Memorandum 16-182 United States Coast Guard Lease

Memorandum 16-182

TO:                       MAYOR BRYAN ZAK & HOMER CITY COUNCIL             

THROUGH:       PORT & HARBOR ADVISORY COMMISSION

FROM:                 KATIE KOESTER, CITY MANAGER

DATE:                  NOVEMBER 2, 2016

SUBJECT:         RECOMMENDATIONS RE: NEW LEASE FOR USCG

USCG – NAUSHON FACILITY & MOORAGE SUPPORT

The City has had a long-standing relationship with the United States Coast Guard as they have established two cutter support facilities and moorings in Homer.  It is the USCG’s policy as set by Congressional appropriations to maintain all their leases, which includes writing and implementation of said leases.

The USCG’s lease for the Cutter Roanoke expired September 30, 2016.  There has also been a change of command and a new cutter stationed in Homer: the Cutter Naushon.  The USCG has recently contacted the City with a draft for a new, long-term lease.  Staff is currently working with the USCG’s real property department in finalizing that lease; the next step in the process is for the new lease request to go before the Port and Harbor Advisory Commission for recommendations and then to City Council for approval.

It is my recommendation to City Council that the lease with the United States Coast Guard for the continuation of establishing a support facility and moorage for the USCG Cutter Naushon.  Below are some highlighted details of the draft lease:

1. Property: Lot 2, KPB 181-032-18, consists of 14,000 square feet, and exclusive use of 140 feet of dock space on System 5 in the Homer Harbor.
2 & 5. Lease Term & Renewals: Term is set by USCG for one year with nine (9) successive one-year renewals; to begin October 1, 2016 and expire 9/30/2026 with no options remaining.
3. Uplands & Dock Rent:  As per a recent appraisal from October 13, 2016, the annual market rent for Lot 2 is $10,920.00.  Total base rent is determined by the USCG and will include compensation for use of the uplands and dock space; base rent will be $17,058.60 with annual CPI Increases.

Recommendation

The City Manager and Port and Harbor Staff recommends approving Resolution 16-119, awarding United States Coast Guard (USCG) a one-year lease with nine, one-year options for Lot 2, Homer Spit Four Sub, with an annual base rent of $17,058.60, and authorizing the City Manager to move forward with lease negotiations and execute the appropriate documents.

Fiscal Note:  USCG Annual Base Rent will be $17,058.60. Rate is adjusted annually per the Consumer Price Index.