Title 17 . Transportation and Public Facilities

Chapter 42 . Miscellaneous Provisions

Section 250. Disposition of removable improvements on a building lease or concession

17 AAC 42.250. Disposition of removable improvements on a building lease or concession

(a) This section applies to building leases on the airport and on-airport concessions.

(b) Unless the applicable building lease or concession or other written agreement between the department and the building lessee or concessionaire provides otherwise, improvements that the building lessee or concessionaire constructs or purchases on the premises and that the airport manager determines can be removed without material damage to a state-owned building or land remain the lessee's or concessionaire's property while the building lease or concession remains in effect, including any period of extension or holdover with the consent of the airport manager.

(c) Unless the applicable building lease or concession provides otherwise, at the expiration, termination, or cancellation of the building lease or concession, the airport manager shall take one or more of the following actions with respect to the departing building lessee's or concessionaire's improvements that can be removed without material damage to the building or land:

(1) allow the departing building lessee or concessionaire to sell those improvements to a succeeding lessee or concessionaire of the premises, remove all personal property, remediate any contamination, and leave the premises in a clean and neat physical condition acceptable to the manager within 60 days after notice from the manager that the manager has approved an application for a lease of the premises to another person or by such earlier date stated in the notice, but in no event more than 100 days after the expiration, termination, or cancellation date of the lease or concession;

(2) allow or direct the departing building lessee or concessionaire to remove those improvements, remediate, consistent with applicable law, any contamination the departing lessee or concessionaire caused, materially contributed to, or assumed under an assignment, and restore the premises to a clean and neat physical condition acceptable to the manager; or

(3) allow the departing building lessee or concessionaire to transfer to the department, with or without payment of consideration, title to those improvements, remove all personal property, remediate any contamination, and leave the premises in a clean and neat physical condition acceptable to the manager.

(d) A departing building lessee or concessionaire to whom the airport manager has issued a direction under (c)(2) of this section shall comply with the manager's direction within 60 days after issuance of the direction and at no cost to the department. If the lessee or concessionaire shows good cause and if it is not inconsistent with the best interest of the state, the manager shall allow in writing a longer period that is sufficient to permit the lessee or concessionaire to comply with the manager's direction. A lessee or concessionaire who fails to comply with a direction issued by the manager under (c)(2) 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 manager's direction or to remove and dispose of that person's unremoved improvements, remediate any contamination, and restore the premises.

(e) If a departing building lessee or concessionaire does not timely remove or sell the improvements on a premises in accordance with the terms of this section, the improvements will be considered permanently abandoned. The airport manager may sell, lease, demolish, dispose of, remove, or retain the abandoned property for airport use as the manager determines is in the best interest of the state. Unless the law requires otherwise, the manager shall deposit any proceeds from the disposition of abandoned property under this subsection into the revenue fund established under AS 37.15.430 . A departing lessee 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 remove and dispose of the abandoned property, remediate any contamination, and restore the premises.

(f) After the expiration, termination, or cancellation of a building lease or concession, the departing building lessee or concessionaire remains responsible to pay rent to the department and to abide by all other lease obligations, including maintenance of the premises and provision of evidence of insurance coverage to the department for the premises, through the date on which the lessee or concessionaire relinquishes possession of and completely vacates the premises. A departing building lessee or concessionaire will not be considered to have relinquished possession and completely vacated the premises until

(1) the lessee or concessionaire has

(A) remediated, consistent with applicable law, any contamination the lessee or concessionaire caused, materially contributed to, or assumed under an assignment; and

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

(2) either

(A) all of the lessee's or concessionaire's improvements and personal property on the premises have been removed, subject to (g) of this section, or sold to the succeeding lessee or concessionaire; or

(B) title to any of the lessee's or concessionaire's improvements and personal property that remain on the premises has vested in the department.

(g) Unless otherwise provided in the building lease or concession, improvements that cannot be removed from a building lease or concession premises without material damage to a state-owned building or land and site development work and materials, including fill material, gravel, and pavement, that a building lessee or concessionaire completes or places on a premises become part of the state-owned realty and property of the state upon completion or placement. The building lessee or concessionaire

(1) must maintain the fill material, gravel, and pavement throughout the term of the lease, including any extensions and periods of holdover; and

(2) may not remove the fill material, gravel, or pavement unless the airport manager approves in writing.

(h) In this section, "departing building lessee or concessionaire" means a building lessee or concessionaire whose building lease or concession has expired, been terminated, or been canceled and to whom a new building lease or concession or a building lease or concession term extension has not been granted.

History: Eff. 1/14/2001, Register 157

Authority: AS 02.15.020

AS 02.15.060

AS 02.15.090