Memorandum 17-111 Sportsman's Supply Lease

Memorandum 17-111

TO:                        Mayor Zak and Homer City Council

THROUGH:        Port and Harbor Commission

FROM:                 Katie Koester, City Manager

DATE:                  August 9, 2017

SUBJECT:          Recommend New Lease for Sportsman’s Supply and Rental

The Sportsman’s Supply and Rental lease expires on March 31, 2018 and the lease has exceeded all options for renewal.  Based on the Property Management Policy and Procedures (Chpt 13) the lessee has no automatic right to further renewals and the property shall be offered through the competitive bid process, or City Council may elect not to require the competitive bid process.

L.H. and Marcia Pierce, the owner/operators of Sportsman’s Supply and Rental have applied for a new 20-year lease.  The City Administration and the Port and Harbor Advisory Commission have reviewed the application based on HCC 18.08 and the Property Management Policy and Procedures.  Due to Sportsman’s Supply & Rental’s commitment to servicing the fishing, recreational and visitor communities, the Administration and the Port and Harbor Advisory Commission recommend entering into a new 20-year lease without the parcel being advertised through the competitive bid process.

In 2015, during the review of the Sportsman’s Supply and Rental lease, the City discovered that the Sportsman’s Supply and Rental had exceeded the lot boundaries by doubling the square footage used for a Recreational Vehicle (RV) campground.  Sportsman’s Supply was notified of this on Jan. 15, 2015 and again on April 3, 2017.  This was followed by meetings with City personnel in 2016 and 2017 to discuss zoning standards and the fact the Sportsman’s Supply and Rental was renting recreational vehicle spaces beyond the leased area.

Mr. and Mrs. Pierce have agreed to several changes related to how the property will be used and the size of the lease area.  The new lease will be different in several ways:

NO RVs:  Currently, RV campgrounds are not allowed on lots less than 40,000 sq ft. and the Sportsman’s Supply and Rental site is 7,803 sq ft. In addition, “caretaker” housing must be in, or a part of a building, not in a RV.   This fall the Homer Advisory Planning Commission will be reviewing the range of issues associated with RVs on smaller lots in the Marine Districts.  Regardless of that effort, Sportsman’s Supply and Rental has agreed to comply with the standards and have submitted a plan to replace their caretaker’s RV with a permanent caretaker’s structure.

Lease area increase:  The lease area will increase from 7,803 sq ft to approximately 12,500 sq ft to provide room for boat storage which is a permitted use, HCC 21.28.020(b).  This increase in square footage, approximately 4,697 sq ft, is located in the City’s Right-of-Way and reflects the actual square footage used.  The Lease Agreement will include a provision that no structures or improvements will be allowed in the City’s Right-of-Way and if the City has a higher and better use of this additional space the City to provide 180 day notice to vacate the additional area.

Lease fee:  The current lease rate is $0.91 per sq ft.  This fall, an updated appraisal will be completed and the new lease rate will reflect the recommendation of the appraisal.    

Att:        Aerial image

July 26, 2017 Port and Harbor Advisory Commission minutes