City leases Homer Spit lot to Salmon Sisters

Homer’s disaster declaration extended through March 9

Popular local company Salmon Sisters has the green light to move into a complex on the Homer Spit that has long been sitting empty to expand their commercial fishing and retail operations.

The Homer City Council approved a resolution at its Monday meeting that accepts a lease agreement with Salmon Sisters for lot 12C of the Port Industrial Subdivision on the Spit. Located in the city’s Marine Industrial Zone, the lot already has a building on it, the former Auction Block building. It was formerly held by Harbor Leasing LLC, and most recently by Alaska Growth Capital BIDCO.

The Salmon Sisters, Clair Neaton and Emma Teal Laukitis, are commercial fishermen and Homer residents who run their popular retail company online and at a brick and mortar location on Ocean Drive. In presentations to the Port and Harbor Advisory Commission, they’ve pitched their goals for the lot and the building on top of it — they hope to expand their business to include a seafood processing operation, a retail counter and commercial kitchen, a warehouse and direct-to-consumer seafood marketing.

Originally, Salmon Sisters was going to take over the lease from Alaska Growth Capital. Unhappy with the annual base lease amount of $29,785, the company sought to renegotiate it.

At their last meeting in November, members of the council passed a resolution that allowed City Manager Rob Dumouchel to negotiate a lease with Salmon Sisters that was less than fair market value. That new negotiated lease amount is what came back before the council for final approval on Monday.

In a unanimous vote, the council approved a 20-year lease with Salmon sisters at an initial base rate of $25,805, — about $4,000 less than the original lease rate — with options for two consecutive five-year renewals. According to the resolution, the property will be appraised at the end of 2021 and the rent rate for the rest of the lease will be set at a fair market value.

Speaking earlier in the evening at the council’s work session, Buck Laukitis (father of Neaton and Emma Teal Laukitis) said Salmon Sisters needed a decision on the lease.

“We’ve got all of our savings, investment savings in escrow since mid October,” he said. “We can’t use our money and we can’t use that property, and we’d like to be able to get going if the council chooses to pass that.”

Laukitis emphasized that it’s in the city’s best interest to see economic development and a revitalization of that particular lot.

The city has determined that there is a “sufficient valuable public purpose,” but some council members weren’t quite convinced of that at Monday’s meeting. City code allows the city to offer a lease that is less than fair market value when there’s a public purpose, City Attorney Michael Gatti explained at the council’s last meeting.

Council member Rachel Lord said she wasn’t convinced the city had actually heard a good argument for the lease having a public purpose, but ended up supporting the resolution in the end.

“I don’t have a ton of heartburn over like $4,000,” Lord said. “Except we did receive some public comment with concerns about equity and I have yet to hear that public purpose enunciated in a way it is not in the resolution. … So I don’t have it on record in terms of where we’re coming up with the justification for that public purpose.”

Council member Heath Smith pointed out that, while Salmon Sisters may not have provided a presentation of their plans for the lot directly to the council, they did present to the Port and Harbor Advisory Planning Commission.

“And that commission found it compelling enough to send to us with a unanimous vote to negotiate a below market value … under a short-term period, lease,” he said.

Smith trusts the process, he said, and the recommendation of the commission. Council member Caroline Venuti noted that the city commissions are the eyes of the council on a lot of detail work, and said she tries to honor commission decisions that are unanimous.

Council member Donna Aderhold brought up the idea of equity among lessees on the Spit, as she did at the council’s last meeting. She noted that the city has worked hard to clean and tighten up its lease policy there, and that there’s not always a lot of wiggle room for a good reason.

“In the past, you know, leasing at the harbor was kind of a good old boys club,” Aderold said. “And, you know, if I know you and you know me, yeah I can get you a good deal. So we need to be really, really, really careful with making sure that we are equitable with our leases.”

Aderhold did note that this particular lot has been a bit of a thorn in the side of the city for several years, and said she’s interested in getting it back on the city books and productive once more.

Speaking to the idea of public purpose, council member Joey Evensen said he’s looking forward to seeing more of the Homer Harbor being utilized, especially for fish processing.

“I think that’ll have … positive trickle down effects, and that is a public purpose,” he said.

Also at Monday’s council meeting, the city extended its disaster declaration for the COVID-19 pandemic to March 9. The resolution extending the deadline was passed through the consent agenda. The declaration had been set to expire on Dec. 31.

Response efforts related to the pandemic are expected to continue into 2021, according to the resolution, and will require ongoing use of city resources.

“While many of the expenses incurred by the City during 2020 have been covered by CARES ACT money, it remains incumbent that COVID-19 expenses in 2021 be separately accounted to remain eligible for any new or existing grants or reimbursements,” the resolution states.

The measure also notes that vaccinations are anticipated to continue in 2021, and that the city’s Unified Command team and partners are currently planning for dispensing them.

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