Council hits snag in leasing Spit property to local marketers Salmon Sisters

Nov 11, 2020

Salmon Sisters, a Homer company, is known for its seafood and apparel.
Credit aksalmonsisters.com

An empty seafood facility on the Homer Spit is just waiting to get new tenants. But  before it does, the Homer City Council needs some more information.
At its meeting Monday night the council had before it a resolution with local seafood and apparel marketers Salmon Sisters to take over the lease on property that’s lately been vacant on the Spit.
The lease was originally held by Harbor Leasing, LLC, and Assumed by Alaska Growth Capital BidCo, Incorporated. The quick way to get  Salmon sisters into the building, would be for them to assume the existing lease for nearly $30,000 per year.
But that lease rate during the current economic climate turned out to be a sticking point when it came up for approval.
Buck Laukitis, father of the Salmon Sisters and an investor in the company, addressed the council.
“I think the root of the problem of this resolution is the city jumped to the conclusion that we were assuming the existing lease. We've been very explicit. We're applying for a new 20 year lease, not assuming of existing lease. There's been a bankruptcy. The city has a settlement agreement from a bank and we should all move on to a fresh start,” Laukitis said, adding, “As a father and as a businessman, I cannot in good conscience advise them to sign onto a lease with terms written for a completely different economic climate. I'm sorry. We live in a different world today from when your appraisal was done, you should recognize that from your own care's economic assistance.”
Homer Port Director Bryan Hawkins said the Salmon Sisters had requested expedited action from the city, and the quickest way was through a lease assumption.
“This was a setup to move as quickly as possible. That was one of the requests, to get this lease into the new lessees hands as quick as possible,” Hawkins said. “And as a transfer, it could be done in just resolution, with one meeting from council, one meeting from commission.”
Hawkins went on to say that, with council action, city property can be leased at lower-than-market-rate, but it needs to be for the best public interest. Something Councilmember Rachel Lord emphasized.
“And so in so far as we're going to make negotiation beyond our standard base rate, if that were to be something that we could find an agreed upon place or negotiation that administration and staff could, that conforms with code, I will want to see that spelled out very clearly as to the public interest and why that is in the best interest of the city in the long term,” Lord said.
City Councilmember Joey Evensen wasn’t convinced that Salmon Sisters was the right fit for the property on the Spit, as he was hopeful that large-scale industrial seafood processing could someday return to Homer.
“I think the Homer spit economy does have a gap. And I'm not sure that this group can fill that. I wish them all the luck in the world, but there are different properties in our community and some properties have the potential for very large enterprise. And that's what we're talking about up here. So these are key places. This isn't just another lease that's out there on a long list. This is a key spot and it has a potential to do something like an Icicle Seafoods carry can do for our community,” Evensen said. “So I think taking our time, maybe just one other meeting cycle to really review what we're getting into, I don't see the harm in doing that.”
Councilmember Caroline Venuti was excited by the prospect of Salmon Sisters setting up shop on the Spit.
“Well, I'm more of an optimist and I think this will work. And I think they live here, they've been around. He's a fisherman, I believe that he probably has a business plan and this kind of fits into it. And sometimes when there's an opportunity, that's when you have to make your point. And I believe that's what this is doing. I trust that Bryan, and that you and our lawyer will do the best that you can for our city. That's what we expect out of you, no less,” Venuti said. “So, I support this and I think it's a good move. And I too share Rachel's enthusiasm about seeing this happen because it'll spruce up our Spit. We need business. And that's a business that has a name, it's a brand name that people follow. So I think it would be a success.”
Councilmember Donna Aderhold said there have been several suitors for the property, but none have shown the commitment that Salmon Sisters has.
“There have been a number of entities that have inquired about this particular parcel and none of them have come through. And they have not come through to the point that they came to the city requesting a lease,” Aderhold said. “And, that I don't think that it's in the city's best interest to sit on our hands and hope something better comes along because other possibilities have come along and have passed by.”
The council decided to table the resolution until it sorted out whether a new lease, or a lease assumption, is the direction the city and Salmon Sisters will go.