KENAI PENINSULA BOROUGH

ORDINANCE 2001-13

AN ORDINANCE TO WAIVE PENALTIES AND INTEREST ON THE TAXES ACCRUED ON PARCEL 06012016

WHEREAS, the City of Soldotna ("the city") is the current record owner of parcel No. 06012016 ("the property") described as:

Lot Two (2), Block Two (2), Soldotna Central Properties, according to Plat No. 77-18, in the Kenai Recording District, Third Judicial District, State of Alaska.

WHEREAS, the property has been significantly impacted by a release of petroleum products that have resulted in contamination of the groundwater and subsoil of the property; and

WHEREAS, the property has not been in productive use since 1989, and no taxes have been paid on the property since 1996; and

WHEREAS, as of April 16, 2001, the city is owed $5,829.02 in tax and $5,067.45 in interest, and the borough is owed $29,941.84 in taxes and $3,824.95 in penalties and $22,107.84 interest as of the same date; and

WHEREAS, the city has foreclosed on the property for delinquent special assessments unpaid by the prior owners, and the borough has a lien for taxes, penalty, and interest pursuant to AS 29.45.300(b); and

WHEREAS, Q-1 Corporation ("Q-1") has acquired repurchase rights pursuant to AS 29.45.470 and agrees to transfer the repurchase rights to Denali Property II LLC ("Denali"), an Alaska limited liability company. Q-1 is the sole owner of Denali and created Denali for the purpose of acquiring and redeveloping the property; and

WHEREAS, Denali agrees to repurchase the property before July 1, 2001, and agrees to pay the borough, as tax collector for the city and the borough, the full amount of taxes due on the property as though the property continued in private ownership to the date of repurchase; and

WHEREAS, Q-1 agrees to execute upon passage of this ordinance the attached agreement, which includes an indemnification requirement; and

WHEREAS, the city manager of the City of Soldotna (city manager) has testified before this assembly that the city will not sell the property at a foreclosure sale in a contaminated condition and also testified that the city will only transfer the property to a private developer like Q-1 who is willing to develop the property and who will aid the city in ensuring that the responsible parties clean up the property; and

WHEREAS, Denali agrees to use its best efforts to secure expedited cleanup of the contamination of the property in compliance with all applicable laws and regulations; and

WHEREAS, the assembly finds that, due to contamination, the sale price of the property at a foreclosure sale is expected to be substantially less than the total amount of taxes due on the property; and

WHEREAS, the city manager has testified before this assembly that the city is in full accord with the agreements, conditions, and objectives expressed in this ordinance; and

WHEREAS, the borough supports putting the property back into productive use by a taxpaying private property owner;

NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH:

SECTION 1. In consideration of the above, the assembly finds that a waiver of the penalties and interest due on the delinquent taxes on the property is in the best interests of the borough.

SECTION 2. Upon fulfillment of the agreements and conditions stated herein, the assembly authorizes the mayor to waive all penalties and interest on the taxes owed on the property to the date of repurchase and to relinquish the tax lien that has arisen pursuant to AS 29.45.300(b).

SECTION 3. That the mayor is authorized to execute the attached agreement, incorporated herein as Attachment A, and any other necessary documents to fulfill the intents and purposes of this ordinance, provided that all such documents be executed prior to July 1, 2001.

SECTION 4. That the authorization contained in Sections 2 and 3 of this ordinance is conditioned upon the prior passage of a similar ordinance by the Soldotna City Council waiving the interest and penalty due the City of Soldotna on delinquent special assessments and fulfillment of the requirements of the city ordinance and of the terms of all agreements to effectuate the requirements of the city ordinance.

SECTION 5. That this ordinance shall take effect immediately upon its enactment.

ENACTED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH THIS * DAY OF *, 2001.