Kodiak assembly directs manager to pursue $1.30-per-square-foot lease for North Star with annual CPI

The Kodiak Island Borough Assembly on March 26 directed the borough manager to pursue a lease at $1.30 per square foot, plus an annual consumer-price-index adjustment, for the North Star school building while negotiating terms with prospective tenants.

The manager presented a proposal from a nonprofit seeking roughly 10,746 square feet — about 62% of the building — for a daycare and social-service offices. The borough’s estimated monthly rent at the previously used rate of $1.20 per square foot would have been about $12,895.20; assembly members raised concerns that figure would not cover foreseeable maintenance and a pending boiler and roof-related work.

Assembly members debated competing priorities: encouraging child-care capacity in Kodiak, limiting taxpayer exposure to building repairs and ensuring fair treatment of potential for-profit tenants. ‘‘Childcare is a critical need here, but we also have a roof and other capital projects coming,’’ Assemblymember Roberts said, urging a modest cushion for maintenance and fuel-price volatility.

Several members noted the building has had long-term maintenance needs — including a decades-old roof and a large skylight that has caused recurring leaks — and that tenant use by small children can accelerate wear and tear. Projected building operating costs to date totaled roughly $109,602.66 (July–March) and the borough expects an additional boiler replacement near $28,000, figures the manager provided to the assembly.

Assemblymember Woods, who pressed for a rate that provides some additional resiliency, summarized the majority view: ‘‘I think somewhere in that $1.35 to $1.45 range is probably appropriate,’’ he said, later backing the compromise figure. After further discussion, the mayor directed the manager to proceed with $1.30 per square foot plus CPI and bring a proposed lease back for review.

Manager Amy said leases typically run three years with a two-year out clause and that details — including which maintenance items are tenant responsibilities, use of the gym and scheduling for community groups — will be addressed in the written lease. The assembly also asked staff to consider whether nonprofit and for-profit tenants should be treated differently in future discussions, noting that certain uses may require additional planning or zoning review.

The assembly’s directive is intended to advance negotiations and allow the borough to move toward occupying the empty school while preserving flexibility to adjust terms if maintenance costs or tenant usage change.

The lease recommendation will be drafted by borough staff and returned to the assembly for final approval.