Kenai has reached a tentative deal to buy seven beach front properties overlooking Cook Inlet south of the Kenai River mouth, four of which are needed for the city’s proposed access road to the river’s south bank.

Although the sales agreement has been drafted, neither the Kenai City Council nor ARK Properties, the Idaho-based company that owns the seven land parcels, have signed it — an action the council will vote on in a future meeting after resolving the legal question of what Kenai can do with the land.

An ordinance introduced by the city administration at Wednesday’s council meeting would have approved the agreement, buying the land for $1.6 million taken from a $1.9 million state grant for construction of the South Beach Access Road. The council voted to postpone the ordinance, with Council member Terry Bookey opposing. Bookey said he voted against the postponement because he opposed building the road.

The road is intended to provide beach access for summer dipnetters, who currently reach the south side of the Kenai mouth by trespassing on private properties that lie between the river and the current access point, farther south on Dunes Road. The owners of those properties have said the dipnetting traffic creates noise, litter, and vandalism on their land.

The four properties Kenai intends to use for road building lie south of a city-owned wetland, through which the South Beach Access Road was originally routed in February 2015 when Kenai applied for a wetland construction permit from the Army Corps of Engineers. The road’s original route was meant to bypass the private land in the area, but after Kenai’s permit application drew criticism from the U.S. Fish and Wildlife Service for the potential damage the road could do to the area’s hydrology and migratory bird population, Kenai suspended its permit application in June.

The city council authorized City Manager Rick Koch to negotiate the sale with ARK Properties President John McCallum and his local representative Bruce Friend during a meeting on July 1. According to a memo to city council dated June 30, Koch wrote that during previous discussions it had become “apparent that ARK had no interest in selling a portion of their properties, or providing easements across their properties.” ARK would only sell the seven properties together as a package. Koch wrote that McCallum had originally requested $2.5 million, but had bargained down to $1.6 million.

The new road plan, which would be made possible by the land purchase, avoids the wetlands and makes an Army Corps of Engineers permit unnecessary. Koch called the wetland route “an unattractive alternative,” adding that as a condition of the Army Corps permit, Kenai would have to put a conservation easement on wetlands proportional to the wetland area covered by the road. In the June 30, memo Koch estimated the required easement could take up as much as four acres.

“So, at that juncture I thought I would make one last attempt to see if there if was a position to be negotiated that would work in purchasing all of those seven lots within the budgetary resources that were appropriated from the state to the city,” Koch told the council.

Along with city attorney Scott Bloom, Koch traveled to Boise, Idaho to finish bargaining with McCallum. Two of the three unneeded properties are developed — one with an airplane hangar and the other with a house. In documents attached to the ordinance, Koch outlined a plan in which the city would buy the seven parcels with state grant money, using the four necessary for road construction and selling the other three for a total of $900,000, which would further finance construction.

Koch told the council that even without selling the excess properties, the remaining grant money would be enough to make a gravel segment from the end of the already-existing gravel Royal Street to the beach. With the money recovered by the property sale, the new gravel segment, Royal Street and the adjacent Old Cannery Road could be paved to make a continuous road from Bowpicker Lane to the beach.

A legal problem with this plan was discovered before Wednesday’s meeting. Koch recommended that the council postpone the purchase to allow the administration time to negotiate around a part of the Kenai city code that would prevent proceeds from the sale of the unneeded land from being used on road construction. According to the code money from sale of city-owned land “shall be invested and may not be spent or appropriated for any purpose,” allowing an exception only for lands placed in trust. This provision of the code, written in 1984, requires money from land sales to be invested in a fund from which only the interest could be spent.

“If the city just in a straightforward process purchased the lands from the seller, we wouldn’t be able to then turn around, sell them, and use the proceeds to build the road,” Bloom said. “So we’re working on a mechanism to essentially hold the lands in trust for the purpose of building the roads.”

When asked by Council Member Brian Gabriel how much time he would need to devise the mechanism, Bloom said “I can get it up and running by our next meeting for sure.”

Council Member Bob Molloy questioned whether the state would allow its grant money to be used for buying private property.

Koch said he did not expect opposition from the state, and added that at the Sept. 16 council meeting he expects to have a letter confirming this non-opposition from the Alaska Department of Commerce, Community, and Economic Development, the agency through which the state grant was given.

The resolution was approved with an amendment, introduced by Molloy, to make the land purchase conditional on ADCCED’s non-opposition.

Bookey, who was absent from the council chamber but participated by phone, said in a later interview that he didn’t “think the city needs to be in the business of purchasing private residences in the way we are,” naming the cost of utilities and maintenance for the buildings on the property as risks the city shouldn’t take on.

In addition to opposing the land purchase, Bookey said he also questioned the need for the road.

“I think there could be a debate about whether or not we even need a new access road to the beach,” Bookey said. “I think maybe a couple of years ago we could have had that discussion a little bit more, but over the last couple of years I think the city has improved its management of current access sites to a point that I’m not sure it’s a necessary expenditure.”

Reach Ben Boettger at ben.boettger@peninsulaclarion.com