Chapter 16.10
REAL PROPERTY LEASES
Sections:
16.10.040 Appraisal – Required improvements.
16.10.060 Notice of publication.
16.10.070 Terms of leases – Renewal periods.
16.10.080 Leases to be by negotiation.
16.10.110 Payment of annual rentals.
16.10.120 Adjustment of annual rental.
16.10.130 Utilization of leased property.
16.10.140 Subleasing and assignment of leases.
16.10.160 Cancellation or forfeiture of leases – Generally.
16.10.170 Preference rights to re-lease.
16.10.180 Removal or reversion of improvements upon termination of lease.
16.10.190 Giving of notices and demands.
16.10.200 Compliance with regulations.
16.10.210 Reservation of rights-of-way.
16.10.010 Scope.
This chapter governs the procedure for leasing borough-owned real property, excluding tidelands which are subject to the procedures in Chapter 16.08 WMC. The intent of this chapter is to ensure equitable leasing of borough-owned real property in such manner as will encourage development, maximize the value of borough assets, and provide for the highest and best use of borough real property. All real property to which the borough holds title, or to which the borough may become entitled, may be leased as provided in this chapter. [Ord. 1046 § 2, 2023.]
16.10.020 Definitions.
For the purposes of this chapter, the following words and phrases shall have the meanings respectively ascribed to them by this section:
“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 lease 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 borough ordinances.
“Regulations” means the leasing regulations of this chapter as well as other pertinent regulations promulgated by the borough. [Ord. 1046 § 2, 2023.]
16.10.030 Applications.
A. A person or entity seeking a lease for borough-owned real property 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 real property leases shall be submitted to the borough manager and the planning and zoning commission for review before being presented to the borough assembly for consideration.
B. Along with the application for the lease of real property, a development plan must be submitted for review.
1. Development Plan. The development plan shall include:
a. A description of the proposed use for the real property; and
b. A description of the improvements that will be placed on the real property; 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 real property; and
e. A description of the effects that the proposed use of the real property may 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 additional information, including designs and specifications, as the borough manager or the planning and zoning commission may request. The applicant may be required 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. 1046 § 2, 2023.]
16.10.040 Appraisal – Required improvements.
A. No real property 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. Real property shall be leased for an annual rent of six percent of the appraised value of the land and any improvements thereon owned by the borough. State or federal agencies and nonprofit organizations that lease property from the borough may be exempt from this requirement.
B. Upon the filing of an application for a lease of a parcel of classified real property and the deposit of the costs estimated by the borough clerk, the borough shall cause the tract, and any improvements thereon owned by the borough, to be appraised at their fair market value. The borough may use a professional appraiser licensed in the state of Alaska to complete the appraisal. The appraisal shall be transmitted by the appraiser to the borough 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. [Ord. 1046 § 2, 2023.]
16.10.060 Notice of publication.
Following review of the application by the planning and zoning commission, the borough assembly shall review and decide upon the application at a public hearing. The borough clerk will cause a notice of lease application to be published for three consecutive weeks before the public hearing. 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 land use. The notice shall state that anyone wishing to protest the lease must file a written protest with the borough clerk not later than the 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 section shall waive any right to contest the lease application. 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.
All property owners within 300 feet shall be notified by mail regarding the public hearing. [Ord. 1046 § 2, 2023.]
16.10.070 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 lease renewal options. [Ord. 1046 § 2, 2023.]
16.10.080 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 real property, 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. 1046 § 2, 2023.]
16.10.100 Approval of leases.
All leases of borough-owned real property 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 real property shall be made by motion duly passed in regular or special session of borough assembly, following the public hearing regarding the lease application. A report and recommendation from the planning and zoning commission shall accompany the request that goes to the borough assembly for consideration. If the borough assembly determines additional information is required, it may consult with the planning and zoning commission regarding the lease application. [Ord. 1046 § 2, 2023.]
16.10.110 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. [Ord. 1046 § 2, 2023.]
16.10.120 Adjustment of annual rental.
All leases shall stipulate that the annual rental payment shall be subject to adjustment every five years to reflect the current fair market value of the leased property. The fair market value of the leased property shall be determined as provided by WMC 16.10.040. [Ord. 1046 § 2, 2023.]
16.10.130 Utilization of leased property.
Leases shall be utilized solely for the purposes within the scope of the lease. Development for other use or failure to develop the land consistent with an applicable development plan without the express consent of the borough assembly shall constitute a violation of the lease. [Ord. 1046 § 2, 2023.]
16.10.140 Subleasing and assignment of leases.
No lessee of borough-owned real property 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 interests of the borough. [Ord. 1046 § 2, 2023.]
16.10.150 Lease amendments.
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. 1046 § 2, 2023.]
16.10.160 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, the rental payment last made by the lessee shall be forfeited and retained by the lessor.
C. The borough may cancel a lease 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. 1046 § 2, 2023.]
16.10.170 Preference rights to re-lease.
A lessee under this chapter, under an existing lease, shall upon expiration of the lease be allowed a preference right to renew the lease, unless the borough determines that the renewal is not in the best interest of the borough. [Ord. 1046 § 2, 2023.]
16.10.180 Removal or reversion of improvements upon termination of lease.
A lessee’s improvements on borough-owned real property shall be removed by the lessee within 60 days after termination of the lease for any cause; provided, that such removal will not cause injury or damage to the land. The borough manager may extend the time for removing such lessee improvements. With the consent of the borough manager, a lessee may sell their improvement to a succeeding lessee. [Ord. 1046 § 2, 2023.]
16.10.190 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. 1046 § 2, 2023.]
16.10.200 Compliance with regulations.
The lessee shall comply with all federal, state, and local statutes and ordinances with regard to the leased premises, including all borough building and zoning codes. The lessee’s premises shall be opened for inspection by authorized representatives of the borough at all reasonable times. [Ord. 1046 § 2, 2023.]
16.10.210 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 just compensation for all improvements destroyed or damaged. [Ord. 1046 § 2, 2023.]