Borough staff presented a proposed 25-year ground lease Thursday that would allow Kodiak Rodeo and State Fair, Inc., to continue occupying the Kodiak Fairgrounds at an initial annual rent of $500.

The matter matters because the fairgrounds occupy borough land and the nonprofit’s operations are grant-funded; the lease term and below-market rent affect both the nonprofit’s grant eligibility and the borough’s in-kind tax revenue calculations.

Amy Williams, borough manager, told the assembly the group has occupied the fairgrounds under a prior 55-year lease originating with the state. The new lease term is 25 years at $500 per year; Williams said the reduced rent is permitted under borough code KIBC 18.40.020(b) when public-purpose use justifies below-market terms. Staff said the 25-year term is necessary because many of the nonprofit’s capital projects rely on multi-year grants that lenders and grantors expect to see secured by a multi-year lease.

Assembly member Steve asked staff to calculate what the in-kind tax-equivalent value of the lease would be if the property were privately held; Williams said the borough would provide that figure for next year’s budget. The assembly asked whether separate user groups — for example, a race-track association or boarding-stables users — had sought separate leases; Williams said no competing commercial interests had emerged and that the borough has kept the site under one lease.

What happens next: The resolution authorizing the ground lease is in the meeting packet; the assembly will consider the lease at a future meeting and staff will return with an in-kind tax-equivalent estimate for budgeting purposes.