Agenda - Council Work Session - 01/28/2025

Home

2. 2. CC Work Session Meeting Date: 01/28/2025 Primary Strategic Plan Initiative: Information Title: Traprock Park Mono-Pole Cell Tower Lease Purpose/Background: The city was approached in 2024 to lease a portion of park land for a new mono-pole cell tower. The request came for Central Park. However, staff suggested consideration be given to Traprock Park. Traprock Park is a vacant parcel of land located at 15650 Traprock St NW. It is approximately 4.5 acres in size and also abuts Variolite St NW. This park has experienced varying uses,but as noted,the site is vacant from any structures. Although platted as park land, the most notable use in recent years has been a storm debris drop off site for tree branches. The location is surrounded by residential properties with parcel sizes of 1-5 acres. The Towers, LLC has provided a proposed lease with terms related to duration and financial costs. Right now, Verizon would be the carrier on the site. The most notable terms of the lease are as follows: Option to Lease: Upon approval of the lease,the tenant would receive an exclusive option to lease the premise. This option period would encompass up to a four year period,with compensation to the city of$600. Term: Upon commencement of the lease, a total of 10 terms would be granted in five year increments totaling 50 years. Each five year renewal would be at the tenant's option to renew. Rent: The tenant would pay the city$600 per month with an annual increase of.49%. Rent would not begin until the third month of the first year after the commencement date. Year 1 revenue from the lease would equal $6,000,year 2 $7,500,then.49% increase each year after. Staff reviewed the proposed lease,then provided feedback. Staff shared two recent cell tower lease amendments/extension executed in recent years. It should be noted,these two extensions did not require new infrastructure to the sites. Details of the two are below: Alpine Park Mono-Pole: 25 years in five year increments, $26,400 annual revenue, one-time up front payment of$25,000, additional revenue based on additional service providers located on the mono-pole (approximately $500/mo per carrier). Water Tower Lease: 25 years in five year increments, $24,000 annual revenue, first term guaranteed rent payment totaling $120,000. Staff asked for a revised lease based on the recent renewals the city has agreed to. Below are the revised proposed terms for the Traprock Park Lease: Option to Lease: Upon approval of the lease,the tenant would receive an exclusive option to lease the premise. This option period would encompass up to a four year period in two year increments,with compensation to the city of$2,000 for each two year period. Term: Upon commencement of the lease, a total of 10 terms would be granted in five year increments totaling 50 years. Each five year renewal would be at the tenant's option to renew. Rent: The tenant would pay the city$1,150 per month with an annual increase of 1.5%. Rent would not begin until the third month of the first year after the commencement date. Year 1 revenue from the lease would equal $11,500,year 2 $15,800, then a 1.5% increase each year after. Additional Rent: $200/month per additional carrier. In summary, the proposed lease for Traprock Park creates approximately half of the revenue as compared to our