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HomeMy WebLinkAboutRes1997-181 . I . I [Tabled at November 24, 1997 Meeting] Sponsored by: Gifford CITY OF SEWARD, ALASKA RESOLUTION NO, 97-181 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, APPROVING A SUBLEASE FROM THE ALASKA DEPART- MENT OF FISH AND GAME TO THE CITY OF SEWARD FOR THE SEWARD MARICULTURE RESEARCH CENTER AND SHELLFISH HATCHERY, AND APPROVING AN ASSIGNMENT OF THE SUBLEASE BY THE CITY OF SEWARD TO QUTEKCAK NATIVE TRIBE WHEREAS, the City is the owner of certain real property located in the Seward Recording District, Third Judicial District, City of Seward, State of Alaska (the "Property"), more particularly described as: All of Tract One (1), City of Seward Waterfront Tracts, as shown on the survey of same prepared by Hewitt V. Lounsbury and Associates, dated September 1, 1969; and WHEREAS, the City, as lessor, has leased the Property to the University of Alaska (the "University") as lessee, for the term from July 1, 1970 through June 30, 2069, under the conditions of that certain lease agreement dated March 7, 1991, as reflected by the Lease Memorandum recorded April 8, 1991, at Book 60, Page 776, Seward Recording District, Third Judicial District, State of Alaska (the "Lease"); and WHEREAS, the University uses the Property for the University of Alaska Fairbanks School of Fisheries and Ocean Sciences, Institute of Marine Science, Seward Marine Center; and WHEREAS, the need for a research facility and shellfish hatchery in Alaska was identified and the Chugach Regional Resources Commission proposed building a Mariculture Production Facility ("MPF") to produce seedstocks for Alaska aquatic farms and the Alaska Department ofFish and Game (the "ADF&G") proposed building a Mariculture Technical Center ("MTC") to focus on research in Seward; and WHEREAS, under a certain sublease dated October 2, 1995 (the "Sublease"), the City consented to the University's sublease of a portion of the Property (the "Site", as defined in the Sublease) to the ADF&G to construct, operate, and maintain the MPF and MTC; and WHEREAS, the MPF and MTC were constructed on the Site, and ADF&G now seeks a sublessee/operator for the MPF who will assume all responsibilities and operations for not only the MPF but also the maintenance ofthe MTC while producing high quality spat and aquatic plant seed stocks for the Alaska mariculture industry; and CITY OF SEWARD, ALASKA RESOLUTION NO. 97-181 WHEREAS, ADF&G intends to sublease to the City the Site covered by the Sublease, including the MPF and MTC and all ponds, parking areas, structures, and land on or appurtenant to the Site (collectively, the "Facility"); and WHEREAS, ADF&G is permitted to contract with the City under the authority in AS 36.30,850(c) and agrees to sublease the Facility to the City (hereinafter "Sublease II"); and WHEREAS, the City is authorized to acquire and dispose of interests in real property by means of negotiation; and WHEREAS, pursuant to Resolution No. 97-113, the City has negotiated with ADF&G a sublease of the Facility and with QNT an assignment of that sublease; WHEREAS, the City desires to assist in the development of Alaska's mariculture industry and facilitate the operation of the MPF by, in turn, assigning Sublease II to Qutekcak Native Tribe ("QNT"), a non-profit corporation located in the City. QNT has been a significant promoter of such a mariculture facility in Seward. The City has determined that assigning Sublease II to QNT to operate the Facility is in the public interest and will serve a public purpose by assisting shellfish research and development of the shellfish farming industry in Alaska and promoting jobs and economic development locally. The Facility will also complement the adjacent SeaLife Center by providing additional research and educational opportunities in Seward; and WHEREAS, the City is willing to enter into Sublease II with ADF&G and, in turn, assign such agreement to QNT, for the operation of the Facility; provided, however, that QNT agrees as the assignee and the operator, to fully assume, perform and discharge all requirements and obligations, financial or otherwise, imposed on the City through the City's sublease agreement with ADF&G for the operation ofthe Facility; and WHEREAS, QNT further agrees to comply with all terms of the Lease and Sublease relating to the underlying land supporting the Facility; and WHEREAS, the essential terms and conditions of Sublease II and the assignment of Sublease II include: a. Parties. The City is the sublessee under a sublease between ADF&G and the City. Qutekcak Native Tribe is the assignee of the sublease between ADF&G and the City; b, Term. Sublease II has an initial term of ten (10) years. Sublease II is subject to the terms ofthe Lease and Sublease relating to the underlying ground, and QNT agrees to comply with the Lease and Sublease terms; . I r CITY OF SEWARD, ALASKA RESOLUTION NO. 97-181 c. Rent. The City is not paying rent to ADF&G under Sublease II between ADF&G and the City. QNT is not paying rent to the City under the assignment between the City and QNT, QNT agrees to reimburse the City for its administration costs and legal fees relating to Sublease II and the assignment of Sublease II to QNT. QNT shall also indemnify the City for any losses or liabilities under these agreements; and d. Other Covenants. QNT shall provide a performance bond, cash deposit or other surety in favor of the City in an amount sufficient to cover operations of the Facility, including mothballing the Facility or six (6) months operations on termination of Sublease II by ADF&G. QNT shall provide the City assurances that it possesses sufficient technical and financial resources to comply with the terms ofthe assignment of Sublease II. QNT shall assume and agree to perform on behalf of the City all obligations, duties, and responsibilities of the City under Sublease II with ADF&G. QNT shall pay all operational costs, maintenance expenses, and insurance expenses for the Facility, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. Sublease II and the assignment of Sublease II, copies of which are attached as Exhibit A and B hereto and incorporated by reference, are hereby approved in substantial form, and the City Manager is authorized to sign Sublease II and the assignment of Sublease II in substantial form as attached hereto on behalf ofthe City of Seward. The City Manager may, after consultation with the City Attorney, authorize such changes in Sublease II and the assignment of Sublease II which do not materially change the terms of the transaction but which may be necessary to finalize Sublease II and the assignment of Sublease II as necessary to protect the City's interests. 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 transaction involving Sublease II and the assignment of Sublease, including, but not limited to, a lease memorandum and supporting documents necessary to protect the City's interest. The effectiveness of Sublease II and the assignment of Sublease II shall each be conditioned upon the execution and delivery of the other. Section 2. The City finds that the transactions described in this Resolution are in the public interest and that the public interest will be served by the City acquiring a sublease of the Facility and assigning Sublease II to QNT, a local non-profit corporation, to assist shellfish research and CITY OF SEWARD, ALASKA RESOLUTION NO. 97-181 development of the shellfish industry in Alaska and to promote jobs and economic development locally. The City also finds that Sublease II and assignment of Sublease II for less than appraised value during the ten-year term is in the public interest and the public interest will be served by so doing because the Facility is owned by the ADF&G and neither the City nor QNT is obligated to pay rent. The Facility will also complement the adjacent SeaLife Center by providing additional research and educational opportunities in Seward. Section 3, The City finds that it is in the public interest to complete the transactions described in this Resolution without completing a City appraisal of the Facility subject to Sublease II because the City previously leased the Property to the University and the City does not own the Facility or other improvements located on the Site and no lease payments are being paid by or received by the City as part of this transaction. 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 day of , 1997. CITY OF SEWARD, ALASKA Lowell R. Satin, Mayor AYES: NOES: ABSENT: ABSTAIN: ATTEST: Patrick Reilly, City Clerk (City Seal)