Resolution 14-044 Assignment of the Happy Face Lease, Lot 32, Homer Spit Amended to Lee and Kim LLC

CITY OF HOMER

HOMER, ALASKA

                                                                                                                               City Manager

RESOLUTION 14-044

A RESOLUTION OF THE CITY COUNCIL OF HOMER, ALASKA, APPROVING THE ASSIGNMENT OF THE HAPPY FACE LAND LEASE, LOT 32, HOMER SPIT AMENDED, TO YONG KIM DBA LEE AND KIM LLC, EXTENDING THE TERM OF THE LEASE TO TWENTY YEARS, WITH TWO FIVE-YEAR OPTIONS, AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE APPROPRIATE DOCUMENTS.

               WHEREAS, The owners of the Happy Face Restaurant and Sportsman’s Marine Supply have reached a tentative agreement to sell the building and business to Yong Kim dba Lee and Kim LLC; and

               WHEREAS, The buyer has requested an assignment of the lease and extension of the lease term in order to complete the transaction and obtain the necessary financing; and

               WHEREAS, Chapter 13.3 of the Lease Policy provides that the assignee shall submit a new lease application form complete with all attachments and proposals following the process described for new lease applications, and submit it along with any applicable fees to the Lease Committee for review; and

               WHEREAS, A Lease Application / Assignment Form has been submitted and found to be complete and responsive pursuant to Chapter Five of the Lease Policy; and

               WHEREAS, The City Administration has reviewed the application using the proposal evaluation criteria contained in Chapter 6 of the Lease Policy and met with the applicant pursuant to Chapter 5.1 B; and

               WHEREAS, The Administration has concluded that the applicant has the experience, financial capacity, investment plan, and growth potential to provide a significant benefit to the City and justify an assignment of the lease; and

               WHEREAS, Section 14.4 of the Lease Policy provides that “if a lessee intends to assign the lease as part of the sale of the business located on the lease lot, the person who intends to purchase the business may apply to extend the lease term to allow the continuation of the business and secure financing for the purchase.”; and

               WHEREAS, The new owner has applied for financing through the Small Business Administration and approval is contingent upon the lease term being extended.

               WHEREAS, The Administration recommends assignment of the lease, transfer to the new standard lease document, extension of the term to twenty years with two five-year options, and rent at appraised value; and

               WHEREAS, The Lease Committee reviewed the application at a Special Meeting on March 21, 2014 and recommends approval.

               NOW, THEREFORE, BE IT RESOLVED that the Homer City Council hereby approves the assignment of the lease on Lot 32, Homer Spit Amended, to Yong Kim dba Lee and Kim LLC and authorizes the City Manager to execute the appropriate documents.

               BE IT FURTHER RESOLVED that the term of the lease shall be twenty years with two five-year options, the rent shall be appraised market rent, and the permitted uses shall be those included in the draft lease, a copy of which is attached and incorporated herein.

               PASSED AND ADOPTED by the Homer City Council this 24th day of March, 2014.

CITY OF HOMER

                                                                                                         MARY E. WYTHE, MAYOR

ATTEST:

JO JOHNSON, MMC, CITY CLERK

Fiscal Note:  Current rent is $17,739.96 annually. Appraisal will be completed April 2014 to adjust rent rate.