01-14-2015 Council Packet - Laserfiche WebLink

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MAYOR John Keis COUNCIL Rick Montour Michael McGraw Tom Fischer Christian Torkelson 515 Little Canada Road, Little Canada, MN 55117-1600 (651) 766-4029 / FAX: (651) 766-4048 ADMINISTRATOR www.ci.little-canada.mn.us Joel R. Hanson MEMORANDUM TO: Mayor Keis and Members of the City Council FROM: Joel Hanson, City Administrator DATE: January 8, 2015 RE: Steel in the Air Proposal — Cell Tower Analysis for 53 South Owasso When the City purchased the Donovan Construction site at the above address, we also purchase the existing cell tower. (This is the existing tower and not the new one proposed by Verizon.) Steel in the Air helped us evaluate the asking price for the tower prior to acquisition and they have extensive experience in this field on a national basis. Today, Crown Castle, cell tower lessee, is asking to add some land to the tower lease to house additional equipment. While the addition of land to that site does not seem problematic, Crown Castle is also proposing lease revisions and a term extension. From our earlier analysis, we know the current lease rate is lower than market. It also expires in the next few years. My concern is that if we negotiate an extension, we could negatively impact the sale value of the cell tower by agreeing to terms that may hurt the cash value of a lease sale. To prevent this from happening, I am recommending we retain Steel in the Air to assist us in determining appropriate lease terms. I would also want them to set a value on the sale of the tower lease as exists today and what we might obtain if we are able to negotiate favorable terms. This is a substantial asset for the City and I feel this evaluation will help us make the best decision. Given Steel in the Air's experience at our site (they also helped us with the Verizon lease); I feel they are our best option to complete this analysis. I expect to have a formal proposal in time for Wednesday's meeting and I will forward a copy as soon as I receive it.