In August 2015, the Kenai City Council approved the donation of two acres of city land on the corner of Evergreen Street and the Kenai Spur Highway to the local drama group Kenai Performers, which plans to build a new theater there.

However, the legal intricacies of city-owned land — specifically a requirement to finance the Kenai Municipal Airport with the management of certain properties — has so far prevented the city from making good on the donation.

Phil Morin, vice president of the Kenai Performers board of directors, said the group hasn’t been bothered by the delay. Because they are still raising funds for the theater, the extra time has been to their benefit.

“In our situation the timing turned out to be advantageous,” Morin said. “You look at the serendipity and think ‘how fortuitous!’ Otherwise we’d be behind the ball, and we’re not. … We wouldn’t want to have this empty lot that the city could be using sitting around for years and years.”

Decades ago, the Kenai Performers began doing shows in the gymnasium of what’s now the Kenai Boys and Girl’s Club, Morin said. As audiences grew, they moved to other venues to put on high-production musicals that have included “Peter Pan,” “Joseph and the Amazing Technicolor Dreamcoat,” “Guys and Dolls,” and mostly recently, the upcoming “Shrek,” to be performed Feb. 23-25 at Kenai Central High School’s auditorium.

The shows typically cost around $30,000 to $40,000, and renting performance space is usually about 40 percent of their budget, Morin said. With the Kenai Peninsula Borough School District, which owns most of the existing local auditorium space, being pressed to budget tighter, Board of Education members have speculated about raising fees for using the auditoriums — one reason the Performers are seeking their own venue, Morin said.

Building a theater wouldn’t be affordable if the Performers have to purchase the land, Morin said. So far, they’ve spent about $65,000 to commission official plans.

“We’ve got a fairly sleek minimal design that can function as a blackbox theater,” Morin said. “It would be about 5,000 square feet. The tag they have on it right now would be about a million and a half dollars.”

In addition to earning money from ticket sales and the Curtain Call consignment shop in Kenai, Morin said the group would be doing other fundraising and seeking grants and loans for the new theater.

A blackbox theater is a versatile layout with a moveable stage, seating, and lighting system that can be configured for a variety of performances. Morin said it would expand the variety of shows the Kenai Performers put on.

“We would like to do a lot more traditional theater, in the sense of just plays, not big extravagant Broadway events,” Morin said. “Having a smaller space we could modify to our needs, versus having to keep the building intact as it is, would allow us that flexibility to put on more shows more frequently, of a different variety of kinds.”

In 1980 the Alaska state government gave Kenai the land that the city is now donating to the Performers, said Kenai city planner Matt Kelley. In the middle of the decade, the city gave Homer Electric Association the land on Main Street Loop road where their present Kenai office sits. That land had come to city from the old military airfield that covered much of present-day Kenai in the 1940s and 1950s, which the Federal Aviation Administration granted to the newly-chartered city government in 1963, attaching a legal requirement for that land to support the Kenai Municipal Airport.

Kenai owns many acres of land with this obligation, which it fufills by depositing money from the sale of land in an investment fund that finances airport operations. To donate airport-dedicated land to Homer Electric Association instead, the city had to dedicate other land to airport support in its place. It transfered the obligation to a parcel on Evergreen Street — the one that’s presently being donated to the Kenai Performers.

Kelley said he was unsure whether anyone in Kenai’s government knew about the airport obligation when the city council approved the donation to the Kenai Performers in August 2015. He said he discovered it when doing a title search on the property after the council’s approval. The requirement puts the donation — which would raise no revenue for the Kenai airport — in conflict with the 1963 deed, and has delayed it since.

Kenai City Manager Paul Ostrander said there are two options to clear the land for donation: the city can “buy” the property by compensating the airport fund for its value, or move the restriction once again to an equally valuable piece of city property. Ostrander said he intends “to resolve the issue relatively soon.”

“It’s just a matter of finding out what solution makes the most sense,” Ostrander said. “We’ve been struggling with what the best solution is, but we’ll get there. We’ll get it cleared up.”

The Kenai City Council will vote on the option that Kenai administrators decide to pursue. If they decide to “buy” the property to make the donation, its cost would be determined by an appraisal. A previous appraisal of the property valued it at $80,000, Kelley said.

For the option of dedicating other land to the airport to replace the donation property, Ostrander said the difficulty is finding another piece of city land likely to appraise at equal value and that isn’t likely to be needed for a future city purpose.

The airport requirement also rules out leasing the land to the Performers for a nominal rent, a strategy the city has used with other nonprofit groups that want to use its land — for example, with the Peninsula Art Guild, which rents a city property in Old Town for $1 a year.

Reach Ben Boettger at benjamin.boettger@peninsulaclarion.com.