; and,
WHEREAS, the Fine Arts Center is currently in need of general repair and updating;
and,
WHEREAS, the current Lease is scheduled to expire on .June 30, 2015, and the
Peninsula Art Guild, Inc. has requested an extension of the lease until December 30,
2020 under the same terms and conditions as the existing. Lease in order to obtain
grant funding for a substantial repair, renovation, and upgrade of the premises; and,
WHEREAS, Kenai Municipal Code 22.05.055 requires lease terms to be based on the
durability of the proposed use, the amount of investment proposed and made, the
nature of the improvement proposed, and the time required to amortize the
investment; and,
WHEREAS, Kenai Municipal Code, 22.05.056 requires that prior to renewal of a lease,
there must be an appraisal within the last twelve (12) months to determine a fair
market lease rate; and,
WHEREAS, it is in the best interest of the City to waive KMC 22.05.050 and 22.05.055
as a fair market lease is not sought and such appraisal would result in the
unnecessary expenditure of funds and the City owns the improvements; and,
WHEREAS, the directors of the Peninsula Art Guild have requested that City
Administration expedite its request to Execute an Extension of Lease in order to obtain
available grant funding; and,
WHEREAS, an Amendment of the Lease is necessary to correct the purpose of the
lease to remove reference to the Kenai Arts & Humanities Council, which no longer
exists; and,
New Text. Underlined; [DELETED TEXT BRACKETED]
Ordinance No. 2730-2013
Page 2 of 3
WHEREAS, Kenai Municipal Code 22.05.070 allows the Council to deviate from the
principles and policy of lease rates in the best interest of the City; and,
WHEREAS, the Planning &, Zoning Commission reviewed this Ordinance at its
December 11, 2013 meeting and recommended the City proceed with the lease
extension; and
WHEREAS, an extension of the current lease to the Peninsula Arts Guild under the
same terms and conditions of the existing lease at a rate of one dollar ($1,00) per year
is in the best interests of the City,
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA, as follows:
Section 1. Form: That this is a non-code ordinance.
Section 2. Waiver of Code Reguirements: That the Kenai City Council waives the
following provisions of the Kenai Municipal Code as it pertains to the lease renewal a
portion of Lot 3, Block 17, Original Townsite of Kenai and the building known as "The
Fine Arts Center," to the Peninsula Art Guild, Inc. only:
(a) KMC 22,05.050 to allow for a renewal of lease without an appraisal within a
twelve (12) month period prior to the beginning of the term of the renewal lease.
(b) KMC 22.05,055 to allow for the term of the lease not to depend upon the
durability of the proposed use, the amount of investment in improvement
proposed and made, and the nature of the improvement proposed with respect
to durability and time required to amortize the proposed investment.
Section 3. Best Interest Finding: That it is in the best interest of the City to deviate
from the principles and policy of lease rates to provide for a lease renewal to the
Peninsula Art Guild for an annual rental rate of one dollar ($ 1.00) per year to support
the Kenai Arts Community.
Section 4. That the purpose of the lease is amended to remove reference to the Kenai
Arts &, Humanities Council.
Section 5. That the City Manager is authorized to enter into a lease amendment and
extension with the Peninsula Art Guild consistent with the terms of this Ordinance.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA this 18th day of
December, 2013,
PAT PORTER, MAYOR
New Text Underlined; [DELETED TEXT BRACKETED]
(Ordinance No. 2730-2013
Page 3 of 3
ATTEST:
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n r r, a roAiglu, &ty Clerk
Introduced: December 4, 2013
Adopted: December 18, 2013
Effective: December 18, 2013
New Text Underlined; [DELETED TEXT BRACKETED]
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The purpose of this merno is to provide additional information in support of Ordinance No.
2730-2013, which authorizes an extension and amendment of the above referenced Lease
of City Lands without a current appraisal and finding it in the best interest of the City to
deviate from the principles and policy of lease rates to allow for a lease renewal at an
annual rate of $1.00 per year.
The property and building have been leased at an annual rate of $1.00 per year for the
purpose of providing a building to house the Fine Arts Center for the benefit of the local
community since 1991. Prior to 1991, the purpose for which the Lease was issued was as
a "meeting place and display area for crafts." The current request is to extend the Lease to
December 31, 2020 under the same terms and conditions in order to justify future building
maintenance and repair expenditures, satisfy multi-year grand funding requirements, and
pursue future funding opportunities,
The City's principles and policy of lease rates as outlined in Code require a fair return to
the City's General Fund. To ensure a fair return, lease rates are based on fair market
value as determined by a qualified independent appraiser and are 8% of fair market value.
In the absence of an appraisal, the best available information on the value of the land area
and building improvements is the Kenai Peninsula Borough Assessment, which is
approximately $227,451.50 (see attached). Based on this value, the annual lease rate
would be approximately $18,196,12,
The City's Code requires that any renewal lease be reviewed by the Planning & Zoning
Commission as to whether the request conforms to the Comprehensive Plan and the
Kenai Zoning Code, The Request has been scheduled for the December 11, 2013 Meeting
of the Planning & Zoning Commission. The recommendation from the Planning & Zoning
Commission will be provided in a supplemental memo at the December 18, 2013 Council
Meeting,
CC' Peninsula Art Guild, Inc.
Attachments
Land Area Area (SF)
Area 41 -City Playground 44,400
Area 42 -Kenai Historical Society 17,400
Area 43-Peninsula Art Guild Inc. 24,884 $
Totals 86,684 $
Building Improvements Area (SF
Area 41-City Playground 0
Area 42-Kenai Historical Society 960
Area 43-Peninsula Art Guild Inc, 2912
Totals 3,872 $
Total Pro-Rated
Assessed Value
Area 41-City Playground 92,504.27
Area 42-Kenai Historical Society S 94,144.23
Area 43-Peninsula Art Guild Inc. 227,451.50
Pro-Rated Assessed
Value
92,504.27
36,251.67
51,844.06
Pro-Rated Assessed
Value
57,892.56
175,607.44
233,500,00
SECOND AMENDMENT TO LEASE
THIS Second Amendment to Lease is made as of the day of
201 3, by and between the CITY OF KENAI (City), a municipal corporation whose address
is 210 Fidalgo Avenue, Kenai, Alaska 99611, and PENINSULA ART GUILD, INC.
(Lessee), whose address is P.O. Box 703, Kenai, Alaska 99611-0703.
PI&V102=13XV5 I
WHEREAS, on May 23, 1995, the City entered into a lease with the Kenai Arts &
Humanities Council for City-owned lands identified as A portion of Lot 3, Block 17,
Original Townsite of Kenai and the building known as the Fine Arts Center, which lease
was recorded at Book 464 Pages 768-776 on June 13, 1995, in the Kenai Recording
District, Third Judicial District., State of Alaska (the Lease); and,
WHEREAS, since May 23, 1995, the rights under the Lease have been assigned to
the Peninsula Arts Guild; and,
WHEREAS, an Amendment to Lease recorded at Book 486 Pages 465-466 on
June 13, 1996 extended the term of the Lease to June 30, 2015 and required the Lessee to
submit to the City Council, for approval, any proposed construction plans for the property;
and,
WHEREAS, the parties have agreed to extend the term of the Lease to December
31, 2020 and amend the purpose for which the Lease is issued to remove reference to the
Kenai Arts & Humanities Council.
NOW THEREFORE, the parties agree as follows:
The term of this Lease has been extended until December 31, 2020.
2. The purpose for which the Lease is issued has been amended as follows:
Purpose: To provide a building to house the Fine Arts Center for the benefit
of the local community
4. Except as expressly modified or stated herein, all other terms and conditions
of the Lease (as amended) remain in full force and effect.
Second Amendment to Lease Page 1 of 3
Portion of Lot 3, Block 17, Original Townsite of Kenai and Fine Arts Center Building
14 1 all US M N a 01
D
By.
Rick R. Koch
Its: City Manager
PENINSULA ART GUILD
By: _
Name:
Its:
Approved as to fo
Scott Bloom
City Attorney
State of Alaska
) ss
Third Judicial District
The foregoing instrument was acknowledged before me this _ day of _, 2013,
by Rick R. Koch, City Manager for the City of Kenai.
Notary Public of Alaska
My Commission Expires:
Second Amendment to Lease Page 2 of 3
Portion of Lot 3 , Block Original Townsite of Kenai and Fine Arts Center Building
State of Alaska
ss
Third Judicial District
The foregoing instrument was acknowledged before me this
by
(Name)
day of _, 2013,
,(Title), on behalf of
PENINSULA ART GUILD, INC, a Alaska Corl)oration, on behalf of the Corporation.
Notary Public of Alaska
My Commission Expires:
RNMIANW43
CITY OF KENAI
210 Fidalgo Avenue
Kenai, AK 99611-7794
Second Amendment to Lease Page 3 of 3
Portion of Lot 3, Block Original Townsite of Kenai and Fine Arts Center Building
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Whereas, the City of Kenai has continuously leased the building located at 816 Cook Avenue, Kenai,
to the Peninsula Art Guild, Inc. , a non-profit volunteer organization, since 1980 for use as a fine art
center and exhibition space for the Central Kenai Peninsula, and,
Whereas, that memorandum of lease provides that said building is leased for the sum of $1.00 per
year, with the lessee to maintain and repair the building at its expense, and
Whereas, the lessee, Peninsula Art Guild, Inc. dba Kenai Fine Arts Center has embarked upon a
substantial repair, renovation, and upgrade of the premises solely using a substantial portion of its
own separate funds and desires to make further premises improvements in the immediate ftiture, and
Whereas, the lessee, Peninsula Art Guild, anticipates that it will apply in the foreseeable future for
multi-year state and private foundation grant funding to undertake expansion of the Center's
programs, including the sponsorship of statewide juried fine arts competitions and exhibits each
year, the hiring of professional staff, the sponsorship of frequent cultural and community events, and
community outreach to Central Peninsula schools, senior centers, and other civic organizations, and
Whereas in the course of its building repair and grant preparation programs, the directors of
Peninsula Art Guild have ascertained that the existing lease between the City of Kenai and the
Peninsula Art Guild should be extended by a sufficient number of years to justify the further
expenditure of a substantial portion of the lessee's accrued funds and to satisfy multi-year grant
.funding requirements,
Now, Therefore, Peninsula Art Guild, Inc, and its directors individually, hereby request that the City
of Kenai execute a memorandum of lease continuing the existing lease upon its same terms and
conditions for a period of seven additional years, with said extended lease to expire on December
31, 2020.
Adopted on this 12"' Day of November, 2013 by a vote of Yes to o as recorded
in th�rti' inutes of the mee
'Vill
President At t: Secretary
hm
l
TO: Christine Cunningham, Assistant to the City Manager
THRIJ: Rick Koch, City Manager/Acting City Planner
FROM: Nancy Carver, Planning Assistant
\)V
DATE: December 12, 2013
SUBJECT: Peninsula Art Guild, Inc. — Request for Lease Extension — Portion of Lot 3,
Block 17, Original Townsite of Kenai — 816 Cook Avenue
At their meeting on December 12t", the Planning & Zoning Commission reviewed the
lease extension application for the Peninsula Art Guild, Inc. The Commission found the
lease was in compliance with the zoning ordinance and the Comprehensive Plan. The
Commission voted unanimously for the City to proceed with the lease extension for a
Portion of Lot 3, Block 17, Original Townsite of Kenai, 816 Cook Avenue.
December 2. 2013
Peninsula Art Guild/Kenai Fine Art Center
8 16 Cook Avenue, Kenai, AK 99611
907-283-7040
City of Kenai Council
City of Kenai Planning Commission
Dear Members of the Kenai City Council and Planning Commission:
Peninsula Art Guild, which operates the Kenai Fine Arts Center, has had a $1 per year lease with the City of
Kenai on the old fire station at 816 Cook Avenue since at least 1991, although the continuous use of the
facility as an art center goes back to the late 1970s in my personal experience.
As you may have noticed, the Kenai Fine Arts Center has undergone a substantial revitalization in recent
months, with exterior and interior improvements as well as paving, all at the Art Guild's expense. The Kenai
Fine Art Center has also instituted a series of free public art and cultural events every Friday evening. In 2014,
we have scheduled a series of statewide juried exhibitions to showcase the Central Peninsula.
All of this work is done without cost by the Board and volunteers and funded by Our fund-raisers and
donations. At. this time, the total annual income of the Peninsula Art Guild is sufficient to maintain the
premises and its utilities as well as fund our many tree public events, but not more.
Although Our current lease with the City of Kenai expires at the end of 2015, we have requested that the City
extend the lease at this tine for an additional five years, with a new expiration date of December 31, 2020.
We request this extension for several reasons. It is our intent to undertake extensive interiol, repairs,
particularly installing a vapor barrier and new ceiling as well as general upkeep and painting, at the Fine Art
Center in January 2014. After Spring breakup, we anticipate constructing a protected courtyard on the east side
ofthe building where concerts and outdoor events can be held. This courtyard will be constructed of paver
blocks in an area that is currently unmaintained grass and an old storage shed. This work will substantially
upgrade the City's building and benefit the Community as a whole. The amount of work involved will consurne
a very Substantial portion of the financial resources of the Peninsula Art Guild.
We also intend to construct an additional small office space inside the current building facility and offer its use
without charge to various art and music related groups as well as the Historical Society on a non-exclusive
basis. In addition, the Peninsula Art Guild would like to provide additional community outreach by providing
already-requested workshops for senior, youth and other groups but we currently do not have usable space for
such workshops, Providing those facilities will require building renovations for which the Peninsula Art Guild
would likely require grant funding.
To sustain and expand these programs and resources, Nve will need to apply for a series of grants over the next
one to two years to further upgrade the facility and to provide multi-year prograrn. funding. In order to do this,
we must demonstrate long-term control of the premises through. lease. Your assistance is requested and
appreciated.
For the Board of Directors
Joseph Kashi, Secretary