Ordinance 17-41(S) Authorizing Purchase of Lot 42 on the Homer Spit

CITY OF HOMER
HOMER, ALASKA

Mayor

ORDINANCE 17-41(S)

AN ORDINANCE OF THE CITY COUNCIL OF HOMER, ALASKA, AUTHORIZING THE CITY MANAGER TO PurCHASE KENAI PENINSULA BOROUGH PARCEL 18103418, ‘LOT 42,’ FROM THE ALASKA MENTAL HEALTH TRUST AUTHORITY IN THE AMOUNT OF $550,600, acquire quitclaim deeds on parcels on which both the city and the trust claim ownership interests and AUTHORIZING AN EXPENDITURE OF $250,600 FROM THE PORT AND HARBOR ENTERPRISE fund AND A $300,000 LOAN FROM THE GENERAL FUND to the Port and harbor enterprise fund FOR THAT PURPOSE.

WHEREAS, Lot 42 is located on the Homer Spit at the mouth of the Homer Harbor and is currently leased by Icicle Seafoods as part of their Homer-based fish processing operations; and

WHEREAS, The City Administration has been in negotiations with Alaska Mental Health Trust Authority Land Office (“TLO”) for 3 years regarding Lot 42 and a long piece of land extending into the mouth of the Harbor in which the City and the TLO claimed conflicting ownership rights (This property is described in Exhibit A to this Ordinance and hereafter called the “Core Harbor Property”); and

WHEREAS, The purchase of Lot 42 is in the best interest of the Port and Harbor who will benefit from owning land near the Fish Dock; and

WHEREAS, Acquisition of quitclaim deeds from the Trust for the Core Harbor Property ensures the City has clean title of property essential to the City’s Harbor operation and management and protects the City from potentially costly litigation and/or administrative disputes between the City and the Trust; and

WHEREAS, Homer City Code 18.06.040 authorizes the acquisition of real property; and

WHEREAS, Splitting the purchase between the Port and Harbor Enterprise Fund and a low interest loan  from the General Fund to the Port and Harbor Enterprise mitigates the financial hit to either fund and allows the City General Fund a guaranteed return on investment of 3%; and

WHEREAS, The City of Homer recently entered into a long term lease with Icicle Seafoods for Lot 41; and

WHEREAS, Revenue from the leasing of Lot 42 will generate an estimated return on investment of 16 years; and

WHEREAS, The Alaska Mental Health Trust Authority is a state corporation that administers the Alaska Mental health Trust, a perpetual trust, to improve the lives of beneficiaries. The Trust operates much like a private foundation, using its resources to ensure that Alaska has a comprehensive integrated mental health program; and

WHEREAS, The Community of Homer has many needs and services that fall under the mission of AMTHA and requests that the proceeds from the sale of Lot 42 are used to improve the lives of beneficiaries in the City of Homer to the greatest extent permissible by law.

NOW THEREFORE, The City of Homer Ordains:

Section 1: The FY 2017 Operating Budget is hereby amended by appropriating $250,600 from the Port and Harbor Depreciation Reserve for the purchase of Kenai Peninsula Borough Parcel No. 18103418.

 Section 2: The FY 2017 Operating Budget is further amended by authorizing a $300,000 loan over 10 years at 3% with no penalty for early pay off from the General Fund to the Port and Harbor Enterprise Fund for the purchase of Kenai Peninsula Borough Parcel No. 18103418 with the first payment due in 2018.

Section 3:  The City Council approves the acquisition of Lot 42 and the Core Harbor Property for $550,600 subject to the City Attorney’s review as to form and the essential terms reflected in this Ordinance.  The City Manager retains the ability to negotiate all other terms of the acquisition and related agreements, deeds, and other documents.

Section 4: This ordinance is a budget amendment ordinance, is not permanent in nature, and shall not be codified.  

ENACTED BY THE CITY COUNCIL OF THE CITY OF HOMER THIS __ DAY OF ___________, 2017.

CITY OF HOMER

_______________________

BRYAN ZAK, MAYOR
 

ATTEST:

______________________________

MELISSA JACOBSEN, MMC, CITY CLERK

YES:
NO:
ABSTAIN:
ABSENT:

First Reading:
Public Hearing:
Second Reading:
Effective Date:

Reviewed and approved as to form:                                                                                                                                                                                  

Mary K. Koester, City Manager                                                              Holly Wells, City Attorney

Date:                                                                                                          Date: