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HomeMy WebLinkAboutRes1997-161 . I r , Sponsored by: Gifford CITY OF SEWARD, ALASKA RESOLUTION NO. 97-161 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AWARDING A LEASE AND OPTION TO PURCHASE TO CHUGACH ALASKA CORPORATION OF THE SEWARD HISTORIC RAILROAD DEPOT BUILDING WHEREAS, the City advertised requests for proposals for the lease and renovation of the Seward Historic Railroad Depot Building (the "Depot") located on Lot 1, Waterfront Tracts, according to the official plat thereof, filed under Plat No. 95-13, in the records of the Seward Recording District, Third District, State of Alaska; and WHEREAS, the City awarded a 180-day exclusive right to negotiate ("ERN") lease of the Depot jointly to Chugach Alaska Corporation ("CAC") and Qutekcak Native Tribe ("QNT") pursuant to Resolution No. 97-007 on January 13, 1997; and WHEREAS, in spite of an extension of time to allow CAC and QNT to reach agreement, CAC and QNT were unable to complete negotiations for a joint agreement and the ERN expired without resulting in a lease agreement for the Depot; and WHEREAS, the City desires the Depot to be occupied by a responsible party who will renovate the Depot, maintain the Depot's listing on the National Register of Historic Places, and use the Depot for purposes including interpretation of local transportation history and pioneer culture and as a Native cultural center; and WHEREAS, the City is authorized to dispose of interests in its real property by means of auction, sealed bid or negotiation; and WHEREAS, pursuant to Resolution No. 97-153, the City has negotiated with CAC whereby CAC is willing to enter into an agreement to lease (the "Lease") the property on a long-term basis with an option to purchase at a current appraised value of $275,000.00; and WHEREAS, the option to purchase expires September 30, 2002 and is contingent upon CAC completing certain renovations and improvements by May 1, 1998 and September 30, 1998; and WHEREAS, if the option to purchase is exercised by CAC and the City rejects Lessee's purchase ofthe Depot, the City shall instead permit CAC the option to extend the lease term for an additional 20 year period at the end of its initial lease term; and WHEREAS, it is the intent of CAC and the City that if the property, during the lease term or following purchase of the Depot, is not used as described in the Lease or does not remain listed on the National Register of Historic Places, that the ownership of the Depot and land shall revert back to the City; and CITY OF SEWARD, ALASKA RESOLUTION NO. 97-161 WHEREAS, the City has found it in the public interest to enter into the Lease and to convey the fee interest in the property through the option to purchase contained in the Lease to CAC pursuant to the terms of that certain Lease Agreement between the City and CAC, attached in substantial form hereto as Exhibit A and incorporated herein by reference; and WHEREAS, the City has found it in the public interest to make such conveyance without requiring a City appraisal of the property because under the terms of the Lease the potential uses for the property are limited, and the highest and best use of the property has not been determined by means of a City appraisal and that in addition to the cash consideration to be paid to the City, there is value to the community in potential increased local employment and tourism relating to the Depot; and WHEREAS, CAC did obtain an appraisal of the Depot on its own that determined the Fair Market Value ofthe Depot and land to be $275,000, and the City accepts that appraised value as a reasonable value for the Depot and land in its present condition; and WHEREAS, if CAC completes certain renovations and improvements by May 1, 1998 and September 30, 1998, rent otherwise payable through September 30, 2002 will be waived, and the City has found it in the public interest to waive such rent during that period because substantial renovations and Capital Improvements are to be made to the Depot in the amount of $500,000, and the renovated Depot may benefit the community by increased employment and tourism; WHEREAS, if the conditions for waived rent are not met, rent will be paid as established by the terms of the Lease, and rent will be adjusted at five year intervals to Fair Market Value following the waived rent period; WHEREAS, the essential terms and conditions of the lease with option to purchase include: Lessee -- Chugach Alaska Corporation, an Alaskan Native Regional Corpora- tion; Term -- Lease to terminate September 30, 2017. Option to extend for an additional 20 year period; Rent -- If certain construction and capital investment requirements are satisfied, annual rent will be waived through September 30, 2002. If the requirements are not met, the initial annual rent will be $22,000 (8% ofCAC's current appraisal of $275,000). Annual rent to be paid by quarterly payments. Annual rent to be adjusted to 8% of the ap- . I , , CITY OF SEWARD, ALASKA RESOLUTION NO. 97-161 praised fair market value of the Depot and land at 5 year intervals beginning July 1,2000; Option to Purchase -- If the requirements for construction and capital investment are met, CAC shall have the option to purchase the leased land until Septem- ber 30, 2002, at its current appraised value of $275,000. If City rejects the option to purchase, CAC shall have the option to extend the lease for 20 years beyond the end ofthe first lease term; Covenants -- (a) Renovations and construction to be substantially complete and the Depot open to the public by May 1, 1998, All remaining renovations and construction to be completed by September 30, 1998, Depot to remain on National Register of Historic Places, and If the option to purchase is exercised, the quit claim deed will restrict the use of the property to the uses described in the Lease and will require that the property be maintained on the National Register of Historic Places; and (b) (c) (d) WHEREAS, the remaining terms and conditions are as set forth in the Lease attached hereto as Exhibit A and incorporated herein by reference. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The Lease Agreement with option to purchase between CAC and the City, a copy of which is attached as Exhibit A hereto and incorporated by reference, is hereby approved in substantial form, and the City Manager is authorized and directed to sign the Lease Agreement in substantial form as attached hereto on behalf of the City of Seward. The City Manager may, after consultation with the City Attorney, authorize such changes in the Lease Agreement which do not materially change the terms of the transaction but which may be necessary to finalize the lease transaction and complete any closing related to the purchase option contained therein. The City Manager is also authorized to agree to and sign such other documents on behalf of the City as are necessary to complete the lease transaction and purchase option as described in the Lease, including, but not limited to, a lease memorandum and documents necessary to complete a properly exercised option to purchase such as a quit claim deed and the closing instructions. Section 2. Rent shall be waived through September 30, 2002 if certain development conditions of the Lease are met, including (i) CAC completing the renovation of the Depot and construction of Capital Improvements sufficiently to open the Depot to the public by May 1, 1998; (ii) CAC to complete all remaining renovation and construction by September 30, 1998; and (iii) CITY OF SEWARD, ALASKA RESOLUTION NO. 97-161 CAC expending at least $500,000 no later than September 30, 1998 to complete such Capital Improvements. The City finds that the transactions described in this Resolution are in the public interest and that the public interest will be served by leasing the property for less than appraised value during the waived rent period because CAC will invest in substantial improvements to the Depot and land and the renovated Depot may provide local business and employment opportunities as well as promote tourism in the community. The proposed use of the Depot by CAC will also benefit the public interest through the interpretation of local transportation history and Native culture. Section 3. The City finds that it is in the public interest to complete the transaction described in this Resolution without completing a City appraisal because CAC has already obtained a recent appraisal determining the Fair Market Value of the Depot and land to be $275,000, and because of the City imposed restrictions on the use of the Depot, further appraisals of the Depot appear unnecessary. The City hereby accepts the CAC obtained appraisal of $275,000 to be the reasonable value of the Depot and land as of the effective date of the lease and for the purchase option. Section 4. This resolution shall take effect 30 days after passage and posting as required by Seward City Code. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 13th day of October, 1997. AYES: NOES: ABSENT: ABSTAIN: Anderson, Bencardino, Clark, Keil, King None Crane Blatchford ATTEST: '\ Patrick Rein~...-{ ....'; 'A '.' ~&' ... . '~ ~~ City Cler~ C; ...~or.? J...... <) ..:;, CIIt . ....} o=~. '" ,-; .-.:::: ___ '0... ~, (City Seii)e ( Si!]iili 1 0 ~ ~~ ~ i ~ ,\aJ -.. .........- .: ,'.,." \. ' '"'. v, cv . ~f \;. Q.)..~~ '~,',.I....., ,\Cj~......L'-~ /4 ~"" ~,).. ,: I J s.- -S-!tIt ')~ '~,' ,-'<If, ..~.~, v." C.,) ~~ 'of., 't"~" ":S?:::Y