FY2023-11 Land Sale VI EMB2
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Introduced by: Finance Director
Drafted by: Finance Director
Introduced on: 10/20/2022
Public Hearing Date: 11/03/2022
Adopted on: 11/03/2022
KODIAK ISLAND BOROUGH
ORDINANCE NO. FY2023-11
AN ORDINANCE OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH DETERMINING
THAT IT IS IN THE BOROUGH'S BEST INTERESTS TO LEASE THE PROPERTY AT 717 E.
REZANOF DRIVE PURSUANT TO A COMPETITIVE REQUEST FOR PROPOSALS PROCESS
WHICH WAIVES CERTAIN DISPOSAL PROCEDURES.
RECITALS
WHEREAS, the Kodiak Island Borough owns Lot 5A, Block 1, US Survey 2538A, Kodiak
Recording District, Third Judicial District, State of Alaska, which is an approximately 2.49 acre
parcel and includes the Borough project office at 720 Egan Way and an approximately 92,115 sq.
ft. portion of the parcel leased from 1997 until recently by the Sisters of Providence for the
Providence Kodiak Island Counseling Center; and,
WHEREAS, the structures previously leased by Sisters of Providence are old and in poor
condition. The structures are known to have asbestos containing materials and lead based paint
in some locations; and,
WHEREAS, the Sisters of Providence have vacated the property, and the Borough must
evaluate whether to destroy the buildings, to renovate the buildings for Borough use, or to dispose
of the property by lease or sale to a third party; and,
WHEREAS, the Borough Assembly finds that, apart from the Borough projects office, consisting
of an approximately 16,349 sq. ft. portion of the parcel, the Borough does not have a present use
for the parcel; and, that due to the costs to either demolish the buildings or to secure and maintain
the property and to remediate the asbestos and lead paint if the Borough were to retain it for
Borough use, disposal by lease to a party who will address these issues and provide revenue to
the Borough more advantageous to the residents of the Borough; and,
WHEREAS, the Borough has been contacted by multiple parties seeking to obtain rights to
lease the property at 717 E. Rezanof Drive for use for employee housing or other purposes
serving community needs; and,
WHEREAS, the Borough Assembly finds that it is in the Borough's best interests to dispose of
a leasehold interest in the property at 717 E. Rezanof Drive under a competitive proposal process
to the party offering the proposal which most benefits the Borough; and,
WHEREAS, KIBC 18.40.030 authorizes leases for up to a fifty-five year term with the term
dependent upon the desirability of the proposed use, the amount of investment in improvements
proposed and made, the nature of the proposed improvement with respect to durability and time
Kodiak Island Borough, Alaska
Ordinance No. FY2023-11
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ROD=
required to amortize the investment. The Borough Assembly finds that it is in the Borough's best
interests to lease the property for a term of at least ten years with the duration of the term to
depend upon the proposal accepted; and,
WHEREAS, KIBC 18.20.020 permits the Borough to dispose of land in any manner not
prohibited by law, unless another provision of Title 18 of the KIB Code or another provision of law
establishes a specific mandatory procedure; and,
WHEREAS, KIBC 18.20.030 calls for Planning Commission review and recommendation prior
to approval of a disposal of an interest in land by the Borough; and,
WHEREAS, the Assembly finds that Planning Commission review of this proposed disposal of
an interest in land would not provide meaningful guidance where the land was previously under
a long term lease to a third party and would continue to be leased. Additionally, the Borough is
soliciting proposals which may have varied elements making evaluation of the proposed use by
the Planning Commission prior to the decision to dispose by lease impractical. Further, the
Assembly can refer the successful proposal to the Planning Commission review if the Assembly
determines that such review would be warranted. Therefore, it is in the Borough's best interests
to dispose of a leasehold interest in the property at 717 E. Rezanof Drive without requiring
Planning Commission review under KIBC 18.20.030 prior to disposal; and,
WHEREAS, KIBC 18.20.050 calls for an ordinance and public vote ratifying the disposal if a
sale, lease or other permanent disposal of an interest in Borough land valued at over $1 million
to a single entity is to be accomplished by means other than an outcry auction; and,
WHEREAS, the Assembly finds that the deteriorated condition and presence of asbestos and
lead paint in the buildings on this parcel makes it difficult to determine an accurate market value;
that the value to the Borough is less than the market value when the lack of a current use and the
required remediation costs are taken into account; that it is in the Borough's best interests to have
a clear determination as to whether the ratification requirement will apply to proposals received
for this disposal process; and, that disposal by competitive proposals is a competitive disposal
method similar to a disposal by outcry auction. Therefore, the Assembly finds that the ratification
requirement in KIBC 18.20.050 should be waived because the policies underlying that
requirement are adequately served here; and,
WHEREAS, KIBC 2.125.040 calls for the Architectural Review Board to review all architectural
and engineering proposals and design drawings for Borough owned buildings and publicly funded
projects; and,
WHEREAS, the Assembly finds that the Architectural Review Board review of design drawings
for Borough owned buildings and public projects under KIBC 2.125.040 was not intended to
include review of private party plans for redevelopment or remodel of leased Borough buildings
under a privately funded project, and that it is appropriate to clearly exempt the proposals for
leasehold improvements of the property from review by the Architectural Review Board.
NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND
BOROUGH THAT:
Section 1: This ordinance is NOT of permanent nature and shall NOT become a part of the
Kodiak Island Borough Code of Ordinances.
Kodiak Island Borough, Alaska Ordinance No. FY2023-11
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Section 2: that the Borough Manager is directed to solicit proposals for the lease of an
approximately 92,115 square foot portion of Lot 5A, Block 1, US Survey 2538A, Kodiak Recording
District, Third Judicial District, State of Alaska, consisting of the land and structures formerly
leased by Sisters of Providence (the Property), which Property is depicted on the diagram
attached as Appendix 1 to this ordinance.
Section 3: that the lease of the Property authorized by this ordinance shall not be subject to
Planning Commission review and recommendation prior to disposal under KIBC 18.20.030. To
the extent that code section would apply it is superseded by this ordinance and will not apply to
the disposal by lease under this ordinance.
Section 4: that the lease of the Property authorized by this ordinance shall not be subject to
a requirement for ratification of the ordinance authorizing the disposal under KIBC 18.20.050. To
the extent that code section would apply it is superseded by this ordinance and will not apply to
the disposal by lease under this ordinance.
Section 5: that the redevelopment or remodel of the structures on the leased Property shall
not be subject to Architectural Review Board review of engineering proposals and design
drawings for Borough owned buildings under KIBC 2.125.040. To the extent that code section
would apply it is superseded by this ordinance and will not apply to the disposal by lease under
this ordinance.
Section 6: the procedure for disposal of a leasehold interest in the Property shall include
substantially the following steps:
A. The Borough shall solicit competitive proposals.
B. A committee selected by the Borough Manager shall score and rank the proposals
taking into consideration:
1. the capacity and resources of the respondent to accomplish the renovation
work and complete the project putting the Property into productive use;
2. the respondent's familiarity with the Kodiak community and ability to
address community needs with the project;
3. the timeline and development plan for putting the Property back into
productive use and remedying conditions on the Property in an expedient manner;
4. the respondent's commitment to provide local management and to be
responsive to community concerns; and,
5. the revenue to the Borough from the rental.
Such other factors as the Manager deems appropriate to include in the request for proposals:
Kodiak Island Borough, Alaska
Ordinance No. FY2023-11
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C. the Manager shall review the evaluation committee's rankings, and may seek
additional information before making a recommendation to the Assembly for intent to award the
lease; and,
D. the Assembly shall have final approval of the award to the successful respondent.
Section 7: Among other requirements, the terms for the lease shall include:
A. the Property is leased AS IS;
B. renovation of the structures on the Property is at no expense to the Borough;
C. remediation of any dangerous conditions on the Property, including asbestos
containing materials and lead based paint as required by law;
D. defense and indemnification of the Borough from any claims or damages relating
to the tenant's use of the Property;
E. maintenance of the Property throughout the lease term at the tenant's expense,
leaving it in a condition at the end of the lease which does not pose a liability to or impose
significant costs on the Borough; and,
F. use of the Property will be only in compliance with the zoning code and any 0
applicable laws, and Assembly approval is required for a change in use from the proposed use.
Section 8: This ordinance shall become effective as provided in KIBC 1.10.040.
ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
THIS THIRD DAY OF NOVEMBER, 2022
KODIAK ISLAND BOROUGH
� A�
Aimee Williams, Mayor GV V
VOTES:
Ayes: Delgado, Griffin, LeDoux, Smith, Smiley, Turner
One Vacant Seat on the Assembly
ATTEST: -4
Nova Javier, Borough Cerk
Kodiak Island Borough, Alaska Ordinance No. FY2023-11
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