Chapter 20.20
LAND SALE

Sections:

20.20.010    Policy.

20.20.020    Mayor authorized to sell borough land.

20.20.030    Terms of the land sale.

20.20.040    Notice of the borough land sale.

20.20.050    Tax foreclosure sale.

20.20.060    Auction sale.

20.20.070    Lottery sale.

20.20.080    Over-the-counter sale.

20.20.090    Direct sale.

20.20.100    Exchange sale.

20.20.110    Cooperative sale.

20.20.120    Combination sale.

20.20.130    Conveyance of the land.

20.20.140    Statement of expenses and revenues.

20.20.150    Release of agricultural covenants and restrictions.

20.20.010 Policy.

It is the intent and goal of the borough to offer for sale to the general public for fair market value, except as provided by FNSBC 20.20.030(C), all patented, unretained, general grant lands. (Ord. 86-056 § 2, 1986. 2004 Code § 25.15.010.)

20.20.020 Mayor authorized to sell borough land.

A. The mayor may sell unretained borough land according to the terms fixed by the assembly by ordinance except that the mayor shall not sell approved but unpatented general grant land without fully disclosing the unpatented status of the land to the purchaser and without obtaining the consent of the State of Alaska Director of Lands, Department of Natural Resources. The ordinance shall identify and disclose any known existing mining claims on the property and other known third party interests impacting or impacted by the proposed sale, and indicate whether the borough has notified the proposed buyer of the claims or interests.

B. The mayor shall not sell borough land to a person who is delinquent in the payment of any tax, debt or obligation owed to the borough.

C. Without specific approval by ordinance the borough shall not develop or otherwise subdivide borough land for the purpose of public sales if the development or subdivision would require the borough to construct roads. (Ord. 2015-56 § 3, 2016; Ord. 2013-85 § 9, 2013; Ord. 86-056 § 2, 1986. 2004 Code § 25.15.020.)

20.20.030 Terms of the land sale.

A. The assembly shall by ordinance fix the terms of all sales of borough land. The ordinance shall contain the date of the sale, the method or methods of sale, the manner in which payment is to be made, the interest to be conveyed, the instrument of conveyance to be used, and any other term the assembly deems appropriate.

B. The assembly may authorize payment to be made over time only if:

1. The down payment, payment schedule and rates of interest are reasonable; and

2. The period for total payment does not exceed 10 years, or 20 years if the land is sold for agricultural use.

C. The assembly may authorize the mayor to sell land for less than fair market value only if the land is to be offered for sale at an auction, or if the ordinance authorizing the sale contains:

1. A finding that the sale for less than fair market value is in the best interests of the borough;

2. A statement of the facts on which the finding is based; and

3. The period of time during which the offer may be accepted.

D. If the assembly requires a prospective buyer to pay to the borough a down payment, bond or other deposit, and if the prospective buyer breaches a term of the sale, then the borough shall retain as liquidated damages the prospective buyer’s down payment, bond or other deposit.

E. The assembly may authorize a land development incentive as part of the terms of a land sale as follows:

1. Within a three-year period following the date of closing, a purchaser shall be eligible to receive a 10 percent discount on the remaining principal balance owed on the parcel if:

a. The current assessed value of the improvements constructed on the parcel as shown on the borough property tax assessment equals or exceeds (i) $25,000 in the case of designated recreational parcels, or (ii) $50,000 in the case of designated residential or commercial parcels; or

b. The promissory note and deed of trust are satisfied in full through the approval of construction financing in an amount equal to or exceeding (i) $25,000 in the case of designated recreational parcels, or (ii) $50,000 in the case of designated residential or commercial parcels.

2. The purchaser shall be responsible for providing evidence to the borough to obtain the development incentive. (Ord. 97-005 § 2, 1997; Ord. 86-056 § 2, 1986. 2004 Code § 25.15.030.)

20.20.040 Notice of the borough land sale.

The mayor shall cause notice of a borough land sale to be published four times in the 30-day period immediately preceding the date of the sale. The notice shall contain a brief description of the land, the general location of the land and the terms of the sale as fixed by the assembly by ordinance. (Ord. 2016-40 § 103, 2016; Ord. 86-056 § 2, 1986. 2004 Code § 25.15.040.)

20.20.050 Tax foreclosure sale.

Notwithstanding conflicting provisions of this title, the mayor shall sell and manage tax foreclosed property according to the requirements of AS 29.45 and Chapter 8.24 FNSBC. (Ord. 86-056 § 2, 1986. 2004 Code § 25.15.050.)

20.20.060 Auction sale.

The assembly may by ordinance authorize the mayor to sell borough land by the use of either an outcry or sealed bid public auction. The mayor shall sell the land to the highest bidder who performs all the terms of the sale. The mayor may promulgate rules and regulations for conducting an auction. (Ord. 86-056 § 2, 1986. 2004 Code § 25.15.060.)

20.20.070 Lottery sale.

The assembly may by ordinance authorize the mayor to sell borough land by the use of a lottery. Only natural persons may participate in a lottery sale. A natural person may purchase by lottery only one parcel of borough land every three years. In order to ensure the fair and equitable disposal of borough land to the public, the assembly may by ordinance impose additional limits on the number of parcels a person may buy from lottery sales. The mayor may promulgate rules and regulations for conducting a lottery. (Ord. 86-056 § 2, 1986. 2004 Code § 25.15.070.)

20.20.080 Over-the-counter sale.

A. The assembly may by ordinance authorize the mayor to sell borough land by the use of over-the-counter sales if the land was offered for sale at an auction or lottery and the land did not sell at the auction or lottery. Land offered for sale over-the-counter may be purchased on a first-come, first-served basis at the division of land management. The mayor may promulgate rules and regulations for conducting an over-the-counter sale.

B. The division of land management shall periodically review the terms of sale of all land offered for sale over-the-counter and shall:

1. Adjust rates of interest to reflect the prevailing market conditions, provided the rate of interest shall be not more than six percentage points above nor less than two percentage points above the prevailing Federal Reserve discount rate to member banks.

2. Adjustments in the price of any lot offered in the over-the-counter sale shall be made by the manager of the division of land management. Price adjustments shall be made only under the guidance of an independent fee appraiser. The assembly shall be informed of the substance of the price adjustments made by the division of land management as the adjustments occur. Independent fee appraisals may be obtained by the division of land management at any time. (Ord. 2013-85 § 10, 2013; Ord. 99-020 § 12, 1999; amended during 1993 republication; Ord. 88-009 § 2, 1988; Ord. 86-072 § 2, 1986; Ord. 86-056 § 2, 1986. 2004 Code § 25.15.080.)

20.20.090 Direct sale.

A. The assembly may by ordinance authorize the mayor to sell borough land directly to the owner of land adjoining the borough land if there is no public use for the land and if:

1. The land has no legal or physical access and the cost of developing access would be greater than the resulting value of the parcel with access; or

2. The cost of surveying, platting, or taking other action necessary to establish an acceptable legal description would exceed the value of the property; or

3. The land is of such a size or shape as to be illegal or unfeasible to develop as an independent parcel under the applicable land use ordinances.

B. As a condition of sale, the deed conveying the borough land shall contain a provision prohibiting the property from being sold unless and until it is incorporated into the adjoining property through all applicable borough ordinances. (Ord. 2006-14 § 2, 2006; Ord. 86-056 § 2, 1986. 2004 Code § 25.15.090.)

20.20.100 Exchange sale.

The assembly may by ordinance authorize the mayor to exchange borough land but only if the ordinance authorizing the exchange sale contains a finding that the exchange sale is in the best interests of the borough and a statement of the facts on which the finding is based. (Ord. 86-056 § 2, 1986. 2004 Code § 25.15.100.)

20.20.110 Cooperative sale.

The assembly may by ordinance authorize the mayor to develop and sell borough land in cooperation with a person or a public agency. This cooperation may include, but is not limited to, the sale of borough land subject to a preliminary subdivision plat, the sale to a private developer of borough land subject to a development contract, or a land disposal in cooperation with a public agency. A cooperative sale shall be conducted according to the bidding requirements of FNSBC Title 16, unless the cooperative sale is in cooperation with a public agency. (Ord. 86-056 § 2, 1986. 2004 Code § 25.15.110.)

20.20.120 Combination sale.

The assembly may by ordinance authorize the mayor to sell borough land by the use of any combination of the methods authorized by this chapter. (Ord. 86-056 § 2, 1986. 2004 Code § 25.15.120.)

20.20.130 Conveyance of the land.

A. After the buyer has paid to the borough the payments required by ordinance, the mayor shall execute the instrument of conveyance authorized by ordinance that transfers the land or the interest in land to the buyer.

B. An instrument conveying land for agricultural use shall contain restrictions that:

1. Restrict the use to agricultural use; and

2. Prohibit subdivision. (Ord. 86-056 § 2, 1986. 2004 Code § 25.15.130.)

20.20.140 Statement of expenses and revenues.

At the conclusion of each sale of borough land, the mayor shall deliver to the assembly a written statement that sets forth the expenses of conducting the sale and the revenues derived or to be derived from the sale. (Ord. 86-056 § 2, 1986. 2004 Code § 25.15.140.)

20.20.150 Release of agricultural covenants and restrictions.

Current owners of land sold by the borough, the title to which is subject to agricultural covenants and restrictions, may make application to the mayor to have the borough release by conveyance those covenants and restrictions (hereinafter “restrictions”) subject to the following procedure:

A. Application. The owner shall apply using a form provided by the borough for release of the restrictions. The application should include the legal description of the property involved and be accompanied by the appropriate application and processing fee. The owner shall agree to be bound by procedures herein outlined.

B. Title Report. The owner shall provide the borough with a preliminary commitment for title insurance which lists any other parties with an interest in the property which could be affected by the proposed release. The borough will review the preliminary commitment and may require the applicant to secure a nonobjection to the proposed release by the listed party. The borough will not process an application where a listed party objects to the release.

C. Appraisal. Upon direction from the borough the owner will secure, at the owner’s cost, a fair market value appraisal of the property completed by an appraiser licensed by the state of Alaska. The purpose of the appraisal will be to determine the difference between the fair market value of the property in its present state, i.e., subject to the restrictions, and the value of the property with the restrictions released. If an owner holds title to more than one adjacent parcel, a single appraisal may be secured to determine the value of each parcel.

1. The borough will review the appraisal and if it is acceptable proceed with the release process.

2. If the borough has questions or disagrees with the value determination it may offer additional evidence to the owner to resolve any difference of value.

3. After reviewing the borough’s information, the owner and the borough agree upon a new value, then the release process may continue.

4. If the applicant and the borough cannot come to agreement on value the borough will secure a second appraisal at its own cost. The borough’s values and the applicant’s value will then be averaged to determine the selling price.

5. If at any time the applicant decides that the value(s) determined by the above process is unacceptable they may withdraw from the process and terminate their application. No paid fees will be refunded.

D. Conveyance. After the applicant has paid to the borough the value difference determined through the appraisal process described in subsection (C) of this section, the mayor shall execute the deed releasing and conveying the covenants and restrictions to the owner. Cost of recording shall be borne by the applicant. (Ord. 2012-36 § 2, 2012. 2004 Code § 25.15.150.)