That the City Council approve and authorize the City Manager to execute a communications site lease agreement renewal with SBA 2012 TC Assets for a wireless telecommunications facility located at 1400 West Whittier Boulevard at the La Bonita Park Clock Tower.

SBA 2012 TC Assets (“SBA”) currently operates and maintains a wireless telecommunications facility on City-owned property at La Bonita Park. The City of La Habra Planning Commission approved the facility on July 17, 1997, pursuant to Conditional Use Permit #96-34. The facility consists of a sixty-foot antenna structure that is designed as a clock tower to conceal the antennas and radio equipment. The clock tower, which was designed to be architecturally compatible with other buildings in La Habra, features a stucco finish, tile roof, and working analog clock. SBA leases approximately 850 square feet of space at the park from the City of La Habra to operate its facility. The facility has been in commercial operation at La Bonita Park since July 1998.

The original five-year agreement for the wireless telecommunications facility began on June 30, 1998 and included four (4) extensions of five (5) years each. The current agreement and term extensions is set to expire on June 30, 2023. SBA has requested a renewal of the agreement for a second 25-year term. At the time of the original agreement, the monthly lease rate was $850 with yearly increases based on the percentage change of the annual Consumer Price Index (CPI). As a result, the current monthly rent is $1,391.42 per month. Over the full 25-year term of the agreement, expiring in June of this year, staff estimates that the City will have received approximately $330,000 in revenue from the original lease and extensions.

Subject to Council approval, staff has negotiated a rent increase for the proposed new lease to start at $2,825 per month, which will automatically increase each year by three percent. The initial term of the proposed agreement is for five (5) years and includes four (4) additional five (5) year term extensions, unless either party to the lease elects to terminate the agreement in accordance with the termination provisions. Assuming the agreement goes to its full potential 25 year term, it will generate approximately $1.2 million in General Fund revenue. Staff conducted an informal survey of cell site lease rates in other cities in Orange County and found that the proposed $2,825 per month lease rate negotiated with SBA appears to be within a range of current market rates. In addition to the General Fund revenue, the telecommunication facility also provides enhanced cell phone service within its coverage area. Notwithstanding the rent increase, the remainder of the agreement renewal is substantially the same as the original agreement, with the addition of relocation language which is now standard for these types of agreements. The City Attorney's office has reviewed this agreement.

Approval of the lease renewal will result in annual General Fund revenue of $33,900 in the first year, which shall then increase annually by 3%. If approved, the proposed agreement renewal has the potential to generate approximately $1.2 million in General Fund revenue over the full 25-year agreement period.