City of Homer

LEASE  COMMITTEE

                                                October 9, 2008   3:00 pm                            

Cowles Council Chambers

Meeting Synopsis

Session 08-05, a Meeting of the Lease Committee was called to order at 3 p.m. on October 9, 2008 by Chair Shelly Erickson at the Homer City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.

PRESENT:  Shelly Erickson, member of the Economic Development Commission; Rick Abboud, City Planner; Bryan Hawkins, Port & Harbor Director; Philip Alderfer, public committee member; John Velsko, member of the Port & Harbor Advisory Commission

NOT PRESENT:  Regina Harville, Finance Director

STAFF:  Walt Wrede, City Manager; Lisa Ellington, Port & Harbor Administrative Secretary

APPROVAL OF AGENDA

VELSKO/ABBOUD  APPROVE AGENDA AS WRITTEN.

 No objection. Motion carried.

PUBLIC COMMENTS REGARDING ITEMS ON THE AGENDA –  None

APPROVAL OF MINUTES – March 14, 2008 synopsis and July 23, 2008 synopsis

VELSKO/ALDERFER MOTION TO APPROVE THE MINUTES WITH CORRECTION ON PAGE 14 OF THE PACKET, THE JULY 23, 2008 MINUTES, 2ND PARAGRAPH, CHANGE LEGISLATOR TO LEGISLATURE. 

No Objection.  Motion carried.

VISITORS - None

STAFF & COUNCIL REPORTS – None

PUBLIC HEARING – None

PENDING BUSINESS

            a.  Kenai River Seafoods update

City Manager Wrede stated that the Kenai River Seafoods proposal for Lot 9A was recommended by the Lease Committee at their March meeting and approved by the City Council to begin lease negotiations in April, 2008.   He continued that there were some phone calls at that time but there have been no lease negotiation meetings and Bryan Hawkins tried to contact them yesterday without success.  City Manger Wrede said that this brings up a lease policy question as to how long an application should be valid until it is decided that there will be no follow through and the RFP should be put out there again, this is not addressed in the current Lease Policies.  Mr. Velsko mentioned Harbor Leasing LLC’s (Hogan) interest in that lot if Kenai Seafood’s proposal fell through. Mr. Velsko continued that Mr. Hogan had expressed interest in pursuing that lease in addition to the one he has now and that was one of the conditions we talked about at the Lease Committee, that if this fell through we’d notify him.  City Manager Wrede stated that the Chair sent Mr. Hogan a letter based on the last meeting explaining why his proposal for that lot was found to be nonresponsive.  Mr. Hogan can apply again when an RFP is issued. 

ALDERFER/VELSKO  MOTION TO RECOMMEND THE CITY MANAGER WRITE TO KENAI RIVER SEAFOODS NOTIFYING THEM THEY HAVE 30 DAYS TO RESPOND AND BEGIN LEASE NEGOTIATIONS AND IF THEY DO NOT, THEN RECOMMEND TO CITY COUNCIL THAT THEIR PROPOSAL BE VOID AND THE LEASE COMMITTEE WOULD RECOMMEND THE LOT BE AVAILABLE FOR ANOTHER RFP.

No objection.  Motion carried.

Committee discussed the issue of completing new lease negotiations within a certain time period and the need to add this criteria to the Lease Policy and to future RFP documents.

NEW BUSINESS –

Lease Committee regular meeting schedule

Chair Erickson stated that the Economic Development Commission and the Port and Harbor Advisory Commission support a regular meeting schedule for the Lease Committee.  Mr. Velsko suggested a quarterly meeting as adequate to conduct business and save staff time. Discussion continued on frequency of meetings considering the lease policy changes that need to be addressed.

VELSKO/ABBOUD MOTION FOR THE LEASE COMMITTEE TO MEET ON A QUARTERLY BASIS

No objection. Motion carried.

Chairman Erickson inquired when the next meeting would be.  It was determined that January 8, 2009 would be the second Thursday of the month, three months from now. She requested the meeting be put on the calendar.

MOTION AMMENDED-QUARTERLY LEASE COMMITTEE MEETINGS WOULD BEGIN ON JANUARY 8, 2009 AT 3 PM.

No objection.  Motion carried as amended.

Commission stated that a special meeting can always be called if needed.

Review of Lease Policies

Chairman Erickson stated that the Economic Development Commission supports revising the Lease Policies to address any hang ups and to make them more business friendly.  She further suggested a hand out of some sort with bullet points for potential proposers stating what is required of lease holders.

City Manager Wrede agreed and added that the policies were written more for the Lease Committee than for the applicant and that the Lease Committee is the right body to refine the policies, not the Economic Development Commission.  Mr. Abboud said that correspondence from the Economic Development Commission with their suggestions would be welcome.  Mr. Alderfer stated that the hand out or trifold that Chairman Erickson suggested would be best produced after the policy revisions are completed.

Committee discussed how to approach the Lease Policy review, it was decided that all committee members would look through all the chapters and come prepared with revisions to discuss at the January meeting.

Mr. Velsko suggested using parts of the existing Land Allocation Plan to create a 2009 Lease Packet for the public that would be inexpensive to produce.  Only the “land available for lease” pages and “currently leased land” pages would be included with contact information for the current lease holders added.

Assignment of Leases

City Manager Wrede stated another lease policy issue to be addressed is the assignment of existing leases.  The City attorney is currently looking into options to make the selling of a business on City leased property easier, one specific question is how to structure a RFP when the City owns the land and someone else owns the building.  Assignment of leases is mentioned in two places in the Lease Policies but it is cumbersome and assignments are now treated as a new lease application.

Discussion ensued including: the current RFP process for a new lease; zoning and building code compliance that would create quality structures; the highest and best use of a property - for example the sale of a successful business that provides jobs and revenue to a new owner that has the means to continue the business; preparing a checklist for procedures to go through if selling a business on City land; and sales falling through because of the current policies on assignments.

Commission decided to wait for the legal opinion and discuss again at the January meeting.

Land Allocation Plan – land available for lease

City Manager Wrede explained that the City Council approves the Land Allocation Plan every year.  They solicit recommendations from the Lease Committee and Port and Harbor Commission with regards to what lands should be leased out.  Council usually does this in January or February so he said that might be something else to talk about at the next meeting. 

Discussion continued on the number of lots that should be offered in 2009 and in the future with regards to:  parking considerations including the Spit Parking Study that was just approved by Council; the harbor expansion; Spit Comprehensive Plan which will not be completed for a year or possible two but the zoning is in place; the current economy; dredge spoil location; a possible pre-application process to determine the interest in lots; short term leases; and the Council involvement in the lease process.

Question arose regarding if RFP’s expire every year.  City Manager Wrede said they do expire because the Council needs to authorize the lots available for lease every year.  Committee suggested a possible policy change for having lots stay available until Council says otherwise.

Chair Erickson asked City Manager Wrede the status on the Alaska Marine Highway lease.  He said Council approved the issue of a 50 year lease due to its importance to the community but that the lease has not been finalized and it will state that the lease will not be assignable without the Council’s approval.

RFP lots this fall

Chair Erickson stated that lots available for RFP in 2009 appear to be all on Fish Dock Road namely Lots 9, 10 and 13B.  Mr. Hawkins stated the Chip Pad (which just completed a short term lease) is available and that the Port and Harbor Commission was also interested in the overslope lots in the corners of the harbor on Freight Dock Road.

Committee proceeded to go through part of the 2007 Land Allocation Plan (LAP) with City Manager Wrede providing background and updating the information as follows:  packet page 55 (LAP page 5), Lot 12C is now leased to Auction Block; packet page 56 (LAP page 6) Lot 13B is available, it currently has two short term lessees who would vacate if a long term lease is negotiated; packet page 57 (LAP page 7) chip pad is available; packet page 64 (LAP page 14) Pier One Theatre, currently a multi use lot, future dredge spoils will make the lot more valuable by creating more uplands; packet page 65 (LAP page 15) Charter business Tract 1B, renewed; packet page 66 (LAP page 16) Tract 1C Sportsman Supply, renewed; packet page 67 (LAP page 17) Coast Guard, not sure what the terms are; packet page 73 (LAP page 23) Dockside Two, number of options will be checked; packet page 75 (LAP page 25) Chapple RV Park, currently in their last option expires in about 2 years potentially more land that will be available; and packet page 82 (LAP page 32) Harbor Enterprises, Mr. Hawkins will check into the terms of their lease.

Website

Chair Erickson recommended lots available for lease be posted on the City’s website.  She inquired on how difficult that would be.  City Manager Wrede said if it was just a list it would be easy, if it was more complex it would take more time. Committee decided a list of available lots could be posted on the City’s website as soon as the lots are known and the bullet points or handout on the process could be posted as soon as it is created. 

The Committee then discussed the issue of who recommends to Council the lots available for RFP.  Mr. Alderfer suggested the recommendation start with the Lease Committee and that the recommendations stand until a lease is successfully negotiated or it is pulled by the Council.  He continued that if the Port and Harbor Commission was the only body providing recommendations than that implies all leases are on the Spit.

City Manager Wrede brought up another issue.  He stated if an RFP is issued and there are no bids or no acceptable bids, the City doesn’t have the ability to negotiate with someone else who missed the RFP deadline.  They are told they need to wait for the next RFP process which can stymie business.  He stated that may be the way the policy needs to stay but it is a current road block the City encounters.

COMMENTS OF THE AUDIENCE – None

COMMENTS OF THE STAFF - None

COMMENTS OF THE COUNCILMEMBER (If one is assigned) – N/A

COMMENTS OF THE COMMITTEE – None

COMMENTS OF THE CHAIR – Chair Erickson said she appreciated everyone’s good work.

ADJOURN

Chair Erickson stated the next meeting will be January 8, 2009.  There being no further business to come before the Committee, Chair Erickson adjourned the meeting at 4:25 p.m.

  Lisa Ellington, Port and Harbor Administrative Secretary

Approved:            January 8, 2009