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Item No: 7F Meeting Date: December 14, 2015 Type of Business: Council Business Administrator Review: ____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Brian Erickson, Public Works Director Item Title/Subject: Resolution 8484, Approving Water Tower Lease Agreement with T-Mobile Background: Staff has been negotiating with Insite Inc., T-Mobile Central, LLC’s agent, regarding their soon to expire lease on the Mounds View water tower. Currently, this lease is in its third and final 5-year extension. The original lease, with an effective date May 15, 1996, allowed the tenant to use approximately 200 square feet in the base of the water tower for their equipment cabinets, as well as a location on the top of the tower for their antennas. The amount of the original lease was $11,000 for the partial year of 1996 and all of 1997. After that, the lease payment increased 4% annually resulting in a lease payment of $22,283.98 for 2015. Discussion: This summer, staff was contacted by Insite Inc. regarding an update to the lease with T-Mobile Central, LLC. During those negotiations, staff requested T-Mobile remove their equipment cabinets from the base of the tower, as T-Mobile is the only tenant that uses that space. As a result, any T-Mobile equipment maintenance or repair requires city staff to open the tower to allow access. In addition, a portion of the water tower base is not available for city use. Due to the effort required to relocate the equipment cabinets, the lease allows for 18 months to complete this work. Staff will work with Insite to insure that the location of the outdoor shelter is mutually agreeable. At this point, the anticipated location is just south of the existing shelters, near the booster station to the west of the tower. Once the equipment is relocated, the lease will be updated to show the area that T-Mobile has leased. Staff has met on site with representatives of T-Mobile to begin the relocation process. The lease cost is adjusted with this lease. T-Mobile had proposed continuing with the existing rate structure by adding 4% to the existing 2015 rate. This would have resulted in a 2016 rate of $23,175.34. However, staff negotiated a higher rate of $28,000 per year with a 4% inflation factor, an increase of $4,824.66 per year. The new lease is similar to the old lease in that it will have the option of being extended up to three additional times for five years each time. The City Attorney has reviewed the proposed agreement and is in agreement with the proposed lease. Recommendation: Staff recommends that the City Council approved the updated lease agreement with T-Mobile Central, LLC, with the lease terms as shown in the attached agreement. Respectfully submitted, Brian Erickson – Director of Public Works/City Engineer