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Thru: Dale Bagley, Mayor thru: Robert Bright, Planning Director Max Best, Borough Surveyor from

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TO: Timothy Navarre, Assembly President

Kenai Peninsula Borough Assembly Members

THRU: Dale Bagley, Mayor
THRU: Robert Bright, Planning Director

Max Best, Borough Surveyor

FROM: Roy E. Dudley, Land Management Agent
DATE: May 29, 2002
SUBJECT: Ordinance 2002-22, An Ordinance Authorizing the Negotiated Sale of Tract A, Arness Dock Subdivision, Located in the Vicinity of Nikiski High School, to Offshore Systems - Kenai
Offshore Systems – Kenai (OSK) has submitted an application for the negotiated sale of Tract A, Arness Dock Subdivision, according to Plat No. KN 86-235, on file in the Kenai Recording District, containing 4.62 acres. OSK will pay market value. The KPB Assessing Department has appraised the fair market value of Tract A at $34,000.
OSK is currently leasing Tract A, Arness Dock Subdivision from the Kenai Peninsula Borough (KPB) as authorized by Ordinance No. 86-88. Marathon Oil Company previously maintained a communication tower but the tower has been removed. Tract A is currently unimproved. The lease terms are:


55 years commencing 12/11/86 and ending 12/10/2041

Renewal Option

Successive 10 year terms at end of initial lease

Current Annual Rental



Every 5 years.

AT&T Wireless Services desires to lease Tract A from OSK. AT&T Wireless intends to construct a cellular facility to service the local area, OSK offices and the offshore platforms. AT&T Wireless does not enter into subleases with tenants due to the length of the term of the cellular lease and prefers to deal directly with the owner.

The following points support selling subject Tract A to OSK:

  • OSK has already purchased all the other land it was previously leasing from the KPB.

  • Tract A is encumbered with a long-term lease to OSK that expires 2041.

  • Subject Tract A is surrounded by OSK land making it of limited use to others.

  • OSK will pay market value for Tract A.

  • AT&T Wireless Services desires to lease Tract A from OSK for a cellular facility.

  • The KPB owns land in close proximity to subject Tract A that is also suitable for cellular facility should it need to develop a separate facility.

  • Sale of Tract A to OSK will benefit the public and other property in the area when the communications link is established.

The proposed ordinance requests exceptions to KPB 17.10.090 (requiring classification before sale), KPB 17.10.130(D) (requiring a deed restriction), and KPB 17.10.110 (notice of a land sale). Tract A is an isolated parcel that is particularly suitable for use as a communication tower site. Restricting its use to a commercial classification or any other classification will not serve a useful purpose because it is surrounded by land that is not restricted. Additionally, the proposed use is for a communication tower. Should this use change, the owners will have paid market value for Tract A based on its highest and best use, and should be free to put the parcel to those uses that will bring them the highest financial return in the same way the surrounding parcels can. A notice of disposition is intended to help with marketing the parcel. However, this parcel already has an identified buyer and advertising the sale will not serve a useful purpose.

The ordinance also requires that as a condition of the sale KPB shall be authorized to install a 911 antenna on the tower at no cost. AT&T Wireless Services volunteered this same benefit at the Skyview High School tower site. This is an added reason to authorize this negotiated sale in order to facilitate getting the communication tower constructed.
At its May 28, 2002 meeting the Planning Commission recommended _________________.

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