Kodiak borough continues lease talks for Northstar School, directs condition and market surveys

The Kodiak Island Borough Assembly continued discussion Thursday on short-term leases and long-term stewardship of the Northstar School building, directing staff to obtain a condition survey and a market survey to inform lease terms and maintenance responsibilities.

Manager Amy (borough manager) told the assembly the borough has inquiries from a local day-care provider (Shoonac request for a wing), city parks and recreation (gym use for youth programs), the Red Cross (currently occupying space) and the YMCA of Alaska (interested in office space in nearby college cottages). Amy said the packet included a draft memo from the school district listing historical utilities and an insurance quote of about $27,000 for the current year. She also provided fiscal-year utility figures and a snow-and-ice control cost of just over $11,000 for FY24; she noted no heating fuel was added to tanks in June–July and those months’ fuel use is therefore not included in the short sample. Amy said tenants could take on janitorial and Internet costs but that security and some one-time improvements would be borough costs unless allocated to tenants.

The assembly debated whether prospective tenants should absorb routine maintenance. Assembly member Ryan said he would not support the borough taking on routine maintenance and said maintenance obligations should be part of any occupancy arrangement. Several other members echoed concerns that charging a single tenant for a small portion (about 25%) of the building’s square footage would not cover the full facility costs and that the borough should seek other tenants or revenue streams. Assembly member Larry and others emphasized the building is an asset the borough may need if student populations grow and warned that disposing of the site could require a costly new school if enrollment later rises.

Members flagged known capital needs: a roof replacement estimated at $1 million–$2 million and other system upgrades that are not funded. Several members recommended creating a reserve or sinking fund for predictable future replacements. Assembly members also discussed offering short-term, capped leases (two to five years was raised repeatedly) so future assemblies could revisit use if school district enrollment changes.

After discussion, an assembly member asked for a formal market survey and a conditional assessment of the building covering foreseeable five-year system replacements, replacement-cost estimates and usability constraints. When no member objected, the assembly directed staff to obtain the surveys and related cost information to return at a future meeting.

The assembly did not adopt a lease, set rates or approve capital expenditures at the work session; members asked staff to return with a condition survey, a market-rent analysis, replacement-cost figures and potential scenarios for short-term leases or disposal.