HomeMy WebLinkAbout10112021 City Council Work Session Packet - Annex BuildingSeward City Council
Work Session Packet
Topic: Discuss options for the future use or
potential sale of the Annex Building
October 11, 2021
City Council Chambers Beginning at 6:30 p.m.
City Council Agenda Statement
Meeting Date: October 11, 2021
To: City Council
From: Janette Bower, City Manager
Agenda Item: Discuss the possible sale of the Annex building
Background and justification:
In response to discussion at recent City Council meetings where Council Members requested the City
Manager examine the viability of selling the "Annex" building, the City Manager ordered an appraisal
of the property, located at Lots 38,39, & 440 (physical address is 238 Fifth Avenue, Seward Alaska
99664). MacSwain Associates LLC conducted the appraisal in July of 2021 and determined that the
property has an estimated market value of $400,000. A discussion on this topic took place at the
September 13 regular City Council meeting and Council requested the City Manager meet with He
Will Provide and obtain more information on the possible relocation of staff that are working out of
the Annex facility.
Items of note that should be evaluated include the following:
The Appraiser noted the following, "Notably, the subject building was constructed in 1950
and is nearing the end of its economic life. Information provided by the client indicates the
building is afflicted with environmental conditions including mold, asbestos, and lead paint.
These factors greatly impact the marketability of the property and represent a detrimental
condition. After completing our analysis, we determined the highest and best use is for
redevelopment of the property. The report is prepared in accordance with the Uniform
Standards ofProfessionaiAppraisai Practice (USPAP)."
2. A local nonprofit food bank (He Will Provide) operates out of the Annex building and
provides a valuable service to the community through their distribution of hundreds of free
meals to the vulnerable population in Seward. City Administration met with representatives
from He Will Provide to give them an update on this topic on September 23.
The City Manager requests City Council provide direction on the possible sale of the Annex building.
Consistency checklist:
N/A
Fiscal note:
Not applicable
Attorney Review:
Yes ❑ No ❑ Not applicable x❑
Recommendation
City Council provide the City Manager direction on the future use or sale of the Annex facility.
Sponsored by: Bridges
CITY OF SEWARD, ALASKA
RESOLUTION 2019-005
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY MANAGER TO WAIVE LEASE
PAYMENT REQUIREMENTS FOR THE HE WILL PROVIDE
INCORPORATED FOOD PANTRY
WHEREAS, upon approval of Resolution 2013-047, the City of Seward negotiated and
entered into a lease agreement with the He Will Provide Inc. (HWPI) Food Pantry to utilize the
City Hall Annex basement for their food panty services; and
WHEREAS, the HWPI Food Pantry is a 501(c)(3) non -far -profit organization that,
through volunteer services, provides between 50-60 families approximately 40,000 pounds of
food annually; and
WHEREAS, the HWPI Food Pantry is in good standing with the City of Seward lease
agreement paying either monthly or quarterly in an amount equal to $62.5 per month; and
WHEREAS, on January 14, 2019 there was a discussion item on the city council agenda
titled "Discuss eliminating rent for the He will Provide Food Bank"; and
WHEREAS, after council discussion, administration was asked to return with a
resolution authorizing the city manager to waive the HWPI lease payment requirements; and
WHEREAS, the HWPI Food. Pantry intends to use the lease payment savings to
purchase food from local establishments, such as powdered milk, rice and beans.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA that:
Section 1. The City Manager is authorized to change the lease payment requirements for
the He Will Provide Inc. Food Pantry to $300 per month.
Section 2. Amending the 2019.budget to reduce Rents and Leases revenue, account No.
01000-000-4380 by $3,900.
Section 3. This resolution shall take effect immediately upon adoption.
CITY OF SEWARD, ALASKA
RESOLUTION 2019-005
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this
28t` day of January, 2019..
THE CITY OF SEWARD, ALASKA
"11
Squires,
jKr-11
AYES:
Osenga, Seese, McClure, Towsley, Lane, Horn, Squires
NOES:
None
ABSENT:
None
ABSTAIN:
None
ATTEST:
ibrenda J. Ball
City Clerk
(City Seal)
Cj .
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= SEAS,
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Agenda Statement
Meeting Date: January 28, 2019
To: Seward City Council
From: Jeff Bridges, Interim City Manag
Agenda Item: Waiving Lease Payment Requirements with He Will Provide Inc.
Food Pantry
BACKGROUND & JUSTIFICATION:
The City of Seward entered into a lease agreement with He Will Provide Inc. (HWPI) on August
2°d, 2013 following the approval of Resolution 2013-047.
HWPI is a 501(c)(3) registered non -for -profit currently in good standing with the City in their
lease payments. The HWPI Food Pantry pays either quarterly or monthly in an amount equal to
six hundred and twenty-five dollars ($625) per month.
The HWPI Food Pantry is open fifty-two (52) weeks per year all staffed by volunteers. In 2018
they gave out an estimated 40,000 pounds of food to a regular client base of 50-60 families.
On the January 141h Regular City Council meeting there was a discussion item titled "Discuss
eliminating rent for the He Will Provide Food Bank". After Council discussion, Administration
was directed to return with a Resolution to authorize the City Manager to waive the lease
payment requirements for the HWPI Food Pantry.
INTENT: To authorize the City Manager to waive the lease payment requirements for the He
Will Provide Inc. Food Pantry.
CONSISTENCY CHECKLIST:
Yes
No
N/A
1.
Comprehensive Plan (document source here):
X
2.
Strategic Plan (document source here):
X
3.
Other (list):
X
FISCAL NOTE: This action will result in a reduction in Lease and Rents revenue equal to $7,500
per year.
Approved by Finance: ✓,,� �,ir�2c-��
ATTORNEY REVIEW: Yes No X
RECOMMENDATION: Approve Resolution 2019- 005 authorizing the City Manager to waive
the lease payment requirement for the He Will Provide Food Pantry.
81
Sponsored by: Hunt
CITY OF SEWARD, ALASKA
RESOLUTION 2013-047
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND
EXECUTE A LEASE AGREEMENT WITH HE WILL PROVIDE INC. FOR
THE PURPOSE OF PROVIDING A CHARITABLE FOOD DISTRIBUTION
PROGRAM IN THE BASEMENT OF THE CITY ANNEX BUILDING
WHEREAS, He Will Provide Inc. ("HWPI"), established locally in 2007, is the only
Seward -based charitable food distribution program; and
WHEREAS, HWPI was organized by a number of local entities, has no specific religious
affiliation, and its services are available to any Alaskan regardless of need; and
WHEREAS, HWPI provides food for up to 100 Seward area individuals weekly; and
WHEREAS, HWPI is one of only two food banks statewide that is able to offer a shopping -
like service for individuals and families; and
WHEREAS, HWPI needs a new location in which to operate because the building it
currently occupies has been sold and it must vacate its current location; and
WHEREAS, the relocation of the Library/Museum into its new building has left vacant
space in the former library building located at 238 Fifth Avenue, now referred to as the City Annex
Building; and
WHEREAS, HWPI provides an important public service through its food distribution
program.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 1. The Seward City Council finds that the public's interest is not served by
conducting an appraisal as a basis for establishing the lease rate, and that authorizing the City
Manager to negotiate and execute a lease with HWPI for less than fair market value is in the public's
interest.
Section 2. The City Manager is authorized to negotiate and execute a Lease Agreement with
HWPI, to lease approximately 1200 square feet of the south and west corner of the City Annex
Building at 238 5th Avenue, Seward, Alaska, upon substantially the terms specified in the attached
,., form of lease.
CITY OF SEWARD, ALASKA
RESOLUTION 2013-047
Section 3. The 2013 budget for General Fund Lease revenues is hereby amended to increase
by $3,125 for the period of approximately August through December, 2013.
Section 4. This resolution shall take effect 30 days after adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 24t" day of
June, 2013.
THE CITY OF SEWARD, ALASKA
Davi Seawa , ayor
AYES:
Valdatta, Bardarson, Keil, Shafer, Casagranda, Terry, Seaward
NOES:
None
ABSENT:
None
ABSTAIN:
None
Council Agenda Statement
Meeting Date: June 24, 2013
From: Ron Long, Assistant City Manager
Agenda Item: He Will Provide Inc. Lease
BACKGROUND & JUSTIFICATION:
The He Will Provide Inc. Food Pantry is a 501(c) (3) registered coalition of charitable organizations
that joined forces in 2009 to help meet the nutritional needs of Seward. The group helps feed up to
100 individuals weekly. The building space that has been occupied by the Food Pantry since its
inception has been sold and the group is looking for a new space to operate from. Construction and
relocation of the new Library /Museum has made space available in the City of Seward's Old
Library/new City Hall Annex Building. A Lease agreement between the City and the Food Pantry
will benefit the community and make good use of the vacant space. Based on the charitable service
provided, administration recommends that council finds it to be in the public's best interest to
establish a less than full market value lease rate.
INTENT: Authorize the City Manager to negotiate and execute a lease agreement with He Will
Provide Inc.
CONSISTENCY CHECKLIST:
Yes
No
N/A
Comprehensive Plan:
1
The Comprehensive Plan "values the contributions of the various
organizations and individuals that work to better our community"
X
Strategic Plan:
2.
The Strategic Plan supports "being responsive to the needs of its citizens",
X
"values a sense of community" and "enhance social services".
3.
Other (list):
FISCAL NOTE: This lease agreement will generate $7,500 in rental income per year, for a total of
$37,500 gross income over the full five-year term. The lessee will be responsible for its own
janitorial and maintenance costs, but the City will bear the water, sewer, and electric utility costs
associated with the leased space.
Approved by Finance Department: i t-DI V"Q
ATTORNEY REVIEW: Yes X No
RECOMMENDATION:
Approve Resolution 2013- bfl, Authorize the City Manager to negotiate and execute a lease with
He Will Provide Inc. Food Pantry and the City of Seward.
fA_
MACSWAIN ASSOCIATES LLC
4401 Business Park Boulevard, Suite 22, Anchorage, Alaska 99503
APPRAISAL REPORT
City of Seward Annex Property
Lots 38, 39, & 40, Original Townsite of Seward
238 Fifth Avenue, Seward, Alaska
Date of Value: July 8, 2021 File No. 21-3551
Submitted To:
Janette Bower, City Manager
City of Seward
PO Box 167
Seward, AK 99664
MacSwain Associates LLC
4401 Business Park Blvd., Suite 22
Anchorage, Alaska 99503
Phone: 907-561-1965
Fax: 907-561-1955
s. macswainCamacswain. com
August 2, 2021
Janette Bower, City Manager
City of Seward
PO Box 167
Seward, AK 99664
Re: City of Seward Annex Property
Lots 38, 39, & 40, Original Townsite of Seward
238 Fifth Avenue, Seward, Alaska
Dear Ms. Bower:
We have prepared an Appraisal Report of the above -referenced property located in Seward,
Alaska. The appraised property consists of the 8,192± square foot Annex Building situated
on 9,000± square feet of land at the southeast corner of Adams Street and Fifth Avenue. The
purpose of the appraisal is to assist the client with making a selling decision. The type of
value estimated is market value. The City of Seward leases a portion of the basement area
to the Food Bank in Seward. According to the City, the initial lease rate was $625 per month,
but subsequently reduced in order to assist the Food Bank with enhancing their charitability.
The lease is valid through 2025 with a five-year option to renew. We do not consider this
lease to meet the criteria of an arm's-length transaction as the City of Seward is not acting
in their best financial interest, but rather as a steward of the community. Thus, the property
rights appraised is the fee simple estate.
Notably, the subject building was constructed in 1950 and is nearing the end of its economic
life. Information provided by the client indicates the building is afflicted with environmental
conditions including mold, asbestos, and lead paint. These factors greatly impact the
marketability of the property and represent a detrimental condition. After completing our
analysis, we determined the highest and best use is for redevelopment of the property. The
report is prepared in accordance with the Uniform Standards of Professional Appraisal
Practice (USPAP).
Based on the data, reasoning, and analysis that follows, the market value of the appraised
property, as of July 8, 2021, is estimated as follows.
FOUR HUNDRED THOUSAND DOLLARS $400,000
21-3551: City of Seward Annex Property, Seward, Alaska
MacSwain Associates LLC
We direct your attention to the Scope of Work, Certificate of Appraisal, and Assumptions
and Limiting Conditions for an explanation of restrictions and limitations of this report. We
also direct your attention to the limiting language regarding COVID-19, which succeeds the
Assumptions and Limiting conditions in the addendum. If you have any questions, please
contact our office.
Respectfully submitted,
R
Alex Kleinke
State of Alaska Certificate No. 148873
Steve MacSwain, MAI
State of Alaska Certificate No. 42
21-3551: City of Seward Annex Property, Seward, Alaska
MacSwain Associates LLC
Appraiser Certification
The undersigned certifies that to the best of their knowledge and belief:
4 The statements of fact contained in this report are true and correct.
4 The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are our personal, impartial, and unbiased
professional analyses, opinions, and conclusions.
4 We have no present or prospective interest in the property that is the subject of this report,
and no personal interest with respect to the parties involved.
4 We have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
4 We have not performed any services as an appraiser or in any other capacity, regarding the
property that is the subject of this report, within the three-year period immediately preceding
acceptance of this assignment.
4 Our engagement in this assignment was not contingent upon developing or reporting
predetermined results.
4 Our compensation for completing this assignment is not contingent upon the development
or reporting of a predetermined value or direction in value that favors the cause of the client,
the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
4 The reported analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the requirements of the Code of Professional Ethics and
Standards of Professional Appraisal Practice of the Appraisal Institute.
4 The reported analyses, opinion, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
4 The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
4 Alex Kleinke inspected the property on July 8, 2021. Steve MacSwain, MAI is familiar with
the property from other appraisal assignments in Seward.
4 No one provided significant real property appraisal assistance to the persons signing this
certification.
4 As of the date of this report, Alex Kleinke and Steve MacSwain, MAI are certified General
Real Estate Appraisers in the State of Alaska and have completed the education requirements
through June 2023.
4 As of the date of this report, Steve MacSwain, MAI has completed the Standards and Ethics
Education Requirements for Designated Members of the Appraisal Institute.
21-3551: City of Seward Annex Property, Seward, Alaska
MacSwain Associates LLC
4 As of the date of this report, Alex Kleinke has completed the Standards and Ethics Education
Requirements for Practicing Affiliates of the Appraisal Institute.
4 As of the date of this report, Steve MacSwain, MAI has completed the continuing education
program for Designated Members of the Appraisal Institute.
4 As of the date of this report, Alex Kleinke has completed the continuing education program
for Practicing Affiliates of the Appraisal Institute.
Steve MacSwain, MAI
State of Alaska Certificate No. 42
812121
Alex Kleinke Date
State of Alaska Certificate No. 148873
21-3551: City of Seward Annex Property, Seward, Alaska
MacSwain Associates LLC
Table of Contents
Title Page
Transmittal Letter
Appraiser Certification
Table of Contents
Appraisal Summary 1
Chapter 1: Definition of the Appraisal Problem 5
Chapter 2: Seward Area and Market Summary 9
Chapter 3: Neighborhood Summary 13
Chapter 4: Site Description and Analysis 15
Chapter 5: Improvement Description and Analysis 17
Chapter 6: Highest and Best Use Analysis 21
Chapter 7: Property Valuation 23
Addendum
Assumptions and Limiting Conditions
Statement on COVID-19
Appraiser Qualifications
21-3551: City of Seward Annex Property, Seward, Alaska
MacSwain Associates LLC
Appraisal Summary
Value Type:
Market value
Property Type:
Commercial
Property Rights Appraised:
Fee simple estate
Location:
Southeast corner of Adams Street and Fifth Avenue, within
the Seward Townsite, Seward, Alaska
Legal Description:
Lots 38, 39, & 40, Block 8, Original Townsite of Seward.
Tax Parcel No:
149-130-10
Physical Address:
238 Fifth Avenue, Seward, Alaska
Property Owner:
City of Seward (per KPB)
Site Description:
Three (3) rectangular -shaped lots each measuring 30'X 100',
totaling 9,000± square feet; site is moderately sloping and
near access grade, soils are considered good.
Zoning:
CBD — Central Business District
Access/Frontage:
100± feet of frontage on Adams Street, 90± feet of frontage
on Fifth Avenue and alley
Utility Service:
Public water, sewer, electricity, and telephone
Improvement Description:
The subject improvement was constructed in 1950,
originally as a co-op grocery store. It then was converted
into City offices on the main level with the Food Bank
utilizing a portion of the basement for storage. The structure
contains 8,192± square feet of gross building area.
Construction type is concrete with metal panels on the
second main level. Our analysis indicates the building is
nearing the end of its economic life.
Personal Property & FF&E:
Not included
Land to Building Ratio:
1.1 to 1
Off -Street Parking:
No off-street parking required in CBD zone; subject lot has
three to four on -site parking spaces on southeast portion of
site
Hazardous Substances:
Asbestos, lead paint, and mold in building
21-3551: City of Seward Annex Property, Seward, Alaska 1
MacSwain Associates LLC
Wetland Designation:
Flood Hazard Restrictions:
Highest and Best Use:
Date of Property Inspection:
Effective Appraisal Date:
Date of Report:
Market Value Estimate:
None
Zone X, an area outside the 0.2% annual chance floodplain
As Vacant — Commercial development
As Improved — Interim -use (office -storage)
July 8, 2021
July 8, 2021
August 2, 2021
$400,000
21-3551: City of Seward Annex Property, Seward, Alaska 2
MacSwain Associates LLC
Subject Property Photographs
Date: July 8, 2021 Taken by: Alex Kleinke
South view of subject from Adams Street
East view of property from Adams Street / Fifth
Avenue intersection
East view of Adams Street frontage
South view of subject from Adams Street
Northwest view of subject from southeast corner
North view of Fifth Avenue frontage
21-3551: City of Seward Annex Property, Seward, Alaska 3
MacSwain Associates LLC
Subject Property Photographs
Date: July 8, 2021 Taken by: Alex Kleinke
Interior view of office area on main level
View towards office from entrance on main level
Basement office area
Demised office area on main level
View of office on main level
Basement area used by Food Bank
21-3551: City of Seward Annex Property, Seward, Alaska 4
MacSwain Associates LLC
Chapter 1: Definition of the Appraisal Problem
Overview We prepare an Appraisal Report that analyzes the City of Seward Annex
Property, consisting of an 8,192± square foot building comprised of
offices and storage space, situated on a 9,000± square foot site. The
purpose of the appraisal is to assist the City of Seward with making a
selling decision. The report is intended to comply with the Uniform
Standards of Professional Appraisal Practice (USPAP).
Value Type Market value
Client City of Seward
Intended Use of Assist client with making selling decision
Appraisal Report
Intended User of City of Seward, property owner
Appraisal Report
Property Inspection July 8, 2021
Date
Effective Appraisal July 8, 2021
Date
Date of Report August 2, 2021
Identification of Real The appraised property is known as the City of Seward Annex, which
Estate Appraised was the former community library. The physical address is 238 Fifth
Avenue, Seward, Alaska. The Kenai Peninsula Borough identifies the
property as Parcel ID 149-130-10. This location is within the Seward
Townsite, proximate to the current Seward Community Library &
Museum.
21-3551: City of Seward Annex Property, Seward, Alaska 5
MacSwain Associates LLC
Definition of The type of value estimated is market value. Market value is defined as
Market Value follows.
The most probable price which a property should bring in a competitive
and open market under all conditions requisite to a fair sale, the buyer
and seller each acting prudently and knowledgeably, and assuming the
price is not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby:
a. buyer and seller are typically motivated-
b. both parties are well informed or well advised, and acting in what
they consider their own best interests;
C. a reasonable time is allowed for exposure in the open market;
d. payment is made in terms of cash in US dollars or in terms of
financial arrangements comparable thereto; and
e. the price represents the normal consideration for the property
sold unaffected by special or creative financing or sales
concessions granted by anyone associated with the sale. I
We estimate the market value of the fee simple estate, which is defined
Property Rights as follows.
Appraised
Absolute ownership unencumbered by any other interest or estate,
subject only to the limitations imposed by the governmental powers of
taxation, eminent domain, police power, and escheat.2
Legal Description According to the Kenai Peninsula Borough's assessment information,
the subject property is legally defined as follows:
Lots 38, 39, & 40, Block 8, Original Townsite of Seward, Section 10,
Township I South, Range I West, Seward Meridian.
1 Appraisal of Real Estate, Fifteenth Edition (2020), by the Appraisal Institute, p. 49.
2 Appraisal of Real Estate, Fifteenth Edition (2020), by the Appraisal Institute, p. 60.
21-3551: City of Seward Annex Property, Seward, Alaska 6
MacSwain Associates LLC
Property Owner Public Records indicate the owner of the appraised property is as
follows.
City of Seward
PO Box 167
Seward, AK 99664-0167
Assessed The property is owned by the City of Seward and exempt from taxation.
Value The property's assessment history for the past three years is as follows.
The real estate taxes column assumes private ownership, which would
be subject to taxation. Our analysis indicates the assessed value exceeds
market value, as it likely does not reflect the environmental conditions
afflicting the subject.
KPB Historical Assessed Value (149-130-10)
Year Land Improvements Total Mill Rate RE Taxes
2021 $152,500 ($16.94/SF) $498,900 $651,400 9.29 $6,051.51
2020 $152,500 ($16.94/SF) $537,400 $689,900 9.29 $6,049.18
2019 $140,300 ($15.58/SF) $542,000 $682,300 9.29 $6,338.57
Three -Year Sale and There have been no known sales or of the property in the past three
Lease History years. The Food Bank leases a portion of the basement area for storage.
The City of Seward indicated the initial lease rate was $625 per month,
but was subsequently reduced in order to assist the Food Bank with
meeting their charitable obligations. The lease is valid through 2025
with a five-year renewal option. Based on the terms of the lease, we do
not consider this agreement to meet the criteria of an arm's-length
transaction.
Report Type and The cost, sales comparison, and income capitalization approaches to
Methodology value were examined and considered in the appraisal process. Due to
difficulty in estimating depreciation, a cost approach was not developed.
Therefore, the appraisers relied on the sales comparison and income
capitalization approaches to value. The appraisal report is a summary
of the appraisers' data, analyses, and conclusions with supporting
documentation retained on file.
21-3551: City of Seward Annex Property, Seward, Alaska 7
MacSwain Associates LLC
Scope of Appraisal Alex Kleinke of MacSwain Associates, LLC performed the inspection
of the appraised property, data collection, and analysis. Steve
MacSwain, MAI has observed the property during the course of other
Seward appraisal assignments and is familiar with the neighborhood. In
addition, Steve MacSwain, MAI administered the appraisal process,
reviewed draft appraisals, and concurred with an opinion of value.
Preparation of this report encompassed the following scope of work that
concluded with an opinion of market value.
4 Inspected the appraised property on July 8, 2021;
4 Discussed and inspected the property with Jackie Wilde,
Community Development Director with the City of Seward;
4 Reviewed aerial mapping indicating appraised property premises
provided by City of Seward;
4 Reviewed KPB assessor map 149-130;
4 Reviewed Original Townsite of Seward plat map;
4 Reviewed City of Seward Zoning Map and zoning codes;
4 Reviewed City of Seward 2030 Comprehensive Plan Update
prepared by PDC Engineers, adopted May 30, 2017;
4 Gathered data from the KPB Assessor's office and State of Alaska
Recorder's office regarding ownership, assessments, and general
property information;
4 Interviewed Seward real estate Brokers, agents, and property owners
regarding commercial sales and rentals;
4 Interviewed Seward market participants regarding current
commercial market conditions, trends, and expectations;
4 Gathered and confirmed information on comparable remodel costs,
demolition costs, sales and rentals;
4 Applied the sales comparison approach to arrive at an indication of
market value of the land;
4 Reviewed demolition costs on file to estimate cost to raze
improvement at the end of its economic life;
4 Applied the discounted cash flow (DCF) method to determine the
contributory value of the improvements, if any; and
4 Concluded with an estimate of market value.
Exposure Time We have collected and analyzed market and economic data that projects
real estate trends and activity for similar commercial properties.
Discussions with Brokers and analysis of similar property sales indicate
that a period of approximately 12 months prior to our effective date of
value is a reasonable exposure period.
21-3551: City of Seward Annex Property, Seward, Alaska 8
MacSwain Associates LLC
Chapter 2: Seward Area and Market Summary
Overview We present a summary analysis of factors that define the socio-
economic factors defining the Seward economy and real estate market.
The map below depicts Seward location within Southcentral Alaska.
Seward is located at the head of Resurrection Bay, on the southeast side
of the Kenai Peninsula. It lies 70 air miles south of Anchorage or 126
miles via the Seward Highway. Seward has an ice -free port with year-
round access to the Alaska Railroad.
Location Map
Anchorage j
NAnchorage
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U N I T E D S T A T E S
Whittier
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c Kenai oSterling Chugach
State Park
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Cooper
Cohoe Landing Q
Cgi j
Clam Gulch
Kenai National Wildlife Refuge Chenega
o
ook lnfet
Ni SewardSeward s
Homer enai Fjords
National Park+
.S_
.Anchor Dint - Resurrection Bay
Kachemak
City
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Population Within city limits, Seward's 2020 population estimate was 2,509,
representing stability over the past decade. Community growth areas
are principally rural residential neighborhoods to the north outside city
boundaries. According to the State of Alaska Division of Community
and Regional Affairs (DCRA), a table containing Seward's historic
population follows.
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
2,509 2,545 2,569 2,512 2,663 2,740 2,768 2,487 2,752 2,746
21-3551: City of Seward Annex Property, Seward, Alaska 9
MacSwain Associates LLC
The actual contributory population to the Seward economy is 4,700±
residents with the inclusion of rural residential districts located outside
of city boundaries. Moreover, the seasonal population swells to nearly
6,000± during the prime summer months.
Seward Employment Seward employment is gradually shifting from trades and fishing to
leisure, hospitality, and government. Although Seward employment is
projected to increase, we anticipate unemployment to remain above the
statewide rate due to the seasonal character of the economy. Because
of high demand for seasonal employment, part of the work force resides
outside of the Seward residential sphere.
Seward Area Map
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Seward Economic Ice -free deep -water port facilities integrated with road and rail service
Sectors to interior Alaska drive the Seward economy. The port is home to a
commercial fishing fleet, and is the impetus for thriving tourism and
recreation. These latter economic sectors have enhanced retail and
service industries as well as increased demand for petroleum products.
21-3551: City of Seward Annex Property, Seward, Alaska 10
MaCSwain Associates LLC
Diversification of the Seward economy has been a central theme of city
management, planning, and infrastructure development over the past
few decades. Examples of economic diversification include expansion
of the Small Boat Harbor, Alaska Vocational and Technical Center
(AVTEC), Aurora Energy Services Coal Terminal (not operating), and
the Spring Creek Correctional Facility. Furthermore, construction of a
breakwater to protect Seward Marine Industrial Center (SMIC) from
prevailing weather and seas will improve the economic viability as a
market alternative for shipbuilding and repair.
Evolving economic diversification is a stabilizing influence and cause
to enhance growth opportunities for corollary industries. Despite the
seasonal character of the Seward economy, government, natural
resources, health care, and transportation sectors contribute year-round
employment. A summary analysis of the primary components of the
Seward economy follows.
Tourism: Tourism has continued to be a strong economic sector of the
Seward Economy since the recovery from the national recession. Over
the five-year period from 2014 to 2018, the City of Seward reported a
17% increase in sales tax revenue, and a 3 1 % increase in hotel/motel tax
over the same period, with 2019 figures anticipated to grow further.
New hotel construction in 2020 has the potential to further increase
revenues in future seasons. Cruise ship port calls increased from year
to year since 2013 (50 ships) to 2016 (67 ships) to 2019 (87 ships and
95 days with cruise ships in port). Consequently, Seward cruise ship
visitation increased by 84 percent over the same period, with 125,000±
passengers in 2013 to 230,000± passengers estimated in 2019.3 The
2013 figures represent an average passenger/ship ratio of 2,500
passengers, while 2019 figures indicate 2,640 passengers. The increase
is due to not only fuller ships, but also the industry replacing medium-
sized cruise ships with larger cruise ships. Conversely, expedition style
trips with 100 to 200 passengers are becoming increasingly common.
These ships, while lowering the passenger/ship average, offer exclusive,
high -cost ecotrips. As this trend continues, passenger volume should
continue to increase over the long term, with exception to the substantial
decline anticipated for 2020 and 2021 due to the COVID-19 Pandemic.
PortActivity: As an industrial port, Seward has not reached the potential
that was invested in port infrastructure. However, over the past several
years, SMIC has benefited from increased demand for lease property.
Companies that commenced leases in SMIC in 2013 and 2014 include
Rainbow Fiberglass and Boat Repair and Vigor Alaska. Rainbow has
continued to expand their lease footprint, entering into new leases in
3 City of Seward, Comprehensive Annual Financial Reporting.
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MacSwain Associates LLC
2016 and 2019. JAG Alaska, Inc. became the new operator at the
Seward shipyard after Vigor announced its withdrawal. Additional new
lessees in SMIC include SEWMAR, LLC and Hamilton Construction.
Established marine industrial uses that enhance economic productivity
include bulk fuel storage, ship repair and dry-dock, and fish processing
plants.
The US Coast Guard has expressed interest in commencing land leases
in SMIC, however no official commitments have been made as of early
2021. SMIC recently completed a new $27M± rubble mound
breakwater, intended to improve protection and enable moorage of
larger ships, with a new dock rounding out recent SMIC construction.
Construction: A summary of construction projects that had a
measurable effect on the Seward economy include:
4 $30 million Seward Long -Term Care Facility (LTCF) in 2010
4 16,300± square foot Seward Community Library and Museum
in 2012
4 $13 million student housing complex for Alaska Vocational
Technical Center in 2014
4 Conversion of the 13,500± square foot former Elks Lodge into a
brewery/restaurant in 2013
New 80± room hotel on the corner of 4th Avenue and Van Buren
Street
4 19,000± square foot special -use marine industrial building
located north of the Seward Small Boat Harbor
Real Estate Market We anticipate the Seward real estate market to remain stable over the
Summary medium and long-term with upward trending prices for properties in
high demand and limited supply. Importantly, the real estate market has
a direct link to the health of Seward's economic sectors. For example,
increases in tourism and recreation cause greater demand for properties
that can accommodate cruise ships. These market dynamics will cause
upward price pressure. We weighed these market conditions in
analyzing the appraised property that benefits from a strategic location
fronting the Seward Highway. Short-term uncertainty, especially for
the Summer 2021 cruise ship season could dampen the Seward
economy, which relies heavily on tourism. An employee shortage has
prevented many businesses, primarily restaurants, from operating at full
capacity and taking advantage of the return of overland tourism, as
hesitancy to travel has diminished.
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Chapter 3: Neighborhood Summary
Overview The subject is located in Downtown Seward within the Historic District.
Development in the neighborhood is comprised of both private
commercial use and public institutional use. The reader is referred to
the zoning map below illustrating neighborhood land use and assisting
with the description and analysis that follows.
City of Seward Zoning Map
tN
Rural Residential
Single Family Residential
Two Family Residential
Subject r Multi Family Residential
■ Urban Residential
■ Office Residential
Harbor Commercial
W., Auto Commercial
Central Business District
■ Industrial
" Institutional
Park
Resource Management
a
Neighborhood The neighborhood is in the southern portion of Downtown Seward.
Description Located south of the Seward Small Boat Harbor, this neighborhood is
primarily zoned commercial. The prime commercial area fronts Fourth
and Fifth Avenues bounded by Adams Street to the north and Railway
Avenue to the south. Development consists of restaurants, lodging
facilities, and retail, taking advantage of the tourism -based economy.
Laid out in a grid pattern, streets are paved and improved with
sidewalks, curbs, and street lights. Fourth and Fifth Avenues contain
street parking to enable access to neighborhood businesses. All public
utilities are available. The new City of Seward Community Library &
Museum is located just to the east of the subject and City offices are
situated to the northwest. Overall, the immediate neighborhood is
considered to be one of the prime commercial areas in Seward.
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MacSwain Associates LLC
Summary In summary, with tourism industry as the economic focal point,
Seward's outlook is promising. The subject neighborhood south of the
Seward Small Boat Harbor and benefits from its proximity to the Alaska
SeaLife Center. The effects of the COVID-19 Pandemic have had a
measurable effect on the Seward economy, primarily attributed to the
loss of jobs and tax revenue. The impact on real estate prices is not yet
measureable based on reliable data. No analysis or opinions contained
in this appraisal should be construed as predications of future market
conditions or value. Based on these factors, the outlook for the subject
neighborhood is unpredictable.
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Chapter 4: Site Description and Analysis
Overview Analysis of land describes the characteristics that enhance or detract
from its utility or marketability. The site description and analysis is
based on our property inspection and review of the KPB Parcel Map
149-130, aerial, Original Townsite plat map, and other mapping. The
parcel map below as well as aerial mapping on page 17 assists in the
description and analysis of the parcel that follows.
Site Description
KPB Parcel Map 149-130
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Location: Southeast corner of Fifth Avenue and Adams
Street within the Seward Townsite, Seward,
Alaska
Shape and Land Rectangular -shaped site comprised of three
Area: 30'x 100' lots, totaling 9,000± square feet or 0.21±
acre
Access: Fifth Avenue and Adams Street allow street
parking fronting the north and west sides of the
property allowing for parking and pedestrian
access to the property, while the alley along the
east boundary allows vehicular access to the site.
Zoning: I CBD - Central Business, which provides for an
area of convenient, attractive, concentrated
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Frontage and
Exposure:
Easements and
Restrictions:
Public Utilities:
Topography:
Vegetation:
Soil Conditions:
Wetland
Designation:
Flood Hazard:
Environmental
Conditions:
Site Utility:
commercial development primarily intended for
retail, financial, entertainment and professional
services occurring within enclosed structures.
100± feet of frontage on Adams Street, 90± feet
of frontage on Fifth Avenue and alley
None known or shown on Original Townsite plat or
KPB parcel map
Public water, sewer, electricity, and telephone
Moderate descending slope from northwest to
southeast, near grade with access
Cleared
Based on observations of existing and surrounding
improvements, soils appear to be suitable for
development
None noted on KPB Wetland Mapper
Zone X, an area outside the 0.2% annual chance
floodplain
The existence of any hazardous material or other
type of environmental contamination, which may or
may not be present on the property, was not
observed by the appraisers nor do the appraisers
have any knowledge of the existence of such
substances. Our value conclusion assumes that the
property is free of environmental and hazardous
contaminants, beyond those that are known to afflict
the building (asbestos, lead paint, and mold).
Due to arterial frontage and exposure, coupled with
a location within the Seward Townsite and CBD
zoning, the site is well -suited for commercial
development.
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MacSwain Associates LLC
Chapter 5: Improvement Description and Analysis
Overview The description and analysis that follows is based on observations of the
appraised property during the July 8, 2021 property inspection. It
provides the basis for determining the property's highest and best use
and helps in identifying and selecting comparables suitable for analysis.
However, this description and analysis should not be misconstrued as
an engineering report. A description of the subject building follows
with additional details retained on file.
Google Earth Aerial (2011)
Improvement Subject
Description Improvements:
The subject building contains 4,396± square
feet on the main level with a 3,796± square foot
finished basement area. Gross building area is
8,192± square feet. The main level is built out
with individual offices and open office area
demised with cubicle walls. Additionally,
there is a reception area, breakroom, and
restrooms. The basement is used for storage
with minimal office build out with restrooms,
boiler room, and communications room.
Constructed in 1950, the actual age of the
structure is 71 years. It has been renovated and
remodeled over the years; however, has
reportedly been condemned due to the
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Construction Type:
presence of asbestos, mold, and lead paint.
Based on high costs associated with
remediating the building's deficiencies, and
recognizing the demand for vacant land in
Seward, we consider the building to be nearing
the end of its economic life.
Concrete construction with metal panels
Floor Plan
Drawn By: KPB f �,
I
7 5. 5 72.5
EFP
81 3796
13
8.54 5
49
S3
75.5 10.9
26
13.4
__10.9
- 56
23.5
1 s Fr EF 108
5 18
4396 27.5
10.9
26
13.4
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Year Built:
Foundation/Floors:
1950 per KPB
Poured concrete foundation, floors on main
level contain commercial -grade carpet in
office areas, basement area has some exposed
concrete, with others containing carpet and
laminate.
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Roof:
Exterior Walls:
Interior Finish:
Electrical/
Plumbing:
Heating/
Mechanical:
Fire Protection:
Land -to -Building
Ratio:
Parking:
Quality and
Condition:
Deferred
Maintenance:
Flat, built-up roof, membrane covering, roof
appears to require maintenance, enclosed
wood -frame portion provides additional
covering, overhangs above rear stairs are
contain metal covering.
Exterior walls contain stucco over metal panels
with vinyl siding also evident
Interior walls are textured/painted drywall in
office areas. Some storage areas contain
unfinished drywall, ceilings are drop tile
throughout.
The electrical and plumbing systems appear to
be adequate for the current use of the building.
There is fluorescent lighting throughout.
There are two (2) two -fixture restrooms, one
per floor. Additional plumbing includes sinks
in utility room and basement, drinking
fountains.
Heating oil -fired boiler, reportedly in need of
replacement, baseboard heat throughout both
main level and basement, suspended unit
heater in basement
The building is equipped with a wet sprinkler
system on the basement level.
The land -to -building ratio is 1.1 to 1, typical of
commercial improvements in the CBD district in
Downtown Seward
City of Seward not require on -site parking in
CBD zone; subject lot has three to four on -site
parking spaces on the southeast corner and ample
street parking along west and north boundaries
Quality of construction is average and
condition is rated fair.
Items disclosed during the property inspection
included the need for a new boiler,
environmental issues including asbestos, lead
paint, and mold, and areas of the foundation
subject to water inundation. With the
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Remaining
Economic Life:
Site Improvements:
FF&E:
Suitability of
Improvements:
exception of proposed costs for boiler
replacement ($60,000) we were not provided
with building remediation costs.
The subject building was constructed in 1950,
indicating an actual age of 71± years. We
estimate an effective age less than actual age,
but still nearing the end of its economic life.
While the economic life can be extended with
additional building upgrades and renovations,
we consider razing the property to be more
financially feasible. Thus, we conclude the
improvements are nearing the end of their
remaining economic life.
Site improvements consist of gravel on -site
parking area, concrete pad, fuel tank, and
landscaping
Freezers and refrigerators excluded from
valuation
The subject building is suited for interim use as
an office and storage until redevelopment occurs.
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Chapter 6: Highest and Best Use Analysis
Overview The parcel is located within the City of Seward, subject to zoning
regulations. Zoning is CBD, Central Business District. According to
the City of Seward Zoning Code, this designation:
Provides for an area of convenient, attractive, concentrated
commercial development primarily intended for retail,
financial, entertainment and professional services occurring
within enclosed structures. Regulations applying to this zone are
designed to encourage a compact group ofbusinesses ofthe type
which are mutually beneficial and located close enough together
to encourage walk-in trade.
Highest and Best Use The CBD District allows a wide variety of uses, consisting of
As Though Vacant commercial, residential, institutional, or industrial development
alternatives. Some uses require administrative or conditional use
permits. The appraised site consists of three rectangular -shaped lots
measuring 30'X 100'. The 9,000± square foot corner site has 100± feet
of frontage on Adams Street and 90± feet of frontage on Fifth Avenue
and the alley. The site slopes gently from northwest to southeast and is
near access grade. All public utilities are available. Surrounding
development varies; however, commercial development including
restaurants, lodging facilities, and retail are evident. The new City of
Seward Community Library & Museum is located just to the east of the
subject and City offices are situated to the northwest.
Determining the specific land use alternative that maximizes
productivity is a difficult analytical task. Based on corner arterial
frontage, a location within the prime commercial area of Seward,
commercial development is considered financially feasible and is the
highest and best use of the property, as vacant.
Highest and Best Use As Vacant Commercial Development
Highest and Best Use The subject improvement was originally constructed as a co-op grocery
as Improved store and was long used as the Seward library. After completion of the
new City of Seward Community Library & Museum, the subject
improvement was converted for City office use on the main level, with
the Food Bank utilizing a portion of the basement for storage. The
improvement was constructed in 1950 per KPB and is in fair condition.
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Reportedly, the structure is afflicted by environmental conditions
including asbestos, lead paint, and mold. In its current condition, the
existing improvements could not generate sufficient income to attract
potential buyers for continued use in perpetuity. The capital
expenditure required to rehabilitate the structure likely renders this
alternative financially unfeasible. Increasing land values and
diminishing supply of prime sites in Downtown Seward has created
external obsolescence. Based on the site value, property redevelopment
with a new commercial building is the only financially feasible use.
Market evidence in Downtown Seward supports this conclusion. The
former video store property immediately to the south was purchased in
2019, and the improvement was subsequently razed for site
redevelopment. Moreover, the subject building was reportedly
considered for a remodel in order to accommodate the new City of
Seward Community Library & Museum. Instead, the decision was
made to construct the building on the adjacent site, rather than
rehabilitate the former library building. The reported construction cost
for the new project was $7.4 million when the project was planned.
Ultimately, the actual costs were reported to exceed $20 million.
Consequently, we classify the subject property as an interim -use.
However, as an interim -use property, sufficient income could be
generated over the interim period to offset holding costs. Based on the
foregoing, we conclude that the highest and best use, as improved, is an
interim -use property used primarily for office, with some storage uses.
Highest and Best Use Conclusion
As Improved — Interim -Use (Office and Storage)
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Chapter 7: Property Valuation
Overview Our conclusion of highest and best use requires a land valuation, an
analysis of interim income potential, and an estimate of demolition
costs. Therefore, we do not prepare cost approach and sales comparison
approach for improved properties. However, we did collect and analyze
cost and improved sales data to determine highest and best use.
The land sales comparison approach is a systematic procedure of
estimating the market value by comparing it directly to property sales
afforded similar physical character. The approach is founded on the
principle of substitution theorizing value is a function of a
knowledgeable investor's (buyer) intent to pay no more for a specific
property than the cost of acquiring an alternative property offering
similar utility (economic satisfaction).
Comparative Market Our sales search focused on vacant land with similar zoning, physical,
Analysis and economic character to the subject, located in the immediate
neighborhood. This search criteria produced three sales in the
immediate vicinity and two additional sales located on the north end of
the Seward Townsite. The sales transpired between 2017 and 2021,
including a current pending sale. Four sales contain CBD zoning while
one is zoned AC, Auto Commercial. The land sales we relied upon are
listed in the table below. Additional details of the comparables are
retained on file.
Comparable Land Sales
No. Location Zone Sale Date Sale Price Size (SF) Price/ SF
1 Southwest corner of Fourth Avenue and CBD 7/21 $445,000 8,763 $50.78
Washington Street (pending)
2 Northwest comer of Van Buren Street and AC 9/19 $140,000 6,534 $21.43
Fourth Avenue
3 Northwest comer of Fourth Avenue and D CBD 6/19 $350,000 14,139 $24.75
Street
4 West side of Fifth Avenue between Adams CBD 2/19 $175,000 3,876 $45.15
and Washington Street
5 Northwest comer of Railway Avenue and CBD 5/17 $300,000 5,772 $51.98
Fourth Avenue
__ __ Southeast corner of Adams Street and CBD 7/21 -- -- 9,000 -- --
Fifth Avenue (subject)
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Elements of The elements of comparison that have the greatest influence on market
Comparison behavior and the price paid for Seward land is location, zoning, utilities,
access, easements, topography, size differential, shape, and
vegetation/clearing.
Comparative Land
Analysis
Pending Land Sale 1
Land Sale 1 is a pending sale of a commercial site located on the southeast
corner of Fourth Avenue and Washington Street. The site contains 8,763
square feet and zoning is CBD, Central Business District. Frontage is on
three streets plus the alley. The site gently slopes from northwest to
southeast and is near grade with surrounding streets. It has been completely
cleared, graded, and gravel filled and is bordered by a small fence.
Available public utilities include water, sewer, electricity, and telephone.
The property was exposed to the market for over 500 days, originally listed
for $500,000. The pending sale price of $445,000 indicates a unit value of
$50.78 per square foot. By comparison, Land Sale 1 is rated superior in
terms of quality of frontage and topography, but inferior in terms of shape.
The net adjustment is downward, indicating a unit value less than $50.78
per square foot for the subject land.
Land Sale 2
Land Sale 2 is the September 2019 of a commercial site located on the
northwest corner of Van Buren Street and Fourth Avenue, approximately
1,000 feet south of the Seward Small Boat Harbor. The site contains 6,534
square feet and is zoned AC, Auto Commercial. The lot is generally level
and near grade with surrounding streets and properties. Available public
utilities include water, sewer, electricity, and telephone. At the time of sale,
the lot was used for storage. It was not listed for sale through a Broker but
the seller's initial asking price was $200,000. The purchase motivation was
for assemblage with the adjacent site for construction of the Seward
Gateway Hotel. The sale price of $140,000 indicates a unit value of $21.43
per square foot. Comparatively, Land Sale 2 is superior in terms of
topography and size differential. Overriding upward adjustments are
necessary for easements and inferior location away from the prime
commercial area of the Seward Townsite and outside of the Small Boat
Harbor Boardwalk area. Overall, an upward adjustment is necessary,
indicating a unit value greater than $21.43 per square foot for the subject
land.
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x
,r
,�.
I and Calf I
Land Sale 3 is the June 2019 sale of a commercial site located on the
northwest corner of Fourth Avenue and D Street, near the intersection of
Ballaine Boulevard. The site consists of two lots totaling 14,139 square feet
and is zoned CBD, Central Business District. It is generally level and near
grade with surrounding streets and properties. Available public utilities
include water, sewer, electricity, and telephone. At the time of sale, the
property was used as a storage yard as the site was fully fenced with chain -
link plus three -strand barbed-wire and security gates. The purchase
motivation was to fulfill boat storage needs. The sale price of $350,000
indicates a unit value of $24.75 per square foot. Downward adjustments are
required for topography and site improvements. Conversely, location away
from the prime commercial core of Seward necessitates a substantial
upward adjustment. An additional upward adjustment is necessary for size
differential. Overall, we rate this sale inferior, indicating a unit value greater
than $24.75 per square foot for the subject land.
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S E W .�
Land Sale 4
Land Sale 4 is the February 2019 sale of a commercial site, which was
improved with an older structure nearing the end of its economic life.
The property is located on the west side of Fifth Avenue between Adams
Street and Washington Street. Containing 3,876 square feet, zoning is
CBD, central business district. The site moderately slopes from north
to south and is near grade with Fifth Avenue. Publicly available utilities
include water, sewer, electricity, and telephone. The property was
exposed to the market for 308 days, originally listed for $325,000 and
subsequently reduced to $179,000. The sale price of $160,000 requires
an upward quantitative adjustment of $15,000 to reflect the demolition
cost of the older structure. Thus, the adjusted sale price of $175,000
indicates a unit value of $45.15 per square foot. Comparatively, Land
Sale 4 is rated similar, indicating a unit value approximating $45.15 per
square foot for the subject land.
T,and Cah. 4%-
Land Sale 5 is the May 2017 sale of a commercial site located on the
northwest corner of Railway Avenue and Fourth Avenue. At the time
of sale, the site was comprised of three lots approximating 5,772 square
feet. The trapezoidal shaped site has frontage on Railway Avenue and
Fourth Avenue and slopes gently downward from north to south.
Zoning is CBD, Central Business District. Public utilities available
include water, sewer, electricity, and telephone. The purchase
motivation was to assemble with the adjacent restaurant property and
construct a deck. Subsequently, the site was replatted with the adjacent
restaurant site. The sale price of $300,000 indicates a unit value of
$51.98 per square foot. By comparison, this sale is rated inferior in
terms of shape, but superior in terms of quality of frontage and size
differential. The net adjustment is downward, indicating a unit value
less than $51.98 per square foot for the subject land.
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Reconciliation of Presented below is a rating grid and analysis of the land sales used in
Comparative Market comparative analysis.
Analysis
Land Sale No
$/SF
Rank
Net Adjustment
5
$51.98
Superior
1
$50.78
Superior
4
$45.15
Similar
-- -- -- --
-- --
-- --
Subj ect
-- -- -- --
3
$24.75
Inferior
2
$21.43
Inferior
T
The comparable transactions indicate a unit value range from $21.43 to
$51.98 per square foot. Land Sales 2 and 3 are rated inferior, indicating
a unit value greater than $24.75 per square foot. Conversely, Land Sales
1 and 5 are rated superior, indicating a unit value less than $50.78 per
square foot. Moreover, Land Sale 4 is rated similar, indicating a unit
value approximating $45.15 per square foot. After considering the
necessary adjustments, we estimate the unit value of the appraised site
approximates $45 per square foot, which develops the following.
9,000 SF x $45/SF = $405,000
Based on the preceding analysis, market value of the appraised land, as
of July 8, 2021, is estimated as follows.
Estimated Land Value $400,000 (R)
Present Value of Interim Income from Improvements
The contributory value of the interim -use improvements is estimated by
discounting projected net operating income to present value. We note
that estimating the projected interim -use period of the property is
difficult and would likely vary among developers. We anticipate a
relatively short holding period as a buyer of this type of property is
likely to commence development imminently. We anticipate a two-year
holding period is sufficient to plan and design a development, acquire
permitting and contractors, and demolish existing improvements.
During this two-year period, it is a reasonable expectation a property
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owner / developer would attempt to lease out the property to offset
holding costs.
We utilize market rent to project income as the subject building is
primarily owner -occupied with a portion of the basement leased to the
Food Bank, which we consider to be anon arm's-length agreement. We
reviewed lease data from several properties in Seward, including office,
storage, and retail space. The rent comparables collected indicate a wide
range from $0.78 to $3.07 per square foot, per month, primarily on full -
service bases. After making the necessary adjustments, the rental rates
support a blended rate of $1.55 per square foot, per month, which is
based on $2.25 per square foot per month for the main level and $0.75
per square foot for the basement area, both on a full -service bases. This
equates to an annual revenue of $152,400±.
Typical vacancy rates in Seward reported by Brokers hover in the range
of 3% to 8%. Published studies of vacancy rates in the Kenai Peninsula
Borough are scarce, especially since the KPB ceased their economic and
financial publications. The short-term nature of the interim period
increases difficulty in securing tenancy. Therefore, we utilize a higher
vacancy rate, or 10% of potential gross income. This results in an
effective gross income of $137,160. After deducting estimated property
owner expenses (management, taxes, utilities/heating fuel, insurance,
snow removal), the estimated net operating income is $101,600 (based
on operating expense ratio range of 25% to 30%). Owner expenses
include management, property taxes, insurance, utilities and heating
fuel, and minor maintenance / snow removal. We note, an expense
category for major maintenance and reserves is not necessary as a
property owner would not make capital expenditures in a building
shortly prior to razing. The net operating income projection of $101,600
represents the cash flow for Year 1 and Year 2 of the holding period.
Next, we analyze the cost of demolition, which represents a negative
cash flow in Year 2.
Cost of Demolition
The appraisers have reviewed and analyzed comparable demolition
costs retained on file. The comparable demolition cost data has a wide
range from $6 to $20 per square foot with the upper end reflecting
properties with known hazardous materials on site. Further, we have
also interviewed Alaska Demolition regarding the cost to demolish
similar structures. They indicated the general cost to remove properties
similar to the subj ect range from $10 and $15 per square foot of building
area, and indicated demolition costs for buildings with known asbestos
are typically double those without, or $20 to $30 per square foot. Due
to the subject building's known environmental factors, location, and
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type, we estimate a mid -range demolition cost or $25 per square foot.
This equates to a demolition cost of $204,800 for the subject building.
We anticipate demolition costs to increase by the end of the holding
period. We consider a 2% to 4% annual increase to be reasonable,
which results in a demolition cost range of $213,074 to $221,512. We
reconcile with aprojected demolition cost of $215,000.
Conclusion of Present The present value of the improvements is based on two years of interim
Value of income represented by positive cash flows in Year 1 and Year 2 of the
Improvements holding period. The cash flow for Year 1 is simply the income estimated
on Page 28 of $101,600. The Year 2 cash flow consists of two figures:
the same $101,600 positive cash flow, and the demolition cost of
$215,000, which is a negative cash flow. Combining these figures
results in a negative cash flow of $113,400 for Year 2.
Cash Flow Period Cash Flow
Year 1 $101,600
Year 2 - $113,400
Our projection uses a discount range between 10% and 15% to discount
the cash flows in the holding period. A 10% discount rate yields a
present value of negative $1,355, while a 15% discount rate yields a
present value of positive $2,601. Therefore, an investor would consider
the value attributable to the interim income, and the cost of demolition
to offset.
Conclusion of Market Because the value of the improvements is offset by demolition, the
Value market value of the property is equal to our opinion of the market value
of the subject land. In conclusion, it is our opinion the market value of
the subject's unencumbered fee simple estate as of July 8, 2021 is
$400,000.
Estimated Market Value of Subject Property $400,000
21-3551: City of Seward Annex Property, Seward, Alaska 29
�nnr.�nmm
MacSwain Associates LLC
Assumptions and Limiting Conditions
This appraisal is subject to the following assumptions and limiting conditions.
4 No responsibility is assumed for the legal description provided or for matters pertaining to
legal or title considerations. Title to the property is assumed to be marketable unless
otherwise stated.
4 The property is appraised free and clear of all liens or encumbrances unless otherwise stated.
4 The information furnished by others is believed to be reliable, but no warranty is given for
its accuracy.
4 All maps, plot plans, and other illustrative material are believed to be accurate, but are
included only to help the reader visualize the property.
4 It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or
structures that render it more or less valuable. No responsibility is assumed for such
conditions or for obtaining the engineering studies that may be required to discover them.
4 It is assumed the property is in full compliance with all applicable federal, state, and local
environmental regulations and laws unless the lack of compliance is stated, described, and
considered in the appraisal report.
4 It is assumed the property conforms to all applicable zoning, land use regulations, and platting
restrictions unless the nonconformity is identified, described, and considered in the appraisal
report.
4 Possession of this report, or a copy thereof, does not carry with it the right of publication.
4 The appraisers, by reason of this appraisal, is not required to give consultation or testimony
or to be in attendance in court with reference to the property in question unless arrangements
have been previously made.
4 Neither all nor any part of the contents of this report shall be disseminated to the public
through advertising, public relations, news, sales, or other media without the prior written
consent and approval of the appraisers.
4 The existence of any hazardous material or other type of environmental contamination, which
may or may not be present on the property, was not observed by the appraisers nor do the
appraisers have any knowledge of the existence of such substances, with the exception of
known asbestos and lead paint. However, the presence of any additional substances may
affect the value of the property. Therefore, the client is urged to retain an environmental
assessment for discovery and evaluation.
21-3551: City of Seward Annex Property, Seward, Alaska
MacSwain Associates LLC
Statement on COVID-19
The appraisal report is subject to the following language.
4 This appraisal was performed following public awareness that COVID-19 was affecting
residents in the United States. At the time of the appraisal, COVID-19 was having
widespread health and economic impacts. The effects of COVID-19 on the real estate market
in the subject neighborhood were not yet measurable based on reliable data. The analyses
and value opinion in this appraisal are based on the data available to the appraiser at the time
of the assignment and apply only as of the effective date indicated. No analysis or opinions
contained in this appraisal should be construed as predictions of future market conditions or
value.
21-3551: City of Seward Annex Property, Seward, Alaska
MacSwain Associates LLC
4401 Business Park Boulevard, Suite 22, Anchorage, Alaska 99503
Appraiser: Alex Kleinke
State of Alaska, Certified General Real Estate Appraiser — License 4148873
Education: Bachelor of Business Administration, Finance, University of Alaska Anchorage (2009)
Master of Business Administration (MBA), University of Alaska Anchorage (2012)
Professional Experience: 2009 to Present — MacSwain Associates LLC
Real estate appraiser of all property types throughout Alaska including commercial, industrial, land, rights -of -way,
and special-purpose properties. Appraisals performed for financing, right-of-way acquisitions, conservation
easements, leasing, insurance, taxation, estate planning, investment analysis, and buy -sell decisions.
Appraisal Education: The following is a list of recently completed appraisal courses and seminars.
2021 Analyzing Operating Expenses by the Appraisal Institute, Online
2021 Business Practices and Ethics by the Appraisal Institute, Online
2020 7-Hour National USPAP 2020-2021 Update Course by the Appraisal Institute, Anchorage, AK
2017 Business Practices and Ethics by the Appraisal Institute, Online
2017 7-Hour Equivalent USPAP Update Course by the Appraisal Institute, Online
2016 Advanced MarketAnalysis and Highest and Best Use by the Appraisal Institute, Chicago, IL
2016 General Sales Comparison Approach by the Appraisal Institute, Chicago, IL
2015 Real Estate Finance, Statistics, and Valuation Modeling by the Appraisal Institute, San Diego, CA
2015 General Report Writing and Case Studies by the Appraisal Institute, Las Vegas, NV
2015 General Income Approach Parts I and II by the Appraisal Institute, San Diego, CA
2013 The Discounted Cash Flow Model: Concepts, Issues, and Apps. by the Appraisal Institute, San Diego, CA
2013 General Appraiser Site Valuation and Cost Approach by the Appraisal Institute, Fort Lauderdale, FL
2012 General Market Analysis and Highest and Best Use by the Appraisal Institute, San Diego, CA
201115-Hour National USPAP Course by the Appraisal Institute, Anchorage, AK
2010 Basic Appraisal Procedures by the Appraisal Institute, Anchorage, AK
2010 Basic Appraisal Principles by the Appraisal Institute, Anchorage, AK
Sample of Significant and Project Assignments:
2020-21 — Eight right-of-way appraisals for Knik-Goose Bay Road Reconstruction Project
2020 — 43 City of Seward Lease Parcels including commercial, industrial, and marine -type properties
2020 — 41 City of Kenai Lease Parcels including aviation, commercial, industrial, and marine -type properties
2019 — City of Kodiak Lease Parcels including aviation and communication sites, seaplane base, and shipyard
2018 — Fractional interest of land and sandwich leases for Anchorage hotel and fuel station properties
2017 — Pacific Spaceport Complex, market rent of launch complex facilities within PSCA on Kodiak Island
2016-2017 — Provided insurable value project appraisals for properties in Utgiagvik, Dillingham, Iliamna, Kotzebue,
Nome, Cordova, Naknek, Angoon, Haines, Hoonah, Juneau, Kake, Anchorage, Bethel, and Yakutat
2015 — 40 City of Seward Lease Parcels including commercial, industrial, and marine -type properties
2015 — 97 City of Kenai Lease Parcels including aviation, commercial, industrial, and marine -type properties
2015 — Assisted with cost estimate to acquire lands to develop proposed AKLNG from Pt. Thomson to Nikiski
2014-2020 — 50+ Right-of-way appraisals for Parks Highway MP 48.8 to 52.3 Reconstruction Project
2014 — Assisted with project management and appraisals of Nikiski properties for Alaska LNG acquisitions
2012 — Assisted in the income analysis portion of the Trans Alaska Pipeline System (TAPS)
2010-2021 — Alaska Railroad Corporation (ARRC) land lease appraisals in Anchorage, Seward, and Whittier
Professional Affiliation: Practicing Affiliate — Appraisal Institute
`icediw 148873
3120
iwState of Alaska
�tectAae, 612312021
Expires:06/30/2023 Department of Commerce, Community, and Economic Develoi
Division of Corporations, Business, and Professional Licem
Board of Certified Real Estate Appraisers
Licensee: ALEXANDER H KLEINKE
License Type: Certified General Real Estate Appraiser
Status: Active
Commissioner: Julie Anderson
MacSwain Associates LLC
4401 Business Park Boulevard, Suite 22, Anchorage, Alaska 99503
Appraiser: Steve MacSwain, MAI
Member of Appraisal Institute - No. 5700
State of Alaska, Certified General Real Estate Appraiser - No. 42
Professional Experience: 1986 to Present - MacSwain Associates LLC
1976 to 1986 - Appraisal Company of Alaska - President
1970 to 1975 - Real Estate Services Corporation — Appraiser
1969 to 1970 - State of Alaska Department of Highways - Right of Way Agent
Real estate appraiser and consultant of all property types throughout Alaska including commercial, industrial,
subdivisions and special-purpose properties. Appraisals have been performed for financing, leasing, insurance,
condemnation, taxation, property damages, investment analysis, and buy -sell decisions. Appraisals include valuation
of both real property and business enterprises. Professional experience totals 49 years. Life-long Alaskan resident
of Alaskan Native descent.
Education: Bachelor of Business Administration, Finance (1969), University of Alaska Fairbanks
Appraisal Education: The following is a list of completed appraisal courses and seminars.
2021 Cool Tools: New Technologyfor Real Estate Appraisers by the Appraisal Institute
2021 Desktop Appraisals (Bifurcated, Hybrid) and Evaluations by the Appraisal Institute
2021 Hot Topics & Myths in Appraiser Liability by LIA Administrators & Insurance Services
2020 Uniform Standards of Professional Appraisal Practice Update by the Appraisal Institute
2019 How Tenants Create or Destroy Value: Leasehold Valuation and its Impact on Value by the Appraisal Institute
2017 — Appraising Environmentally Contaminated Properties by the Appraisal Institute
2017 Residential & Commercial Valuation of Solar by the Appraisal Institute
2017 Right of Way Acquisition for Pipeline Projects by the International Right of Way Association
2015 Litigation Appraising: Specialized Topics and Applications by the Appraisal Institute
2015 Business Practices and Ethics by the Appraisal Institute
2013 Complex Litigation Appraisal Case Studies by the Appraisal Institute
2013 Uniform Appraisal Standards for Federal Land Acquisitions (Yellow Book) by the Appraisal Institute
2012 Appraisal Curriculum Overview by the Appraisal Institute
2010 Reviewing Appraisals in Eminent Domain by the International Right of Way Association
2010 Commercial Appraisal Engagement and Review Seminar for Bankers and Appraisers by the Appraisal Institute
2009 — The Appraiser as an Expert Witness: Preparation and Testimony by the Appraisal Institute
2009 Attacking and Defending an Appraisal in Litigation by Whitmer Education
2008 Uniform Standards of Professional Appraisal Practice by the Appraisal Institute
2007 Business Practices and Ethics by the Appraisal Institute
2007 Eminent Domain Law for Right of Way Professionals by the International Right of Way Association
2007 Appraisal Review for Federal Aid Programs by the International Right of Way Association
2007 Analyzing Operating Expenses by the Appraisal Institute
1969-2006: Numerous appraisal classes pertaining to principles, income capitalization, cost analysis, sale
comparison approach, and highest and best use analysis by the Appraisal Institute, Society ofReal Estate Appraisers,
International Right -of -Way Association, International Association of Assessing Officers, and Marshall Valuation
Service
Membership and Organizations: Member of Appraisal Institute — No. 5700, International Right of Way
Association (IRWA), and Building Owners and Managers Association (BOMA)
Public Service: Past Chairman of the State Board of Certified Appraisers
Past Member of Board of Equalization, Municipality of Anchorage, National Experience Review Committee of
the Appraisal Institute, and Regional Ethics and Counseling Panel of the Appraisal Institute
Past President of Alaska Chapter 57 of the Appraisal Institute
Significant Assignments:
4 Appraised Pacific Spaceport Complex -Alaska (PSCA) land and facilities for Alaska Aerospace Corporation on
Kodiak Island.
4 Appraised proposed LNG Pipeline, a FERC-regulated 860-mile pipeline transporting liquefied natural gas.
4 Appraised the Trans -Alaska Pipeline System, a FERC-regulated 800- pipeline that transports crude oil from
Prudhoe Bay to Valdez, for TAPS ownership.
4 Appraised remote lands (65,000± acres) owned by three Native corporations damaged by the Selendang Ayu
grounding and subsequent oil spill.
4 Appraised Calais Company, Inc., a real estate holding company consisting of 39 commercial parcels in Anchorage.
4 Principal real estate consultant and expert witness for all lands affected by the Exxon Valdez oil spill. Project
involved over 2,000,000 acres of remote land and nearly 2,000 private property owners.
4 Appointed as a representative of a three -member panel that analyzed and valued over 1,000,000 acres and 8,000
parcels for the Mental Health Lands Settlement.
Contract assessor for the North Slope Borough, Kodiak Island Borough, City of Nome, and the City of Valdez.
Represented Seibu Alaska, Inc. (Alyeska Resort and Alyeska Prince Hotel) in preparing of their property tax
appeal with the Municipality of Anchorage that resulted in a $65 million reduction in assessed value.
4 Appraised submerged tideland parcels and wetlands parcels located in Womens Bay on Kodiak Island for the
purpose of an exchange between Koniag, Inc. and U.S. Fish and Wildlife Service.
4 Appraised Common Carrier Pipeline right-of-ways leased and operated by BP Transportation Alaska and
ConocoPhillips Alaska.
4 Appraised 3,600 acres consisting of the former Adak Naval Air Station and Submarine Base conveyed to the City
of Adak and the State of Alaska.
Expert Witness Experience: Steve MacSwain, MAI is qualified as an expert witness in both the United States
Federal Court and the State of Alaska Superior Court. Steve has testified as an expert witness in State and Federal
courts. In addition, Steve has testified as expert witness in numerous Alaskan municipal tax courts, public hearings,
and depositions on matters related to real property.
Arbitrator Experience: Appointed a Master by the Superior Court of Alaska and Municipality of Anchorage to
serve as an arbitrator in determining just compensation.
`i`e°s.# APRU42State of Alaska
Effective: 5�V8l2021 2021
Expires 0613W2023
Department of Commerce, Community, and Economic Development
Division of Corporations, Business, and Professional Licensing
Board of Certified Real Estate Appraisers
Licensee. STEVEN JAMES MACSWAIN
License Type: Certified General Real Estate Appraiser
Status: Active
Comrnhssioner: Julie Anderson
SEWARD CITY OF Property ID 14913010
PO BOX 167 Address 238 FIFTH AVE
SEWARD, AK 99664-0167 Document / Book Page
Acreage 0.2000
uu
Property ID Display Name Address
14913010 SEWARD CITY OF PO BOX 167
Value History
Year
Reason
Assessed
Land
Structures
Total
2021
Main Roll Certification
$152,500
$498,900
$651,400
2020
Main Roll Certification
$152,500
$537,400
$689,900
2019
Main Roll Certification
$140,300
$542,000
$682,300
2018
Main Roll Certification
$122,000
$582,300
$704,300
2017
Main Roll Certification
$122,000
$591,800
$599,000
$626,400
$507,200
$480,200
$473,300
$473,300
$713,800
2016
Main Roll Certification
$122,000
$721,000
2015
Main Roll Certification
$122,000
$748,400
2014
Main Roll Certification
$122,000
$629,200
2013
Main Roll Certification
$122,000
$602,200
2012
Main Roll Certification
$122,000
$595,300
2011
Main Roll Certification
$122,000
$595,300
2010
Main Roll Certification
$122,000
$511,200
$633,200
2009
Main Roll Certification
$101,800
$599,600
$701,400
2008
Main Roll Certification
$81,400
$442,300
$523,700
2007
Main Roll Certification
$81,400
$442,300
$523,700
2006
Main Roll Certification
$81,400
$442,300
$523,700
2005
Main Roll Certification
$81,400
$442,300
$523,700
2004
Main Roll Certification
$77,500
$442,300
$519,800
2003
Main Roll Certification
$77,500
$442,300
$519,800
2002
Main Roll Certification
$77,500
$442,300
$519,800
2001
Main Roll Certification
$77,500
$442,300
$519,800
Attribute
Story Use
Attribute
Code
Detail
0
Roofing Cover
1
Built-up
0
Stories
1
1 GENOFF
Exterior Wall
344
PF.- Stucco on Metal Panels
B GENOFF
Exterior Wall
344
Concrete, Formed
Floor Areas
Code
Description
Story
Gross
Heated
AC
GENOFF
Office Building
1
4,396
4,396
0
GENOFF
Office Building
B
3,796
3,796
0
Total
8,192
8,192
0
Exterior
Features
I
Code
Description
Story
Size
Heated
AC
EFP
Enclosed frame porch
81.00
0
0
EFP
Enclosed frame porch
108.00
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ATTEST:
Agreement between the
CITY OF SEWARD
And
HE WILL PROVIDE INC.
SUBJECT: Amending the lease payment amount for He Will Provide Inc. authorized by Resolution 2019-005
and subsequently amended as follows: ape" ✓�
/Z.8//9
Original Contract:
INITIAL TERM. During the Initial Term, HWPI shall pay to the City as rent for the Leased Property the
amount of $625.00 (Six Hundred Twenty -Five Dollars) each month payable in advance on the first day of each
calendar month. Monthly rent for any partial month shall be prorated at the rate of 1/30th of the monthly rental
per day. Alternatively, during the initial period, the parties may agree to an annual instead of a monthly payment,
also payable in advance.
Amendment No. 1:
3. RENT
INITIAL TERM. During the Initial Term, HWPI shall pay to the City as rent for the Leased Property the
amount of $300.00 (Three Hundred Dollars) each month payable in advance on the first day of each calendar
month. Monthly rent for any partial month shall be prorated at the rate of 1/30th of the monthly rental per day.
Alternatively, during the initial period, the parties may agree to an annual or quarterly instead of a monthly
payment, also payable in advance.
HE WILL PROVIDE INC.
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CITY OF SEWARD
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LEASE AGREEMENT
BETWEEN THE CITY OF SEWARD AND "HE WILL PROVIDE INC."
THIS LEASE AGREEMENT (the "Lease") is made by and between the CITY OF
SEWARD (the "City"), a municipal corporation located in the Kenai Peninsula Borough,
State of Alaska, whose mailing address is P.O. Box 167, Seward, Alaska 99664 and HE
WILL PROVIDE INC. ("HWPI"), whose mailing address is P.O. Box 3445, Seward,
Alaska 99664 (collectively "the Parties").
WHEREAS, the City is willing to rent certain real property to be used by HWPI for
storage and distribution of food; and
WHEREAS, the City Council of Seward has determined that lease of the property
described herein to HWPI for the purposes described herein for less than fair market
value is in the public interest.
NOW THEREFORE, for and in consideration of the mutual promises and
covenants hereinafter contained, the Parties hereto agree as follows:
TERMS:
1. LEASE OF REAL PROPERTY. For and in consideration of the covenants and
agreements herein contained, to be kept and performed by HWPI, the City does hereby
lease to HWPI the real property known and described as follows: approximately 1200
square feet of the south and west corner of the City Annex Building at 238 5th
Avenue, Seward, Alaska (the "Leased Property"), for the term of this Lease.
2. TERM. The term of this Lease shall be five years beginning g--�2 ,
201_1, and ending ?-1 , 201,j_ (the "Initial Term"), and may be renewed
at the sole option of the City for an additional five years. Thereafter, this Lease shall
continue from month -to -month unless the City gives HWPI notice to terminate pursuant
to this Lease not less than thirty days prior to termination. if this Lease is continued at
the City's option as provided herein, all terms under this Lease shall continue to bind the
Parties to this agreement.
3. RENT.
INITIAL TERM. During the Initial Term, HWPI shall pay to the City as rent for the
Leased Property the amount of $625.00 (Six Hundred Twenty -Five Dollars) each month,
payable in advance on the first day of each calendar month. Monthly rent for any partial
month shall be prorated at the rate of 1/30th of the monthly rental per day. Alternatively,
during the initial period, the parties may agree to an annual instead of a monthly
payment, also payable in advance.
4. INSPECTION BY HWPI. HWPI shall inspect the Leased Property prior to signing
this Lease. Unless HWPI within such period of time gives written notice to the City
specifying any defect in or other proper objection to the Leased Property, HWPI agrees
that it shall be conclusively presumed, as between the City and HWPI, that HWPI has
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fully inspected and acknowledged that the Leased Property is in good condition and
repair, and that HWPI is satisfied with and has accepted the Leased Property in such
good condition and repair.
5. INSPECTION BY THE CITY. The City shall have the right to enter on the
premises where the Leased Property may be located for the purpose of inspecting it or
observing its use upon the giving of twenty-four hours advance written notice. Any
inspection by the City shall occur only during business hours.
6. ALTERATIONS AND IMPROVEMENTS. HWPI, at its sole cost and expense,
may make any and all alterations, additions, and improvements to the Leased Property,
provided such alterations, additions, and improvements are approved by the City in
advance.
7. TITLE TO IMPROVEMENTS BY HWPI. Any other provisions of this Lease to the
contrary notwithstanding, HWPI, upon termination of this Lease for any reason, may,
but need not, promptly remove, in no event later than thirty days from the termination of
the Lease, trade fixtures and equipment from the Leased Property provided that HWPI
shall repair any damages to the Leased Property caused by such removal. All additions
to and improvements of the Leased Property of any kind not removed by HWPI upon
termination of this Lease shall immediately become the property of the City.
8. MAINTENANCE. HWPI, at its own cost and expense, shall keep the Leased
Property clean and undamaged, subject to normal non -abusive use. The City may
promptly repair any damage not caused by the negligence or intentional misconduct of
HWPI,
9. SIGNAGE. HWPI, with the consent of the City, may construct, install or maintain,
or affix any sign, banner or like display identifying the Leased Property as a food bank
to be placed upon the Leased Property in such manner as to be visible from the outside
thereof. Any signage so displayed or affixed shall be removed upon the expiration or
termination of this Lease.
10, INSURANCE. HWPI, at its own expense, will maintain the Leased Property
insured for such risks and in such amounts as may be consistent with the City's risk
management procedures. Upon request by the City, HWPI will deliver to the City
evidence of all such insurance.
11. TAXES AND FEES. HWPI shall be responsible for any and all license fees,
assessments, and sales, use, property, and other taxes, if any, now or in the future
imposed on the Leased Property.
12. OWNERSHIP. The Leased Property is and shall at all times remain the sole
property of the City, and HWPI shall have no right, title, or interest therein except as
expressly set forth in this Lease.
13. SUSPENSION OF OBLIGATIONS OF THE CITY. The obligations of the City
under this Lease shall be suspended, and shall not be considered an event of default, to
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the extent that the City is hindered or prevented from complying with those obligations
because of labor disturbances, including strikes and lockouts, civil disturbance,
blockade, insurrection, sabotage, riot, war, acts of enemies of the United States of
America, acts of nature, epidemic, fires, storms, floods, earthquakes, tsunamis,
accidents, governmental regulations, or any cause whatsoever beyond the control of the
City. In such event, the time for the City to perform its obligations hereunder shall be
extended by that amount of time necessary to compensate for the delay.
14. INDEMNITY. Except as caused by the City's negligence, HWPI will indemnify
the City against, hold the City harmless from, and defend the City against all claims,
actions, proceedings, costs, damages, and liabilities, including attorneys' fees, arising
out of, connected with, or resulting from the Leased Property, including without limitation
the manufacture, selection, delivery, possession, use, operation, or return of such the
Leased Property.
15. DEFAULT. If HWPI fails to pay rent or any other sums to be paid by HWPI
hereunder, or if a party fails to perform any obligation required by this Lease, the party
alleged to be noncompliant shall have thirty days to cure after written notice is given by
the other party to cure. A party shall not be in default if diligently pursuing a cure that
cannot reasonably be completed within thirty days. If any default shall continue uncured
following notice of default as required by the Lease, the non -defaulting party shall have
the right to immediately terminate this Lease in addition to all other rights and remedies
provided by law or equity, cumulatively or in the alternative. Upon immediate
termination under this section, HWPI shall have thirty days to vacate the Leased
Property to allow the City to remove the same as required by Section 16 (Vacation and
Removal of Leased Property) of this Lease.
16. VACATION OF LEASED PROPERTY. On expiration or termination of this
Lease, with respect to the Leased Property, HWPI shall vacate the Leased Property to
the City in good repair, subject to normal, non -abusive use, in the following manner:
(A) HWPI shall be solely responsible for any and all damage caused by or to
the Leased Property, except normal, non -abusive use.
17. EFFECT OF WAIVER. No delay or omission to exercise any right, power, or
remedy under this Lease shall impair any such right, power, or remedy, nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence therein, or
of any similar breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default. Any waiver,
permit, consent, or approval of any kind or character of any breach or default under this
Lease, or any waiver of any provision or condition of this Lease, must be in writing and
be effective only to the extent in such writing specifically set forth. All remedies, either
under this Lease or by law, or otherwise, shall be cumulative and not alternative.
18. ATTORNEY'S FEES. In the event of any legal action filed in relation to this
Lease, each party shall bear its own legal fees and costs, including attorney's fees and
expert witness costs.
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19. NOTICES. Any communications between the City and HWPI, payments, and
notices provided herein to be given or made, may be given or made by mailing them to
the City and HWPI at the following addresses:
He Will Provide Inc.
P.O. Box 3445
Seward, Alaska 99664
City of Seward
Attn: City Clerk
P.O. Box 167
Seward, Alaska 99664
(or to such other address as either party may indicate in writing to the other party.)
20. TERMINATION. Either party may terminate this Lease prior to the expiration of
the Initial Term pursuant to the default provisions in this Lease. After the expiration of
the Initial Term, the City has the right to terminate upon the giving of written notice to
HWPI one full calendar month in advance of the date of intended termination.
21. TIME OF ESSENCE. Time is the essence of this agreement.
22. NO ASSIGNMENT. Neither this Lease nor any right or interest hereunder shall
be assigned or transferred by HWPI in any respect whatsoever without the prior written
consent of the City.
23. COMPUTATION OF TIME. The time in which any act provided by this Lease is
to be done by shall be computed by excluding the first day and including the last, unless
the last day is a Saturday, Sunday or a holiday, and then it is also excluded.
24. SUCCESSORS IN INTEREST. Each and all of the terms, covenants and
conditions in this Lease shall inure to the benefit of and shall be binding upon the
successors in interest of the City and HWPI,
25. ENTIRE AGREEMENT. This Lease contains the entire agreement of the Parties
with respect to the matters covered by this Lease, and no other agreement, statement
or promise made by any party which is not contained in this Lease shall be binding or
valid.
26. GOVERNING LAW. This Lease shall be governed by, construed and enforced in
accordance with the laws of the State of Alaska. The terms of this Lease are subject in
all respects to the Charter and Code of Ordinances of the City in effect on the effective
date of this Lease, and as they may be hereafter amended.
27. VENUE. Venue for any legal action arising out of or relating to this Lease shall
be in the Superior Court for the State of Alaska, Third Judicial District at Anchorage,
unless otherwise agreed to by the Parties. For purposes of this Lease, the City and
HWPI consent to the personal jurisdiction of such court.
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28. PARTIAL INVALIDITY. If any provision of this Lease is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of the
provisions shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
29. RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be deemed
or construed by the Parties or by any third person to create the relationship of principal
and agent or of partnership or of joint venture or of any association between the City
and HWPI; and neither the method of computation of rent, nor any other provisions
contained in this Lease nor any acts of the Parties, shall be deemed to create any
relationship between the City and HWPI other than the relationship of lessee and lessor.
30. INTERPRETATION. The language in all parts of this Lease shall in all cases be
simply construed according to its fair meaning and not for or against the City or HWPI
as both the City and HWPI have had the opportunity to seek assistance of counsel in
drafting and reviewing this Lease.
31. CAPTIONS. Captions of the articles, paragraphs and subparagraphs of this
Lease are for convenience and reference only, and the words contained therein shall in
no way be held to explain, modify, amplify or aid in the interpretation, construction or
meaning of the provisions of this Lease.
32. AMENDMENT. This Lease may not be amended except in writing executed by
both Parties.
33. COUNTERPARTS. This Lease may be signed in counterparts.
34. EFFECTIVE DATE. This Lease shall be effective upon the date of execution by
all Parties. If this Lease is signed in counterparts, the effective date shall be the date
when the last party signs and delivers this Lease.
35. AUTHORITY. The City and HWPI each represent and warrant that each has the
authority to enter into and perform this Lease, the Lease is valid and binding in
accordance with its terms, and the persons executing this Lease on behalf of the City
and HWPI are fully authorized to do so.
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Dated this day of 2013.
CITY OF SEWARD HE WILL PROVIDE INC.
ATTEST:
Mhanna KAse
CMC
City Clerk
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