MEMORANDUM

TO:                 Ron Long, Assembly President

                        Kenai Peninsula Borough Assembly Members

THRU:           John J. Williams, Mayor

            Max Best, Planning Director 

FROM:          Marcus Mueller, Land Management Officer

DATE:           April 27, 2006

SUBJECT:    Ordinance 2006- 25 Authorizing the Conveyance of Lot 1, Block 8 and Lot 2, Block 7 Fairview Subdivision, according to Plat No. 56-2936, Homer Recording District to the City of Homer in exchange of a 99-year lease of the South Peninsula Hospital

In 2003 the voters of the South Peninsula Hospital Service Area approved the expenditure of $17 million for capital improvements to the South Peninsula Hospital. The hospital expansion design requires a subdivision plat to combine the City owned parcel Tract A South Peninsula Hospital Subdivision with the borough owned parcels Lot 1 Block 8 and Lot 2 Block 7. The common objectives of the city and borough are 1) to have single ownership of the resulting parcel and 2) to secure the hospital assets sufficiently to protect the capital investment in the hospital. While the borough desires to be the sole owner, the city is unwilling to part with its ownership interest. Significant negotiations have taken place between the city and borough that have led to this proposal which will resolve issues between the city and borough in the interest of moving the expansion project forward.

The attached ordinance would authorize the conveyance of the two borough owned parcels to the City of Homer. In return the City would execute a plat to combine these parcels with Tract A South Peninsula Hospital Subdivision creating a new “Tract A-1”. The City would then lease this entire parcel back to the borough for a term of 99 years. This lease would likely be in the form of an amendment to the existing hospital lease, preserving the remaining original terms and conditions.

Attachments:

·Hospital Lease Dated Nov. 10, 1969

·Property Map