Prompted by a standing-room only crowd in the Kenai City Council Chambers on Monday night, Kenai council members discussed options for concluding a 30-year dispute between residential and commercial interests in a neighborhood south of the Kenai Spur Highway.
For some, the strip of wooded land known as Lawton Acres — between the Spur and the residential Lawton Drive — is a commercially valuable undeveloped highway-fronting property. For residents of Lawton Drive neighborhoods it is a barrier against the noise and traffic of the Spur and Walmart to the north. Some of these residents have opposed development on the strip since the late 1980s and on Monday many provided over an hour of public testimony against a speculative proposal by Kenai administrators to divide Lawton Acres into four sellable properties, leaving in city hands a barrier of woods between 30 feet and 130 feet on the neighborhood-facing south side, and also keeping the Field of Flowers, a cleared area of the property which the city seeds with wildflowers every summer.
The proposal to divide the land was in response to an offer from a dentist, Jeremy Sorhus, to buy 4 acres on the east side of the 16-acre lot for a woods-enclosed dentist office. While few Lawton Drive residents have publicly opposed Sorhus’ plan, wider development of Lawton Acres has once again stirred controversy. Greg Daniels — a Lawton resident since 1982 and an outspoken opponent of the development deal — mobilized support for preserving the property by planting the neighborhood with signs reading “Save Lawton Acres.”
Explaining why he created the division plan on Monday, Kenai City Manager Paul Ostrander referred to concerns that Daniels and others had expressed at a Jan. 24 work session over Sorhus’ offer — that the dentist office would be “a foot in the door” for further Lawton Acres development. Ostrander said he’d created the compromise in recognition of “the fact that (Sorhus’ offer) is a foot in the door.”
“If you agree to this one development, what does it look like for the rest of it?” Ostrander said. “(The development plan) was an attempt by us and the council to be as transparent as possible.”
Airport land
Lawton Acres is a small piece of Kenai’s 5,057 acres of municipal-owned land — about 33 percent of the city’s total acreage. Part of this landholding is a legacy of Kenai’s military history which has led to perennial disputes between the city and private interests over land use and value. After Kenai was chartered in May 1963, the Federal Aviation Administration granted the city about 1,800 acres of the decommissioned military airfield that covered much of modern Kenai during the 1940s and 50s. Some of this land became the present Kenai Municipal Airport, but other properties, like Lawton Acres, were given under the condition that they be legally dedicated to financing the airport by earning sale and lease revenue to be deposited in the airport fund.
Much of this land was sold for airport funding, but Lawton Acres is among the land that remains in city hands under the airport dedication. If it’s not used for airport support, the FAA can reclaim it, making the preservation of Lawton Acres from development legally difficult.
Council member Tim Navarre likened the airport-dedicated land to a trust fund for the airport.
“If one of you had a child, but you died, and you left a trust fund for them with somebody to manage, you wouldn’t want that trustee to mismanage that trust fund,” Navarre said. “That’s sort of what the FAA has done with the city. It’s not because the city wanted to be put in that position. But the FAA said, ‘Here, airports aren’t cheap to run, so you have to use this in the best interest of the airport,’ i.e., the child with his trust fund. You don’t get to manipulate it and say, ‘Oh, I can trade him a piece of land that’s equal in value.’”
Navarre was speaking against one option to preserve Lawton Acres as a buffer: removing it from its airport-financing obligation by dedicating land of equal value to the airport as a substitute. Such a land-swap wouldn’t be unprecedented. In the mid-1980s, the FAA released the land that’s now the site of Homer Electric Association’s Kenai office from the obligation to support the airport in exchange for land of similar worth in the Evergreen Subdivision.
Trading other city land for Lawton Acres is possible, though doing so would require the FAA’s consent, said Kenai City Attorney Scott Bloom.
Another option for permanently preserving the strip would be for local residents to pay its value to the airport fund via a local improvement district — a funding arrangement in which property-owners who would benefit from a project agree to divide its cost among themselves. Forming a local improvement district in Kenai requires that half the beneficiaries agree to it.
A Feb. 2015 appraisal valued Lawton Acres at about $450,000, and Ostrander said there were approximately 100 properties in the neighborhood that would benefit — creating a charge of $4,500 for each local landowner. In an April 14 memo to the Kenai City Council, Ostrander wrote that “forming a local improvement district is unlikely a viable approach” because of the high cost per landowner.
The question of who should pay for Lawton Acres is complicated by an uncertain price tag. Whether sold for preservation or development, Kenai municipal code requires that land be appraised for an up-to-date value before a sale. In the Feb. 2015 appraisal, McSwain and Associates compared Lawton Acres to recent sales of five other properties to arrive at a value between $412,250 and $494,700 — equal to between $25,000 per acre and $30,000 per acre for the 16-acre strip.
Realtor and Kenai Airport Commission Chair Glenda Feeken said the 2015 appraisal is likely low. Citing recent sales on the Kenai Spur Highway and Kalifornsky Beach Road, Feeken said that “outside the city, an acre’s hitting about $60,000.” Feeken believes that a new assessment of Lawton Acres will put a much higher price on it.
In the 1970s, various oil companies used the vacant land that’s now the Kenai Field of Flowers as a safety training ground, starting fires to teach their employees how to put them out. This use has left the ground contaminated, requiring a clean-up if it were to be developed. The February 2015 appraisal did not adjust for the land’s contamination.
Roy Welles, a former Kenai Planning and Zoning commissioner and Lawton resident who advocated for preserving the strip, said that because of the contamination the Field of Flowers “should be off the table from the standpoint of economic value,” and that excluding it from the assessment should drop Lawton Acres’ value accordingly.
“So if you took $29,000 per acre and the other three tracts, that’s down to $331,600 (total for the lot),” Welles said.
Council opinion
Council member Bob Molloy said he may work with Kenai city attorney Scott Bloom on a multiple-choice ballot proposition over what should be done with Lawton Acres. He plans to bring the proposition to the city council for a vote on whether or not to include it in the October municipal election. The deadline for doing so is the council’s August 2 meeting. The ballot proposition, Molloy said, would be “to see if the city as a whole would support (buying Lawton Acres), rather than putting the burden of what is really city land on the residents around there through a local improvement district.”
Molloy said he would prefer for the city to pay Lawton Acres’ value into the airport fund instead of having local residents do so.
“I’d rather see if all of us are willing to participate in that, either by authorizing the general fund to pay for it or by authorizing a land swap,” Molloy said.
Council member Mike Boyle also said he also disliked the option of a local improvement district, but said a ballot proposition wouldn’t “be his first choice.” He’d prefer the city council vote to buy Lawton Acres with city general fund money to maintain the strip as a park or other preserved land.
Council member Glenese Pettey favored a ballot proposition on the issue. She said Kenai’s population as a whole would be unlikely to approve of the city buying Lawton Acres.
“It ain’t free,” Pettey said of the property. “It absolutely requires money. There are a lot of our neighbors who aren’t here that this will also affect. I’m sure that they would be concerned about the tax dollars they’ve paid into the general fund of Kenai. If we just out and out bought it and it belonged to the city, they would want to have a say-so as well.”
Navarre said he wouldn’t “specifically like to have a vote, because I think it misleads the people, and people play against each other.” He said he’d prefer continued negotiations over the property.
Council member Henry Knackstedt said that because the contaminated Field of Flowers is unlikely to be a valuable commercial property, council members should focus more narrowly on the western end of Lawton Acres that Sorhus is seeking to buy. He said Sorhus’ plan was “probably the best type of development we could expect to see on such a property, with the buffers and all of that.” As for the rest of the property, Knackstedt said he’d be open to considering a land trade or a local development district.
Council members James Glendening and Kenai Mayor Brian Gabriel also favored selling the strip’s western end to Sorhus. Molloy did not.
“I’d like to take the personality and the individual that got us here — the Sorhus application — out of the equation, because I don’t like to do business on the basis of personalities, for the city,” Molloy said. “… If you sell the property, you could have another business, and what people put down as a plan isn’t always what happens.”
Glendening said properties like Lawton Acres are likely to become more valuable as commercial and geographic trends shift business growth away from Kenai’s traditional commercial centers on the western Spur Highway and in Old Town, where the Kenai River bluffs are eroding away property at a rate of three feet per year.
“Without getting too far down the rabbit hole and into the weeds, we have to think holistically about how our community is going to look in the near future, into the far future,” Glendening said.
Reach Ben Boettger at ben.boettger@peninsulaclarion.com.
