Approving a Temporary Non-Exclusive Fiber Optic License Agreement allowing Microsoft to install fiber optic conduit banks under four locations within existing but undeveloped city roadways.

Approve and authorize the City Manager or her designee to execute the Temporary Non-Exclusive Fiber Optic License Agreement. (Sarah Chilton, Deputy City Attorney)

There is no direct fiscal impact from granting this License.

Certain real property was dedicated to the city as right-of-way for the development of sections of streets known as W. LaTierra and South 143rd Avenue, generally located south of Maricopa County Road (MC 85) between S. La Cometa and S. 141st Avenue, (collectively the “City Roadways”). City utility infrastructure improvements have been installed within the City Roadways, but the City Roadways have not been improved with street improvements.

The property adjacent to the City Roadways is owned and being developed by Microsoft Corporation, a Washington Corporation (“Microsoft”). Microsoft's development plans require the abandonment of City Roadways. Microsoft has long been aware of the requirements for the abandonment, which included the relocation of all existing utility infrastructure improvements located within the City Roadways.

More than two years ago, Microsoft sought permission from the City to allow it to construct or cause the construction of fiber optic facilities to cross the City Roadways before the relocation of the City’s existing water and sewer infrastructure improvements and the abandonment of the City Roadways. Microsoft, however, was unwilling to agree to a license that the City provided in or about December 2021 that included terms that minimized the City’s exposure to liabilities associated with damage to the existing city utility infrastructure improvements and to Microsoft’s facilities if Microsoft installed its facilities within the City Roadways. Subsequently, fiber optic conduit was installed within two locations within the City Roadways without the city having granted a license or easement. 

Microsoft is continuing the development of its property and has asked the City to grant it a license of easement for the existing fiber optic facilities Microsoft installed within the City Roadways and to allow the installation of fiber optic facilities in two additional locations within the City Roadways. Staff is supportive of the request subject to the terms and conditions set forth in the attached Temporary Non-Exclusive Fiber Optic License Agreement.  These terms include:

• A requirement that Microsoft complete the relocation of the existing city utility infrastructure improvements and the abandonment of the City Roadways by December 31, 2024;
• A requirement that Microsoft remove its improvements from the City Roadways it Microsoft fails to complete the relocation of the existing city utility infrastructure improvements and the abandonment of the City Roadways by December 31, 2024, or pay the City $5,000 per day until the relocation and abandonment have been completed; and
• Waiver and indemnification provisions that minimize the risk of the City being liable for any damage resulting from work done within the License Areas either to Microsoft’s improvements or the city’s existing utility infrastructure improvements.