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HomeMy WebLinkAbout12 Ground Leases for two District Propertiesenda Item # ACTION 12 To: Board of Directors From: Kathleen Neus Date: December 07, 2016 Subject: Consideration of an Amended and Re -Stated Ground Lease with AT&T and a Ground Lease Agreement with T-Mobile 1. WHY THIS MATTER IS BEFORE THE BOARD It is the Boards authority to approve land lease -use agreements and settlement agreements. 2. HISTORY • 10695 Brockway Rd In November of 2014 District staff was reviewing District owned property on the south side of the Truckee River and near the Regional Park areas for a potential easement for both the Legacy and Brockway Rd Trails being considered by the Town of Truckee (Town). It was at this time that staff noticed a cell tower located on the southern portion of the parcel leased to the Truckee Donner Recreation and Park District (TDRPD). In December of 2014 the District received a routing request from the Town regarding Crown Castle's request to make modifications to the T-Mobile cell tower located at 10570 Brockway Rd. The District notified the Town regarding the trespass of the cell tower, specifically that the District believed that the tower was on District owned land located at 10695 Brockway, the parcel adjacent to the intended parcel owned by the Truckee Sanitary District (TSD). As it turned out neither Pacific Bell Mobile Services (agreement was originally with Pacific Bell Mobile Services which at some point had been sold to T-Mobile) nor the tower installer surveyed the property prior to or after construction of the tower. The District had the property line in question surveyed in 2015 with a full survey and Record of Survey filed in 2015. The surveys confirmed that the tower is definitely located on the District's property. The District has been in contact and in negotiations with Crown Castle, agent for T- Mobile West Tower, LLC, the owner of the tower, since February of 2015. Negotiations have extended for such a long time in order for the District and Crown Castle to obtain accurate survey information and negotiate terms of the lease, the "back rent" and a settlement agreement and for Crown Castle to confirm access to the site. • 11280 Valley Rd In July of 2013 District staff received a phone call from the subcontractor for the AT&T tower located on Valley Rd. AT&T at the time was interested in enlarging the leased space as the tower required upgrading. During the phone conversations the subcontractor stated that the tower "could fall down at any time". The District requested a structural analysis of the tower in its current condition and with the proposed modifications. In October of 2013 the District received a letter stating that AT&T and Crown Castle International Corp (Crown Castle) have entered into an agreement for Crown Castle will now be managing and operating the cell tower. The District's agreement with AT&T states that the "Lessee may not assign, sublet or otherwise transfer all or any part of its interest in this lease or in the premises; however, Lessee may assign it interest to its parent company, any subsidiary or affiliate or to any successor -in - interest or entity acquiring 51 % or more of its stock or assets with prior written consent of Lessor." With the notification regarding the specific section of the agreement the District entered into negotiations with Crown Castle as agent for AT&T. The District has been in negotiations with AT&T and Crown Castle since mid -July 2013. Early negotiations focused on the amount of rent and did not progress to the District's satisfaction until Crown Castle stepped -in for AT&T. As progress was made on the rent amount, the parties discovered that some of the communications facilities and part of the access to the site were not on District owned property. This revelation resulted in the need for Crown to engage in survey work and a site visit with District staff to locate facilities. It also resulted in the parties realizing that a portion of the area that Crown Castle believed was subject to the lease, approximately 322 sf, was actually on property adjacent to the leased premises and the property owned by the District. Negotiations were bogged down again as Crown Castle desired to re -configure the leased area on the District -owned property in order to "re -capture" the 322 sf. Due to the small size of the tank site property and the District's need to protect its ability to operate, maintain, repair and replace its facilities, we would not agree to increase the footprint of the leased area beyond what has existed. In order to provide Crown Castle some certainty that the site would serve its needs into the foreseeable future, the District is agreeing at this time to approve some additional facilities at the site. These facilities primarily include additional antennas and a dish that will be attached to the tower. 3. NEW INFORMATION District staff and counsel have been working diligently to bring resolution for both sites in new lease agreements and a settlement agreement (Attachment 1) for the tower located on the District's Brockway Rd parcel. Summaries of the leases and settlement agreement are attached to this report (Attachment 2). Staff and counsel have achieved all and just require the Board's approval to finish the project. The Ground Lease for the Regional Park site and the Amended and Restated Ground Lease for the Gateway Tank site involve the leasing of property and operation of existing facilities for investor owned public utility type services and therefore are the types of projects which have been determined not to have a significant effect on the environment and which are categorically exempt from the provisions of CEQA pursuant to Section 15301 of the CEQA Guidelines. The District will need to approve and file a Notice of Exemption (Attachment 3) for each lease. 4. FISCAL IMPACT The fiscal impact associated with this item is as follows: 11280 Valley Rd • $36,000 annually with a 50% revenue share annual CPI-U adjustment • Includes $7,500 for legal fees • Relief of snow removal obligation 10695 Brockway Rd • $14,400 annually, with a 50% revenue share and an annual CPI-U adjustment • Settlement a one-time payment of $100,000 All revenue is to be deposited in the Water Department General Fund 5. RECOMMENDATION It is staff's recommendation for the Board to 1) Approve and authorize the General Manager to execute the following agreements: a. Settlement Agreement and General Release with T-MOBILE WEST TOWER LLC, for Back Rent at the Regional Park site. b. Amended and Re -Stated Ground Lease Agreement with NCWPCS MPL 28 - YEAR SITES TOWER HOLDINGS LLC, for the tower located at Valley Rd c. Ground Lease Agreement with T-MOBILE WEST TOWER LLC, for the tower located at the Regional Park site 2) Approve and authorize the filing of a Notice of Exemption for each of the Amended and Restated Ground Lease Agreement with NCWPCS MPL 28 YEAR SITES TOWER HOLDINGS LLC and the Ground Lease Agreement with T-MOBILE WEST TOWER LLC. Michael D. Holley General Manager