17 AAC 45.245 - Disposition of permanent improvements and site development materials on a land lease

(a) Unless otherwise provided in the applicable land lease or in another written agreement between the department and the lessee, permanent improvements that a lessee, other than a government agency, has constructed or purchased on the premises, but not site development materials, are the lessee's property as long as the lease remains in effect, including any period of extension or holdover with consent of the department.

(b) Unless otherwise provided in a land lease or the department otherwise directs under (f) of this section, at the expiration, cancellation, or termination of a lease that is neither extended nor followed by a successive lease, the departing lessee may do one or more of the following:

(1) remove lessee-owned permanent improvements from the premises, remediate any contamination for which the lessee is responsible under this chapter, and restore the premises to a clean and neat physical condition acceptable to the department within 60 days after the expiration, cancellation, or termination date of the lease;

(2) sell lessee-owned permanent improvements to the succeeding lessee, remove all personal property, remediate any contamination for which the lessee is responsible under this chapter, and leave the premises in a clean and neat physical condition acceptable to the department within 60 days after notice from the department that the department has approved an application for a lease of the premises by another person or such longer period specified in the notice, but in no event more than 180 days after the expiration, termination, or cancellation date of the lease;

(3) elect to have the department sell lessee-owned permanent improvements at public auction under (c) and (d) of this section, remediate any contamination for which the lessee is responsible under this chapter, and restore the premises to a clean and neat physical condition acceptable to the department; if the department sells permanent improvements under this paragraph for removal from the premises, the departing lessee's obligation under this paragraph continues until the premises are remediated and restored to a clean and neat physical condition acceptable to the department after the improvements have been removed.

(c) If a departing lessee elects under (b)(3) of this section to have the department sell lessee-owned permanent improvements at public auction, the lessee shall, within 30 days after the expiration, cancellation, or termination of the lease

(1) submit to the department a written request and authorization to sell the permanent improvements by public auction;

(2) provide to the department an executed conveyance document transferring clear title to the permanent improvements to the successful bidder at the public auction, along with authorization to the department, as agent for the departing lessee for purposes of the sale only, to endorse the name of the successful bidder on the conveyance document upon receipt of payment of the successful bid price; and

(3) before the date of the public auction, remove all personal property, remediate any contamination for which the lessee is responsible under this chapter, and leave the premises in a neat and clean physical condition acceptable to the department.

(d) When selling lessee-owned permanent improvements at public auction for a departing lessee, the department will establish the terms and conditions of the sale as provided under 17 AAC 45.333. The department will pay the lessee any proceeds of the sale of the permanent improvements, less the administrative costs of the public auction and any financial obligation the lessee owes to the department under the lease. Payment will be made within a reasonable time after the department completes the sale transaction and receives the proceeds, but not to exceed 60 days. If all or a portion of the permanent improvements do not sell at public auction, the lessee shall remove those permanent improvements, remediate any contamination for which the lessee is responsible under this chapter, and restore the premises to a clean and neat physical condition acceptable to the department within 60 days after the auction.

(e) If the lessee shows good cause to the department and if it is not inconsistent with the best interest of the state, the department will grant an extension of time that is sufficient to allow the lessee to

(1) remove or sell lessee-owned permanent improvements;

(2) remediate any contamination for which the lessee is responsible under this chapter; and

(3) restore the premises to a clean and neat physical condition acceptable to the department.

(f) The department will, by written notice, direct a departing lessee to remove lessee-owned permanent improvements from the premises, to remediate, consistent with applicable law, any contamination for which the departing lessee is responsible under this chapter, and to restore the premises to a clean and neat physical condition acceptable to the department if the department determines in writing

(1) that the continued presence of the permanent improvements on the premises is not consistent with either

(A) the applicable provisions of this chapter and of any other statute or regulation, including any relating to noise or airport land use; or

(B) any written airport program or plan required for compliance with applicable federal or state law;

(2) that the continued presence of the permanent improvements on the premises is not in the best interest of the state; or

(3) that the permanent improvements present a hazard to public health or safety.

(g) A departing lessee to whom the department has issued a direction under (f) of this section shall comply with the department's direction within 60 days after issuance of the direction and at no cost to the department. If the departing lessee shows good cause to the department and if it is not inconsistent with the best interest of the state, the department will allow in writing a longer period that is sufficient to allow the lessee to comply with the department's direction. A departing lessee who fails to comply with a direction issued by the department under (f) of this section shall, within 30 days of being billed by the department, reimburse the department for any costs reasonably incurred by the department, including legal and administrative costs, to enforce the department's direction or to remove and dispose of unremoved lessee-owned permanent improvements, remediate any contamination for which the lessee is responsible under this chapter, and restore the premises.

(h) If a departing lessee does not timely remove or sell the lessee-owned permanent improvements on a premises in accordance with the requirements of this section, any remaining permanent improvements and any remaining personal property of the departing lessee will be considered permanently abandoned. The department may sell, lease, demolish, dispose of, remove, or retain the abandoned property for airport use as the department determines is in the best interest of the state. The departing lessee shall, within 30 days after being billed by the department, reimburse the department for any costs reasonably incurred by the department, including legal and administrative costs, to demolish, remove, dispose, clear title to, or sell the abandoned property and to remediate and restore the premises.

(i) A departing lessee will not be considered to have relinquished possession and completely vacated the premises until

(1) the lessee has

(A) remediated, consistent with applicable law, any contamination for which the lessee is responsible under this chapter; and

(B) restored the premises to a clean and neat physical condition acceptable to the department; and

(2) either

(A) removed all of the lessee's permanent improvements and personal property from the premises or sold the permanent improvements and personal property to a succeeding lessee under the provisions of this section; or

(B) transferred title to the lessee's permanent improvements and personal property that remain on the premises to the department.

(j) Site development work and site development materials that a land lessee completes or places on a premises become part of the state-owned realty and property of the state upon completion or placement. The lessee

(1) must maintain the site development work and site development materials throughout the term of the lease, including any extensions and periods of holdover; and

(2) may not remove the site development work or site development materials unless the department approves in writing.

(k) In this section, "departing lessee" means a lessee whose land lease has expired, been terminated, or been canceled and to whom a new lease or a lease term extension for that land has not been granted.

(l) After the expiration, termination, or cancellation of a lease, including any holdover under 17 AAC 45.252, the departing lessee loses all right to occupy or use the premises without the express or implied consent of the department. Except as the department notifies the departing lessee otherwise in writing, the department consents to the departing lessee's continued use and occupancy of the premises to diligently accomplish the requirements of this section. Until the departing lessee relinquishes possession of and completely vacates the premises under (i) of this section and notifies the department in writing that it has relinquished and vacated the premises, the departing lessee shall perform the following as if the lease were still in effect,

(1) pay rent to the department;

(2) maintain the premises;

(3) provide the department with evidence of each insurance coverage, if any, required under the lease; and

(4) cease using the premises other than to diligently accomplish the requirements of this section, and to comply with the other requirements of the lease.

Notes

17 AAC 45.245

Eff. 3/28/2002, Register 161; am 3/22/2008, Register 185

Authority:AS 02.15.020

AS 02.15.060

AS 02.15.090