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515 Little Canada Road, Little Canada, MN 55117-1600 <br />(651) 766-4029 / FAX: (651) 766-4048 <br />www.cidittle-canadadnn.us <br />MEMORANDUM <br />TO: Mayor Blesener & Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: December 12, 2014 <br />RE: Verizon Lease — 53 South Owasso <br />MAYOR <br />Bill Blesener <br />COUNCIL. <br />Rick Montour <br />John Keis <br />Michael McGraw <br />Shelly Boss <br />ADMINISTRATOR <br />Joel R. Hanson <br />As you will recall, we approved a conditional use permit for a second cell tower to be operated by <br />Verizon at 53 South Owasso. ('Phis was done after documentation was provided that they could not be <br />accommodated on the existing tower.) <br />Staff has been negotiating a lease with them to consummate this transaction. The attached copy was <br />prepared by the City Attorney in response to Verizon's draft. They key terms are as follows: <br />• Starting annual rent of $15,000 (they initially started at $9,000) and this is at the high end of the <br />range suggested by our consultant. <br />• 3% per year escalator versus the 2% they offered. <br />• We are guaranteeing them access their site but we are not granting them an easement. By <br />avoiding an easement, we make it easier to accomplish redevelopment of the site. We will be <br />responsible for the costs of the new access, but they will absorb all costs to relocate utilities to <br />their site. <br />• We will have a $10,000 performance bond to guarantee removal of the tower if they discontinue <br />use of the tower. <br />• The initial term is five years. They have the option for up to Lour, five-year extensions. <br />Subject to further comments by Verizon, staff recommends approval of the lease as prepared by the City <br />Attorney. <br />1 <br />