A Sterling senior citizens group cleared a giant hurdle Tuesday in its drive to create a senior housing complex when the Kenai Peninsula Borough Assembly voted to authorize purchase of three lots near the existing Sterling Senior Center as a future housing project campus.
The land, located in the Sumpter Subdivision, will be sold to Sterling Area Senior Citizens, a nonprofit corporation, for $61,000, plus closing costs to be paid over a 10 year period at an annual interest rate of 6 percent. That will cover the borough's cost and result in a small financial gain to the borough because of the interest.
Assembly member Grace Merkes of Sterling called the purchase and resale "a win-win situation" that would benefit the seniors' project and the borough.
The senior corporation will pay market value for the lots.
The Sterling group wants to construct additional facilities on the three lots, including a fitness center, an adult day-care center and a senior housing campus. The initial housing project will be a 10-unit apartment complex with other buildings to follow. The land will provide enough space for associated well and septic systems.
"Purchasing this other land will help us to finalize our projected plans for the next 10 to 15 years," said George Elser of Sterling, president of Sterling Area Senior Citizens.
Elser said the 6-percent interest rate under the proposal would be a good investment, better certainly than what local banks pay in interest on savings.
Dillon Kimple of Sterling said the owner of the property originally had offered it for sale at $80,000. Subsequent events led him to lower the price to $60,000, a figure borough officials said was market value. He said the land was "pretty nice property" and that time was of the essence if the seniors were to acquire it for their purposes.
Judy Warren, director of the Sterling Area Senior Citizens, said the seniors' plan was an ambitious one, but one that hinged on acquiring the three lots.
"One of the reasons for us for being so urgent ... is that there was an offer made on this property that was before these people knew we had this plan in place and wanted to acquire it," she said. "We wanted to tie up this (land) as soon as we could so we could continue with this long-range plan. Without it, of course, we would be very limited."
As proposed, the ordinance would have required a $60,000 purchase price plus half the closing costs up to $600, with the borough absorbing the rest and a payoff period of 20 years. Assembly member Chris Moss moved to amend the details, making the purchase price $61,000 and reducing the period to 10 years, which he said was more in line with other sales of borough property. Those amendments were approved.
Assembly President Pete Sprague of Soldotna was the only one to object to the purchase and resale agreement, saying he was concerned the assembly would be setting a precedent that would lead other nonprofits to appeal to the borough for what essentially amounted to a loan and mortgage.
"Are we setting a precedent of becoming a banking institution?" he said.
Sprague said he had nothing against the project itself, only the procedure by which the land was being acquired.
The final vote as 8-1, with only Sprague voting no.
In other business, the assembly:
Again turned down Resolution 2004-021, which proposed subdividing 867 acres of land in the Point Possession area and putting it up for sale. The assembly had previously turned down the proposal, but voted Tuesday night to reconsider that decision.
Unanimously approved Ordinance 2004-04, clarifying the powers and duties of advisory planning commissions to note that they have the power to make recommendations both through the Kenai Peninsula Borough Planning Commission or directly to the the assembly upon direction of the assembly.
Unanimously approved Ordinance 2003-19-37, appropriating $161,809 to a special assessment fund for the Char Subdivision natural gas line utility special assessment district. An accompanying resolution (2004-022) also passed the assembly, authorizing the borough to negotiate terms with Enstar Natural Gas Company to construct the gas main line. Pipeline construction bringing gas to the subdivision is expected to begin this summer.
Unanimously approved Ordinance 2004-01, amending borough code to require public notice of vacancies on service areas and boards before such vacancies are filled.
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