Discussion: Proposed Verizon Cell Tower Lease Amendment

MD7, on behalf of Verison Wireless, has presented the City with a proposed amendment to a Cell tower Lease.  The original lese began in 2001 and is in its final years under the original terms.  The proposal largely leaves the terms unchanged except for the monthly rent rate and rent escalators.  Earlier in 2022, the proposed change would have dropped the monthly rate from its current approximately $2,800/month to $1,800/month.  As discussions continued, MD7 emailed and indicated a monthly rent rate of $1,950 would be supported.  The rent escalator would change from an annual increase based on a calculation within the lease agreement to a 10% increase after each five year term.

Under both 2022 proposals, the maximum length of the lease agreement would be 25 five years.  If the maximum time frame occurred and the terms were implemented under the beginning monthly rate of $1,950, the maximum revenue generated by the lease would be approximately $714,297 over the next 25 years.
 

Brian Hagen, City Administrator

Provide consensus direction of one of the following options:
1) Let the lease terminate at the end of the original contract.
2) Accept the proposal and direct staff to notify MD7 of such support.
3) Propose a counter offer for staff to present to MD7 for Verizon Wireless' consideration.