LEASE COMMITTEE                                                                                                            UNAPPROVED

SPECIAL MEETING MINUTES

NOVEMBER 16, 2009

                                                                                                                                                          

Session 09-08 a Regular Meeting of the Lease Committee was called to order on November 16, 2009 at 3:00 pm by Chair Shelly Erickson at the Homer City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.

 

PRESENT:          SHELLY ERICKSON, ECONOMIC DEVELOPMENT ADVISORY COMMISSION

                        PHILIP ALDERFER, PUBLIC AT LARGE

                        BRYAN HAWKINS, PORT & HARBOR DIRECTOR

                        RICK ABBOUD, CITY PLANNER

                        JOHN VELSKO, PORT & HARBOR ADVISORY COMMISSION

                        REGINA HARVILLE, FINANCE DIRECTOR

 

STAFF:              PORT & HARBOR ADMINISTRATIVE SUPERVISOR MARTIN

                        DEPUTY CITY CLERK KRAUSE

                       

Approval of the Agenda

 

Chair Erickson requested the agenda be amended to move Item B under New Business to Item A.

 

The amended agenda was approved by consensus of the committee.

 

Public Comments Regarding Items on the Agenda

 

There were no comments.

 

RECONSIDERATION

 

None.

 

APPROVAL OF THE MINUTES

 

None.

 

VISITORS

 

None.

 

STAFF & COUNCIL REPORT/COMMITTEE REPORTS/BOROUGH REPORTS

 

None.

 

PUBLIC HEARING

 

None.

 

Pending Business

 

A.         El Pescador Sublease Request

            1.         Review and discussion on proposed response to El Pescador request for Subleases.

           

Chair Erickson requested a motion to discuss.

 

VELSKO/ ABBOUD - MOVED TO DISCUSS.

 

There was no discussion.

 

VOTE. YES. NON-OBJECTION. UNANIMOUS CONSENT.

 

Motion carried.

 

Mr. Bryan Hawkins stated he drafted a letter but in review of the minutes there were some mixed messages, so he would like the Committee to review and add comments or changes as desired.

 

Discussion on the enclosed draft of the letter composed by Mr. Hawkins ensued. Chair Erickson asked if there were any points he was uneasy about. He stated there were none and noted the two issues as stated in the draft letter, the setback requirements and building limited to 30%. The Committee was in consensus that this not languish.

The building needed to be removed however concerns were expressed that a perceived planning and zoning question was addressed in the letter from the Harbormaster.

Mr. Abboud explained that this is the quagmire they face with a number of things that go on and pointed out this was a violation of the lease, and maybe the word variance should not be used and recommended an alternative statement. He went to state that since overbuilding the 30% was not prohibited, but a permit was needed. He noted there was a process for approval and it was up to the lessee to apply for a permit, however he was hesitant in approving something that violated code. Mr. Abboud explained that this business has been in violation since the beginning and it harbors ill feelings by those who are in compliance.

Mr. Velsko noted receiving inquiries about allowing another similar business in the same situation. He stated he responds to those questions that the Lease Committee does not perform enforcement.

Mr. Abboud commented that a good response would be the Committee is not addressing that situation at this time.

Further discussion ensued on recommending zero lot lines and the setbacks be addressed in the Spit Comprehensive Plan. It was noted that it would be a good idea to include it and when a draft plan is available for review, this committee should definitely be included on the review commentary. This currently is not the proper time to address or comment as there is an issue on the floor.

It was suggested to change the word “variance” to “permit”; it is possible to get a permit for this structure, discussion on permit for structure or exemption from a rule. Revised recommended wording was offered.

Ms. Harville read the revised recommended paragraph, “Another obstacle is that HCC 21.28.040(d) states that Tenant may not build on more than 30% of their lot. Your lot currently is at the maximum allowed under this rule without any sublease buildings. It is possible to get a Conditional Use Permit, through the City’s Planning Department allowing more than 30% use, and then voted on by the Homer City Council. The Lease Committee cannot recommend you apply for a CUP due to the setback issue. Please contact the planning Department if you have any questions.

Mr. Alderfer went on record stating that he appreciates it is not the Committees position to encourage or discourage, however he felt it important to give someone full and complete information and if they know an application is going to be denied then it would be fair to the business owner to let them know.

There was a brief discussion on whether the Committee was offering false hope to the business owner.

There were no further recommended changes to the draft letter.

 

VOTE. YES. NON-OBJECTION. UNANIMOUS CONSENT.

 

Motion carried.

 

NEW BusinesS

 

Chair Erickson turned the gavel to Vice Chair Alderfer and stepped down from the dais as she was previously found to have a conflict of interest on the next topic for discussion.

 

A.         Home Run Oil Lease Proposal for Tank Farm

 

 

Vice Chair Alderfer requested Mr. Hawkins to update the Committee.

 

Mr. Hawkins stated that after the last meeting questions were submitted from Home Run Oil. The Port and Harbor Advisory Commission reviewed this issue. The Commission did not fully support using Lot 13 but recommended using Lot 8D1 and if Lot 8D1 was not feasible for the proposed use then only recommended using the western portion of Lot 13. Clarification on what the western portion of Lot 13 was given by Mr. Hawkins using the aerial map of the spit; Mr. Abboud asked if a recent master plan or analysis was conducted on what would be needed to support activities related to the Deep Water Dock (DWD) expansion and what actually is the proposed plan for the DWD Expansion. Mr. Hawkins pointed out what Phase I, 2 and 3 of the DWD would entail. Mr. Abboud still had difficulty is processing a decision when he did not know the other side of the coin. He further asked what plans were made or talked about regarding support on the uplands.

Mr. Velsko stated that was a major concern of the Port & Harbor Commission to keep it for staging.

Ms. Harville asked if there would be enough room on Lot 8D1 for the proposed Tank Farm.

The Committee requested response from Mr. Erickson. Mr. Erickson responded the physical attributes of Lot 8D1 and some hindrances dealing with that lot.

Mr. Alderfer felt the Port & Harbor recommendation was either or situation. Mr. Velsko explained that they felt it was important to have the project proceed and that was why they recommended the western portion. He further added that the one causeway was so far in the future.

 

HAWKINS/ALDERFER - MOVED THAT IN RESPONSE OF HOME RUN OIL TO THE LEASE COMMITTEE FOR A LONG TERM LEASE OF A PORTION OF LOT 13 (HOMER Spit #5) on the Homer Spit in order to construct A TANK FARM, FUEL DISTRIBUTION HUB AND PIPELINE TERMINUS, THE LEASE COMMITTEE DENIES THIS REQUEST DUE TO THE CRITICAL NEED OF THIS PROPERTY AS SUPPORT FOR THE DEEP WATER DOCK PRESENT AND FUTURE CORE OPERATIONS, AS STATED IN THE CITY OF HOMER’S LAND USE PLAN.

 

Mr. Hawkins explained that he did not believe Lot 13 was the best place for a tank farm. This would be the 3rd tank farm on the spit and it may get more support if they were all kept together. He further stated that the adjacent land is critical to the operations of the DWD. What revenue is generated is quite substantial. Mr. Velsko re-stated that the intention of the PH Commission and did not know if he could vote in favor of this motion. Mr. Abboud asked if the Lease Committee could trump future land designation. Mr. Hawkins stated that they could only make the recommendations to council to re-designate the use of Lot 13 if the committee approved the use from the applicant. The audio was intermittent due to interference from fax machine. Mr. Velsko stated he would have to vote against the motion due to the wishes of the Port & Harbor Commission which he represents those interests.

 

VOTE. YES. HARVILLE, ALDERFER, HAWKINS, ABBOUD.

VOTE. NO. VELSKO.

 

Motion carried.

 

HAWKINS/VELSKO - THE LEASE COMMITTEE RECOMMENDS THAT THE HOMER CITY COUNCIL OFFER A REQUEST FOR PROPOSAL FOR LOT 8D1, HOMER SPIT #6, AS A PREFERRED LOCATION IN RESPONSE TO THE REQUEST FROM HOME RUN OIL FOR A LONG TERM LEASE ON THE SPIT FOR A TANK FARM, FUEL DISTRIBUTION HUB AND PIPELINE TERMINUS FROM THE CITY OF HOMER’S DEEP WATER DOCK.

 

Mr. Hawkins felt this was the best use and location for the proposed new tank farm. He additionally noted that Home Run Oil wanted the distribution hub and pipeline terminus included in the language of the lease. It was discussed if specific language was needed to address access to the DWD in the proposal request; if easements would be required; additional concerns by Coastal Management, etc.

 

VOTE. YES. NON-OBJECTION. UNANIMOUS CONSENT.

 

 

Motion carried.

 

The committee next addressed questions submitted by Home Run Oil in October. There was a brief discussion on sale of city property, lot 8D1. It was noted that leasing was recommended and that selling city property was not under this committee’s purview. It was recommended to send this issue back to the Port & Harbor Commission to get their recommendation. The committee addressed the extended lease of one 40 year term lease with two 10 year extensions. There was no objection to granting a long term lease due to the expense of setting up the infrastructure required for a project like this.

 

ALDERFER/HARVILLE – MOVED TO RECOMMEND PORT & HARBOR DIRECTOR AND CITY MANAGER TO INCLUDE ATYPICAL LEASE LENGTHS AS APPROPRIATE FOR THIS PROPOSAL PACKAGE.

 

There was no discussion.

 

VOTE. YES. NON-OBJECTION. UNANIMOUS CONSENT.

 

Motion carried.

 

Mr. Hawkins reported various lease prices raging from the current tank farm 2008 appraisal was $0.44/sf; the 2007 chip pad land only $0.49/sf; short term lease on the chip pad to the sulfur load outs and scrap metal was at $0.60/sf. There was brief discussion on language in the lease policy/proposal process related to current market rates that offers protection on the lease rates.

 

There was no further discussion the Committee asked Mr. Erickson if he would like to add anything or had questions to ask the committee.

 

Mr. Erickson stated that Lot 8D1 had a significant easement that allows access to Homer Fuel Dock which makes it unusable for Tank Farm on the Harbor side of the property.  He pointed out using the aerial photo the area of the lot that due to easements would be unusable. There is 9 years left on the existing lot. If possible in the future could be re-platted. It was noted possible different rate to accommodate that issue. He noted that the second portion of his proposal has never made it to discussion and he proposed at JJ Float adding a fuel dock for boats. It would require using a portion of Lot 22 for a small tank farm, minimal parking needed and small warehouse for storage.

 

The committee thanked Mr. Erickson for the additional concerns and proposal.

 

Vice Chair Alderfer summarized actions taken by the committee.

 

There was additional discussion on the pros and cons of selling city owned land on the spit.

 

There was no further discussion.

 

B.         Kachemak Bay Wooden Boat Society

 

Chair Erickson asked if Mr. Hawkins had additional information. Mr. Hawkins responded he has not received any thing more. He clarified that it was along the lines of a boat museum not fish processing for Mr. Abboud. This use does not fit the current land allocation. A better sit may be better suited. Questions regarding whether it was longer term and exactly what they are interested.

 

 

HARVILLE/HAWKINS - MOVED TO POSTPONE THIS UNTIL MORE INFORMATION IS RECEIVED.

 

There was further discussion included not postponing this but recommending Mr. Hawkins write a letter that addresses the land allocation designation, that their proposed use would be consider non-conforming use and not permitted, include a lease proposal package and to find out their intent of the lease, short term long term, etc.

 

VOTE. YES. HAWKINS. VELSKO. HARVILLE.

VOTE. NO. ABBOUD. ALDERFER. ERICKSON.

 

Motion Failed.

 

ALDERFER/ABBOUD - MOVED TO RECOMMEND MR. HAWKINS WRITE A LETTER TO THE KACHEMAK WOODEN BOAT SOCIETY TO INFORM THEM OF THE LEASE PROPOSAL PROCESS AND REQUEST ADDITIONAL INFORMATION ON THEIR INTENT.

 

There was no further discussion.

 

VOTE. YES. NON-OBJECTION. UNANIMOUS CONSENT.

 

Motion carried.

 

INFORMATIONAL MATERIALS

 

None.

 

Comments from the AUDIENCE

 

Mrs. Erickson noted that discussion was warranted by the Committee and the Port & Harbor Commission on Lot 22. She commented that this was also part of the initial proposal submitted by Home Run Oil.

 

Mr. Abboud requested this to be included on the next agenda.

 

Mr. Erickson clarified that the smaller enterprise was contingent upon the larger enterprise more so than the other way around. It was noted that Lot 22 was withheld from the last RFP process to be held for possible public access to the new ramp. A brief discussion on the size of the lots and probable location as close to JJ ramp as possible would be preferred.

 

Vice Chair Alderfer felt that this committee would be reviewing the proposals in January. Mr. Velsko was concerned that a competing bid may be received on these lots. It was confirmed that Lot 21 was previously offered for RFP process. Vice Chair Alderfer recalled the committee recommending in a prior meeting to lease additional lots on that side of the Spit. It was agreed that it could on the January agenda.

 

There was no further discussion.

 

Chair Erickson stepped back to the table.

 

COMMENTS OF THE CITY STAFF

 

None.

 

COMMENTS OF THE CHAIR

 

None.

 

comments of the committee

 

None.

 

 
adjournment

 

There being no further business to come before the Committee, Chair Erickson adjourned the meeting at 4:25 p.m.  There will be a Regular Meeting on January 14, 2010 at 3:00 p.m. in the City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.

 

 

                                                                       

 Renee Krause, Deputy City Clerk I

Approved: