Potential buyers and frustrated lessees urged Kenai City Council members to allow the sale of airport land at a work session Monday night.
The council held two work sessions: one to go over updates to the city’s junk car ordinance and another regarding unsolicited offers to buy airport land. While no one showed up to comment on junk cars, half a dozen community members addressed the council during the second work session, expressing interest in further developing airport lots and woes about being stuck on leased lots with no favorable way out.
Major complaints were that contractors are reluctant to get involved with lots that are leased and not owned, that the city’s record of selling airport land is inconsistent and that lessees are not given sufficient options when they wish to end their affiliation with their lots.
Sid Morris, owner of Olga’s Jewelry in Kenai, said when he assumed his lease from its previous owner, he was told he would be able to purchase the lot later on when he was ready.
“I’ve been leasing the property for about 30 years from the City of Kenai, and I think it’s time for me to be able to buy it,” Morris said. “When I originally purchased, I didn’t have the finances to be able to buy the property along with the building, I just couldn’t afford it. The land lease was a favorable price that allowed me to buy the building and pay the lease, but as the years have gone by… of course, it’s steadily increased.”
Morris said he worries about what will happen to his business if he is unable to sell it.
“I’m 70 years old and considering and thinking about retiring,” he said. “I personally don’t think I could sell that building to anybody that wanted to buy a building knowing that they’re sitting on a land-leased piece of property that they could never own.”
City Manager Rick Koch used an interactive chart to explain that, in order for the city to avoid losing money on a lot over a 50-year span, the sale price of an airport lot needs to be enough to compensate for money that will no longer be collected through lease payments.
When Council member Ryan Marquis asked if the city would technically own buildings on airport land if the leased lots were given up, Koch’s answer was “yes.” Testifying community members said this is the most likely outcome for lessees who want to go in a different direction but are unable to purchase their lots to resell them.
“The formula that the city manager has devised, it’s not obtainable,” said Annalea Lott, owner of Main Street Tap and Grill. “We’ll never be able to purchase the property.”
Koch acknowledged that lease agreements were not originally set up with agreeable exit strategies for lessees. The city is beginning to incorporate exit strategies into the new lease agreements it makes, Koch said.
Those interested in purchasing airport lots — including Fred Braun of Jack White Real Estate, Robert Breeden of Breeden Alaska Properties, and Duane Bannock of Schilling Commercial Real Estate — asserted that developing land is easier when it is owned outright.
“I just think (allowing sale of airport land) would be a plus… I do believe that there should certainly be restrictions on those sales,” Braun said. “From the realtor side of things, I don’t know of any contractor, personally, that would prefer to ever build on city-leased land.”
The council’s major concerns with selling airport lots were that it might not be in the best interest of the city and could eventually affect the health of the airport.
No council action can be taken at a work session. Vice Mayor Brian Gabriel said the council’s next step regarding airport land will be to introduce it in the form of a discussion item or ordinance at its next meeting.
While airport land took up most of the night’s focus, it was not the only thing on the council’s radar. During the first work session, the council heard from City Planner Matthew Kelley, who went over several updates to the city’s junk car ordinance. They included doing away with the stipulation that car covers had to be a certain color, clarifying definitions including “rear yard,” and “side yard,” and exempting cars stored in light and heavy industrial zones from the ordinance altogether.
Gabriel said the council’s next step will likely be to address these updates at its next meeting.
“The city planner and administration generated their changes to the code,” Gabriel said. “There wasn’t a whole lot of objection to those, so … I suspect that would come back to council for deliberation.”
The Kenai City Council’s next meeting will take place at 7 p.m. in the City Hall Council Chambers on Fidalgo Avenue on Wednesday.
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