MEMORANDUM

TO: Pete Sprague, Assembly President

Kenai Peninsula Borough Assembly Members

THRU: Dale L. Bagley, Mayor

Max Best, Planning Director

Paul Ostrander, Land Management Officer

FROM: Marcus A. Mueller, Land Management Agent

DATE: March 22, 2004

SUBJECT: Ordinance 2004-08 An Ordinance Authorizing a Land Exchange with Offshore Systems - Kenai to Acquire Land to Support the North Peninsula Recreational Service Area Cross Country Ski Trail

The 2001 Outcry Auction, as authorized by Ordinance 2001- 31, offered Assessor Parcel Numbers 012-020-06 and 012-020-07 for sale. Offshore Systems - Kenai (OSK) purchased 012-020-07 for $91,000. The Kenai Peninsula Borough (KPB) withdrew 012-020-06 from the sale because a long segment of the North Peninsula Recreation Service Area (NPRSA) cross-country ski trail system was known to be located on the parcel. A shorter segment of the trail was also found to be located on 012-020-07 after conveyance to OSK had occurred.

A land exchange has been proposed within parcels 012-020-06 and 012-020-07 to accommodate the NPRSA cross-country ski trail. Tracts 1 & 2, OSK SUBDIVISION, were planned to facilitate the exchange. The attached Exhibits A & B illustrate the subject properties and the proposed exchange.

Although the exchange parcels were intended to be of nearly equal value, the land exchange will result in a net gain in land value of $9,100 for OSK. OSK will contribute $9,100 in the exchange as outlined in the exchange agreement. OSK is desirous of the exchange because the land the borough will be conveying is suitable for expanding their operations.

The KPB Planning Commission will consider this ordinance at its regularly scheduled meeting of April 12, 2004, and the action taken will be reported to the assembly.