Chapter 13.12


13.12.010    Property available for leasing.

13.12.020    Preleasing procedure – Appraisal.

13.12.030    Rental value.

13.12.040    Terms and conditions.

13.12.050    Procedures.

13.12.060    Lease auction.

13.12.070    Mayor – Authority to regulate procedure.

13.12.010 Property available for leasing.

All real property and all interests in real property which are owned by the city, or to which the city may become entitled, may be leased as provided in this chapter. (Ord. 90-21 §4(part), 1990)

13.12.020 Preleasing procedure – Appraisal.

A. No real property owned by the city shall be leased (whether or not it has previously been leased, unless the lessee is exercising an option to renew contained in a lease) unless the property has been appraised within one year prior to the date contemplated for the beginning of the lease.

B. No appraisal is required if the fair rental value of the property does not exceed two hundred fifty dollars per month and the term of the lease is one year or less, or if the property has been assessed by a tax assessor during the year in which the property is to be leased. (Ord. 90-21 §4(part), 1990)

13.12.030 Rental value.

A. City-owned real property shall be leased for a fair rental value, except as provided by subsection B of this section. Fair rental value is the rental computed from the appraised fair rental value of the property and means 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, for the use permitted by the city and by law.

B. City-owned real property may be leased to the United States, the state of Alaska, a political subdivision or agency of the United States or the state of Alaska, or a nonprofit organization for a rental less than the fair rental value if the council finds that such lease would be in the public interest. (Ord. 90-21 §4(part), 1990)

13.12.040 Terms and conditions.

Each lease of city property shall include the following provisions, which shall be deemed to be incorporated by reference and fully enforceable as if set out in full in every lease in which they are not expressly included:

A. City property shall not be leased for a term (including any renewal periods to which the lessee may be or may become entitled) of more than twenty years unless the council shall find, based on the purpose, the intended use of the leased premises, and the nature of the improvements which are to be made on the leased premises that a longer term will benefit the city, is consistent with long-range development plans and is in the public interest.

B. Every lease having a term of more than two years shall provide for adjustment of rentals at specified intervals during the term of lease, which intervals shall not exceed six years. If no interval is specified in a lease for the adjustment of rent, the interval shall be two years.

C. A lessee may be given credit against current or future rent for all or a portion of the value of a leasehold improvement made by the lessee, or of other work performed or by the lessee on or off the leased premises; provided, that:

1. The mayor authorizes the specific improvement, including the type and quality of work, if any, and the credit, or maximum amount of credit, to be given in writing before the improvement or other work is begun; and

2. The improvement or other work increases the value of the leased premises or of other city property.

D. The renewal or extension of a lease shall be considered as a new lease unless the lease provides that the lessee has an option to renew or extend the lease. Upon a showing of hardship or for good cause, the mayor, at his or her option, may renew or extend the lease for a period not to exceed one year without notice, auction or council approval.

E. Upon condemnation of all or any part of the leased premises, including inverse condemnation, by the United States, the state of Alaska or any subdivision or agency thereof, the lease shall terminate unless the lessee agrees that the lease should continue in full force and effect. Unless the condemnation is by the city, the city shall not be liable in damages or pay any compensation to the lessee as a result of the condemnation terminating the lease.

F. The city expressly reserves the right, without compensation of the lessee or adjustment of the agreed rent, to grant surface, underground and overhead utility easements or rights-of-way in, upon or over the leased premises, if the exercise of the right will not unreasonably interfere with the lessee’s improvements placed upon the leased premises or with the lessee’s use of the property.

G. The lease shall provide the terms, conditions and limitations of the removal or reversion of the improvements or chattels upon the leased premises upon termination of the lease. The retiring lessee may, with the mayor’s consent, sell improvements made at the lessee’s expense to the succeeding lessee, if any. If the improvements or chattels are not removed within the time set forth in the lease, the improvements and chattels may, upon reasonable notice to the lessee, be sold at public sale to be provided by regulations of the mayor. Proceeds of the sale shall be first applied to the city’s costs and expenses of maintaining, removing and selling the improvements and chattels and to rentals for the period of nonremoval. The city may bid at the sale and may be credited with the value of the city’s costs, expenses and rentals due resulting from the nonremoval of the improvements or chattels. The city, if it is the purchaser, shall have all other rights, both legal and equitable, of any other purchaser at and after such sale.

H. The city, through the mayor or his designated representative, shall have the right to enter and inspect the leased premises at any reasonable time.

I. A lessee may sublease or assign the lease only with the prior written consent of the mayor.

J. The city may issue a conditional lease on property to which the city reasonably expects to acquire title prior to the actual receipt of title. The city shall not, in any such conditional lease, authorize the lessee or any other person to enter the leased premises prior to the date that the city acquires title thereto. Leases issued on a conditional basis shall be void, and all prepaid rents shall be refunded, unless the city actually acquires title to the entire premises described in the lease. If the city acquires a portion of the leased premises but does not acquire title to the entire leased premises, the lease shall be void unless the lessee agrees that the lease should be effective notwithstanding the city’s failure to acquire title to the entire leased premises. The city shall not be liable for any claim for damages that may be caused to the property by the lessee or liable for any claims of any third party or the lessee, or for any claims that may arise from ownership. In the event the city does receive title to the property under lease, the conditional lease shall then have the same standing, force and effect as an unconditional lease. (Ord. 90-21 §4(part), 1990)

13.12.050 Procedures.

All leases shall be approved by the city council by noncode ordinance pursuant to Section 13.04.070. The provisions of Sections 13.04.040 and 13.04.070 relating to the disposal of city-owned property shall apply to all leases authorized by this chapter. (Ord. 90-21 §4(part), 1990)

13.12.060 Lease auction.

Unless otherwise provided in this chapter, property shall be leased to the highest responsible bidder at a lease auction. Upon a city council determination of a public interest, a negotiated bid may be accepted by the council by noncode ordinance pursuant to Sections 13.04.070 and 13.04.160 in place of public bidding. (Ord. 90-21 §4(part), 1990)

13.12.070 Mayor – Authority to regulate procedure.

The mayor may provide by regulation for the procedures and form as to applications, surveys, appraisals, auction, bidding, form and substance of lease termination, forfeiture or any other matter involving the leasing of city property to implement the intent and purpose of this chapter. The absence of a regulation shall not invalidate any auction procedure or lease executed or to be executed by the city, where the requirements of the chapter have been otherwise satisfied. (Ord. 90-21 §4(part), 1990)