Borough Assembly Will Consider Ward Cove Sale
April 04, 2011
The Ketchikan Assembly will consider Resolution Number 2317 at tonight's meeting , which if approved, will authorize the sale of all remaining Borough-owned property at Ward Cove to Power Systems and Supplies of Alaska, LLC.
David and Andrew Spokely, owners of Power Systems and Supplies of Alaska, a Ketchikan-based Limited Liability Company, submitted the lone responsive bid in the amount of $2,100,000. They also submitted a $25,000 security check.
On February 11, 2011, the Ketchikan Gateway Borough issued an Invitation for Bids to purchase all of the Borough’s property at Ward Cove. Two addenda to the Invitation for Bids were issued, one on March 2 and the other on March 9. The February 11 Invitation for Bids was published in Ketchikan, other parts of Alaska, and the Pacific Northwest at a cost of approximately $5,000. The Invitation for Bids was also mailed directly to more than 30 prospective bidders. Prospective bidders were given more than one month to submit bids.
A commercial and industrial marina are among the plans for development and use of the property by Power Systems and Supplies of Alaska.
While Power Systems and Supplies of Alaska expressed no plans to dispose of major portions of the properties for the foreseeable future, it wrote a letter on March 19 expressing a willingness to share with the Ketchikan Borough “windfall profits” from a sale of the properties.
Upon review of the information submitted by the lone bidder, the Borough Finance Director concluded that Power Systems and Supplies of Alaska has the capacity to pay the purchase price. In a memorandum included here as Exhibit D, the Borough Finance Director noted:
Power Systems and Supplies of Alaska ( PSSA) financial transactions are through a local bank in Ketchikan. Upon review by the Borough of the last three years of tax returns, current annual operating revenues of PSSA generate sufficient revenues and liquidity to service debt of $2,100,000. Power Systems and Supplies of Alaska's plan is to consolidate operations in Ward Cove and indicates substantial savings in operations enhancing their ability to finance the debt.
If the Assembly authorizes the sale of the property, both the Borough and Power Systems and Supplies of Alaska will be responsible for certain closing costs. The Borough is also responsible for cleaning up a small oil spill on the property which will involve the removal of an estimated 8+ cubic yards of soil and 5+ cubic yards of wood chips. Additionally, the Borough is responsible for removal of 17 totes of used oil and other hazardous materials. Power Systems and Supplies of Alaska has indicated verbally that it is willing to assume full responsibility for the cleanup of the estimated 8+ cubic yards of soil and 5+ cubic yards of wood chips, as well as the removal of 17 totes of used oil and other hazardous materials for $50,000. That figure is well under the Borough’s estimated cost of performing the work.
Borough Manager Dan Bockhorst has no reservations whatsoever over the proposed sale according to Resolution 2317. Moreover, senior-level Borough staff is unanimous in its support of the proposed sale.
If approved, Resolution Number 2317 will authorize the Borough Manager to enter into a purchase and sale agreement to convey the Ward Cove property to Power Systems and Supplies of Alaska for $2,100,000. The form of the agreement will be substantially the same as the form included in the Invitation for Bids.
Resolution Number 2317 further authorizes the Borough Manager to execute such additional contracts and agreements as may be necessary to sell the property. These would include an agreement to transfer to Power Systems and Supplies of Alaska full responsibility for the cleanup of the estimated 8+ cubic yards of soil and 5+ cubic yards of wood chips, as well as the removal of 17 totes of used oil and other hazardous materials for $50,000. They will also include provisions reflecting the “windfall profits” provision outlined in the March 19 letter from Power Systems and Supplies of Alaska.
The Borough Assembly will meet tonight in the Assembly Chamber at 1900 First Avenue, Suite 144. The meeting is scheduled to begin at 5:30 pm.
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