Chapter 16.08
TIDELAND LEASES1

Sections:

16.08.010    Scope.

16.08.020    Definitions.

16.08.030    Applications.

16.08.040    Appraisal – Required improvements.

16.08.050    Fair rental value to be used for leases – Exceptions.

16.08.060    Notice of publication.

16.08.070    Terms of lease – Renewal period.

16.08.080    Leases to be by negotiation.

16.08.090    Right of borough assembly to reject lease proposal.

16.08.100    Approval of leases.

16.08.110    Payment of annual rentals.

16.08.120    Adjustment of annual rentals.

16.08.130    Utilization of leased property.

16.08.140    Subleasing and assignment of leases.

16.08.150    Modification of leases.

16.08.160    Cancellation or forfeiture of leases – Generally.

16.08.170    Preference rights to release.

16.08.180    Removal or reversion of improvements upon termination of lease.

16.08.190    Giving notices and demands.

16.08.200    Compliance and regulations.

16.08.210    Reservation of rights-of-way.

16.08.010 Scope.

This chapter pertains to the leasing of borough-owned tidelands and to the responsibilities of the borough manager and borough assembly with respect thereto. The intent of this chapter is to ensure equitable leasing of borough-owned tidelands in such manner as will encourage development for its highest and best use in the borough. All tidelands to which the borough holds title, or to which the borough may become entitled, may be leased as provided in this chapter. [Ord. 990 § 2, 2021.]

16.08.020 Definitions.

For the purposes of this chapter, the following words and phrases shall have the meanings respectively ascribed to them by this section:

“Borough tidelands” means all those lands which are periodically covered by tidal waters between the elevations of mean high and mean low tides, together with such additional lands as may be conveyed by the state to the borough as tidelands.

“Fair rental value” means the rent computed from the appraised fair market value of the land, and such term shall mean the highest price, described in terms of money for which the property would rent, if exposed for rent for a reasonable time in the open market, with an owner willing but not forced to rent and a renter willing but not forced to rent, both being fully informed of all the purposes for which the property is best adapted or could be used.

“Lease” means a surface lease issued or held pursuant to this chapter and any other ordinances of the borough.

“Regulations” means the leasing regulations of this chapter as well as other pertinent regulations promulgated by the borough. [Ord. 990 § 2, 2021.]

16.08.030 Applications.

A. A person seeking a lease for borough-owned tidelands (or submerged lands) shall file an application with the borough clerk’s office. A nonrefundable processing fee of $100.00 shall be paid to the borough at the time of filing. Applications for tidelands leases shall be submitted to the planning and zoning and port commissions before being presented to the borough assembly for consideration.

B. Along with the application for lease of tidelands, a development plan must be submitted for review by the planning and zoning and port commissions.

1. Development Plan. A development plan that includes and is consistent with plans required by other agencies involved in the development process. The development plan shall include:

a. A description of the proposed use for the tidelands, submerged land, and adjacent uplands; and

b. A description of the improvements that will be placed on the tidelands, submerged land, and adjacent uplands; and

c. The dates by which construction will begin and will be completed; and

d. The estimated cost of the improvements that will be placed on the tidelands, submerged lands, and adjacent uplands; and

e. A description of the effects that the proposed use of the tidelands, submerged lands, and adjacent uplands will have on public streets, public facilities, public services, public utilities, traffic, and parking. The description shall include a plan for mitigating adverse effects on streets, public facilities, public services, public utilities, traffic congestion, and parking, and a plan for paying the costs thereof; and

f. The names and addresses of the owners, officers, and proposed managers.

The development plan shall describe how the applicant will fulfill the terms of any permits or approvals required by the City and Borough of Wrangell. The applicant shall provide such additional information, including designs and specifications, as the planning and zoning and port commissions may request. The planning and zoning and port commissions may require the applicant to amend its development plan. All fees associated with the lease shall be paid by the applicant. Such fees include but are not limited to an application fee, survey, assessment, public notices, and recording fees. [Ord. 990 § 2, 2021.]

16.08.040 Appraisal – Required improvements.

A. No tidelands shall be leased, or a renewal lease issued therefor, unless the same has been appraised within six months prior to the date fixed for beginning of the term of the lease or renewal lease. No land shall be leased for an annual rent less than six percent of the appraised value of the land and any improvements thereon owned by the borough.

B. Upon the filing of an application for a lease of a parcel of classified tidelands and the deposit of the costs estimated by the borough clerk, the borough assessor shall cause the tract, and any improvements thereon owned by the borough, to be appraised at their fair market value. If the borough assessor is unable to provide an appraisal, the services of a professional appraiser licensed in the state of Alaska may be used. The appraisal shall be transmitted by the assessor or appraiser to the assembly which shall review the same and determine the appraised value of the tract and improvements thereon owned by the borough. Facilities for supplying utility services shall not be considered as such improvements. The assembly shall determine the annual rental as six percent of the appraised value and shall determine any limitations, reservations, requirements, or special conditions to be included in the lease.

C. Each lease shall contain a requirement that the lessee construct improvements suitable for the use of which the land is classified of a specified minimum value within two years from the date of the lease and that a Corps of Engineers permit shall be obtained prior to construction when required. Improvements in the limited context of the tidelands leasing provisions may include a parking lot with fill or surfacing, drainage, ingress and egress as the assembly shall require. The applicant shall be notified of the amount of the minimum annual rental and the value of the improvements required to be constructed thereon. [Ord. 990 § 2, 2021.]

16.08.050 Fair rental value to be used for leases – Exceptions.

Except as otherwise stated in this chapter, no tidelands of the borough shall be leased for less than the fair rental value thereof. Notwithstanding the preceding provisions, the borough may lease tidelands for less than the fair rental value to any state or federal agency, nonprofit organization, or new industries, as defined in AS 29.10.132, if such lease is determined by the borough assembly to be fair and proper and in the best interest of the public. The determination of the fair rental value of tidelands, as determined by the borough assembly, shall be conclusive in the absence of fraud. [Ord. 990 § 2, 2021.]

16.08.060 Notice of publication.

Once the planning and zoning and port commissions have both taken action on the application to go before the borough assembly, the borough clerk will cause a notice of tidelands lease application to be published for three consecutive weeks before final action of the borough assembly to approve or reject the tidelands lease. The publication shall be published in the newspaper at least two times, with the final publication at least one week prior to the final action on the application. The notice shall identify the applicant, the location of the proposed lease, and the proposed use. The notice shall state that anyone wishing to protest the lease must file a written protest with the borough clerk not later than a date identified in the notice. Such protest shall be in writing and shall state all reasons for the protest. Failure to timely protest as required by this subsection shall constitute a waiver of any right to lease or use the location and shall waive any right to contest the awarding of the lease. No sooner than one week after the date set for receipt of protests, the borough manager shall submit to the borough assembly a report and recommendation on each protest timely received by the borough. No lease shall be approved by the assembly until the borough manager’s report has been submitted to the assembly.

Additionally, the borough clerk shall mail notice to the owners, as shown on the borough tax rolls, of upland property within a radius of at least 1,200 feet of the shore-side boundary of the tidelands or submerged lands to be leased. Such notice will not be sent to the applicant if the applicant is the owner of some of the upland property. [Ord. 990 § 2, 2021.]

16.08.070 Terms of leases – Renewal periods.

Leases under this chapter may be issued for a maximum initial period of 21 years, and may provide for not more than six, five-year renewal options. The assembly will approve or reject the negotiated lease. No rights to new leases or new use of tidelands or submerged lands may arise until the assembly approves a final written lease. Nothing in this chapter requires the borough assembly to accept any lease. [Ord. 990 § 2, 2021.]

16.08.080 Leases to be by negotiation.

Leases may be negotiated by the borough manager or their designee with any person making application for the lease of tidelands, but no lease shall be consummated and executed until the borough assembly has satisfied itself that the lease of such property is in the long range interest of the borough, that such lease has been negotiated fairly and impartially and without favoritism and that the terms of the lease adequately protect the borough, including the receipt of an annual rental reflecting the true value of the premises leased. [Ord. 990 § 2, 2021.]

16.08.090 Right of borough assembly to reject lease proposal.

The borough assembly shall be under no obligation to accept any lease proposal but shall evaluate all proposals under the criteria set forth in this chapter and accept or reject leases based on such evaluations. [Ord. 990 § 2, 2021.]

16.08.100 Approval of leases.

All leases of borough-owned tidelands shall be submitted for the approval of the borough attorney as to legal sufficiency and to form and to the borough assembly for determination as to whether or not the lease should be issued. The decision to lease property shall be made by motion duly passed in regular or special session of borough assembly. In determining whether or not a lease should be issued both the planning and zoning and port commissions shall take action on a recommendation, the reports of which shall accompany the request that goes to the borough assembly for consideration. If the borough assembly finds additional information is required, the borough assembly may consult with the planning and zoning or port commission as to the advisability of any particular lease. [Ord. 990 § 2, 2021.]

16.08.110 Payment of annual rentals.

Annual rental in amounts up to and including $250.00 shall be paid on an annual basis. Annual rentals in amounts exceeding $250.00 shall be paid in annual, quarterly, or monthly installments as provided for in the lease. All rentals shall be paid in advance. [Ord. 990 § 2, 2021.]

16.08.120 Adjustment of annual rental.

All leases shall stipulate that the annual rental payment shall be subject to adjustment on the fifth anniversary of the date of the lease and each fifth anniversary date thereafter. All adjusted rates shall be computed at six percent of the fair market value of the land and improvements owned by the borough and leased thereunder. Such value shall be determined by an appraisal made by the borough assessor, or private appraiser, and determined by the assembly as provided in WMC 16.08.040. [Ord. 990 § 2, 2021.]

16.08.130 Utilization of leased property.

Leases shall be utilized solely for the purposes within the scope of the lease. Development for other use without the express consent of the borough assembly shall constitute a violation of the lease. The borough assembly shall require a development plan to be submitted and followed by the lessee. Failure to develop the land consistent with the development plan constitutes grounds for cancellation of the lease at the option of the borough assembly. [Ord. 990 § 2, 2021.]

16.08.140 Subleasing and assignment of leases.

No lessee of city tidelands shall sublease or assign their lease or any interest therein without the prior written consent of the borough assembly. Consent to sublease or assign shall not be unreasonably withheld, but shall be granted in all cases, where the borough assembly finds that the assignment or sublease will not be detrimental to the interest of the borough in the development of borough tidelands. [Ord. 990 § 2, 2021.]

16.08.150 Modification of leases.

No lease under this chapter may be modified orally or in any manner other than by a lease amendment approved by the borough assembly and signed by all parties thereto or their respective successors in interest. [Ord. 990 § 2, 2021.]

16.08.160 Cancellation or forfeiture of leases – Generally.

A. Leases in good standing may be canceled in whole or in part at any time upon written agreement between the lessee and the borough.

B. If the lease should be terminated because of any breach by the lessee, as provided in this chapter, the annual rental payment last made by the lessee shall be forfeited and retained by the lessor.

C. A lease may be canceled if the leased premises are used for any unlawful purpose.

D. If the lessee shall be in default in the performance, observance, or conditions of any of the lease terms, covenants, or stipulations thereto, or of valid regulations enforced, the borough manager may immediately take appropriate action, including but not limited to cancellation of the lease. No improvements may be removed during any time the lessee is in default. [Ord. 990 § 2, 2021.]

16.08.170 Preference rights to release.

A lessee under this chapter, under an existing lease, shall upon expiration of the lease be allowed a preference right to release those lands previously leased by them, if all of the factors are substantially equivalent, unless it shall be determined by the borough that the renewal of such lease is not in the best interest of the borough. [Ord. 990 § 2, 2021.]

16.08.180 Removal or reversion of improvements upon termination of lease.

Improvements owned by a lessee on borough tidelands shall be removed by him or her within 60 days after termination of the lease for any cause; provided, that such removal will not cause injury or damage to the land; and that the borough manager may extend the time for removing such improvements in cases where hardship is shown. The retiring lessee may, with the consent of the borough manager, sell their improvement to the succeeding lessee. [Ord. 990 § 2, 2021.]

16.08.190 Giving of notices and demands.

Any notice or demand which must be given under the terms of a lease under this chapter may be given, in writing, by registered or certified mail addressed to the other party at the address shown on the lease. Notice shall be deemed given when deposited in the United States postal receptacle. [Ord. 990 § 2, 2021.]

16.08.200 Compliance with regulations.

The lessee shall comply with all regulations or ordinances which any proper public authority shall promulgate for the promotion of sanitation and fire protection and shall comply with all building and zoning codes. The lessee’s premises shall be opened for inspection by authorized representatives of the borough at all reasonable times. [Ord. 990 § 2, 2021.]

16.08.210 Reservation of rights-of-way.

The borough expressly reserves the right to grant easements or rights-of-way across leased land if it is determined in the best interest of the borough to do so. The lessee whose land such easements cross shall be entitled to damages for all improvements destroyed or damaged. [Ord. 990 § 2, 2021.]


1

For statutory provisions on borough tideland leases, see AS 38.05.820(b)(7).