City and Borough reach agreement for leasing office space after years without active agreement

Kodiak’s City Council has approved a three-year lease with the Kodiak Island Borough to use 6,922 square feet of their office space at 710 Mill Bay Road. The previous lease agreement between the borough and city expired in June of 2020 and the city has been using the office space as a “holdover tenant” ever since.

The rental area has expanded since the 2020 agreement by 375 square feet and the monthly rate has increased from $2.20 per square foot to $2.55. The new lease will cost the city $17,651.10 a month.
At last week’s City Council meeting, City Manager Mike Tvenge said the original proposed rate was higher when negotiations started with the Borough.

“I want you to know that the initial proposed rate was $18,135.88 before city management negotiated a reduction from the $2.66 a square foot to $2.55,” Tvenge stated. “The lease space includes 25 offices, one conference room and two offices that are shared with the Kodiak Island Borough [building officials].”

The borough can also increase the rent rate on the anniversary of the lease agreement over the next three years, if the utility costs have increased 10% or more cumulatively since the last adjustment.

Councilmember John Whiddon noted that the new agreement between the two municipal entities took years to get to negotiate, so he’s thankful this matter is resolved.

“I appreciate all the hard work that has gone on behind the scenes to get this done,” he said. “I understand most of the concerns and the issues with this lease in terms of the habitability of that particular space, and I believe all those issues are still on the table that we need to address over the next three years.”

Repair work yet to be done within the borough’s office building includes fixing broken windows, replacing thermostats and upgrading LED lighting. During a previous work session on Jan. 9, Borough Mayor Scott Arndt told the council those items were a priority.

The new lease agreement between the city and the borough is retroactively in effect as of Jan. 1, 2024.

During the City Manager’s report, the council received an update on one of its well-known buildings, the Griffin Memorial. The historic property, which was formerly the island’s first medical facility, is being considered for a nomination to the National Register of Historic Places.
According to Manager Tvenge, the city is also paying Wolf Architecture to conduct a Lidar survey of the Griffin Memorial building. This will allow the city to conduct an as-built survey of the Griffin Memorial and update their space needs assessment going forward.

In other business Thursday night, the council joined the Kodiak Island Borough in proclaiming Feb. 9 as Coast Guard appreciation day. The borough passed a similar proclamation earlier this month on Jan. 18 during their latest regular meeting.

The Kodiak City Council is scheduled to hold their next regular meeting on Feb. 8 at 6:30 p.m.