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1977-17 Relating to the Acquisition and Disposition of Borough Real PropertySections: KODIAK ISLAND BOROUGH ORDINANCE NO. 77 -17 -0 AN ORDINANCE RELATING TO THE ACQUISITION AND DISPOSITION OF BOROUGH REAL PROPERTY BE IT ORDAINED by the Assembly of the Kodiak Island Borough, Alaska as follows: SECTION 1. Chapters 18.44 through 18.64 of the Kodiak Island Borough Code are hereby repealed. SECTION 2. Title 18 of the Kodiak Island Borough Code is hereby amended by adding a new chapter 10 to read as follows: CHAPTER 18.10 REAL PROPERTY ACQUISITION 18.10.010 Procedure. 18.10.020 Review. 18.10.030 Classification of Availability. 18.10.010 Procedure. Real property to be acquired for a valuable consideration or as part of a program of grants under which the borough may receive only a limited amount of acreage may be acquired only purusant to a resolution of the assembly. Such resolution may set the terms, conditions and manner of acquisition of the property or it may authorize the manager to set such terms, conditions and manner of acquisi- tion. Other real property may be the assembly may authorize or as code. The manager is authorized property at its fair market value Page 1, Ordinance No. 77 -17 -0 acquired in such manner as otherwise provided in this to lease or purchase real where the lease or purchase price does not exceed $5,000 in one transaction. The manager shall make a written report of such transaction to the assembly on a quarterly basis. 1 1 01 0 1 1 1 2 5 5 18.10.020 Review. Upon acquisition of any real erty acquired by tax foreclosure property, including real pro excluding real property acquired for a specific purpose or project, the planning commission shall review the newly acquired land, and make recommendations as to whether all or any portion of the land should be devoted to public use, reserved for future use to meet projected borough requirements or made available for sale, lease or other disposition. The manager shall review the planning commission action and make recom- mendations to the assembly. 18.10.030 Classification of Availability The assembly shall review all recommendations and may, by reso- lution, declare any such lands to be devoted to public use, reserved for future use or available for sale or other perma- nent disposition, for leasing, or for any combination of sale, other permanent disposition and leasing. The assembly may at any time on its own motion, or upon the recommendation of the manager, review the status of any lands held by the borough and change the existing availability classification. Any resolu- tion declaring lands available for sale, other permanent dispo- sition or leasing may include such terms, conditions, and procedures for disposition as may be required to protect the public interest consistent with this title. SECTION 3. Title 18 of the Kodiak Island Borough Code is hereby amended by adding a new chapter 20 to read as 1 follows: Sections: CHAPTER 18.20 PERMANENT DISPOSAL OF REAL PROPERTY 18.20.010 Disposition of Real Property. 18.20.020 Convyance to Government. 18.20.030 App e Page 2, Ordinance No. 77 -17-0 1 1 1 0'0 1 1 2 6 5 4 18.20.040 Land Valued at One Thousand Dollars or Less. 18.20.050 Land Valued at More Than One Thousand Dollars and Less than Twenty -Five Thousand Dollars. 18.20.060 Ordinance and Voter Ratification Required. 18.20.070 Property Acquired by Tax Foreclosure. 18.20.080 Method of Sale. 18.20.090 Terms and Conditions of Sale. 18.20.100 Form of Documents 18.20.110 Payment. 18.20.120 Development Plans. 18.20.130 Commencement and Completion of Construction. 18.20.140 Assignment. 18.20.150 Quitclaim Deed. 18.20.160 Limitation on Warranty of Title. 18.20.170 Taxes, Fees and Charges. 18.20.180 Location on the Premises. 18.20.190 Clearing. 18.20.200 Expenses of Transaction. 18.20.210 Compliance with Laws. 18.20.220 Waste or Destruction. 18.20.230 Non - Waiver. 18.20.240 Liens and Encumbrances. 18.20.250 Modifications. 18.20.260 Termination Prior to Conveyance. 18.20.270 Conveyance by Special Warranty Deed. 18.20.280 Certificate of Completion. 18.20.290 Breach of Special Warranty Deed. 18.20.010 Disposition of Real Property. Real Property of the borough may be sold or otherwise permanently disposed under the terms and conditions established by this chapter. 18.20.020 Conveyance to Government. Real Property may be sold, leased, donated or exchanged with the United States, the state, or any political subdivision thereof for less than appraised value of said lands whenever, in the judg- ment of the assembly, it is advantageous to the borough to do so in the manner and upon the terms prescribed by the assembly by resolution. 18.20.030 Appraisal. The fair market value of real property to be considered for sale or permanent disposition, other than to a governmental entity, shall be established by an appraisal of the land and all improvements thereon by a quali- fied appraiser or the assessor. The required appraisal shall be performed within 90 days prior to the date of sale and the Page 3, Ordinance No.77- » -n r) l I n 2 b 5 r property may not be sold or otherwise permanently disposed of for less than the fair market value so determined. 18.20.040 Land Valued at One Thousand Dollars or Less. Sale or other permanent disposition of land acquired from the state and valued at $1,000.00 or less, shall be in the manner and by the terms established by resolution of the assembly. 18.20.050. Land Valued at More Than One Thousand Dollars and Less than Twent -Five Thousand Dollars. A. Land considered for sale and acquired from the state valued at more than $1,000, and land not acquired from the state valued at less than $25,000 shall be reviewed by the •lanning commission which shall make recommendations to the anager concerning desirable uses of the property, including the •rojected need, if any, for present or future recreational or ether public use. Review and recommendation by the planning ommissioner is not required again if previously performed within ix months prior to submission to the assembly. B. After review of the planning commission's ecommendations, the manager may, if in his opinion it is in he best interests of the borough to do so, recommend to the ssembly that the land be sold. The recommendation shall set • ut the proposed development of the property, if the manager • etermines such a plan to be necessary, the value of the • roperty as determined by the assessor or a qualified appraiser d the recommended terms and conditions of sale. C. After receipt of the recommendations, the ssembly may, by resolution, find that the property is no onger required for municipal purposes and direct the sale or ermanent disposition of such lands in compliance with this hapter and under such additional terms and conditions as it squires. age 4, Ordinance No. 77 -17 -0 1 1 0 1 1! 2 5 5 .5 D. Notice of proposed disposition shall be published in a newspaper of general circulation within the borough once each week for two successive weeks not less than i i 30 days prior to the date of disposal and shall be posted in at least three public places within the borough for at least 30 days prior to the disposal. Additional notice may be given by any means determined to be reasonable by the manager or assembly. i The notice must contain a brief description of the land, its i area and general location, the proposed use, term, minimum I offer, limitations, if any, and time and place set for the auction or bid opening. E. Sale shall be to the highest bidder, as determined by auction or sealed bid to the highest responsible bidder, in a manner provided by resolution of the assembly. If there are no acceptable offers, the manager shall reject all bids and at the instance of the assembly advertise the property for sale again in the same manner after waiting at least 60 days from the date the previous bids were rejected. If the date fixed for the sale exceeds 90 days from the last time the land was appraised the land shall be reappraised. 18.20.060 Ordinance and Voter Ratification Re ired. Sale or other permanent disposition of land not acquired from the state and valued at $25,000 or more shall be in accordance with the procedure set forth in section 50 of this chapter and, in addition, shall be by ordinance ratified by a majority of voters voting at a regular election or special election at which the question of the ratification is submitted. The election shall be conducted as required by AS 29.48.260. 18.20.070 Property Acquired by Tax Foreclosure. Real property of the borough acquired by tax foreclosures may Page 5, Ordinance No. 77 -17 -0 1 1 1 1 1 1 be disposed of in the same manner as other real property of the borough subject to the provisions of state law. 18.20.080 Method of Sale. Sales under this chapter shall be by contract. Upon payment of the contract price, completion of construction of all required improvements and compliance with all other conditions, a warranty deed shall be issued. Upon receipt of the full purchase price prior to completion of all improvements required by a development plan, a special warranty deed shall be issued subject to designated conditions. 18.20.090 Terms and Conditions of Sales. In addition to any other applicable provisions of this code, the terms, conditions and covenants set forth in this chapter shall be applicable to all sales and are hereby incorporated as though set forth in full in the sales contract or deed of conveyance. The sales contract or deed of conveyance shall contain such additional restrictions and reservations as the assembly deems necessary to protect the public interest. 18.20.100 Form of Documents. The borough attorney shall prepare or approve the form for all sales contracts and deeds. 18.20.110 Payment. A. Buyer shall pay the borough an amount equal to ten percent of the total purchase price upon execution of a sales contract as a minimum down payment on the purchase of the property. B. The remaining balance shall be paid to the borough over a period not to exceed ten years from the date of execution of the sales contract. If the principal balance is $5,000 or less, buyer shall make annual payments of not less than ten percent of the balance due plus accrued interest. If Page 6, Ordinance No.77 -17 -0 '1 '!7 r the principal balance exceeds $5,000 buyer shall make quarterly payments of not less than 2 -1/2% of the balance due plus accrued interest. C. Interest shall accrue from the date of the contract at the rate established by a savings and loan associa- tion in Kodiak for comparable financing at or about the time of sale. 18.20.120 Development Plans. A. The buyer shall submit detailed plans of i the contemplated development, conforming to the proposed use, to the borough within 180 days from the execution of the con- tract of sale. B. The time plans may be extended by the borough for an additional period, not to exceed 180 days, upon timely application and for good cause. "Timely application" as used in this section means an application reveived by the borough on or before the date previously set for submission of construction plans. An exten- sion may not be granted if the buyer is in breach of any term, condition or covenant of the contract or deed. borough if C. 2 5 5 Page 7, Ordinance No. 77 -17 -0 for submission of construction Construction plans shall be approved by the 1. The value of the improvements to be constructed is at least three times the purchase price of the property; 2. The development will comply with all applicable federal, pal laws; and 3. The buyer is not state and munici- in breach of any term, condition or covenant of the sale contract. I 1 18.20.130 Commencement and Completion of Construction. A. Construction of the improvements required by the development plan shall be commenced within two years after execution of the contract and shall be completed within five years from the date of execution of the contract. B. The time for commencement and completion of improvements may be extended by the borough for good cause upon timely application by the buyer. The time of extension shall not exceed one year. Timely application, for the purposes of this section, means an application for an extension of time received by the borough on or before the date previously set for commencement of construction or completion of construction, whichever deadline is applicable. The borough shall not grant an extension of time if the buyer is then in breach of any term, condition or covenant of the contract or deed. 18.20.140 Assignment. Buyer shall not assign, convey, pledge or encumber the sale contract or any interest the sale contract without the prior written consent of the borough assembly. Any assignment made without the express written approval of the borough shall be void. As used in this section, assignment of an interest in the sale contract shall include the transfer of any controlling interest in a corporation or other business entity that is a buyer under a sale contract. 18.20.150 Quitclaim Deed. Upon execution of the sale contract, the buyer shall execute and deliver to the borough a quitclaim deed in proper form, relinquishing all right, title and interest in and to the property sufficient for clearing title to the property in the event of default by the buyer. Page 8, Ordinance No.77 -17 -0 oo 12 7 n 18.20.160 Limitation on Warranty of Title. A. The title to be conveyed by the borough is expressly subject to any claims asserted and established by any village, regional or special corporation, under any provision of the Alaska Native Land Claims Act; and all reservations, restrictions and easements of record. B. If it is determined, subsequent to the execution of the sale contract or deed, that the borough had no right, title or interest in the premises at the time of execu- tion of this agreement because of claims asserted and estab- lished by any village, regional or special corporation, under any provision of the Alaska Native Land Claims Act, and that the conveyance to the Buyer did not establish a valid third -pa rty interest excepting the property from selection, the sale contract shall terminate and be of no further force and effect. All payments of principal and interest received by the borough from the buyer under the agreement shall be returned to the buyer and the buyer agrees to indemnify, hold and save the borough harmless, to the extent of such reimbursement, from any claims or liability for damages based upon trespass or similar actions brought by any village, regional or special corporation. 18.20.170 Taxes, Fees and Charges. Buyer shall pay all taxes, fees, assessments and other charges levied by any public or private authority against the premises and shall timely file all notices or declarations relating to taxes, fees, charges or assessments with the appropriate authority. The borough shall promptly forward to buyer any and all notices of taxes, fees, charges or assessments relating to the property received by the buyer. 18.20.180 Location on the Premises. Buyer shall .properly locate the boundary of the premises subject to the Page 9, Ordinance No. 77 -17 -0 n 1 2 5 7 sale contract and shall construct all improvements within those boundaries and shall not encroach on other lands of the borough or other parties. 18.20.190 Clearing. Prior to full payment to the borough and completion of all required improvements, buyer may remove and utilize only so much of the standing timber or other materials from the premises as may be reasonably necessary to permit construction of the proposed improvements and utiliza- tion of the proposed premises for the stated purpose. 18.20.200 Expenses of Transaction. The buyer shall pay attorney fees incurred for the preparation of all necessary documents and all other fees associated with the preparation, execution or recording of the contract for sale and any deed. 18.20.210 Compliance With Laws. Buyer shall comply with all laws relating to the possession and occupancy of the property or relating to the construction, maintenance or altera- tion of any improvement to the premises. 18.20.220 Waste or Destruction. Buyer shall not permit, allow or suffer any waste or destruction to the premises. 18.20.230 Non - Waiver. The failure of the borough to insist upon strict performance of any term, condition or covenant of the sale contract or any deed, or to exercise any right to remedy available on a breach thereof, or the acceptance of full or partial payment during the continuance of any breach, shall not constitute a waiver of such breach of any applicable term, condition or covenant of the sales contract or deed. 18.20.240 Liens and Encumbrances. Buyer shall keep the property free and clear from any liens or encumbrances arising from construction, maintenance or repairs on the property or from any other cause and shall, at buyer's sole cost and expense, promptly secure the removal of any lien so filed. Page 10, Ordinance No. 77 -17 -0 1 5 C. Upon termination, all payments I made by the buyer for the Previosuly purchase of the premises shall accrue to the benefit of the borough as reasonable rental and liqui- dated damages associated with the buyer's breach and the borough shall have a right to record the quitclaim deed and re -enter the property. The contract shall thereafter be of no further force and effect, but such termination shall not waive any remedy the borough may have against buyer for waste or removal of timber, minerals or other resources from the property in violation of the contract. 18.20.250 Modification. No modification of a contract for sale or deed will be bindin g on either party unless reduced to writing and subscribed by buyer and I' I' the borough. 18.20.260 Termination Prior to Conve ante. A. If buyer defaults in any payment required by the contract for sale and such default is not cured within 30 days, the borough may, at its option, declare the entire remaining balance of principal and interest to be immediately due and payable. Notice of acceleration shall be mailed to the buyer by certified mail and if the buyer fails to pay the balance of principal and interest within 30 days from the date of mailing of the notice, the borough may declare the contract to be terminated. B. If the buyer defaults in the performance of any other term, covenant or condition of the contract of sale, prior to receipt of a deed from the borough, and fails to cure such default within 30 days after mailing of notice from the borough by certified mail, specifying the nature of the default, the borough may, at its option, declare the contract to be terminated. Page 11, Ordinance No. 77 - - 1 h 0 1 1 1 5 7 18.20.270 Conveyance by Special Warranty Deed. A. If the buyer desires to obtain restricted title to the property pending construction of all improvements required by the contract, the borough shall, upon receipt of the balance of principal and interest due to the borough, and providing buyer is not then in default, convey title to buyer by a special warranty deed. B. The conveyance by special warranty deed shall be subject to the following conditions: 1. Grantee may pledge or encumber the property for temporary or permanent financing of improvements required to be constructed by the contract of sale and for additional funds, if any, in an amount not to exceed the principal payments made to the borough for the property conveyed. The pledge or encumbrance shall be subject to the covenant running with the land requir- ing the construction of improvements specified in the contract for sale in accordance with approved plans. 2. Grantee shall pay real property taxes and assessments on the property when due and shall not create, cause or suffer any lien or encumbrance to attach to the property, other than authorized in subsection 1 above, until the borough certifies that all improvements required to be con- Page 12, Ordinance No.77 -17 -0 0 0 1 I 1 2 5 7 4 Page 13, Ordinance No. 77 -17 -0 structed have been completed by the grantee. 3. The grantee shall promptly commence or continue construction of the improve- ments required by the contract of sale in accordance with the approved plans and shall diligently prosecute con- struction of those improvements to completion. In any event, construc- tion shall commence within two years from the date of execution of the contract for sale and shall be com- pleted within five years from the date of execution of the contract for sale. 4. Until the borough certifies that all required improvements have been com- pleted, the grantee shall have no power to convey or transfer the prop- erty or any part thereof without the prior written consent of the borough except to a morgagee or trustee as security to obtain financing as permit- ted by subsection 1 of this section. The conveyance or transfer prohibited shall include transfer by any party of controlling interest in a corporation that is a grantee under this Deed or any similar significant change in ownership of such stock or the relative distribution thereof by any means including, but not limited to, increased capitalization, merger, 1 ) •i ' 2 b 7 issuance of additional or new stock oz. classification of stock. C. The covenants set forth in subsection B shall run in favor of and enure to the benefit of the borough for the entire period during which such covenants are in force and shall be binding upon the owner of any land or interest in land to which the covenants relate. In the event of a breach of any such covenant, the borough may exercise all rights and remedies available and may maintain any action in law or equity to enforce the curing of such breach. 18.20.280 Certificate of Completion. A. Upon completion of all required improve- ments in accordance with the provisions of the approved con- struction plans, the borough will furnish the grantee under a special warranty deed with a certificate of completion. The certificate shall be a conclusive determination of satisfaction of the conditions and covenants of the contract for sale and special warranty deed relating to timely construction of improve- ments and shall terminate all existing covenants and conditions binding on the grantee, provided, however, that such termina- tion shall not relieve grantee of his obligation to pay property taxes or assessments. The certificate of completion shall be in a form suitable for recording in the office of the district recorder. B. If the borough shall refuse or fail to provide a certificate of completion, the borough shall, within 30 days after written request by the grantee provide the grantee with a written statement, indicating in what respects the grantee has failed to duly complete said improvements and what measures or acts will be necessary, in the opinion of the Page 14, Ordinance No. 77 -17 -0 nI n l 1 1 1? 5 7 borough, for the grantee to take or perform in order to obtain such certification. 18.20.290 Breach of Warranty Deed. A. At any time prior to certification by the borough that improvements have been completed as required, the borough may terminate the estate granted by the special warranty deed if Page 15, Ordinance No. 77 -17 -0 1. The grantee, in violation of section 270 B 2, fails to 'pay property taxes or assessments when due or places an unauthorized lien or encumbrance on the property and such taxes or assess- ments are not paid or the lien or encumbrances removed or discharged, or provisions satisfactory to the borough for such payment, removal or discharge, within 90 days after mailing of written or service of notice from the borough. 2. There is, in violation of section 270 B 4, a transfer of the property or any part thereof or a change in the owner- ship or distribution of the stock of the grantee, and such violation is not cured within 60 days after mailing or service of written notice from the borough; or 3. The grantee defaults in timely commence- ment or completion of required improve- ments in compliance with approved plans, or abandons or suspends con- struction work for any substantial 0 . 0 ' 2 6 7 7 time, in violation of section 270 B 3, and such default relating to timely commencement or prosecution of the work is not cured within 60 days after mailing or service of notice by the borough, or, as relates to timely completion in accordance with plans, is not cured within six months after mailing or service of notice or within any extended period of time that may be granted by the borough for good cause shown. B. Upon termination of the grantee's estate, fee title to the property shall be revested in the borough and the borough may re -enter and take possession of the property, subject only to those rights and interests as hereinafter set forth in this section. It is the intent of this ordinance that the conveyance of the property by special warranty deed shall contain a condition subsequent providing that upon default by grantee in performance of any covenant or condition required by section 18.20.270 B and the failure of the grantee to remedy such default within times and in the manner as provided, the borough may at its option declare a termination in favor of the borough of all rights and interest in the property conveyed by the deed, subject, however, to specified limited interests. C. Following termination of the grantee's interest, the property shall continue to be subject to and limited by the lien or encumbrance of any mortgage or deed of trust authorized by this chapter and any rights or interests created by this chapter for the protection of holders of such Mortgage or deed of trust. Page 16, Ordinance No. 77 -17 -0 r) 0 '1 2 5 7 D. If title to the property or part thereof shall revest in the borough in accordance with the provisions of this chapter, the borough shall use its best efforts to resell the property or part thereof, in a reasonably prompt manner and subject to any authorized encumbrance to a party or parties, determined by the borough to be qualified and respon- sible who will assume the obligation of making or completing the improvements or such other improvements in their stead as shall be satisfactory to the borough. Upofi such resale of the property the proceeds thereof shall be applied as follows: 1. To reimburse the borough, for all net costs and expenses incurred as a result of grantee's breach including, but not limited to, salaries of per- sonnel in connection with the repos- session, management and resale of the property or part thereof; all taxes, assessments, and water and sewer charges with respect to the property or part thereof; any payments made or necessary to be made to discharge any encumbrances or liens existing on the property or part thereof at the time of revesting of title thereto in the borough or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults, or acts of the grantee, its successors, or trans- ferees; any expenditures made or obligations incurred with respect to Page 17, Ordinance No.77 -17 -0 the making or completion of the im- provements or any part thereof on the property or part thereof, and any amounts otherwise owing the borough by the Grantee and its successors or transferees; and then 2. To reimburse the Grantee, its succes- sors or transferees up to an amount equal to the sum of the purchase price paid by it for the property, or allo- cable to the part thereof, and the cash actually invested by it in making any of the improvements on the improve- ments on the property or part thereof, less any gains or income withdrawn or made by it from this conveyance or from the property. Any balance remain- ing after such reimbursements shall be retained by the borough. SECTION 4. Title 18 of the Kodiak Island Borough Code is hereby amended by adding a new chapter 30 to read as follows: Sections: 1 1 2 5 7 18.30.010 Lands Available for Leasing. 18.30.020 Leasing Requirements. 18.30.030 Leasing Procedures. 18.30.040 Qualification of Applicants or Bidders. 18.30.050 Applications for Lease. 18.30.060 Development Plan. 18.30.070 Deposits for Costs. 18.30.080 Appraisal and Reappraisal Required. 18.30.090 Minimum Acceptable Annual Rental. 18.30.100 Rights Prior to Leasing. 18.30.110 Review. Page 18, Ordinance No.77 -17 -0 CHAPTER 18.30 LEASE OF LANDS 1i1 1 1 f 1 2 5 1 18.30.120 Term of Lease. 18.30.130 Renewal of Lease. 18.30.140 Preference Privilege. 18.30.150 Deposit and Receipt. 18.30.160 Bids - Manager Rejection. 18.30.170 Bidder - Appeal. 18.30.180 Execution of Lease. 18.30.190 Terms and Conditions of Lease. 18.30.200 Payment of Annual Rentals. 18.30.210 Adjustment of Rental. 18.30.220 Lease Utilization. 18.30.230 Responsibility to Properly Locate on Leased Premises. 18.30.240 Waste and Injury to Land. 18.30.250 Approval of Other Authorities. 18.30.260 Subleasing. 18.30.270 Assignments. 18.30.280 Modification. 18.30.290 Cancellation and Forfeiture. 18.30.300 Notice or Demand. 18.30.310 Rights of Mortgagee or Lienholder. 18.30.320 Entry and Reentry. 18.30.330 Forfeiture of Rental. 18.30.340 Written Waiver. 18.30.350 Expiration of Lease. 18.30.360 Renewal Preference. 18.30.370 Removal or Reversion of Improvements Upon Termination of Lease. 18.30.380 Compliance With Laws. 18.30.390 Condition of Premises. 18.30.400 Inspection. 18.30.410 Use of Material. 18.30.420 Right -of -Way. 18.30.430 Warranty. 18.30.440 Lease Rental Credit. 18.30.010 Lands Available for Leasing. All lands and interests in land owned by the borough, including all improvements, may be leased as hereinafter provided. Lands devoted to or reserved for public use may not be leased nor may an existing lease of such lands be renewed unless such lease is for, or will not interfere with, the public use or purpose to which the land is devoted or reserved. No lands may be leased which have not been declared by assembly resolution, passed within 30 days prior to assembly approval of the lease, to be no longer required for municipal purposes and available for leasing. 18.30.020 Leasing Requirements. Land shall be leased by the borough as follows: Page 19, Ordinance No. 77 -17 -0 f) 9 , i 1 ? . 5 1 A. Lands acquired from the state with a computed annual minimum rental of $500 or less may be leased for a term of up to five years by negotiation with the manager, subject to the approval of the assembly. B. Lands acquired from the state with a computed annual minimum rental in excess of $500, and all lands not acquired from the state, shall be leased by competitive bid in compliance with the procedure set forth in subsections D and E of section 18.20.050. C. The lease of lands not acquired from the state and appraised at $25,000 must be authorized and by ordinance ratified by a majority of the qualified voters voting at a regular or special elction at which the question of the ratification of the ordinance is submitted. The procedures established by AS 29.48.260 shall be followed. D. Lease of land under paragraph B shall be approved by resolution of the assembly. 18.30.030 Leasing Procedures. Unless otherwise provided by resolution of the assembly relating to the lease of specific lands, the land leasing procedures established by this chapter shall be utilized in the leasing of any borough land. 18.30.040 Qualifications of Applicants or Bidders. An applicant or bidder for a lease is qualified if the applicant or bidder: Page 20, Ordinance No. 77 -17 -0 A. Is nineteen years of age or over, or B. Is a group, association, or corpo- ration which is authorized to conduct business under the laws of Alaska, or C. Is acting as an agent for another and has qualified by filing with the clerk, prior to the time set for the disposition, a proper power of attorney or a letter of authorization creating such agency. The agent shall represent only one principal, to the exclusion of himself. 18.30.050 Applications for Lease. A. Applications for a negotiated lease or for lease by competitive bid shall be filed with the clerk on forms provided by him and available at the municipal building. Only forms completed in full and accompanied by a non - refundable $25 filing fee will be accepted for filing. Applications for lease by competitive bid must be filed within the time period advertised. B. Appliations for a negotiated lease of land pursuant to section 18.30.020 A shall be considered as applications for general use purposes. 18.30.060 Development Plan. A. Filing fees are not refundable. With every application for a lease by competitive bid, except an applica- tion for general use purposes, the applicant shall submit a development plan showing and stating: 1. The purpose of the proposed lease; 2. The use, value and nature of improve- ments to be constructed; 3. The type of construction; Page 21, Ordinance No. 77 -17 -0 9 9 1 1 2 4. The dates construction is estimated to commence and be completed; and 5. whether the intended use complies with this title and the comprehensive plan of the borough. B. The assembly shall evaluate the applications and development plans and shall accept a proposed development plan properly submitted by a prospective bidder if the develop- ment plan reflects proposed improvements having a value of not less than two times the appraised value of the land to be leased and the plan is consistent with the borough comprehensive plan and is in compliance with all applicable federal, state and local laws. C. The assembly shall direct the borough manager to give written notification to each applicant of the assembly's decision to accept or reject the individual applicant's develop- ment plan. If an applicant's development plan is rejected by the assembly he shall not submit a bid for the lease of land. If an applicant's development plan is accepted by the assembly he shall be notified by the borough manager at least 30 days before the time set for acceptance of competitive bids, of the acceptance and that he may submit a bid for the land. 18.30.070 Deposits for Costs. All applications for negotiated leases and competitive bids filed with the clerk will be forwarded to the manager or other designated official for an estimate of costs required to handle the application including but not limited to survey, appraisal and advertising of the area under application. The applicant shall be notified in writing of the cost estimate and he shall make a deposit •I with the borough in that amount within 30 calendar days after the date of the notice. If the applicant fails to make the Page 22, Ordinance No. 77 -17 -0 deposit, the application shall be cancelled. If the applicant does not accept a lease within 30 days after it is offered to the applicant, all deposit money spent or encumbered for survey, appraisal or advertising shall be forfeited, and the balance, if any, shall be returned to the applicant. If the land applied for upon which deposit for costs is made is leased to another, the latter shall be required to pay actual costs of survey, appraisal and advertising, and the original deposit shall be returned to the depositor.. Where the applicant becomes the lessee, he shall be required to pay any excess of costs over deposits, and where the deposit exceeds actual costs, the excess shall be credited to present or future rents under the lease. All survey, appraisal and advertising shall be performed only under the authorization of the borough, and any such work performed without such authorization will not be accepted. 18.30.080 Appraisal and Reappraisal Reauired. A. No land or interest in land may be leased, or a renewal lease issued, unless the land has been appraised within 90 days prior to the date fixed for beginning of the term of the lease of renewal lease. The appraisal shall be performed by the assessor or a qualified appraiser and shall reflect fair market value of the land and to improvements located thereon. B. Land leased for a term in excess of five (5) years shall be reappraised by the borough at the end of the first five year term and at the end of every five year term thereafter for the purposes of adjustment of rental as provided in this chapter. 18.30.090 Minimum Acceptable Annual rental. A. Annual minimum rentals shall be computed as ten percent of the appraised fair market value of the land and Page 23, Ordinance No. 77 -17 -0 1 2 5 1 1 all improvements thereon and shall be the lowest acceptable bid in the event of an auction or lease by sealed bid. I , B. No land shall be leased for less than the approved, appraised annual rental except that when leased to a governmental unit, agency, department or body for public purposes. 18.30.100 Rights Prior to Leasing. The filing of an application for a lease does not give the applicant a right to a lease or to the use of the land applied for. Any use not authorized by lease shall constitute a trespass against the borough. 18.30.110 Review. Leased land may not be changed in use, nor may any renewal lease be issued until the proposed use or renewal has been reviewed and approved by the assembly. 18.30.120 Term of Lease. Leases may be issued for a period not to exceed 55 years. The term of any given lease shall depend upon the desirability of the proposed use, the amount of investment in improvements proposed and made, and the nature of the proposed improvement with respect to durability and time required to amortize the proposed investment. 18.30.130 Renewal of Lease. If, at the expiration of the lease of any lands hereunder, the lessee desires a renewal lease on the lands, properties, or interests covered thereby, he shall, not sooner than 60 calendar days prior to the expiration, and not later than 30 calendar days prior to the expiration, make application for a renewal lease in writing on forms provided by the borough clerk, certifying under oath as to the character and value of all improvements existing on the lands, properties or interests, the purpose for which he desires a renewal lease and such other information as the manager may require to evaluate the renewal application. The applicant shall deposit $25.00 with the clerk as a renewal fee. Page 24, Ordinance No.77 -17 -0 The manager may thereupon lease the lands in compliance with all sections of this chapter with a preference being allowed the former lessee if all other pertinent factors are substan- tially equivalent. The date that the application for renewal of lease is presented to the office of the manager, as evidenced by the borough receipt date stamped thereon, whether delivered or forwarded by regular, certified or registered mail, shall be binding. ' 1 2 ', ^, 18.30.140 Preference Privilege. A lessee under an existing lease shall, upon the expiration or the termination by mutual agreement, be allowed a preference privilege to re -lease those lands previously leased by him if all other factors are substantially equivalent. When the lease is put up for public bidding, the preference privilege holder shall at the close of the bidding indiate if he wishes to exercise his preference privilege and meet the highest bid. If he does so choose, he shall meet all the requirements of this chapter. If the pref- erence privilege holder elects not to exercise his privilege at that time, or if he does not fulfill the requirements of this chapter, his preference privilege is forfeited and cancelled. No preference privilege will inure to a lessee whose lease has been cancelled or terminated for cause. 18.30.150 Deposit and Receipt. The apparent high bidder, or the preference privilege holder, if his preference privilege is exercised, shall upon award of the lease deposit with the borough the portion of the annual rental then due together with the unpaid costs of survey, appraisal and adver- tising. All payments must be made in cash, money order, certified check or cashier's check, or any combination thereof. Upon deposit of the required sum by apparent high bidder or preference privilege bidder, the manager shall thereupon issue Page 25, Ordinance No.77 -17 -0 to the successful bidder a receipt for the required sum con- taining a description of the land or interest leased, and the rental bid. Bidder shall acknowledge the receipt in writing. 18.30.160 Bids - Manager Rejection. Prior to the signing of the formal lease by the borough, the manager may, without cause reject any and all bids for leases when the best interest of the borough clearly justifies such action. 18.30.170 Bidder - Appeal. An aggrieved bidder may appeal the manager's determination of the apparent high bidder or the preference privilege bidder to the assembly within five business days following such determination. Appeals must be in writing and contain a short statement of the grounds for the appeal and be verified under oath. The assembly shall, within 30 days of receipt of a timely appeal, review the asserted grounds for appeal and rule thereon. The assembly's decision I shall be final, but without prejudice to any other rights an aggrieved bidder may have. Failure of the assembly to rule within 30 days shall constitute a rejection of both the claim under the appeal and the contested bid. 18.30.180 Execution of Lease. After expiration of the period for appeal of the manager's determination of the high holder, or, if an appeal was filed, upon expiration of the time for action by the assembly or based upon their determina- tion, the manager shall notify the successul bidder that the borough is prepared to issue the lease. The bidder shall, wthin 30 days after receipt of such notice, remit to the borough the bid balance and any other sums that may be due, and shall complete and sign all necessary documents. Failure to timely remit payment or complete and sign documents shall result in a forfeiture of any and all rights previously acquired in the proposed lease, and any money paid or deposited with the borough. Page 26, Ordinance No.77 -17 -0 7 l 18.30.190 Terms and Conditions of Leases. The provisions of this chapter and all other applicable provisions of this code are binding as terms and conditions of any lease of borough land. These terms and conditions, if not fully set forth in the lease, are hereby incorporated by reference as though fully set out in full in the lease. The lease shall contain such additional terms, conditions and restrictions as the borough determines to be in the best public interest. 18.30.200 Payment of Annual Rentals. Annual rentals or less shall be paid annually in advance. Annual of more than $250 but less than $500 shall be paid in in two equal installments every six months. Annual of $250 rentals advance 2 5 1 rentals of $500 or more, but less than $1,000 shall be paid in advance every calendar quarter. Annual rentals of $1,000 or more shall be'paid in advance each calendar month. 18.30.210 Adjustment of Rental. Annual rental payments shall be reviewed and adjusted by the manager not less often than every fifth year beginning with the rental payment due after completion of each review period. Any changes or adjustments shall be based upon changes in the appraised fair market value of the land and improvements owned by the borough, excluding landfill placed upon the land by the lessee. The lessee may protest the adjustment to the manager, and if denied wholly or in part, an appeal may be taken to the assembly. The decision of the assembly shall be final. 18.30.220 Lease Utilization. Leased borough lands shall be utilized for purposes within the scope of the applica- tion, the terms of the lease, and in substantial conformity with the borough comprehsive plan. Utilization or development for other than the allowed uses shall constitute a violation of the lease and subject the lease to cancellation. Failure to Page 27, Ordinance No.77 -17 -0 1 commence construction of the proposed improvements within two years or failure to complete constructor of the proposed improvements within five years of the date of lease shall be a breach of lease and shall, at the borough's option, result in termination of the lease unless the borough has granted an extension under the terms and conditions set forth in section I 18.20.130. 18.30.230 Res to Properly Locate on Leased Premises. It shall be the responsbility of the lessee to properly locate himself and his improvements on the leased land. It is unlawful to encroach on other lands of the borough or on lands owned or leased by another. 18.30.240 Waste and Iniury to Land. No person may i to or upon wilfully commits waste, trespass or other injury borough land. In addition to civil liability for damages and, penalties, a person convicted of violating this section is guilty of a misdemeanor. 18.30.250 A royal of Other Authorities. The issuance by the borough of leases under the provisions of this title does not relieve the lessee of responsibility of obtaining licenses or permits as may be required by the borough or by I duly authorized state or federal agencies. 18.30.260 Subleasing. No lands leased from the be subleased without the prior written approval of borough may A proposed manager, which shall not be unreasonably withheld. sublease shall not be approved for lands not containing improve- meats, nor shall a sublease be approved unless it appears that the utilization of improvements is a substantial esubject s fo all sublease. Subleases shall be in writing and be terms and conditions of the original lease and this chapter. Page 28, Ordinance No. 77 -17-0 18.30.270 Assignments. Lessee may assign the lands leased to him if the proposed assignment is first approved by , the manager. The assignee shall be subject to all of the provisions of the original lease and this chapter. 18.30.280 Modification. The lease may be modified only by an agreement in writing signed by all parties or their successor in interest. 18.30.290 Cancellation and Forfeiture. A. The lease, if in good standing, may be cancelled in whole or in part, at any time, upon mutual written agreement by the lessee and the manager. B. The manager may cancel the lease if the property is used for any unlawful purpose. C. If the lessee defaults in the performance or observance of any of the lease terms, covenants or stipulations or fails to comply wth any of the provi- sions of this code, and the default continues for 30 calendar days after service of written notice from the borough stating the nature of the default, the borough may subject the lessee to appropriate legal action including, but not limited to termination of the lease. No improvements may be removed by the lessee or other person during any time the lessee is in default. D. If the lessee fails, for a period of one year or for such shorter period as may be specified in the lease to make substantial use of property for which a development plan was not required, or fails to make substantial use of the property within one year after completion of required improvement pursuant to a development plan, or within such shorter time as Page 29, Ordinance No. 77 -17 -0 1 '1 I i .t ! "' ? 5 ? may be specified in the lease, the borough may termi- nate the lease. 18.30.300 Notice or Demand. Any notice or demand, which, under the terms of •a lease or under any statute, must be given or made by the parties thereto, shall be in writing, and be given or made by registered or certified mail, addressed to the other party at the address of record. Either party may designate in writing such new or other address to which the notice or demand shall thereafter be so given, made or mailed. A notice given hereunder shall be deemed delivered when deposited in a United States general or branch post office enclosed in a registered or certified mail prepaid wrapper or envelope addressed as hereinbefore provided. 18.30.310 Rights of Mortgagee or Lienhoider. In the event of cancellation or forfeiture of a lease for cause, the holder of a properly recorded mortgage, conditional assignment or collateral assignment will have the option to acquire the lease for the unexpired term thereof, subject to the same terms and conditions as in the original lease. 18.30.320 Entry and Reentry. In the event the lease should be terminated as herein provided, or by summary proceed- ings or otherwise, or in the event that the demised lands, or any part thereof should be abandoned by the lessee during the term, the borough may immeediately or any time thereafter, reenter and resume possession of the land or any portion thereof, and remove all persons and property therefrom either by summary proceedings or by a suitable action or proceeding at law without being liable for any damages therefor. No reentry by the borough shall be deemed an acceptance of a surrender of the lease. Page 30, Ordinance No. 77 -17 -0 1 1) 2 5 18.30.330 Forfeiture of Rental. If the lease is terminated because of any breach by the lessee, as herein provided, the rental payment last made by the lessee shall be forfeited and retained by the lessor as partial or total damages for the breach. 18.30.340 Written Waiver. The receipt of rent by the borough with knowledge of any breach of the lease by the lessee or of any default on the part of the lessee in observance Page 31, Ordinance No. 77 -17 -0 or performance of any of the conditions or covenants of the lease, shall not be deemed to be a waiver of a provision of the lease. No failure on the part of the borough to enforce any covenant or provision therein contained, nor any waiver of any right thereunder by the borough unless in writing, shall dis- charge or invalidate such covenants or provisions or affect the right of the borough to enforce the same in the event of any subsequent brech or default. The receipt by the borough of any rent or any other sum or money after the termination, in any manner, of the term demised, or after the giving by the borough of any notice thereunder to effect such termination, shall not reinstate, continue, or extend the resultant term therein demised, or destroy, or in any manner impair the efficacy of any notice or termination as may have been given thereunder by the borough to the lessee prior to the receipt of any such sum of money or other consideration, unless so agreed to in writing and signed by the borough. 18.30.350 Expiration of Lease. Unless the lease is renewed or sooner terminated as provided herein, the lessee shall peaceably and quietly leave, surrender and yield up unto the borough all of the leased land on the last day of the term of the lease. 1 1 1 2 5 9 18.30.360 Renewal Preference. Any renewal preferen granted the lessee is a privilege, and is neither a right nor bargained for consideration. The lease renewal procedure and renewal preference shall be that provided by ordinance in effect on the date the application for renewal is received by the designed official. 18.30.370 Removal or Revision of Improvements Upon Termination of Lease. A. Improvements owned by the lessee and not Permanently affixed to the land shall, within 60 calendar days after the termination of the lease, be removed by lessee, provided, such removal will not cause injury or damage to the lands or improvements demised and further provided that the manager may extend the time for removing such improvments in cases where hardship is proven. Improvements owned by the lessee may, with the consent of the manager, be sold to the succeeding lessee. All periods of time granted the lessee to remove improvements are subject to the lessee's paying to the borough pro rata lease rentals for the period. Improvements owned by the lessee and permanently affixed to the land shall revert to and absolute title shall vest in the borough. B. If any improvements or chattels not owned by the borough and not permanently affixed to the land, which have an appraised value in excess of $5,000 as determined by the assessor, are not removed within the time allowed, such improvements or chattels shall upon due notice to the lessee, be sold at public sale under the direction of the manager. The proceeds of the sale shall inure to the lessee if he placed such improvements or chattels on the lands, after deducting for the borough rents due and owing and expenses incurred in making Page 32, Ordinance No. 77_17_n such sale. If no responsible bids are received, title to such improvements or chattels shall vest in the borough. C. If any improvements or chattels having as appraised value of $5,000 or less, as determined by the assessor, are not removed within the time allowed, such improvements and chattels shall revert to, and absolute title shall vest in the borough. 18.30.380 Compliance With Laws. Lessee shall comply with all applicable provisions of federal, state or borough statutes, ordinances, regulations or other laws relating to lessee's occupancy of the leased land. 18.30.390 Condition of Premises. The lessee shall keep the leased premises in neat, clean, sanitary and safe condition and shall take all reasonable precautions to prevent, and take all necessary action to supress destruction or un- t controlled grass, brush or other fire on the leased lands. The lessee shall not undertake any activity which causes or increases a sloughing off or loss of suface materials of the leased land. 18.30.400 Inspection. The lessee shall allow an authorized representative of the borough to enter the leased land for inspection at any reasonably time. 18.30.410 Use of Material. The lessee shall not sell or remove for use off the premises any timber stone, gravel, peatmoss, topsoils, or any other material valuable for building or other commercial purposes; provided, however, that material may be removed or used if required for the development or utilization of the leasehold and, if its use or removal is first approved by the manager. 18.30.420 Right -of -Way. A. The borough expressly reserves the right to reasonable ingress or egress over and across the leased premises Page 33, Ordinance No. 77 -17 -0 1 for the purposes of constructing, repairing, maintaining or replacing any utility or road right -of -way, which the borough is authorized to construct or maintain and to grant to itself reasonable easements over and through the leased premises for these purposes. B. The borough reserves the right to grant easements or rights -of -way over and across leased land if it is determinated in the best interest of the borough to do so. If the borough grants an easement or right -of -way across any of the leased land, the lessee shall be entitled to damages for all lessee -owned improvements or crops destroyed or damaged. Damges shall be limited to improvements and crops only, and loss shall be determined by fair market value. Annual rentals may be adjusted to compensate the lessee for loss of use. 18.30.430 Warranty. The borough does not warrant by its classification or leasing of land that th land is suited for the use authorized under the classification or lease and no guaranty is given or implied that it shall be profitable to employ the land to said use. 18.30.440 Lease Rental Credit. When authorized in writing by the manager prior to the commencement of any work, the lessee may be granted credit against current or future rent; provided, the work accomplished on or off the leased area, results in increased valuation of the leased or other borough -owned lands. The authorization may stipulate type of work, standards of construction and the maximum allowable credit for the specific project. Title to improvements or chattels credited against rent under this section shall vest immediately and be in the borough and shall not be removed by the lessee upon termination of the lease. Page 34, Ordinance No. 7717-0: 1 ATTEST: 2 5 9 h 7 / "r Ark / / /iv/" Borough A FIRST READING: ,-;7, /91'1 SECOND READING: September 1, 1977 EFFECTIVE DATE: September 1, 1977 age 35, Ordinance No. 77_17_0 KODIAK ISLAND BOROUGH