MEMORANDUM 05-57

TO: Mayor Hornaday / Homer City Council

FROM: Walt Wrede

DATE: March 22, 2005

SUBJECT: Proposed Harbor Lease / Lot 9A

The City recently solicited proposals for leases on selected spit parcels that were authorized for lease by the City Council. The City received one proposal for Lot 9A, Port Industrial Subdivision No. 4. The proposal was submitted by a company called Harbor Leasing LLC. The principle owners of the company are Kevin Hogan, owner of the Auction Block and Steve Zimmerman, owner of Desperate Marine. The proposal package was reviewed for completeness and for compliance with applicable laws and regulations. The Lease Committee found the submittal to be both complete and responsive. The initial discussion and negotiation process has begun.

Harbor Leasing is proposing to demolish the existing building on Lot 9A, construct a new 6,000 square foot building with a footprint of 60 by 100, pave the lot and parking area, upgrade storm drainage, and comply with planning and landscaping requirements. The building will be jointly occupied by Desperate Marine and the Auction Block Co. Approximately 40 by 60 feet of the ground floor will be used by Desperate Marine as a retail hardware and hydraulic shop. Above this section will be office space for both businesses of 1000 square feet each with a 400 foot common area. The remainder of the building (60 by 60 feet) will be used by the Auction Block Co. for warehouse/processing space and cold storage. The Port and Harbor Commission will review the proposed development at its regular meeting on March 23, 2005.

This memorandum constitutes a recommendation on a successful bidder and is submitted to the Council pursuant to Section 6.2 (D) of the Property Management Policy and Procedures Manual. In short, the administration is looking favorably upon this lease proposal, wishes to notify the Council as such, and requests authorization to proceed with the negotiation process. If the Council approves this memorandum, the next step will be to finalize the lease document and present it to the Council for final approval at the April 11^th meeting.

RECOMMENDATION:

Authorize the Lease Committee to negotiate a proposed lease with Harbor Leasing LLC for final approval by the City Council.