Resolution 16-117 Assignment of Lease for Fish Factory on Lot 12-A1 to Seven Seas Fish Company

CITY OF HOMER

HOMER, ALASKA

                                                                                                                               City Manager

RESOLUTION 16-117

A RESOLUTION OF THE HOMER CITY COUNCIL APPROVING AN ASSIGNMENT OF LEASE FOR THE FISH FACTORY ON LOT 12-A1 AND AWARDING SEVEN SEAS FISH COMPANY, DBA ALASKAN FISH FACTORY, A NEW LEASE WITH OPTIONS TO RENEW FOR LOT 12-A1, PORT INDUSTRIAL NO. 3, AND A PORTION OF LOT 12B, PORT INDUSTRIAL NO. 4, WITH AN ANNUAL BASE RENT OF $26,119.80, AND AUTHORIZING THE CITY MANAGER TO MOVE FORWARD WITH LEASE NEGOTIATIONS AND EXECUTE THE APPROPRIATE DOCUMENTS.

               WHEREAS, The Fish Factory, LLC has reached a tentative agreement to sell the building and business to Seven Seas Fish Company, Ltd. and continue operating it as a fish processing business under the name Alaskan Fish Factory, Ltd.; and

WHEREAS, Both parties are seeking the City of Homer’s approval of assigning the lease to the new owners before the end of 2016 in order to complete the business sale before the beginning of the upcoming 2017 fishing season; and

WHEREAS, Per Chapter 13.3 of the City’s Lease Policies and Procedures, Seven Seas Fish Co. has submitted a request for lease assignment and new lease application with their proposal, seeking the remaining amount of The Fish Factory’s lease term (14 years) or a twenty-year term; and

WHEREAS, The Fish Factory is also leasing a portion of Lot 12B, the lot adjacent to Lot 12-A1 and both parties requested this portion be included in the new lease; this section of parcel was leased to The Fish Factory on a short-term basis until they fulfilled all requirements listed under Conditional Use Permit 10-05 in which case their lease for Lot 12-A1 would be amended to include the portion of Lot 12B; and

WHEREAS, The majority of the requirements in CUP 10-05 were completed in a timely manner, issues regarding RV storage prevented the CUP from being finalized until recently; and

WHEREAS, The City Administration, the Lease Advisors, and the Port and Harbor Advisory Commission have reviewed the application and proposal and found it to be complete and responsive; and

WHEREAS, Seven Seas has provided sufficient information to the City to show that The Fish Factory is being sold to a responsible party and can continue operating it as a viable fish processing plant on the Homer Spit; and

               WHEREAS, The Lease Advisors and the Port and Harbor Advisory Commission recommend to City Council that the lease assignment request be granted to Seven Seas Fish Company, and a new lease with options to renew be awarded to Seven Seas Fish Company, Ltd., dba Alaskan Fish Factory, Ltd. for Lot 12-A1 and a portion of Lot 12B for the purpose of operating a fish processing business without the parcel being advertised through the Request for Proposals process.

               NOW, THEREFORE, BE IT RESOLVED that the Homer City Council hereby approves the assignment of lease for The Fish Factory on Lot 12-A1 and awarding Seven Seas Fish Company, Ltd., dba Alaskan Fish Factory, Ltd. a new lease with options to renew for Lot 12-A1, Port Industrial No. 3, and a Portion of Lot 12B, Port Industrial No. 4, with a base rent of $26,119.80 per year (subject to change as determined by lease negotiations and/or ordered appraisal if needed), and authorizing the City Manager to move forward with lease negotiations and execute the appropriate documents.

               BE IT FURTHER RESOLVED that this assignment and new lease is contingent upon any outstanding zoning code violations being resolved by Mike McCune, owner of The Fish Factory, before the completion and signing of a new lease with Seven Seas Fish Company.

               PASSED AND ADOPTED by the Homer City Council this 21st day of November, 2016.

CITY OF HOMER

                                                                                                         BRYAN ZAK, MAYOR

ATTEST:

JO JOHNSON, MMC, CITY CLERK

Fiscal Note:  Base lease will be $26,119.80 annually, subject to change as determined by lease negotiations and/or ordered appraisal if needed, and is adjusted annually to keep pace with the Consumer Price Index.